# EDGAR Filing Document

**Accession Number:** 0002093101
**File Stem:** 0001193125-26-029976
**Filing Date:** 2026-1
**Character Count:** 2653855
**Document Hash:** 0d02226a65eaf246046539e0a3f47751
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-26-029976.hdr.sgml**: 20260130

**ACCESSION NUMBER**: 0001193125-26-029976

**CONFORMED SUBMISSION TYPE**: 10-12B/A

**PUBLIC DOCUMENT COUNT**: 22

**FILED AS OF DATE**: 20260130

**DATE AS OF CHANGE**: 20260129

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Atrium Therapeutics, Inc.
- **CENTRAL INDEX KEY:** 0002093101
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-12B/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-43008
- **FILM NUMBER:** 26580239

**BUSINESS ADDRESS:**
- **STREET 1:** 3020 CALLAN ROAD
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92121
- **BUSINESS PHONE:** 858-401-7900

**MAIL ADDRESS:**
- **STREET 1:** 3020 CALLAN ROAD
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92121

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Bryce Therapeutics, Inc.
- **DATE OF NAME CHANGE:** 20251022

**As filed with the Securities and Exchange Commission on January 29, 2026** 

**File No. 001-43008** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

**Amendment No. 1** 

**to** 

**FORM 10** 

**GENERAL FORM FOR REGISTRATION OF SECURITIES** 

**Pursuant to Section 12(b) or (g) of** 

**The Securities Exchange Act of 1934** 

## Atrium Therapeutics, Inc.
**(Exact name of registrant as specified in its charter)** 

---

| | |
|:---|:---|
| **Delaware** | **39-4639499** |
| **(State or other jurisdiction of**<br> **incorporation or organization)** | **(I.R.S. Employer**<br> **Identification Number)** |
| **10578 Science Center Drive, Suite 125**<br> **San Diego, California** | **92121** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**(619) 876-0700** 

**(Registrant's telephone number, including area code)** 

**Securities to be registered pursuant to Section 12(b) of the Act:** 

---

| | |
|:---|:---|
| **Title of Each Class**<br> **to be so Registered** | **Name of Each Exchange**<br> **on Which Each Class is to be Registered** |
| Common Stock, $0.001 par value | The Nasdaq Stock Market LLC |

---

**Securities to be registered pursuant to Section 12(g) of the Act**: **None** 

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12(b)-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
|  |  | Emerging growth company | ☒ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

**INFORMATION REQUIRED IN REGISTRATION STATEMENT CROSS REFERENCE** 

**SHEET BETWEEN ITEMS OF FORM 10 AND THE ATTACHED INFORMATION STATEMENT.** 

Certain information required to be included herein is incorporated by reference to specifically identified portions of the body of the information statement filed herewith as Exhibit 99.1 (the "Information Statement"). None of the information contained in the Information Statement shall be incorporated by reference herein or deemed to be a part hereof unless such information is specifically incorporated by reference.

**Item 1.** **Business** <br>

The information required by this item is contained under the sections "Questions and Answers about the Separation and Distribution," "Information Statement Summary," "Cautionary Statement Regarding Forward-Looking Statements," "Business," and "Where You Can Find More Information" of the Information Statement. Those sections are incorporated herein by reference.

---

| | |
|:---|:---|
| **Item 1a.** | **Risk Factors**  |

---

The information required by this item is contained under the sections "Information Statement Summary" and "Risk Factors" in the Information Statement. Those sections are incorporated herein by reference.

**Item 2.** **Financial Information** <br>

The information required by this item is contained under the sections "Capitalization," "Unaudited Pro Forma Combined Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Combined Financial Statements" of the Information Statement.

Those sections are incorporated herein by reference.

**Item 3.** **Properties** <br>

The information required by this item is contained under the section "Business—Properties" of the Information Statement. That section is incorporated herein by reference.

**Item 4.** **Security Ownership of Certain Beneficial Owners and Management** <br>

The information required by this item is contained under the section "Security Ownership of Certain Beneficial Owners and Management" of the Information Statement. That section is incorporated herein by reference.

**Item 5.** **Directors and Executive Officers** <br>

The information required by this item is contained under the section "Corporate Governance and Management" of the Information Statement. That section is incorporated herein by reference.

**Item 6.** **Executive Compensation** <br>

The information required by this item is contained under the sections "Corporate Governance and Management—Non-Employee Director Compensation," "Corporate Governance and Management—Human Capital Management Committee Interlocks and Insider Participation" and "Executive Compensation" of the Information Statement. Those sections are incorporated herein by reference.

**Item 7.** **Certain Relationships and Related Transactions, and Director Independence** <br>

The information required by this item is contained under the sections "Certain Relationships and Related Party Transactions," "Security Ownership of Certain Beneficial Owners and Management" and "Corporate

------

Governance and Management—Director Independence" of the Information Statement. Those sections are incorporated herein by reference.

**Item 8.** **Legal Proceedings** <br>

The information required by this item is contained under the section "Business—Legal Proceedings" of the Information Statement. That section is incorporated herein by reference.

**Item 9.** **Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters** <br>

The information required by this item is contained under the sections "Information Statement Summary," "Risk Factors," "The Separation and Distribution," "Dividend Policy," "Corporate Governance and Management," "Shares Eligible for Future Sale" and "Description of Securities" of the Information Statement. Those sections are incorporated herein by reference.

**Item 10.** **Recent Sales of Unregistered Securities** <br>

None.

**Item 11.** **Description of Registrant's Securities to be Registered** <br>

The information required by this item is contained under the sections "Questions and Answers about the Separation and Distribution," "Information Statement Summary," "The Separation and Distribution" and "Description of Securities" of the Information Statement. Those sections are incorporated herein by reference.

**Item 12.** **Indemnification of Directors and Officers** <br>

The information required by this item is contained under the sections "The Separation and Distribution—The Separation Agreement—Indemnification," "Executive Compensation—Limitation of Liability and Indemnification of Officers and Directors," "Certain Relationships and Related Party Transactions—Indemnification Agreements" and "Indemnification of Directors and Officers" of the Information Statement. Those sections are incorporated herein by reference.

**Item 13.** **Financial Statements and Supplementary Data** <br>

The information required by this item is contained under the sections "Unaudited Pro Forma Combined Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Index to Combined Financial Statements" of the Information Statement. Those sections are incorporated herein by reference.

**Item 14.** **Changes in and Disagreements with Accountants on Accounting and Financial Disclosure** <br>

The information required by this item is contained in the section "Change in Independent Registered Public Accounting Firm" of the Information Statement. That section is incorporated herein by reference.

**Item 15.** **Financial Statements and Exhibits** <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Financial Statements

The information required by this item is contained under the section "Index to Combined Financial Statements" beginning on page F-1 of the Information Statement. That section is incorporated herein by reference.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Exhibits

The following documents are filed as exhibits hereto:

---

| | |
|:---|:---|
| **Exhibit**<br>**Number** | **Exhibit**<br> **Description** |
| 2.1 | [Separation and Distribution Agreement, dated as of October 25, 2025, among Avidity Biosciences, Inc., Atrium Therapeutics, Inc. and Novartis AG^](d42675dex21.htm) |
| 2.2 | [Agreement and Plan of Merger, dated October 25, 2025, among Avidity Biosciences, Inc., Novartis AG and Ajax Acquisition Sub, Inc.^](d42675dex22.htm) |
| 3.1 | [Certificate of Incorporation, adopted as of September 30, 2025\*\*](http://www.sec.gov/Archives/edgar/data/0002093101/000119312525314415/d42675dex31.htm) |
| 3.2 | [Certificate of Amendment to Certificate of Incorporation, adopted as of December 8, 2025\*\*](http://www.sec.gov/Archives/edgar/data/0002093101/000119312525314415/d42675dex32.htm) |
| 3.3 | [Bylaws, adopted as of September 30, 2025\*\*](http://www.sec.gov/Archives/edgar/data/0002093101/000119312525314415/d42675dex33.htm) |
| 3.4 | [Form of Amended and Restated Certificate of Incorporation, to be in effect following the Distribution\*\*](http://www.sec.gov/Archives/edgar/data/0002093101/000119312525314415/d42675dex34.htm) |
| 3.5 | [Form of Amended and Restated Bylaws, to be in effect following the Distribution\*\*](http://www.sec.gov/Archives/edgar/data/0002093101/000119312525314415/d42675dex35.htm) |
| 4.1 | Form of Common Stock Certificate of Atrium Therapeutics, Inc.\* |
| 10.1 | [License Agreement, dated as of October 25, 2025, by and between Avidity Biosciences, Inc. and Atrium Therapeutics, Inc.†](d42675dex101.htm) |
| 10.2 | [Form of Transition Services Agreement, by and between Avidity Biosciences, Inc. and Atrium Therapeutics, Inc.†](d42675dex102.htm) |
| 10.3 | [Research Collaboration and License Agreement, dated as of April 17, 2019, by and between Eli Lilly and Company and Avidity Biosciences, Inc.†](d42675dex103.htm) |
| 10.4 | [Research Collaboration and License Agreement, dated as of November 27, 2023, by and between Bristol-Myers Squibb Company and Avidity Biosciences, Inc.†](d42675dex104.htm) |
| 10.5 | [Atrium Therapeutics, Inc. 2026 Incentive Award Plan, including forms of grant notices and agreements thereunder#](d42675dex105.htm) |
| 10.6 | Form of Make Whole Restricted Stock Unit Grant Notice and Make Whole Restricted Stock Unit Agreement under the Atrium Therapeutics, Inc. 2026 Incentive Award Plan\* |
| 10.7 | [Atrium Therapeutics, Inc. 2026 Employee Stock Purchase Plan#](d42675dex107.htm) |
| 10.8 | Employment Agreement to be entered into by and between Atrium Therapeutics, Inc. and Kathleen Gallagher\*# |
| 10.9 | Employment Agreement to be entered into by and between Atrium Therapeutics, Inc. and Husam Younis\*# |
| 10.10 | Employment Agreement to be entered into by and between Atrium Therapeutics, Inc. and Steven Hughes\*# |
| 10.11 | Employment Agreement to be entered into by and between Atrium Therapeutics, Inc. and Brendan Winslow\*# |
| 10.12 | Employment Agreement to be entered into by and between Atrium Therapeutics, Inc. and Stephanie Kenney\*# |
| 10.13 | Employment Agreement to be entered into by and between Atrium Therapeutics, Inc. and Rocio Martin Hoyos\*# |

---

------

---

| | |
|:---|:---|
| **Exhibit<br>Number** | **Exhibit<br>Description** |
| 10.14 | Atrium Therapeutics, Inc. Non-Employee Director Compensation Program\*# |
| 10.15 | Form of Indemnification Agreement to be in effect following the Distribution\* |
| 10.16 | Amended and Restated Lease Agreement, dated December 18, 2020, by and between ARE-SD Region No. 44, LLC and Avidity Biosciences, Inc.\* |
| 16.1 | [Letter re Change in Independent Registered Public Accounting Firm\*\*](http://www.sec.gov/Archives/edgar/data/0002093101/000119312525314415/d42675dex161.htm) |
| 21.1 | List of Subsidiaries — (None) |
| 99.1 | [Preliminary Information Statement dated January 29, 2026](d42675dex991.htm) |

---

\* To be filed by amendment

\*\* Previously filed

# Indicates a management contract or any compensatory plan, contract or arrangement.

^ Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted exhibits or schedules upon request.

† Portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K. The omitted
information is not material and is the type of information the Company customarily and actually treats as private or confidential. The Company has determined that the information is both (i) not material and (ii) of the type that the
Company treats as private and confidential.

------

**SIGNATURES** 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| Atrium Therapeutics, Inc. | Atrium Therapeutics, Inc. |
| By: | /s/ Kathleen Gallagher |
| Name: | Kathleen Gallagher |
| Title: | Chief Executive Officer and Director |

---

Dated: January 29, 2026

## Exhibit 2.1

**Exhibit 2.1** 

**Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Such omitted information has been noted in this document with a placeholder identified by the mark "[\*\*\*]".** 

SEPARATION AND DISTRIBUTION AGREEMENT

DATED AS OF OCTOBER 25, 2025

AMONG

AVIDITY BIOSCIENCES, INC.,

BRYCE THERAPEUTICS, INC.,

AND,

SOLELY WITH RESPECT TO <u>SECTION</u> <u>1.1</u>, <u>SECTION</u> <u>2.1(</u><u>a</u><u>)</u>, <u>SECTION</u> <u>2.1</u><u>(b</u><u>),</u> <u>SECTION</u> <u>2.1(</u><u>d</u><u>)</u>, <u>SECTION</u> <u>2.2,</u> <u>SECTION</u> <u>2.4(</u><u>b</u><u>)</u>, <u>SECTION</u> <u>2.7</u>, <u>SECTION</u> <u>3.2</u>, <u>SECTION</u> <u>4.2</u>, <u>SECTION</u> <u>4.6</u>, <u>SECTION</u> <u>4.11</u>, <u>SECTION</u> <u>4.12</u>, <u>SECTION</u> <u>5.1</u> THROUGH <u>SECTION</u> <u>5.6</u>, <u>SECTION</u> <u>7.1(</u><u>f</u><u>)</u>, <u>SECTION</u> <u>8.3</u>, <u>SECTION</u> <u>8.6</u>, <u>SECTION</u> <u>8.7</u>, <u>SECTION</u> <u>8.8</u>, AND <u>SECTION</u> <u>8.11,</u>

NOVARTIS AG

------

<u>**Table of Contents**</u> 

---

| | | |
|:---|:---|:---|
|  ARTICLE I DEFINITIONS; CONSTRUCTION | ARTICLE I DEFINITIONS; CONSTRUCTION | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.1 | General | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.2 | Interpretation | 17 |
|  ARTICLE II SEPARATION | ARTICLE II SEPARATION | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.1 | Transfer of Assets and Assumption of Liabilities | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.2 | Transition Services; Treatment of Commingled Contracts | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.3 | Nonassignability of Assets and Liabilities | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.4 | Wrong Pockets | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.5 | Novation of Liabilities | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.6 | Guarantees | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.7 | SpinCo Funding | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.8 | Funds in Transit | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.9 | Restriction on Prepayment of Expenses | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.10 | Disclaimer of Representations and Warranties | 29 |
|  ARTICLE III DISTRIBUTION | ARTICLE III DISTRIBUTION | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.1 | Distribution | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.2 | SpinCo Organizational Documents | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.3 | Directors | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.4 | Election of Officers | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.5 | State Securities Laws | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.6 | Listing Application | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.7 | Withholding | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.8 | Warrants | 31 |
|  ARTICLE IV ADDITIONAL COVENANTS; FURTHER ASSURANCES | ARTICLE IV ADDITIONAL COVENANTS; FURTHER ASSURANCES | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.1 | Permits; Consents | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.2 | Transitional Trademark Use | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.3 | Intellectual Property Recordation | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.4 | Employee Matters | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.5 | Release of Liens | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.6 | No Solicit | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.7 | Insurance Matters | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.8 | Further Assurances | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.9 | Technology Transfer | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.10 | Permitted Third Party Sale | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.11 | No Amendments to Third Party Agreements | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.12 | Data and Materials Separation | 46 |
|  ARTICLE V INDEMNIFICATION; RELEASE | ARTICLE V INDEMNIFICATION; RELEASE | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.1 | Release of Pre-Distribution Claims | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.2 | Indemnification by the Company | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.3 | Indemnification by SpinCo | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.4 | Claims | 50 |

---

i

------

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.5 | Limitation of Liability; Mitigation | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.6 | Liability for Taxes | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.7 | Tax Returns | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.8 | Tax Contests | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.9 | Section 336(e) Election | 56 |
|  ARTICLE VI ACCESS TO INFORMATION | ARTICLE VI ACCESS TO INFORMATION | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.1 | Provision of Corporate Records | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.2 | Access to Information | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.3 | Tax Information and Cooperation | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.4 | Witnesses; Documents and Cooperation in Proceedings | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.5 | Confidentiality | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.6 | Privileged Matters | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.7 | Ownership of Information | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.8 | Cost of Providing Records and Information | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.9 | Retention of Records | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.10 | Other Agreements Providing for Exchange of Information | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.11 | Policies and Best Practices | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.12 | Compliance with Laws and Agreements | 65 |
|  ARTICLE VII CONDITIONS PRECEDENT TO THE DISTRIBUTION | ARTICLE VII CONDITIONS PRECEDENT TO THE DISTRIBUTION | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 7.1 | Conditions Precedent to Distribution | 65 |
|  ARTICLE VIII MISCELLANEOUS | ARTICLE VIII MISCELLANEOUS | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.1 | Survival | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.2 | Distribution Expenses | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.3 | Amendment | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.4 | Waiver | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.5 | Counterparts and Signature | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.6 | Binding Effect; No Assignment; No Third Party Beneficiaries | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.7 | Parent Guaranty | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.8 | Termination | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.9 | Subsidiaries | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.10 | Governing Law | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.11 | Submission to Jurisdiction; Waiver | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.12 | Waiver of Jury Trial | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.13 | Specific Performance | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.14 | Notices | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.15 | Entire Agreement | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.16 | Severability | 72 |

---

ii

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ANNEXES, SCHEDULES AND EXHIBITS

---

| | |
|:---|:---|
| Exhibit A | Transition Services Agreement |
| Schedule A-1 | Avidity Bio Net Names |
| Schedule A-2 | Avidity Marks |
| Schedule A-3 | Other Avidity Net Names |
| Schedule B | Commingled Contracts |
| Schedule C-1 | RemainCo Intellectual Property |
| Schedule C-2 | RemainCo In-License Agreements |
| Schedule C-3 | RemainCo Marks |
| Schedule C-4 | RemainCo Net Names |
| Schedule C-5 | RemainCo Programs |
| Schedule D | Retention Program |
| Schedule E-1 | Scheduled Platform IP |
| Schedule E-2 | SpinCo Intellectual Property |
| Schedule E-3 | SpinCo IT Assets |
| Schedule E-4 | SpinCo Real Property |
| Schedule E-5 | SpinCo Contracts |
| Schedule E-6 | SpinCo Tangible Assets |
| Schedule E-7 | SpinCo Marks |
| Schedule E-8 | SpinCo Net Names |
| Schedule F | SpinCo Employees |
| Schedule G | SpinCo Programs |
| Schedule H | Third Party Agreements |
| Schedule I | Transferred Plans |
| Schedule J | Employment Arrangements |
| Schedule K | Transition Employees |

---

iii

------

This SEPARATION AND DISTRIBUTION AGREEMENT (this "*Agreement*"), is made and entered into as of October 25, 2025, among Avidity Biosciences, Inc., a Delaware corporation (the "*Company*"), Bryce Therapeutics, Inc., a Delaware corporation and a wholly owned Subsidiary of the Company ("*SpinCo,*" and together with the Company, the "*Parties,*" and each a "*Party*"), and, solely with respect to <u>Section</u> <u>1.1</u>, <u>Section</u> <u>2.1(a)</u>, <u>Section</u> <u>2.1(b)</u>, <u>Section</u> <u>2.1(d)</u>, <u>Section</u> <u>2.2</u>, <u>Section</u> <u>2.4(b)</u>, <u>Section</u> <u>2.7</u>, <u>Section</u> <u>3.2</u>, <u>Section</u> <u>4.2</u>, <u>Section</u> <u>4.6</u>, <u>Section</u> <u>4.11</u>, <u>Section</u> <u>4.12</u>, <u>Section</u> <u>5.1</u> through <u>Section</u> <u>5.6</u>, <u>Section</u> <u>7.1(f)</u>, <u>Section</u> <u>8.3</u>, <u>Section</u> <u>8.6</u>, <u>Section</u> <u>8.7</u>, <u>Section</u> <u>8.8</u> and <u>Section</u> <u>8.11</u>, Novartis AG, a company limited by shares (*Aktiengesellschaft*) incorporated under the laws of Switzerland ("*Parent*").

<u>INTRODUCTION</u> 

WHEREAS, the Company, Parent and Ajax Acquisition Sub, Inc., a Delaware corporation and wholly owned Subsidiary of Parent ("*Merger Sub*"), have entered into the Agreement and Plan of Merger, dated as of October 25, 2025 (the "*Merger Agreement*"), pursuant to which, among other things, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged (the "*Merger*") with and into the Company, with the Company surviving the Merger as a wholly owned Subsidiary of Parent;

WHEREAS, it is a condition to the Merger that, prior to the Effective Time, (i) the Company will distribute to the holders of the issued and outstanding shares of common stock of the Company (collectively, the "*Company Common Stock*") as of the Distribution Record Date all of the issued and outstanding common stock of SpinCo (the "*SpinCo Common Stock*"), on a pro rata basis in accordance with their ownership interests in the Company, in accordance with the terms and conditions of this Agreement and subject to compliance with applicable Law (such distribution, the "*Distribution*") or (ii) a Permitted Third Party Sale shall have been consummated in accordance with definitive agreements entered into for such Permitted Third Party Sale (the consummation of such Permitted Third Party Sale, the "*Sale*");

WHEREAS, the board of directors of the Company (the "*Company Board*") has determined that it is in the best interests of the Company and its stockholders to separate certain businesses, product candidates and corporate infrastructure of the Company, such that at the time of the Distribution, (i) the Company will own and conduct the RemainCo Business and (ii) SpinCo will own and conduct the SpinCo Business;

WHEREAS, in connection with the transactions contemplated by the Merger Agreement, the Company and Parent have, substantially contemporaneously with the execution and delivery of this Agreement, entered into a License Agreement on the date hereof, pursuant to which, among other things, as of the Effective Date (as defined in the License Agreement), SpinCo will grant certain intellectual property rights that are necessary or useful for the RemainCo Business to RemainCo, and RemainCo will grant certain rights to SpinCo; and

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WHEREAS, for U.S. federal income tax purposes, it is intended that the Distribution (if any) shall be a taxable distribution by the Company to its stockholders (the "*Intended Tax Treatment*").

NOW, THEREFORE, in consideration of the foregoing and of the covenants and agreements contained in this Agreement, the Parties agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

SECTION 1.1 <u>General</u>. Unless otherwise defined herein or unless the context otherwise requires, as used in this Agreement, the following terms shall have the following meanings:

"*401(k) Plan*" has the meaning set forth in <u>Section</u> <u>4.4(b)(iv)</u>.

"*Accounting Expert*" has the meaning set forth in <u>Section</u> <u>5.9(b).</u>

"*Affiliate*" has the meaning set forth in the Merger Agreement; <u>provided</u> that, for avoidance of doubt, after the Distribution Effective Time, (a) none of Parent, the Company or any of their respective Subsidiaries shall be deemed to be an Affiliate of SpinCo or any member of the SpinCo Group, and (b) none of SpinCo or any of its Subsidiaries shall be deemed to be an Affiliate of Parent, the Company or any member of the RemainCo Group.

"*Agent*" has the meaning set forth in <u>Section</u> <u>3.1(a)</u>.

"*Agreement*" has the meaning set forth in the Preamble.

"*Approved Leave Employee*" has the meaning set forth in <u>Section</u> <u>4.4(a)</u>.

"*Assets*" means all right, title and ownership interests in and to all assets, properties, claims, information generated for the Business, Intellectual Property, Contracts and rights (including goodwill) wherever located (including in the possession of vendors or other Third Parties or elsewhere on behalf of the applicable Person), of every kind, character and description, whether real, personal or mixed, tangible or intangible, whether accrued or contingent, in each case whether or not received, recorded or reflected or required to be recorded or reflected on the books and records or financial statements of such Person, including rights and benefits pursuant to any Contract, license, permit, indenture, note, bond, mortgage, agreement, concession, franchise, instrument, undertaking, commitment, understanding or other arrangement.

"*Assignee*" has the meaning set forth in <u>Section</u> <u>8.6(a)</u>.

*"Avidity Bio Net Names"* means all Net Names containing or consisting of "Avidity" in conjunction with "Bio" or "Biosciences" (or any variant thereof), including those Net Names set forth on <u>Schedule A-1</u>. 

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*"Avidity Marks"* means those Trademarks consisting of or containing the words "Avidity" or "Avidity Bio" or "Avidity Biosciences," or the "Avidity" logo or device, including those Trademarks set forth on <u>Schedule</u> <u>A-2</u> (but excluding the SpinCo Avidity Name).

"*Business*" means the RemainCo Business or the SpinCo Business, as applicable.

"*Business Day*" has the meaning given to such term in the Merger Agreement.

"*Callan Road Facility*" means the premises located at 3020/3030 Callan Road, San Diego, CA 92121.

"*Callan Road Sublease*" means the Sublease Agreement, dated as of April 29, 2024, between the Company and Turning Point Therapeutics, Inc., as modified by Consent to Sublease Agreement, dated as of April 29, 2024, as amended by First Amendment to Sublease Agreement, dated as of March 19, 2025, as modified by Landlord Consent to First Amendment to Sublease, dated as of May 1, 2025.

"*Cardiovascular Field*" has the meaning given to such term in the License Agreement.

"*Change of Control Transaction*" has the meaning given to such term in the License Agreement.

"*Claim Notice*" has the meaning set forth in <u>Section</u> <u>5.4(a)</u>.

"*Closing*" has the meaning given to such term in the Merger Agreement.

"*COBRA*" means Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code and any similar state Law.

"*Code*" means the U.S. Internal Revenue Code of 1986, as amended.

"*Commingled Assets*" has the meaning set forth in <u>Section</u> <u>4.12(a)</u>.

"*Commingled Contract*" means any Contract, other than any Third Party Agreement, to which any member of the SpinCo Group or RemainCo Group is a party and relates to both (a) the SpinCo Business and (b) the RemainCo Business, including the Contracts set forth on <u>Schedule</u><u> </u><u>B</u>.

"*Company*" has the meaning set forth in the Preamble.

"*Company Board*" has the meaning set forth in the Recitals.

"*Company Common Stock*" has the meaning set forth in the Recitals.

"*Company Controlled Claim*" has the meaning set forth in <u>Section</u> <u>5.8(b)</u>.

"*Company Employee Benefit Plan*" has the meaning given to such term in the Merger Agreement.

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"*Company Indemnified Taxes*" shall mean, without duplication, (a) any and all Taxes arising in respect of (i) the SpinCo Indemnifiable Pre-Closing Reorganization Steps, (ii) the Distribution or (iii) any Permitted Third Party Sale or ROFN Sale (as defined in the Merger Agreement); (b) any Transfer Taxes allocated to the Company under <u>Section</u> <u>5.6(c)</u>; and (c) any Taxes of the Company and its Subsidiaries (and any consolidated group or other similar group filing a Consolidated Return of which the Company is or was the common parent) for the Pre-Distribution Tax Period that are not SpinCo Indemnified Taxes.

"*Company Prepared Returns*" has the meaning set forth in <u>Section</u> <u>5.7(a)</u>.

"*Company RSUs*" has the meaning given to such term in the Merger Agreement.

"*Company Stock Options*" has the meaning given to such term in the Merger Agreement.

"*Company Warrants*" has the meaning given to such term in the Merger Agreement.

"*Confidential Information*" means, with respect to a Party, all non-public, confidential or proprietary information concerning such Party or its Subsidiaries or, with respect to the Company, the RemainCo Business, any RemainCo Assets or any RemainCo Liabilities, or, with respect to SpinCo, the SpinCo Business, any SpinCo Assets or any SpinCo Liabilities, as well as all Personal Data, which, prior to or following the Distribution, has been disclosed by a Party or its Subsidiaries to another Party or its Subsidiaries, or otherwise has come into the possession of, the other Party or its Subsidiaries or to which such other Party or its Subsidiaries otherwise has access, including pursuant to the access provisions of <u>Section</u> <u>6.1</u>, <u>Section</u> <u>6.2</u> or any other provision of this Agreement, including any data or documentation resident, existing or otherwise provided in a database or in a storage medium, permanent or temporary, intended for confidential, proprietary or privileged use by a Party (except to the extent that such information can be shown to have been (a) in the public domain or known to the public through no fault of the receiving Party or its Subsidiaries, (b) lawfully acquired by the receiving Party or its Subsidiaries from sources other than the disclosing Party or its Subsidiaries not known to be subject to confidentiality obligations with respect to such Confidential Information or (c) independently developed by the receiving Party or its Affiliates after the time of the Distribution without reference to or use of any Confidential Information). Notwithstanding the foregoing or anything to the contrary in this Agreement, (i) the existence of, and the terms and conditions of, this Agreement shall be deemed to constitute the Confidential Information of each Party, and (ii) all Platform Information (as defined in the License Agreement) shall be deemed to constitute the Confidential Information of the Company.

"*Confidentiality Agreement*" has the meaning given to such term in the Merger Agreement.

"*Consolidated Return*" has the meaning set forth in <u>Section</u> <u>5.7(f)</u>.

"*Contract*" means, with respect to any Person, any contract, agreement, lease, sublease, license, sublicense, commitment, sale or purchase order, indenture, note, bond, loan, mortgage, deed of trust, instrument or other arrangement, whether written or oral, that is or purports to be legally binding and to which such Person is a party or by which such Person or such Person's properties or assets are bound, but excluding any Company Employee Benefits Plan.

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"*Conveyancing and Assumption Instruments*" shall mean, collectively, the various Contracts and other documents (including bills of sale, stock powers, certificates of title, assignments of Contracts, assignments of Intellectual Property, consents (to the extent obtained), permits, easements, leases, deeds and other instruments of conveyance) entered into prior to the Distribution and to be entered into to effect the Transfer of Assets and the assumption of Liabilities in the manner contemplated by this Agreement and the Distribution, or otherwise relating to, arising out of or resulting from the Transfer of Assets or assumption of Liabilities between members of two Groups, in substantially the form to be effected pursuant to Delaware Law, the Laws of one of the other states of the United States or the Laws of foreign jurisdictions, and in such form as the applicable parties agree or, if not appropriate for a given Transfer or assumption, in such form or forms as the applicable parties thereto agree (but taking into account any requirements of applicable Law) including to record or register transfer of title in each applicable jurisdiction, which shall be on an "as is," "where is," and "with all faults" basis.

"*Current Employee*" means, with respect to a Person, any individual who, at the applicable time, is actively employed by such Person or on an approved leave of absence (including maternity, paternity, family, sick or short- or long-term disability leave, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, leave under the Family Medical Leave Act or other approved leave).

"*Data and Materials Separation Plan*" has the meaning set forth in <u>Section</u> <u>4.12(a)</u>.

"*Data Protection and Information Security Requirements*" has the meaning given to such term in the Merger Agreement.

"*Delayed Asset*" has the meaning set forth in <u>Section</u> <u>2.3(b)</u>.

"*Delayed Liability*" has the meaning set forth in <u>Section</u> <u>2.3(b)</u>.

"*Discharge*" has the meaning set forth in <u>Section</u> <u>4.5</u>.

"*Distribution*" has the meaning set forth in the Recitals.

"*Distribution Date*" means the day on which the Distribution is effected.

"*Distribution Effective Time*" means the time, on the Distribution Date, that the Company effects the Distribution.

"*Distribution Record Date*" means such date as may be determined by the Company Board or a committee of the Company Board, as the record date for the Distribution.

"*Effective Time*" has the meaning given to such term in the Merger Agreement.

"*EOR*" has the meaning set forth in <u>Section</u> <u>4.4(a)</u>.

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"*ERISA*" means the Employee Retirement Income Security Act of 1974.

"*Exchange Act*" means the Securities Exchange Act of 1934.

"*Excluded Benefits*" has the meaning set forth in <u>Section</u> <u>4.4(a)(i)</u>.

*"Facility Access Services"* has the meaning set forth in <u>Section</u> <u>2.2(a)(iii)</u>.

"*Final Determination*" has the meaning set forth in <u>Section</u> <u>5.7(c)</u>.

"*Governmental Authority*" has the meaning given to such term in the Merger Agreement.

"*Group*" means the RemainCo Group or the SpinCo Group, as applicable.

"*Guaranteed Obligations*" has the meaning set forth in <u>Section</u> <u>8.7(a)</u>.

"*Indemnified Party*" has the meaning set forth in <u>Section</u> <u>5.4(a)</u>.

"*Indemnifying Party*" has the meaning set forth in <u>Section</u> <u>5.4(a)</u>.

"*Information Statement*" means the Information Statement filed with the SEC as an exhibit to the Spin-Off Registration Statement and made available to the holders of Company Common Stock in connection with the Distribution, including any amendments or supplements thereto.

"*Intellectual Property*" has the meaning given to such term in the Merger Agreement.

"*Intended Tax Treatment*" has the meaning set forth in the Recitals.

"*IT Assets*" has the meaning given to such term in the Merger Agreement.

"*IT Support Services*" has the meaning set forth in <u>Section</u> <u>2.2(a)(ii)</u>.

"*Judgment*" has the meaning given to such term in the Merger Agreement.

"*Lab Recommissioning Plan*" has the meaning set forth in <u>Section</u> <u>2.2(a)(iii)</u>.

"*Law*" has the meaning given to such term in the Merger Agreement.

"*Liability*" or "*Liabilities*" means any and all debts, guarantees, assurances, commitments, losses, remediation, deficiencies, penalties, settlements, sanctions, costs, expenses, interest and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law, Proceeding, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority and those arising under any Contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, covenant, commitment or undertaking or any fines, damages or equitable relief which may be imposed and including all costs and expenses related thereto.

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"*Liable Party*" has the meaning set forth in <u>Section</u> <u>2.5(b)</u>.

"*License Agreement*" means the intellectual property license agreement entered into between the Company and SpinCo as of the date of this Agreement.

"*Lien*" has the meaning given to such term in the Merger Agreement.

"*Losses*" means all losses, damages, claims, demands, payments, penalties, judgments or settlements, including all reasonable costs and expenses (including the costs and expenses of any and all Proceedings and demands, assessments, judgments, settlements and compromises relating thereto and the reasonable and documented costs and expenses of attorneys', accountants', consultants' and other professionals' fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder) relating thereto, suffered by an Indemnified Party; <u>provided</u>, that, Losses shall not include any special, consequential, reputational, indirect or punitive damages (other than special, consequential, indirect, reputational or punitive damages (a) awarded by a court of competent jurisdiction in connection with a Third Party Claim or (b) that are, in the case of special, consequential or indirect damages, a reasonable foreseeable result of the relevant breach).

*"Make Whole Award*" has the meaning set forth in <u>Section</u> <u>4.4(c)(iii)</u>.

"*Merger*" has the meaning set forth in the Recitals.

"*Merger Agreement*" has the meaning set forth in the Recitals.

"*Merger Sub*" has the meaning set forth in the Recitals.

"*Nasdaq*" means the Nasdaq Stock Market.

*"Net Names"* means all domain names (both gTLDs, including traditional and new gTLDs, and ccTLDs), URLs, web addresses, social media tags, handles and other identifiers and all accounts therefor.

"*Objection Notice*" has the meaning set forth in <u>Section</u> <u>5.9(b)</u>.

"*Occupancy License Agreement*" means the occupancy license agreement to be entered into between the Company and SpinCo at or following the Distribution Effective Time, on such reasonable and customary terms as are mutually acceptable to the Company, SpinCo and Parent; <u>provided</u>, that the Company and SpinCo will not be required to enter into such occupancy license agreement unless RemainCo is obligated to provide Facility Access Services pursuant to the Transition Services Agreement.

"*Other Party*" has the meaning set forth in <u>Section</u> <u>2.5(a)</u>.

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*"Other Avidity Net Names"* means all Net Names containing or consisting of "Avidity" and any RemainCo Mark or any other term (for clarity, other than the SpinCo Avidity Name, which is a SpinCo Asset), including those Net Names set forth on <u>Schedule A-3</u>.

"*Parent*" has the meaning set forth in the Preamble.

"*Parties*" and "*Party*" have the meaning set forth in the Preamble.

"*Permitted Lien*" has the meaning given to such term in the Merger Agreement.

"*Permitted Third Party Sale*" has the meaning given to such term in the Merger Agreement.

"*Person*" has the meaning given to such term in the Merger Agreement.

"*Personal Data*" has the meaning given to such term in the Merger Agreement.

"*Pre-Closing Reorganization*" means all actions required to be performed by the Parties prior to the Distribution Effective Time pursuant to <u>Article II</u>.

"*Pre-Distribution Tax Period*" means any Tax period ending on or before the Distribution Date and the portion of any Straddle Tax Period that ends on the Distribution Date.

"*Privileged Information*" means all information subject to the privileges, immunities or other protections from disclosure which may be asserted under applicable Law, including attorney-client privilege, business strategy privilege, joint defense privilege, common interest privilege, and protection under the work-product doctrine.

"*Proceeding*" has the meaning given to such term in the Merger Agreement.

"*Proxy Statement*" has the meaning given to such term in the Merger Agreement.

"*RCAs*" has the meaning set forth in <u>Section</u> <u>4.4(i)</u>.

"*Recommissioning Equipment*" has the meaning set forth in <u>Section</u> <u>2.2(a)(iii)</u>.

"*Recordation Period*" has the meaning set forth in <u>Section</u> <u>4.3</u>.

"*Records*" has the meaning set forth in <u>Section</u> <u>6.1</u>.

"*RemainCo*" means the Company after the Distribution Effective Time and consummation of the Merger.

"*RemainCo Assets*" means all right, title and interest of the Company or any of its Subsidiaries in and to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) subject to <u>Section</u> <u>2.1(d)</u>, all Intellectual Property (other than the RemainCo Marks and Names) (A) owned or controlled by the Company or its Subsidiaries, but excluding the SpinCo Intellectual Property or (B) set forth on <u>Schedule C-1</u> ((A) and (B) collectively subject to <u>Section</u> <u>2.1(d)</u>, the "*RemainCo Intellectual Property*"), (ii) RemainCo Marks and Names, and (iii) the in-license agreements listed on <u>Schedule C-2</u>; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all Assets (other than Intellectual Property) owned or controlled by the Company or any of its Subsidiaries other than the SpinCo Program Assets.

"*RemainCo Business*" means all businesses, operations, activities, physical assets and intangible assets (such as Intellectual Property, including all trade secrets, know-how and other confidential or proprietary information) of the Company and its Subsidiaries (including SpinCo and its Subsidiaries), whether or not such businesses, operations, activities, or physical and intangible assets are or have been terminated, divested or discontinued, other than the SpinCo Business.

"*RemainCo Group*" means the Company (or, after effectiveness of the Distribution, RemainCo), each Person (other than any member of the SpinCo Group) that is a Subsidiary of the Company immediately after the Distribution and each Person that becomes a Subsidiary of the Company following the date of this Agreement but prior to the Distribution that SpinCo and Parent mutually agree is a member of the RemainCo Group.

"*RemainCo Indemnitees*" means: (a) the Company and each Affiliate thereof after giving effect to the Distribution and the Closing; and (b) each of the respective directors, officers, employees and agents of any of the entities described in the immediately preceding clause (a), in each case, in their capacity as such, and each of the heirs, executors, successors and assigns of any of the foregoing, except in the case of clauses (a) and (b), the SpinCo Indemnitees.

"*RemainCo Intellectual Property*" has the meaning set forth in the definition of "RemainCo Assets."

"*RemainCo Liabilities*" means all Liabilities of the Company or any of its Subsidiaries (including SpinCo or any member of the SpinCo Group), without duplication and in each case, not expressly allocated to or retained by SpinCo or any member of the SpinCo Group pursuant to this Agreement, including Liabilities to the extent arising out of or resulting from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any RemainCo Assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the ownership or operation of the RemainCo Business (including any discontinued business or any business which has been sold or transferred other than in connection with a Sale), as conducted at any time prior to, on or after the Distribution Effective Time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any transaction expenses incurred by the Company or any of its Subsidiaries in connection with the Merger Agreement and this Agreement, whether paid on, prior to or after the Distribution Effective Time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the employment or engagement of all current and former employees and service providers of the Company (including employment Taxes), whether arising on, prior to or following the Distribution Effective Time, other than (i) Liabilities with respect to Transferred Employees and service providers of the Company pursuant to any Contracts Transferred to SpinCo or any other member of the SpinCo Group, to the extent solely arising out of or resulting from actions or inactions attributable to the period following the Distribution Effective Time, or (ii) Liabilities allocated to SpinCo or any member of the SpinCo Group pursuant to <u>Section</u> <u>4.4</u>;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any Company Employee Benefit Plan which is not a Transferred Plan, other than (i) Liabilities under such Company Employee Benefit Plan with respect to SpinCo Employees to the extent attributable to the period prior to the Distribution Effective Time, or (ii) Liabilities allocated to SpinCo or any member of the SpinCo Group pursuant to the definition of SpinCo Liabilities or pursuant to <u>Section</u> <u>4.4</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any Liabilities allocated to the Company or any member of the RemainCo Group pursuant to <u>Section</u> <u>4.4</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Liabilities pursuant to any agreements or obligations of Parent, or following the Closing, any member of the RemainCo Group, under this Agreement, the Merger Agreement, the License Agreement, the Transition Services Agreement or the Occupancy License Agreement.

For the avoidance of doubt, notwithstanding this definition, any liabilities with respect to Taxes shall be governed by <u>Section</u> <u>5.6</u>.

"*RemainCo Marks*" means all the Trademarks, other than the Avidity Marks and the SpinCo Marks, owned or controlled by the Company or any of its Subsidiaries and primarily used in or primarily related to the RemainCo Programs or the RemainCo Business, including those Trademarks set forth on <u>Schedule C-3</u>.

"*RemainCo Marks and Names*" means, collectively, the RemainCo Marks, the RemainCo Net Names and the Other Avidity Net Names.

"*RemainCo Net Names*" means all the Net Names, other than the Avidity Bio Net Names and Other Avidity Net Names, owned or controlled by the Company or any of its Subsidiaries and primarily used in or primarily related to the RemainCo Programs or the RemainCo Business, including those Net Names set forth on <u>Schedule C-4</u>.

"*RemainCo Programs*" means those development programs, conducted by the Company or any of its Subsidiaries, prior to or as of the Distribution Effective Time, that are set forth on <u>Schedule C-5</u> or are otherwise intending to target any disease, disorder or condition outside the Cardiovascular Field.

*"RemainCo Transition Period"* means the period commencing on the Distribution Effective Time and, (i) with respect to the use of any SpinCo Marks (other than as described in clause (ii)), ending on the date that is [\*\*\*] ([\*\*\*]) days from the Distribution Effective Time and (ii) with respect to the use of the Avidity Marks (including use of any Avidity Mark as part of a corporate or business name or as part of a Net Name), ending on the date that is [\*\*\*] ([\*\*\*]) months from the Distribution Effective Time.

"*Representatives*" has the meaning given to such term in the Merger Agreement.

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"*Retention Program*" means the program set forth on <u>Schedule</u> <u>D</u>.

"*Sale*" has the meaning set forth in the Recitals.

"*Scheduled Platform IP*" means the Intellectual Property set forth on <u>Schedule</u> <u>E-1</u>.

"*Science Center Drive*" means the premises located at 10578 Science Center Drive, San Diego, CA 92121.

"*SEC*" means the United States Securities and Exchange Commission.

"*Section 336(e) Agreement*" has the meaning set forth in <u>Section</u> <u>5.9(b)</u>.

"*Section 336(e) Allocation Statement*" has the meaning set forth in <u>Section</u> <u>5.9(b)</u>.

"*Section 336(e) Election*" has the meaning set forth in <u>Section</u> <u>5.9(a)</u>.

"*Section 336(e) Election Statement*" has the meaning set forth in <u>Section</u> <u>5.9(a)</u>.

"*Separation Benefits*" has the meaning set forth in <u>Section</u> <u>4.4(a)(iv)</u>.

"*Siloed Facility*" has the meaning set forth in <u>Section</u> <u>2.2(a)(iii)</u>.

"*Spin-Off Registration Statement*" means any registration statement to be submitted or filed with the SEC to effect the registration of the SpinCo Common Stock to be distributed in respect of Company Common Stock to the Exchange Act, including any amendment or supplement thereto, information statement or prospectus, periodic report or similar disclosure document, whether or not filed with the SEC or any other Governmental Authority.

"*SpinCo*" has the meaning set forth in the Preamble.

"*SpinCo Annual Incentive Plan*" shall mean the annual incentive plan to be adopted by SpinCo.

"*SpinCo Assets*" means any and all right, title, and interest of the Company or any of its Subsidiaries in and to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) subject to <u>Section</u> <u>2.1(d)</u>, (i) the Scheduled Platform IP, (ii) the Intellectual Property (other than SpinCo Marks and Names, which are addressed in clause (iii) below) owned or controlled by the Company or its Subsidiaries and exclusively used in or exclusively related to the SpinCo Programs or the SpinCo Business (including the Intellectual Property set forth on <u>Schedule</u> <u>E-2</u>) ((i) and (ii), collectively and subject to <u>Section</u> <u>2.1(d)</u>, the "*SpinCo Intellectual Property*"); and (iii) the SpinCo Marks and Names; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) all IT Assets (A) located at the SpinCo Real Property that are exclusively related to, as between the RemainCo Business and the SpinCo Business, the SpinCo Business, (B) used exclusively by Transferred Employees or (C) as set forth on <u>Schedule E-3</u>; (ii) all licenses, permits, registrations, approvals and authorizations which have been issued by any Governmental Authority that are held by a member of the SpinCo Group that are exclusively related to, as between the RemainCo Business and the SpinCo Business, the SpinCo Business, or to the extent transferable, exclusively related to, as between the RemainCo Business and the SpinCo Business, the SpinCo Business ("*SpinCo Permits*"); (iii) all deposits, letters of credit, prepaid expenses, trade accounts and other accounts that are exclusively related to, as between the RemainCo Business and the SpinCo Business, the SpinCo Business; (iv) all inventories of clinical products, goods, materials, parts, raw materials and clinical supplies that are exclusively related to, as between the RemainCo Business and the SpinCo Business, the SpinCo Business; (v) all real property leases set forth on <u>Schedule E-4</u> (the "*SpinCo Real Property*"); (vi) (x) the Third Party Agreements, and any other Contracts that are exclusively related to, as between the RemainCo Business and the SpinCo Business, the SpinCo Business (including those Contracts set forth on <u>Schedule E-5</u> solely to the extent they are exclusively related to the SpinCo Business), and all rights and obligations arising under any such Contracts, and (y) the portions of any Commingled Contracts that are exclusively related to, as between the RemainCo Business and the SpinCo Business, the SpinCo Business, and all rights and obligations arising under any such portions, it being understood that all Commingled Contracts are subject to <u>Section</u> <u>2.2</u>; (vii) the lab equipment and other tangible Assets set forth on <u>Schedule</u> <u>E-6</u>, solely to the extent such lab equipment and other tangible Assets are not necessary for the conduct of the RemainCo Business as conducted during the 12 months prior to the date of this Agreement (but subject to any data separation requirements under <u>Section</u> <u>4.12</u> and the Lab Recommissioning Plan); (viii) all rights under insurance policies and all rights in the nature of insurance, indemnification or contribution that are exclusively related to, or to claims arising out of, the SpinCo Business; <u>provided</u>, that this Agreement does not purport to Transfer ownership of any of the insurance policies of any member of the SpinCo Group or the RemainCo Group; (ix) any goodwill that is as of the Distribution Effective Time exclusively related to the SpinCo Business; and (x) all other Assets (other than Intellectual Property) owned or controlled by the Company or its Subsidiaries and exclusively related to, as between the RemainCo Business and the SpinCo Business, the SpinCo Business (the Assets in this clause (b) collectively, the "*SpinCo Program Assets*").

*"SpinCo Avidity Name"* means such new corporate name and business name as SpinCo may select, prior to the Distribution Effective Time, if such new corporate name and business name contains the term Avidity; <u>provided</u>*,* <u>however</u>*,* that any such name shall not include the term "Bio" or "Biosciences" or any variant of "Bio" or "Biosciences."

"*SpinCo Benefit Plans*" has the meaning set forth in <u>Section</u> <u>4.4(b)(iii)</u>.

"*SpinCo Business*" means the business, operations and activities of the Company and its Subsidiaries (including SpinCo and its Subsidiaries), as conducted at any time prior to the Distribution Effective Time with respect to the SpinCo Programs or the Third Party Agreements.

"*SpinCo Common Stock*" has the meaning set forth in the Recitals.

"*SpinCo Controlled Claims*" has the meaning set forth in <u>Section</u> <u>5.8(c)</u>.

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"*SpinCo Employees*" means the Current Employees of the Company or any of its Affiliates (including the SpinCo Group) listed on <u>Schedule</u> <u>F</u>, as such Schedule may be updated from time to time prior to the Distribution Effective Time (i) to remove one or more individuals to reflect terminations between the date hereof and the Distribution Effective Time, (ii) to remove one or more individuals as determined by Parent, after reasonable consultation with the Company, (A) in the event that Parent determines that any such individual(s) listed on <u>Schedule F</u> provides services that are critical to the RemainCo Business or (B) for any other reasonable purpose, and (iii) as reasonably agreed to after good faith discussion among the Parties and Parent. "*SpinCo Funding*" has the meaning set forth in <u>Section</u> <u>2.7</u>.

"*SpinCo Funding Shortfall*" has the meaning set forth in <u>Section</u> <u>2.7</u>.

"*SpinCo Group*" means SpinCo and each Person that is a Subsidiary of SpinCo as of the Distribution Effective Time, and each Person that becomes a Subsidiary of SpinCo after the Distribution Effective Time.

"*SpinCo Indemnifiable Pre-Closing Reorganization Steps*" are the steps undertaken by the Company, SpinCo and its Affiliates pursuant to the Pre-Closing Reorganization.

"*SpinCo Indemnified Taxes*" shall mean any (a) Transfer Taxes allocated to SpinCo under <u>Section</u> <u>5.6(c)</u>; (b) U.S. federal, state, local and non-U.S. income Tax liability for any Pre-Distribution Tax Period, other than Taxes described in clauses (a) and (b) of the definition of Company Indemnified Taxes, to the extent related to the SpinCo Assets, as determined by the Parties on a pro forma SpinCo Group Consolidated Return prepared (i) assuming the members of the SpinCo Group were not included in the RemainCo Group; (ii) including only Tax Items relating to the SpinCo Assets in the relevant Tax Return of the RemainCo Group for the applicable tax period; (iii) except as provided herein, following the past practices of the Company in applying all applicable elections, accounting methods and conventions for the applicable taxable period; (iv) applying the highest applicable statutory marginal corporate U.S. federal, state, local and non-U.S. income Tax rate in effect for such taxable period; and (v) only taking into account actual cash Taxes payable by RemainCo for such Pre-Distribution Tax Period attributable to taxable income generated outside of, or unrelated to, the RemainCo Business and not attributable to the SpinCo Indemnifiable Pre-Closing Reorganization Steps or the Distribution; and (c) to the extent not described in clause (b), any federal, state, local and non-U.S. income Tax liability imposed on SpinCo or any of its Subsidiaries with respect to any Tax Return that is filed on a separate basis for any taxable period.

"*SpinCo Indemnitees*" means: (a) SpinCo and each Affiliate thereof after giving effect to the Distribution and Closing; and (b) each of the respective directors, officers, employees and agents of any of the entities described in the immediately preceding clause (a), in each case, in their capacity as such, and each of the heirs, executors, successors and assigns of any of the foregoing. For the avoidance of doubt, the term SpinCo Indemnitees shall not include stockholders of SpinCo in their capacity as stockholders thereof.

"*SpinCo Intellectual Property*" has the meaning set forth in the definition of "SpinCo Assets."

"*SpinCo Liabilities*" means all Liabilities, without duplication, to the extent arising out of or resulting from:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any SpinCo Assets (other than Liabilities arising under any Commingled Contracts to the extent such Liabilities relate to the RemainCo Business pursuant to <u>Section</u> <u>2.2</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the ownership or operation of the SpinCo Business, as conducted at any time prior to, on or after the Distribution Effective Time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the SpinCo Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the employment or engagement of Transferred Employees, either (i) exclusively arising following the Distribution Effective Time or (ii) as otherwise allocated to SpinCo or any member of the SpinCo Group pursuant to <u>Section</u> <u>4.4</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any Liabilities allocated to SpinCo or any member of the SpinCo Group pursuant to <u>Section</u> <u>4.4</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any Transferred Plan (including any employment or individual agreement set forth on <u>Schedule J</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the payment of the amounts under the Retention Program;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the payment of any amounts in respect of any New Hire RSUs, New Hire Cash Award or Post-Closing Portion of an award under the Special Bonus Program (each as defined in the Company Disclosure Letter attached to the Merger Agreement) granted to a Transferred Employee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Liabilities pursuant to any agreements or obligations of SpinCo, or following the Closing, any member of the SpinCo Group, under this Agreement, the Merger Agreement, the License Agreement, the Transition Services Agreement or the Occupancy License Agreement.

For the avoidance of doubt, notwithstanding this definition, any liabilities with respect to Taxes (other than employment Taxes relating to the SpinCo Employees as contemplated by clause (d) above) shall be governed by <u>Section</u> <u>5.6</u>;

"*SpinCo Marks*" means the Avidity Marks and the other Trademarks set forth on <u>Schedule E-7</u>.

"*SpinCo Marks and Names*" means, collectively, the SpinCo Marks and the SpinCo Net Names.

"*SpinCo Net Names*" means the Net Names set forth on <u>Schedule E-8</u>, the Avidity Bio Net Names and any future-registered Net Names consisting of the SpinCo Avidity Name.

"*SpinCo Permits*" has the meaning set forth in the definition of "*SpinCo Assets*."

"*SpinCo Post-Distribution Value*" means the arithmetic (unweighted) average for each of the ten (10) trading days following the date of Distribution of the products of the number of outstanding shares of SpinCo Common Stock and the last traded price of a share of SpinCo Common Stock for such trading day.

------

"*SpinCo Prepared Returns*" has the meaning set forth in <u>Section</u> <u>5.7(b)</u>.

"*SpinCo Program Assets*" is defined in the definition of "*SpinCo Assets*."

"*SpinCo Programs*" means those development programs, conducted by the Company or any of its Subsidiaries prior to or as of the Distribution Effective Time, that are set forth on <u>Schedule G</u> or that are otherwise intending to target any disease, disorder or condition in the Cardiovascular Field.

"*SpinCo Real Property*" has the meaning set forth in the definition of "*SpinCo Assets*."

"*SpinCo Severance Plan*" means the plan established by SpinCo that provides for severance benefits.

*"SpinCo Transition Period"* means the period commencing on the Distribution Effective Time and, (i) with respect to the use of any RemainCo Marks and any Avidity Marks that consist of or contain "Avidity" in conjunction with "Bio" or "Biosciences" or any variant thereof, ending on the date that is [\*\*\*] ([\*\*\*]) days from the Distribution Effective Time; <u>provided</u>*,* <u>however</u>*,* (ii) with respect to any references to any RemainCo Marks, any RemainCo Net Names, or any corporate or business name consisting of or containing "Avidity" in conjunction with "Bio" or "Biosciences" or any variant thereof, SpinCo shall have [\*\*\*] ([\*\*\*]) days from the Distribution Effective Time to remove all such references from any and all public-facing assets, inventories, advertisements, communications, website content, other internet or electronic communication vehicles and other documents and materials of SpinCo and the SpinCo Group, except as otherwise permitted in <u>Section</u> <u>4.2(b)</u>.

"*Springing Transition Services*" has the meaning set forth in <u>Section</u> <u>2.2(a)</u>.

"*Straddle Tax Period*" means any Tax period beginning on or before the Distribution Date and ending after the Distribution Date.

"*Subsidiary*" has the meaning given to such term in the Merger Agreement.

"*Tax*" or "*Taxes*" has the meaning given to such term in the Merger Agreement.

"*Tax Claim*" has the meaning set forth in <u>Section</u> <u>5.8(a)</u>.

"*Tax Contest*" means any audit, examination, proceeding, notice of deficiency or other adjustment, assessment or redetermination by any Governmental Authority relating to Taxes.

"*Tax Item*" means, with respect to any income Tax, any item of income, gain, loss, deduction, credit, recapture, or any other item which increases or decreases Taxes paid or payable.

"*Tax Return*" has the meaning given to such term in the Merger Agreement.

------

"*Third Party*" means any Person who is not a Party to this Agreement.

"*Third Party Agreement*" means those agreements with Third Parties listed on <u>Schedule</u> <u>H</u> (accurate and complete copies of which are in the possession of the Company as of the Distribution Effective Time).

"*Third Party Claim*" has the meaning set forth in <u>Section</u> <u>5.4(a)</u>.

"*Trademarks*" has the meaning given to such term in the Merger Agreement.

"*Transactions*" has the meaning given to such term in the Merger Agreement.

"*Transfer*" and its derivatives, including "*Transferring*," "*Transferred*," and any other word form with the same root, shall be understood to mean to sell, assign, transfer, convey and deliver.

"*Transfer Documents*" has the meaning set forth in <u>Section</u> <u>2.1(b)</u>.

"*Transfer Taxes*" has the meaning set forth in <u>Section</u> <u>5.6(c)</u>.

"*Transferred Employees*" means the SpinCo Employees who are not Approved Leave Employees as of immediately prior to the Distribution Effective Time and who remain employed by the SpinCo Group (or a professional employer organization or employer of record engaged by a member of the SpinCo Group) immediately following the Distribution Effective Time.

"*Transferred Plan*" means any Company Employee Benefit Plan the sponsorship of which is being transferred from RemainCo to SpinCo or retained by SpinCo as part of the Pre-Closing Reorganization. Each Transferred Plan is listed on <u>Schedule</u> <u>I</u>, which may be updated as reasonably agreed to after good faith discussion by the Parties.

"*Transition Employees*" has the meaning set forth in <u>Section</u> <u>4.4(a)(v)</u>.

"*Transition Services Agreement*" means the transition services agreement to be entered into between the Company and SpinCo at the Distribution Effective Time, in the form agreed upon by the Parties as of the date of this Agreement and attached hereto as <u>Exhibit</u> <u>A</u>.

"*Treasury Regulations*" means the United States Treasury Regulations promulgated under the Code, and any reference to any particular Treasury Regulations section shall be interpreted to include any final or temporary revision of or successor to that section regardless of how numbered or classified.

"*Workers Compensation Event*" has the meaning set forth in <u>Section</u> <u>4.4(j)</u>.

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SECTION 1.2 <u>Interpretation</u>. The words "hereof," "herein" and "hereunder" and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions, table of contents and headings included herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits, Annexes and Schedules are to Articles, Sections, Exhibits, Annexes and Schedules of this Agreement unless otherwise specified in this Agreement. All Exhibits, Annexes and Schedules appended hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation," whether or not they are in fact followed by those words or words of like import. "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." The word "or" shall not be exclusive. References to "dollars" or "$" are to United States of America dollars. References (a) to any Law shall be deemed to refer to such Law as amended from time to time and to any rules, regulations or interpretations promulgated thereunder as of the applicable date or during the applicable time, (b) to any Contract are to that Contract as amended, modified or supplemented from time to time in accordance with the terms hereof, if applicable, and thereof; (c) to any Person include the successors and permitted assigns of that Person, (d) from or through any date means, unless otherwise specified, from and including or through and including, respectively, (e) to the "date hereof" means the date of this Agreement and (f) to a "party" or the "parties" mean the parties to this Agreement unless otherwise specified in this Agreement or the context otherwise requires. Unless otherwise specified in this Agreement, (i) any action required to be taken by or on a day or Business Day may be taken until 11:59 p.m. Eastern Time on such day or Business Day, (ii) all references to "days" shall be to calendar days unless otherwise indicated as a "Business Day" and (iii) all days, Business Days, times and time periods contemplated by this Agreement will be determined by reference to Eastern Time. The parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against any particular party.

ARTICLE II

SEPARATION

SECTION 2.1 <u>Transfer</u> <u>of</u> <u>Assets</u> <u>and Assumption of</u> <u>Liabilities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Prior to the Distribution Effective Time and subject to <u>Section</u> <u>2.3</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Transfer</u> <u>and Assignment of</u> <u>SpinCo Assets</u>. The Company shall, and shall cause its applicable Subsidiaries to, Transfer to SpinCo or any member of the SpinCo Group designated by SpinCo, and such members of the SpinCo Group shall accept from the Company and its Subsidiaries, all of the SpinCo Assets; <u>provided</u>, <u>however</u>, that from the date hereof until consummation of the Transfer pursuant to this <u>Section</u> <u>2.1</u><u>(a)</u>, the Company shall not, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), make any Transfer of SpinCo Assets except for any such Transfer that is effective immediately prior to, and conditioned upon the occurrence of, the Distribution Effective Time;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Acceptance and Assumption of</u> <u>SpinCo Liabilities</u>. The applicable members of the SpinCo Group shall accept, assume and agree faithfully to perform, discharge and fulfill all of the SpinCo Liabilities in accordance with their respective terms. The applicable members of the SpinCo Group shall be responsible for all SpinCo Liabilities, regardless of (A) when, where or against whom such SpinCo Liabilities arose or arise (<u>provided</u>, <u>however</u>, that nothing contained herein shall preclude or inhibit SpinCo from asserting against Third Parties any defenses available to the legal entity that incurred or holds such SpinCo Liability), (B) whether the facts on which they are based occurred prior to or subsequent to the Distribution Effective Time, regardless of where or against whom such SpinCo Liabilities are asserted or determined or whether asserted or determined prior to the date of this Agreement or (C) whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the RemainCo Group or the SpinCo Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Transfer</u> <u>and Assignment of</u> <u>RemainCo Assets</u>. SpinCo shall, and shall cause the applicable members of the SpinCo Group to, Transfer to the Company or any member of the RemainCo Group designated by the Company, all of the RemainCo Assets, if any, held by SpinCo or any such members of the SpinCo Group; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Acceptance and Assumption of</u> <u>RemainCo Liabilities</u>*.* The applicable members of the RemainCo Group shall accept, assume and agree faithfully to perform, discharge and fulfill all RemainCo Liabilities in accordance with their respective terms, regardless of (A) when, where, or against whom such RemainCo Liabilities arose or arise (<u>provided</u>, <u>however</u>, that nothing contained herein shall preclude or inhibit the Company from asserting against Third Parties any defenses available to the legal entity that incurred or holds such RemainCo Liability), (B) whether the facts on which they are based occurred prior to or subsequent to the Distribution Effective Time, regardless of where or against whom such RemainCo Liabilities are asserted or determined or whether asserted or determined prior to the date of this Agreement, or (C) whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the RemainCo Group or the SpinCo Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Transfer Documents</u>. In furtherance of the Transfer of the Assets and the assumption of the Liabilities in accordance with <u>Section</u> <u>2.1(a)</u>, prior to the Distribution Effective Time (i) each Party shall prepare, execute and deliver, and shall cause the applicable members of its Group to prepare, execute and deliver, such Conveyancing and Assumption Instruments as and to the extent reasonably necessary to evidence the valid Transfer of all of such Party's and the applicable members of its Group's right, title and interest in and to such Assets to the other Party and the applicable members of its Group in accordance with <u>Section</u> <u>2.1(a)</u> (it being agreed and understood that no Party shall be required to enter into any Conveyancing and Assumption Instrument that requires either Party to make any representations or warranties, express or implied, not contained in this Agreement or agree to any covenants or other obligations, including indemnities, effective after the Distribution (except to the extent required to comply with applicable Law, and in which case the Parties and the parties to such Conveyancing and Assumption Instrument shall enter into such supplemental agreements or arrangements as and to the extent reasonably necessary to preserve the allocation of economic benefits and burdens contemplated by this Agreement, the License Agreement, the Transition Services Agreement and the Occupancy License Agreement)) and (ii) each Party shall prepare, execute and deliver, and shall cause the applicable members of its Group to execute and deliver, to the other Party such

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Conveyancing and Assumption Instruments as and to the extent reasonably necessary to evidence the valid and effective assumption of the Liabilities by such Party and the applicable members of its Group in accordance with <u>Section</u> <u>2.1(a)</u> (it being agreed and understood that no Party shall be required to enter into any Conveyancing and Assumption Instrument that requires either Party to make any representations or warranties, express or implied, not contained in this Agreement or agree to any covenants or other obligations, including indemnities, effective after the Distribution (except to the extent required to comply with applicable Law, and in which case the Parties and the parties to such Conveyancing and Assumption Instrument shall enter into such supplemental agreements or arrangements as and to the extent reasonably necessary to preserve the allocation of economic benefits and burdens contemplated by this Agreement, the License Agreement, the Transition Services Agreement and the Occupancy License Agreement)). For purposes of the Transfer of the Third Party Agreements from RemainCo to SpinCo, at RemainCo or SpinCo's request at any time prior to the Distribution Date, Parent shall provide a draft Conveyancing and Assumption Instrument with respect to such Third Party Agreements, in form reasonably satisfactory to Parent, at least five (5) Business Days prior to the Distribution Date. All of the foregoing documents contemplated by this <u>Section</u> <u>2.1(b)</u> shall be referred to collectively herein as the "*Transfer Documents*." To the extent that any provision of a Transfer Document conflicts with any provision of this Agreement, this Agreement shall govern and control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Waiver of Bulk-Sale and Bulk-</u><u>Transfer</u><u> </u><u>Laws</u>. SpinCo and each member of the SpinCo Group hereby waives compliance by each and every member of the RemainCo Group with the requirements and provisions of any "bulk-sale" or "bulk-transfer" Laws of any jurisdiction that may be applicable with respect to the transfer or sale of any or all of the SpinCo Assets or SpinCo Real Property to any member of the SpinCo Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Intellectual Property</u>. In the event of a Change of Control Transaction consummated prior to the Distribution Effective Time, the terms "RemainCo Intellectual Property" and "SpinCo Intellectual Property" as used in this Agreement shall mean, effective as of the date immediately prior to the effectiveness of the Change of Control Transaction, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "*RemainCo Intellectual Property*" shall mean all Intellectual Property (other than the RemainCo Marks and Names) (A) owned or controlled by the Company or its Subsidiaries, including the Scheduled Platform IP, or (B) set forth on <u>Schedule C-1</u>, but in each case under clauses (A) and (B) excluding the SpinCo Intellectual Property and the SpinCo Marks and Names; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) "*SpinCo Intellectual Property*" shall mean the Intellectual Property (other than Trademarks and Net Names) owned or controlled by the Company or any of its Subsidiaries that is exclusively used in or exclusively related to the SpinCo Programs or the SpinCo Business, including the Intellectual Property set forth on <u>Schedule E-2</u> (but excluding, for the avoidance of doubt, the Scheduled Platform IP)*.*

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SECTION 2.2 <u>Transition Services; Treatment of</u> <u>Commingled Contracts</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Transition Services.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) From the date of this Agreement through the Distribution Effective Time, RemainCo and SpinCo shall, and from the Distribution Effective Time through the applicable Service Period (as defined in the Transition Services Agreement), SpinCo shall (with reasonable cooperation from RemainCo) use reasonable best efforts to: (A) establish replacement Contracts, contract rights, bids, purchase orders or other agreements with respect to the SpinCo Business with any Third Party that, as of the date of this Agreement or the Distribution Effective Time, is a vendor or service provider with respect to any of the transition services described in Sections A, B, C and D of Schedule B to the Transition Services Agreement (the "*Springing Transition Services*"); <u>provided</u>, <u>however</u>, that if and to the extent that replacement (or new, as applicable) Contracts, contract rights, bids, purchase orders or other agreements are not established prior to the Distribution Effective Time with respect to the CMO Agreements (as defined in the Transition Services Agreement), or the compounds, products, materials or services identified on Schedule 2 to Schedule B to the Transition Services Agreement, then SpinCo shall use reasonable best efforts to enter into new Contracts (if applicable) or statements of work under existing CMO Agreements for purposes of enabling SpinCo to place orders for the applicable compounds, products, materials or services in accordance with the Services described in Section D.1 and Section D.2 of Schedule B to the Transition Services Agreement; or (B) establish other reasonable and lawful arrangements designed to provide the SpinCo Group with the rights and obligations contemplated under the Springing Transition Services; <u>provided</u>, <u>however</u>, that neither RemainCo nor SpinCo makes any representation or warranty that any Third Party shall consent to any such assignment or agree to enter into any such Contract, contract right, bid, purchase order or other agreement with any member of the SpinCo Group on the existing terms of any applicable Commingled Contract or at all. RemainCo shall be under no obligation to provide any Springing Transition Service pursuant to the Transition Services Agreement if and to the extent that (x) SpinCo obtains such Springing Transition Service pursuant to any replacement Contracts, contract rights, bids, purchase orders or other agreements or arrangements established pursuant to clauses (A) or (B) of this <u>Section</u> <u>2.2(a)(i)</u> or (y) Parent or any of its Affiliates establishes, on behalf of SpinCo, any similar replacement Contracts, contract rights, bids, purchase orders or other agreements or arrangements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) From the date of this Agreement through the Distribution Effective Time, RemainCo and SpinCo shall, and from the Distribution Effective Time through the applicable Service Period with respect to the Springing Transition Services set forth in Section A and B of Schedule B to the Transition Services Agreement (the "*IT Support Services*"), SpinCo shall (with reasonable cooperation from RemainCo) use reasonable best efforts to establish separate information technology systems and infrastructure with respect to the SpinCo Business. RemainCo's obligation to provide the IT Support Services shall be subject to SpinCo's compliance with the immediately preceding sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) As promptly as practicable (and, in any event, no later than 20 Business Days) after the date hereof, the Company, SpinCo and Parent shall use reasonable best efforts to agree upon a lab recommissioning plan for Science Center Drive (the "*Lab Recommissioning Plan*"), pursuant to which the Parties and Parent shall jointly review and determine which of the facilities and lab equipment (including as set forth on <u>Schedule E-6</u>), whether in possession of the Company, SpinCo or a Third Party, whether or not included within the RemainCo Assets or the SpinCo Assets, are necessary for the recommissioning of an independent laboratory facility at Science Center Drive as of the Distribution Effective Time that

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is independent, operational and functioning in substantially the same manner as Science Center Drive was operated prior to the date that Science Center Drive was decommissioned by the Company (such facilities and lab equipment, the "*Recommissioning Equipment*"). In connection with the Lab Recommissioning Plan, the Parties and Parent shall (i) review <u>Schedule E-6</u> (or the SpinCo Assets or RemainCo Assets, if applicable) to identify whether SpinCo should receive Recommissioning Equipment therein prior to the Distribution Effective Time (in each case, subject to Parent's reasonable discretion), or (ii) if necessary or useful for the recommissioning of Science Center Drive, procure Recommissioning Equipment from Third Parties prior to the Distribution Effective Time (subject to Parent's reasonable discretion). The Parties and Parent shall use their respective reasonable best efforts to implement the Lab Recommissioning Plan prior to the Distribution Effective Time. Notwithstanding the foregoing, without Parent's prior written consent (not to be unreasonably withheld), RemainCo and SpinCo shall not incur costs or expenses in excess of $3,750,000 in connection with the establishment of such laboratory facility or implementation of the Lab Recommissioning Plan. If the Parties determine in good faith that establishment of such facility will not be complete prior to the Distribution Effective Time, then SpinCo and RemainCo shall use reasonable best efforts to establish, at SpinCo's sole cost and expense, physical, procedural and other arrangements reasonably necessary or appropriate to prevent cross-contamination, whether chemical or biological, of the laboratory environment, biological materials, laboratory equipment, personnel, personal protective equipment, and other assets or materials involved in, related to or generated by the respective research and development activities of RemainCo and SpinCo at the Callan Road Facility, and obtain all consents from the prime landlord and the sublandlord required under the Callan Road Sublease to establish such arrangements (the "*Siloed Facility*"). Without limitation of the foregoing, RemainCo shall be under no obligation to provide any of the Springing Transition Services set forth in Section C of Schedule B to the Transition Services Agreement (the "*Facility Access Services*") unless and until RemainCo has established the Siloed Facility and the Occupancy License Agreement has been entered into by the Company and SpinCo. Any delay in establishing the Siloed Facility or entering into the Occupancy License Agreement as described in this <u>Section</u> <u>2.2(a)(iii)</u> beyond the Distribution Effective Time shall not, in any event, extend the Service Period (as defined in the Transition Services Agreement) with respect to any such Springing Transition Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Without limitation of the foregoing, RemainCo shall be under no obligation to provide any of the Springing Transition Services set forth in Section D.1 of Schedule B to the Transition Services Agreement unless and until SpinCo has established a quality management system for the SpinCo Business that is substantially identical, in relevant part with regards to similarly situated businesses with limited early clinical-stage assets, to the Company's existing quality management system. Any delay in establishing such quality management system beyond the Distribution Date shall not, in any event, extend the Service Period (as defined in the Transition Services Agreement) with respect to any such Springing Transition Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Except for obligations under any Contract of RemainCo or SpinCo in effect as of the date of this Agreement or as of the Distribution Date, neither RemainCo, SpinCo, nor their respective Affiliates shall be required to expend any non-*de minimis* unreimbursed money, commence any litigation, offer or grant any non-*de minimis* unreimbursed accommodation (financial or otherwise) to any Third Party or to extend or renew any Commingled Contract to fulfill their obligations under this <u>Section</u> <u>2.2(a)</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) If a Change of Control Transaction occurs at any time, RemainCo shall not be obligated to provide any of the Services (as defined in the Transition Services Agreement) set forth on Schedule B thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) SpinCo shall provide mailbox forwarding services to RemainCo until the earlier of (A) the date RemainCo completes the address changes required in connection with its regulatory correspondence and (B) the date that is forty-two (42) months from the Distribution Effective Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Commingled Contracts.* From the date of this Agreement and until the date that is twelve (12) months after the Distribution, to the extent (i) the applicable rights and obligations (or comparable services) under any Commingled Contract, to the extent related to the SpinCo Business or the RemainCo Business, as applicable, have not been or are not contemplated to be Transferred to the SpinCo Group or the RemainCo Group, as applicable, in accordance with <u>Section</u> <u>2.1(a)</u> or provided to the SpinCo Group or the RemainCo Group, as applicable, pursuant to the Transition Services Agreement, (ii) replacement Contracts, contract rights, bids, purchase orders or other agreements for such Commingled Contract, to the extent related to the SpinCo Business or the RemainCo Business, as applicable, have not yet been obtained or are not contemplated to be obtained pursuant to this Agreement, and (iii) requested by SpinCo or RemainCo, as applicable, in good faith and in writing, RemainCo or SpinCo, as applicable, shall use reasonable best efforts to assist the other Party to (in each case with effect following the Distribution Effective Time): (A) establish replacement Contracts, contract rights, bids, purchase orders or other agreements with respect to the SpinCo Business or the RemainCo Group, as applicable, with any Third Party which is a counterparty to such Commingled Contract; or (B) establish reasonable and lawful arrangements designed to provide the SpinCo Group or the RemainCo Group, as applicable, with the rights and obligations under such Commingled Contract to the extent related to the SpinCo Business or the RemainCo Group, as applicable; <u>provided</u>, <u>however</u>, that neither the Company nor SpinCo makes any representation or warranty that any Third Party shall consent to any such assignment or agree to enter into any such Contract, contract right, bid, purchase order or other agreement with any member of the SpinCo Group or the RemainCo Group, as applicable, on the existing terms of the applicable Commingled Contract or at all. Neither RemainCo, SpinCo, nor their respective Affiliates shall be required to expend any non-*de minimis* unreimbursed money, commence any litigation, offer or grant any non-*de minimis* unreimbursed accommodation (financial or otherwise) to any Third Party or to extend or renew any Commingled Contract to fulfill their obligations under this <u>Section</u> <u>2.2(b)</u>.

SECTION 2.3 <u>Nonassignability of</u> <u>Assets</u> <u>and</u> <u>Liabilities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding anything to the contrary set forth herein, to the extent that any Transfer or attempted Transfer or assumption or attempted assumption hereunder (i) is prohibited by any applicable Law or (ii) without a Third Party consent would (A) constitute a breach or other contravention of such Asset or Liability, (B) subject a Party or any of their respective officers, directors, agents or Affiliates, to civil or criminal liability, or (C) be ineffective, void or voidable and, in each case of (A), (B) and (C), such Third Party consent has not been obtained prior to the Distribution, then, in each case of (i) and (ii): subject to the conditions to the Distribution, the Distribution shall proceed without such Transfer or assumption.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) From and after the Distribution, with respect to (i) any Asset whose Transfer pursuant to this Agreement is delayed (each, a "*Delayed Asset*", and which shall not include, for the avoidance of doubt, any Third Party Agreement) or (ii) any Liability whose assumption pursuant to this Agreement is delayed (each, a "*Delayed Liability*"), the Party (or relevant member of its Group) (x) retaining such Delayed Asset shall thereafter hold for the use and benefit of the Party or relevant member of its Group entitled thereto (at the expense of the Person entitled thereto) and use reasonable best efforts to cooperate with the intended recipient to agree to any reasonable and lawful arrangements designed to provide the applicable Party or relevant member of its Group with the economic claims, rights, benefits and control over such Delayed Asset and assume the economic burdens and obligations with respect thereto in accordance with this Agreement, including by subcontracting, sublicensing or subleasing arrangements to the extent legally permissible, and (y) intended to assume such Delayed Liability shall, or shall cause the applicable member of its Group to, pay or reimburse the Party (or relevant member of its Group) retaining such Delayed Liability for all amounts paid or incurred by such Party in connection with the retention of such Delayed Liability. In addition, the Party retaining any Delayed Asset or Delayed Liability (or relevant member of its Group) shall or shall cause such member of its Group to treat such Delayed Asset or Delayed Liability in the ordinary course of business in accordance with past practice. In furtherance of the foregoing, and subject to applicable Law, each Party shall, or shall cause any relevant member of its Group to, (A) use reasonable best efforts to enforce at another Party's (or relevant member of its Group's) request, or allow another Party's Group to enforce in a commercially reasonable manner, any rights of the Party or its Group under such Delayed Assets and Delayed Liabilities against any other Persons, (B) not waive any rights related to such Delayed Assets or Delayed Liabilities to the extent related to the Business, Assets or Liabilities of another Party's Group, (C) subject to <u>Section</u> <u>2.2</u> and the terms and conditions of such underlying Contract, (1) not terminate (or consent to be terminated by the counterparty) any Contract that constitutes such Delayed Asset except in connection with (i) the expiration of such Contract in accordance with its terms (it being understood, for the avoidance of doubt, that sending a notice of non-renewal to the counterparty to such Contract in accordance with the terms of such Contract is expressly permitted) or (ii) a partial termination of such Contract that would not reasonably be expected to impact any rights under such Contract related to the Business, Assets or Liabilities of such other Party, (2) not amend, modify or supplement any Contract that constitutes such Delayed Asset in a manner material (relative to the existing rights and obligations related to such other Party's Business, Assets or Liabilities under such Contract) and adverse to the Business, Assets or Liabilities of such other Party or any member of its Group or (3) provide written notice to the applicable other Party as soon as reasonably practicable after receipt of any notice of breach received from a counterparty to any Contract that constitutes such Delayed Asset and that would reasonably be expected to impact the other Group, and (D) take (or refrain from taking) such actions as reasonably requested by the Party to which such Delayed Asset or Delayed Liability is to be Transferred or assumed in order to place such Party in the same position as if such Delayed Asset or Delayed Liability had been Transferred as of the Distribution so that all the benefits and burdens relating to such Delayed Asset or Delayed Liability, including possession, use, risk of loss, potential for income and gain, and dominion, control and command over such Delayed Asset or Delayed Liability, are to inure from and after the Distribution to the relevant member or members of the RemainCo Group or SpinCo Group entitled to the receipt of such Delayed Asset or required to assume such Delayed Liability. Once the required Third Party consent is obtained, condition satisfied, or potential violation, conflict, or other circumstance that

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caused the deferral of the Transfer of the Delayed Asset or assumption of the Delayed Liability is resolved, the Parties shall, or shall cause their relevant Affiliates to, Transfer such Asset and all earnings to the extent arising from such Asset from the time of the Distribution until the time of such Transfer or assumption of such Liability at no additional cost, which shall be treated as having been Transferred or assumed prior to the Distribution and owned by such Group for U.S. federal (and applicable state or local) income tax purposes from and after the Distribution, to the extent allowable by applicable Law or except as otherwise required by a Final Determination. Subject to the terms and conditions hereof (including compliance with the terms of this <u>Section</u> <u>2.3</u>), no Party shall have any Liability to the other Party (or its respective Affiliates) arising out of or relating to the failure to obtain any such Third Party consent that may be required in connection with the transactions contemplated by this Agreement, despite otherwise complying with this <u>Section</u> <u>2.3</u>. For so long as any Party (or member of its Group) holds any Assets allocated to the other Group pursuant to this Agreement and provides to the other Group any claims, rights and benefits of any such Assets pursuant to an arrangement described in this <u>Section</u> <u>2.3</u>, the Party whose Group receives such claims, rights and benefits shall indemnify and hold harmless the members of the other Group from and against all Losses incurred as a result thereof in accordance with this Agreement, other than as a result of the gross negligence, fraud or willful misconduct of the members of the Group providing such claims, rights and benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Party (or relevant member of its Group) retaining any Asset or Liability due to the deferral of the Transfer of such Asset or the deferral of the assumption of such Liability pursuant to this <u>Section</u> <u>2.3</u> or otherwise shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced, assumed, or agreed in advance to be reimbursed by the Party (or relevant member of its Group) entitled to such Asset or the Person intended to be subject to such Liability, other than reasonable attorneys' fees and recording or similar or other incidental fees, all of which shall be reasonably promptly reimbursed by the Party (or relevant member of its Group) entitled to such Asset or the Person intended to be subject to such Liability. None of SpinCo or the Company or any of their respective Affiliates shall be required to commence any litigation or offer or pay any non-*de minimis* amount of money or otherwise grant any non-*de minimis* accommodation (financial or otherwise) to any Third Party with respect to any Assets or Liabilities not Transferred or assumed, respectively, as of the Distribution.

SECTION 2.4 <u>Wrong Pockets</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to <u>Section</u> <u>2.2</u> and <u>Section</u> <u>2.3</u>, if after the Distribution (i) any Party discovers that any SpinCo Asset is held by any member of the RemainCo Group or any of their respective then-Affiliates, (A) such Party shall provide notice to the other Party of such SpinCo Asset and (B) RemainCo shall, and shall cause the other members of its respective Group and its respective then-Affiliates to, use their respective reasonable best efforts to promptly procure the Transfer of the relevant SpinCo Asset and all earnings to the extent arising from such SpinCo Asset from the time of the Distribution until the time of such transfer to SpinCo or an Affiliate of SpinCo designated by SpinCo, for no additional consideration; or (ii) any Party discovers that any RemainCo Asset is held by any member of the SpinCo Group or any of their respective then-Affiliates, (A) such Party shall provide notice to the other Party of such RemainCo Asset and (B) SpinCo shall, and shall cause the other members of its respective Group and its respective then-Affiliates to, use their respective reasonable best efforts to promptly procure the Transfer of the

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relevant RemainCo Asset and all earnings to the extent arising from such RemainCo Asset from the time of the Distribution until the time of such transfer to the Company or an Affiliate of the Company designated by the Company, for no additional consideration. If reasonably practicable and permitted under applicable Law, such Transfer may be effected by rescission of the applicable portion of a Conveyancing and Assumption Instrument as may be agreed by the relevant Parties. For the avoidance of doubt, nothing herein will be deemed to modify or amend the obligations of SpinCo to assign certain Intellectual Property to RemainCo as set forth in Section 2.2 of the License Agreement, or to result in a return to SpinCo of any such Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) At any time prior to the Distribution Effective Time, Parent may, in its sole discretion, elect to designate additional RemainCo Assets as SpinCo Assets, such that such Assets will be assigned to or remain with SpinCo at the Distribution Effective Time; <u>provided</u>, that (i) any such designated RemainCo Assets must be primarily related to the SpinCo Business or reasonably determined by Parent to be beneficial to the SpinCo Business, and (ii) the designation of such Assets as SpinCo Assets may not result in the assumption of additional SpinCo Liabilities by SpinCo that exceed the value of such Assets. To the extent that the designation of any such Assets as SpinCo Assets would result in the assumption of additional SpinCo Liabilities by SpinCo that exceed the value of such Assets, or where such Assets are not primarily related or beneficial to the SpinCo Business, the Parties and Parent will negotiate in good faith to determine the allocation of such Assets as between RemainCo and SpinCo; <u>provided</u>, that if the Parties and Parent do not agree upon the allocation prior to the Distribution Effective Time, such Assets will be deemed RemainCo Assets. For clarity, SpinCo has no right to designate any SpinCo Assets as RemainCo Assets.

SECTION 2.5 <u>Novation of</u> <u>Liabilities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Party, at the written request of the other Party, shall use reasonable best efforts (i) to obtain, or to cause to be obtained, any consent, substitution or amendment required to novate or assign all obligations under Contracts, licenses and other Liabilities for which a member of such Party's Group and a member of the other Party's Group are prior to the Distribution Effective Time jointly or severally liable and that do not constitute Liabilities of such other Party following the Distribution Effective Time as provided in this Agreement (such other Party, the "*Other Party*"), or (ii) to obtain in writing the unconditional release of all parties to such arrangements, other than any member of the Group who assumed or retained such Liability as set forth in this Agreement, so that, in any such case, the members of the applicable Group will be solely responsible for such Liabilities; <u>provided</u>, <u>however</u>, that no Party shall be obligated to pay any consideration (or otherwise incur any Liability or obligation) therefor to any Third Party from whom any such consent, substitution or amendment is requested (unless such Party is fully reimbursed or otherwise made whole by the requesting Party), and the Company shall not pay any consideration other than a *de minimis* amount to obtain any such consent, substitution or amendment, without Parent's prior written approval (not be unreasonably withheld, conditioned or delayed); <u>provided</u>, <u>further</u>, that in connection with the Transfer of the SpinCo Real Property to SpinCo, SpinCo shall be required to deliver any documentation or additional security, without any liability to the Company for such security, to the extent required by the terms of the applicable real property lease to provide such novation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Parties are unable to obtain, or to cause to be obtained, any such required consent, release, substitution or amendment, the Other Party or a member of the Other Party's Group shall continue to be bound by such Contract, license or other obligation that does not constitute a Liability of such Other Party and, unless not permitted by Law or the terms of such Contract, license or other obligation, as agent or subcontractor for such Party, the Party or member of such Party's Group who assumed or retained such Liability as set forth in this Agreement (the "*Liable Party*") shall, or shall cause a member of its Group to, pay, perform and discharge fully all the obligations or other Liabilities of such Other Party or member of the Other Party's Group thereunder from and after the Distribution Effective Time. The Liable Party shall indemnify the Other Party as set forth in <u>Article V</u>; <u>provided</u>, <u>however</u>, that the Liable Party shall have no obligation to indemnify the Other Party for losses resulting from such Other Party's gross negligence, willful misconduct or bad faith. The Other Party shall, without further consideration, promptly pay and remit, or cause to be promptly paid or remitted, to the Liable Party or any member of the Liable Party's Group, any money, rights and other consideration received by it or any member of its Group in respect of such performance by the Liable Party (unless any such consideration is an Asset of such Other Party pursuant to this Agreement). If and when any such consent, release, substitution or amendment shall be obtained or such agreement, lease, license or other rights or obligations shall otherwise become assignable or able to be novated, the Other Party shall promptly Transfer all rights and Liabilities thereunder of any member of such Other Party's Group to the Liable Party, or to another member of the Liable Party's Group, without payment of any further consideration and the Liable Party, or another member of the Liable Party's Group, without the payment of any further consideration, shall assume such rights and Liabilities. Notwithstanding the foregoing, if, for the SpinCo Real Property, the Parties are unable to obtain from the relevant landlord a novation of, or release of the Company for all liabilities first arising after the Distribution Effective Time under any underlying lease, SpinCo shall not extend, expand or otherwise amend or modify such lease in a manner that increases SpinCo's obligations under such lease without the prior written consent of RemainCo.

SECTION 2.6 <u>Guarantees</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) The Company shall, and shall cause the other members of its Group to (with the reasonable cooperation of the applicable other Party) use reasonable best efforts to (A) cause a member of the RemainCo Group to be substituted in all respects for a member of the SpinCo Group, as applicable, and (B) have all members of the SpinCo Group removed or released as guarantor of or obligor for any Liability of the Company (including any credit agreement, guarantee, indemnity, surety bond, letter of credit, banker acceptance and letter of comfort given or obtained by any member of the SpinCo Group for the benefit of any member of the RemainCo Group) to the fullest extent permitted by applicable Law, and (ii) SpinCo shall, and shall cause the other members of its Group to (with the reasonable cooperation of the applicable Party), use reasonable best efforts to (A) cause a member of the SpinCo Group to be substituted in all respects for a member of the RemainCo Group, as applicable, and (B) have all members of the RemainCo Group removed or released as guarantor of or obligor for any Liability of SpinCo (including any credit agreement, guarantee, indemnity, surety bond, letter of credit, banker acceptance and letter of comfort given or obtained by any member of the RemainCo Group for the benefit of any member of the SpinCo Group) to the fullest extent permitted by applicable Law, in each case (clauses (i)-(ii)), on or prior to the Distribution or as soon as reasonably practicably thereafter. Except as otherwise provided in <u>Section</u> <u>2.6(b)</u>, no member of the SpinCo Group, or the RemainCo Group or any of their respective Affiliates from time to time shall be required to commence any litigation or offer or pay any amount of money or otherwise grant any accommodation (financial or otherwise) to any Third Party with respect to any such guarantees.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) On or prior to the Distribution or as soon as reasonably practicable thereafter, to the extent required to obtain a release of any member of the SpinCo Group from a guaranty for the benefit of any member of the RemainCo Group, the Company shall, and shall cause the other members of its Group to, as applicable, execute a guaranty agreement in the form of the existing guaranty, except to the extent that such existing guaranty contains representations, covenants or other terms or provisions either (i) with which any member of the RemainCo Group, as the case may be, would be reasonably unable to comply or (ii) which would be reasonably expected to be breached. On or prior to the Distribution or as soon as reasonably practicable thereafter, to the extent required to obtain a release of any member of the RemainCo Group from a guaranty for the benefit of any member of the SpinCo Group, SpinCo shall, and shall cause the other members of its Group to, as applicable, execute a guaranty agreement in the form of the existing guaranty, except to the extent that such existing guaranty contains representations, covenants or other terms or provisions either (A) with which any member of the SpinCo Group, as the case may be, would be reasonably unable to comply or (B) which would be reasonably expected to be breached.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If any of SpinCo or the Company is unable to obtain, or to cause to be obtained, any such required removal as set forth in clauses (a) and (b) of this <u>Section</u> <u>2.6</u>, (i) the Party whose Group is the relevant beneficiary of such guarantee or any letters of credit, performance bonds, surety bonds, bankers acceptances, or other similar arrangements shall indemnify and hold harmless the unreleased guarantor or obligor for any Loss arising from or relating thereto and shall or shall cause one of the other members of its Group, as agent or subcontractor for such unreleased guarantor or obligor to pay, perform and discharge fully all the obligations or other Liabilities of such unreleased guarantor or obligor thereunder and (ii) each of SpinCo and the Company agrees not to (and to cause the members of their respective Groups not to) renew or extend the term of, increase its obligations under, or Transfer to a Third Party, any unreleased guarantees or letters of credit, performance bonds, surety bonds, bankers acceptances, or other similar arrangements, for which such unreleased Party is or may be liable, without the prior written consent of such other Party (such consent not to be unreasonably withheld, delayed or conditioned), unless all obligations of such other unreleased Party and the other members of such Party's Group with respect thereto are thereupon terminated by documentation reasonably satisfactory in form and substance to such Party.

SECTION 2.7 <u>SpinCo Funding</u>. Immediately prior to the Distribution Effective Time (but not in the event of a Sale), the Company shall pay and contribute to SpinCo, by wire transfer of immediately available funds to an account designated by SpinCo, an amount equal to the remainder of (a) $270,000,000, minus (b) the sum of the amount of marketable securities and cash and cash equivalents contained in any bank and brokerage accounts owned by SpinCo as of the close of business on the day prior to the Distribution Effective Time (such net amount, the "*SpinCo Funding*"). If (i) the aggregate amount of marketable securities and cash and cash equivalents contained in any bank and brokerage accounts owned by the RemainCo Group as of the close of business on the day prior to the Distribution Effective Time is less than (ii) the SpinCo Funding (such difference, the "*SpinCo Funding Shortfall*"), Parent

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shall cause the Company to pay, or pay on behalf of the Company, the SpinCo Funding Shortfall to SpinCo concurrently with the Closing (except, for the avoidance of doubt, in the event of a Sale). Any payment of the SpinCo Funding Shortfall pursuant to this <u>Section</u> <u>2.7</u> shall be treated as an adjustment to the SpinCo Funding prior to the Distribution Effective Time for all U.S. federal (and applicable state, local and foreign) income tax purposes, and none of the Parties shall take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment. In the event that SpinCo holds in its bank or brokerage accounts marketable securities, cash or cash equivalents having an aggregate value exceeding $270,000,000, SpinCo shall, not later than immediately prior to the Distribution Effective Time, distribute to the Company marketable securities, cash or cash equivalents that are sufficient to reduce the value of SpinCo's remaining marketable securities, cash and cash equivalents to $270,000,000.

SECTION 2.8 <u>Funds in Transit</u>. Except as otherwise provided in the Transition Services Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) With respect to any outstanding checks issued or payments initiated by the Company, SpinCo, or any of the members of their respective Groups prior to the Effective Time, such outstanding checks and payments shall be honored following the Effective Time by the Person or Group owning the account on which the check is drawn or from which the payment was initiated, respectively, without limiting the ultimate allocation of Liability for such amounts under this Agreement or the Transition Services Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As between the Company and SpinCo (and the members of their respective Groups), except to the extent prohibited by applicable Law, all payments and reimbursements received after the Effective Time by either the Company or SpinCo (or any member of their respective Groups) that relate to a Business, Asset or Liability of the other Party (or member of its Group), shall be held by such Party in trust for the use and benefit of the Party entitled thereto and, promptly following receipt by such Party of any such payment or reimbursement, such Party shall pay over, or shall cause the applicable member of its Group to promptly pay over, to the other Party (or a member of such other Party's Group) the amount of such payment or reimbursement without right of set-off.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any payments made after the Effective Time by either the Company or SpinCo (or any member of their respective Groups) on behalf of the other Party (or member of its Group) shall be promptly reimbursed by such other Party. Upon written request, the Party that received the benefit of such payment shall promptly reimburse, or shall cause the applicable member of its Group to promptly reimburse the paying Party (or a member of such paying Party's Group) the amount of such reimbursement without right of set-off.

SECTION 2.9 <u>Restriction on Prepayment of Expenses</u>. Prior to the Distribution Effective Time, the Company shall not, and shall cause its Affiliates (including SpinCo) not to, prepay any trade payables or other accounts payable of the SpinCo Group except in the ordinary course of business, consistent with past practice, and the Company shall continue to pay trade payables and other accounts payable in the ordinary course of business, consistent with past practice.

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SECTION 2.10 <u>Disclaimer of Representations and Warranties</u>. EACH OF THE COMPANY (ON BEHALF OF ITSELF AND EACH MEMBER OF THE REMAINCO GROUP) AND SPINCO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE SPINCO GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, IN THE LICENSE AGREEMENT, IN THE TRANSITION SERVICES AGREEMENT, IN THE OCCUPANCY LICENSE AGREEMENT OR IN THE MERGER AGREEMENT OR CERTIFICATES DELIVERED WITH RESPECT THERETO, NO PARTY TO THIS AGREEMENT, THE LICENSE AGREEMENT, THE TRANSITION SERVICES AGREEMENT, THE OCCUPANCY LICENSE AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, THE LICENSE AGREEMENT, THE TRANSITION SERVICES AGREEMENT, THE OCCUPANCY LICENSE AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING TO ANY OTHER PARTY HERETO OR THERETO IN ANY WAY, EXPRESS OR IMPLIED, AS TO THE ASSETS, BUSINESSES OR LIABILITIES CONTRIBUTED, TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR GOVERNMENTAL APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS, RESTRICTIONS ON TRANSFER, ENCUMBRANCE OR LIEN, NON-INFRINGEMENT, OR ANY OTHER MATTER CONCERNING, ANY ASSETS, BUSINESSES OR LIABILITIES OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF EITHER PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY CONTRIBUTION, ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER OR THEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR THEREIN, IN THE LICENSE AGREEMENT, IN THE TRANSITION SERVICES AGREEMENT, IN THE OCCUPANCY LICENSE AGREEMENT OR IN THE MERGER AGREEMENT OR CERTIFICATES DELIVERED WITH RESPECT THERETO, ALL SUCH ASSETS ARE BEING OR HAVE BEEN TRANSFERRED ON AN "AS IS, WHERE IS" BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM, DEED OR CONVEYANCE WITHOUT WARRANTY) AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (A) ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND VALID TITLE OR INTEREST, FREE AND CLEAR OF ANY SECURITY INTEREST, RESTRICTIONS ON TRANSFER, ENCUMBRANCE, CHARGE, ASSESSMENT OR LIEN AND (B) ANY NECESSARY CONSENTS OR GOVERNMENTAL APPROVALS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH. NO PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY IN THE EVENT THAT ANY INFORMATION EXCHANGED OR PROVIDED PURSUANT TO THIS AGREEMENT WHICH IS AN ESTIMATE OR FORECAST, OR WHICH IS BASED ON AN ESTIMATE OR FORECAST, IS FOUND TO BE INACCURATE.

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ARTICLE III

DISTRIBUTION

SECTION 3.1 <u>Distribution</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On the Distribution Date, but immediately prior to the Effective Time, the Company shall instruct the Company's stock transfer agent (the "*Agent*") to effect the Distribution by distributing the SpinCo Common Stock to holders of record of Company Common Stock as of the Distribution Record Date, and to credit the appropriate number of shares of such SpinCo Common Stock to book entry accounts for each such holder of Company Common Stock, as further contemplated by this Agreement and the Merger Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The SpinCo Common Stock to be issued in the Distribution is generally intended to be distributed pursuant to a book entry system. The Company shall instruct the Agent to deliver the SpinCo Common Stock previously delivered to the Agent to a depositary and to mail (or otherwise transmit in accordance with the Agent's regular practices) to each holder of record of Company Common Stock on the Distribution Record Date, a statement of the SpinCo Common Stock credited to such holder's account. In lieu of fractional shares, cash shall be given to holders otherwise entitled to such fractional shares of SpinCo Common Stock on the Distribution Date. As soon as practicable following the Distribution Date, the Agent shall (i) aggregate all fractional SpinCo Common Stock into whole SpinCo Common Stock and (ii) sell such SpinCo Common Stock in the open market at then-prevailing prices and shall distribute to each such holder such holder's ratable share of the proceeds of such sale, net of brokerage fees incurred in such sales, and after deducting any Taxes required to be withheld therefrom.

SECTION 3.2 <u>SpinCo</u> <u>Organizational Documents</u>. On or prior to the Distribution Date, the Parties shall have taken all necessary actions to provide for the certificate of incorporation of SpinCo and the bylaws of SpinCo to be amended and restated in substantially the forms of the certificate of incorporation and bylaws of the Company in effect as of the date of this Agreement, with any modifications by SpinCo subject to the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed).

SECTION 3.3 <u>Directors</u>. On or prior to the Distribution Date, the Company and SpinCo shall take all necessary action so that as of the Distribution Date, the board of directors of SpinCo will be as set forth in the Information Statement, including the resignation or removal of any individuals not so identified.

SECTION 3.4 <u>Election of Officers</u>. On or prior to the Distribution Date, SpinCo shall take all necessary actions so that as of the Distribution Date, the executive officers of SpinCo will be as set forth in the Information Statement, including the resignation or removal of any individuals not so identified.

SECTION 3.5 <u>State Securities</u> <u>Laws</u>. Prior to the Distribution Date, the Company and SpinCo shall take all such action as may be necessary or appropriate under the securities or "blue sky" laws of states or other political subdivisions of the United States in order to effect the Distribution.

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SECTION 3.6 <u>Listing Application</u>. Prior to the Distribution Date, the Company and SpinCo shall prepare and file with Nasdaq a listing application and related documents and shall take all such other actions with respect thereto as shall be necessary or desirable in order to cause Nasdaq to list on or prior to the Distribution Date, subject to official notice of issuance, the SpinCo Common Stock. If Nasdaq has not listed the SpinCo Common Stock on or prior to the Distribution Date, SpinCo shall take all such actions with respect thereto as shall be necessary or desirable in order to cause Nasdaq to list the SpinCo Common Stock as soon as practicable thereafter, including by filing a Form 8-A with the SEC no later than five Business Days after the Distribution Date. The Company and SpinCo agree that, at SpinCo's option, SpinCo may list its shares for trading under the ticker symbol "RNA" and the Company shall use reasonable best efforts to assist SpinCo in transferring the ticker symbol "RNA" to SpinCo. 

SECTION 3.7 <u>Withholding</u>. Notwithstanding anything in this Agreement to the contrary, each Party and any other applicable withholding agent shall be entitled to deduct and withhold from any amounts payable or otherwise distributable in accordance with this Agreement (including the Distribution), such amounts of Tax as are required to be deducted or withheld therefrom in accordance with applicable Tax Law and shall remit the amount withheld promptly to the applicable Governmental Authority. In the case of a distribution that is subject to withholding, the distributing party may reduce the distribution of otherwise distributable property by an appropriate portion thereof commensurate with the amount of required withholding and remit the required withholding tax to the applicable Governmental Authority in accordance with applicable Law (regardless of whether the withheld distributable property is sold or exchanged to obtain such funds or such Party or withholding agent uses its own funds). Amounts deducted or withheld in accordance with this <u>Section</u> <u>3.7</u> will be treated for all purposes under this Agreement or any other agreement as having been paid to, or distributed and received by, the Person in respect of which the withholding and deduction was made.

SECTION 3.8 <u>Warrants</u>. On the Distribution Date, but immediately prior to the Effective Time, SpinCo shall issue shares of SpinCo Common Stock to the holders of the Company Warrants that are entitled to receive such shares of SpinCo Common Stock in accordance with the terms of the Company Warrants.

ARTICLE IV

ADDITIONAL COVENANTS; FURTHER ASSURANCES

SECTION 4.1 <u>Permits;</u> <u>Consents</u>. On or prior to the Distribution Date, the Parties shall use their respective reasonable best efforts to (i) Transfer or cause to be Transferred any transferable SpinCo Permits which are held in the name of any member of the RemainCo Group, or in the name of any employee, officer, director, stockholder or agent of a member of the RemainCo Group, on behalf of the Company, to SpinCo, and (ii) obtain all consents with respect to any Contracts to the extent required in connection with the Distribution.

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SECTION 4.2 <u>Transitional Trademark Use</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as expressly provided in this <u>Section</u> <u>4.2</u>, (i) SpinCo and the SpinCo Group shall have no right, title, or interest in or to any RemainCo Marks, and (ii) the Company and the RemainCo Group shall have no right, title, or interest in or to any SpinCo Marks. Each Party hereby acknowledges and agrees that neither it nor its respective Group members shall acquire any goodwill, rights or benefits arising from their uses of the other Party's Trademarks during the SpinCo Transition Period or the RemainCo Transition Period, as applicable, and that all such goodwill, rights and benefits shall inure solely to SpinCo and the SpinCo Group (with respect to the SpinCo Marks) or the Company and the RemainCo Group (with respect to the RemainCo Marks).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As soon as reasonably practicable but in no event later than the end of: (i) the applicable SpinCo Transition Period, SpinCo shall, and shall cause the SpinCo Group to, use reasonable best efforts to cease any and all use of all RemainCo Marks or any variant thereof, whether used as a Trademark, as a Net Name or as a corporate or business name, and (ii) the applicable RemainCo Transition Period, the Company shall, and shall cause the RemainCo Group, to use reasonable best efforts to cease any and all use of all SpinCo Marks, whether used as a Trademark, as a Net Name or as a corporate or business name, from any and all public-facing assets, inventories, advertisements, communications, website content, other internet or electronic communication vehicles and other documents and materials of SpinCo or the Company, and their respective Groups and Parent, as applicable. Nothing in this <u>Section</u> <u>4.2(b)</u> or in <u>Section</u> <u>4.2(c)</u> shall preclude any uses of the Avidity Marks and other SpinCo Marks by Parent, the Company and the RemainCo Group, or uses of the RemainCo Marks by SpinCo and the SpinCo Group, that are required under applicable Law, including uses of the Avidity Marks and other SpinCo Marks, including the SpinCo Avidity Name (by Parent and the RemainCo Group) or the RemainCo Marks (by the SpinCo Group) in textual sentences in a nominative manner referencing the historical relationship between the Company and SpinCo (<u>provided</u> such historic references are factually accurate and not misleading), or uses of the Avidity Marks, the other SpinCo Marks or the RemainCo Marks, as applicable, in historical, tax, and similar records, or the retention, following the end of the SpinCo Transition Period (for the SpinCo Group) or the applicable RemainCo Transition Period (for Parent and the RemainCo Group), of any books, records, documents and other materials by the SpinCo Group or by Parent and the RemainCo Group, as applicable, which contain or display any of the RemainCo Marks or any Avidity Marks and other SpinCo Marks, as applicable, which are used solely for internal, historic or archival purposes, or uses or references to the SpinCo Marks or the RemainCo Marks, as applicable, in regulatory or corporate filings or for litigation or other legal purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Subject to the terms of <u>Section</u> <u>4.2</u><u>(a)</u> and <u>Section</u> <u>4.2</u><u>(b)</u>, (i) SpinCo and the SpinCo Group hereby grant to the Parent, the Company and the RemainCo Group, a non-exclusive (but exclusive in the pharmaceutical field with respect to any corporate name or business name containing the term "Avidity" in conjunction with "Bio" or "Biosciences" or any variant of "Bio" or "Biosciences"), non-transferable (except as set forth in <u>Section</u> <u>4.2</u><u>(e)</u>), non-sublicensable (except as set forth in <u>Section</u> <u>4.2</u><u>(f)</u>), royalty-free, worldwide right and license to use the SpinCo Marks in connection with the RemainCo Business and the RemainCo Programs, including with any products and services that RemainCo may develop, commercialize and otherwise exploit following the Distribution Effective Time outside the Cardiovascular Field, and (ii) the Company and the RemainCo Group hereby grant to SpinCo and the SpinCo Group, on an "as is" basis, a non-exclusive, non-transferable (except as set forth in <u>Section</u> <u>4.2</u><u>(e)</u>), non-sublicensable (except as set forth in <u>Section</u> <u>4.2</u><u>(f)</u>), royalty-free, worldwide right and license to use the RemainCo Marks in connection with the SpinCo Business and the SpinCo Programs, solely during the SpinCo

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Transition Period (in the case of SpinCo and the SpinCo Group) and solely during the RemainCo Transition Period (in the case of the Parent, the Company and the RemainCo Group) and, in each case ((i) and (ii)), solely in the manner in which such SpinCo Marks or RemainCo Marks were used by the Company, in each respective Business (as applicable) within the twelve (12) month period prior to the Distribution Effective Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) As promptly as reasonably practicable, but in no event later than the expiration of the RemainCo Transition Period, RemainCo shall, and shall cause its Subsidiaries to, take all actions reasonably necessary to change the corporate or business name of each entity in the RemainCo Group that includes the term Avidity in its corporate or business name to a new corporate name or business name that does not include the term Avidity or any variant thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) RemainCo may assign the license granted in <u>Section</u> <u>4.2(c)</u>, in whole or in part, in connection with a merger, consolidation, or sale of all or substantially all of, any portion of the RemainCo Assets to which the license relates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) RemainCo and SpinCo may each sublicense the relevant licenses granted in <u>Section</u> <u>4.2(c)</u>, in whole or in part, to (i) its current and future Affiliates, (ii) its vendors, consultants, contractors, suppliers, and other third party service providers in connection with the RemainCo Business or SpinCo Business (as applicable), and (iii) its distributors, customers, and collaboration partners in connection with the distribution, licensing, offering and sale of the current and future products and services of the RemainCo Business or SpinCo Business (as applicable); <u>provided</u>, that RemainCo and SpinCo (as applicable) shall be responsible for compliance by any sublicensee to the terms and conditions set forth herein that are applicable to such sublicensee and <u>provided that</u> each sublicense granted by RemainCo or SpinCo (as applicable) shall terminate immediately upon expiration of the RemainCo Transition Period (for any RemainCo sublicensee) or the SpinCo Transition Period (for any SpinCo sublicensee).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) (i) SpinCo shall not, and shall cause each SpinCo Group member and each permitted sublicensees not to, use any of the RemainCo Marks in any manner that is reasonably likely to harm or impair the goodwill associated with the RemainCo Marks or RemainCo's rights therein or compromise the validity of the RemainCo Marks and (ii) the Company shall not, and shall cause each RemainCo Group member and each permitted sublicensees not to, use any of the SpinCo Marks in any manner that is reasonably likely to harm or impair the goodwill associated with the SpinCo Marks or SpinCo's rights therein or compromise the validity of the SpinCo Marks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) RemainCo shall retain possession and control of the Avidity Bio Net Names and the Other Avidity Net Names during the RemainCo Transition Period. During the RemainCo Transition Period, RemainCo shall only use the Avidity Bio Net Names consistently with how such Net Names were used by the Company immediately prior to the Distribution Effective Time, or to include redirects for consumers to other Net Names as necessary to conduct the RemainCo Business and efficiently transition from the Avidity Bio Net Names and Other Avidity Net Names prior to expiration of the RemainCo Transition Period. Furthermore, during the RemainCo Transition Period, upon SpinCo's request, RemainCo shall include on the Avidity Bio Net Names and Other Avidity Net Names such hyperlinks as SpinCo may reasonably request redirecting consumers to other Net Names of SpinCo relating to the SpinCo Business. At the end of the RemainCo Transition Period, Parent, the Company and the RemainCo Group shall cease any use of the Avidity Bio Net Names and the Other Avidity Net Names and RemainCo shall (i) assign to SpinCo the Avidity Bio Net Names, and (ii) either allow the Other Avidity Net Names to lapse or retain such Net Names for defensive purposes only, at its sole discretion.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If, at any time from the date of this Agreement through the end of the RemainCo Transition Period, SpinCo undergoes a Change of Control Transaction, (i) RemainCo shall have the right (but not the obligation) to purchase the Avidity Marks, for a nominal fee to be agreed between the Parties, which fee shall not exceed the total application, prosecution and renewal costs incurred by SpinCo and not reimbursed by RemainCo in connection with the Avidity Marks between the Distribution Effective Time and the date of the Change of Control Transaction, if applicable, and (ii) RemainCo's obligations under <u>Section</u> <u>4.2(h)</u> shall no longer be effective, and for clarity, RemainCo shall no longer be required to transition (or allow to lapse, as applicable) the Avidity Bio Net Names or the Other Avidity Net Names to SpinCo.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) During the RemainCo Transition Period, and except as provided below, SpinCo shall have the sole right (but not the obligation) to initiate and control any enforcement action against a third party, or to control the defense of any third party claim, involving any of the Avidity Marks, at its sole cost and expense and using counsel of its choice; <u>provided that,</u> with respect to any third party enforcement action or any defense of a third party claim involving any "Avidity" (alone without any other words), "Avidity Bio" or "Avidity Biosciences" name or mark, SpinCo shall consult in good faith with RemainCo, and RemainCo shall have the right to provide input, on the overall strategy with respect to any such enforcement action or defense and SpinCo shall consider such input in good faith (and shall not unreasonably reject such input) and <u>provided further that</u>, if SpinCo should decline to enforce or defend within sixty (60) days (or such shorted period as may be required to comply with any legal or regulatory deadlines) of becoming aware of such third party infringement or claim, then RemainCo shall have the right (but not the obligation) to initiate and control any such enforcement action or to control any such defense, at its sole cost and expense and using counsel of its choice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Prior to the Distribution Effective Time, the Company shall expressly abandon the U.S. trademark applications for the marks consisting of "Avidity" and "On Point" ([\*\*\*]) and shall file a new application for the mark "On Point and Design" (the same design as shown in [\*\*\*]) (without "Avidity") for the same goods and services covered by [\*\*\*] and any such new application shall be deemed a RemainCo Mark.

SECTION 4.3 <u>Intellectual Property Recordation</u>. The Company and SpinCo shall, and shall cause any members of their respective Groups to, promptly after the Distribution Effective Time, but in no event later than forty-five (45) Business Days thereafter (the "*Recordation Period*"), sign and execute all additional documents and undertake all other actions reasonably required or advisable to effectuate and register the ownership of all Intellectual Property (a) owned by SpinCo, on the one hand, or (b) owned by the Company or any member of the RemainCo Group, on the other, that is intended to be transferred to the other Party or a member of the other Party's Group, pursuant to <u>Section</u> <u>2.2</u>, in the United States Patent and Trademark Office and United States Copyright Office and all foreign equivalents thereof; <u>provided</u>, that SpinCo shall be responsible for preparing, at its own cost, all such additional documents reasonably required or advisable to effectuate and register the ownership

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of all Intellectual Property and shall provide such documents to RemainCo at least fifteen (15) Business Days prior to the end of the Recordation Period. Without limiting the foregoing, except as set forth in the License Agreement and subject to the rights and licenses granted to the other Party under the License Agreement and herein, each of the Company and SpinCo acknowledges that, after the Distribution Effective Time, the other Party is free to maintain, abandon, sell or assign all such Intellectual Property at its sole discretion without any consent of such Party.

SECTION 4.4 <u>Employee Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Transfer</u> <u>of</u> <u>Current Employees</u>. As part of the Pre-Closing Reorganization, and not later than immediately prior to the Distribution Effective Time, RemainCo Group shall transfer and assign the employment of each SpinCo Employee to a member of the SpinCo Group (or a professional employer organization or employer of record engaged by a member of the SpinCo Group (an "*EOR*")) in accordance with applicable Law. Notwithstanding the foregoing, if any SpinCo Employee is not actively at work for RemainCo Group as of the Distribution Effective Time by reason of receiving short-term or long-term disability benefits under a Company Employee Benefits Plan, or other approved leave with RemainCo Group, excluding paid-time off, vacation or similar leave (any such employee, an "*Approved Leave Employee*"), then such Approved Leave Employee shall remain employed by RemainCo Group. Thereafter, a member of the SpinCo Group (or an EOR) shall offer employment (such offer to comply with the requirements of <u>Section</u> <u>4.4(a)(i)</u> below) to such Approved Leave Employee contingent upon and effective as of the date such Approved Leave Employee returns to active employment with the RemainCo Group, <u>provided</u>, that such date is within twelve (12) months of the Distribution Effective Time, and as of such date, such Approved Leave Employee shall be deemed a Transferred Employee. For any Approved Leave Employee, reference to the "Distribution Effective Time" herein shall be treated as references to the first date and time at which the applicable Approved Leave Employee's employment commences with a member of the SpinCo Group. For the avoidance of doubt, the SpinCo Group (and any EOR) shall not have any obligation to offer employment to any Approved Leave Employee who does not return to active employment on or before the date that is twelve (12) months after the Distribution Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Initial Employment Terms</u>. For a period of twelve (12) months immediately following the Distribution Effective Time (or, if shorter, the date of employment termination of the relevant Transferred Employee), SpinCo shall, or shall cause its Affiliates or EOR to, provide each Transferred Employee with (a) a base salary or hourly wage rate and cash incentive compensation opportunities (excluding equity-based incentive opportunities) that are each no less favorable than such offered to such Transferred Employee immediately prior to the Distribution Effective Time, (b) employee benefits that are substantially comparable in the aggregate to the employee benefits (excluding equity and equity-based compensation or benefits, defined benefit pension benefits, nonqualified deferred compensation and post-employment welfare benefits (collectively, "*Excluded Benefits*")) provided to the Transferred Employees immediately prior to the Distribution Effective Time, and (c) a primary work location at the same work location or another location within 50 miles thereof as was the case immediately prior to the Distribution Effective Time.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Employment Arrangements</u>. SpinCo will assume and honor, or will cause a member of the SpinCo Group or an EOR to assume and honor, the employment and individual agreements set forth on <u>Schedule</u> <u>J</u> (including any severance obligations in respect of a Transferred Employee set forth therein), which <u>Schedule J</u> shall be updated from time to time prior to the Distribution Effective Time to include any employment or individual service provider agreement between any member of the RemainCo Group and individual who becomes a Transferred Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Vacation and Paid Time Off</u>. On the Distribution Date, the Company shall, or shall cause one of its Affiliates (other than a member of the SpinCo Group) to, pay all Transferred Employees for their accrued, unused vacation and paid time off through the Distribution Effective Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Certain Severance Reimbursements</u>. In the event that a Current Employee at the executive level of any member of the RemainCo Group as of immediately following the Distribution Effective Time resigns from employment with RemainCo or any of its Affiliates (including, after the Effective Time, Parent and its Affiliates) under circumstances entitling such individual to severance payments or benefits or any accelerated payment of any deferred cash, retention, transaction or similar bonus or award (collectively, "*Separation Benefits*") and commences employment with SpinCo within 24 months following the Effective Time, SpinCo shall reimburse RemainCo for the aggregate amount of the Separation Benefits within 30 days following such individual's date of commencement of employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Transition Employees</u>. The Parties shall ensure that each employee listed on <u>Schedule K</u> (each such employee, a "*Transition Employee*") shall not be a SpinCo Employee as of immediately prior to the Distribution Effective Time. A member of the SpinCo Group shall offer employment to each Transition Employee as of the end of the applicable transition period specified on <u>Schedule K</u> on terms and conditions consistent with this <u>Section</u> <u>4.4</u>, and shall hire each such Transition Employee who accepts such offer of employment. Each Transition Employee who commences employment with the SpinCo Group shall be deemed a Transferred Employee as of the end of the applicable transition period. No Transition Employee who receives an offer of employment from a member of the SpinCo Group in accordance with this <u>Section</u> <u>4.4(a)(v)</u> shall be eligible for severance benefits in connection with the termination of such Transition Employee's employment with the RemainCo Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>At-Will Status</u>. Nothing in this Agreement shall create any obligation on the part of any member of the RemainCo Group or any member of the SpinCo Group or an EOR to (A) continue the employment of any individual or permit the return from a leave of absence for any period or (B) change the employment status of any individual from "at-will."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Benefit Plan Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Transferred Plans</u>. Except as provided otherwise in the Transition Services Agreement, the Parties shall take any and all action as shall be necessary or appropriate such that, effective as of the Distribution Effective Time or as required by applicable Law, (i) the Company and each member of the RemainCo Group, to the extent applicable, shall cease to be a participating employer in any Transferred Plan and (ii) the Transferred Employees shall cease participation under any Company Employee Benefit Plan that is not a Transferred Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>COBRA</u>. SpinCo or its Affiliates shall become responsible for compliance with the health care continuation requirements of COBRA or other similar state Law (and all associated costs and obligations) with respect to any Transferred Employee who incurs a "qualifying event" under COBRA or other similar law on or after the Distribution Effective Time. The Parties agree that neither the Distribution or any transfers of employment from the Company or its Subsidiaries to the SpinCo Group or an EOR that occur as contemplated by this Agreement shall constitute a "qualifying event" for purposes of COBRA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Service Credit</u>. SpinCo shall, or shall cause its Affiliates or an EOR to, credit each Transferred Employee with all service credited to such Transferred Employee by RemainCo (or any of RemainCo's Affiliates which is a predecessor employer of such Transferred Employee) as of the Effective Time for purposes of eligibility, vesting, level of paid time off benefits and future paid time off accruals and for purposes of determining severance amounts, in each case other than (a) as would result in duplication of benefits for the same service period or (b) in connection with any Excluded Benefits. SpinCo shall, for the plan year of each Transferred Employee's initial participation in welfare benefit plans maintained by SpinCo or its Affiliates (or an EOR) and offered to such Transferred Employee ("*SpinCo Benefit Plans*"), use reasonable best efforts to (a) waive, or cause to be waived, all pre-existing condition exclusions, evidence of insurability requirements, actively at work requirements, waiting periods and similar requirements under applicable SpinCo Benefit Plans to the same extent such requirements would not have been applicable to or were otherwise satisfied by such Transferred Employee (or the spouse or dependent thereof) prior to the Distribution Effective Time under an analogous Company Employee Benefit Plan, and (b) credit, or cause to be credited to, each Transferred Employee (or the spouse or dependent thereof) with all amounts paid prior to the Distribution Effective Time with respect to any Company Employee Benefit Plan which is a group health benefit plan for purposes of satisfying all applicable deductible, coinsurance, and out-of-pocket requirements under the analogous SpinCo Benefit Plan as if such amounts had been paid with respect to such SpinCo Benefit Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>401(k)</u>. As of the Distribution Effective Time, Transferred Employees shall cease active participation in the Avidity Biosciences 401(k) Plan (the "*401(k) Plan*"). Prior to the Distribution Effective Time, the Company shall fully vest all employees of the Company and its Affiliates who participate in the 401(k) Plan in their account balances (to the extent not already fully vested).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Establishment of Severance Plan</u>. As of or prior to the Distribution Effective Time, SpinCo may, or may cause the members of the SpinCo Group to, establish the SpinCo Severance Plan (which shall be a Transferred Plan) to be effective with respect to qualifying terminations from the SpinCo Group following the Distribution Effective Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Compensation Plans</u>. The SpinCo Annual Incentive Plan shall be established following the Effective Time, depending on the date in which the Effective Time occurs, and shall have terms and opportunities that are comparable to those in effect as of immediately prior to the Effective Time under the corresponding Company Employee Benefit Plan; <u>provided</u>, (i) performance metrics under the SpinCo Annual Incentive Plan shall relate to the SpinCo Business, and (ii) SpinCo may modify the terms of the SpinCo Annual Incentive Plan as it deems necessary and appropriate to comply with applicable Laws.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Generally</u>. Prior to the Distribution, the Company shall take any action as shall be necessary or appropriate to provide that each outstanding Company Stock Option and Company RSU outstanding immediately prior to the Distribution shall remain outstanding following the Distribution and, upon the Effective Time, shall be treated in accordance with the terms of the Merger Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>S</u><u>hort-Term</u> <u>Incentive Plans</u>. SpinCo shall have full responsibility with respect to any Liabilities and the payment or performance of any obligation arising out of or relating to any 2026 annual cash bonus or other short-term cash incentive plan or program in which Transferred Employees participate (and, for the avoidance of doubt, shall retain responsibility for payment of the bonuses thereunder with respect to the entire 2026 calendar year); it being understood that (A) neither RemainCo nor any member of the RemainCo Group will assume any Liabilities for any annual cash or other short-term cash incentive plan or program maintained or sponsored by SpinCo or its Subsidiaries following the Distribution and (B) neither SpinCo nor any member of the SpinCo Group will assume any Liabilities for any annual cash or other short-term cash incentive plan or program maintained or sponsored by RemainCo or its Subsidiaries following the Distribution (other than as provided for in this <u>Section</u> <u>4.4(c)(ii)</u> with respect to Transferred Employees).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Establishment of New Equity Plans; Make Whole Awards</u>. Prior to the Distribution Date, the Company and SpinCo shall cooperate to establish (i) an equity compensation plan (and forms of standard award and Make Whole Award agreements thereunder), which plan and standard award agreements (other than the Make Whole Award agreements) are intended to be substantially similar to the Company's 2020 Incentive Award Plan (and the forms of award thereunder) and (ii) an employee stock purchase plan intended to comply with the requirements of Section 423 of the Code, which plan is intended to be substantially similar to the Company's 2020 Employee Stock Purchase Plan. SpinCo shall adopt such plans, and the Company shall approve such plans as SpinCo's sole shareholder, following the filing of the listing application by SpinCo pursuant to Section 3.6 and prior to the Distribution Effective Time; <u>provided</u>, that, except for the Make Whole Awards, no awards shall be granted under such equity compensation plan and no offering periods shall commence under such employee stock purchase plan prior to the Distribution Effective Time. After such adoption and approval, and prior to the Distribution Effective Time, the Company and SpinCo shall (i) take all steps necessary to register the equity compensation plan under the Securities Act on Securities and Exchange Commission Form S-8 or other appropriate form, (ii) after such registration, grant the Make Whole Awards to all holders of outstanding Company RSUs and Company Stock Options who are current service providers to SpinCo and its Affiliates (including the Company) as of such grant under the equity compensation plan; and (iii) provide evidence reasonably acceptable to Parent that the foregoing in clauses (i) and (ii) have been completed. "*Make Whole Award*" means an award evidencing the right to receive, for each share of Company Common Stock underlying a Company RSU or Company Stock Option held by the grantee as of the Distribution Record Date (other than the New Hire RSUs or any portion of the 2026 LTI Awards that is unvested as of the Distribution Date, each as defined in the Company Disclosure Letter attached to the Merger Agreement), whether vested or unvested, as of the date the Make Whole Award is granted, that number of shares of

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SpinCo Common Stock received per each share of Company Common Stock by holders of Company Common Stock in the Distribution, which Make Whole Award will be settled as soon as practicable after the Distribution Effective Time and for which any tax withholding will be satisfied through a mandatory "sell-to-cover" arrangement established by SpinCo for such purpose. The form of Make Whole Award agreement, and applicable provisions of the equity compensation plan, shall be subject to advance review and approval by Parent (not to be unreasonably withheld, conditioned or delayed).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Individual Arrangements</u>. SpinCo acknowledges and agrees that it shall have full responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to any employment, consulting, non-competition, retention or other compensatory arrangement entered into between any member of the SpinCo Group and any Transferred Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Visas; Work Permits</u>. If any Transferred Employee requires a visa, work permit or employment pass or other approval for his or her employment to transfer or continue with SpinCo Group (or an EOR) following the Distribution Date, RemainCo shall, prior to the Distribution Date, provide assistance as reasonably requested by SpinCo in connection with ensuring necessary applications are promptly made and securing the necessary visa, permit, pass or other approval effective as of the Distribution Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Contingent Labor</u>. Prior to the Distribution Date, RemainCo shall use reasonable best efforts to (i) make individual natural person independent contractors exclusively related to the SpinCo Business and directly engaged by any member of the RemainCo Group available to SpinCo and cooperate in transferring such contractors to SpinCo or its Affiliate, and (ii) make any individual natural person independent contractors related to the both the SpinCo Business and the RemainCo Business and directly engaged by any member of the RemainCo Group available to SpinCo for the purpose of such contractors entering into arrangements with SpinCo or its Affiliate, <u>provided</u>, that any such arrangement does not interfere with such individual natural person independent contractor's provision of services to the RemainCo Group. Prior to the Distribution Date, RemainCo shall (i) provide to SpinCo contact information for third-party service providers providing contingent personnel exclusively to the SpinCo Business and reasonably cooperate in identifying and transferring such contingent workforce to the extent requested by SpinCo, and (ii) provide to SpinCo contact information for third-party service providers providing contingent personnel related to both the SpinCo Business and the RemainCo Business for the purpose of such third-party service providers entering into arrangements with SpinCo or its Affiliate, <u>provided</u>, that any such arrangement does not interfere with such contingent personnel's provision of services to the RemainCo Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Cooperation; Personnel</u> <u>Records</u><u>; Data Sharing</u>. At all times following the Distribution Effective Time, the Parties shall, or shall cause any member of their respective Groups to, cooperate in good faith as reasonably necessary to facilitate the administration of the Transferred Plans, as applicable, and the resolution of related employee benefit claims, including with respect to the provision of employee-level information necessary for the other Party to manage, administer, finance and file required reports with respect to such administration. The Parties shall, or shall cause any member of their respective Groups to, use reasonable best efforts to provide each other such records and information as reasonably necessary

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or appropriate to carry out their obligations under applicable Law, this Agreement, or for the purposes of administering the Transferred Plans, as applicable, as soon as reasonably practicable after the Distribution Effective Time or upon prior written request by the other Party. All information and records regarding employment and personnel matters of Transferred Employees shall be accessed, retained, held, used, copied and transmitted after the Distribution Date by the Parties in accordance with all applicable Laws relating to the collection, storage, retention, use, transmittal, disclosure and destruction of such records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Director Obligations</u>. The Company shall retain responsibility for the payment of any cash fees payable in respect of service on the Company Board that are payable but not yet paid as of the Distribution (which amounts, for the avoidance of doubt, shall be calculated on a pro-rated basis to reflect the period of service through the Distribution Date), and SpinCo shall have no responsibility for any such payments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Confidentiality and Other Restrictive Covenant Agreements</u>. The Company agrees that, following the Distribution Effective Time, the Company shall not, and shall cause its Affiliates to not, seek to enforce the terms of any Avidity Employee Invention Assignment and Confidentiality Agreement between any member of the RemainCo Group and a Transferred Employee (collectively, "*RCAs*") with respect to any such Transferred Employee's right to be employed by or provide services to the SpinCo Group; <u>provided</u> that nothing in this <u>Section</u> <u>4.4(i)</u> shall require the Company to, or to cause any of its Affiliates to, waive, or shall be deemed to relieve any Transferred Employee from, any (i) any obligations of confidentiality or nonuse of the Company's Confidential Information (except with respect to the use and disclosure of Confidential Information to the extent related to the SpinCo Business in connection with the SpinCo Business or as otherwise permitted by this Agreement, the License Agreement, the Transition Services Agreement or the Occupancy License Agreement), (ii) obligations not to solicit any employees of the Company or its Subsidiaries who SpinCo is not permitted to solicit under <u>Section</u> <u>4.6</u>, or (iii) invention assignment provisions with respect to the RemainCo Business. In addition, to the extent any SpinCo Employee breaches or threatens to breach an RCA in a manner that is harmful to the SpinCo Business following the Distribution Effective Time, the Company agrees that if the Company or its applicable Affiliates does not enforce such RCA against such SpinCo Employee, it shall, and shall cause its applicable Affiliate to, assign the right, but not the obligation, for SpinCo or any member of the SpinCo Group to enforce such SpinCo Employee's RCAs with respect to such breach or threatened breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Workers Compensation</u>. SpinCo shall be responsible for all claims for workers compensation benefits that are incurred on or after the Distribution Effective Time by any Transferred Employee and RemainCo Group shall be responsible for all claims for workers compensation benefits that are incurred prior to the Distribution Effective Time by any of the Current Employees of the Company or any of its Affiliates; *provided* that if a Workers Compensation Event (as defined below) occurs over a period both preceding and following the Distribution Effective Time, the claim shall be the joint responsibility and liability of SpinCo and the RemainCo Group and shall be equitably apportioned between SpinCo and the RemainCo Group based upon the relative periods of time that the Workers Compensation Event transpired preceding and following the Distribution Effective Time. A claim for workers compensation benefits shall be deemed to be incurred when the event giving rise to the claim (the "*Workers Compensation Event*") occurs.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>No</u> <u>Third Party</u> <u>Beneficiaries</u>. No provision of this Agreement shall be construed to create any third-party right to any Person, including compensation or benefits on the part of any Current Employee or other future, present, or former employee of any member of the SpinCo Group or RemainCo Group under any Company Employee Benefit Plan, Transferred Plan or otherwise. This Agreement is solely for the benefit of the Parties and their respective successors and permitted assigns. No provision in this Agreement shall modify or amend any other agreement, plan, program, or document. Nothing in this Agreement is intended to confer upon any Current Employee or former employee or service provider of SpinCo, the Company or either of their respective Subsidiaries or Affiliates (or an EOR) any right to continued employment or service, or any recall or similar rights to an individual on layoff or any type of approved leave.

SECTION 4.5 <u>Release of</u> <u>Liens</u>. The Company shall, at its sole cost and expense, use reasonable best efforts to cause any Lien on any SpinCo Asset that serves as collateral or security for any Liability of any member of the RemainCo Group to be unconditionally released and discharged (any such unconditional release and discharge, a "*Discharge*") prior to the Distribution. If any such Lien is not so Discharged prior to the Distribution, the Company shall, at its sole cost and expense, use reasonable best efforts to cause such Lien to be Discharged as promptly as reasonably possible thereafter. Any loss of, or Liabilities resulting from restrictions on the use of, the underlying asset arising from the failure of any such Lien to be Discharged shall constitute a RemainCo Liability.

SECTION 4.6 <u>No Solicit</u>. None of RemainCo, SpinCo or any member of their respective Groups shall, for a period of [\*\*\*] the Effective Time, without the prior written consent of the other Party, directly or indirectly, recruit or solicit, any person who is an employee of the other Party or its Subsidiaries or induce, or attempt to induce, any such employee to terminate his or her employment with, or otherwise cease his or her relationship with, the other Party or its Subsidiaries; <u>provided</u>, <u>however</u>, that (i) nothing in this <u>Section</u> <u>4.6</u> shall be deemed to prohibit any general solicitation for employment through advertisements and search firms not specifically directed at employees of such other Party or any hiring as a result thereof, (ii) the prohibitions of this <u>Section</u> <u>4.6</u> shall not apply with respect to employees who have been terminated by a Party or its Subsidiaries or who have not been employed by a Party or its Subsidiaries for at least 180 days, and (iii) nothing in this <u>Section</u> <u>4.6</u> shall be deemed to prohibit any member of the SpinCo Group from offering employment to a Transition Employee in accordance with <u>Section</u> <u>4.4(a)(v)</u>. The Parties agree that irreparable damage may occur in the event that the provisions of this <u>Section</u> <u>4.6</u> were not performed in accordance with their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to an injunction or injunctions to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

SECTION 4.7 <u>Insurance Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) From and after the Effective Time, with respect to any Losses, damages and Liabilities incurred by any member of the SpinCo Group arising out of or resulting from an occurrence or any actual or alleged act, omission, breach or error that took place prior to the Effective Time, RemainCo will provide SpinCo with access to, and SpinCo may, upon ten (10) Business Days' prior written notice to RemainCo, make claims under, the Company's historical

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policies of insurance, but solely to the extent that such policies provided coverage for such members of the SpinCo Group prior to the Effective Time; <u>provided</u>, that such access to, and the right to make claims under, such insurance policies, shall be subject to the terms and conditions of such insurance policies, including any limits on coverage or scope, any deductibles and other fees and expenses, and shall be subject to the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) SpinCo shall report any claim in writing to RemainCo, as promptly as is reasonably practicable, and in any event in sufficient time so that such claim may be made and managed by RemainCo in accordance with the Transition Services Agreement and RemainCo's claim reporting procedures in effect immediately prior to the Effective Time (or in accordance with any modifications to such procedures after the Effective Time communicated by the Company to SpinCo in writing);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) SpinCo and the members of the SpinCo Group shall solely bear and be liable for (and neither the Company nor any members of the RemainCo Group shall have any obligation to repay or reimburse SpinCo or any member of the SpinCo Group for), and shall indemnify, hold harmless and reimburse the Company and the members of the RemainCo Group for, any deductibles, self-insured retentions, fees and expenses of any kind to the extent resulting from any access to, or any claims made by SpinCo or any other members of the SpinCo Group under any insurance provided pursuant to this <u>Section</u> <u>4.7(a)</u>, including any indemnification payments under <u>Article V</u>, settlements, judgments, legal fees and allocated claims expenses and claim handling fees, whether such claims are made by members of the SpinCo Group, its employees or Third Parties; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) SpinCo shall solely bear and be liable for (and neither the Company nor any members of the RemainCo Group shall have any obligation to repay or reimburse SpinCo or any member of the SpinCo Group for) all excluded, uninsured, uncovered, unavailable or uncollectible amounts of all such claims made by SpinCo or any member of the SpinCo Group under the policies as provided for in this <u>Section</u> <u>4.7(a)</u>. In the event an insurance policy aggregate limit is exhausted, or believed likely to be exhausted, due to noticed claims, the SpinCo Group, on the one hand, and the RemainCo Group, on the other hand, shall be responsible for their pro rata portion of the reinstatement premium, if any, based upon the Losses of such Group submitted to the Company's insurance carrier(s) (including any submissions prior to the Effective Time). To the extent that the RemainCo Group or the SpinCo Group is allocated more than its pro rata portion of such premium due to the timing of Losses submitted to the Company's insurance carrier(s), the other Party shall promptly pay the first Party an amount so that each Group has been properly allocated its pro rata portion of the reinstatement premium. Subject to the following sentence, the Company may elect not to reinstate the policy aggregate limit. In the event that, at any time prior to the Effective Time, the Company elects not to reinstate the policy aggregate limit, it shall provide prompt written notice to SpinCo, and SpinCo may direct the Company in writing to, and the Company shall, in such case, reinstate the policy aggregate limit; <u>provided</u>, that SpinCo shall be responsible for all reinstatement premiums and other costs associated with such reinstatement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except as provided in <u>Section</u> <u>4.7(a)</u>, from and after the Effective Time, neither SpinCo nor any member of the SpinCo Group shall have any rights to or under any of the insurance policies of the Company or any other member of the RemainCo Group. At the Effective Time, SpinCo shall, unless it has obtained the prior written consent of the Company, have in effect all insurance programs obligations required to comply with SpinCo's contractual obligations and such other insurance policies required by Law or as reasonably necessary or appropriate for companies operating a business similar to SpinCo's. Such insurance programs may include but are not limited to general liability, commercial auto liability, worker's compensation, employer's liability, product/completed operations liability, pollution legal liability, surety bonds, professional services liability, property, cargo, employment practices liability, employee dishonesty/crime, directors' and officers' liability, fiduciary liability and cyber liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Neither SpinCo nor any member of the SpinCo Group, in connection with making a claim under any insurance policy of the Company or any member of the RemainCo Group pursuant to this <u>Section</u> <u>4.7</u>, shall take any action that would be reasonably likely to: (i) have an adverse impact on the then-current relationship between the Company or any member of the RemainCo Group, on the one hand, and the applicable insurance company, on the other hand; (ii) result in the applicable insurance company terminating, conditioning, or reducing coverage, or increasing the amount of any premium owed by the Company or any member of the RemainCo Group under the applicable insurance policy; or (iii) otherwise compromise, jeopardize or interfere with the rights of the Company or any member of the RemainCo Group under the applicable insurance policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All payments and reimbursements by SpinCo pursuant to this <u>Section</u> <u>4.7</u> will be made within thirty (30) days after SpinCo's receipt of an invoice therefor from the Company. If the Company incurs costs to enforce SpinCo's obligations herein, SpinCo agrees to indemnify and hold harmless the Company for such enforcement costs, including reasonable, documented attorneys' fees. The Company shall retain the exclusive right to control its insurance policies and programs, including the right to exhaust, settle, release, commute, buy back or otherwise resolve disputes with respect to any of its insurance policies and programs and to amend, modify or waive any rights under any such insurance policies and programs, notwithstanding whether any such policies or programs apply to any SpinCo Liabilities or claims SpinCo has made or could make in the future, and no member of the SpinCo Group shall erode, exhaust, settle, release, commute, buyback or otherwise resolve disputes with the Company's insurers with respect to any of the Company's insurance policies and programs, or amend, modify or waive any rights under any such insurance policies and programs. SpinCo shall cooperate with the Company and share such information as is reasonably necessary in order to permit the Company to manage and conduct its insurance matters as it deems appropriate, including with respect to (i) any claims made pursuant to <u>Section</u> <u>4.7(a)</u> and the management thereof, (ii) any policy premium adjustments with respect to the Company's historical policies of insurance, in each case to the extent that such policies provided coverage for members of the SpinCo Group prior to the Effective Time, and (iii) the release of any and all Company surety bonding obligations to the extent related to any such insurance policies described in clause (ii). Neither the Company nor any of the members of the RemainCo Group shall have any obligation to secure extended reporting for any claims under any insurance policies of the Company or any member of the RemainCo Group for any acts or omissions by any member of the SpinCo Group incurred prior to Effective Time.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) This Agreement shall not be considered as an attempted assignment of any policy of insurance or as a Contract of insurance and shall not be construed to waive any right or remedy of any member of the RemainCo Group in respect of any insurance policy or any other Contract or policy of insurance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) SpinCo does hereby, for itself and each other member of the SpinCo Group, agree that no member of the RemainCo Group shall have any Liability whatsoever as a result of the insurance policies and practices of the Company and the members of the RemainCo Group as in effect at any time, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

SECTION 4.8 <u>Further Assurances</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In addition to and without limiting the actions specifically provided for elsewhere in this Agreement, including <u>Section</u> <u>2.3</u>, each of the Parties shall cooperate with each other and use (and shall cause its respective Subsidiaries and Affiliates to use) reasonable best efforts, at and after the Distribution Effective Time, to take, or to cause to be taken, all actions, and to do, or to cause to be done, all things reasonably necessary on its part under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Agreement, the License Agreement, the Transition Services Agreement and the Occupancy License Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without limiting the foregoing, from and after the Distribution Effective Time, each Party shall cooperate with the other Party, subject to <u>Section</u> <u>2.3</u>, to execute and deliver, or use reasonable best efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment, Transfer or title, and to make all filings with, and to obtain all consents or approvals of, and provide any notices to, any Governmental Authority or other Person under any permit, license, Contract, agreement, indenture or other instrument, and to take all such other actions as such Party may reasonably be requested to be taken by the other Party from time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and the Transfers of the applicable Assets and the assignment and assumption of the applicable Liabilities and the other transactions contemplated hereby and thereby. Without limiting the foregoing, each Party shall, subject to <u>Section</u> <u>2.3</u>, take such other actions as may be reasonably necessary to vest in such other Party such title and such rights as possessed by the transferring Party to the Assets allocated to such other Party, free and clear of any Liens, other than any Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At or prior to the Distribution Effective Time, the Company and SpinCo in their respective capacities as stockholders of the members of their Groups, shall each ratify any actions which are reasonably necessary or appropriate to be taken by the Company, SpinCo or any of the members of their respective Groups, as the case may be, to the extent necessary to effectuate the transactions contemplated by this Agreement, the License Agreement, the Transition Services Agreement and the Occupancy License Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) At or prior to the Distribution Effective Time, each of the Company and SpinCo shall enter into, or (where applicable) shall cause a member or members of their respective Group (as applicable) to enter into any Contracts in respect of the Distribution necessary to effectuate the transactions contemplated by this Agreement, the License Agreement, the Transition Services Agreement or the Occupancy License Agreement.

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SECTION 4.9 <u>Technology Transfer</u>. Subject to the License Agreement, as soon as reasonably practicable, but in no event later than nine (9) months following the Distribution Effective Time, the Company, together with RemainCo Group, shall complete or cause to be completed, the transfer to SpinCo and the SpinCo Group all tangible embodiments of the SpinCo Assets, including all trade secrets, know-how and any other confidential or proprietary information that constitutes, embodies or is otherwise included in the SpinCo Intellectual Property, in accordance with the provisions thereof.

SECTION 4.10 <u>Permitted Third Party Sale</u>. If a definitive agreement is entered into by the Company for a Permitted Third Party Sale and such sale is subsequently consummated, then, from and after such Sale, notwithstanding anything to the contrary in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) References to the Distribution shall be deemed to be references to the Sale, including for purposes of the Distribution Date and Distribution Effective Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) The obligations under <u>Section</u> <u>5.9</u> and <u>Section</u> <u>5.7(c)</u> shall no longer apply to the Company, SpinCo or any of their respective Affiliates; (ii) <u>Section</u> <u>5.7(f)</u> shall apply to the Company, SpinCo or any of their respective Affiliates only for the relevant taxable periods (or portions thereof) ending on or prior to the date of the Permitted Third Party Sale; and (iii) for purposes of <u>Section</u> <u>5.6(b)</u>, Company Indemnified Taxes and SpinCo Indemnified Taxes shall be determined on a separate return basis, and not on a Consolidated Return basis, unless the Company has made an election to file a Consolidated Return that includes SpinCo.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The obligations set forth in <u>Article III</u>, including the Distribution of SpinCo by the Company to its stockholders, shall cease to apply.

SECTION 4.11 <u>No Amendments to Third Party</u> <u>Agreements</u>. The Company, SpinCo or any of their Affiliates or successors shall not, without the prior written consent of Parent, terminate, modify or amend, or waive, release or assign any rights, obligations or claims under the Third Party Agreements, in any manner reasonably expected to adversely affect the RemainCo Business or RemainCo's or Parent's rights in connection therewith or related thereto. To the extent that the Company, SpinCo or any of their Affiliates or successors, as applicable, determines that a modification or amendment thereto is reasonably required, the Company, SpinCo or the applicable Affiliate or successor, as applicable, shall (a) promptly deliver to Parent a written notice describing in reasonable detail the scope, terms, and conditions of the proposed modification or amendment and requesting Parent's consent thereto, and (b) consult with Parent in good faith and consider Parent's views and comments with respect to such modification or amendment.

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SECTION 4.12 <u>Data and Materials Separation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As promptly as practicable (and, in any event, no later than 20 Business Days) after the date hereof, the Company, SpinCo and Parent shall use reasonable best efforts to agree upon a data and materials separation plan (the "*Data and Materials Separation Plan*"), pursuant to which the Parties and Parent shall (i) jointly review and determine which of the data, books, records, files, work papers, laboratory notebooks or other documents (whether in tangible or electronic form, but excluding the Commingled Contracts, which are addressed in <u>Section</u> <u>2.2(b)</u>), inventories and biological or research materials (including mouse models, antibody libraries, samples, clones, cell lines and assays), whether in possession of the Company, SpinCo or a Third Party, included within the RemainCo Assets or the SpinCo Assets are (A) exclusively related to the RemainCo Business, (B) exclusively related to the SpinCo Business or (C) related to both the RemainCo Business and the SpinCo Business (the assets described in this clause (C), the "*Commingled Assets*") and (ii) with respect to the Commingled Assets, determine each of RemainCo's and SpinCo's respective possession of, and rights of access to, such Commingled Assets (which will include the determination of appropriate redactions to ensure that each Party does not have access to data, information or such assets to the extent related to the other Party's Business). The Data and Materials Separation Plan will provide that, in the event of any disagreement regarding the determinations in accordance with the foregoing clause (i) or (ii), the Parties and Parent would engage one or more independent Third Parties (as designated in the Data and Materials Separation Plan) to resolve such disagreements. RemainCo shall retain possession of each Commingled Asset from and after completion of the Pre-Closing Reorganization unless and until the Parties and Parent determine, pursuant to the Data and Materials Separation Plan, that SpinCo should possess such Commingled Asset, at which time the Data and Materials Separation Plan will provide for RemainCo to furnish SpinCo with a copy or portion of any such Commingled Asset (which may, in the case of documents, be redacted or, in the case of other assets, separated, to the extent related to the RemainCo Business in accordance with the Data and Materials Separation Plan).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Parties and Parent shall use their respective reasonable best efforts to (i) implement the actions set forth in the Data and Materials Separation Plan prior to the Distribution Effective Time (or, in the case of SpinCo Assets delivered pursuant to <u>Section</u> <u>4.9</u>, as promptly as practicable following the date of delivery of such assets) and (ii) from and after the Distribution Effective Time, comply with the requirements under the Data and Materials Separation Plan with respect to the maintenance of Commingled Assets that by their nature cannot be fully disentangled. The Commingled Assets, (x) to the extent related to the RemainCo Business, shall constitute Confidential Information of the Company and (y) to the extent related to the SpinCo Business, shall constitute Confidential Information of SpinCo.

ARTICLE V

INDEMNIFICATION; RELEASE

SECTION 5.1 <u>Release of Pre-</u><u>Distribution</u> <u>Claims</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except (i) as provided in <u>Section</u> <u>5.1(b)</u>, (ii) as may be otherwise expressly provided in this Agreement, the Merger Agreement, the License Agreement or in the Transition Services Agreement or the Occupancy License Agreement, and (iii) for any matter for which any Indemnified Party is entitled to indemnification pursuant to this <u>Article V</u>, each Party (A) on behalf of itself and each member of its Group, and to the extent permitted by Law, all Persons who at any time prior to the Distribution were stockholders, directors, officers, agents or employees of any member of its respective Group (in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, does

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hereby, irrevocably but effective at the time of and conditioned upon the occurrence of the Distribution, and at the time of the Distribution shall, remise, release and forever discharge the other Party and the other members of such other Party's Group and their respective successors and all Persons who at any time prior to the Distribution were stockholders, directors, officers, agents or employees of any member of such other Party's Group (in their capacity as such), in each case, together with their respective heirs, executors, administrators, successors and assigns from any and all Liabilities whatsoever, whether at Law or in equity, whether arising under any Contract, by operation of Law or otherwise, in each case, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution, including in connection with the Pre-Closing Reorganization, Distribution or any of the other transactions contemplated hereunder, under the License Agreement, under the Transition Services Agreement and under the Occupancy License Agreement and (B) in any event will not, and will cause its respective Subsidiaries not to, bring any Proceeding or claim against any member of the other Group in respect of such Liabilities. Each Party hereby acknowledges that it is aware that factual matters now unknown to it may have given or may hereafter give rise to Liabilities that are presently unknown, unanticipated and unsuspected, and further agrees that this release has been negotiated and agreed upon in light of that awareness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Nothing contained in <u>Section</u> <u>5.1(a)</u> shall impair or otherwise affect any right of either Party and, as applicable, a member of such Party's Group, or Parent or its Affiliates, to enforce this Agreement, the Merger Agreement, the License Agreement, the Transition Services Agreement, the Occupancy License Agreement or any agreements, arrangements, commitments or understandings contemplated in this Agreement, the Merger Agreement, the License Agreement, the Transition Services Agreement or the Occupancy License Agreement to continue in effect after the Effective Time. In addition, nothing contained in <u>Section</u> <u>5.1(a)</u> shall release any Person from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Liability assumed, Transferred or allocated to a Party or a member of such Party's Group pursuant to or contemplated by, or any other Liability of any member of such Group under, this Agreement, the Merger Agreement, the License Agreement, the Transition Services Agreement or the Occupancy License Agreement including (A) with respect to the Company or any of its Affiliates, any RemainCo Liability and (B) with respect to SpinCo or any of its Affiliates, any SpinCo Liability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any Liability for unpaid amounts for products or services or refunds owing on products or services due on a value-received basis for work done by a member of one Group or its Affiliates at the request or on behalf of a member of the other Group or its Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any Liability provided in or resulting from any other Contract or understanding that is entered into after the Distribution Effective Time between any Party (or a member of such Party's or Parties' Group or any of their respective Affiliates), on the one hand, and the other Party (or a member of such other Party's Group or any of their respective Affiliates), on the other hand;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any Liability that the Parties may have with respect to indemnification pursuant to this Agreement, the Merger Agreement, the, License Agreement, Transition Services Agreement, the Occupancy License Agreement or otherwise for claims brought against the Parties by other Persons, which Liability shall be governed by the provisions of this <u>Article V</u> and, if applicable, the appropriate provisions of the Merger Agreement, the License Agreement, the Transition Services Agreement or the Occupancy License Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any Liability the release of which would result in a release of any Person other than the Persons released in <u>Section</u> <u>5.1(a)</u>; <u>provided</u>, that the Parties agree not to bring any Proceeding or permit any other member of their respective Group to bring any Proceeding against a Person released in <u>Section</u> <u>5.1(a)</u> with respect to such Liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Nothing contained in <u>Section</u> <u>5.1(a)</u> shall release the Company from indemnifying any director, officer or employee of SpinCo who was a director, officer or employee of the Company or any of its Affiliates prior to the Distribution Effective Time or the Effective Time, as the case may be, solely in their respective capacities with respect to the Company or its Affiliates prior to the Distribution Effective Time or Effective Time, as the case may be, to the extent such director, officer or employee is or becomes a named defendant in any Proceeding with respect to which he or she was entitled to such indemnification pursuant to then-existing obligations; it being understood that if the underlying obligation giving rise to such Proceeding is a SpinCo Liability (other than any Proceeding arising out of the Merger), SpinCo shall indemnify the Company and its Affiliates for such Liability (including the Company's costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this <u>Article V</u>. Nothing contained in <u>Section</u> <u>5.1(a)</u> shall release any person who is or was a director, officer or employee of the Company or any of its Affiliates prior to the Distribution Effective Time or the Effective Time, as the case may be, solely in their respective capacities with respect to the Company or its Affiliates prior to the Distribution Effective Time or Effective Time, as the case may be, solely to the extent such director, officer or employee is not entitled to be indemnified by the Company or its applicable Affiliate for such Liability under Delaware Law or the Company's or such applicable Affiliate's organizational documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each Party shall not, and shall not permit any member of its Group to, make any claim, demand or offset, or commence any Proceeding asserting any claim or demand, including any claim of contribution or any indemnification, against the other Party or any member of the other Party's Group, or any other Person released pursuant to <u>Section</u> <u>5.1(a)</u>, with respect to any Liabilities released pursuant to <u>Section</u> <u>5.1(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) It is the intent of each Party, by virtue of, and in accordance with, the provisions of this <u>Section</u> <u>5.1</u>, to provide, to the fullest extent permitted by applicable Law, for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed at or before the Effective Time, whether known or unknown, between or among either Party (or a member of such Party's Group), on the one hand, and the other Party (or a member of such other Party's Group), on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members at or before the Effective Time), except as specifically set forth in this <u>Section</u> <u>5.1</u>. At any time, at the reasonable request of the other Party, each Party shall cause each member of its respective Group and, to the extent practicable, each other Person on whose behalf it released Liabilities pursuant to this <u>Section</u> <u>5.1</u> to execute and deliver releases, to the fullest extent permitted by applicable Law, reflecting the provisions hereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each of RemainCo and SpinCo, each on behalf of itself and its Subsidiaries, hereby waives any claims, rights of termination and any other rights under any Contract by and between or among any member of the RemainCo Group or the SpinCo Group, related to or arising out of the Distribution (including with respect to any "change of control" or similar provision or from any Party no longer being an Affiliate of the other Party, and agrees that any change in rights or obligations that would automatically be effective as a result thereof be deemed amended to no longer apply).

SECTION 5.2 <u>Indemnification by the</u> <u>Company</u>. Except as otherwise specifically set forth in any provision of this Agreement, from and after the Distribution Date, the Company agrees to indemnify, defend and hold harmless the SpinCo Indemnitees from and against any and all Losses of the SpinCo Indemnitees to the extent arising out of, by reason of or otherwise in connection with (i) the RemainCo Liabilities, (ii) the failure of the Company or any other member of the RemainCo Group or any other Person to pay, perform or otherwise promptly discharge any RemainCo Liabilities, whether prior to, at or after the Distribution Effective Time, (iii) any breach by any member of the RemainCo Group of this Agreement, (iv) except to the extent it relates to SpinCo Liabilities, any guarantee, indemnification obligation, surety bond or other credit support agreement, arrangement, commitment or understanding to the extent discharged or performed by RemainCo or any of its Affiliates for the benefit of SpinCo or any of its Affiliates that survives the Distribution Effective Time, (v) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information supplied by Parent or Merger Sub in writing expressly for inclusion in the Spin-Off Registration Statement, the related Information Statement or the Proxy Statement (including any amendments or supplements), or any other filings with the SEC made in connection with the transactions contemplated by this Agreement, (vi) any Liabilities of the SpinCo Indemnitees relating to, arising out of or resulting from claims by any holders of common stock of the Company, in their capacity as such, in connection with the Distribution, except to the extent relating to, arising out of or resulting from existing agreements between such holders and any SpinCo Indemnitees, and (vii) any Company Indemnified Taxes. This <u>Section</u> <u>5.2</u> shall apply with respect to any Taxes solely to the extent such Taxes constitute Company Indemnified Taxes and in no event shall the Company be required to indemnify, defend and hold the SpinCo Indemnitees harmless from and against any and all Losses to the extent such Losses relate to Taxes that are not Company Indemnified Taxes.

SECTION 5.3 <u>Indemnification by</u> <u>SpinCo</u>. Except as otherwise specifically set forth in any provision of this Agreement, from and after the Distribution Date, SpinCo agrees to indemnify, defend and hold harmless the RemainCo Indemnitees from and against any and all Losses of the RemainCo Indemnitees to the extent arising out of, by reason of or otherwise in connection with (i) the SpinCo Liabilities; <u>provided</u>, that SpinCo shall have no obligation to indemnify the RemainCo Indemnitees to the extent any Losses incurred by SpinCo result from RemainCo's breach of any obligation to SpinCo under the License Agreement and to the extent

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such breach either constitutes or causes a breach by SpinCo under the Third Party Agreement identified in Section 1.1(a)(1) of the Company Disclosure Letter to the Merger Agreement, (ii) the failure of SpinCo or any other member of the SpinCo Group or any other Person to pay, perform or otherwise promptly discharge any SpinCo Liabilities, whether prior to, at or after the Distribution Effective Time, (iii) any breach by any member of the SpinCo Group of this Agreement, (iv) except to the extent it relates to RemainCo Liabilities, any guarantee, indemnification obligation, surety bond or other credit support agreement, arrangement, commitment or understanding to the extent discharged or performed by SpinCo or any of its Affiliates for the benefit of RemainCo or any of its Affiliates that survives the Distribution Effective Time, (v) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the Spin-Off Registration Statement, the related Information Statement or the Proxy Statement (including any amendments or supplements) or any other filings with the SEC made in connection with the transactions contemplated by this Agreement (but excluding any such Liabilities to the extent relating to information supplied by Parent or Merger Sub in writing expressly for inclusion in the Spin-Off Registration Statement, the related Information Statement, the Proxy Statement or such other filings), (vi) any Liabilities of the RemainCo Indemnitees relating to, arising out of or resulting from claims by any holders of common stock of SpinCo, in their capacity as such, in connection with the Distribution, (vii) any Liabilities of the RemainCo Indemnitees incurred in connection with RemainCo's performance of the services described in Section D of Schedule B to the Transition Services Agreement (including any Liabilities arising under non-cancellable commitments pursuant to the CMO Agreements, including related statements of work, used in connection with the provision of such services), except to the extent of any Liability of RemainCo under Section 6.2 of the Transition Services Agreement in connection with RemainCo's performance of such services; and (viii) any SpinCo Indemnified Taxes. This <u>Section</u> <u>5.3</u> shall apply with respect to any Taxes solely to the extent such Taxes constitute SpinCo Indemnified Taxes and in no event shall SpinCo be required to indemnify, defend and hold harmless the RemainCo Indemnitees from and against any and all Losses to the extent such Losses relate to Taxes that are not SpinCo Indemnified Taxes. Notwithstanding anything to the contrary herein, in no event shall SpinCo be required to indemnify, defend or hold harmless the RemainCo Indemnitees from and against any Losses to the extent such Losses relate to the matters set forth in Section 1.1(a)(i) of the Company Disclosure Letter to the Merger Agreement.

SECTION 5.4 <u>Claims</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If a claim or demand is made by a Third Party (a "*Third Party Claim*") against a SpinCo Indemnitee or a RemainCo Indemnitee (each, an "*Indemnified Party*") as to which such Indemnified Party is entitled to indemnification pursuant to this Agreement, such Indemnified Party shall notify the Party which is or may be required pursuant to <u>Section</u> <u>5.2</u> or <u>Section</u> <u>5.3</u> to make such indemnification (the "*Indemnifying Party*") in writing, and in reasonable detail (a "*Claim Notice*"). The Claim Notice shall be given promptly after the Indemnified Party becomes aware of the facts indicating that a claim for indemnification may be warranted and shall state in reasonable detail (to the extent known) the nature and amount of the claim. The failure of the Indemnified Party to promptly deliver a Claim Notice shall not relieve the Indemnifying Party of its obligations under this <u>Article V</u>, except to the extent that the Indemnifying Party is actually and materially prejudiced by the failure to give such Claim Notice.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If a Claim Notice relates to a Third Party Claim, the Indemnifying Party may, through counsel of its own choosing and reasonably satisfactory to the Indemnified Party, assume the defense and investigation of such Third Party Claim; <u>provided</u>, that the Indemnified Party shall be (i) entitled to participate in any such defense with counsel of its own choice at its own expense and (ii) entitled to participate in any such defense with counsel of its own choice at the expense of the Indemnifying Party if representation of both Parties by the same counsel creates a conflict of interest under applicable standards of professional conduct; <u>provided</u>, <u>further</u>, that, notwithstanding the foregoing clauses (i) and (ii), if any RemainCo Indemnitee asserts a claim under <u>Section</u> <u>5.3(v)</u>, the applicable Indemnified Parties shall be entitled to participate in any defense of such claim with counsel of their own choice at the expense of the Indemnifying Party. In any event, if the Indemnifying Party fails to take reasonable steps necessary to defend diligently the Proceeding within thirty (30) days after receiving a Claim Notice with respect to the Third Party Claim, the Indemnified Party may assume such defense, and the fees and expenses of its attorneys will be covered by the indemnity provided for in this <u>Article V</u>. The Indemnifying Party shall not, without the consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed), settle or compromise any pending or threatened Third Party Claim in respect of which indemnification may be sought hereunder (whether or not the Indemnified Party is an actual or potential party to such Proceeding) or consent to the entry of any judgment (i) which does not, to the extent that an Indemnified Party may have any Liability with respect to such Proceeding, include as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnified Party of a written release from all Liability in respect of such Third Party Claim, (ii) which includes any statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Party or (iii) in any manner that involves any injunctive relief against the Indemnified Party or that may materially and adversely affect the Indemnified Party. The Indemnified Party may not compromise or settle any pending or threatened Third Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed, unless the sole relief granted is equitable relief for which the Indemnifying Party would have no Liability or to which the Indemnifying Party would not be subject.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parties agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such Third Party Claim. In connection with any fact, matter, event or circumstance that may give rise to a claim against an Indemnifying Party under this Agreement, and in addition to the obligations of the Parties in <u>ARTICLE VI</u>, the Indemnified Party shall: (i) preserve all material evidence relevant to the claim; (ii) allow the Indemnifying Party's Representatives to investigate the fact, matter, event or circumstance alleged to give rise to such claim and whether and to what extent any amount is payable in respect of such claim; and (iii) disclose (at its own expense) to the Indemnifying Party and its Representatives all material of which it is aware which relates to the claim and provide all such information and assistance, including access to premises and personnel, and the right to examine and copy or photograph any assets, accounts, documents and records, as the Indemnifying Party or its Representatives may reasonably request, subject to the Indemnifying Party or its Representatives agreeing in such form as the Indemnified Party may reasonably require to keep all such information confidential and to use it only for the purpose of investigating and defending the claim in question.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except in the case of intentional fraud and as otherwise provided in this Agreement, the rights and remedies under this <u>Article V</u> are exclusive and in lieu of any and all other rights and remedies that any Party may have against any other Party or any failure to perform any covenant or agreement set forth in this Agreement. Each Party expressly waives any and all other rights, remedies and causes of action it or its Affiliates may have against the other Party, or their respective Affiliates, respectively, now or in the future under any Law with respect to the transactions contemplated by this Agreement. The remedies expressly provided in this Agreement shall constitute the sole and exclusive basis for and means of recourse between the Parties with respect to transactions contemplated by this Agreement.

SECTION 5.5 <u>Limitation of</u> <u>Liability</u><u>; Mitigation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Party may obtain duplicative indemnification or other recovery for Losses and recoveries under one or more provisions of this Agreement, License Agreement, the Transition Services Agreement or the Occupancy License Agreement or under any other Contract, agreement, arrangement or understanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Indemnified Party shall use reasonable best efforts to pursue all legal rights and remedies available to mitigate and minimize any Losses in respect of which such Indemnified Party is entitled to recover from an Indemnifying Party pursuant to this <u>Article V</u> promptly upon becoming aware of any event or circumstance that could reasonably be expected to constitute or give rise to such Losses; <u>provided</u>, that such efforts in respect of Taxes shall not be required to the extent such efforts give rise to a greater than *de minimis* cost to the Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any indemnity payment made by a Party to the other Party pursuant to this <u>Article V</u> in respect of a Loss shall be net of an amount equal to (i) any insurance proceeds actually received and any other amounts actually recovered from Third Parties (whether by payment, discount, credit, relief, insurance, reductions in Tax or otherwise) by the Indemnified Party or an Affiliate in respect of such claim, less (ii) any related costs and expenses of such receipt or recovery, including the aggregate cost of pursuing any related insurance claims and any Taxes. If the Indemnified Party or an Affiliate receives any amounts under applicable insurance policies, or from any other Person alleged to be responsible for any Losses, subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to the amount received by the Indemnified Party or its Affiliate, net of expenses incurred by such Indemnified Party in collecting such amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto solely by virtue of the indemnification provisions of this Agreement. The Indemnified Party shall use reasonable best efforts to seek to collect or recover any Third Party insurance proceeds or other indemnification, contribution or similar payments to which the Indemnified Party is entitled in connection with any Liability for which the Indemnified Party seeks indemnification pursuant to this <u>Article V</u>; <u>provided</u>, that the Indemnified Party's ability or inability to collect or recover any such insurance proceeds shall not limit the Indemnifying Party's obligations under this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The amount of any claim by an Indemnified Party under this Agreement (i) shall be reduced to reflect any actual Tax savings (for the avoidance of doubt, determined taking into account the corresponding effect on the U.S. federal (and applicable state and local) tax basis of the assets of the Indemnified Party) received by any Indemnified Party that result from the Losses that gave rise to such indemnity and (ii) shall be increased by an amount equal to any Tax cost incurred by any Indemnified Party that results from receipt of payments under this <u>Article V</u>.

SECTION 5.6 <u>Liability for Tax</u><u>es</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Other than as provided under <u>Section</u> <u>5.2</u>, <u>Section</u> <u>5.3</u>, <u>Section</u> <u>5.6(b)</u>, and <u>Section</u> <u>5.6(c)</u>, each Party is responsible for its own Taxes as imposed under applicable Law, and no indemnification shall be provided under this Agreement by either Party with respect to Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall be liable for any Company Indemnified Taxes and SpinCo shall be liable for any SpinCo Indemnified Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company and SpinCo each hereby agree, any transfer, excise, sales, use, value added, stamp, documentary, filing, recordation taxes and other similar Taxes, fees and charges (including real property transfer taxes) incurred in connection with this Agreement and the transaction contemplated hereby, together with any interest, penalties or additions with respect thereto ("*Transfer Taxes*") shall be split equally between the Company and SpinCo. The Parties agree to cooperate to minimize or eliminate any Transfer Taxes. The Party legally required to do so shall file all necessary Tax Returns and other documentation with respect to any Transfer Taxes and pay any such Transfer Taxes to the applicable Governmental Authority, and the other Parties shall cooperate in connection with the filing of such Tax Returns.

SECTION 5.7 <u>Tax Returns</u>.(a)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall prepare (or cause to be prepared) and timely file (or cause to be filed) all Tax Returns of the Company (including any Tax Returns filed on a consolidated, combined, unitary or similar basis which the Company is responsible to file) for the Pre-Distribution Tax Period (such Tax Returns, "*Company Prepared Returns*"). Unless otherwise required by Law, all Company Prepared Returns shall be prepared in a manner consistent with prior practice of preparing the relevant Tax Return and the Intended Tax Treatment, provided that the Company may in its sole discretion make any election under Section 174 of the Code (including as amended by the One Big Beautiful Bill Act of 2025) or Section 174A of the Code regardless of whether such election would be consistent with prior practice. To the extent any Company Prepared Return is reasonably expected to result in SpinCo becoming responsible for a payment of Taxes pursuant to <u>Section</u> <u>5.6(b)</u>, the Company shall submit such Company Prepared Return to SpinCo at least fifteen (15) days (or, in the case of any such Tax Return due within fifteen (15) days of the Distribution Date, as soon as reasonably practicable) prior to the due date (taking into account any extensions of the time to file) for SpinCo's review, and the Company shall consider in good faith any reasonable comments proposed by SpinCo within fifteen (15) days of its receipt of such Company Prepared Return.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) SpinCo shall prepare (or cause to be prepared) and timely file (or cause to be filed) all Tax Returns of SpinCo or any of its Subsidiaries for the Pre-Distribution Tax Period and are required to filed after the Pre-Closing Reorganization, other than Company Prepared Returns (such Tax Returns to be filed by SpinCo, "*SpinCo Prepared Returns*"). Unless otherwise required by Law, all SpinCo Prepared Returns shall be prepared in a manner consistent with prior Tax Returns and the Intended Tax Treatment. To the extent any SpinCo Prepared Return is reasonably expected to result in the Company becoming responsible for a payment of Taxes pursuant to <u>Section</u> <u>5.6(b)</u>, SpinCo shall submit such SpinCo Prepared Return to the Company at least fifteen (15) days (or, in the case of any such Tax Return due within fifteen (15) days of the Distribution Date, as soon as reasonably practicable) prior to the due date (taking into account any extensions of the time to file) for the Company's review, and SpinCo shall consider in good faith any reasonable comments proposed by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parties (together with such Parties' respective Affiliates) shall not take any position on any Tax Return or in connection with any Tax Contest with respect to any Tax Return that is inconsistent with the Intended Tax Treatment or, if applicable, <u>Section</u> <u>5.9</u> unless and until there has been a final determination within the meaning of Section 1313 of the Code (or any similar state, local or non-U.S. law) ("*Final Determination*") or if required as a result of a change of applicable Law after the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A Party or its Subsidiary that is entitled to file an amended Tax Return for a Pre-Distribution Tax Period shall be permitted to prepare and file an amended Tax Return at its own cost and expense; <u>provided</u>, <u>however</u>, that (i) such amended Tax Return shall be prepared in a manner consistent with the past practice of the Parties and their Affiliates unless otherwise modified by a Final Determination or otherwise required by applicable Law; and (ii) if such amended Tax Return is reasonably expected to result in the other Party becoming responsible for a payment of Taxes shown thereon or pursuant to <u>Section</u> <u>5.6</u>, such Party shall file such amended Tax Return only if the prior written consent of the respective other Party has been obtained, such consent not to be unreasonably withheld, conditioned or delayed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Party shall be entitled to refunds (including any similar credit or offset of Taxes) that relate to Taxes for which it is liable hereunder in accordance with <u>Section</u> <u>5.6</u>, net of any reduction for reasonable costs and additional Taxes in connection thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company shall use reasonable best efforts to file U.S. federal income Tax Returns as the common parent on a consolidated basis under Section 1502 of the Code and the Treasury Regulations thereunder, and any similar state or local income Tax Returns (each, a "*Consolidated Return*") that include SpinCo and each of its Subsidiaries as may be filed under applicable state or local Law, for the taxable periods during which SpinCo is a Subsidiary of the Company and an affiliate of the Company for purposes of Section 1502 and the Treasury Regulations thereunder. SpinCo and each of its Subsidiaries, as applicable, will consent to join in the filing of any Consolidated Return filed by the Company and shall designate the Company as its agent for the purpose of taking any and all action necessary or incidental to such filing, including providing the Company with any and all reasonable information and consents as may be required and taking any and all other action as the Company may reasonably request that is necessary or useful for the filing of such Consolidated Return.

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SECTION 5.8 <u>Tax</u> <u>Contests</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Parties shall notify each other within twenty (20) Business Days after receipt by it or any of its Affiliates of written notice of any pending U.S. federal, state, local or foreign Tax audit or examination or notice of deficiency or other adjustment, assessment or redetermination relating to any Company Indemnified Taxes or SpinCo Indemnified Taxes for which the other Party could be responsible hereunder (a "*Tax Claim*"); <u>provided</u>, <u>however</u>, that the failure to give such notice shall not relieve the Parties of any of its obligations under this <u>Section</u> <u>5.8</u>, except to the extent that the other Party is actually and materially prejudiced by such failure. Such notice shall specify in reasonable detail the basis for such Tax Claim and shall include a copy of the relevant portion of any correspondence received from any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company will have the right to control, at its own expense, any Tax Claim that relates to a Company Prepared Return (a "*Company Controlled Claim*"); <u>provided</u>, <u>however</u>, that to the extent that such Company Controlled Claim could reasonably be expected to result in SpinCo becoming responsible for a payment pursuant to <u>Section</u> <u>5.6(b)</u> or otherwise increase any tax liability of SpinCo for any tax period beginning after the Distribution Date, the Company shall (i) keep SpinCo reasonably informed of material developments with respect to such Company Controlled Claim, (ii) consult with SpinCo before taking any significant or material action in connection with such Company Controlled Claim and (iii) to the extent such Company Controlled Claim is reasonably expected to result in SpinCo becoming responsible for any SpinCo Indemnified Taxes, not settle, compromise or abandon any such Company Controlled Claim without obtaining the prior written consent of SpinCo (such consent not to be unreasonably withheld, conditioned or delayed).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) SpinCo will have the right to control, at its own expense, any Tax Claim that relates to a SpinCo Prepared Return (a "*SpinCo Controlled Claim*"); <u>provided</u>, <u>however</u>, that to the extent such Company Controlled Claim could reasonably be expected to result in the Company becoming responsible for a payment pursuant to <u>Section</u> <u>5.6(b)</u>, SpinCo shall (i) keep the Company reasonably informed of material developments with respect to such SpinCo Controlled Claim, (ii) consult with the Company before taking any significant or material action in connection with such SpinCo Controlled Claim and (iii) to the extent such SpinCo Controlled Claim is reasonably expected to result in Company Indemnified Taxes, not settle, compromise or abandon any such SpinCo Controlled Claim without obtaining the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding the provisions of <u>Section</u> <u>5.4(a)</u> and <u>Section</u> <u>5.4(b)</u> (*Claims*), the provisions of this <u>Section</u> <u>5.8</u> shall exclusively control with respect to any Tax Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Except for the provisions of <u>Section</u> <u>5.6</u> and foregoing provisions of this <u>Section</u> <u>5.8</u>, any and all Tax sharing, Tax allocation, Tax indemnity or similar agreements, arrangements, or practices (including any advance pricing agreement, closing agreement or other similar written agreement relating to Taxes with any Governmental Authority, but excluding (i) customary commercial Contracts the primary purpose of which is not Taxes and (ii) any

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agreements or arrangements solely between SpinCo and SpinCo Subsidiaries) to which SpinCo or any of its Subsidiaries is a party or otherwise subject shall be terminated as of the Distribution Date and after the Distribution Date neither of SpinCo nor any of its Affiliates shall be bound thereby, have any Liability thereunder, or be obligated to make any payment thereunder. Notwithstanding any other provision in any such Tax sharing, Tax Allocation, Tax indemnity or similar agreement relating to the Tax liabilities of the consolidated group of which the Company is the parent, SpinCo and its Subsidiaries shall not be entitled to any payment or any compensation for the actual or future use by such consolidated group of any Tax attribute of SpinCo or any of its Subsidiaries.

SECTION 5.9 <u>Section 336</u><u>(e)</u> <u>Election</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the Distribution is effected and the Company is able to file a Consolidated Return for U.S. federal income tax purposes, the Company and its Subsidiaries, on the one hand (not including SpinCo and its Subsidiaries), and SpinCo and its Subsidiaries, on the other hand, shall enter into a written, binding agreement, in accordance with Treasury Regulations Section 1.336-2(h)(1)(i), or otherwise the Parties shall enter into a written, binding agreement, in accordance with Treasury Regulations Section 1.336-2(h)(2)(i), in each case, to make the Section 336(e) Election (the "*Section 336(e) Agreement*"). In each case:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Parties shall enter into the Section 336(e) Agreement within the time and manner required pursuant to Treasury Regulations Section 1.336-2(h);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Company and, if applicable, SpinCo shall make (or cause any of its Affiliates to make) a timely and irrevocable election under Section 336(e) of the Code (and any similar provision of applicable state or local income Tax Law) and Treasury Regulations Section 1.336-2(h) with respect to the Distribution (the "*Section 336(e) Election*") consistent with the Section 336(e) Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Company and SpinCo shall reasonably cooperate in the preparation of the "Section 336(e) election statement" as described in Treasury Regulations Section 1.336-2(h)(5) and (6) (the "*Section 336(e) Election Statement*"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Company, and if applicable, SpinCo, shall duly execute and file a properly completed Section 336(e) Election Statement and, if applicable, provide SpinCo a copy thereof in accordance with Treasury Regulations Section 1.336-2(h)(1)(iv).

The Company and SpinCo hereby agree to be bound by the Section 336(e) Agreement, if any, and the Section 336(e) Election, if any, and, if the Section 336(e) Election is made, shall (and shall cause their respective Affiliates to): (1) take all necessary actions to effectuate the Section 336(e) Election, (2) act in accordance with the Section 336(e) Election for all applicable Tax purposes (including in the preparation and filing of any Tax Returns), (3) not take, or cause to be taken, any action or position inconsistent with the Section 336(e) Election unless required to do so pursuant to a Final Determination, and (4) duly and timely file all income Tax Returns and any other forms, attachments and schedules necessary to effectuate the Section 336(e) Election (including IRS Form 8883 and any similar forms under applicable state and local income Tax laws).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Within thirty (30) days after the Distribution Date (or as soon as reasonably practicable thereafter), SpinCo shall provide to the Company a schedule which will provide for the determination of the "aggregate deemed asset disposition price" and the "adjusted grossed-up basis" (each as defined under applicable Treasury Regulations) and the allocation of such "aggregate deemed asset disposition price" and "adjusted grossed-up basis" (which shall be based on the SpinCo Post-Distribution Value provided by the Company and as used by Company for filing its income Tax Returns) among the Distribution Date assets of the applicable member or members of the applicable Group, each in accordance with Section 336 of the Code and applicable Treasury Regulations thereunder or any comparable provisions of state or local law (the "*Section 336(e) Allocation Statement*"). If within thirty (30) days after the Company's receipt of the Section 336(e) Allocation Statement, the Company agrees in writing to such Section 336(e) Allocation Statement, then the Section 336(e) Allocation Statement shall be final and binding on the parties hereto, and the Company, SpinCo and their respective Affiliates shall file all Tax Returns in a manner consistent with such agreed Section 336(e) Allocation Statement. In the event the Company objects in writing to the Section 336(e) Allocation Statement within such thirty (30)-day period ("*Objection Notice*"), SpinCo and the Company shall negotiate in good faith to resolve the dispute. If, after a period of thirty (30) days following the Company's submission of an Objection Notice to SpinCo, any proposed changes set forth in the Objection Notice remain disputed, all such disputes shall be submitted as promptly as practical to an internationally recognized independent accounting firm reasonably acceptable to SpinCo and the Company (the "*Accounting Expert*") for resolution, together with such supporting documentation and information as the Parties deem appropriate (it being agreed that the Parties will make their respective submissions contemporaneously on a date and in a manner directed by the Accounting Expert, and with a copy sent simultaneously and in the same manner to the other Party). The Accounting Expert shall act solely as an accounting expert and not as an arbitrator. The Accounting Expert (i) shall be bound by the provisions set forth in this Agreement, including the allocation principles set forth in this <u>Section</u> <u>5.9</u>, (ii) may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value for such item claimed by either SpinCo or the Company, and (iii) shall consider only those items and amounts set forth in the Objection Notice and the Section 336(e) Allocation Statement, including each of the components thereof, that are identified as being items and amounts to which SpinCo and the Company have been unable to agree. The fees, costs and expenses of the Accounting Expert will be allocated to and borne in inverse proportion to the relative extent to which SpinCo, on the one hand, and the Company, on the other hand, prevail on the disagreements resolved by the Accounting Expert. The Accounting Expert shall finally and conclusively resolve any dispute relating to matters set forth in this <u>Section</u> <u>5.9(b)</u> within thirty (30) days following receipt of the submission. Such determination of the Accounting Expert shall, absent fraud or manifest error, be final, conclusive and binding upon, and non-appealable by, the parties hereto. Notwithstanding anything herein to the contrary, the failure of the Accounting Expert to strictly conform to any deadline or time period contained herein shall not render the determination of the Accounting Expert invalid and shall not be a basis for seeking to overturn any determination rendered by the Accounting Expert. Promptly upon receiving the final and binding Section 336(e) Allocation Statement, SpinCo and the Company shall return an executed copy thereof to the other Party. If a Section 336(e) Election is made, SpinCo, the Company and their respective Affiliates will not take any position, whether in audits, Tax Returns, or otherwise, that is inconsistent with any such final and binding Section 336(e) Allocation Statement unless required to by a Final Determination or otherwise required by applicable Law.

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ARTICLE VI

ACCESS TO INFORMATION

SECTION 6.1 <u>Provision of Corporate</u> <u>Records</u>. After the Distribution Date, upon the prior written request by a Party or any of its Affiliates for specific and identified agreements, documents, books, records or files (whether written or electronic) including accounting and financial records (collectively, "*Records*") which relate to such Party and the conduct of its Business, or which such Party determines are reasonably necessary or advisable in order for such Party or any of its Affiliates to prepare its financial statements and any reports or filings to be made with any Governmental Authority or for legal compliance, the other Party shall arrange, as soon as reasonably practicable following the receipt of such request, to provide appropriate copies of such Records (or the originals thereof if the requesting Party has a reasonable purpose for such originals) in the possession or control of such other Party or any member of its Group to the extent such items are not already in the possession or control of the requesting Party or its Affiliates; <u>provided</u>, that this sentence shall not require any Party or such Party's Affiliates to (i) disclose any Records, that in the reasonable judgment of such Party would (A) be detrimental to such Party's or any of its Affiliates' Business or operations, (B) result in the disclosure of any trade secrets or know-how of Third Parties or violate any of its obligations with respect to confidentiality, (C) be reasonably likely to result in a violation of any Law, fiduciary duty or binding agreement entered into prior to the date of this Agreement or (D) if SpinCo or any of its Affiliates after giving effect to the Distribution, on the one hand, and the Company or any of its Affiliates after giving effect to the Distribution, on the other hand, are adverse parties in a litigation or other Proceeding to disclose or permit access to any information that is reasonably pertinent to such litigation or other Proceeding or (ii) disclose any Privileged Information of any Party or any of its Affiliates.

SECTION 6.2 <u>Access to Information</u>. Subject to applicable Law, for a period of five (5) years following the Distribution Date, upon reasonable prior notice, each of the Company and SpinCo shall (and shall cause its Subsidiaries to) afford the other applicable Party's officers and other authorized Representatives reasonable access, during normal business hours, to its employees and properties that relate to such other Party's Business and, during such period, each Party shall (and shall cause its Subsidiaries to) furnish promptly to the other Party all information concerning such other Party's Business, as applicable, and such other Party's properties and personnel related thereto as may be reasonably requested; <u>provided</u>, that this sentence shall not require any Party or such Party's Subsidiaries to (a) permit any inspection, or to disclose any information, that in the reasonable judgment of such Party would (i) be detrimental to such Party's or any of its Subsidiaries' Business or operations, (ii) result in the disclosure of any trade secrets or know-how of Third Parties or violate any of its obligations with respect to confidentiality, (iii) be reasonably likely to result in a violation of any Law, fiduciary duty or binding agreement entered into prior to the date of this Agreement or (iv) if SpinCo or any of its Affiliates after giving effect to the Distribution, on the one hand, and the Company or any of its Affiliates after giving effect to the Distribution, on the other hand, are adverse parties in a litigation or other Proceeding to disclose or permit access to any information that is reasonably pertinent to such litigation or other Proceeding, (b) disclose any Privileged Information of any Party or any of its Subsidiaries or (c) submit to any invasive environmental testing or sampling. Notwithstanding the foregoing, neither Party shall be required to provide the other Party with any documents or information protected by the attorney-client privilege, work-product doctrine, or any similar legal protection that were created after giving effect to the Distribution and relate solely to such Party's own business; <u>provided</u>, that each Party shall cooperate in good faith to provide, to the extent practicable, non-privileged information responsive to any reasonable request under this <u>Section</u> <u>6.2</u>.

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SECTION 6.3 <u>Tax</u> <u>Information and Cooperation</u>. The Company and SpinCo shall reasonably cooperate and shall cause their respective Affiliates and Representatives to reasonably cooperate, in respect of the Pre-Closing Reorganization, the Distribution and in preparing and filing all Tax Returns relating to any Pre-Distribution Tax Period, including maintaining and making available to each other, and to any Governmental Authority as reasonably requested, their respective employees and all records reasonably necessary in connection with Taxes of SpinCo or the SpinCo Business and in resolving all disputes and audits relating to Taxes allocable to a Pre-Distribution Tax Period. The Company and SpinCo agree to use reasonable best efforts (i) to retain all books and records (or, in the alternative, to deliver such books and records to SpinCo) with respect to Tax matters pertinent to SpinCo or the SpinCo Business relating to any Tax period beginning before the Distribution Date until ninety (90) days after the expiration of the applicable statute of limitations (taking into account any extensions of the time to file) and to abide by all record retention agreements entered into with any Governmental Authority and (ii) to allow the other Party, their respective Affiliates and Representatives, at times and dates mutually acceptable to the Parties, to inspect, review and make copies of such records as may be reasonably necessary or appropriate from time to time, such activities to be conducted during normal business hours and at such Party's expense. The Party requesting such cooperation will bear the reasonable out-of-pocket costs of the other Party. In no event shall any Party be entitled to receive information under this <u>Section</u> <u>6.3</u> that does not relate solely to SpinCo or the SpinCo Business except that, in the case of Tax information relating in part to SpinCo or the SpinCo Business, a Party otherwise required to provide Tax information under this <u>Section</u> <u>6.3</u> shall use reasonable best efforts to provide such Tax information as relates solely to SpinCo or the SpinCo Business (which may include, to the extent reasonable, redacted versions of such information that show solely the portions of the relevant materials that relate solely to SpinCo or the SpinCo Business). For the avoidance of doubt, this <u>Section</u> <u>6.3</u> shall be subject to the last sentence of <u>Section</u> <u>5.6(c)</u>. Notwithstanding anything to the contrary in this Agreement, in no event shall SpinCo or any of its Subsidiaries be entitled pursuant to this <u>Section</u> <u>6.3</u> or otherwise under this Agreement to have any access to any consolidated, combined, unitary or similar Tax Return (i) with respect to any taxable period beginning after the Distribution for which the Company or any of its Subsidiaries (not including SpinCo and its Subsidiaries) is the parent or (ii) with respect to any taxable period for which a Person other than the Company or any its Affiliates (as determined prior to the Distribution) is the parent. Notwithstanding anything to the contrary in this Agreement, the Company or any of its Affiliates (not including SpinCo and its Subsidiaries) shall not be entitled under this Agreement to have access to any income Tax Return of SpinCo or any of its Subsidiaries with respect to any taxable period beginning after the Distribution Effective Time except to the extent reasonably necessary in connection with any dispute relating to any Company Indemnified Taxes or SpinCo Indemnified Taxes (which may include, to the extent reasonable, redacted versions of such information that show solely the portions of the relevant materials that relate solely to the Company Indemnified Taxes or SpinCo Indemnified Taxes, as applicable). Notwithstanding the provisions of <u>Section</u> <u>6.2</u>, the provisions of <u>Section</u> <u>5.8</u> and this <u>Section</u> <u>6.3</u> shall exclusively control with respect to access to Tax information.

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SECTION 6.4 <u>Witnesses; Documents and Cooperation in</u> <u>Proceedings</u>. At all times from and after the Distribution Date, each of the Company and SpinCo shall use reasonable best efforts to make available to the other, upon reasonable written request, its and its Subsidiaries' former and then-current Representatives as witnesses and any Records within its control or which it otherwise has the ability to make available without undue burden, to the extent that such Persons or Records may reasonably be required in connection with the prosecution or defense of any Proceeding in which the requesting Party may from time to time be involved. The requesting Party shall bear all reasonable out-of-pocket costs and expenses incurred in connection therewith. This provision shall not apply to any Proceeding brought by one Party against another Party (as to which production of documents and witnesses shall be governed by applicable discovery rules).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Without limiting any provision of this <u>Section</u> <u>6.4</u>, the Parties shall cooperate and consult, and shall cause each member of their respective Groups to cooperate and consult, to the extent reasonably necessary with respect to any Proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In connection with any matter contemplated by this <u>Section</u> <u>6.4</u>, the Parties will enter into a mutually acceptable joint defense agreement so as to maintain to the extent practicable any applicable attorney-client privilege or work product immunity of any member of any Group.

SECTION 6.5 <u>Confidentiality</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding any termination of this Agreement, during the term of this Agreement and for a period of ten (10) years following any such termination (except that the nondisclosure obligations and restrictions on use with respect to any Confidential Information that constitutes a trade secret shall continue in effect for so long as the Confidential Information remains a trade secret under applicable Law), each Party shall, and shall cause each of the other members of its Group and each of its and their respective Affiliates to, hold, and cause each of their respective officers, employees, agents, consultants and advisors to hold, in strict confidence, at a standard of care no less than that used for its own Confidential Information (and in any event no less than a reasonable standard of care), and not to disclose or release or, except as otherwise permitted by this Agreement, the License Agreement, the Transition Services Agreement or the Occupancy License Agreement, use, without the prior written consent of the applicable Party to whom (or to whose Group) the Confidential Information relates (which may be withheld in each such Party's sole and absolute discretion), any and all Confidential Information concerning or belonging to the other Party, any member of its Group or any of its or their respective Affiliates; <u>provided</u>, that each Party may disclose, or may permit disclosure of, such Confidential Information of the other Party (i) to its (or any member of its Group's or any of its or their respective Affiliates') respective auditors, attorneys, financial advisors, bankers and other appropriate employees, consultants and advisors who have a need to know such Confidential Information for auditing and other purposes and are informed of the confidentiality and non-use obligations to the same extent as is applicable to the Parties and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if any Party, any member of its Group or any of its or their respective Affiliates is required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule, (iii) to the extent required in connection with any Proceeding by one Party (or a member of its Group or

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any of its or their respective Affiliates) against any other Party (or member of such other Party's Group or any of its or their respective Affiliates) or in respect of claims by one Party (or member of its Group or any of its or their respective Affiliates) against the other Party (or member of such other Party's Group or any of its or their respective Affiliates) brought in a Proceeding, (iv) to the extent necessary in order to permit a Party (or member of its Group or any of its or their respective Affiliates) to prepare and disclose its financial statements in connection with any regulatory filings or Tax Returns, (v) to the extent necessary for a Party (or member of its Group) to exercise or enforce its rights or perform its obligations under this Agreement, the License Agreement, the Transition Services Agreement, the Occupancy License Agreement or the Third Party Agreements or to conduct its respective Business, (vi) to any Governmental Authority in accordance with applicable procurement regulations and contract requirements or (vii) to other Persons in connection with their evaluation of, and negotiating and consummating, a potential strategic transaction, to the extent reasonably necessary in connection therewith, provided an appropriate and customary confidentiality agreement has been entered into with the Person receiving such Confidential Information containing confidentiality, non-use and other terms that are no less favorable to the applicable Party to whom (or to whose Group) the Confidential Information relates in the aggregate than those contained in this <u>Section</u> <u>6.5</u>. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made by a Third Party that relates to clauses (ii), (iii), or (vi) above, each Party, as applicable, shall promptly notify (to the extent permissible by Law) the Party to whom (or to whose Group or its or their respective Affiliates) the Confidential Information relates of the existence of such request, demand or disclosure requirement and shall provide such Party (or any applicable member of its Group or its or their respective Affiliates) a reasonable opportunity to seek, at its expense, an appropriate protective order or other remedy, which such Parties shall, and shall cause the other members of their respective Group (or, if applicable, its or their respective Affiliates) to, cooperate in obtaining to the extent reasonably practicable. In the event that such appropriate protective order or other remedy is not obtained, the Party who is (or whose Group's member, or respective Affiliate, is) required to make such disclosure shall or shall cause the applicable member of its Group or applicable Affiliate to furnish (at the expense of the Party seeking to limit such request, demand or disclosure requirement), or cause to be furnished, only that portion of the Confidential Information that is legally required to be disclosed and shall take reasonable best steps to ensure that confidential treatment is accorded to such Confidential Information (at the expense of the Party seeking (or whose Group's member, or applicable Affiliate, is seeking) to limit such request, demand or disclosure requirement). Any Confidential Information disclosed under any of the preceding provisions of this <u>Section</u> <u>6.5</u><u>(a)</u> shall continue to otherwise be treated as Confidential Information following such disclosure, <u>provided</u>, that such disclosure is not a public disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of SpinCo and the Company acknowledges, on behalf of itself and each other member of its Group, that it and the other members of its Group may have in their possession confidential or proprietary information of Third Parties that was received under confidentiality or non-disclosure agreements or policies with each such Third Party while such Party or members of its Group were Subsidiaries of the Company prior to the Distribution Date. Each of SpinCo and the Company shall, and shall cause the other members of its Group to, hold and cause its and their respective Affiliates and Representatives (or potential buyers) to hold, in strict confidence the confidential and proprietary information of Third Parties to which they or any other member of their respective Groups has access, in accordance with the terms of any policies or agreements entered into prior to the Distribution Date between one or more members of the SpinCo Group or the RemainCo Group (whether acting through, on behalf of, or in connection with, the separated Businesses) and such Third Parties.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) With respect to any Personal Data disclosed by a Party pursuant to this Agreement, each Party agrees to comply with all applicable Data Protection and Information Security Requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) For the avoidance of doubt and notwithstanding any other provision of this <u>Section</u> <u>6.5</u>, the disclosure and sharing of Privileged Information shall be governed solely by <u>Section</u> <u>6.6</u>. For clarity, to the extent that any Contract or policy to which a Party is bound or its Confidential Information is subject provides that certain Confidential Information shall be maintained confidential on a basis that is more protective of such Confidential Information or for a longer period of time than provided for in this <u>Section</u> <u>6.5</u>, then the applicable provisions contained in such Contract or policy shall control with respect thereto.

SECTION 6.6 <u>Privileged Matters</u>. The Parties recognize that legal and other professional services that have been and will be provided prior to the Distribution Date have been and will be rendered for the benefit of each of the members of the RemainCo Group and the members of the SpinCo Group, and that each of the members of the RemainCo Group and each of the members of the SpinCo Group should be deemed to be the client for the purposes of asserting all privileges which may be asserted under applicable Law. To allocate the interests of each Party in the information as to which any Party is entitled to assert a privilege, the Parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with Privileged Information that relates exclusively to the RemainCo Business (other than with respect to Liabilities as to which SpinCo is required to provide indemnification under <u>Article V</u>), whether or not the Privileged Information is in the possession of or under the control of the Company or SpinCo. The Company shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges, immunities or other protections in connection with any Privileged Information that relates exclusively to the subject matter of any claims constituting RemainCo Liabilities, or other Liabilities as to which it is required to provide indemnification under <u>Article V</u><u>,</u> now pending or which may be asserted in the future, whether or not the Privileged Information is in the possession of or under the control of any member of the RemainCo Group or the SpinCo Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) SpinCo shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with Privileged Information which relates exclusively to the SpinCo Business (other than with respect to matters or claims that are RemainCo Liabilities or other Liabilities as to which the Company is required to provide indemnification under <u>Article V</u>), whether or not the Privileged Information is in the possession of or under the control of the Company or SpinCo. SpinCo shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges, immunities or other protections in connection with any Privileged Information which relates exclusively to the subject matter of any claims constituting SpinCo Liabilities, or other Liabilities as to which it is required to provide indemnification under <u>Article V</u>, now pending or which may be asserted in the future, in any lawsuits or other Proceedings initiated against or by SpinCo, whether or not the Privileged Information is in the possession of SpinCo or under the control of any member of the RemainCo Group or the SpinCo Group.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parties agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this <u>Section</u> <u>6.6</u>, with respect to all privileges not allocated pursuant to the terms of <u>Section</u> <u>6.6(a)</u> and <u>(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No Party may waive any privilege which may be asserted under any applicable Law, and in which the other Party has a shared privilege, without the written consent of the other Party, such consent not to be unreasonably withheld, conditioned or delayed, except to the extent reasonably required in connection with any Third Party Claims or as provided in <u>Section</u> <u>6.6(e)</u> below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In the event of any litigation or dispute between or among the Parties, or any members of the respective Groups, either Party may waive a privilege in which the other Party has a shared privilege, without obtaining the consent of the other Party, <u>provided</u>, <u>however</u>, that such waiver of a shared privilege shall be effective only as to the use of Privileged Information with respect to the litigation or dispute between the members of the respective Groups, and shall not operate as a waiver of the shared privilege with respect to any Third Party Claims.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) If a dispute arises between or among the Parties or any members of the respective Groups regarding whether a privilege should be waived to protect or advance the interest of any Party, each Party agrees that it shall (i) negotiate in good faith, (ii) endeavor to minimize any prejudice to the rights of the other Party, and (iii) not unreasonably withhold consent to any request for a waiver by the other Party. Each Party hereto specifically agrees that it will not withhold consent to a waiver for any purpose except to protect its own legitimate interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Upon receipt by any member of the respective Groups of any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of Privileged Information subject to a shared privilege or as to which another Party has the sole right hereunder to assert a privilege, or if any Party obtains knowledge that any of its or any member of its Group's current or former Representatives have received any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of such Privileged Information, such Party shall promptly notify the other Party of the existence of the request (which notice shall be delivered to such other Party no later than five (5) Business Days following the receipt of such subpoena, discovery or other request) and shall provide the other Party a reasonable opportunity to review the information and to assert any rights it or they may have under this <u>Section</u> <u>6.6</u> or otherwise to prevent the production or disclosure of such Privileged Information. For the avoidance of doubt, nothing in this <u>Section</u> <u>6.6</u> shall require either Party to disclose or seek consent to disclose any privileged communications or attorney work product created after giving effect to the Distribution that relate solely to such Party's business, consistent with <u>Section</u> <u>6.2</u><u>.</u>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The transfer of all Records and other information pursuant to this Agreement is made in reliance on the agreements of the Company and SpinCo, as set forth in <u>Section</u> <u>6.2</u>, <u>Section</u> <u>6.3</u>, <u>Section</u> <u>6.4</u>, <u>Section</u> <u>6.5</u> and this <u>Section</u> <u>6.6</u>, to maintain the confidentiality of Privileged Information and to assert and maintain all applicable privileges. The access to information being granted pursuant to <u>Section</u> <u>6.1</u>, <u>Section</u> <u>6.2</u>, <u>Section</u> <u>6.3</u> and <u>Section</u> <u>6.4</u> hereof, the agreement to provide witnesses and individuals pursuant to <u>Section</u> <u>6.2</u> and <u>Section</u> <u>6.4</u> hereof, the furnishing of notices and documents and other cooperative efforts contemplated by <u>Section</u> <u>6.4</u> hereof, and the transfer of Privileged Information between and among the Parties and their respective Subsidiaries and Representatives pursuant to this Agreement shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

SECTION 6.7 <u>Owners</u><u>hip of Informa</u><u>tion</u>. Any information owned by one Party or any member of its Group or any of its or their respective Affiliates that is provided to a requesting Party pursuant to <u>Article V</u> or this <u>ARTICLE VI</u> shall be deemed to remain the property of the providing Party (or member of its Group or applicable Affiliate). Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights to any Party (or member of its Group or any of its or their respective Affiliates) of license or otherwise in any such information, whether by implication, estoppel or otherwise.

SECTION 6.8 <u>Cost of Providing</u> <u>Records</u> <u>and Information</u>. A Party requesting Records, information or access to personnel, witnesses or properties, under <u>Article V</u> or this <u>ARTICLE VI</u>, agrees to reimburse the other Party (or member of such Party's Group or its or their respective Affiliates), upon the presentation of invoices therefor, for the reasonable out-of-pocket costs (which shall not include the costs of salaries and benefits of employees of such Party (or its Group or any of its or their respective Affiliates) or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees' employer regardless of the employees' service with respect to the foregoing), if any, incurred in seeking to satisfy the request of the requesting Party (or member of such Party's Group or any of its or their respective Affiliates).

SECTION 6.9 <u>Retention of</u> <u>Records</u>. Except (a) as provided in <u>Section</u> <u>6.3</u>, (b) when a longer retention period is otherwise required by applicable Law or (c) as agreed to in writing by the Parties, the RemainCo Group and the SpinCo Group shall use reasonable best efforts to retain all Records relating to the RemainCo Business and the SpinCo Business, as applicable, in accordance with its respective regular records retention policies and procedures, until the latest of: (i) the maximum amount of time required under each Parties' respective records retention policies and procedures, (ii) the date on which such Records are no longer required to be retained pursuant to any "litigation hold" issued by the Company or any member of the RemainCo Group prior to the Distribution and communicated to SpinCo in writing at least thirty (30) days prior to the Distribution, (iii) the concluding date of any period as may be required by any applicable Law, (iv) with respect to any pending or threatened Proceeding arising after the Distribution Date, to the extent that any member of a Group in possession of such Records has been notified in writing pursuant to a "litigation hold" by any Party of such pending or threatened Proceeding, the concluding date of any such "litigation hold," and (v) the concluding date of any period during which the destruction of such Records would reasonably be expected to interfere with a pending or threatened investigation by a Governmental Authority which is known to any member of the Group in possession of such Records at the time any retention obligation with regard to such Records would otherwise expire. Each Party shall, and shall cause the other members of its Group (and any of their respective Affiliates) to use reasonable best efforts (at the requesting Party's sole cost and expense) to preserve and not to destroy or dispose of such Records without the prior written consent (such consent not to be unreasonably withheld, conditioned or delayed) of the requesting Party (and, for the avoidance of doubt, reasonable best efforts shall include issuing a "litigation hold").

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SECTION 6.10 <u>Other</u> <u>Agreements</u> <u>Providing for Exchange of Information</u>. The rights and obligations granted under this <u>ARTICLE VI</u> are subject to any specific limitations, qualifications and additional provisions on the sharing, exchange or confidential treatment of Confidential Information set forth in this Agreement, the Merger Agreement, the License Agreement, the Transition Services Agreement, the Occupancy License Agreement and in any other agreement to which a member of the RemainCo Group and a member of the SpinCo Group is a party.

SECTION 6.11 <u>Policies and Best Practices</u>. Without representation or warranty, SpinCo and the Company shall continue to be permitted to share, on a confidential basis, "best practices" information and materials (such as policies, workflow templates and standard form Contracts).

SECTION 6.12 <u>Compliance with</u> <u>Laws</u> <u>and</u> <u>Agreements</u>. Nothing in this <u>ARTICLE VI</u> shall be deemed to require any Person to provide any Privileged Information if doing so would, in the opinion of counsel to such Person, be inconsistent with any legal or constitutional obligation applicable to such Person.

ARTICLE VII

CONDITIONS PRECEDENT TO THE DISTRIBUTION

SECTION 7.1 <u>Conditions Precedent to</u> <u>Distribution</u>. The obligations of the Parties to effect the Distribution are subject to the satisfaction or, to the extent permitted by applicable Law, waiver on or prior to the Distribution Date, as applicable, of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) each of the conditions to the obligations of the Parties to the Merger Agreement to effect the Merger set forth in Article VII of the Merger Agreement shall have been satisfied or, to the extent permitted therein, waived (other than (i) solely in the case of a Permitted Third Party Sale, the condition set forth in Section 7.1(d) of the Merger Agreement, (ii) the condition set forth in Section 7.1(e) of the Merger Agreement with respect to completion of the Distribution and (iii) those conditions that by their nature are to be satisfied at the Closing; each of which is then capable of being satisfied);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) no Judgment preventing the consummation of the Distribution, the Pre-Closing Reorganization or the Merger shall have been issued by any Governmental Authority of competent jurisdiction and remain in effect, and there shall not by any Law enacted or deemed applicable to the Distribution, the Pre-Closing Reorganization or the Merger by any Governmental Authority of competent jurisdiction that makes consummation of the Distribution, the Pre-Closing Reorganization or the Merger illegal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the License Agreement shall be in full force and effect;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Transition Services Agreement shall have been duly executed and delivered by the parties thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Pre-Closing Reorganization shall have been effected in all material respects; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Conveyancing and Assumption Instruments effecting the Transfer of the Third Party Agreements from RemainCo to SpinCo prior to the Distribution Effective Time, in form reasonably satisfactory to Parent, shall have been duly executed and delivered by RemainCo and SpinCo.

The foregoing conditions shall not limit the rights of the Parties under the Merger Agreement.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.1 <u>Survival</u>. The covenants and agreements of the Parties contained in <u>Section</u> <u>2.2</u>, <u>Section</u> <u>2.3</u>, <u>Section</u> <u>2.4</u>, <u>Section</u> <u>2.5</u>, <u>Section</u> <u>2.6</u>, <u>Section</u> <u>4.1</u>, <u>Section</u> <u>4.2</u>, <u>Section</u> <u>4.3</u>, <u>Section</u> <u>4.4</u>, <u>Section</u> <u>4.6</u>, <u>Section</u> <u>4.7</u>, <u>Section</u> <u>4.8</u>, <u>Section</u> <u>4.9</u>, <u>ARTICLE V</u>, <u>ARTICLE VI</u> and this <u>ARTICLE VIII</u> of this Agreement shall survive the Distribution Date.

SECTION 8.2 <u>Distribution</u> <u>Expenses</u>. Except as otherwise set forth in this Agreement, the Transition Services Agreement or the Occupancy License Agreement, all costs and expenses incurred on or prior to the Distribution Date in connection with the preparation, execution, delivery, printing and implementation of this Agreement, the Transition Services Agreement, the Occupancy License Agreement, the Information Statement and the Spin-Off Registration Statement, and the Distribution and the consummation of the transactions contemplated thereby, shall be charged to and paid by RemainCo, and shall be deemed to be RemainCo Liabilities, in each case to the extent they are not paid prior to the Distribution Effective Time. Except as otherwise set forth in this Agreement, the Transition Services Agreement or the Occupancy License Agreement, each Party shall bear its own costs and expenses incurred after the Distribution Date. Any amount or expense to be paid or reimbursed by any Party to any other Party shall be so paid or reimbursed promptly after the existence and amount of such obligation is determined and written demand therefor is made.

SECTION 8.3 <u>Amendment</u>. Subject to Law and as otherwise provided in this Agreement, at any time prior to the Distribution Effective Time, this Agreement may be amended, modified and supplemented, by written agreement of the Parties and Parent. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties and Parent.

SECTION 8.4 <u>Waiver</u>. At any time prior to the Distribution Effective Time, either Party may (a) extend the time for the performance of any of the obligations or other acts of the other Party or (b) waive compliance with any of the agreements of the other Party or any conditions to its own obligations, in each case, only to the extent such obligations, agreements and conditions are intended for its benefit; <u>provided</u>, <u>however</u>, that any such extension or waiver will be binding upon a Party only if such extension or waiver is set forth in a writing executed by such Party.

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SECTION 8.5 <u>Counterparts and Signature</u>. This Agreement may be executed in two (2) or more counterparts (including by an electronic signature, electronic scan or electronic transmission in portable document format (.pdf), including (but not limited to) DocuSign, delivered by electronic mail), each of which will be deemed an original but all of which together will be considered one and the same agreement and will become effective when counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.

SECTION 8.6 <u>Binding Effect; No Assignment; No</u> <u>Third Party</u> <u>Beneficiaries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement will not be assigned by any Party or Parent (whether by operation of Law or otherwise) without the prior written consent of the other Party and Parent, except that RemainCo and Parent may assign, in their sole discretion and without the consent of any other Party (or Parent, in the case of RemainCo's assignment), any or all of their rights, interests and obligations hereunder to one or more of their Affiliates (each, an "*Assignee*"). Any Assignee may thereafter assign, in its sole discretion and without the consent of any other Party or Parent, any or all of its rights, interests and obligations hereunder to one or more additional Assignees, respectively; <u>provided</u>, <u>however</u>, that in connection with any assignment to an Assignee, RemainCo and Parent (or the assignor), as applicable, will remain liable for the performance by RemainCo and Parent (and such assignor, if applicable), as applicable, of their obligations hereunder. Subject to the preceding sentence, but without relieving any Party or Parent, as applicable, of any obligation hereunder, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and Parent and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except as provided in <u>Article V</u> relating to Indemnified Parties, nothing in this Agreement, express or implied, will confer upon any Person other than RemainCo, SpinCo and Parent and their respective successors and permitted assigns any right, benefit or remedy of any nature by reason of this Agreement.

SECTION 8.7 <u>Parent</u> <u>Guaranty</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Parent hereby guarantees unconditionally, for the benefit of SpinCo, the due performance by the Company of its obligations under this Agreement, the License Agreement, the Transition Services Agreement and the Occupancy License Agreement following the Effective Time (the "*Guaranteed Obligations*"). If the Company fails to perform any such obligation, Parent, upon written request of SpinCo, shall, or shall cause the Company to, perform such obligations promptly upon receipt of such request. This guaranty shall apply regardless of any amendments, variations, alterations, waivers or extensions to this Agreement, the License Agreement, the Transition Services Agreement or the Occupancy License Agreement, except to the extent any of the foregoing modifies the application thereof. For the avoidance of doubt, this guaranty of this <u>Section</u> <u>8.7</u> shall only be effective from and after the Effective Time.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Parent hereby waives any and all notice of the creation, renewal, extension or accrual of the Guaranteed Obligations and notice of or proof of reliance by SpinCo upon this <u>Section</u> <u>8.7</u> or acceptance of this <u>Section</u> <u>8.7</u>. The Guaranteed Obligation conclusively shall be deemed to have been created, contracted or incurred in reliance upon this <u>Section</u> <u>8.7</u>, and all dealings between SpinCo, on the one hand, and the Company, on the other, likewise conclusively shall be presumed to have been had or consummated in reliance upon this <u>Section</u> <u>8.7</u>. When pursuing its rights and remedies hereunder against Parent, SpinCo shall be under no obligation to pursue such rights and remedies it may have against the Company or any other Person for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by SpinCo to pursue such other rights or remedies or to collect any payments from the Company or any such other Person or to realize upon or to exercise any such right of offset shall not relieve Parent of any liability hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Parent expressly and irrevocably waives any election of remedies by SpinCo, promptness, diligence, acceptance hereof, presentment, demand, protest and any notice of any kind not provided for herein or not required to be provided to the Company under or in connection with this Agreement, other than defenses that are available to the Company hereunder or under the License Agreement, the Transition Services Agreement or the Occupancy License Agreement. SpinCo acknowledges and agrees that Parent shall be entitled to all rights, remedies and benefits of the Company hereunder following the Effective Time. Parent acknowledges that it will receive substantial direct and indirect benefits from the transaction contemplated by this Agreement and that the waivers set forth in this <u>Section</u> <u>8.7</u> are made knowingly in contemplation of such benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Parent represents and warrants that (i) it is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, to the extent such concepts are applicable in such jurisdiction, (ii) it has all requisite power and authority to execute, deliver and perform its obligations under this Agreement solely for purposes of this <u>Section</u> <u>8.7</u> and this Agreement has been duly executed and delivered by it and, assuming due authorization, execution and delivery by the other parties hereto, constitutes a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms (except as may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization, preference or similar laws of general applicability relating to or affecting the rights of creditors generally and subject to general principles of equity (regardless of whether enforcement is sought in equity or at law)) and (iii) the execution, delivery and performance of this Agreement does not contravene any law to which Parent is subject or result in any breach of any Contract to which Parent is a party, other than such contravention or breach that would not be material to Parent or limit its ability to carry out the terms and provisions of this Agreement solely for purposes of this <u>Section</u> <u>8.7</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) SpinCo agrees that its rights in respect of any claim or liability under this Agreement asserted by it against Parent shall be limited solely to satisfaction out of, and enforcement against, the assets of Parent and the RemainCo Group, and SpinCo covenants, agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any of Parent's former, current or future directors, officers, agents, or stockholders or any former, current or future directors, officers, agents, employees, general or limited partners, members, managers or stockholders of any of the foregoing, as such, whether by the enforcement of any assessment or by any legal or equitable Proceeding, or by virtue of any applicable law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) No amendment, supplement or modification to this <u>Section</u> <u>8.7</u> shall be made without the written agreement of Parent.

SECTION 8.8 <u>Termination</u>. This Agreement (including <u>Article V</u>) shall terminate automatically concurrently with any termination of the Merger Agreement in accordance with the terms thereof and may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Distribution by any written instrument executed by the Company and Parent, without the approval of SpinCo. In the event of such termination, no Party shall have any Liability of any kind to any other Party or any other Person. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by the Parties; <u>provided</u>, <u>however</u>, that <u>Article V</u> shall not be terminated or amended after the Distribution in respect of a Third Party beneficiary thereto without the consent of such Person.

SECTION 8.9 <u>Subsidiaries</u>. Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any entity that is contemplated to be a Subsidiary of such Party after the Distribution Date.

SECTION 8.10 <u>Governing</u> <u>Law</u>. This Agreement shall be governed by, and construed in accordance with, and all disputes arising out of or in connection with this Agreement or the transaction contemplated hereby shall be resolved under, the Law of the State of Delaware regardless of the Law that might otherwise govern under applicable principles of conflicts of laws thereof.

SECTION 8.11 <u>Submission to Jurisdiction; Waiver</u>. The Parties agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties irrevocably consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably and unconditionally waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each Party and Parent agrees that service of process on such Person as provided in <u>Section</u> <u>8.14</u> shall be deemed effective service of process on such Person.

SECTION 8.12 <u>Waiver of Jury Trial</u>. EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

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SECTION 8.13 <u>Specific Performance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Parties acknowledge and agree that, in the event of any breach of this Agreement, irreparable harm would occur that monetary damages could not make whole. It is accordingly agreed that (i) each Party will be entitled, in addition to any other remedy to which it may be entitled at Law or in equity, to specific performance, or other non-monetary equitable relief, to prevent or restrain breaches or threatened breaches of this Agreement in any action without the posting of a bond or undertaking and (ii) the Parties will, and hereby do, waive, in any action for specific performance, the defense of adequacy of a remedy at Law and any other objections to specific performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the Parties' rights to specific performance pursuant to <u>Section</u> <u>8.13(a)</u>, each Party may pursue any other remedy available to it at Law or in equity, including monetary damages.

SECTION 8.14 <u>Notices</u>. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given and received (a) upon receipt, if delivered personally, (b) two Business Days after deposit in the mail, if sent by registered or certified mail, (c) on the next Business Day after deposit with an overnight courier, if sent by overnight courier, (d) upon transmission, if sent by email transmission and no "bounce back" or similar message of non-delivery is received with respect thereto; <u>provided</u>, that the notice or other communication is sent to the address or email address set forth beneath the name of such party below (or to such other address or email address as such party shall have specified in a written notice to the other parties):

If to the Company (prior to the Effective Time):

Avidity Biosciences, Inc.

3020 Callan Road

San Diego, CA 92121

Attention: [\*\*\*]

Email: [\*\*\*]

with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP

200 Clarendon Street

Boston, MA 02116

Attention: Graham Robinson

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Laura Knoll

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Merric Kaufman

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Greg Schuster

Email: [\*\*\*]

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If to SpinCo (prior to the Effective Time):

Bryce Therapeutics, Inc.

3020 Callan Road

San Diego, CA 92121

Attention: [\*\*\*]

Email: [\*\*\*]

with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP

200 Clarendon Street

Boston, MA 02116

Attention: Graham Robinson

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Laura Knoll

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Merric Kaufman

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Greg Schuster

Email: [\*\*\*]

If to SpinCo (after the Effective Time):

Bryce Therapeutics, Inc.

10578 Science Center Drive, Suite 125

San Diego, CA 92121

Attention: [\*\*\*]

Email: [\*\*\*]

If to Parent or the Company (after the Effective Time):

Novartis AG

c/o Novartis International AG

Lichtstrasse 35

4056 Basel

Switzerland

Attention: [\*\*\*]

Email: [\*\*\*]

with a copy to (which shall not constitute notice):

Covington & Burling LLP

One CityCenter

850 Tenth Street, NW

Washington, DC 20001

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Attention: Catherine J. Dargan

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Michael J. Riella

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alicia Zhang

Email: [\*\*\*]

SECTION 8.15 <u>Entire</u> <u>Agreement</u>. This Agreement (including any Schedules, Annexes or Exhibits hereto and the documents and instruments referenced herein), the License Agreement, the Transition Services Agreement, the Occupancy License Agreement, the Merger Agreement and the Confidentiality Agreement, constitute the entire agreement between the parties with respect to the subject matter of this Agreement, and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

SECTION 8.16 <u>Severability</u>. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such a determination, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

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IN WITNESS WHEREOF, the Parties and Parent have caused this Agreement to be duly executed as of the date first above written.

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| | |
|:---|:---|
| AVIDITY BIOSCIENCES, INC. | AVIDITY BIOSCIENCES, INC. |
| By: | /s/ Sarah Boyce |
| Name: Sarah Boyce | Name: Sarah Boyce |
| Title: President & Chief Executive Officer | Title: President & Chief Executive Officer |

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| | |
|:---|:---|
| BRYCE THERAPEUTICS, INC. | BRYCE THERAPEUTICS, INC. |
| By: | /s/ Michael F. MacLean |
| Name: Michael F. MacLean | Name: Michael F. MacLean |
| Title: President | Title: President |

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[*Signature Page to Separation and Distribution Agreement*] 

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IN WITNESS WHEREOF, the Parties and Parent have caused this Agreement to be duly executed as of the date first above written.

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| | |
|:---|:---|
| NOVARTIS AG | NOVARTIS AG |
| By: | /s/ David Quartner |
| Name: David Quartner | Name: David Quartner |
| Title: Attorney-in-Fact | Title: Attorney-in-Fact |
| By: | /s/ Tanay Kanti Ghosh |
| Name: Tanay Kanti Ghosh | Name: Tanay Kanti Ghosh |
| Title: Attorney | Title: Attorney |

---

[*Signature Page to Separation and Distribution Agreement*]

## Exhibit 2.2

**Exhibit 2.2** 

AGREEMENT AND PLAN OF MERGER

DATED AS OF OCTOBER 25, 2025

AMONG

NOVARTIS AG,

AJAX ACQUISITION SUB, INC.

AND

AVIDITY BIOSCIENCES, INC.,

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<u>**Table of Contents**</u> 

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| | | |
|:---|:---|:---|
|  ARTICLE 1 DEFINITIONS; INTERPRETATION | ARTICLE 1 DEFINITIONS; INTERPRETATION | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.1. | Definitions | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.2. | Interpretation | 19 |
|  ARTICLE 2 THE MERGER | ARTICLE 2 THE MERGER | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.1. | The Merger | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.2. | Effects of the Merger | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.3. | Closing | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.4. | Effective Time | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.5. | Surviving Corporation | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.7. | ROFN | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.8. | Permitted Third Party Sale | 22 |
|  ARTICLE 3 CONSIDERATION; EXCHANGE OF CERTIFICATES | ARTICLE 3 CONSIDERATION; EXCHANGE OF CERTIFICATES | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.1. | Conversion of Merger Sub Capital Stock | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.2. | Conversion of Company Common Stock | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.3. | Exchange of Certificates | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.4. | Company Equity Awards and Warrants | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.5. | Employee Stock Purchase Plan | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.6. | Adjustments to Prevent Dilution | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.7. | Withholding Rights | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.8. | Appraisal Rights | 29 |
|  ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY | ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.1. | Organization | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.2. | Capitalization | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.3. | Authorization; No Conflict | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.4. | Subsidiaries | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.5. | SEC Documents | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.6. | Company Financial Statements | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.7. | Absence of Material Adverse Effect | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.8. | Proceedings | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.9. | Information Supplied | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.10. | Broker's or Finder's Fees | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.11. | Employee Plans | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.12. | Employment Matters | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.13. | Opinion of Financial Advisor | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.14. | Taxes | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.15. | Compliance | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.16. | Intellectual Property | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.17. | Data Protection | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.18. | Material Contracts | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.19. | Regulatory Matters | 54 |

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.20. | Real Property | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.21. | Environmental Matters | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.22. | Insurance | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.23. | Affiliate Transactions | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.24. | Takeover Provisions | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.25. | Assets | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.26. | Books and Records | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.27. | Anti-Corruption Compliance | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.28. | Trade Controls | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.29. | National Security | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.30. | Solvency | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.31. | SpinCo Activities | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.32. | No Other Representations or Warranties | 63 |
|  ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.1. | Organization | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.2. | Merger Sub | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.3. | Authorization; No Conflict | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.4. | Information Supplied | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.5. | Sufficient Funds | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.6. | Proceedings | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.7. | Ownership of Company Common Stock | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.8. | Broker's or Finder's Fees | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.9. | No Other Representations or Warranties | 65 |
|  ARTICLE 6 COVENANTS | ARTICLE 6 COVENANTS | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.1. | Conduct of the Company | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.2. | Proxy Statement; Stockholders' Meeting | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.3. | Employee Matters | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.4. | Further Assurances | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.5. | Public Statements | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.6. | Standard of Efforts; Governmental Approvals | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.7. | Notification of Certain Matters; Interactions with Governmental Authorities | 79 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.8. | Access to Information | 80 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.9. | No Solicitation | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.10. | Indemnification and Insurance | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.11. | Section 16 Matters | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.12. | Transaction Litigation | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.13. | Deregistration; Stock Exchange Delisting | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.14. | Takeover Provisions | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.15. | Obligations of Merger Sub | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.16. | Merger Sub Stockholder Consent | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.17. | Certain Pre-Closing Actions | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.18. | Tax Matters | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.19. | Spin-Off Matters | 88 |

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-iii-

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| | | |
|:---|:---|:---|
|  ARTICLE 7 CONDITIONS | ARTICLE 7 CONDITIONS | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 7.1. | Conditions to Each Party's Obligation to Effect the Merger | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 7.2. | Additional Conditions to Obligations of Parent and Merger Sub to Effect the Merger | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 7.3. | Additional Conditions to the Company's Obligations to Effect the Merger | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 7.4. | Frustration of Closing Conditions | 92 |
|  ARTICLE 8 TERMINATION | ARTICLE 8 TERMINATION | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.1. | Termination | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.2. | Effect of Termination | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.3. | Termination Fees and Expenses | 95 |
|  ARTICLE 9 GENERAL PROVISIONS | ARTICLE 9 GENERAL PROVISIONS | 97 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.1. | Notices | 97 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.2. | Amendments and Waivers | 99 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.3. | Representations and Warranties | 99 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.4. | Governing Law; Jurisdiction | 99 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.5. | WAIVER OF JURY TRIAL | 99 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.6. | Counterparts; Effectiveness | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.7. | Assignment; Third Party Beneficiaries | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.8. | Severability | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.9. | Entire Agreement; No Reliance | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.10. | Enforcement | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.11. | Remedies | 101 |

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| | |
|:---|:---|
|  SCHEDULES AND EXHIBITS | SCHEDULES AND EXHIBITS |
|  Schedule I | Antitrust Proceedings |
|  Exhibit A | Form of Certificate of Incorporation of the Surviving Corporation |

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-iv-

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This AGREEMENT AND PLAN OF MERGER (this "*Agreement*"), is made and entered into as of October 25, 2025, among NOVARTIS AG, a company limited by shares (*Aktiengesellschaft*) incorporated under the laws of Switzerland ("*Parent*"), AJAX ACQUISITION SUB, INC., a Delaware corporation and an indirect wholly owned subsidiary of Parent ("*Merger Sub*"), and AVIDITY BIOSCIENCES, INC., a Delaware corporation (the "*Company*").<br>

<u>INTRODUCTION</u> 

WHEREAS, on the terms and subject to the conditions set forth herein, the parties intend that Merger Sub will be merged (the "*Merger*") with and into the Company, with the Company surviving the Merger as a wholly owned Subsidiary of Parent, in accordance with the General Corporation Law of the State of Delaware (the "*DGCL*");

WHEREAS, in connection with the transactions contemplated hereby, the parties wish to effect the separation of the SpinCo Business and the RemainCo Business, prior to the Effective Time, through a spin-off of the SpinCo Business (or a portion thereof) into a separate, publicly traded company, which may be preceded or followed by a sale of certain SpinCo Assets pursuant to a certain right of first negotiation, in each case, in accordance with this Agreement and the Spin-Off Agreements;

WHEREAS, the Company Board has unanimously (i) determined that this Agreement, the Separation and Distribution Agreement and the Transactions are advisable, fair to and in the best interests of the Company and the stockholders of the Company (the "*Stockholders*"), (ii) adopted, approved and declared advisable this Agreement, the Separation and Distribution Agreement and the Transactions in accordance with the DGCL, and approved the execution, delivery and performance by the Company of this Agreement and the Separation and Distribution Agreement and the consummation by the Company of the Transactions, (iii) resolved to recommend that the Stockholders vote to approve the adoption of this Agreement and the Separation and Distribution Agreement on the terms and subject to the conditions set forth herein and in the Separation and Distribution Agreement (the "*Company Recommendation*") and (iv) to the extent necessary, adopted a resolution having the effect of causing this Agreement and the Transactions not to be subject to any Takeover Provision that might otherwise apply to the Transactions, in each case on the terms and subject to the conditions of this Agreement;

WHEREAS, the respective boards of directors of Parent and Merger Sub have adopted, approved and declared advisable this Agreement and the Transactions and the board of directors of Merger Sub has recommended that the sole stockholder of Merger Sub adopt this Agreement; and

WHEREAS, concurrently with the execution and delivery of this Agreement, the Company and SpinCo are executing and delivering the Separation and Distribution Agreement and the License Agreement.

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NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants and agreements set forth in this Agreement, the parties agree as follows:

ARTICLE 1

DEFINITIONS; INTERPRETATION

SECTION 1.1. <u>Definitions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As used in this Agreement, the following terms have the respective meanings set forth below:

"*Acquisition Proposal*" means any inquiry, offer, proposal or indication of interest (in writing or otherwise) from any Person or "group" (as defined under Section 13(d) of the Exchange Act) relating to any transaction or series of related transactions (other than the Transactions) involving (i) any acquisition or purchase by any Person or "group" (as defined under Section 13(d) of the Exchange Act), directly or indirectly, of 20% or more of any class of outstanding voting or equity securities of the Company, or any tender offer or exchange offer that, if consummated, would result in any Person or "group" (as defined under Section 13(d) of the Exchange Act) beneficially owning 20% or more of any class of outstanding voting or equity securities of the Company, (ii) any merger, amalgamation, consolidation, share exchange, business combination, liquidation, dissolution or similar transaction involving the Company or any Company Subsidiary that, if consummated, would result in any Person or "group" (as defined under Section 13(d) of the Exchange Act), directly or indirectly, (A) acquiring assets (including equity interests of any Company Subsidiary) of the Company or any Company Subsidiary representing 20% or more of the Company's consolidated assets (based on the fair market value thereof) or (B) beneficially owning 20% or more of any class of outstanding voting or equity securities of the Company or of the surviving entity or of the resulting direct or indirect parent of the Company or such surviving entity, (iii) any acquisition or license (other than any non-exclusive and non-material license granted by the Company in the ordinary course of business consistent with past practice) of, or joint venture, collaboration or other similar transaction involving, (A) assets (including equity interests of any Company Subsidiary) of the Company or any Company Subsidiary representing 20% or more of the Company's consolidated assets (based on the fair market value thereof), or (B) delpacibart etedesiran (del-desiran), delpacibart braxlosiran (del-brax) or delpacibart zotadirsen (del-zota) or (iv) any combination of the foregoing; *provided*, *however*, that none of the Spin-Off Distribution, the ROFN Sale or any inquiry, offer, proposal or indication of interest solely to effect the ROFN Sale shall be an Acquisition Proposal.

"*Affiliate*" means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. For this purpose, "*control*" (including, with its correlative meanings, "*controlled by*" and "*under common control with*") means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

"*Anti-Corruption Laws*" means all Laws regarding corruption, bribery, ethical business conduct, money laundering, political contributions, gifts, gratuities, and improper payments, including the U.S. Foreign Corrupt Practices Act (15 U.S.C. §78-dd-1, et seq.), the UK Bribery Act 2010, and Laws implementing the Organisation for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

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"*Antitrust and Judgment/Illegality Conditions*" means the conditions set forth in <u>Section</u> <u>7.1(b)</u>, <u>Section</u> <u>7.1(c)</u> and <u>Section</u> <u>7.2(a)</u> (it being understood that for purposes of <u>Section</u> <u>8.3(c)(ii)</u>, <u>Section</u> <u>7.2(a)</u> constitutes an Antitrust and Judgment/Illegality Condition even if Parent or Merger Sub waives such condition).

"*Business Day*" (i) means any day other than Saturday, Sunday or any day on which commercial banks in New York, New York or Basel or Zurich, Switzerland are authorized or required by applicable Law to remain closed, and (ii) solely for the purposes of determining the Closing Date, means any day other than a Saturday or Sunday or any day on which the Secretary of State of Delaware is authorized or required by applicable Law to remain closed.

"*Cardiovascular Product*" has the meaning set forth in the License Agreement.

"*Code*" means the Internal Revenue Code of 1986.

"*Collaboration Partners*" means any of the Company's or any Company Subsidiary's licensees or licensors or any Third Party with which the Company or any Company Subsidiary has entered into a Contract for the research, development, supply, manufacturing, testing, distribution, import, export or commercialization of the Company Platform or any Company Product.

"*Company Board*" means the Board of Directors of the Company.

"*Company Charter Documents*" means the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of the Company.

"*Company Common Stock*" means shares of common stock, par value $0.0001 per share, of the Company.

"*Company Employee Benefit Plan*" means any benefit plan, program, policy, practice, trust, fund, arrangement or Contract (i) maintained, contributed to or required to be contributed to by the Company or any Company Subsidiary or (ii) under which the Company or any Company Subsidiary has or would reasonably be expected to have any liability (including on account of any ERISA Affiliate of the Company or any Company Subsidiary) (whether or not an "employee benefit plan" within the meaning of Section 3(3) of ERISA), in each case of <u>clauses</u> <u>(i)</u> and <u>(ii)</u>, that provides benefits to current or former employees, non-employee directors, or individual independent contractors (or beneficiaries thereof), including any pension, profit-sharing, 401(k) retirement, bonus, incentive compensation, deferred compensation, loan, vacation, sick pay, employee stock ownership, stock purchase, stock option or other equity-based compensation plans, severance, indemnification, employment, Contractor, unemployment, death, hospitalization, sickness, or other medical, dental, vision, life, or other insurance, long- or short-term disability, change of control, fringe benefit, cafeteria plan or any other employee or fringe benefit plan, program, policy, practice, trust, fund, arrangement or Contract (in each case prior to giving effect to the Spin-Off). Company Employee Benefit Plan shall not include any plan or arrangement maintained by a Governmental Authority.

"*Company Equity Awards*" means the Company Stock Options and the Company RSUs.

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"*Company Intellectual Property*" means all Intellectual Property owned or purported to be owned by (whether wholly or jointly with others), licensed or sublicensed to, or used or held for use by, the Company or any Company Subsidiary that, in each case, (i) are used or practiced in, intended to be used with or practiced in, developed, filed or registered for, or necessary to, the conduct of the RemainCo Business as presently conducted and as presently contemplated to be conducted, (ii) relate to the Company Platform or (iii) relate to any Company Product that is included in the RemainCo Assets, including all Owned Company Intellectual Property and all Non-Owned Company Intellectual Property.

"*Company Material Adverse Effect*" means any event, condition, change, effect, circumstance, occurrence or development of a state of facts (each, an "*Effect*" and, collectively, "*Effects*"), individually or in the aggregate with all other Effects, that has had, or would reasonably be expected to have, a material adverse effect on (i) the business, operations, assets, properties, liabilities (contingent or otherwise), condition (financial or otherwise) or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) the ability of the Company to consummate the Transactions on or before the Outside Date; *provided* that no such Effect shall be considered in determining whether a Company Material Adverse Effect has occurred for purposes of <u>clause</u> <u>(i)</u> of this definition to the extent that it results from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) changes in any applicable Law or GAAP or interpretation thereof occurring after the date hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) changes generally affecting the economy or financial or securities markets (including changes in interest rates and exchange rates);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) general conditions in the biopharmaceutical industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) acts of terrorism, war, armed hostilities, natural disasters, weather-related events or fires, epidemics, pandemics or disease outbreaks, or any escalation or general worsening of any of the foregoing in this <u>clause</u> <u>(D)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) changes in the market price or trading volume of the shares of Company Common Stock (it being understood and agreed that the facts and circumstances giving rise to such changes may be taken into account in determining whether there has been a Company Material Adverse Effect);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) any failure, in and of itself, by the Company to meet any internal or published industry analyst projections or forecasts or estimates of revenues or earnings for any period ending on or after the date hereof (it being understood and agreed that the facts and circumstances giving rise to such failure may be taken into account in determining whether there has been a Company Material Adverse Effect);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G) the announcement, pendency, or consummation of the Transactions (including any resulting loss of or adverse change in the relationship of the Company and the Company Subsidiaries with their respective customers, partners or suppliers) (it being understood and agreed that this <u>clause</u> <u>(G)</u> shall not apply with respect to any representation or warranty the purpose of which is to address the consequences of the execution and delivery of this Agreement or the Spin-Off Agreements, the consummation of the Transactions or the ROFN Sale or the performance of obligations hereunder);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(H) any results, outcomes or data arising from the non-clinical studies or clinical trials of the Company or any competitors of the Company (or the announcements thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I) results of meetings with, or any guidance, announcement or publication, by the FDA or other Governmental Authority relating to any Company Product or product or product candidate of any competitor of the Company, including any decision by the FDA or any other Governmental Authority with respect to approval, market entry or threatened market entry of any product competitive with any Company Product;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(J) any manufacturing or supply chain disruptions or delays affecting any Company Product (to the extent not caused by any action or failure to take any action of the Company or any Company Subsidiary);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(K) any developments relating to reimbursement, coverage or payor rules with respect to any Company Product, and any recommendations, statements or other pronouncements published or proposed by professional medical organizations or any Governmental Authority, or any panel or advisory body empowered or appointed thereby, relating to pricing, reimbursement or coverage of any Company Product or product or product candidate of any competitor of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(L) any Transaction Litigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(M) Effects solely to the extent that they (1) relate to the SpinCo Assets or SpinCo Liabilities, (2) would not, individually or in the aggregate, reasonably be expected to adversely affect the Company, any other member of the RemainCo Group, the RemainCo Business, Parent or any of Parent's Affiliates and (3) would not, individually or in the aggregate, reasonably be expected to have a material and adverse effect on the ability of SpinCo to perform its obligations under the Third Party Agreements (as defined in the Separation and Distribution Agreement); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(N) the matter(s) set forth in <u>Section</u> <u>1.1(a)</u><u>(i)</u> of the Company Disclosure Letter;

in each case with respect to <u>clauses (A)</u>, <u>(B)</u>, <u>(C)</u>, and <u>(D)</u>, only to the extent the Company and the Company Subsidiaries, taken as a whole, are not disproportionately affected by such changes or events relative to other companies in the biopharmaceutical industry (and only to the extent of such disproportionate impact), and with respect to <u>clauses (H)</u>, <u>(I),</u> <u>(J)</u> and <u>(K)</u>, only to the extent such condition or event does not result from (1) any action taken (or the failure to take any action) by or at the direction of the Company or any Company Subsidiary constituting common law fraud or a violation of applicable Law or (2) any willful or material failure on the part of the Company or any Company Subsidiary to comply with the then-approved clinical protocol for the development of any Company Product, unless Parent shall have consented in writing to the taking of, or the failure to take, any such action.

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"*Company Platform*" means the Company's platform technology relating to oligonucleotide-based therapeutics or delivery technologies, including all uses and processes involved in the use of such platform technologies, and all modifications thereto, including the technologies set forth in Exhibit 1.128 of the License Agreement.

"*Company Product*" means any product or product candidate (including any pharmaceutical or medicinal therapy agents, compounds or molecules) subject to a non-clinical or clinical trial, or being researched, tested, developed, manufactured, imported, exported or otherwise exploited by, or on behalf of, the Company or any Company Subsidiary or any other product with respect to which the Company or any Company Subsidiary has royalty rights, (a) including delpacibart etedesiran (del-desiran), delpacibart braxlosiran (del-brax), delpacibart zotadirsen (del-zota), and AOC 1045 and (b) other than for purposes of <u>Section</u> <u>4.19</u> and <u>Section</u> <u>6.7</u>, excluding any Cardiovascular Products that are SpinCo Assets, in each case, in any dosage form or formulation.

"*Company RSUs"* means all restricted stock units denominated in Company Common Stock, whether subject to time-based or performance-based vesting, that are granted under any Stock Plan.

"*Company Stock Options*" means all options to purchase shares of Company Common Stock granted under any Stock Plan.

"*Company Subsidiaries*" means the Subsidiaries of the Company.

"*Company Subsidiary Charter Documents*" means the certificate of incorporation and bylaws, or applicable equivalent documents, of the Company Subsidiaries.

"*Company Tax Group*" means the Company or any Company Subsidiary (including SpinCo and its Subsidiaries for any period ending on or before the date of the Spin-Off Distribution (if any) or the closing of the ROFN Purchase Agreement (if any), as applicable), and any grouping among the Company and the Company Subsidiaries for Tax purposes.

"*Company Warrants*" means all warrants to purchase shares of Company Common Stock, including the pre-funded warrants originally issued by the Company on March 4, 2024.

"*Confidentiality Agreement*" means the Confidentiality Agreement, dated as of July 15, 2025, between the Company and Novartis International AG, as amended on July 27, 2025.

"*Contract*" means, with respect to any Person, any contract, agreement, lease, sublease, license, sublicense, commitment, sale or purchase order, indenture, note, bond, loan, mortgage, deed of trust, instrument or other arrangement, whether written or oral, that is or purports to be legally binding and to which such Person is a party or by which such Person or such Person's properties or assets are bound.

"*Copyrights*" means all copyrights (including all copyrights in any packaging, package inserts, website content, social media content, marketing or promotional materials, labeling information or other text provided to consumers), mask works, fonts and typefaces and similar rights, whether registered or unregistered, and all rights in any copyrightable works, in each case, throughout the world, all registrations and applications for any of the foregoing and all extensions, restorations and renewals for any of the foregoing, and all rights and priorities afforded under any Law with respect to any of the foregoing in any jurisdiction.

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"*Data Room*" means the electronic data room hosted by Donnelley Financial Solutions and maintained by the Company in connection with the Transactions.

"*Employee Company RSU*" means any Company RSU granted to a then-current employee of the Company or any Company Subsidiary.

"*Employee Company Stock Option*" means any Company Stock Option granted to a then-current employee of the Company or any Company Subsidiary.

"*Environmental Laws*" means any Law, Judgment or Authorization relating to pollution, the environment, natural resources, or human health and safety, including any of the foregoing relating to (i) the presence, receipt, management, manufacture, processing, generation, use, distribution, transport, treatment, handling, storage, disposal, removal or remediation of any Hazardous Substance, (ii) air, indoor air, water (including ground, surface and drinking water), land surface or subsurface strata, noise or odor pollution, (iii) the Release or threatened Release into the environment of any Hazardous Substance, or (iv) the health and safety of employees and other individuals.

"*ERISA*" means the Employee Retirement Income Security Act of 1974.

"*ERISA Affiliate*" means any Person which is (or at any relevant time was or will be) a member of a "controlled group of corporations" with, under "common control" with, or a member of an "affiliate service group" with the Company as such terms are defined in Sections 414(b), (c), (m) or (o) of the Code.

"*Exchange Act*" means the Securities Exchange Act of 1934.

"*Exclusively Licensed Intellectual Property*" means all Non-Owned Company Intellectual Property that is exclusively licensed to the Company or any Company Subsidiary, including any Non-Owned Company Intellectual Property that is exclusively licensed to the Company or any Company Subsidiary relating to (i) the Company Platform or any Company Product or the exploitation thereof, in each case, to the extent such exclusively in-licensed Non-Owned Company Intellectual Property (A) is used or practiced in, intended to be used with or practiced in, developed, filed or registered for, or necessary to, the conduct of the RemainCo Business as presently conducted and as presently contemplated to be conducted or (B) relates to any Company Product that is included in the RemainCo Assets, (ii) reagents for manufacturing, (iii) methods of manufacturing or (iv) methods or fields of use, whether or not the license is subject to retained rights of the licensor or other Persons, of any of the foregoing.

"*Expenses*" means all out-of-pocket costs and expenses (including all fees and expenses of counsel, accountants, investment bankers, financing sources, experts and consultants to a party hereto and its Affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement, the Spin-Off Agreements, the ROFN Purchase Documents and the Transactions, including the preparation, printing, filing and mailing of the Proxy Statement and the Spin-Off Registration Statement and all other matters related to the Transactions.

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"*FDA*" means the United States Food and Drug Administration or any successor agency thereto.

"*FDCA*" means the United States Federal Food, Drug, and Cosmetic Act.

"*Foreign Investment Laws*" means all applicable Laws in effect from time to time that are designed or intended to prohibit, restrict or regulate actions by foreigners to acquire interests in or control over domestic equities, securities, entities, assets, land or other holdings for reasons of national security or other public policy.

"*GAAP*" means United States generally accepted accounting principles, consistently applied.

"*Good Clinical Practices*" means all applicable requirements and standards for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials of pharmaceuticals (including drugs and biologics) (including all applicable requirements relating to protection of human subjects), as set forth in the FDCA (including 21 C.F.R. Parts 11, 50, 54, 56, and 312), and such standards of good clinical practice (including all applicable requirements relating to protection of human subjects), or as are required by Governmental Authorities in any other countries, including applicable regulations or guidelines from the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use, where the Company currently intends to sell Company Products.

"*Good Documentation Practices*" means all applicable requirements and standards and practices of creating and maintaining records that are accurate, attributable, verified as genuine, legible, contemporaneous and complete, and are created and stored using security measures that protect the confidential nature (if applicable) and integrity of the records, and prevent unauthorized access to, and alteration, corruption or loss of such records in a manner sufficient to satisfy the requirements contained in 21 C.F.R. Parts 58, 312, 210, and 211, the FDA's relevant guidance documents including E6(R2) Good Clinical Practice: Integrated Addendum to ICH E6(R1) (March 2018), and all comparable standards of any other applicable Governmental Authority.

"*Good Laboratory Practices*" means all applicable requirements and standards for conducting non-clinical laboratory studies of pharmaceuticals (including drugs and biologics), as set forth in the FDCA (including 21 C.F.R. Parts 11 and 58), and such standards of good laboratory practices as are required by Governmental Authorities in any other countries, including applicable regulations or guidelines from the Organisation for Economic Co-operation and Development, where the Company currently intends to sell Company Products.

"*Good Manufacturing Practices*" means all applicable requirements and standards for the manufacture, processing, packaging, testing, transportation, handling and holding of drug products, as set forth in the FDCA (including 21 C.F.R. Parts 11, 210, 211, and 610), and such standards of good manufacturing practices as are required by Governmental Authorities in any other countries, including applicable regulations or guidelines from the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use, where the Company currently intends to sell the Company Products.

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"*Governmental Authority*" means any transnational, supranational, national, federal, state, provincial, municipal, local or foreign governmental, judicial, quasi-judicial, legislative, executive, regulatory (including stock exchange) or administrative authority, department, agency, organization, body, court, arbitration tribunal or panel, instrumentality or official, including any political subdivision thereof.

"*Hazardous Substance*" means (i) any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, (ii) any substance, waste or material having any constituent elements displaying any of the foregoing characteristics, including any medical or biological waste, reagent, petroleum product or byproduct, asbestos or asbestos-containing material, lead, polychlorinated biphenyls, per- and poly-fluoroalkyl substances or (iii) any substance, waste or material regulated under any Environmental Law or that is capable of causing harm or injury to human health, natural resources or the environment or would reasonably be expected to give rise to liability or any obligation to remediate under any applicable Law.

"*Health Care Laws*" means (i) the FDCA, the PHSA and all other Laws applicable to the ownership, testing, research, development, manufacture, quality, safety, packaging, storage, use, distribution, labeling, promotion, sale, offer for sale, import, export or disposal of pharmaceutical products; (ii) all U.S. federal and state fraud and abuse Laws, including the Federal Healthcare Program Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Stark Law (42 U.S.C. §1395nn), the civil False Claims Act (31 U.S.C. § 3729 et seq.), the Program Fraud Civil Remedies Act (31 U.S.C. § 3801 et seq.), the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)), the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the Exclusion Laws (42 U.S.C. § 1320a-7); (iii) the Health Insurance Portability and Accountability Act of 1996 (commonly referred to as "*HIPAA*"), as amended by the Health Information Technology for Economic and Clinical Health Act (commonly referred to as the "*HITECH Act*") (Pub. L. 104–191; Pub. L. 111-5); (iv) Titles XVIII (42 U.S.C. §1395 et seq.) and XIX (42 U.S.C. §1396 et seq.) of the U.S. Social Security Act of 1935; (v) the U.S. federal Physician Payments Sunshine Act (42 U.S.C. § 1320a-7h); (vi) Laws governing all federal and state health care programs defined in 42 U.S.C. §1320a-7b(f), government pricing or price reporting programs, including Medicare (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security Act), the Medicaid Drug Rebate Program (42 U.S.C. § 1396r-8) and any state supplemental rebate program, the VA Federal Supply Schedule (38 U.S.C. § 8126), TRICARE (10 U.S.C. § 1071 et seq.) or any state pharmaceutical assistance program or U.S. Department of Veterans Affairs agreement; (vii) all applicable Laws or Judgments administered by the FDA and other applicable Regulatory Authorities, including those governing or relating to Good Clinical Practices, Good Documentation Practices, Good Laboratory Practices, and Good Manufacturing Practices, including FDA's regulations at 21 C.F.R. Parts 11, 50, 54, 56, 58, 210, 211, 312, 600 and 610; and (viii) any other applicable Laws related to healthcare regulatory matters, including any comparable state, local and foreign equivalent Laws in respect of any of the foregoing.

"*HSR Act*" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

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"*Intellectual Property*" means all intellectual property, industrial and proprietary rights of any kind or nature, whether protected, created or arising under any Law in any jurisdiction, including the following: (i) Patents, (ii) Trademarks, (iii) Copyrights, (iv) Know-How, (v) all rights in software, designs, databases, data, collections of data, and compilations of data, (vi) domain names (both gTLDs, including traditional and new gTLDs, and ccTLDs), URLs, web addresses, social media tags, handles and other identifiers and all accounts therefor, (vii) all rights to sue, at law or in equity, for past, present and future infringements, misappropriations or other violations of any of the foregoing, (viii) all rights to secure or recover the proceeds, including licenses, royalties, income, payments, claims and damages, and all injunctive and other relief, with respect to any such infringements, misappropriations or other violations, and (ix) all other rights similar or pertaining to any of the foregoing in any jurisdiction worldwide.

"*Intervening Event*" means any Effect occurring or arising after the date hereof that did not result from or arise out of the announcement or pendency of, or any actions required to be taken by the Company (or to be refrained from being taken by the Company) pursuant to, this Agreement and that was neither known to, nor reasonably foreseeable by, or the effects of which were neither known to, nor reasonably foreseeable by, the Company Board as of the date hereof, that materially and positively affects the business, assets or operations of the Company and the Company Subsidiaries, taken as a whole, and is not related to any Acquisition Proposal, which Effect becomes known to the Company Board after the date hereof and prior to obtaining the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement, other than (i) the receipt, existence of or terms of an Acquisition Proposal, (ii) any inquiry, indication of interest, proposal or offer that could reasonably be expected to lead to an Acquisition Proposal, or the consequences thereof, (iii) developments or changes in the biopharmaceutical industry, (iv) changes, in and of itself, in the market price or trading volume of the shares of Company Common Stock, or (v) the fact that, in and of itself, the Company exceeds any internal or published industry analyst projections or forecasts or estimates of revenues or earnings.

"*IRS*" means the Internal Revenue Service of the United States of America.

"*IT Assets*" means computers, computer software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines and all other information technology equipment, and all associated documentation (excluding any public networks).

"*Judgment*" means any judgment, ruling, order, writ, injunction, award, decision, assessment or decree of any Governmental Authority (whether temporary, preliminary or permanent).

"*Know-How*" means all trade secrets (including those trade secrets defined in the Uniform Trade Secrets Act and under corresponding statutory or common law of any jurisdiction), know-how, and similar proprietary rights in confidential information of any kind, inventions (whether patentable or not and whether or not reduced to practice), discoveries, analytic models, improvements, compounds, processes, techniques, assays, chemical and biological materials, devices, methods, patterns, formulations and specifications.

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"*Law*" means any and all applicable federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, ordinance, code, rule, regulation, ruling, guidance, decree, treaty, Judgment or other legal requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

"*License Agreement*" has the meaning set forth in the Separation and Distribution Agreement.

"*Lien*" means, with respect to any property or asset, any mortgage, lien, license, sublicense, pledge, claim, charge, hypothecation, option, right of first or last refusal, right of first or last offer, covenant not to sue, assert or exercise, security interest or other encumbrance of any kind or nature whatsoever.

"*made available to Parent*" means that such information, document or material was: (i) publicly available and filed as an exhibit to a Company SEC Document available on the SEC EDGAR database after January 1, 2024, and at least three days prior to the date hereof, (ii) delivered to Parent or Parent's Representatives via electronic mail or in hard-copy form at least 24 hours prior to the execution and delivery of this Agreement, or (iii) made available for review by Parent or Parent's Representatives at least 24 hours prior to the execution and delivery of this Agreement in the Data Room.

"*Nasdaq*" means the Nasdaq Stock Market.

"*Non-Employee Company RSU*" means any Company RSU that is not an Employee Company RSU.

"*Non-Employee Company Stock Option*" means any Company Stock Option that is not an Employee Company Stock Option.

"*Non-Owned Company Intellectual Property*" means all Company Intellectual Property that is not Owned Company Intellectual Property.

"*Owned Company Intellectual Property*" means all Company Intellectual Property owned or purportedly owned (whether wholly or jointly with others, as applicable) by the Company or any Company Subsidiary (or, with respect to Company Intellectual Property owned or purportedly owned by and licensed from SpinCo, by SpinCo).

"*Parent Material Adverse Effect*" means any Effect that, individually or in the aggregate with all other Effects, that has had, or would reasonably be expected to have, a material adverse effect on the ability of Parent or Merger Sub to consummate the Transactions on or before the Outside Date.

"*Patents*" means all national, regional and international statutory invention registrations, issued patents and patent applications of any kind, including all applications and filings made pursuant to the Patent Cooperation Treaty (PCTs), provisionals, non-provisionals, converted provisionals, requests for continued examination, continuations, continuations-in-part, divisionals, substitutions, additions, reexaminations, reissues, supplemental examinations,

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oppositions, *inter partes* review, post-grant review, transitional program for covered business method patent review, interference proceedings, derivation proceedings, all rights in respect of design patents, utility models, certificates of invention and any similar rights, including so-called pipeline protection, patent term extension, and supplemental protection certificates, all inventions disclosed in each such registration, patent or patent application, and all rights and priorities afforded under any Law with respect to any of the foregoing in any jurisdiction, including all earlier-filed applications from which benefit or priority rights are derived, and all extensions, restorations, and renewals of any of the foregoing.

"*Permitted Lien*" means (i) any Lien that arises out of or with respect to Taxes of the Company Tax Group not yet due and payable that arose by operation of Law or that are being contested in good faith and for which adequate reserves have been established in accordance with GAAP, (ii) any materialmen's, mechanics', carriers', workers', warehousemen's, repairers' and similar Liens arising in the ordinary course of business, securing obligations as to which there is no default and which are not yet due and payable, or the validity or amount of which is being contested in good faith by appropriate proceedings which have the effect of preventing the forfeiture or sale of the property subject thereto and for which adequate reserves have been established in accordance with GAAP, (iii) with respect to real property, any nonmonetary Lien or other requirement or restriction arising under any zoning, entitlement, building, conservation restriction or other land use or Environmental Law that is not violated by the current or proposed use of such real property or the operation of the business of the Company and the Company Subsidiaries, and (iv) any non-exclusive licenses to or under Intellectual Property granted by the Company or any Company Subsidiary to any vendor or contractor pursuant to an agreement entered into in the ordinary course of business consistent with past practice in which such license is incidental to and not material to performance under such agreement.

"*Permitted Sale Proceeds*" means the cash proceeds received by the Company, any of its Affiliates or SpinCo in a ROFN Sale or Permitted Third Party Sale *less* the total amount of Expenses incurred by or on behalf of the Company or SpinCo in connection with or related to the authorization, preparation, negotiation, execution and performance of such transaction and any definitive agreements related thereto.

"*Permitted Third Party Sale*" means a sale of SpinCo by the Company to a Third Party in exchange for payment of an agreed purchase price in accordance with <u>Section</u> <u>2.8</u>.

"*Person*" means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization, limited liability company or other entity, including any Governmental Authority.

"*Personal Data*" means all data or information that relates to an identified or identifiable person and any other data or information that constitutes personal data or personal information under any applicable Law relating to privacy, data protection, or other Laws pertaining to data protection and information security, which information includes any genetic data, financial, credit, medical information, names, addresses, social security or insurance numbers, telephone numbers, facsimile numbers, email addresses or other contact information, any device identifier, or any other information that constitutes protected health information under 45 C.F.R. § 160.103.

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"*PHSA*" means the Public Health Service Act.

"*Pre-Closing Period*" means the period from the date hereof until the earlier of the Effective Time and the valid termination of this Agreement pursuant to <u>Article 8</u>.

"*Proceeding*" means any suit, claim, action, proceeding, arbitration, mediation, investigation, litigation, hearing, demand, inquiry or request for documents, whether by subpoena or informal letter.

"*Proxy Statement*" means the proxy statement relating to the Stockholders' Meeting, as amended or supplemented from time to time, together with all annexes, schedules or exhibits thereto (including the letter to stockholders, notice of meeting and form of proxy), as required to be filed with the SEC.

"*Regulatory Authority*" means the FDA, the European Medicines Agency, the U.K. Medicines and Healthcare products Regulatory Agency, the China National Medical Products Administration, China's Center for Drug Evaluation, the Japan Pharmaceuticals and Medical Devices Agency, Health Canada and any other Governmental Authority with jurisdiction over the research, development, commercialization, manufacture, marketing or exploitation of the Company Platform or any Company Product, or any successor agency to any of the foregoing.

"*Release*" means any release, spill, emission, discharge, leaking, pouring, dumping or emptying, pumping, injection, deposit, disposal, dispersal, leaching or migration into the indoor or outdoor environment (including soil, ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any property.

"*RemainCo Assets*" has the meaning set forth in the Separation and Distribution Agreement.

"*RemainCo Business*" has the meaning set forth in the Separation and Distribution Agreement.

"*RemainCo Group*" has the meaning set forth in the Separation and Distribution Agreement.

"*Representatives*" means, with respect to any Person, such Person's directors, officers, employees, investment bankers, financial advisors, attorneys, accountants, auditors, consultants, agents and other representatives.

"*Requisite Company Vote*" means the affirmative vote of the holders of not less than a majority of the outstanding Company Common Stock.

"*ROFN*" means the right of first negotiation granted to the ROFN Holder by the Company under the ROFN Side Letter.

"*ROFN Assets*" means the assets of the Company and its Subsidiaries that are subject to the ROFN in the ROFN Side Letter; *provided*, *however*, in no case shall any RemainCo Assets be included in the ROFN Assets.

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"*ROFN Holder*" has the meaning set forth in <u>Section</u> <u>1.1(a)(ii) of the Company Disclosure Letter.</u>

"*ROFN Purchase Agreement*" means a definitive written agreement entered into between the Company or any of its Subsidiaries, on the one hand, and the ROFN Holder or one of its Affiliates, on the other hand, in which the parties agree to effect the ROFN Sale.

"*ROFN Purchase Documents"* mean collectively, the ROFN Purchase Agreement and any written Contracts between the Company or any of its Subsidiaries, on the one hand, and the ROFN Holder or one of its Affiliates, on the other hand, or other instruments and documents delivered in connection therewith.

"*ROFN Sale*" means a transaction or series of related transactions that directly result from any exercise by the ROFN Holder of the ROFN pursuant to the terms and conditions of the ROFN Side Letter in which the ROFN Assets (but no other assets of the Company or its Subsidiaries) are sold, licensed or transferred, directly or indirectly, and in accordance with <u>Section</u> <u>2.7</u>.

"*ROFN Side Letter*" means the side letter agreement, dated as of November 27, 2023, between the Company and the ROFN Holder, but excluding any subsequent amendments, modifications or restatements thereof.

"*SEC*" means the United States Securities and Exchange Commission.

"*Securities Act*" means the Securities Act of 1933.

"*Separation and Distribution Agreement*" means the Separation and Distribution Agreement entered into between SpinCo and the Company on or about the date hereof.

"*Solvent*" when used with respect to any Person, means that, as of any date of determination, (a) the amount of the "fair saleable value" of the assets of such Person will, as of such date, exceed the sum of (i) the value of all "liabilities of such Person, including contingent and other liabilities," as of such date, as such quoted terms are generally determined in accordance with applicable Law governing determinations of the insolvency of debtors, and (ii) the amount that will be required to pay the probable liabilities of such Person, as of such date, on its existing debts (including contingent and other liabilities) as such debts become absolute and mature, (b) such Person will not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged following such date, (c) such Person will be able to pay its liabilities, as of such date, including contingent and other liabilities, as they mature, and (d) such Person is not insolvent under applicable Law. For purposes of this definition, "not have an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged" and "able to pay its liabilities, as of such date, including contingent and other liabilities, as they mature" means that such Person will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due.

*"SpinCo*" means Bryce Therapeutics, Inc., a Delaware corporation.

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*"SpinCo Assets*" has the meaning set forth in the Separation and Distribution Agreement.

"*SpinCo Business*" has the meaning set forth in the Separation and Distribution Agreement.

"*SpinCo Employees*" has the meaning set forth in the Separation and Distribution Agreement.

*"SpinCo Liabilities*" has the meaning set forth in the Separation and Distribution Agreement.

"*Spin-Off*" means the transactions contemplated by the Separation and Distribution Agreement and the Spin-Off Registration Statement, including the formation of SpinCo, the assignment or license of assets and liabilities of the Company to SpinCo, and the Spin-Off Distribution.

*"Spin-Off Agreements*" means the Separation and Distribution Agreement, the License Agreement and the Transition Services Agreement.

"*Spin-Off Distribution*" means the Distribution, as such term is defined in the Separation and Distribution Agreement.

"*Stock Plans*" means the Company's 2013 Amended and Restated Equity Incentive Plan, 2020 Incentive Award Plan, 2022 Employment Inducement Incentive Award Plan, each as amended from time to time, and any other equity plans, agreements or arrangements of the Company or any Company Subsidiary, other than the ESPP.

"*Subsidiary*" means, with respect to any Person, any other Person of which (i) such first Person or any of its subsidiaries is a general partner or holds a majority of the voting interests of a partnership or (ii) securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other corporate bodies performing similar functions (or, if there are no such ownership interests having ordinary voting power, 50% or more of the equity interests of which) are at any time directly or indirectly owned or controlled by such first Person.

"*Superior Proposal*" means a *bona fide* written Acquisition Proposal made by any Person or "group" (as defined under Section 13(d) of the Exchange Act) after the date hereof and prior to obtaining the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement that is on terms that the Company Board determines in good faith (after consultation with outside legal counsel and a financial advisor of nationally recognized reputation), taking into account all legal, financial, regulatory, and other aspects of the Acquisition Proposal and the Person or "group" (as defined under Section 13(d) of the Exchange Act) making the Acquisition Proposal (including any conditions to closing and certainty of closing, timing, any applicable break-up fees and expense reimbursement provisions, and ability of such Person or "group" (as defined under Section 13(d) of the Exchange Act) to consummate the Acquisition Proposal), (a) would, if consummated, result in a transaction that is more favorable to the holders of Company Common Stock (solely in their capacity as such) from a financial point of view than the Transactions (including any revisions to the terms of this Agreement proposed by

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Parent pursuant to <u>Section</u> <u>6.9(d)</u>) and (b) is reasonably likely to be consummated on the terms proposed without undue delay; *provided* that, for purposes of the definition of "Superior Proposal", the references to "20%" in the definition of Acquisition Proposal shall be deemed to be references to "50%"; *provided further* that in no event shall an Acquisition Proposal be deemed to be a Superior Proposal (i) if consummation of the transaction contemplated thereby is subject to any financing condition or otherwise requires financing that is not fully committed or (ii) solely as a result of such Acquisition Proposal not including a condition relating to a spin-off or separation of any business or assets of the Company or any ROFN Sale as a condition to the consummation thereof.

"*Takeover Provisions*" means any "moratorium," "control share acquisition," "fair price," "interested stockholder," "affiliate transaction," "business combination" or other anti-takeover Laws, including Section 203 of the DGCL, or similar state anti-takeover laws and regulations, and any similarly restrictive provision in the Company Charter Documents or the Company Subsidiary Charter Documents.

"*Tax*" means all federal, state, local or foreign taxes, levies, imposts, duties or other like assessments, charges or fees (including estimated taxes, charges and fees), including any customs duties and any income, franchise, profits, gross receipts, minimum, base-erosion and anti-abuse, digital services, diverted profits, transfer, conveyance, documentary, excise, property, escheat, unclaimed property, windfall profit, sales, use, value-added, goods and services, ad valorem, license, capital, wage, employment, payroll, withholding, worker's compensation, social security, severance, occupation, import, stamp, stamp duty, alternative, add-on minimum, environmental and other governmental taxes and charges, including any interest, penalties and additions to tax with respect thereto and any penalties imposed for any failure to timely, correctly or completely file any Tax Return.

"*Tax Return*" means any report, return, statement, declaration, election, schedule, voucher, document or other written information supplied to or filed with, or required to be supplied to or filed with, any Governmental Authority in connection with Taxes, including any amendments thereof, or schedules or attachments thereto.

"*Tax Sharing Agreement*" means any Tax allocation, apportionment, sharing, or indemnification agreement or arrangement, other than any agreement that is pursuant to an ordinary course commercial Contract the primary purpose of which does not relate to Taxes.

"*Taxing Authority*" means any Governmental Authority responsible for the collection, administration, assessment or regulation of Taxes or the enforcement of Tax Laws.

"*Third Party*" means any Person or "group" (as defined under Section 13(d) of the Exchange Act) of Persons, other than Parent, the Company or any of their respective Affiliates.

"*To the knowledge of the Company*" and similar phrases mean (i) the actual knowledge of the individuals listed on <u>Section</u> <u>1.1(a)(iii)</u> of the Company Disclosure Letter, after making reasonable inquiry, and (ii) all knowledge which was, or would reasonably have been expected to be, obtained by such Persons after such reasonable inquiry, which, for purposes of <u>Section</u> <u>4.16</u> shall include such actual knowledge after making due inquiry of the Company's outside intellectual property counsel, but in no event shall any such inquiry for purposes of this definition require a freedom to operate analysis if such analysis was not conducted prior to the date hereof.

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"*Trade Controls Laws*" means any applicable Law pertaining to economic and trade sanctions, export and import controls, customs, and antiboycott laws, rules, and regulations including U.S. economic and trade sanctions administered by the U.S. Department of the Treasury's Office of Foreign Assets Control, the International Traffic in Arms Regulations administered and enforced by the Department of State's Directorate of Defense Trade Controls, the Export Administration Regulations administered and enforced by the U.S. Department of Commerce's Bureau of Industry and Security, Section 999 of the Code and U.S. customs regulations.

"*Trademarks*" means all trademarks, trade names, trade dress, service marks, logos, trade styles, certification marks, collective marks, designs, product get-up and product configuration rights, industrial designs and other identifiers of source, origin or quality, whether registered or unregistered, all registrations and applications for any of the foregoing and all renewals thereof, all rights and priorities afforded under any Law with respect to any of the foregoing in any jurisdiction and all goodwill associated with any of the foregoing.

"*Transaction Litigation*" means any Proceeding asserted, threatened or commenced against the Company or any of its directors or officers in such individual's capacity as such by any Stockholder (in its capacity as such or through a derivative action) challenging or seeking to restrain or prohibit the consummation of the Transactions.

"*Transactions*" means the transactions contemplated by this Agreement and the Spin-Off Agreements, including the Merger and the Spin-Off.

"*Transition Services Agreement*" has the meaning set forth in the Separation and Distribution Agreement.

"*U.S. Bulk Data Final Rule*" means the U.S. DOJ Final Rule Implementing Executive Order 14117 of February 28, 2024 (Preventing Access to Americans' Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern), 90 Fed. Reg. 1636, codified at 28 C.F.R. Part 202.

"*WARN Act*" means the Worker Adjustment and Retraining Notification Act of 1988, and any similar provision of state Law that applies to the Company or any Company Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The following terms are defined in the following sections of this Agreement:

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| | |
|:---|:---|
| Term | Section |
|  Acceptable Confidentiality Agreement | 6.9(a) |
|  Agreement | Preamble |
|  Antitrust Laws | 4.3(c) |
|  Appraisal Shares | 3.8 |

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------

---

| | |
|:---|:---|
| Term | Section |
|  Authorizations | 4.15(b) |
|  Bankruptcy and Equity Exception | 4.3(a) |
|  Book-Entry Shares | 3.2(a) |
|  Callan Road Facility | 4.20(c) |
|  Callan Road Master Lease | 4.20(c) |
|  Candidate Date | 4.19(h) |
|  Capitalization Date | 4.2(a) |
|  Certificate | 3.2(a) |
|  Certificate of Merger | 2.4 |
|  Closing | 2.3 |
|  Closing Date | 2.3 |
|  Company | Preamble |
|  Company Adverse Recommendation Change | 6.9(c) |
|  Company Disclosure Letter | Article 4 |
|  Company Financial Statements | 4.6(a) |
|  Company Recommendation | Introduction |
|  Company Registered IP | 4.16(a) |
|  Company SEC Documents | 4.5(a) |
|  Company Securities | 4.2(b) |
|  Company Subsidiary Securities | 4.4(b) |
|  Continuation Period | 6.3(a) |
|  Continuing Employees | 6.3(a) |
|  Contractor Census | 4.12(c) |
|  Contractors | 4.12(c) |
|  Data Protection and Information Security Requirements | 4.17(a) |
|  Delaware Courts | 9.4(b) |
|  DGCL | Introduction |
|  Effective Time | 2.4 |
|  Employee Census | 4.12(b) |
|  ESPP | 3.5 |
|  Exchange Fund | 3.3(a) |
|  Excluded Share | 3.2(a) |
|  Federal Health Care Programs | 4.19(k) |
|  Final Offering Period | 3.5 |
|  Government Official | 4.27 |
|  IND | 4.19(d) |
|  Indemnified Party | 6.10(a) |
|  Insurance Policies | 4.22 |
|  IP Contractor | 4.16(i) |
|  Lease | 4.20(b) |
|  Leased Real Property | 4.20(b) |
|  Material Contract | 4.18(a) |
|  Maximum Amount | 6.10(c) |
|  Merger | Introduction |
|  Merger Consideration | 3.2(a) |

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------

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| | |
|:---|:---|
| Term | Section |
|  Merger Sub | Preamble |
|  Misconduct Allegation | 4.12(h) |
|  Option Consideration | 3.4(a) |
|  Outside Date | 8.1(b)(i) |
|  Parent | Preamble |
|  Paying Agent | 3.3(a) |
|  Reverse Termination Fee | 8.3(c) |
|  Review Board | 4.19(a) |
|  RSU Consideration | 3.4(b) |
|  Sanctions | 4.28 |
|  Security Incident | 4.17(b) |
|  Specified Agreement | 8.1(d)(i) |
|  Spin-Off Carveout | 6.1(c) |
|  Spin-Off Registration Statement | 6.19(b) |
|  Stockholders | Introduction |
|  Stockholders' Meeting | 6.2(b) |
|  Surviving Corporation | 2.1 |
|  Termination Fee | 8.3(b) |
|  Willful Breach | 8.2 |

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SECTION 1.2. <u>Interpretation</u>. The words "hereof," "herein" and "hereunder" and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions, table of contents and headings included herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits, Annexes and Schedules are to Articles, Sections, Exhibits, Annexes and Schedules of this Agreement unless otherwise specified in this Agreement. All Exhibits, Annexes and Schedules appended hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation," whether or not they are in fact followed by those words or words of like import. "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." The word "or" shall not be exclusive. References to "dollars" or "$" are to United States of America dollars. References (a) to any Law shall be deemed to refer to such Law as amended from time to time and to any rules, regulations or interpretations promulgated thereunder as of the applicable date or during the applicable time, (b) to any Contract are to that Contract as amended, modified or supplemented from time to time in accordance with the terms hereof, if applicable, and thereof, unless otherwise expressly provided herein; *provided* that with respect to any Contract listed on the Company Disclosure Letter, all such amendments, modifications or supplements must also be listed in the appropriate section of the Company Disclosure Letter, (c) to any Person include the successors and permitted assigns of that Person, (d) from or through any date means, unless otherwise specified, from and including or through and including, respectively, (e) to the "date hereof" means the date of this Agreement and (f) to a "party" or the "parties" mean the parties to this Agreement unless otherwise specified in this Agreement or the context otherwise

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requires. Unless otherwise specified in this Agreement, (i) any action required to be taken by or on a day or Business Day may be taken until 11:59 p.m. Eastern Time on such day or Business Day, (ii) all references to "days" shall be to calendar days unless otherwise indicated as a "Business Day" and (iii) all days, Business Days, times and time periods contemplated by this Agreement will be determined by reference to Eastern Time. Unless otherwise specified in or required by this Agreement, neither the specification of any dollar amount in any representation or warranty contained in this Agreement nor the inclusion of any specific item in the Company Disclosure Letter is intended to imply that such amount, or higher or lower amounts, or the item so included or other items, are or are not material. Unless otherwise specified in or required by this Agreement, neither the specification of any item or matter in any representation or warranty contained in this Agreement nor the inclusion of any specific item in any section of the Company Disclosure Letter is intended to imply that such item or matter, or other items or matters, are or are not in the ordinary course of business. The parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against any particular party.

ARTICLE 2

THE MERGER

SECTION 2.1. <u>The Merger</u>. At the Effective Time, on the terms and subject to the conditions of this Agreement and in accordance with the DGCL, Merger Sub shall be merged with and into the Company, whereupon the separate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation and a wholly owned Subsidiary of Parent (the "*Surviving Corporation*").

SECTION 2.2. <u>Effects of the Merger</u>. The Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL, including that from and after the Effective Time, the Surviving Corporation shall possess all the properties, rights, powers, privileges, immunities, licenses, franchises and authority and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company and Merger Sub, all as provided under this Agreement and the DGCL.

SECTION 2.3. <u>Closing</u>. Subject to the provisions of <u>Article 7</u>, the closing of the Merger (the "*Closing*") shall take place remotely by electronic exchange of documents on a date to be specified by the parties, which shall be no later than one Business Day after the date the conditions set forth in <u>Article 7</u> (other than any such conditions which by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted, waiver of those conditions at the Closing) have been satisfied or, to the extent permitted, waived by the party or parties entitled to the benefit of such conditions, or at such other place, at such other time, or on such other date as Parent and the Company may mutually agree (such date upon which the Closing occurs, the "*Closing Date*").

SECTION 2.4. <u>Effective Time</u>. As soon as practicable on the Closing Date, the parties shall cause the Merger to be consummated by filing with the Secretary of State of the State of Delaware a certificate of merger (the "*Certificate of Merger*") in such form as reasonably agreed upon between the parties and as required by, and executed in accordance with, the relevant provisions of the DGCL and shall make all other filings or recordings required under the DGCL. The Merger shall become effective at such time as the Certificate of Merger is duly filed with such Secretary of State, or at such later time as Parent and the Company shall agree and specify in the Certificate of Merger (the "*Effective Time*").

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SECTION 2.5. <u>Surviving Corporation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Certificate of Incorporation</u>. The certificate of incorporation of the Surviving Corporation shall, by virtue of the Merger and without any action on the part of the parties, be amended and restated at the Effective Time so as to read in its entirety as set forth in <u>Exhibit A</u>, and, as so amended and restated, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended, restated or amended and restated as provided therein and under the DGCL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Bylaws</u>. The bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation, except that references to Merger Sub's name shall be replaced with references to the Surviving Corporation's name, until thereafter amended, restated or amended and restated as provided therein and under the DGCL.

SECTION 2.6. <u>Directors and Officers</u>. The directors of Merger Sub immediately prior to the Effective Time shall, from and after the Effective Time, be the initial directors of the Surviving Corporation and shall serve until the earlier of their resignation, removal or death or until their respective successors have been duly elected or appointed and qualified, as the case may be. The officers of Merger Sub immediately prior to the Effective Time shall, from and after the Effective Time, be the initial officers of the Surviving Corporation and shall serve until the earlier of their resignation, removal or death or until their respective successors have been duly elected or appointed and qualified, as the case may be. The Company shall use reasonable best efforts to cause each director of the Company immediately prior to the Effective Time to resign from the Company Board, to be effective as of, and conditioned upon the occurrence of, the Effective Time. 

SECTION 2.7. <u>ROFN</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall deliver to the ROFN Holder the ROFN Notice (as defined in the ROFN Side Letter) no later than 24 hours after the public announcement of this Agreement and, if the ROFN Holder delivers a ROFN Exercise Notice in accordance with (and as defined in) the ROFN Side Letter within the time period set forth therein, the Company shall comply with its obligations under the ROFN Side Letter and, notwithstanding any other provision of this Agreement requiring written consent of Parent, shall be permitted to enter into the ROFN Purchase Documents and consummate the ROFN Sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the ROFN Holder delivers a ROFN Exercise Notice in accordance with (and as defined in) the ROFN Side Letter, the Company shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) not disclose in connection with the potential ROFN Sale any information of the Company or any of its Subsidiaries related to the RemainCo Business, any RemainCo Assets or any RemainCo Liabilities, keep Parent informed in reasonable detail of developments in connection with the potential ROFN Sale, including by promptly providing Parent with the ROFN Notice, the ROFN Exercise Notice, drafts of any ROFN Purchase Agreement or other ROFN Purchase Documents and summaries of substantive communications relating thereto that are exchanged between the ROFN Holder and the Company (or their respective Representatives) relating in any way to the ROFN;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) promptly respond to Parent's reasonable requests for, and regularly discuss, updates on the status of the potential ROFN Sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if the ROFN Purchase Documents are entered into by the Company, use its reasonable best efforts to ensure that the ROFN Sale is consummated prior to the anticipated Closing Date and to satisfy on a timely basis all conditions precedent to the transactions contemplated by the ROFN Purchase Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) provide Parent with prompt written notice of any material default or material breach (or any event that, with or without notice, lapse of time or both, would give rise to any material default or material breach) under the ROFN Purchase Documents of which the Company becomes aware that would reasonably be expected to result in termination of the ROFN Purchase Agreement or any rights with respect to the ROFN or the incurrence of a material liability or other material obligation of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the Company or SpinCo, as applicable, (i) does not receive from the ROFN Holder a ROFN Exercise Notice prior to expiry of the ROFN Exercise Period (each as defined in the ROFN Side Letter) or (ii) does receive a valid ROFN Exercise Notice within the ROFN Exercise Period but has not entered into definitive agreements to effect a ROFN Sale by the end of the ROFN Negotiation Period (as defined in the ROFN Side Letter), then the Company shall cease all discussions with the ROFN Holder regarding the ROFN Assets and a potential ROFN Sale and shall thereafter no longer agree or enter into any arrangement in respect of a ROFN Sale, except in each case to the extent necessary to comply with the Company's obligations under the ROFN Side Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The ROFN Sale shall (i) not delay the Company's obligations to conduct the Spin-Off in accordance with the Spin-Off Agreements and this Agreement; *provided*, that the ROFN Assets may be sold to the ROFN Holder prior to or following the Spin-Off, (ii) not include any assets of the Company that would constitute RemainCo Assets and (iii) not impose any obligations or other liabilities on the Surviving Corporation or any of its Affiliates after the Closing other than those expressly set forth in the Spin-Off Agreements, from which time all such other obligations and other liabilities relating to the ROFN Sale shall be entirely for SpinCo's account, or include provisions that adversely impact the Surviving Corporation or any of its Affiliates or their respective businesses.

SECTION 2.8. <u>Permitted Third Party Sale</u>. Any Permitted Third Party Sale shall (a) not delay the Company's obligations to conduct the Spin-Off in accordance with the Spin-Off Agreements and this Agreement; (b) be consummated on the same terms as the Spin-Off Agreements (except that the Distribution of SpinCo by the Company to its shareholders shall be replaced by the sale of SpinCo by the Company to such Third Party as contemplated by the Separation and Distribution Agreement and except for the payment of an agreed purchase price to the Company for SpinCo), (c) not include any assets of the Company that would constitute RemainCo Assets, (d) not impose any obligations or other liabilities on the Surviving Corporation

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or any of its Affiliates after the Closing other than those expressly set forth in the Spin-Off Agreements, from which time all such other obligations and other liabilities relating to such sale shall be entirely for SpinCo's account, or include provisions that adversely impact the Surviving Corporation or any of its Affiliates or their respective businesses, (e) include a full release of claims by the applicable acquirer (on behalf of itself and its Affiliates) in favor of the Company and its Affiliates relating to the Transactions, and (f) be completed, if at all, within 60 days from the date of entry into a definitive agreement to effect the Permitted Third Party Sale.

ARTICLE 3

CONSIDERATION; EXCHANGE OF CERTIFICATES

SECTION 3.1. <u>Conversion of Merger Sub Capital Stock</u>. At the Effective Time, by virtue of the Merger and without any action on the part of the parties, each share of Merger Sub capital stock will be converted into and become one fully paid and non-assessable share of common stock of the Surviving Corporation.

SECTION 3.2. <u>Conversion of Company Common Stock</u>. At the Effective Time, by virtue of the Merger and without any action on the part of the parties or any Stockholder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (including any shares issued as a result of the exercise of any Company Warrants prior to the Effective Time, but excluding (i) any shares to be cancelled pursuant to <u>Section</u> <u>3.2(b)</u> and (ii) any Appraisal Shares (each share described in <u>clauses (i)</u> and <u>(ii)</u> of this <u>Section</u> <u>3.2(a)</u>, an "*Excluded Share*")) shall be cancelled and shall be converted automatically into the right to receive an amount in cash equal to $72.00, without interest, subject to any applicable withholding Taxes (the "*Merger Consideration*"). As of the Effective Time, all shares of Company Common Stock (other than the Excluded Shares) shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of either a certificate representing any such shares of Company Common Stock (each, a "*Certificate*") or non-certificated shares of Company Common Stock represented by book-entry ("*Book-Entry Shares*") shall cease to have any rights with respect thereto, except the right to receive, as the case may be, (A) the Merger Consideration payable with respect to such shares of Company Common Stock upon surrender of such Certificate or Book-Entry Shares in accordance with <u>Section</u> <u>3.3</u>, without interest, or (B) the payment referred to in <u>Section</u> <u>3.8</u>, in the case of each Appraisal Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each share of Company Common Stock held in the treasury of the Company and each share of Company Common Stock owned by Parent or Merger Sub or any direct or indirect wholly owned Subsidiary of Parent or the Company immediately prior to the Effective Time shall automatically be cancelled without any conversion thereof and shall cease to exist and no payment or distribution shall be made with respect thereto.

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SECTION 3.3. <u>Exchange of Certificates</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Paying Agent</u>. Prior to the Effective Time, Parent shall enter into an agreement with such bank or trust company as may be designated by Parent and reasonably acceptable to the Company to act as agent (the "*Paying Agent*") for the holders of shares of Company Common Stock, holders of Non-Employee Company Stock Options, holders of Non-Employee Company RSUs and holders of Company Warrants to receive the funds to which holders of such shares of Company Common Stock (other than the Excluded Shares) shall become entitled pursuant to <u>Section</u> <u>3.2(a)</u>, Non-Employee Company Stock Options shall become entitled to pursuant to <u>Section</u> <u>3.4(a)</u>, Non-Employee Company RSUs shall become entitled to pursuant to <u>Section</u> <u>3.4(b)</u>, or Company Warrants shall become entitled to pursuant to <u>Section</u> <u>3.4(e)</u>. As and when necessary to comply with its and Merger Sub's obligations hereunder, Parent shall deposit, or shall cause to be deposited, with the Paying Agent for the benefit of such holders of shares of Company Common Stock (other than Excluded Shares), holders of Non-Employee Company Stock Options, and holders of Non-Employee Company RSUs a cash amount in immediately available funds necessary for the Paying Agent to make payments under <u>Section</u> <u>3.2(a)</u>, <u>Section</u> <u>3.4(a)</u>, <u>Section</u> <u>3.4(b)</u> or <u>Section</u> <u>3.4(e)</u>, as applicable (such cash being hereinafter referred to as the "*Exchange Fund*"). The Exchange Fund shall not be used for any other purpose. The Exchange Fund shall be invested by the Paying Agent as directed by Parent; *provided* that (i) no such investment or losses thereon shall relieve Parent from making the payments required by <u>Section</u> <u>3.2(a)</u>, <u>Section</u> <u>3.4(a)</u>, <u>Section</u> <u>3.4(b)</u> or <u>Section</u> <u>3.4(e)</u> or affect the amount of Merger Consideration payable in respect of such shares of Company Common Stock, the Option Consideration payable in respect of the Non-Employee Company Stock Options, the RSU Consideration payable in respect of the Non-Employee Company RSUs or the amounts payable in respect of the Company Warrants, and (ii) no such investment of the Exchange Fund shall have maturities that could prevent or delay payments to be made pursuant to this Agreement. Any and all interest or other amounts earned with respect to such funds shall become part of the Exchange Fund, and any amounts in excess of the amounts payable under <u>Section</u> <u>3.2(a)</u>, <u>Section</u> <u>3.4(a)</u>, <u>Section</u> <u>3.4(b)</u> or <u>Section</u> <u>3.4(e)</u> shall be promptly returned to Parent and any and all interest or other amounts earned with respect to such funds shall be treated for all U.S. federal (and applicable state or local) income Tax purposes as earned by Parent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Exchange Procedures</u>. As promptly as practicable (but no later than five Business Days) after the Effective Time, Parent and the Surviving Corporation shall cause the Paying Agent to mail to each holder of record of Certificates and to each holder of record of Book-Entry Shares, in each case whose shares were converted into the right to receive the Merger Consideration pursuant to <u>Section</u> <u>3.2(a)</u>, (i) a letter of transmittal, which shall be in reasonable and customary form, which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent (or effective affidavits in lieu thereof in accordance with <u>Section</u> <u>3.3(f)</u>) and which shall be in such form and have such other provisions as Parent may reasonably specify and (ii) instructions for use in surrendering the Certificates or Book-Entry Shares in exchange for the Merger Consideration payable with respect thereto. Upon surrender to the Paying Agent of a Certificate for cancellation (or effective affidavits in lieu thereof in accordance with <u>Section</u> <u>3.3(f)</u>), together with a duly completed and validly executed letter of transmittal, or receipt of an "agent's message" by the Paying Agent (or such other evidence, if any, of transfer as the Paying Agent may reasonably request) in the case of Book-Entry Shares, the holder of such Certificate or Book-Entry Shares shall receive in exchange therefor the Merger Consideration which the shares of Company Common Stock theretofore represented by such Certificate or book-entries entitle such holder to receive pursuant to the provisions of this <u>Article 3</u> and the Certificate or Book-Entry Shares so surrendered shall then be cancelled. No interest shall be paid or shall accrue on any Merger Consideration payable to holders of Certificates or Book-Entry Shares pursuant to the provisions of this <u>Article 3</u>. In the event of a transfer of ownership of Company Common Stock that is not

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registered in the transfer records of the Company, payment may be made to a Person other than the Person in whose name the Certificate or Book-Entry Shares so surrendered are registered if such Certificate shall be properly endorsed or otherwise be in proper form for transfer or such Book-Entry Shares shall be properly transferred and the Person requesting such issuance shall pay any stock transfer Taxes required by reason of the payment to a Person other than the registered holder of such Certificate or Book-Entry Shares or establish to the reasonable satisfaction of Parent that such Tax has been paid or is not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Further Ownership Rights in Company Common Stock</u>. The Merger Consideration paid upon the surrender or exchange of Certificates and Book-Entry Shares in accordance with the terms of this <u>Article 3</u> shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock theretofore represented by such Certificates or book entries, and, after the Effective Time, there shall be no further registration of transfers on the stock transfer books of the Company of the shares of Company Common Stock which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates or Book-Entry Shares are presented to the Surviving Corporation or the Paying Agent for any reason, they shall be cancelled and exchanged as provided in this <u>Article 3</u>, except as otherwise provided by applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Termination of Exchange Fund</u>. Any portion of the Exchange Fund which remains undistributed to the holders of Certificates or Book-Entry Shares, Non-Employee Company Stock Options or Non-Employee Company RSUs for 12 months after the Effective Time shall be delivered to Parent or one of its Affiliates, upon demand, and any holders of Certificates or Book-Entry Shares, Non-Employee Company Stock Options or Non-Employee Company RSUs who have not theretofore complied with the applicable exchange procedures contemplated by this <u>Article 3</u> shall thereafter look only to Parent (subject to applicable abandoned property, escheat or similar Laws), as general creditors thereof, for payment of their claim for Merger Consideration, Option Consideration or RSU Consideration, as applicable, without any interest thereon and subject to any withholding of Taxes required by applicable Law in respect of such holder's surrender of their Certificates or Book-Entry Shares and compliance with the procedures in <u>Section</u> <u>3.3(b)</u>, in respect of their Non-Employee Company Stock Options, or in respect of their Non-Employee Company RSUs, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>No Liability</u>. None of Parent, Merger Sub, the Company, the Surviving Corporation, the Paying Agent or their respective Affiliates shall be liable to any Person in respect of any Merger Consideration or any cash from the Exchange Fund delivered to a Governmental Authority pursuant to any applicable abandoned property, escheat or similar Laws. If any Certificate or Book-Entry Share shall not have been surrendered prior to the earlier of (i) two years after the Effective Time and (ii) immediately prior to the date on which the Merger Consideration payable with respect to the shares of Company Common Stock represented by such Certificate or Book-Entry Share pursuant to this <u>Article 3</u> would otherwise escheat to or become the property of any Governmental Authority, then any such Merger Consideration shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation, free and clear of all claims or interests of any Person previously entitled thereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Lost, Stolen or Destroyed Certificates</u>. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent or the Paying Agent, the posting by such Person of a bond in such reasonable amount as Parent or the Paying Agent, as the case may be, may direct as indemnity against any claim that may be made against it with respect to such Certificate (which amount shall not exceed the Merger Consideration payable with respect to the shares of Company Common Stock represented by such Certificate), the Paying Agent shall, subject to such Person's compliance with the exchange procedures set forth in <u>Section</u> <u>3.3(b)</u> (other than the surrender of a Certificate), issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration payable with respect to the shares of Company Common Stock represented by such Certificate in accordance with this <u>Article 3</u>.

SECTION 3.4. <u>Company Equity Awards and Warrants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Treatment of Options</u>. Each Company Stock Option that is outstanding as of immediately prior to the Effective Time shall (i) to the extent unvested, become fully vested and exercisable effective immediately prior to, and contingent upon, the Effective Time, and (ii) at the Effective Time, by virtue of the Merger and without any further action on the part of the holder thereof or the parties, (x) if such Company Stock Option has a per share exercise price that is less than the Merger Consideration, be cancelled and, in exchange therefor, the former holder thereof shall be entitled to receive, in consideration of the cancellation of such Company Stock Option and in settlement therefor, a payment in cash (without interest and subject to any applicable withholding Taxes required by applicable Law) equal to the product of (1) the total number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time and (2) the excess of the Merger Consideration over the per share exercise price payable under such Company Stock Option immediately prior to the Effective Time (the "*Option Consideration*"), and (y) if such Company Stock Option has a per share exercise price that is equal to or greater than the Merger Consideration, be cancelled at the Effective Time without consideration payable in respect thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Treatment of Restricted Stock Units</u>. Except as provided in the Company Disclosure Letter, each Company RSU that is outstanding as of immediately prior to the Effective Time shall (i) to the extent unvested, become fully vested effective immediately prior to, and contingent upon, the Effective Time, and (ii) at the Effective Time, by virtue of the Merger and without any further action on the part of the holder thereof or the parties, be cancelled and converted automatically into the right of the holder thereof to receive a payment in cash (without interest and subject to any applicable withholding Taxes required by applicable Law) equal to the product of (1) the Merger Consideration multiplied by (2) the total number of shares of Company Common Stock subject to such Company RSU immediately prior to the Effective Time (the "*RSU Consideration*").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Payment</u>. On or prior to its first applicable payroll payment date that is no earlier than 10 days following the Closing, (i) the Surviving Corporation shall make (or cause to be made) a payment subject to withholding, if any, required by applicable Law, to each former holder of Employee Company Stock Options or Employee Company RSUs, such holder's Option Consideration or RSU Consideration, as applicable and (ii) Parent shall deposit with the Paying Agent a cash amount for the Paying Agent to pay to each former holder of Non-Employee Company Stock Options or Non-Employee Company RSUs such holder's Option Consideration or RSU Consideration, as applicable, in accordance with <u>Section</u> <u>3.4</u> and cause the Paying Agent to make such payments to such holders in accordance with the agreement to be entered into between the Paying Agent and Parent or its Affiliate.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Termination of Stock Plans</u>. As of the Effective Time, all Stock Plans and all outstanding equity and equity-based awards shall be terminated, effective as of immediately prior to the Closing and contingent upon the occurrence of the Closing, and no further shares of Company Common Stock, Company Equity Awards, equity interests or other rights with respect to shares of Company Common Stock shall be granted thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Treatment of Company Warrants</u>. During the Pre-Closing Period, the Company shall take all required actions to effect the treatment of the Company Warrants hereunder and shall use reasonable best efforts to comply with its obligations under the Company Warrants, including to deliver any notices required under the terms of any outstanding Company Warrants to the holders thereof, and the Company shall provide Parent with a reasonable opportunity to review and comment on such notices and will give reasonable and good faith consideration to any comments provided by Parent to such notices. Each Company Warrant that is outstanding immediately prior to the Effective Time will, upon the Effective Time, become exercisable by the holder thereof solely for the same Merger Consideration as such holder would have been entitled to receive following the Effective Time pursuant to <u>Section</u> <u>3.2(a)</u> if such holder had been, immediately prior to the Effective Time, the holder of the number of shares of Company Common Stock then issuable upon exercise in full of such warrant without regard to any limitations on exercise contained therein. Following the Effective Time, no holder of any Company Warrant shall have any right hereunder or thereunder to acquire any Company Securities or any securities in the Surviving Corporation, SpinCo, Parent or any of their respective Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Impact of Permitted Sale Proceeds</u>. In the event of a distribution of Permitted Sale Proceeds prior to the Effective Time, as soon as practicable following the distribution of Permitted Sale Proceeds to holders of Company Common Stock and prior to the Effective Time, the Company shall pay each holder of Company RSUs or Company Stock Options as of the record date used by the Company for such distribution an amount in cash from the Permitted Sale Proceeds, subject to applicable tax withholding, equal to the product of (i) the aggregate number of shares of Company Common Stock underlying the outstanding Company RSUs and Company Stock Options held by such holder as of such record date (whether vested or unvested) and (ii) the per share amount payable to holders of Company Common Stock in such distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Board Actions</u>. Prior to the Effective Time, the Company Board (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary and appropriate, including obtaining any consents, required to, prior to the Effective Time, effect the transactions described in this <u>Section</u> <u>3.4</u>, including delivering written notice (in form reasonably approved by Parent) to each holder of a Company Equity Award of the treatment of such award pursuant to this <u>Section</u> <u>3.4</u>.

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SECTION 3.5. <u>Employee Stock Purchase Plan</u>. The Company, the Company Board or the applicable committee thereof, as applicable, shall take all actions necessary to terminate the Company's 2020 Employee Stock Purchase Plan (the "*ESPP*") and all outstanding rights thereunder no later than the day immediately prior to the Closing Date, contingent upon the occurrence of the Closing, and to otherwise effectuate the treatment of the ESPP as contemplated in this <u>Section</u> <u>3.5</u>. From and after the date hereof, the Company shall (a) take all actions necessary to ensure that (i) no new participants are permitted to participate in the ESPP and that participants may not increase their payroll deductions or purchase elections from those in effect on the date hereof and (ii) except for the offering or purchase period (if any) under the ESPP that is in progress as of the date hereof (the *"Final Offering Period*"), no offering or purchase period shall be commenced following the date hereof and (b) to the extent required by the ESPP, provide notice to participants describing the treatment of the ESPP pursuant to this <u>Section</u> <u>3.5</u>. The Final Offering Period shall terminate no later than fifteen (15) Business Days following the date hereof, and the Company shall cause the exercise date applicable to the Final Offering Period to accelerate and occur on such termination date with respect to any then-outstanding purchase rights. Notwithstanding anything in this Agreement to the contrary, (A) all amounts allocated to each participant's account under the ESPP at the end of the Final Offering Period shall thereupon be used to purchase whole shares of Company Common Stock under the terms of the ESPP for such offering period, which shares of Company Common Stock shall be cancelled at the Effective Time in exchange for the right to receive the Merger Consideration in accordance with <u>Section</u> <u>3.2(a)</u> following the purchase of shares of Company Common Stock and (B) the Company shall return to each participant the funds, if any, that remain in such participant's account after such purchase.

SECTION 3.6. <u>Adjustments to Prevent Dilution</u>. Without limiting the other provisions of this Agreement, in the event that, during the period between the date hereof and the Effective Time, the number of outstanding shares of Company Common Stock or securities convertible into or exchangeable or exercisable for shares of Company Common Stock shall be changed into a different number of shares or securities or a different class as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, issuer tender or exchange offer or other similar transaction, then the Merger Consideration and any other amounts payable pursuant to this Agreement shall be equitably adjusted, without duplication, to reflect such change; *provided* that, in any case, nothing in this <u>Section</u> <u>3.6</u> shall be construed to permit the Company to take any action with respect to its securities that is prohibited by the terms of this Agreement and for the avoidance of doubt, no adjustments shall be made solely as a result of the Spin-Off Distribution or any distribution of the Permitted Sale Proceeds.

SECTION 3.7. <u>Withholding Rights</u>. Notwithstanding anything in this Agreement to the contrary, each of Parent, Merger Sub, the Surviving Corporation, the Paying Agent, and their respective agents shall be entitled to deduct and withhold from any payment to be made to any Person pursuant to this Agreement any amount that Parent, Merger Sub, the Surviving Corporation, the Paying Agent, or their respective agents, as applicable, is required to deduct or withhold under any applicable Tax Law (including as a result of the Spin-Off Distribution or any distribution of the Permitted Sale Proceeds). Any amount so deducted shall be paid to the applicable Taxing Authority in accordance with applicable Tax Law and treated for all purposes of this Agreement as having been paid to the Person in respect of which such amount was withheld.

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SECTION 3.8. <u>Appraisal Rights</u>. Notwithstanding anything in this Agreement to the contrary, shares of Company Common Stock that are outstanding immediately prior to the Effective Time (other than any shares to be cancelled pursuant to <u>Section</u> <u>3.2(b)</u>) and that are held by any Person who is entitled to demand and properly demands appraisal of such shares ("*Appraisal Shares*") pursuant to, and who complies in all respects with, Section 262 of the DGCL shall not be converted into the right to receive Merger Consideration and shall entitle the holder only to payment for such Appraisal Shares in accordance with and to the extent provided by Section 262 of the DGCL; *provided* that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262 of the DGCL, then such Appraisal Shares shall automatically be deemed to have been converted as of the Effective Time into, and become exchangeable solely for the right to receive, Merger Consideration as provided in <u>Section</u> <u>3.2(a)</u>. The Company shall promptly provide notice to Parent of any demands received by the Company for appraisal of any shares of Company Common Stock, and Parent shall have the right to participate in and direct (*provided* that such direction may not result in a binding obligation on the part of the Company that is effective prior to the Effective Time) all negotiations and proceedings with respect to such demands. The Company shall not, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing. Any cash deposited with the Paying Agent pursuant to <u>Section</u> <u>3.3(a)</u> with respect to shares of Company Common Stock that become Appraisal Shares shall be returned to Parent upon demand therefor.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in (a) the disclosure letter delivered by the Company to Parent prior to the execution of this Agreement (the "*Company Disclosure Letter*"), which Company Disclosure Letter identifies the particular Section (or, if applicable, subsection) of this <u>Article 4</u> to which such exception relates, (b) any disclosure contained in any other section (or, if applicable, subsection) of the Company Disclosure Letter to the extent that it is reasonably apparent from the face of such disclosure that such disclosure is intended to qualify such other representation and warranty or (c) disclosure in the Company SEC Documents publicly filed after January 1, 2024, and at least three days prior to the date hereof, excluding, in each case, any exhibits or schedules to such Company SEC Documents, any information in the "Risk Factors" or "Forward-Looking Statements" sections thereof and any other statements therein that are similarly cautionary, predictive or forward-looking in nature (it being acknowledged and agreed that <u>clause (c)</u> shall not apply to the representations and warranties set forth in <u>Section</u> <u>4.1</u> (*Organization*) <u>Section</u> <u>4.2</u> (*Capitalization*), <u>Section</u> <u>4.3</u> (*Authorization; No Conflict*), <u>Section</u> <u>4.4</u> (*Subsidiaries*), <u>Section</u> <u>4.5</u> (*SEC Documents*), <u>Section</u> <u>4.9</u> (*Information Supplied*), <u>Section</u> <u>4.10</u> (*Broker's or Finder's Fees*), <u>Section</u> <u>4.13</u> (*Opinion of Financial Advisor*) and <u>Section</u> <u>4.24</u> (*Takeover Provisions*)), the Company hereby represents and warrants to Parent and Merger Sub as follows:

SECTION 4.1. <u>Organization</u>. The Company (a) is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware, (b) has all requisite corporate power and authority to carry on its business as now conducted, and (c) is duly qualified or licensed to do business and (where applicable) is in good standing as a foreign corporation in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified, licensed or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has made available to Parent accurate and complete copies of the Company Charter Documents as in effect as of the date hereof. The Company Charter Documents are in full force and effect, and the Company is not in violation of the Company Charter Documents in any material respect.

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SECTION 4.2. <u>Capitalization</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The authorized capital stock of the Company consists of (i) 400,000,000 shares of Company Common Stock and (ii) 40,000,000 shares of preferred stock, par value $0.0001 per share. At the close of business on October 23, 2025 (the "*Capitalization Date*"), there were (A) 146,910,657 shares of Company Common Stock issued and outstanding, (B) no shares of preferred stock outstanding, (C) no shares of Company Common Stock held by the Company in its treasury, (D) outstanding Company Stock Options to purchase an aggregate of 13,668,203 shares of Company Common Stock, (E) 3,919,806 shares of Company Common Stock subject to or otherwise deliverable in connection with outstanding Company RSUs, (F) 6,822,737 shares of Company Common Stock issuable pursuant to the Company Warrants, (G) 5,144,614 shares of Company Common Stock reserved for issuance in respect of future awards under the Stock Plans, and (H) 1,299,919 shares of Company Common Stock reserved for issuance under the ESPP. All such issued and outstanding shares of capital stock of the Company have been, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized and validly issued, fully paid and non-assessable, and free of preemptive rights. All outstanding shares of Company Common Stock and all Company Equity Awards and Company Warrants have been issued or granted, as applicable, in compliance in all material respects with applicable Law. <u>Section</u> <u>4.2(a)</u> of the Company Disclosure Letter sets forth an accurate and complete list as of the Capitalization Date of each outstanding Company Equity Award and Company Warrant, including, as applicable, the holder, the type of Company Equity Award, date of grant, expiration date, exercise price, vesting schedule or forfeiture conditions and number of shares of Company Common Stock subject thereto, and the Stock Plan under which the award is granted. From the close of business on the Capitalization Date to the date hereof, the Company has not issued any shares of capital stock, or any other Company Securities, except upon the exercise or settlement of the Company Equity Awards or Company Warrants, in each case outstanding as of the close of business on the Capitalization Date. Accumulated payroll deductions in respect of the Final Offering Period were $1,657,170.33 as of the close of business on the Capitalization Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Other than the Company Common Stock, there are no outstanding bonds, debentures, notes, other indebtedness or securities of the Company having the right to vote or, other than the outstanding Company Equity Awards, Company Warrants, or purchase rights under the ESPP, that are convertible into or exchangeable or exercisable for, securities having the right to vote on any matters on which the Stockholders may vote. Except as set forth in this <u>Section</u> <u>4.2</u>, as of the date hereof, there are no issued, reserved for issuance or outstanding (i) shares of capital stock or other voting securities of or ownership interests in the Company, (ii) securities of the Company convertible into or exchangeable or exercisable for shares of capital stock or other voting securities of, or ownership interests in, the Company, (iii) warrants, calls, options or other rights to acquire from the Company, or other obligation (including under any stockholder rights plan or other arrangement commonly referred to as a "poison pill") of the Company to issue, any capital stock or other voting securities, or ownership interests in, or any securities convertible into or exchangeable or exercisable for capital stock or other voting securities, or ownership interests in, the Company, or (iv) restricted shares, stock appreciation rights, performance units, contingent

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value rights, "phantom" stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of any capital stock or other voting securities of, or ownership interests in, the Company (the items in <u>clauses (i)</u> through <u>(iv)</u> being referred to collectively as "*Company Securities*"). There are no outstanding contractual obligations of the Company or of any Company Subsidiary of any kind to redeem, purchase or otherwise acquire any Company Securities other than the Company Warrants. There are no stockholder agreements, voting trusts or other agreements or understandings to which the Company or any Company Subsidiary is a party relating to the voting or disposition of any Company Securities or granting to any Person or group of Persons the right to elect, or to designate or nominate for election, a director to the Company Board or any Company Subsidiary.

SECTION 4.3. <u>Authorization; No Conflict</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and the Spin-Off Agreements and to consummate the Transactions. The execution, delivery and performance of the Company's obligations under this Agreement and the Spin-Off Agreements and the consummation of the Transactions have been duly and validly authorized by the Company Board. No other corporate proceedings on the part of the Company or its Stockholders are necessary to authorize the consummation of the Transactions and the performance of the Company's obligations under this Agreement and the Spin-Off Agreements, except for (i) the approval of this Agreement and the Separation and Distribution Agreement by the Requisite Company Vote, and (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware. At a meeting duly called and held, the Company Board unanimously (A) determined that this Agreement, the Separation and Distribution Agreement and the Transactions are advisable, fair to and in the best interests of the Company and the Stockholders, (B) adopted, approved and declared advisable this Agreement, the Separation and Distribution Agreement and the Transactions in accordance with the DGCL, and approved the execution, delivery and performance by the Company of this Agreement and the Separation and Distribution Agreement and the consummation by the Company of the Transactions, (C) resolved to recommend that the Stockholders vote to approve the adoption of this Agreement and the Separation and Distribution Agreement on the terms and subject to the conditions set forth herein and in the Separation and Distribution Agreement, and (D) to the extent necessary, adopted a resolution having the effect of causing this Agreement and the Transactions not to be subject to any Takeover Provision that might otherwise apply to the Transactions, in each case on the terms and subject to the conditions of this Agreement. As of the date hereof, none of the foregoing resolutions of the Company Board have been amended, rescinded or modified. This Agreement and the Separation and Distribution Agreement have been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery hereof by Parent and Merger Sub (in the case of this Agreement) and by Parent (in the case of the Separation and Distribution Agreement), constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar Laws of general application affecting or relating to the enforcement of creditors' rights generally and equitable principles of general applicability (the "*Bankruptcy and Equity Exception*").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) None of the execution, delivery or performance of this Agreement or the Spin-Off Agreements by the Company, the consummation by the Company of the Transactions, or compliance by the Company with any of the provisions herein or therein will (i) result in a violation or breach of, contravene or conflict with, (x) the Company Charter Documents or (y) any Company Subsidiary Charter Documents, (ii) assuming compliance with the matters referred to in <u>Section</u> <u>4.3(c)</u>, conflict with or result in a violation or breach of any applicable Judgment or any provision of any applicable Law, (iii) assuming compliance with the matters referred to in <u>Section</u> <u>4.3(c)</u>, require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Company or any Company Subsidiary is entitled under any provision of any Contract binding upon the Company or any Company Subsidiary or any Authorization affecting, or relating in any way to, the assets or business of the Company and the Company Subsidiaries or (iv) result in the creation or imposition of any Lien on any asset of the Company or any Company Subsidiary, except in the case of each of <u>clauses (ii)</u>, <u>(iii)</u> and <u>(iv)</u> of this <u>Section</u> <u>4.3(b)</u>, as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The execution, delivery and performance by the Company of this Agreement and the Spin-Off Agreements and the consummation by the Company of the Transactions require no action by or in respect of, or filing by or with, any Governmental Authority, except for (i) filing the Certificate of Merger with the Secretary of State of the State of Delaware, (ii) compliance with and filings pursuant to the HSR Act, applicable non-U.S. competition and antitrust Laws (collectively, "*Antitrust Laws*") and applicable Foreign Investment Laws, if any, (iii) compliance with any applicable requirements of the Securities Act, the Exchange Act and any other United States state or federal securities Laws, (iv) compliance with any Nasdaq rules and the listing of the shares of common stock of SpinCo on Nasdaq, and (v) actions or filings the failure of which to make or obtain has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

SECTION 4.4. <u>Subsidiaries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 4.4</u> of the Company Disclosure Letter sets forth an accurate and complete list of the Company Subsidiaries, indicating for each such Subsidiary its respective jurisdiction of organization and amount and ownership of equity securities thereof issued and outstanding. Each Company Subsidiary (i) is an entity duly organized, validly existing and (where applicable) in good standing under the Laws of its jurisdiction of organization, (ii) has all requisite entity power and authority to carry on its business as now conducted, and (iii) is duly qualified or licensed to do business and (where applicable) is in good standing as a foreign corporation in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified, licensed or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has made available to Parent accurate and complete copies of each of the Company Subsidiary Charter Documents as in effect on the date hereof. The Company Subsidiary Charter Documents are in full force and effect, and none of the Company Subsidiaries are in violation of the Company Subsidiary Charter Documents in any material respect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All of the outstanding capital stock or other voting securities of, or other ownership interests in, the Company Subsidiaries is owned by the Company, directly or indirectly, free and clear of any Liens or any other limitation or restriction (including on the right to vote, sell or otherwise dispose of such capital stock or other voting securities or ownership interests, but excluding any such restriction on the right to sell or otherwise dispose of such capital stock or other voting securities under applicable securities Laws). Except as set forth in <u>Section</u> <u>4.4</u> of the Company Disclosure Letter, there are no issued, reserved for issuance or outstanding (i) shares of capital stock or other voting securities of or ownership interests in any Company Subsidiary, (ii) securities of the Company or any Company Subsidiary convertible into or exchangeable or exercisable for shares of capital stock or other voting securities of, or ownership interests in, any Company Subsidiary, (iii) warrants, calls, options or other rights to acquire from the Company or any Company Subsidiary, or other obligations of the Company or any Company Subsidiary to issue, any capital stock or other voting securities of, or ownership interests in, or any securities convertible into or exchangeable or exercisable for any capital stock or other voting securities of, or ownership interests in, any Company Subsidiary or (iv) restricted shares, stock appreciation rights, performance units, contingent value rights, "phantom" stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of any capital stock or other voting securities of, or ownership interests in, any Company Subsidiary (the items in <u>clauses (i)</u> through <u>(iv)</u> of this <u>Section</u> <u>4.4(b)</u>, collectively, "*Company Subsidiary Securities*"). There are no outstanding contractual obligations of the Company or of any Company Subsidiary of any kind to redeem, purchase or otherwise acquire any Company Subsidiary Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except for the capital stock or other voting securities of, or ownership interests in, the Company Subsidiaries, the Company does not own, directly or indirectly, any capital stock or other voting securities of, or ownership interests in, any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No former Subsidiary of the Company (other than the Company Subsidiaries) carried on any business, conducted any operations, held any assets or had any liabilities for which the Company or any Company Subsidiary is or would reasonably be expected to be liable.

SECTION 4.5. <u>SEC Documents</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Since January 1, 2022, the Company has filed with or furnished to the SEC all forms, reports, schedules, statements, prospectuses, registration statements, definitive proxy statements and other documents (collectively, including all exhibits thereto and information incorporated by reference therein, the "*Company SEC Documents*") required to be filed by the Company with or furnished by the Company to the SEC in a timely manner. As of their respective filing dates (and as of the date of any amendment or supplement thereto), (i) each Company SEC Document complied in all material respects with the requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002, as the case may be, and the applicable requirements of Nasdaq, in each case, applicable to such Company SEC Documents and (ii) except to the extent that information contained in such Company SEC Documents has been revised, amended, modified, superseded (prior to the date hereof) by a later filed Company SEC Document, the Company SEC Documents when filed or furnished pursuant to the Securities Act or the Exchange Act did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No Company Subsidiary is required to file any forms, reports or other documents with the SEC pursuant to Section 13 or 15 of the Exchange Act or similar non-U.S. authority.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company and the Company Subsidiaries have established, have maintained and maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and such disclosure controls and procedures are designed to ensure that all information (both financial and non-financial) required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure and to enable the "principal executive officer" and "principal financial officer" (as such terms are defined in the Sarbanes-Oxley Act of 2002) of the Company to make the certifications required under the Exchange Act with respect to such reports.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company and the Company Subsidiaries have established, have maintained and maintain a system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act): (i) designed to provide reasonable assurance regarding the reliability of the Company's financial reporting and the preparation of Company financial statements for external purposes in accordance with GAAP, (ii) that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company and the Company Subsidiaries, (iii) that provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company and the Company Subsidiaries are being made only in accordance with authorizations of the Company's management and the Company Board, and (iv) that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's or the Company Subsidiaries' assets that could have a material effect on the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company is, and since January 1, 2022, has been, in compliance in all material respects with all applicable listing and corporate governance requirements of Nasdaq, and is, and since January 1, 2022, has been, in compliance in all material respects with all applicable rules, regulations and requirements of the Sarbanes-Oxley Act of 2002 and the SEC. There are no outstanding loans or other extension of credit made by the Company or any Company Subsidiary to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company. Since January 1, 2022, neither the Company nor, to the knowledge of the Company, the Company's independent registered public accounting firm, has identified or been made aware of (i) any material deficiencies or weaknesses in the design or operation of internal controls that are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information, (ii) any fraud, whether or not material, that involves management or other employees who have a role in internal controls or (iii) any claim or allegation regarding any of the foregoing.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Neither the Company nor any Company Subsidiary is a party to, or has any commitment to become a party to, any joint venture, off balance sheet partnership or any similar Contract or arrangement (including any Contract or arrangement relating to any transaction or relationship between or among the Company and any Company Subsidiary, on the one hand, and any unconsolidated Affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or any off balance sheet arrangements (as defined in Item 303(a) of Regulation S-K under the Securities Act)), where the result, purpose or intended effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company or any Company Subsidiary in the Company's published financial statements or other Company SEC Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company has made available to Parent accurate and complete copies of all material correspondence through the date hereof between the SEC, on the one hand, and the Company or any Company Subsidiary, on the other hand, including comment letters from the staff of the SEC relating to the Company SEC Documents containing unresolved comments and all written responses of the Company thereto. To the knowledge of the Company, as of the date hereof, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the date hereof, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document.

SECTION 4.6. <u>Company Financial Statements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The consolidated financial statements of the Company contained in the Company SEC Documents (including, in each case, any related notes and schedules thereto) (collectively, the "*Company Financial Statements*") comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in conformity with GAAP (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) during the periods involved and present fairly, in all material respects, the consolidated financial position and the consolidated results of operations, changes in stockholders' equity and cash flows of the Company and the Company Subsidiaries as of the dates or for the periods presented therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments as permitted by GAAP and the applicable rules and regulations of the SEC).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company and the Company Subsidiaries have no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise), and there is no existing condition, situation or set of circumstances that would reasonably be expected to result in any such liability or obligation, except liabilities or obligations that (i) are accrued or reserved against in the most recent Company Financial Statements included in the Company SEC Documents filed prior to the date hereof or are reflected in the notes thereto, (ii) are current liabilities incurred in the ordinary course of business consistent with past practice since the date of such Company Financial Statements and, individually and in the aggregate, are not material to the Company and the Company Subsidiaries, taken as a whole, (iii) are performance or compliance obligations under the terms of any Contract to which the Company or any Company Subsidiary is a party or by which it is bound (and do not arise from any failure by the Company or any Company Subsidiary to perform or comply with such Contract) and that has been made available to Parent or (iv) are incurred in connection with the Transactions.

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SECTION 4.7. <u>Absence of Material Adverse Effect</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Since December 31, 2024, through the date hereof, there has not been or occurred any Effect, individually or in the aggregate with all other Effects, that has had, or would reasonably be expected to have, a Company Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Since December 31, 2024, through the date hereof, the Company and the Company Subsidiaries have conducted their business in the ordinary course of business consistent with past practice and there has not been or occurred any event, condition, action or occurrence that, if taken during the period from the date hereof through the Effective Time without Parent's consent, would constitute a breach of any of the covenants in <u>clauses (i)</u> through <u>(vi)</u>, <u>(viii)</u>, <u>(ix)</u>, <u>(xiii)</u>, <u>(xv)</u>, <u>(xvi)</u>, <u>(xxi)</u>, <u>(xxiv)</u>, and, solely as it relates to the foregoing, <u>(xxix)</u> of <u>Section</u> <u>6.1(b)</u>.

SECTION 4.8. <u>Proceedings</u>. There are no Proceedings, pending or, to the knowledge of the Company, threatened, against or affecting the Company or any Company Subsidiary or any present or former officer, director or employee of the Company or any Company Subsidiary in such individual's capacity as such, and neither the Company nor any Company Subsidiary is subject to any outstanding Judgment, in each case, that would reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.

SECTION 4.9. <u>Information Supplied</u>. Each of (a) the Proxy Statement, at the time of the filing thereof, at the time of any amendment of or supplement thereto, and at the time of any publication, mailing, distribution or dissemination thereof, and on the date of the Stockholders' Meeting (as it may be adjourned or postponed in accordance with this Agreement), and (b) the Spin-Off Registration Statement, at the time of the confidential submission or the filing thereof, at the time of any amendment of or supplement thereto, on the date it is declared effective by the SEC and at the time of any publication, mailing, distribution or dissemination thereof, (i) will comply as to form in all material respects with the requirements of the Exchange Act, and (ii) will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. For clarity, the representations and warranties in this <u>Section</u> <u>4.9</u> will not apply to statements included or incorporated by reference in the Proxy Statement or the Spin-Off Registration Statement based upon information supplied to the Company by Parent or Merger Sub or any of their Representatives specifically for inclusion therein.

SECTION 4.10. <u>Broker</u><u>'</u><u>s or Finder</u><u>'</u><u>s Fees</u>. Except for Goldman Sachs & Co. LLC and Barclays Capital Inc., no broker, investment banker, finder, or other Person performing similar functions on behalf of the Company or any Company Subsidiary or under the Company's or any Company Subsidiary's authority is or will be entitled to any advisory, commission or broker's or finder's fee or similar fee or commission or reimbursement of expenses from the Company or any Company Subsidiary in connection with any of the Transactions based upon arrangements made by or on behalf of the Company or any Company Subsidiary.

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SECTION 4.11. <u>Employee Plans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 4.11(a)</u> of the Company Disclosure Letter sets forth an accurate and complete list of all Company Employee Benefit Plans that are subject to ERISA, that provide for severance, change of control, retention, termination or similar pay, compensation, bonus or benefits, or that are otherwise material (in each case prior to giving effect to the Spin-Off).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to each Company Employee Benefit Plan set forth in <u>Section</u> <u>4.11(a)</u> of the Company Disclosure Letter, the Company has made available to Parent an accurate and complete copy of: (i) the most recent plan document, including all amendments thereto (or, in either case, with respect to any unwritten material Company Employee Benefit Plan, a written description of the terms thereof), and any related trusts, (ii) the current summary plan description, including any summaries of material modifications, (iii) the most recent determination letter (or if applicable, advisory or opinion letter) from the Internal Revenue Service, if any, and any pending applications for a determination or opinion letter, (iv) the most recent annual report on Form 5500 required to be filed with the Internal Revenue Service with respect thereto (if any), including all schedules and attachments thereto, (v) the most recently prepared coverage and non-discrimination testing results (if any), and (vi) all material non-routine notices or other written correspondence regarding such Company Employee Benefit Plan from the Internal Revenue Service, Department of Labor, Pension Benefit Guarantee Corporation, or other Governmental Authority received by the Company within the last three years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Company Employee Benefit Plan that is intended to be "qualified" within the meaning of Section 401(a) of the Code has been the subject of a favorable and up-to-date determination, advisory or opinion letter from the Internal Revenue Service on which the Company is entitled to rely, and no event has occurred, and no conditions, facts, or circumstances exist, that would reasonably be expected to cause the loss of such qualification or the imposition of liability, penalty or Tax under ERISA, the Code or other applicable Law related to such qualification. All assets of the Company Employee Benefit Plans consist of cash or actively traded securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each Company Employee Benefit Plan has been operated, established, maintained and administered in all material respects in accordance with its terms and with all provisions of ERISA, the Code and other applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Neither the Company nor any Company Subsidiary has engaged in any non-exempt prohibited transaction, within the meaning of Section 4975 of the Code or Section 406 of ERISA, and, to the knowledge of the Company, no such prohibited transaction has occurred with respect to any Company Employee Benefit Plan. No fiduciary, within the meaning of Section 3(21) of ERISA, has breached their fiduciary duty with respect to a Company Employee Benefit Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) No Company Employee Benefit Plan is (i) subject to Title IV of ERISA or Section 412 of the Code, (ii) a "multiemployer plan" within the meaning of Section 3(37) of ERISA, (iii) a "multiple employer plan" within the meaning of Section 4063 or 4064 of ERISA, (iv) a "multiple employer welfare arrangement" (as defined in Section 3(40) of ERISA), or (v) any health or other welfare arrangement that is self-insured, and none of the Company, any Company Subsidiary or any ERISA Affiliate of the Company or any Company Subsidiary has in the past six years sponsored, maintained, contributed to, been required to contribute to, or had any obligations or incurred any liability under any plan described in the foregoing <u>clauses (i)</u> through <u>(v)</u> of this <u>Section</u> <u>4.11(f)</u>. No Company Employee Benefit Plan is funded by a "voluntary employees' beneficiary association" within the meaning of Section 501(c)(9) of the Code or other funding arrangement for the provision of welfare benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Neither the Company nor any Company Subsidiary provides, or has any liability or obligation to provide life insurance, health or medical benefits to any individual, or to the dependent of any individual, extending beyond the termination of the individual's employment, except to the extent required by the Consolidated Omnibus Budget Reconciliation Act of 1985 or similar provisions of state Law for which the individual pays for the full cost of coverage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Neither the execution and delivery of this Agreement or the Spin-Off Agreements nor the consummation of the Transactions, alone or in combination with any other event (such as a termination of employment), will (i) result in any payment becoming due, or increase the amount of any compensation due, to any current or former employee or other service provider of the Company or any Company Subsidiary under any Company Employee Benefit Plan, (ii) increase any benefits otherwise payable under any Company Employee Benefit Plan, (iii) except as provided in <u>Section</u> <u>3.4</u>, result in the acceleration of the time of payment or vesting of any compensation or benefits, (iv) result in the payment of any amount that would, individually or in combination with any other such payment, reasonably be expected to constitute an "excess parachute payment," as defined in Section 280G(b)(1) of the Code, or (v) result in the triggering or imposition of any restrictions or limitations on the rights of the Company or any Company Subsidiary to amend or terminate any Company Employee Benefit Plan. Neither the Company nor any of the Company Subsidiaries has any obligation to pay any "gross up" or other reimbursement payment for any income or other Taxes, including under Section 409A or Section 4999 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) All Company Equity Awards and all other equity or equity-based awards granted under any Stock Plan have been granted in accordance with the terms of the applicable Stock Plan and have been administered in accordance with the terms of the applicable award agreement. Each Company Stock Option has an exercise price that is no less than the fair market value of the underlying Company Common Stock on the date of grant, as determined in accordance with Section 409A of the Code, and is otherwise exempt from Section 409A of the Code. Each Company Stock Option intended to qualify as an "incentive stock option" under Section 422 of the Code so qualifies. The Company has made available to Parent accurate and complete copies of (i) each Stock Plan, (ii) the forms of standard award agreement under the Stock Plans, and (iii) copies of any award agreements that materially deviate from such forms. The treatment of the Company Equity Awards under this Agreement and the Spin-Off Agreements does not violate the terms of the Stock Plans or any Contract governing the terms of such awards and will not cause adverse tax consequences under Section 409A of the Code.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) At all times, the ESPP has qualified as an "employee stock purchase plan" under Section 423 of the Code, and has been administered in accordance with its terms and all applicable Laws. All options to purchase shares under the ESPP (now outstanding or previously exercised or forfeited) have satisfied applicable Law, including the requirements of Section 423 of the Code. The treatment of the ESPP and purchase rights thereunder under this Agreement and the Spin-Off Agreements does not violate the terms of the ESPP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Each Company Employee Benefit Plan or other arrangement that constitutes a "nonqualified deferred compensation plan" subject to Section 409A of the Code has been written, executed and operated in compliance with Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) No Company Employee Benefit Plan is subject to any Laws other than those of the United States or any state, county, or municipality in the United States, nor is any Company Employee Benefit Plan maintained outside of the United States or for the benefit of employees, directors, consultants or other independent contractors located outside of the United States, and neither the Company nor any Company Subsidiary contributes to or has any obligation to contribute to any scheme, plan or arrangement mandated by a Governmental Authority other than the United States federal government.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Other than routine claims for benefits, no Proceedings with respect to any Company Employee Benefit Plan are pending or, to the knowledge of the Company, threatened, and there are no facts that reasonably would be expected to give rise to any such Proceedings, with respect to any Company Employee Benefit Plan or the assets of a Company Employee Benefit Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) There has been no amendment to, or written interpretation of or announcement by the Company or any of its Affiliates relating to, or change in employee participation or coverage under, any Company Employee Benefit Plan that would materially increase the expense of maintaining such Company Employee Benefit Plan above the level of expense incurred in respect thereof for the most recent fiscal year ending prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) For each Company Employee Benefit Plan, all contributions, premiums and payments that have become due have been made within the time periods prescribed by the terms of such plan and applicable Law (or, to the extent not required to be made or paid on or before the date hereof, have been properly reflected on the financial statements of the Company in accordance with GAAP).

SECTION 4.12. <u>Employment Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Neither the Company nor any Company Subsidiary is or has ever been a party to or otherwise bound by any collective bargaining agreement, Contract or other understanding with a labor union or labor organization, nor is any such Contract presently being negotiated, nor, to the knowledge of the Company, is there, nor has there been, a representation campaign or certification process with respect to any of the employees of the Company or any Company Subsidiary. There is no pending or, to the knowledge of the Company, threatened, labor

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strike, labor dispute, concerted walkout, concerted work stoppage, concerted slow-down or lockout involving the Company or any Company Subsidiary. There are no Proceedings pending or, to the knowledge of the Company, threatened, between the Company or any Company Subsidiary, on the one hand, and (i) any of their current or former employees, consultants, leased employees, temporary employees, or individual independent contractors or any other individual who provides (or formerly provided) personal services to the Company or any Company Subsidiary or (ii) any person seeking employment with the Company or any Company Subsidiary, on the other. No review, complaint or Proceeding by any Governmental Authority or employee or independent contractor or former employee or independent contractor with respect to the Company or any Company Subsidiary in relation to the employment or engagement of any employee or individual independent contractor is pending or, to the knowledge of the Company, threatened, nor has the Company or any Company Subsidiary received any notice from any Governmental Authority indicating an intention to conduct the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has made available to Parent an accurate and complete list of each officer and employee of the Company or any Company Subsidiary as of the date hereof and any prospective employee to whom the Company or any Company Subsidiary has made an offer of employment as of the date hereof, by name or, for individuals located outside the United States or who are citizens of the European Union, employee identification number, together with, as applicable, each such person's job title, date of hire (actual or prospective), exempt classification status under the Fair Labor Standards Act, full-time or part-time status, immigration status, work location (identified by street address), annual base salary or wages, accrued vacation or other leave, annual incentive or bonus compensation target for the current calendar year (or other applicable bonus period), and whether such employee is currently on disability or other leave of absence, other than short-term absences of less than six weeks (such list, the "*Employee Census*"). All employees of the Company and any Company Subsidiary are employed on an "at-will" basis and their employment can be terminated at any time for any reason without any material amounts being owed to such individual other than with respect to wages accrued before termination, unreimbursed expenses, accrued but unused vacation and other paid time off, and any amounts required to be paid to such individual pursuant to applicable Law. <u>Section</u> <u>4.12(b)</u> of the Company Disclosure Letter contains an accurate and complete list of all SpinCo Employees who are or at any relevant time have been involved in any research and development activities as part of the RemainCo Business, other than in a *de minimis* manner. All employment agreements and proprietary information and inventions agreements executed by the SpinCo Employees have been made available to Parent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has made available to Parent an accurate and complete list of each natural person who serves as an independent contractor, consultant, or other non-employee service provider of the Company or any Company Subsidiary who (i) is reasonably expected to receive payments in excess of $100,000 per annum, (ii) has provided services as an independent contractor in three or more calendar years, or (iii) has provided more than 1,500 hours of services in either of the past two calendar years, or is reasonably expected to provide more than 1,500 in the current calendar year (such persons, collectively, "*Contractors*") as of the date hereof, together with each such person's description of services, consulting or contracting term and consulting or contracting fee (such list, the "*Contractor Census*"). Each of the Company's and the Company Subsidiaries' relationships with any individual independent contractor, consultant, or other non-employee service provider can be terminated on not more than 30 days' notice for any reason without any amounts being owed to such individuals, other than with respect to compensation or payments accrued before the effective time of termination.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company and the Company Subsidiaries are, and in the past three years have been, in compliance in all material respects with all Laws governing labor and employment, including those relating to wages, hours, benefits, worker classification, labor, immigration (including with respect to Forms I-9), affirmative action, collective bargaining, discrimination, civil rights, pay equity and transparency, paid sick leave, protected leave (including family, medical and parental leave), disability rights and accommodations, safety and health, workers' compensation, the collection and payment of withholding or Social Security Taxes and similar Taxes. Neither the Company nor any Company Subsidiary is, or in the past three years has been, a government contractor. All employees of the Company and the Company Subsidiaries are employed in the United States, and all of the terms and conditions of their employment are governed exclusively by United States Law and not the Law of any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company has made available to Parent an accurate and complete list of each former employee whose employment with the Company, or any Company Subsidiary has been terminated within the past 12 months, together with the job title, termination date of each such former employee, and whether the termination was voluntary or involuntary. Neither the Company nor any Company Subsidiary has experienced a "plant closing," "business closing," or "mass layoff" as defined in the WARN Act or any similar state, local or non-U.S. Law affecting any site of employment of the Company or any Company Subsidiary or one or more facilities or operating units within any site of employment or facility of the Company in the past three years, and, during the 90-day period preceding the date hereof, no employee of the Company or Company Subsidiary has suffered an "employment loss," with respect to the Company as defined in the WARN Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) To the knowledge of the Company, no employee of the Company or any Company Subsidiary or any Contractor is a party to, or is otherwise bound by any non-competition agreement, or other restrictive covenant that in any material way prohibits, adversely affects or restricts the performance of such employee's or such Contractor's duties to the Company or any Company Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company and the Company Subsidiaries have properly classified, pursuant to the Code and any other applicable Laws, all individual independent contractors, consultants, or other non-employee service providers used by the Company and any Company Subsidiary during the three-year period immediately preceding the date hereof. Neither the Company nor any Company Subsidiary has any "leased employees" within the meaning of Section 414(n) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) In the past three years, no formal (or to the knowledge of the Company on the date hereof, informal) allegation, complaint, charge, or claim of harassment on the basis of gender, sex or race, sexual assault, sexual misconduct, gender discrimination, racial or ethnic discrimination has been made against any Person who is or was an officer, director, manager or supervisory-level employee of the Company or any Company Subsidiary (a "*Misconduct Allegation*"), and neither the Company nor any Company Subsidiary has entered into any settlement agreement, tolling agreement, nondisparagement agreement, confidentiality agreement or non-disclosure agreement, or any similar Contract with respect to any Misconduct Allegation.

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SECTION 4.13. <u>Opinion of Financial Advisor</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company Board has received the opinion of Goldman Sachs & Co. LLC, to be subsequently confirmed by delivery of written opinion to the Company Board, to the effect that, as of the date of such opinion and based upon and subject to the matters set forth therein, including the various assumptions made, procedures followed, matters considered, and qualifications and limitations set forth therein, (i) the Merger Consideration to be paid to the holders of Company Common Stock pursuant to this Agreement and (ii) the shares of SpinCo common stock to be issued to the holders of Company Common Stock in the Spin-Off Distribution pursuant to the Separation and Distribution Agreement are fair, from a financial point of view, to the holders of Company Common Stock (other than Parent and its affiliates), and such opinion has not been withdrawn, revoked or modified. The Company shall provide a copy of such written opinion to Parent solely for informational purposes promptly after receipt thereof by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company Board has received the opinion of Barclays Capital Inc., to be subsequently confirmed by delivery of written opinion to the Company Board, to the effect that, as of the date of such opinion and based upon and subject to the matters set forth therein, including the various assumptions made, procedures followed, matters considered, and qualifications and limitations set forth therein, (i) the Merger Consideration to be paid to the holders of Company Common Stock (other than the holders of Excluded Shares) pursuant to this Agreement and (ii) the shares of SpinCo common stock to be issued to the holders of Company Common Stock in the Spin-Off Distribution pursuant to the Separation and Distribution Agreement is fair, from a financial point of view, to such holders, and such opinion has not been withdrawn, revoked or modified. The Company shall provide a copy of such written opinion to Parent solely for informational purposes promptly after receipt thereof by the Company.

SECTION 4.14. <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All income and other material Tax Returns required to be filed by or with respect to the Company Tax Group have been timely filed when due (taking into account applicable extensions automatically granted). All Tax Returns filed by or with respect to the Company Tax Group are accurate and complete in all material respects. All material Taxes of the Company Tax Group that are due have been timely paid in full. The Company has made adequate provision in accordance with GAAP for all accrued Taxes of the Company Tax Group not yet due and payable, and all other Tax matters. There are no Liens on any of the assets, rights or properties of the Company Tax Group with respect to Taxes, other than Liens for Taxes not yet due and payable that arose by operation of Law or Permitted Liens. No extension or waiver of the statute of limitations with respect to the time to assess Taxes of the Company Tax Group has been granted, which grant will remain in effect after Closing or has been requested where such request is currently pending, in each case, other than pursuant to an automatically granted extension of time to file Tax Returns.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No material claims or deficiencies have been asserted in writing or otherwise in connection with any audit or examination by any Taxing Authority against the Company Tax Group, and no issue has been raised with the Company Tax Group (or any of its agents) by any examination conducted by any Taxing Authority that, by application of the same principles, would reasonably be expected to result in a material proposed deficiency for any other period not so examined which deficiency (or deficiencies), in either case, is not (or are not) adequately reserved for in the most recent Company Financial Statements. Any material deficiency resulting from any audit or examination relating to Taxes of the Company Tax Group by any Taxing Authority has been paid or is being contested in good faith and in accordance with applicable Law and is adequately reserved for on the balance sheets contained in the Company Financial Statements in accordance with GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) There is no material audit, examination or other proceeding (including any refund litigation, deficiency, proposed adjustment or other matter in controversy) now pending or, to the knowledge of the Company, threatened, against or with respect to the Company Tax Group in respect of any amount of Taxes or any Tax Return.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company Tax Group has not been involved in any transaction or series of transactions the main purpose, or one of the main purposes, of which was the avoidance of Tax, or any transaction that produced a loss for Tax purposes with no corresponding commercial or economic loss. The Company Tax Group is not currently, and has never been, a party to a "listed transaction" within the meaning of Treasury Regulation Section 1.6011-4(b)(2) or any similar transaction under any corresponding provision of state, local or non-U.S. Law or any "tax shelter" within the meaning of Section 6622 of the Code or any other transaction requiring disclosure under any similar provision of state, local or non-U.S. Tax Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Neither the Company nor any Company Subsidiary has ever entered into any joint venture, partnership or other arrangement (including any collaboration agreement) that could reasonably be treated as a partnership for United States federal, state, local, or non-U.S. Tax purposes or holds interest in any Person (other than a Company Subsidiary) that are treated as equity for U.S. federal income Tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Neither the Company nor any Company Subsidiary is a party to any Tax Sharing Agreement (other than any Tax Sharing Agreement to which only the Company Tax Group is party).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Since April 1, 2019, no claim has been made by any Governmental Authority in a jurisdiction in which the Company or any Company Subsidiary does not file a Tax Return to the effect that the Company or such Company Subsidiary is or may be subject to taxation by, or required to file any Tax Return in, such jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Neither the Company nor any Company Subsidiary has, or has ever had, a permanent establishment, fixed place of business, or branch in any jurisdiction outside of the country under the laws of which it was formed.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company Tax Group will not be required to include any material item of income in, or exclude any material item of deductions from, taxable income from any Tax period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting made prior to Closing for a Tax period (or portion thereof) ending prior to the Closing, (ii) closing agreement as described in Section 7121 of the Code executed prior to the Closing, (iii) change in method of accounting adopted prior to the Closing, (iv) open transaction disposition entered into prior to Closing outside the ordinary course of business, (v) prepaid amount received prior to Closing outside of the ordinary course of business, (vi) application of Sections 951, 951A, 956, 965 of the Code or any related provisions applicable to "controlled foreign corporations" (within the meaning of Section 957 of the Code) under federal, state, local or any foreign Tax Law, (vii) any deferred intercompany transaction in a Tax period (or portion thereof) ending prior to the Closing or excess loss account, (viii) any transaction under which previously utilized Tax losses or credits may be recaptured (including a dual consolidated loss or an excess loss account), (ix) Section 1400Z-2(a)(1)(A) of the Code, or (x) any comparable provision of state, local or foreign Tax Law. The Company Tax Group has not made an election under Section 965(h) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) As of December 31, 2024, the United States federal income Tax Returns of the Company have been examined by and settled with the IRS or have expired or otherwise have been closed by virtue of the expiration of the relevant statute of limitations for all taxable periods ending on or before December 31, 2019.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Company Tax Group has not entered into a closing agreement pursuant to Section 7121 of the Code or any material closing agreement under any similar provision of state, local or non-U.S. Tax Law since conversion to a corporation in 2019. There is no request for a private letter ruling, technical advice memorandum or similar document with respect to the Company or any Company Subsidiary now pending with the IRS. The Company has made available to Parent accurate and complete copies of all private letter rulings, technical advice memoranda, and similar documents received by the Company or any Company Subsidiary from the IRS or any other Taxing Authority since conversion to a corporation in 2019.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Neither the Company nor any Company Subsidiary (i) has been a member of an affiliated group filing a consolidated United States federal income Tax Return (other than a group the common parent of which is the Company) or (ii) has any liability for Taxes of any Person (other than the Company and Company Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or non-U.S. Tax Law), by contract (other than any contract the primary purpose of which does not relate to Taxes), or as a transferee or successor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Company and the Company Subsidiaries have duly and timely withheld, collected, paid and reported to the proper Governmental Authorities all material Taxes required to have been withheld, collected, paid or reported and complied with all information collection and record maintenance provisions in relation thereto under applicable Tax Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Neither the Company nor any Company Subsidiary has ever (i) constituted a "distributing corporation" or a "controlled corporation" in a distribution of stock purported to or intended to be governed by Section 355 or 361 of the Code within the past two years from the date hereof or (ii) been a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) or made an election under Section 897(i)(1) of the Code.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) As of the Closing Date, there is no limitation on the availability or use of any carryforward of net operating loss, Tax credit or other Tax attribute as a result of the application of Sections 382 or 383 of the Code (or similar provision of state, local or non-U.S. Tax Law) other than any such limitation arising as a result of the Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The Company Tax Group has possession, custody or control of all records and documentation that it is obliged to hold, preserve and retain for the purposes of any Tax and sufficient information to enable it to compute correctly the Company Tax Group's liability for Taxes, and such records and documentation have been delivered to Parent. All agreements between or among members of the Company Tax Group have been adequately documented, and such documents have been duly executed in a timely manner. The prices for any property or services (or for the use of any property) provided by or to the Company Tax Group are arm's-length prices for purposes of all applicable transfer pricing Laws, including Section 482 of the Code and any similar provision of state, local or non-U.S. applicable Law. All transactions and other dealings between the Company Tax Group and a Third Party have been (and can be demonstrated to have been) conducted on arm's-length commercial terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) For purposes of this Agreement, the representations contained in this <u>Section</u> <u>4.14</u> and, to the extent referencing the Code or Taxes, <u>Section</u> <u>4.11</u> and <u>Section</u> <u>4.12</u>, are the sole and exclusive representations of the Company Tax Group with respect to Taxes. All representations made pursuant to this <u>Section</u> <u>4.14</u> are made equally with respect to each predecessor of any member of the Company Tax Group (other than any predecessor of any member of the Company Tax Group prior to April 1, 2019) and any former Subsidiary of the Company Tax Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) As of the date immediately prior to the Closing Date, the Company Tax Group has filed all material income Tax Returns for the tax year ending December 31, 2024, required to be filed by or with respect to the Company Tax Group in a manner consistent with past practice and paid any amount of Taxes shown as due to be paid on such Tax Returns.

SECTION 4.15. <u>Compliance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company and the Company Subsidiaries are, and, to the knowledge of the Company and to the extent related to the Company Platform or any Company Product, their Collaboration Partners are, and since January 1, 2022, have been, in material compliance with all Laws applicable to the Company or any Company Subsidiary or by which any of their respective properties or other assets or any of their businesses or operations are bound. Since January 1, 2022, none of the Company, any Company Subsidiary or, to the knowledge of the Company and to the extent related to the Company Platform or any Company Product, their Collaboration Partners, have received any notice or other communication from any Governmental Authority of any violation or any investigation with respect to any such Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Company, the Company Subsidiaries, and, to the knowledge of the Company and to the extent related to the Company Platform or any Company Product, their Collaboration Partners possess all material registrations, licenses, franchises, permits, exemptions, clearances, certificates, approvals, consents and authorizations, and supplements or amendments to, the foregoing (collectively, "*Authorizations*") from Governmental

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Authorities, or required by Governmental Authorities to be obtained, in each case, necessary for the lawful conduct of their respective businesses as now conducted. All such Authorizations are in full force and effect, the Company and the Company Subsidiaries and, to the knowledge of the Company and to the extent related to the Company Platform or any Company Product, their Collaboration Partners are in compliance in all material respects with the terms of all Authorizations and since January 1, 2022, none of the Company, any Company Subsidiary, or, to the knowledge of the Company and to the extent related to the Company Platform or any Company Product, any of their Collaboration Partners has received notice to the effect that a Governmental Authority was considering the amendment, termination, revocation or cancellation of any Authorization. The consummation of the Transactions, in and of itself, will not cause the revocation, termination or cancellation of any Authorization, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

SECTION 4.16. <u>Intellectual Property</u>. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 4.16(a)</u> of the Company Disclosure Letter sets forth, as of the date hereof, an accurate and complete list of all (i) Patents and Patent applications (including any abandoned, withdrawn or expired Patents or Patent applications on which priority is claimed), (ii) Trademark registrations and applications, (iii) domain name registrations and applications (both gTLDs, including traditional and new gTLDs, and ccTLDs) and social media tags, handles and identifiers (including any account therefor), and (iv) Copyright registrations and applications that, in each case, are Owned Company Intellectual Property, Exclusively Licensed Intellectual Property or Company Intellectual Property owned or purportedly owned by and licensed from SpinCo (collectively, "*Company Registered IP*"). For each item of Company Registered IP, <u>Section</u> <u>4.16(a)</u> of the Company Disclosure Letter sets forth an accurate and complete list of, as applicable: (A) all jurisdictions in which such Intellectual Property is registered, issued or granted or has been applied for and, in the case of any domain names, the registrar through which such domain name has been registered, (B) all registration, issuance, grant, serial and application numbers, (C) all filing, registration, issuance and grant dates and, in the case of any domain names, next renewal date, and (D) the legal (and, if different, record) owner(s) thereof and, if co- or jointly-owned, all co- or joint-owner(s). All Company Registered IP that is registered or has been issued or granted is valid, enforceable, subsisting and in full force and effect and all Company Registered IP that is the subject of a pending application for registration, issuance or grant is valid and subsisting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) None of the Owned Company Intellectual Property has been or currently is the subject of any pending Proceeding, (ii) to the knowledge of the Company, none of the Non-Owned Company Intellectual Property has been or currently is the subject of any pending Proceeding, and (iii) to the knowledge of the Company, none of the Owned Company Intellectual Property and none of the material Non-Owned Company Intellectual Property, in each case, has been or currently is the subject of any threatened Proceeding (including, in each case, <u>clauses (i)</u> through <u>(iii)</u>, with respect to Patents, inventorship challenges, post-grant review proceedings, *inter partes* review proceedings, derivation proceedings, interferences, reexaminations and pre- and post-grant oppositions and invalidity challenges, and, with respect to Trademarks, invalidity, nullity, opposition, cancellation, concurrent use, substantive office actions (e.g., third party citations, lack of distinctiveness, genericness and other substantive refusals or objections), reexamination, expungement or similar Proceeding). No Owned Company Intellectual Property

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and, to the knowledge of the Company, no material Non-Owned Company Intellectual Property has been or currently is the subject of any Judgment restricting the Company's or any Company Subsidiary's rights in, to and under such Company Intellectual Property or the validity, enforceability, use, right to use, ownership, registration, right to register, priority, duration, scope or effectiveness of any such Company Intellectual Property or triggering any additional payment obligations with respect to any such Company Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) The Company or a Company Subsidiary (A) solely and exclusively held the right to claim priority to each of the Patents within the Owned Company Intellectual Property at the respective times that the Patents were filed, (B) solely and exclusively owned each of the Patents within the Owned Company Intellectual Property at the respective times that the Patents were filed, and (C) is the sole and exclusive owner of all Owned Company Intellectual Property, (ii) all Owned Company Intellectual Property and, to the knowledge of the Company, all Exclusively Licensed Intellectual Property, is free and clear of all Liens, except for Permitted Liens and, with respect to the Exclusively Licensed Intellectual Property, the terms of the written license agreement granting to the Company or any Company Subsidiary an exclusive license to use or practice under such Exclusively Licensed Intellectual Property, and (iii) the Owned Company Intellectual Property and the Exclusively Licensed Intellectual Property constitute all of the Intellectual Property that is material and necessary to operate and conduct the RemainCo Business as such business is currently operated and conducted and as such business is currently contemplated to be operated and conducted. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) None of the Company, any Company Subsidiary, or to the knowledge of the Company, any Third Party licensor of Exclusively Licensed Intellectual Property, is party to any Contracts with any Third Parties that materially limit or materially restrict use of the Company Intellectual Property by the Company or any Company Subsidiary or that require any payments for such use. Neither the Company nor any Company Subsidiary has entered into any Contract granting another Person, or permitting another Person to retain, with respect to any Owned Company Intellectual Property or Exclusively Licensed Intellectual Property, the right (i) to bring any infringement, misappropriation or other enforcement actions with respect to, or otherwise to enforce, any such Company Intellectual Property, (ii) to defend any claim of infringement, misappropriation or other violation arising from the practice or other exploitation of any such Company Intellectual Property (or pursuant to which the Company or a Company Subsidiary expressly agrees to indemnify any Person against any such claim) or to defend the validity or patentability of any Patent within the Owned Company Intellectual Property or (iii) to control the prosecution of any such Company Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To the knowledge of the Company, there has been no unauthorized use, or infringement, misappropriation or other violation, by any Third Party of any Company Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The conduct of the RemainCo Business as such business has been conducted, as it currently is being conducted or as it currently is contemplated to be conducted (including with respect to the Company Platform or with respect to any Company Product, whether or not yet commercialized, that is included in the RemainCo Assets), has not, and does not presently, infringe, misappropriate or otherwise violate any Intellectual Property or other proprietary rights of any Third Party, except as would not, individually or in the aggregate,

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reasonably be expected to be material to the Company and the Company Subsidiaries. Neither the Company nor any Company Subsidiary has received any notice from any Third Party (including any unsolicited written offer to license such Third Party's Intellectual Property or any request for indemnification) claiming or alleging that the conduct of the RemainCo Business as such business has been conducted, as it currently is being conducted or as it currently is contemplated to be conducted (including relating to the use or practice of any Company Intellectual Property or with respect to the Company Platform or with respect to any Company Product, whether or not yet commercialized, that is included in the RemainCo Assets) infringes, misappropriates or otherwise violates such Third Party's Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) All issuance, renewal, maintenance and other payments that have become due with respect to any Owned Company Intellectual Property and, to the knowledge of the Company, with respect to any Exclusively Licensed Intellectual Property, in each case, have been timely paid in full. All documents and other material required to be filed with respect to the Owned Company Intellectual Property and, to the knowledge of the Company, with respect to any Exclusively Licensed Intellectual Property, in each case, for the purposes of maintaining such Company Intellectual Property and updating the chain of title have been filed in a timely manner. Each of the Patents included in the Company Registered IP that is Owned Company Intellectual Property and, to the knowledge of the Company, that is Non-Owned Company Intellectual Property, in each case, properly identifies each inventor of the claims thereof as determined in accordance with the applicable Law of the jurisdiction in which such Patent is issued or is pending, or, in the case of abandoned Patents, was pending.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Company and the Company Subsidiaries have taken commercially reasonable measures to protect, preserve and maintain the secrecy, confidentiality and value of all Know-How and all other confidential and non-public data and other information included within the Company Intellectual Property, and to the knowledge of the Company and each Company Subsidiary, there has been no unauthorized disclosure or use of any material Know-How of the Company or any Company Subsidiary included within the Company Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company and the Company Subsidiaries have (i) caused each Person who was or is involved in the creation or development of any Intellectual Property as an employee of or independent contractor, consultant, or other non-employee service provider (each, an "*IP Contractor*") to the Company or any Company Subsidiary to execute a binding and enforceable written agreement which includes provisions (including a present assignment of all right, title and interest therein and thereto) sufficient to ensure that the Company or such Company Subsidiary is the exclusive owner of any and all Intellectual Property created or developed by such Person within the scope of, or resulting from, their employment with the Company or such Company Subsidiary and, in the case of such IP Contractor, from the services such IP Contractor performs for the Company or such Company Subsidiary and (ii) caused all employees and other Persons (who are not otherwise bound by confidentiality and nondisclosure obligations to the Company by operation of law) with access to any non-public Company Intellectual Property to execute a binding and enforceable written confidentiality agreement that includes customary confidentiality terms and restrictions on use sufficient to protect the proprietary interests of the Company or such Company Subsidiary with respect to such Company Intellectual Property. No current or former employee of, or IP Contractor to, the Company or any Company Subsidiary owns

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any right, title, or interest in or to any Intellectual Property created or developed by such employee or IP Contractor during their employment or other engagement with the Company or such Company Subsidiary that either (A) is (or should have been) Company Intellectual Property or (B) is necessary for the conduct of the RemainCo Business as such business currently is being conducted or as it currently is contemplated to be conducted, and neither the Company nor any Company Subsidiary has received any written notice or claim to the contrary. To the knowledge of the Company, there has been no disclosure of any non-public Company Intellectual Property to any employee or other Person who has not executed a binding and enforceable written confidentiality agreement or is not otherwise bound by confidentiality and nondisclosure obligations to the Company by operation of law, as described in <u>clause (ii)</u> of this <u>Section</u> <u>4.16(i)</u>. To the knowledge of the Company, no employee or other Person who has executed such confidentiality agreement is in breach of, or is threatening to breach, any such written confidentiality agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) To the knowledge of the Company, the Company and each Company Subsidiary have complied with any and all obligations pursuant to the Patent and Trademark Law Amendments Act, 35 U.S.C. §200 et seq., or other similar obligations under the Laws of any jurisdiction with respect to any Patents that are part of the Company Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) No Owned Company Intellectual Property and, to the knowledge of the Company, no material Non-Owned Company Intellectual Property has been developed or otherwise obtained, in whole or in part, through the use of funding or other resources of any Governmental Authority or institution of higher learning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Section 4.16(l)</u> of the Company Disclosure Letter sets forth an accurate and complete list of (i) all licenses, sublicenses, rights, interests and options granted by the Company or a Company Subsidiary to any Third Party with respect to any Intellectual Property (including coexistence agreements, prior rights agreement, rights of first or last refusal, covenants not to sue, exercise or assert, immunities from suit and rights to indemnification) (other than non-disclosure agreements and non-material and non-exclusive licenses granted by the Company or a Company Subsidiary to advertising agencies, vendors and other similar contractors, including non-material and non-exclusive licenses granted by the Company or a Company Subsidiary under material transfer agreements, clinical trial agreements, supply agreements, and manufacturing agreements, in each case, entered into in the ordinary course of business consistent with past practices), and (ii) all licenses, sublicenses, rights, interests and options granted by any Third Party to the Company or a Company Subsidiary with respect to any Intellectual Property (other than (A) licenses to generally commercially available software licensed pursuant to a standard "off-the-shelf" or "shrink wrap" or "click wrap" agreements and (B) agreements, including material transfer agreements, clinical trial agreements, supply agreements, and manufacturing agreements, to the extent, in each case, the grant of rights to use Intellectual Property thereunder are non-exclusive and incidental to and not material to performance under such agreement and such agreement is entered into in the ordinary course of business consistent with past practices), and in each case of <u>clauses (i)</u> and <u>(ii)</u> of this <u>Section</u> <u>4.16(l)</u>, other than licenses, sublicenses, rights, interest and options solely related to the SpinCo Business. Other than pursuant to a Contract set forth in <u>Section</u> <u>4.16(l)</u> of the Company Disclosure Letter, there are no royalties, license fees, honoraria or other payment obligations of the Company or any Company Subsidiary or any of its or their Affiliates, excluding maintenance fees payable to Governmental Authority, with respect to any of the Non-Owned Company Intellectual Property.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Neither the Company nor any Company Subsidiary has received any written opinions from counsel with respect to the validity, invalidity, enforceability, unenforceability, non-infringement or infringement of any Company Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) None of (i) the execution and delivery of this Agreement, (ii) the consummation of the Transactions, or (iii) the performance by the Company or any Company Subsidiary of its obligations hereunder, in each case of <u>clauses (i)</u>, <u>(ii)</u> and <u>(iii)</u> of this <u>Section</u> <u>4.16(n)</u> conflicts or will conflict with, or alters or impairs or will alter or impair, any of the Company's or any Company Subsidiary's rights in, to and under any Company Intellectual Property or the validity, enforceability, use, right to use, ownership, registration, right to register, priority, duration, scope, or effectiveness of any Company Intellectual Property or will alter any, or trigger any additional, royalties, license fees, honoraria or other payment obligations of the Company or any Company Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) There is no Company Registered IP or other material Company Intellectual Property that, as of the Closing, will be owned or purported to be owned (wholly or jointly with others) by, or exclusively licensed to, SpinCo, and which is necessary for the RemainCo Business as such business has been conducted, as it currently is being conducted or as it is currently contemplated to be conducted (including with respect to the Company Platform or with respect to any Company Product, whether or not yet commercialized, that is included in the RemainCo Assets), which is not subject to the licenses granted to the Company pursuant to the License Agreement. Subject to the Spin-Off and, to the extent consummated prior to the Closing, the ROFN Sale, as of the Closing, the Company and the Company Subsidiaries will (i) continue to own or have valid and enforceable rights or licenses in and to all Company Intellectual Property in the same manner as the Company and Company Subsidiaries owned or held rights in such Company Intellectual Property immediately prior to Closing, and (ii) have rights to all material Intellectual Property that, in each case, is owned by, is licensed or sublicensed to, or used or held for use by, the Company or any of its Subsidiaries relating to the RemainCo Business at any time between the date of this Agreement and the Closing as are sufficient for the Company and the Company Subsidiaries to use such material Intellectual Property to the same extent as used by the Company and the Company Subsidiaries in the RemainCo Business in the twelve-month period prior to the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The statements set forth on <u>Section</u> <u>4.16(p)</u> of the Company Disclosure Letter are true and complete.

SECTION 4.17. <u>Data Protection</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Since January 1, 2022, the Company and Company Subsidiaries have complied in all material respects with all Laws and all published rules, policies, and procedures established by the Company and Company Subsidiaries related to cyber security, privacy or data protection (collectively, "*Data Protection and Information Security Requirements*"), including with respect to the collection, use, disclosure, transfer, safeguarding, deletion, and other processing of Personal Data by and on behalf of the Company and Company

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Subsidiaries. Since January 1, 2022, except as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, each of the Company and Company Subsidiaries has provided all requisite notices and obtained all required consents that are necessary for the conduct of business as currently conducted, and the Transactions will comply in all material respects with all Data Protection and Information Security Requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Company and the Company Subsidiaries has implemented and maintains a comprehensive written information security program and has organizational, administrative, physical and technical safeguards designed to secure any Personal Data and any IT Assets from loss, damage, and unauthorized access, acquisition, interruption, alteration, modification, use or other processing, or any other compromise of confidentiality, integrity or availability of Personal Data or the IT Assets (any such incident, a "*Security Incident*"). Since January 1, 2022, there have not been any Security Incidents or claims related to Security Incidents and there are no information security or other vulnerabilities that could cause a material Security Incident. To the knowledge of the Company, there are no data security, information security, or other technological vulnerabilities with respect to the IT Assets that could adversely impact their operations or cause a Security Incident.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All IT Assets used by Company or any Company Subsidiary are (i) owned by the Company or any Company Subsidiary, (ii) currently in the public domain or otherwise available to the Company or the relevant Company Subsidiary without the approval or consent of any Person or (iii) licensed or otherwise used by the Company or the relevant Company Subsidiary pursuant to terms of valid, binding written agreements. The IT Assets operate and perform in a manner that permits the Company and the Company Subsidiaries to conduct their respective businesses as currently conducted in all material respects and, to the knowledge of the Company, since January 1, 2022, no Person has gained unauthorized access to the IT Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) None of the Company, any Company Subsidiary or, to the knowledge of the Company, any Collaboration Partner or other Third Party from which the Company or any Company Subsidiary receives Personal Data is (i) a "covered entity" as that term is defined at 45 C.F.R. § 160.103, (ii) a "business associate" as that term is defined at 45 C.F.R. § 160.103, or (iii) to the knowledge of the Company, in breach of any "business associate contract," as described in 45 C.F.R. § 164.504(e). Since January 1, 2022, neither the Company nor any Company Subsidiary is in violation of the applicable portions of the administrative simplification provisions of Health Insurance Portability and Accountability Act or the regulations contained in 45 C.F.R. Parts 160 and 164, if applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) None of the Company, any Company Subsidiary, or, to the knowledge of the Company, any Third Party acting on behalf of the Company or any of the Company Subsidiaries, has, since January 1, 2022, received any (i) written or, to the knowledge of the Company, oral notice of an investigation into compliance with, or a complaint alleging non-compliance with, Data Protection and Information Security Requirements, (ii) written or, to the knowledge of the Company, oral claim for compensation for loss or unauthorized collection, processing or disclosure of Personal Data, or (iii) written or, to the knowledge of the Company, oral notification of an application for rectification, erasure or destruction of Personal Data that is still outstanding.

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SECTION 4.18. <u>Material Contracts</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except for this Agreement and the Separation and Distribution Agreement, <u>Section</u> <u>4.18(a)</u> of the Company Disclosure Letter contains an accurate and complete list of the following Contracts to which the Company or any Company Subsidiary is a party or by which it is bound as of the date hereof (each such Contract, whether or not set forth in such section of the Company Disclosure Letter, together with each Contract required to be listed in <u>Section</u> <u>4.16(l)</u> of the Company Disclosure Letter and each Contract required to be filed by the Company as a "material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), a "*Material Contract*"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) each Contract (A) the terms of which obligate or may in the future obligate the Company or any Company Subsidiary to make any severance, termination or similar payment to any current or former employee or (B) pursuant to which the Company or any Company Subsidiary may be obligated to make any transaction, retention bonus or similar payment to any current or former employee or director;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) each Contract (A) materially limiting the freedom or right of the Company or any Company Subsidiary (or, after the Effective Time, Parent or any of its Affiliates) to engage in any line of business or compete with any other Person in any geographic area, (B) containing any "most favored nations" terms and conditions (including with respect to pricing) or exclusivity obligations, (C) granting any right of first refusal, right of first offer, right of negotiation or similar right with respect to any material assets or business of the Company or any Company Subsidiary, or (D) that requires the Company or any Company Subsidiary to purchase a minimum quantity of goods or supplies relating to any Company Product;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) each Contract that provides for indemnification (or reimbursement or advancement of legal fees or expenses) of any current or former officer, director or employee of the Company or any Company Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) each Lease under which the Company or any Company Subsidiary leases, subleases or licenses any real property (whether as lessor or lessee);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) each Contract not otherwise disclosed pursuant to this <u>Section</u> <u>4.18(a)</u> requiring or otherwise expected to involve (together with all other Contracts with the counterparty thereto) the potential payment by or to the Company and the Company Subsidiaries of more than an aggregate of $2,800,000 in any 12-month period following the date hereof and that is not terminable without penalty or further payment by the Company or any Company Subsidiary on less than 90 days' notice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) each Contract (A) for the disposition of any material assets or business of the Company or any Company Subsidiary, (B) for the acquisition, directly or indirectly, of a material portion of the assets or business of any other Person (whether by merger, sale of stock or assets or otherwise) or (C) related to any disposition or acquisition of material assets or business of the Company that contains continuing representations, covenants, indemnities or other obligations (including "earn out" or other contingent payment obligations);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) each Contract for any material joint venture, partnership, strategic alliance, collaboration or similar revenue sharing or partnering arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) each Contract that is material to the Company and the Company Subsidiaries, taken as a whole, and (A) that relates to the research, testing, clinical trial, development, commercialization, manufacture, marketing, importation, exportation, sale, distribution, supply or license of the Company Platform or any Company Product or (B) under which non-clinical or clinical data relating to the Company Platform or any Company Product is or may be generated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) each Contract (other than in respect of trade debt incurred in the ordinary course of business consistent with past practice) related to indebtedness for borrowed money or any guarantees of any of the foregoing or the granting of Liens (other than Permitted Liens) over the property or assets of the Company or any Company Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) each Contract under which the Company or any Company Subsidiary (A) is required to make any expenditure including a capital commitment, loan or capital expenditure, of more than an aggregate of $5,000,000 after the date of this Agreement or (B) has, directly or indirectly, made any loan, extension of credit or capital contribution to, or other investment in, any Person (other than the Company or any Company Subsidiary and other than investments in marketable securities in the ordinary course of business consistent with past practice);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) each Contract involving (A) "milestone" or other similar contingent payments, including upon the achievement of regulatory or commercial milestones, or (B) payment of royalties or other amounts calculated based upon sales, revenue, income or similar measure of the Company, any Company Subsidiary or any Company Product;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) each Contract with a Collaboration Partner requiring the Company or any Company Subsidiary (or following Closing, Parent or any of its Affiliates) to use commercially reasonable (or similar) efforts related to research, development, regulatory approval, commercialization, sales, or marketing of any Company Product or any other product;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) each hedging, swap, derivatives or similar Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) each Contract with a third-party professional employer organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) each Contract with any Governmental Authority or any academic institution (except for clinical trial agreements, material transfer agreements and non-disclosure agreements (1) that are entered into in the ordinary course of business and (2) pursuant to which no material Intellectual Property has been or is contemplated to be generated);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) each stockholders', investor rights, registration rights, tax receivables or similar or related Contract or any Contract relating to the exercise of any voting rights with respect to any Company Securities or Company Subsidiary Securities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) each Contract that involves the settlement of any past, pending or threatened Proceeding which (A) requires payment obligations after the date hereof in excess of $250,000 or (B) imposes material nonmonetary obligations or restrictions on the Company or any Company Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Material Contracts is legal, valid, binding and in full force and effect and enforceable in accordance with its terms by the Company and any applicable Company Subsidiary party thereto, subject to the Bankruptcy and Equity Exception. Neither the Company nor any Company Subsidiary is in material breach or default under any Material Contract, nor, to the knowledge of the Company, does any condition exist that, with notice or lapse of time or both, would constitute a material breach or default thereunder by the Company or any Company Subsidiary party thereto. To the knowledge of the Company, no other party to any Material Contract is in material breach or default thereunder, nor does any condition exist that, with notice or lapse of time or both, would constitute a material breach or default thereunder of such other party. Neither the Company nor any Company Subsidiary has received or given any notice of termination or cancellation under any Material Contract or received or given any notice of breach or default in any material respect under any Material Contract, which breach or default has not been cured. The Company has made available to Parent accurate and complete copies of all of the Material Contracts, together with all amendments thereto and waivers thereunder.

SECTION 4.19. <u>Regulatory Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All activities of the Company, the Company Subsidiaries and, to the knowledge of the Company and to the extent relating to the Company Platform or any Company Product, their Collaboration Partners are being, and since January 1, 2022, have been, conducted in compliance in all material respects with all Health Care Laws applicable to the Company, the Company Subsidiaries, the Company Platform or any Company Product, or by which any property, business, product or other asset of the Company and the Company Subsidiaries is bound or affected. Since January 1, 2022, none of the Company or any Company Subsidiary or, to the knowledge of the Company, any of their Collaboration Partners (to the extent relating to any Company Product) has received any notice or other written communication from the FDA, or any other Governmental Authority, or any institutional review boards, privacy boards, data safety monitoring boards or ethics committees responsible for review, oversight, or approval of any clinical trial involving a Company Product or the Company Platform in any jurisdiction (a "*Review Board*"), alleging any violation of any applicable Law or otherwise indicating an investigation into a potential violation of any applicable Law with respect to such activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Section 4.19(b)</u> of the Company Disclosure Letter sets forth an accurate and complete listing of all human clinical trials, together with the dates and brief descriptions of such trials, previously or currently undertaken or sponsored by or on behalf of the Company, any Company Subsidiary, or to the knowledge of the Company, any Collaboration Partner, or any third-party investigator for whom the Company or any Company Subsidiary provides material or financial support for any such clinical trial, in each case, with respect to any Company Product. To the knowledge of the Company, accurate and complete copies of all material data, material reports and other material documentation with respect to such non-clinical and clinical trials have been made available to Parent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All non-clinical studies conducted by or on behalf of the Company and the Company Subsidiaries (i) have been and are being conducted, as applicable, in compliance with all requirements of the Animal Welfare Act, the United States Department of Agriculture's implementing regulations, and the Guide for the Care and Use of Laboratory Animals, if applicable, and with all requirements of 21 C.F.R. Part 58, (ii) which constitute *in vivo* activities have been approved by an external ethical review or animal welfare body, to the extent required by applicable Laws, and have been conducted with purpose bred animals (*i.e.*, not wild caught), and (iii) have employed the procedures and controls required under Good Laboratory Practices if applicable. None of the Company or any Company Subsidiary or, to the knowledge of the Company, any Collaboration Partner has received any notice or other communication from a Governmental Authority or a Review Board requiring the termination or suspension or material modification of any non-clinical study with respect to any Company Product or otherwise involving the use of the Company Platform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All human clinical trials with respect to any Company Product conducted by or on behalf of the Company, any Company Subsidiary or, to the knowledge of the Company, any Collaboration Partner (i) have been, and are being, conducted in material compliance with all applicable Health Care Laws, including by filing annual and periodic reports, amendments and safety reports for the Company Products required to be made to any Regulatory Authority, and (ii) have been properly registered in compliance with all applicable Laws and the results of all such clinical trials have been disclosed in accordance with such Laws, in each case, including 42 C.F.R. Part 11, to the extent applicable. None of the Company or any Company Subsidiary, or, to the knowledge of the Company, any Collaboration Partner, has received any notice that the FDA, any Review Board, or any domestic or non-U.S. Governmental Authority, has initiated, or threatened to initiate, any clinical hold or other action to suspend any clinical trial sponsored by or on behalf of the Company or any Company Subsidiary, any action to suspend or terminate any Investigational New Drug application in the United States or other non-U.S. equivalent documents (each, an "*IND*") sponsored by or on behalf of the Company or any Company Subsidiary or otherwise restrict the clinical study of any Company Product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) None of the Company, any Company Subsidiary or any of their respective officers or employees, and to the knowledge of the Company, none of their respective Collaboration Partners, representatives or agents (in each case, acting in the capacity of a representative or agent of the Company or any Company Subsidiary), has engaged in any conduct that is not compliant in any material respect with applicable Health Care Laws relating to the integrity of data generated or used in any clinical trials or other studies related to the development, use, handling, safety, efficacy, quality, reliability or manufacturing of any Company Product or the Company Platform. Since January 1, 2022, none of the Company, any Company Subsidiary, any officer, director, employee or contractor of the Company or any Company Subsidiary or, to the knowledge of the Company, any Collaboration Partner or agent of the Company or any of the Company Subsidiaries has made any materially false statements on, or material omissions from, any notifications, applications, approvals, reports and other submissions to the FDA or any similar Regulatory Authority.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) All development and manufacture of the Company Products, including any components thereof and any clinical supplies used in any clinical trials, by or on behalf of the Company of the Company Subsidiaries has been conducted in compliance in all material respects with the applicable specifications and requirements of Good Manufacturing Practices and Health Care Laws. None of the Company, any of the Company Subsidiaries or any of their respective officers or employees, and to the knowledge of the Company, none of their respective Collaboration Partners, representatives or agents acting on behalf of the Company or any of the Company Subsidiaries has, with respect to any Company Product, (i) been subject to a Regulatory Authority shutdown or import or export prohibition or (ii) received any Form FDA 483, or other Regulatory Authority written notice of inspectional observations, "warning letters," "untitled letters" or written requests or requirements to make any material change to any Company Product or any of the Company's or the Company Subsidiaries' processes or procedures. The Company and the Company Subsidiaries have instituted and maintain policies and procedures reasonably designed to ensure the integrity of data generated in manufacturing all Company Products and reasonably designed to encourage employees to report any compliance issues related thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company has no knowledge of (i) any adverse event or adverse finding in non-clinical or clinical testing that should have been reported but was not yet reported to any applicable Regulatory Authority or Review Board with respect to the safety, efficacy or quality of any Company Product, (ii) as of the date of this Agreement, any adverse event or adverse finding occurring in any ongoing clinical trial where the investigator or any Review Board or Regulatory Authority has prior to the execution of this Agreement requested or recommended verbally or in writing, as a result of such event or finding, a change, modification or cessation of such clinical trial, or (iii) any scientific or technical fact or circumstance that has had or would reasonably be expected to have, individually or in the aggregate, a material and adverse effect on the scientific, therapeutic or commercial viability of the Company Platform or any Company Product in light of the particular stage of development of such Company Product and taking into account all relevant facts and circumstances at the time such facts or circumstances arose, including medical and clinical considerations, the regulatory environment and competitive market conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Company has made available to Parent accurate and complete copies of: (i) all Authorizations from the FDA and all material Authorizations from any other applicable Regulatory Authority held by the Company or any of the Company Subsidiaries related to any Company Product, (ii) all material written submissions made to and material written regulatory communications with the FDA or any other applicable Regulatory Authority related to any Company Product after the date on which the Company designated such Company Product as a clinical candidate (the "*Candidate Date*") that are in the Company's or any of the Company Subsidiaries' possession or control as of the date hereof and (iii) all reports, results, data and information obtained, developed, or prepared after the Candidate Date in the Company's or any of the Company Subsidiaries' possession or control as of the date hereof relating to the safety, quality, or efficacy of the Company Platform or any of the Company Products, including all final reports prepared under 21 C.F.R. 58.185, all information collected pursuant to 21 C.F.R. Part 58 and all adverse event (as such term is defined or described in 21 C.F.R. 312.32) and other safety and quality information. For purposes of this <u>Section</u> <u>4.19(h)</u> and <u>Section</u> <u>6.7(b)</u>, "control" shall mean the legal, contractual or other right to access, including access to the information and materials of Collaboration Partners.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) None of the Company or any Company Subsidiary or, to the knowledge of the Company, any Collaboration Partner, is currently marketing, distributing, selling or otherwise commercializing, or has ever marketed, distributed, sold or otherwise commercialized, the Company Platform or any Company Product, whether in or outside the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Neither the Company nor any Company Subsidiary is a party to or has any ongoing reporting obligations under any corporate integrity agreement, monitoring agreement, consent decree, settlement order or similar agreement with or imposed by any Governmental Authority and, to the knowledge of the Company, no such agreement, decree or order is currently contemplated, proposed or pending. To the knowledge of the Company, no Collaboration Partner is a party to any corporate integrity agreement, monitoring agreement, consent decree, settlement order or similar agreement with or imposed by any Governmental Authority to which the Company Platform or any Company Product is subject. None of the Company, any Company Subsidiary, or, to the knowledge of the Company, any of their respective Representatives (acting in such capacity) are subject to any investigation by any Governmental Authority or enforcement, regulatory or administrative proceeding relating to or arising under any Health Care Law and, to the knowledge of the Company, no such investigation or enforcement, regulatory or administrative proceeding has been threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) None of the Company, any Company Subsidiary, any officer, director, managing employee of the Company or any Company Subsidiary or, to the knowledge of the Company and to the extent relating to the Company Platform or any Company Product, any Collaboration Partner: (i) has been placed under or otherwise made subject to, or committed an act, made a statement, or failed to make a statement that, at the time such disclosure was made or failure to disclose occurred, would reasonably be expected to provide a basis for, the FDA to invoke its policy respecting "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities," set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for any comparable non-U.S. Governmental Authority to invoke a similar policy, (ii) has been charged with or convicted of any criminal offense relating to the delivery of an item or service under Medicare, Medicaid, TRICARE or any similar government health care program (collectively, "*Federal Health Care Programs*"), (iii) has been subject to, or convicted of any crime or engaged in any conduct that would reasonably be expected to result in, debarment, exclusion, or suspension from participation in any Federal Health Care Program, or otherwise under 21 U.S.C. Section 335a or any similar Law, (iv) has had a civil monetary penalty assessed against it, him or her under Section 1128A of the Social Security Act, codified at Title 42, Chapter 7, of the United States Code, (v) is currently listed on the United States General Services Administration published list of parties excluded from federal procurement programs and non-procurement programs or the List of Excluded Individuals/Entities published by the Department of Health and Human Services Office of Inspector General, or (vi) to the knowledge of the Company, is the target or subject of any current or potential investigation relating to any Federal Health Care Program-related offense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) To the Company's knowledge, neither the Company nor any of its Affiliates has been involved in any "covered data transactions" subject to the U.S. Bulk Data Final Rule that violate the U.S. Bulk Data Final Rule since the effective date of such rule on April 8, 2025.

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SECTION 4.20. <u>Real Property</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Neither the Company nor any Company Subsidiary owns any real property or interests therein, nor has the Company or any Company Subsidiary ever owned any real property or interests therein. Neither the Company nor any Company Subsidiary is a party to an option, or any other agreement, to purchase any real property or interests therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each lease, sublease, license or any other instrument (each, a "*Lease*") under which the Company or any Company Subsidiary leases, subleases or licenses any real property (each, "*Leased Real Property*"), or under which it has assigned such a lease, sublease or license, is valid and binding on the Company and each other party thereto and is in full force and effect. No event has occurred or circumstance exists that, with notice or lapse of time or both, would permit the termination, modification or acceleration of rent under such Lease. The Company and any Company Subsidiary has a good and valid leasehold interest in each Leased Real Property free and clear of all Liens except Permitted Liens. To the knowledge of the Company, the Leased Real Property and its continued use, occupancy and operation as currently used, occupied and operated, does not constitute a nonconforming use under any applicable building, zoning, subdivision or similar Law applicable to the Leased Real Property, or under the applicable Lease or any restrictive covenant affecting the Leased Real Property. Neither the Company nor any Company Subsidiary has received any notice of any pending or threatened condemnation Proceeding with respect to any Leased Real Property, and no portion of the Leased Real Property has been damaged or destroyed by fire or other casualty, which damage remains unrepaired. No Person leases, subleases, licenses or otherwise has the right to use or occupy any of the Leased Real Property other than, as applicable, the Company or relevant Company Subsidiary and no Person, other than the Company or a Company Subsidiary, is in possession of any Leased Real Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has made available to Parent an accurate and complete copy of the Lease, dated as of May 20, 2021, between 3020-3030 Callan Road Owner, L.L.C. (as-successor-in-interest to HCP Callan Road, LLC) and Turning Point Therapeutics, Inc., as amended by the First Amendment to Lease, dated as of August 31, 2021, the other First Amendment to Lease, dated as of September 16, 2022, the Second Amendment to Lease, dated as of August 2, 2023, and the Fourth Amendment to Lease, dated as of April 29, 2024, with respect to the premises located at 3020/3030 Callan Road, San Diego, CA 92121 (collectively, the "*Callan Road Master Lease*" and such premises, the "*Callan Road Facility*"), together with all amendments thereto and waivers thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Callan Road Master Lease is legal, valid, binding and in full force and effect and enforceable in accordance with its terms by any party thereto. To the knowledge of the Company, no party to the Callan Road Master Lease is in material breach or default thereunder, nor does any condition exist that, with notice or lapse of time or both, would constitute a breach or default thereunder of such other party. To the knowledge of the Company, no party to the Callan Road Master Lease has received or given any notice of termination or cancellation under the Callan Road Master Lease or received or given any notice of breach or default in any material respect under Callan Road Master Lease, which breach or default has not been cured. To the knowledge of the Company, the Callan Road Master Lease is the only agreement between the parties thereto related to the Callan Road Facility.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company has made available to Parent accurate and complete copies of all material and current plans, designs and budgets for the construction being undertaken by or on behalf of the Company at the Callan Road Facility, which materials include the current expected completion date and amount of the Company's tenant improvement allowance for the Callan Road Facility that has been spent.

SECTION 4.21. <u>Environmental Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as has not had, or would reasonably be to not have, individually or in the aggregate, a Company Material Adverse Effect:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company and the Company Subsidiaries are, and since January 1, 2018, have been, in compliance with all applicable Environmental Laws. There are no pending or, to the knowledge of the Company, threatened, Proceedings, Judgments, requests for information, or notices relating to the Company or any Company Subsidiary or any property currently or formerly leased, operated or used by the Company or any Company Subsidiary, related to or arising under any Environmental Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) There has been no Release by the Company or any Company Subsidiary, or for which the Company or any Company Subsidiary would reasonably be expected to be liable by Contract or by operation of Law, of any Hazardous Substance into the environment. Neither the Company nor any Company Subsidiary has generated, treated, stored, disposed of, arranged for, transported, Released, or otherwise handled any Hazardous Substances in a manner that might give rise to any liability under any Environmental Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Neither the Company nor any Company Subsidiary has received any written notice of, entered into, assumed (by contract or operation of Law or otherwise), undertaken or otherwise become subject to any liability of another Person relating to Environmental Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has made available to Parent all Phase I and Phase II environmental site assessments and other material environmental, occupational health and safety, or industrial hygiene records and assessments, including all reports, analyses or modelling of risk of accidental or catastrophic releases of any Hazardous Substances required under Environmental Laws, environmental remedial and investigation reports, brownfields agreements, environmental sampling reports, environmental compliance audits, assessments, and environmental permits, that are in the possession or custody of the Company or any Company Subsidiary, or under their reasonable control.

SECTION 4.22. <u>Insurance</u>. There is no material claim by the Company or any Company Subsidiary pending under any of the material insurance policies of the Company and the Company Subsidiaries that are currently in effect (other than in connection with any Company Employee Benefit Plan) (the "*Insurance Policies*") or under policies that were previously in effect.

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All Insurance Policies are in full force and effect. Neither the Company nor any Company Subsidiary is in breach or default, and neither the Company nor any Company Subsidiary has taken any action or failed to take any action which, with notice or the lapse of time or both, would reasonably be expected to constitute such a breach or default under, or permit rescission or termination of, any of such Insurance Policies. No notice of rescission, cancellation, termination, nonrenewal or material modification has been received with respect to any such Insurance Policy, except for customary notices of cancellation in advance of scheduled expiration.

SECTION 4.23. <u>Affiliate Transactions</u>. No (i) present or former officer or director of the Company or any Company Subsidiary, (ii) beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of five percent or more of the shares of Company Common Stock or (iii) Affiliate, "associate" or member of the "immediate family" (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) of any of the foregoing is a party to any actual or proposed loan, lease or other Contract with or binding upon the Company, any Company Subsidiary or any of their respective properties or assets or has any interest in any property owned by the Company or any Company Subsidiary or has engaged in any transaction with any of the foregoing since January 1, 2022.

SECTION 4.24. <u>Takeover Provisions</u>. Assuming the accuracy of Parent's and Merger Sub's representation and warranty set forth in <u>Section</u> <u>5.7</u>, the Company Board has taken and will take all actions so that the restrictions (whether procedural, voting, approval, fairness or otherwise) applicable to business combinations contained in Section 203 of the DGCL and any other Takeover Provisions are, and will be, inapplicable to the execution, delivery and performance of this Agreement, and the timely consummation of the Merger and any other Transaction and will not restrict, impair or delay the ability of Parent or Merger Sub to vote or otherwise exercise all rights as a Stockholder. No "fair price," "moratorium," "control share acquisition" or other similar Takeover Provisions or any anti-takeover provision in the Company Charter Documents is, or at the Effective Time will be, applicable to the Company Securities, the Merger or the other Transactions.

SECTION 4.25. <u>Assets</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company or a Company Subsidiary has good and marketable title to, or good and valid leasehold interests in, all of the tangible assets reflected as owned, leased or used by it on the most recent consolidated balance sheet of the Company contained in the Company SEC Documents filed prior to the date hereof (except for properties or assets that have been sold or disposed of in the ordinary course of business consistent with past practice since the date of such balance sheet or as part of the Spin-Off or the ROFN Sale) free and clear of any Liens, except for Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) At the Effective Time, the Company or another member of the RemainCo Group will have good and marketable title to, or good and valid leasehold interests in, all RemainCo Assets free and clear of any Liens, except for Permitted Liens.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Other than with respect to Intellectual Property, upon the receipt by the Company of the services, benefits and licenses to be provided to the Company under the Spin-Off Agreements, the Company shall have, directly or indirectly, immediately following the Closing, the assets, properties and rights of every type and description, whether real or personal, tangible or intangible, material to the conduct of the RemainCo Business of the Company and the Company Subsidiaries as such business has been conducted, as it currently is being conducted or as it is currently contemplated to be conducted by the Company immediately prior to Closing, and such assets, properties and rights shall be adequate for the continued conduct of such business after the Effective Time in the same manner as conducted by the Company immediately prior to the Effective Time in all material respects.

SECTION 4.26. <u>Books and Records</u>. Since January 1, 2022, the books and records of the Company and the Company Subsidiaries have been maintained in accordance with GAAP (to the extent applicable) and any other applicable Law and accounting requirements, in each case, in all material respects, and reflect only actual transactions.

SECTION 4.27. <u>Anti-Corruption Compliance</u>. None of the Company, any Company Subsidiary, any officer, director or employee of the Company or any Company Subsidiary or, to the knowledge of the Company, any other Representative acting at the direction of or on behalf of the Company or any Company Subsidiary, in the past six years, directly or indirectly, has (a) violated or is violating in any respect any Anti-Corruption Laws applicable to the Company or any Company Subsidiary; (b) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses or renumerations relating to foreign or domestic political activity; (c) made, offered, authorized, facilitated or promised any payment, contribution, gift, entertainment, bribe, rebate, kickback, financial or other advantage, or anything else of value, regardless of form or amount, to any (i) any Representative of any Governmental Authority, (ii) any Representative of any commercial enterprise that is owned or controlled by a Governmental Authority, including any state-owned or controlled medical facility, (iii) any Representative of any public international organization, such as the International Monetary Fund, the United Nations or the World Bank, (iv) any Person acting in an official capacity for any Governmental Authority, enterprise, or organization identified above, (v) any political party, party official or candidate for political office (each of <u>clauses (i)</u> through <u>(v)</u> of this <u>Section</u> <u>4.27</u>, a "*Government Official*"), (vi) any health care professional, or (vii) any other Person for the purpose of securing an unlawful advantage, inducing the recipient to violate an official or lawful duty or a duty to the recipient's employer, reward the recipient for an unlawful advantage already given, or for any other improper purpose; (d) requested, agreed to receive, or accepted a payment, gift or hospitality from a Person if it is known or suspected that it is offered with the expectation that it will obtain a business advantage for them; or (e) established or maintained, or is maintaining, any unlawful fund of corporate monies or other properties. Neither the Company nor any Company Subsidiary is, or in the past six years has been, under administrative, civil, or criminal investigation, indictment, information, suspension, debarment, or audit by any party, in connection with alleged or possible violations of any Anti-Corruption Laws, or has received written notice from, or made a voluntary disclosure to, the U.S. Department of Justice, the SEC, the UK Serious Fraud Office, or any other Governmental Authority regarding alleged or possible violations of any Anti-Corruption Laws. The Company maintains internal controls that are reasonably tailored to the size, complexity, operations, business lines, geographic footprint, and business model of the Company and the Company Subsidiaries, and which are reasonably designed to ensure compliance with the applicable Anti-Corruption Laws.

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SECTION 4.28. <u>Trade Controls</u>. Since April 24, 2019, none of the Company, any Company Subsidiary, any officer, director or employee of the Company or, to the knowledge of the Company, any other Representative acting at the direction of or on behalf of the Company or any Company Subsidiary, (i) has violated any applicable Trade Controls Laws, (ii) is listed on any list of sanctioned persons administered or enforced by the United States, the United Nations Security Council, the European Union, any European Union member state, or the United Kingdom, or is owned or controlled by, or acting on behalf of, any such Person, (iii) is located, organized or resident in a country or region that is subject to comprehensive sanctions (which as of the date hereof are Cuba, Iran, North Korea, and the Crimea and separatist-controlled portions of the Donetsk and Luhansk regions of Ukraine), (iv) is otherwise targeted under any economic or financial sanctions, trade or export controls imposed, administered, or enforced by the United States, the United Kingdom, the European Union or any of its member states, or any other applicable sanctions authority with jurisdiction over the Company (collectively, "*Sanctions*"); or (v) is engaged in any dealings with any Person or country subject to Sanctions. There is no pending or, to the knowledge of the Company, threatened, investigation, inquiry, enforcement action, claim, complaint, voluntary or directed disclosure, administrative subpoena, or proceeding against the Company, any Company Subsidiary, or against any of the Company's officers, directors or employees, related to any violation or potential violation of any Trade Controls Laws.

SECTION 4.29. <u>National Security</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Neither the Company nor any Company Subsidiary produces, designs, tests, manufactures, fabricates or develops one or more critical technologies, as defined at 31 C.F.R. § 800.215, that would require a U.S. regulatory authorization, as defined at 31 C.F.R. § 800.254, to Parent's principal place of business as defined at 31 C.F.R. § 800.239. The foregoing representations and warranties in this <u>Section</u> <u>4.29(a)</u> relate to the Laws referenced herein solely as in effect as of the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company (i) does not perform the functions set forth in column 2 of Appendix A to 31 C.F.R. part 800 with respect to covered investment critical infrastructure, as defined at 31 C.F.R. § 800.212, (ii) does not maintain or collect, directly or indirectly, U.S. citizens' sensitive personal data, as defined at 31 C.F.R. § 800.241 and (iii) is not a covered foreign person within the meaning of 31 C.F.R. § 850.209. The foregoing representations and warranties in this <u>Section</u> <u>4.29(b)</u> relate to the Laws referenced herein solely as in effect as of the date of this Agreement.

SECTION 4.30. <u>Solvency</u>. As of immediately after giving effect to the Transactions (including the payment of all fees and expenses in connection therewith), SpinCo will be Solvent. 

SECTION 4.31. <u>SpinCo Activities</u>. SpinCo is a newly formed wholly owned Subsidiary of the Company, has not engaged in any business or conducted any operations and has no, and prior to the Spin-Off will have no, assets, liabilities or obligations of any nature other than as required in connection with the Transactions and as incidental to its organization and existence.

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SECTION 4.32. <u>No Other Representations or Warranties</u>. Except for the representations and warranties made by the Company in this Agreement, neither the Company nor any other Person makes any express or implied representation or warranty with respect to the Company or the Company Subsidiaries, or their respective businesses, operations, assets, liabilities or conditions (financial or otherwise) in connection with this Agreement or the transactions contemplated by this Agreement, and the Company hereby disclaims any such other representations and warranties.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Parent and Merger Sub hereby jointly and severally represent and warrant to the Company as follows:

SECTION 5.1. <u>Organization</u>. Each of Parent and Merger Sub (a) is a corporation duly organized, validly existing and (where applicable) in good standing under the Laws of its jurisdiction of incorporation and (b) has all requisite corporate power and authority to carry on its business as now conducted.

SECTION 5.2. <u>Merger Sub</u>. Merger Sub is a wholly owned Subsidiary of Parent that was formed solely for the purpose of engaging in the transactions contemplated by this Agreement. Since the date of its incorporation, Merger Sub has not carried on any business or conducted any operations other than activities incident to Merger Sub's formation, the execution of this Agreement, the performance of its obligations hereunder and matters ancillary thereto.

SECTION 5.3. <u>Authorization; No Conflict</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of Parent and Merger Sub has the requisite corporate power and authority, and has taken all corporate action necessary, to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by Parent and Merger Sub and, assuming the due authorization, execution and delivery hereof by the Company, constitutes a legal, valid and binding obligation of Parent and Merger Sub enforceable against Parent and Merger Sub in accordance with its respective terms, subject in each case to the Bankruptcy and Equity Exception.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) None of the execution, delivery or performance of this Agreement by Parent or Merger Sub, the consummation by Parent or Merger Sub of the transactions contemplated by this Agreement, or compliance by Parent or Merger Sub with any of the provisions herein will (i) result in a violation or breach of, contravene or conflict with the certificate of incorporation or bylaws, or similar organizational documents, of Parent or Merger Sub, (ii) assuming compliance with the matters referred to in <u>Section</u> <u>5.3(c)</u>, conflict with or result in a violation or breach of any applicable Judgment or any provision of any applicable Law, (iii) assuming compliance with the matters referred to in <u>Section</u> <u>5.3(c)</u>, require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse

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of time or both, would constitute a default or termination under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which Parent or Merger Sub is entitled under any provision of any Contract binding upon Parent or Merger Sub or any Authorization affecting, or relating in any way to, the assets or the business of Parent and its Subsidiaries or (iv) result in the creation or imposition of any Lien on any asset of Parent or any of its Subsidiaries, with only such exceptions, in the case of each of <u>clauses (ii)</u> through <u>(iv)</u>, as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the transactions contemplated by this Agreement require no action by or in respect of, or filing by or with, any Governmental Authority, except for (i) filing the Certificate of Merger with the Secretary of State of the State of Delaware, (ii) compliance with and filings pursuant to Antitrust Laws and Foreign Investment Laws, if any, (iii) compliance with any applicable requirements of the Securities Act, the Exchange Act and any other United States state or federal securities Laws, (iv) compliance with any Nasdaq or New York Stock Exchange rules and (v) actions, approvals or filings the failure of which to make or obtain has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

SECTION 5.4. <u>Information Supplied</u>. None of the information with respect to Parent or Merger Sub supplied or to be supplied in writing by or on behalf of Parent or Merger Sub for inclusion in the Proxy Statement will, at the time of the filing of, or at the time of any amendment of or supplement to, or at the time of any publication, mailing, distribution or dissemination of, the Proxy Statement, or on the date of the Stockholders' Meeting (as it may be adjourned or postponed in accordance with this Agreement), contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. None of the information with respect to Parent or Merger Sub supplied or to be supplied in writing by or on behalf of Parent or Merger Sub for inclusion in the Spin-Off Registration Statement will, at the time of the confidential submission or the filing thereof, at the time of any amendment of or supplement thereto, on the date it is declared effective by the SEC, and at the time of any publication, mailing, distribution or dissemination thereof, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.

SECTION 5.5. <u>Sufficient Funds</u>. Parent has access to, and will cause Merger Sub to have, at the Effective Time and at the Closing, the funds necessary to consummate the Merger and the other Transactions, including payment of the aggregate Merger Consideration on the Closing Date, and to pay all related fees and expenses required to be paid by Parent and Merger Sub under this Agreement.

SECTION 5.6. <u>Proceedings</u>. There is no Proceeding pending or, to the knowledge of Parent, threatened, against Parent or any of its controlled Affiliates that would, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect. Neither Parent nor any of its controlled Affiliates is subject to any Judgment that has had or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

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SECTION 5.7. <u>Ownership of Company Common Stock</u>. Neither Parent nor any of its Affiliates directly or indirectly owns, and at all times for the past three years, neither Parent nor any of its Affiliates has owned, beneficially or otherwise, any shares of Company Common Stock or any securities, contracts or obligations convertible into or exercisable or exchangeable for shares of Company Common Stock.

SECTION 5.8. <u>Broker</u><u>'</u><u>s or Finder</u><u>'</u><u>s Fees</u>. No agent, broker, investment banker, finder, or other Person acting on behalf of Parent or any of its Affiliates or under Parent's or any of its Affiliates' authority is or will be entitled to any advisory, commission or broker's or finder's fee or similar fee or commission or reimbursement of expenses in connection with any of the transactions contemplated by this Agreement except for Persons, if any, whose fees and expenses shall be paid by Parent.

SECTION 5.9. <u>No Other Representations or Warranties</u>. Except for the representations and warranties made by Parent and Merger Sub in this Agreement, none of Parent, Merger Sub nor any other Person makes any express or implied representation or warranty with respect to Parent, Merger Sub, their respective Subsidiaries or their respective businesses, operations, assets, liabilities or conditions (financial or otherwise) in connection with this Agreement or the transactions contemplated by this Agreement, and each of Parent and Merger Sub hereby disclaims any such other representations and warranties.

ARTICLE 6

COVENANTS

SECTION 6.1. <u>Conduct of the Company</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) During the Pre-Closing Period, subject to the Spin-Off Carveout and except (i) as set forth in <u>Section</u> <u>6.1</u> of the Company Disclosure Letter, (ii) as expressly required by this Agreement or the Separation and Distribution Agreement, (iii) as required to effect the ROFN Sale in accordance with <u>Section</u> <u>2.7</u>, (iv) for a distribution of Permitted Sale Proceeds to holders of Company Common Stock (less the amount of Permitted Sales Proceeds paid to holders of Company Equity Awards pursuant to <u>Section</u> <u>3.4(f)</u>), (v) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned, or delayed), or (vi) as required by applicable Law, the Company shall, and shall cause the Company Subsidiaries to, (1) conduct their respective businesses, including the RemainCo Business, in the ordinary course of business consistent with past practice in all material respects, and (2) use reasonable best efforts to preserve intact their material assets, maintain their material Authorizations, keep available the services of their respective directors, officers, key employees and key Contractors, and maintain and preserve their present material business relationships with Collaboration Partners, suppliers and other Persons having material business relationships with the Company or any Company Subsidiary.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding <u>Section</u> <u>6.1(a)</u>, subject to the Spin-Off Carveout and except as set forth in <u>Section</u> <u>6.1(b)</u> of the Company Disclosure Letter or as expressly required by this Agreement, by the Separation and Distribution Agreement or by applicable Law, or as required to effect the ROFN Sale in accordance with <u>Section</u> <u>2.7</u>, the Company shall not, and shall not permit the Company Subsidiaries to, during the Pre-Closing Period, directly or indirectly, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned, or delayed, except in the case of <u>clause (vii)</u> (but solely with respect to Company Subsidiary Securities) or <u>clause (iii)</u> of this <u>Section</u> <u>6.1(b)</u>, for which consent shall be in Parent's sole discretion):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) sell, pledge, dispose of, assign, lease, license, sublicense, dedicate to the public, or otherwise transfer, abandon or permit to lapse, or create or incur any Lien (other than Permitted Liens) on, any of the Company's or the Company Subsidiaries' material assets (including any Company Intellectual Property, all of which are material assets), securities, properties, interests, businesses or Authorizations, other than (A) (except in the case of any Company Intellectual Property) sales of obsolete equipment in the ordinary course of business consistent with past practice, or (B) non-exclusive grants of rights to use Company Intellectual Property that are incidental to and not material to performance under the applicable agreement, which agreement is entered into in the ordinary course of business consistent with past practice, such as a material transfer agreement, clinical trial agreement, supply agreement or manufacturing agreement to the extent the grant of rights to use Company Intellectual Property in such agreements is non-exclusive and incidental to and not material to performance thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material assets, securities, properties, interests or businesses, other than supplies in the ordinary course of business consistent with past practice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) merge or consolidate the Company or any Company Subsidiary with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of the Company Subsidiaries (other than the Merger) or form any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) adopt or implement any stockholder rights plan or similar arrangement or enter into any agreement with respect to the voting or registration of any Company Securities or Company Subsidiary Securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) amend, waive, rescind or otherwise modify the Company Charter Documents or the Company Subsidiary Charter Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) (A) split, combine or reclassify any shares of its capital stock, (B) establish a record date for, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, except for dividends payable by any Company Subsidiary to the Company or to any other Company Subsidiary, the Spin-Off Distribution or the distribution of the Permitted Sale Proceeds to holders of Company Common Stock (less the amount of Permitted Sale Proceeds paid to holders of Company Equity Awards pursuant to <u>Section</u> <u>3.4(f)</u>) or (C) redeem, repurchase or otherwise

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acquire, or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any Company Securities or any Company Subsidiary Securities, except, in the case of this <u>clause (C)</u>, (1) acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order for such holders to pay the exercise price of Company Stock Options outstanding as of the date hereof, (2) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to Company Equity Awards outstanding as of the date hereof, (3) the acquisition by the Company of shares of Company Common Stock or Company Equity Awards in connection with the forfeiture of such shares or awards, and (4) the exercise, cancellation or conversion of Company Warrants, in each case, in accordance with their terms as of the date hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) (A) issue, sell, grant, or authorize the issuance, sale or grant of, any Company Securities or Company Subsidiary Securities, other than in the Spin-Off Distribution or the issuance of (1) any shares of Company Common Stock upon the exercise of Company Stock Options, Company Warrants or purchase rights under the ESPP or upon the settlement of vested Company RSUs, in each case, that are outstanding on the date hereof (or, in the case of the ESPP, made pursuant to elections in effect on the date hereof) in accordance with their terms on the date hereof and (2) any Company Subsidiary Securities to the Company or (B) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) create, incur, assume or otherwise become liable (whether directly, contingently or otherwise) with respect to any indebtedness for borrowed money or guarantees thereof, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any Company Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) make any loans, advances or capital contributions to, or investments in, any other Person, or re-invest any funds or monies in any assets or securities with a credit rating lower than those assets or securities into which such funds or monies are invested as of the date hereof, other than (A) advances to its employees and consultants in the ordinary course of business consistent with past practice and (B) advances of expenses as required under the Company Charter Documents, the Company Subsidiary Charter Documents or any Contract made available to Parent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) except as required by the terms of any Company Employee Benefit Plan as in effect on the date hereof and listed in <u>Section</u> <u>4.11(a)</u> of the Company Disclosure Letter, (A) with respect to any current or former director, officer, employee or individual independent contractor of the Company or any Company Subsidiary, (1) grant or increase any severance, change of control, retention, termination or similar pay, compensation, bonus or benefits, or amend any existing arrangement relating thereto, (2) enter into any employment, consulting, severance, retention, change in control, termination, retirement, deferred compensation or other similar agreement (or amend or terminate any such existing agreement), (3) pay any compensation or benefit not provided for under the terms of any Company Employee Benefit Plan as of the date hereof or (4) grant any promotion, other than to fill a vacated role; (B) establish, adopt or amend any Company Employee Benefit Plan, including any collective bargaining agreement, or terminate any Company Employee

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Benefit Plan; (C) recognize any union, works council or similar employee representative with respect to any such individual; (D) enter into any trust, annuity or insurance Contract or similar agreement or take any other action to fund or otherwise secure the payment of any compensation or benefit; (E) establish, adopt or enter into any plan, agreement or arrangement, or otherwise commit to, gross up or indemnify, or otherwise reimburse any current or former service provider for any Tax incurred by such service provider, including under Section 409A or Section 4999 of the Code; or (F) hire or engage the services of any individual as a director, officer, employee or individual independent contractor, other than in the ordinary course of business consistent with past practice for employees or Contractors (x) who are not in commercial or marketing roles and (y) who are below the level of Vice President or whose annual base compensation is less than $200,000 per year, or terminate the service of any such Person other than for cause;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) commence any offering or offering period under the ESPP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) grant, amend or modify, or exercise any discretionary authority to accelerate the vesting of, any Company Equity Awards under any Stock Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) (A) forgive any loans to directors, officers, employees or any of their respective Affiliates or (B) enter into any transactions or Contracts with any Affiliates or other Person that would be required to be disclosed by the Company under Item 404 of Regulation S-K of the SEC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) (A) waive, release, pay, discharge or satisfy any material liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with the terms thereof; (B) accelerate or delay collection in any material respect of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice; or (C) delay or accelerate in any material respect payment of any account payable in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) make any material change in the Company's methods of accounting, except as required by GAAP, Regulation S-X of the Exchange Act or applicable rules and regulations of the SEC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) (A) make any material Tax election unless consistent with prior practice in filing Tax Returns, (B) change or rescind any material Tax election, (C) change any annual Tax accounting period, adopt or change any material method of Tax accounting, (D) amend any material Tax Returns, (E) extend the statute of limitations with respect to any material Tax Return (other than an extension for the filing of a Tax Return that is automatically granted), (F) enter into any closing agreement with any Taxing Authority with respect to a material Tax, (G) settle or compromise any material Tax claim, audit or assessment, or (H) surrender any right to claim a material Tax refund;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) write up, write down or write off the book value of any assets, in the aggregate, except in accordance with GAAP consistently applied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) compromise, settle, or offer or propose to settle, any Proceeding, except with respect to matters that (A) involve the payment of monetary damages not in excess of $500,000 per Proceeding (assuming the payment in full of all future fixed or contingent payments) or $1,000,000 in the aggregate for all such Proceedings, and (B) do not (1) include any other obligation to be performed by, or limitation upon, the Company or any Company Subsidiary, Parent, Merger Sub or their Affiliates that is, individually or in the aggregate, material to the Company, any Company Subsidiary, Parent, Merger Sub or their respective Affiliates; or (2) result in any imposition of any material non-monetary obligation on, or the admission of wrongdoing by, the Company or any Company Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) commence any Proceeding, except with respect to: (A) routine matters in the ordinary course of business, (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (*provided* that the Company consults with Parent and considers the views and comments of Parent with respect to such Proceedings prior to commencement thereof), or (C) in connection with any actual or alleged breach of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) except in connection with any transaction to the extent specifically permitted by any other subclause of this <u>Section</u> <u>6.1(b)</u>, (A) terminate, cancel, assign, renew or agree to any material amendment of, change in or waiver under any Material Contract or any ROFN Purchase Document, (B) enter into any Contract that, if existing on the date hereof, would be a Material Contract (except for any statement of work, purchase order or similar ancillary agreement or documentation issued under an existing Material Contract, in each case not in excess of $1,000,000 individually), or amend or modify any such Contract or (C) amend or modify any Contract in existence on the date hereof that, after giving effect to such amendment or modification, would be a Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) incur or authorize any capital expenditures or any obligations or liabilities in respect thereof, except in accordance with the capital expenditure budget set out in <u>Section</u> <u>6.1(b)(xxi)</u> of the Company Disclosure Letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii) convene any regular or special meeting (or any adjournment or postponement thereof) of the Stockholders other than, to the extent required by applicable Law or a Judgment of a court of competent jurisdiction, an annual meeting of stockholders for purposes of election of directors, ratification of the Company's auditors and other routine matters; *provided* that the Company shall use its reasonable best efforts to oppose any Stockholder proposal presented at any such meeting (*provided*, for the avoidance of doubt, that such efforts shall not require the directors of the Company to take any action that would reasonably be expected to result in a breach of their fiduciary duties under applicable Law);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiii) fail to keep in full force and effect the Insurance Policies or replacement or revised provisions providing insurance coverage in a manner consistent with past practice with respect to the assets, operations and activities of the Company and the Company Subsidiaries as are currently in effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiv) (A) extend, amend, condition, restrict, waive, cancel, abandon, withdraw, fail to renew, permit to lapse, modify or otherwise alter any rights in or to any Company Intellectual Property, (B) fail to diligently prosecute any material Patent application or to maintain any issued Patent, in each case, owned by the Company or any Company Subsidiary that is included in Company Intellectual Property or fail to diligently prosecute or maintain any material Company Intellectual Property as to which the Company or any Company Subsidiary controls the prosecution or maintenance thereof, as applicable, (C) terminate or fail to renew (to the extent renewable at the option of the Company) any Contract under which material Company Intellectual Property is licensed to the Company or (D) disclose to any Third Party, other than under a confidentiality agreement or other legally binding confidentiality undertaking, any trade secret or other Know-How of the Company that is included in the Company Intellectual Property in a way that results in loss of material trade secret protection thereon, except for any such disclosures made as a result of publication of a Patent application filed by the Company or in connection with any required regulatory filing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxv) (A) commence any clinical trial of which Parent has not been informed prior to the date hereof, (B) unless mandated by any Governmental Authority, (x) make any material change to, discontinue, terminate or suspend any ongoing clinical study or (y) withdraw any application for marketing approval of any Company Product from a Regulatory Authority or (C) make any material change to, discontinue, terminate or suspend any ongoing IND-enabling non-clinical study, in each case of <u>clauses (A)</u> through <u>(C)</u> of this <u>Section</u> <u>6.1(b)(xxv)</u>, without first consulting Parent in good faith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvi) select, update, change, test for safety and marketing purposes, or initiate use of any new Trademark or potential new Trademark (including any branding, logo, trade dress, tagline or get up) or any new domain name proposed to be used in connection with, or as a brand for, any Company Product (in each case internally or externally to the Company), including branding (including logo, trade dress, tagline or get up), naming, or product descriptions that are submitted as part of any review in connection with any such Trademark activities, including name related reviews, with a Governmental Authority,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvii) engage in any transfer of data subject to the U.S. Bulk Data Final Rule unless it is exempt under subpart E of the U.S. Bulk Data Final Rule;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxviii) materially revise, alter, update, or otherwise change the current plans and designs for the construction being undertaken by or on behalf of the Company at the Callan Road Facility; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxix) agree, resolve or commit to do any of the foregoing.

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Notwithstanding the foregoing, nothing contained herein shall give to Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or any Company Subsidiary prior to the Effective Time and nothing contained herein is intended to give the Company or any Company Subsidiary, directly or indirectly, the right to control or direct Parent's or its Subsidiaries' operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its and its Subsidiaries' respective operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any action taken or not taken by the Company or the Company Subsidiaries with respect to SpinCo, the SpinCo Assets or SpinCo Liabilities (other than in connection with a Permitted Third Party Sale), shall be subject to <u>Section</u> <u>6.1(a)</u> or <u>Section</u> <u>6.1(b)</u> solely to the extent that such action (i) would be inconsistent with the terms of the Spin-Off Agreements, (ii) would reasonably be expected to adversely affect the Company after giving effect to the Spin-Off, the other members of the RemainCo Group, the RemainCo Business, or, following the Effective Time, Parent or its Affiliates, (iii) would reasonably be expected to prevent, impede or materially delay the consummation of the transactions contemplated by this Agreement or the Spin-Off Agreements or (iv) would reasonably be expected to have a material and adverse effect on the ability of SpinCo to perform its obligations under the Third Party Agreements (as defined in the Separation and Distribution Agreement) (the "*Spin-Off Carveout*").

SECTION 6.2. <u>Proxy Statement; Stockholders</u><u>'</u> <u>Meeting</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As promptly as reasonably practicable (and no later than 30 days) after the date hereof, or such other date as mutually agreed by the parties in writing, the Company shall prepare, in consultation with Parent, and file with the SEC the preliminary Proxy Statement. Except to the extent a Company Adverse Recommendation Change has been made in accordance with <u>Section</u> <u>6.9(d)</u> or <u>Section</u> <u>6.9(e)</u> and has not been rescinded, the Company and the Company Board shall include the Company Recommendation in the Proxy Statement. Each of the Company and Parent shall furnish all information concerning itself and its respective Affiliates that is required to be included in the Proxy Statement or that is customarily included in proxy statements prepared in connection with transactions of the type contemplated by this Agreement. The Company agrees that the Proxy Statement shall comply as to form in all material respects with the requirements of the Exchange Act and that none of the information included or incorporated by reference in the Proxy Statement shall, at the date the Proxy Statement is filed with the SEC or mailed to the Stockholders, at the time of the Stockholders' Meeting, or at the time of any amendment or supplement thereof, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no covenant is made by the Company with respect to statements made in the Proxy Statement based on information supplied in writing by or on behalf of Parent or Merger Sub specifically for inclusion or incorporation by reference therein. Parent agrees that no information supplied in writing by or on behalf of Parent or Merger Sub specifically for inclusion or incorporation by reference in the Proxy Statement shall, at the date the Proxy Statement is filed with the SEC or mailed to the Stockholders, at the time of the Stockholders' Meeting, or at the time of any amendment or supplement thereof, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Company shall use its

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reasonable best efforts to respond as promptly as practicable to any comments (written or oral) of the SEC or its staff with respect to the Proxy Statement. The Company shall promptly notify Parent upon the receipt of any comments (written or oral) from the SEC or its staff or any request from the SEC or its staff for amendments or supplements to the Proxy Statement and shall furnish to Parent a copy of any written comments from the SEC or its staff. Except to the extent a Company Adverse Recommendation Change has been made in accordance with <u>Section</u> <u>6.9(d)</u> or <u>Section</u> <u>6.9(e) and has not been rescinded</u>, prior to filing or mailing the Proxy Statement (or any amendment or supplement thereto) or responding to any comments (written or oral) of the SEC or its staff thereto, the Company (i) shall give Parent and its counsel a reasonable opportunity to review and comment on such document or response; (ii) shall consider any comments proposed by Parent in good faith and (iii) shall not file or mail such document, or respond to the SEC or its staff, prior to receiving the approval of Parent, which approval shall not be unreasonably withheld, conditioned or delayed. The Company will cause the definitive Proxy Statement to be mailed to the Stockholders entitled to vote at the Stockholders' Meeting no less than 20 days before the date of the Stockholders' Meeting. If, at any time prior to the Stockholders' Meeting, any information relating to the Company, Parent or any of their respective Affiliates, officers or directors is discovered by the Company or Parent that should be set forth in an amendment or supplement to the Proxy Statement so that the Proxy Statement does not contain any untrue statement of any material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading, the party that discovers such information shall promptly notify the other party and correct such information, and the Company shall file an appropriate amendment or supplement describing such information with the SEC and, to the extent required by applicable Law, disseminate such information to the Stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall conduct a "broker search" in accordance with Rule 14a-13 of the Exchange Act and upon the reasonable request of Parent. The Company shall duly call, give notice of, convene and hold a meeting of its Stockholders for the purpose of obtaining the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement (the "*Stockholders' Meeting*") with a record date and meeting date to be selected after reasonable consultation with Parent, which meeting date shall be as promptly as practicable, and in no event later than 10 days, after the date on which the Spin-Off Registration Statement has become effective, unless <u>Section</u> <u>7.1(e)(ii)</u> has previously been satisfied, in which case as promptly as practicable, and in no event later than 10 days, after the date on which <u>Section</u> <u>7.1(e)(ii)</u> has been satisfied. The notice of such Stockholders' Meeting shall state that a resolution to adopt this Agreement and the Separation and Distribution Agreement shall be considered at the Stockholders' Meeting. Subject to a Company Adverse Recommendation Change in accordance with <u>Section</u> <u>6.9(d)</u> or <u>Section</u> <u>6.9(e)</u>, the Company shall use its reasonable best efforts to solicit and obtain the Requisite Company Vote in favor of such resolution. The Company shall (A) provide Parent reasonably detailed periodic updates concerning proxy solicitation results on a timely basis following the initial mailing of the Proxy Statement and (B) give written notice to Parent one day prior to the Stockholders' Meeting, and on the day of, but prior to, the Stockholders' Meeting, indicating whether as of such date sufficient proxies representing the Requisite Company Vote has been obtained in favor of such resolution. Notwithstanding anything to the contrary contained herein, the Company shall not postpone or adjourn the Stockholders' Meeting without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned, or delayed); *provided* that if at any time following the

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dissemination of the Proxy Statement, either the Company or Parent reasonably determines in good faith that the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement is unlikely to be obtained at the Stockholders' Meeting, including due to an absence of a quorum, then subject to applicable Law, each of the Company and Parent shall have the right to require an adjournment or postponement of the Stockholders' Meeting for the purpose of soliciting additional votes in favor of this Agreement; *provided*, further, that no such single adjournment or postponement shall delay the Stockholders' Meeting by more than seven days from the prior-scheduled date or to a date on or after the fifth Business Day preceding the Outside Date. Notwithstanding the foregoing, the Company may postpone or adjourn the Stockholders' Meeting if (1) the Company is required to postpone or adjourn the Stockholders' Meeting by applicable Law, or (2) the Company Board or any authorized committee thereof shall have determined in good faith (after consultation with outside legal counsel) that it is necessary or appropriate to postpone or adjourn the Stockholders' Meeting in order to give the Stockholders sufficient time to evaluate any information or disclosure that the Company has sent or otherwise made available to such holders by issuing a press release, filing materials with the SEC or otherwise (in each case so long as any such information or disclosure was made in compliance with this Agreement); *provided* that the Company shall be permitted to postpone or adjourn the Stockholders' Meeting pursuant to this clause (2) on no more than two occasions and in each case no such adjournment or postponement shall delay the Stockholders' Meeting by more than seven days from the prior-scheduled date or to a date on or after the fifth Business Day preceding the Outside Date. In no event shall the record date of the Stockholders' Meeting be changed without Parent's prior written consent, not to be unreasonably withheld, conditioned or delayed, unless the Company is required to do so by applicable Law. Without limiting the generality of the foregoing, but subject to <u>Section</u> <u>6.9</u> and the Company's rights to terminate this Agreement under the circumstances set forth in <u>Section</u> <u>8.1</u>, the Company agrees that its obligations pursuant to this <u>Section</u> <u>6.2</u> shall not be affected by the commencement, public proposal, public disclosure or communication to the Company or any other person of any Acquisition Proposal or by any event constituting or that could constitute an Intervening Event. Notwithstanding any Company Adverse Recommendation Change, unless this Agreement has been validly terminated pursuant to <u>Section</u> <u>8.1</u>, (A) the Company shall submit this Agreement to the Stockholders for approval at the Stockholders' Meeting and (B) the only matters to be voted upon at the Stockholders' Meeting shall be the adoption of this Agreement and the Separation and Distribution Agreement and routine proposals required in connection with such vote, including for the avoidance of doubt adjournments proposed in compliance with this <u>Section</u> <u>6.2(b)</u> and any non-binding advisory vote required under applicable Law (and not any other matters, including any Acquisition Proposal).

SECTION 6.3. <u>Employee Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For a period of one year immediately following the Closing Date, but not beyond the date on which a Continuing Employee's employment with the Company or any of its Subsidiaries terminates (the "*Continuation Period*"), Parent agrees to provide, or to cause one of its Affiliates (including after the Closing, the Company and the Company Subsidiaries) to provide, each individual employed by the Company or any of the Company Subsidiaries immediately prior to the Closing who is retained by Parent (after giving effect to the Spin-Off and the Separation and Distribution Agreement) (each, a "*Continuing Employee*") with (i) the base salary or hourly wages and annual cash bonus targets that are, in each case, at least equal to those

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provided to the Continuing Employee immediately prior to the Closing, and (ii) retirement, health and welfare benefits (excluding any change in control, transaction, retention, equity or equity-based compensation, severance, termination protection, defined benefit pension, deferred compensation, retiree health or welfare, or other similar compensation or benefits) that are substantially comparable in the aggregate to either (A) the employee benefits provided to the Continuing Employee immediately prior to the Closing or (B) in the discretion of Parent, employee benefits provided to similarly-situated new hire employees of Parent and its Affiliates. Nothing herein shall prevent Parent or any of its Affiliates (including, after the Closing, the Company or any of its Subsidiaries) from terminating the employment of any Continuing Employee during the Continuation Period. For all purposes of this <u>Section</u> <u>6.3</u>, the obligations of Parent and its Affiliates with respect to any Continuing Employee engaged outside of the United States through an employer of record shall be subject to the terms and conditions of the applicable Contract with the employer of record and shall be modified accordingly to the extent necessary to comply with such terms and conditions. For the one year period following the Closing Date, Parent shall, or shall cause its applicable Affiliate (including, following the Closing, the Surviving Corporation) to, provide each Continuing Employee with severance benefits described in <u>Section</u> <u>6.3(a)</u> of the Company Disclosure Letter. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Following the Effective Time, Parent will, subject to applicable Laws, give each Continuing Employee full credit for prior service with the Company and the Company Subsidiaries for purposes of vesting and eligibility to participate in employee benefit plans maintained by Parent or its Affiliates for which the Continuing Employee is otherwise eligible to participate (but such service credit shall not be provided for purposes of benefit accrual, except for vacation and severance, as applicable); *provided* that service of a Continuing Employee prior to the Effective Time shall not be recognized for any purpose, including any entitlement to participate in or receive benefits with respect to, any equity or equity-based plans or compensation, any retiree medical programs or other retiree welfare benefit programs, any defined benefit plan or any frozen or grandfathered benefit or frozen or grandfathered plan maintained by Parent or its Affiliates. In no event shall anything contained in this <u>Section</u> <u>6.3(b)</u> result in any duplication of benefits. In addition, Parent shall use reasonable best efforts (i) to waive, or cause to be waived, any limitations on benefits relating to pre-existing conditions to the same extent such limitations are waived under any comparable plan of the Company or any Company Subsidiary applicable to such Continuing Employee prior to the Effective Time and (ii) either to (A) recognize, for purposes of annual deductible and out-of-pocket limits under its medical and dental plans, deductible and out-of-pocket expenses paid by Continuing Employees in the calendar year in which the Effective Time occurs, or (B) pro-rate annual deductibles and out-of-pocket limits under its medical and dental plans for Continuing Employees for the portion of the calendar year containing the Closing Date in which they participate in such plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) Neither Parent nor any of its Affiliates shall be obligated to continue to employ any Continuing Employee for any period of time following the Effective Time, (ii) Parent or its Affiliates may revise, amend or terminate any Company Employee Benefit Plan or any other employee benefit plan, program or policy in effect from time to time, (iii) nothing in this Agreement shall be construed as an amendment of any Company Employee Benefit Plan or any employee benefit plan, program or policy of Parent and its Affiliates, and (iv) nothing in this Agreement shall create any third party beneficiary rights or obligations in any person (including any current or former service provider or employee of Parent or any of its Affiliates (or any beneficiaries or dependents thereof)).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The provisions of this <u>Section</u> <u>6.3</u> shall in no event apply to any employee of the Company or any Company Subsidiary whose employment has been terminated and who is later employed by Parent, the Surviving Corporation or any of their respective Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Except for communications to SpinCo Employees that do not relate to this Agreement, to any employment, compensation or benefits matters addressed in the Separation and Distribution Agreement or the Transactions, all formal written communications to the officers or employees of the Company and the Company Subsidiaries pertaining to employment, compensation or benefit matters in connection with or following the Transactions, or that are affected by this Agreement, shall be subject to Parent's prior consent (not to be unreasonably withheld, conditioned or delayed). The Company shall provide Parent with a copy of the intended communication, and Parent shall have a reasonable period of time to review and comment on each such communication (such review and comments not to be unreasonably withheld, conditioned or delayed). Any group oral presentations with respect to the subject matter described in this <u>Section</u> <u>6.3(e)</u> shall be consistent with such formal written communications in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company and Parent shall cooperate and work together in good faith, and following consultation with Parent, the Company shall use reasonable best efforts to take, or cause to be taken, all actions necessary or advisable, to comply with the obligations set forth in <u>Section</u> <u>6.3(f)</u> of the Company Disclosure Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) If the Effective Time occurs prior to the date on which the Company pays annual bonuses for calendar year 2025, the Company and Parent agree that such annual bonuses shall be treated as set forth in <u>Section</u> <u>6.1(b)(x)</u> of the Company Disclosure Letter.

SECTION 6.4. <u>Further Assurances</u>. At and after the Effective Time, the officers and directors of the Surviving Corporation and Parent shall be authorized to execute and deliver, in the name and on behalf of the Company or Merger Sub, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company, any Company Subsidiary or Merger Sub, any other actions and things necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title, interest and possession in, to and under any of the rights, properties, assets, privileges, powers and franchises of the Company acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

SECTION 6.5. <u>Public Statements</u>. So long as this Agreement is in effect, Parent and the Company shall not, and shall not permit any of their respective Subsidiaries or Representatives to, issue any press release or make any public statement with respect to the Transactions without the prior written consent of the other (which consent shall not be unreasonably withheld, conditioned or delayed) and shall consult with each other prior to issuing any press release or otherwise making any public statement with respect to the Transactions and

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provide to each other for review an advance copy of any such press release or statement, except (a) as may be required by applicable Law, court process or the rules and regulations of any stock exchange on which such party's securities (or those of any of a party's Affiliates) are listed, as applicable, in which case the party required to make the release or announcement shall use its reasonable best efforts to allow the other reasonable time to comment on such release or announcement in advance of such issuance, (b) with respect to any press release or other public statement by the Company expressly permitted by <u>Section</u> <u>6.9</u>, (c) with respect to any press releases or other public statements by Parent or Merger Sub in response to any public announcement permitted by <u>clause (b)</u> of this <u>Section</u> <u>6.5</u>, and (d) each party may make any public statement, including in response to questions from the press, analysts, investors or those attending industry conferences, or (subject to <u>Section</u> <u>6.3(e)</u> in the case of announcements by the Company) make internal announcements to employees and make disclosures in Company SEC Documents, to the extent that such statements are consistent with previous press releases, public disclosures or public statements made jointly by the parties or previously approved by the other parties and otherwise in compliance with this <u>Section</u> <u>6.5</u>. Each of the parties agrees that, promptly following execution of this Agreement, (i) the Company and Parent shall each issue an initial press release with respect to the Transactions, each in a form mutually agreed to by the Company and Parent, and (ii) the Company shall file a current report on Form 8-K with the SEC attaching the Company's initial press release and copies of this Agreement and the Separation and Distribution Agreement as exhibits.

SECTION 6.6. <u>Standard of Efforts; Governmental Approvals</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions provided herein, each party agrees to use (and, as applicable, shall cause its respective controlled Affiliates to use) its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable and in any event prior to the Outside Date, the Transactions, including (i) preparing and filing as promptly as practicable with any Governmental Authority all documentation to effect all necessary notices, reports and other filings (or draft notices, reports and other filings, as applicable), (ii) obtaining as promptly as practicable and maintaining all Authorizations necessary or advisable to be obtained from any Governmental Authority in order to consummate the Transactions and (iii) defending or contesting any Proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authority in respect of any such Proceeding vacated or reversed; *provided* that in no event shall Parent or Merger Sub be obligated to, and none of Company or any Company Subsidiary shall, without the prior written consent of Parent, agree to or proffer, any consent fee, concession or other modification to the terms and conditions of any Contract in order to obtain the Authorizations contemplated by <u>clause (ii)</u> of this <u>Section</u> <u>6.6(a)</u>. The Company, Parent and Merger Sub agree that they will consult with each other with respect to the obtaining of all such necessary Authorizations and (A) the Company shall have the right to review and approve in advance all characterizations of the information relating to the Company and the Company Subsidiaries, (B) Parent shall have the right to review and approve in advance all characterizations of the information relating to Parent or Merger Sub, and (C) each of the Company and Parent shall have the right to review and approve in advance all characterizations of the information relating to the Transactions, in each case, that appear in any filing or submission

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made in connection with obtaining such Authorizations in respect of the Transactions. Notwithstanding anything to the contrary set forth in this Agreement, Parent, upon reasonable consultation with the Company, shall (1) control the strategy and timing for, and make all decisions (and shall take the lead in all meetings and communications with any Governmental Authority) for obtaining any Authorizations from any Governmental Authority in connection with the Transactions and (2) control the overall development of the positions to be taken and any regulatory actions to be requested in any filing or submission with a Governmental Authority in connection with obtaining any Authorizations with respect to the Transactions and in connection with any investigation or other inquiry or Proceeding by or before, or any negotiations with, a Governmental Authority relating to the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In furtherance of, and not in limitation of the foregoing, each of the Company and Parent shall (and shall cause their respective controlled Affiliates, if applicable, to): (i) as promptly as practicable, and in any event within 20 Business Days (or such other time as mutually agreed by the parties) after the date hereof, file or cause to be filed with the United States Federal Trade Commission and the United States Department of Justice any Notification and Report Forms required to be filed under the HSR Act with respect to the Transactions, (ii) as promptly as practicable, and in any event within 20 Business Days (or such other time as mutually agreed by the parties) after the date hereof, make required filings (or draft filings, as applicable) pursuant to any other applicable Antitrust Law or Foreign Investment Laws, if any, with respect to the Transactions and (iii) appropriately supply as promptly as practicable any additional information and documentary material that may be requested and to use their reasonable best efforts to take all other actions necessary to cause the expiration or termination of the applicable waiting periods or obtain any required Authorizations under such Antitrust Laws or Foreign Investment Laws as soon as practicable. No party shall consent to any voluntary delay of the consummation of the transactions contemplated by this Agreement, except with the prior written consent of the other parties hereto, *provided* that Parent has the right to cause its filing under the HSR Act to be withdrawn and refiled, consistent with 16 C.F.R. 803.12(c), to provide the applicable Governmental Authority with additional time to review any of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each party will (i) cooperate in all respects with each other in connection with any filing or submission to any Governmental Authority and in connection with any investigation or other inquiry by any Governmental Authority, in each case with respect to the Transactions, (ii) promptly notify the other party of any communication received from, or given to, any Governmental Authority with respect to the Transactions and keep the other party informed as to the status of any such request, inquiry, investigation, proceeding, or other communication, (iii) subject to applicable Law, provide the other party with a reasonable opportunity to review in advance any proposed communication or other undertakings, such as proposed notices, filings, submissions, or applications (including draft notices, filings, submissions or applications) by it to any Governmental Authority with respect to the Transactions, and consider the other party's comments in good faith, (iv) not agree to participate in any substantive meeting or discussion with any Governmental Authority, in respect of any filing, investigation, inquiry or proceeding concerning this Agreement or the Transactions unless it consults with the other party in advance and, to the extent permitted by such Governmental Authority, gives the other party the opportunity to attend, and (v) furnish the other party with copies of all correspondence, filings and written communications between them and their Affiliates and their respective Representatives, on the one

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hand, and any such Governmental Authority or its staff, on the other hand, with respect to this Agreement or the Transactions except for the parties' HSR filings; *provided* that materials required to be provided pursuant to this section may be redacted (1) to remove references concerning valuation, (2) as necessary to comply with contractual arrangements, (3) as necessary to comply with applicable law, and (4) as necessary to address reasonable privilege or confidentiality concerns; *provided further*, that a party may reasonably designate any competitively sensitive material provided to another party under this section as "Outside Counsel Only."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) At Parent's written request, the Company shall give (or shall cause the applicable Company Subsidiary to give) any notices to Third Parties required to be given under any Contracts in connection with consummation of the Transactions, and use, and cause the Company Subsidiaries to use, reasonable best efforts to obtain any Third Party consents, approvals or waivers required to be obtained under any Contracts in connection with consummation of the Transactions; *provided* that neither the Company nor any Company Subsidiary shall, without the prior written consent of Parent, agree to, or proffer, any consent fee, concession or other modification to the terms and conditions of any Contract in order to obtain any such consent. The Company shall coordinate and cooperate with Parent in determining whether any actions, consents, approvals or waivers are required to be obtained from parties to any Material Contracts in connection with consummation of the Transactions and seeking any such actions, consents, approvals or waivers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding the foregoing provisions of this <u>Section</u> <u>6.6</u> or any other provision of this Agreement, (i) nothing in this <u>Section</u> <u>6.6</u> shall limit any applicable rights a party may have to terminate this Agreement pursuant to <u>Section</u> <u>8.1</u> so long as such party has up to then complied in all material respects with its obligations under this <u>Section</u> <u>6.6</u> and (ii) in no event shall Parent or Merger Sub be required to offer, accept, or agree to, and the Company shall not, without Parent's prior written consent, offer, accept, or agree to, (A) sell, divest, dispose of, lease, license or hold separate, or cause any Company Subsidiary to sell, divest, dispose of, lease, license or hold separate, any portion of the businesses, operations, assets or product lines of Parent, the Company or any of their respective Subsidiaries (or a combination of the respective businesses, operations, assets or product lines of Parent, the Company or any of their respective Subsidiaries), except for the Spin-Off or a ROFN Sale, (B) restrict, prohibit or limit the ability of Parent, the Company or any of their respective Subsidiaries to conduct the businesses or own the assets of Parent, the Company or the Surviving Corporation, or any of their respective Affiliates, (C) restrict, prohibit or limit the ownership or operation by the Company, Parent or any of their respective Subsidiaries of all or any portion of the business or assets of Parent, the Company, the Surviving Corporation or any of their respective Affiliates, (D) cause Parent or any of its Subsidiaries to divest any shares of Company Common Stock, or (E) impose limitations on the ability of Parent or any of its Subsidiaries effectively to acquire, hold or exercise full rights of ownership of, any shares of Company Common Stock, including the right to vote the Company Common Stock acquired or owned by Parent or any of its Subsidiaries on all matters properly presented to the Stockholders.

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SECTION 6.7. <u>Notification of Certain Matters;</u> <u>Interactions with Governmental Authorities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) During the Pre-Closing Period, each of the Company, on the one hand, Parent and Merger Sub, on the other hand, shall give prompt notice to the other of (i) any Proceedings commenced or, to such party's knowledge, threatened, by or against, relating to or involving or otherwise affecting the Company or any Company Subsidiary or Parent or any of its controlled Affiliates, as the case may be, that relate to this Agreement or the consummation of the Transactions, (ii) any event, condition, change, occurrence or development of a state of facts that would reasonably be expected to cause the failure of any of the conditions set forth in <u>Article 7</u>, and (iii) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with any of the Transactions; *provided* that the delivery of notice pursuant to this <u>Section</u> <u>6.7</u> shall not limit or otherwise affect the remedies available hereunder to any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During the Pre-Closing Period, subject to applicable Law, the Company shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) promptly inform Parent in writing of any material submission, filing or other material correspondence submitted or transmitted to, or that is received from, the FDA or any other Regulatory Authority related to the Company Platform or any Company Product and provide Parent with a reasonable opportunity to consult with the Company with respect to and review any filing proposed to be made with the FDA or any other Regulatory Authority by or on behalf of the Company or any of its Subsidiaries and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Regulatory Authority by or on behalf of the Company or any of the Company Subsidiaries, in each case, relating to any Company Product, and shall consider in good faith any comments or other input timely provided by Parent in respect of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) promptly inform Parent, including furnishing copies, of (A) all Authorizations from the FDA and all material Authorizations from any other applicable Regulatory Authority held by the Company or any of the Company Subsidiaries related to any Company Product, (B) all material written submissions made to and material written regulatory communications with the FDA or any other applicable Regulatory Authority related to any Company Product that are in the Company's or any of the Company Subsidiaries' possession or control, and (C) all reports, results, data and information relating to the safety, quality, or efficacy of the Company Platform or any of the Company Products, including all final reports prepared under 21 C.F.R. 58.185, all information collected pursuant to 21 C.F.R. Part 58 and all adverse event (as such term is defined or described in 21 C.F.R. 312.32) and other information in respect of safety, adverse events and quality relating to the Company Platform or any Company Product notified to the Company or that are in the Company's or any of the Company Subsidiaries' possession or control, in each case ((A) through (C)), which arise during the Pre-Closing Period;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) (A) provide notice to Parent prior to any requested, proposed or scheduled meeting with the FDA or any other Regulatory Authority (including, as applicable, any scheduled pre-IND meeting referenced in 21 C.F.R. 312.82), relating to the Company Platform or any Company Product, (B) consult with Parent regarding any such meeting and consider in good faith any input with respect thereto timely provided by Parent and (C) to the extent permitted under applicable Law, provide Parent with an opportunity to attend, or participate in, any such meeting that the Company or any of the Company Subsidiaries has with the FDA or any other Regulatory Authority (*provided* that, if Parent is unable to attend or participate, the Company shall promptly provide Parent with a reasonably detailed written summary of any such meeting); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) (A) if the FDA or any other Regulatory Authority desires to conduct an inspection or audit of the Company or any of the Company Subsidiaries or any of their respective Collaboration Partners, to the extent related to the Company Platform or any Company Product, promptly notify Parent upon the Company becoming aware thereof; (B) to the extent in the Company's or any of the Company Subsidiaries' possession or control, promptly provide Parent with a copy (or detailed written report) of any findings of the FDA or such other Regulatory Authority following any such audit or inspection; and (C) consider Parent's comments regarding any such inspection or audit in good faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company shall promptly post all information required to be disclosed or provided to Parent pursuant to <u>Section</u> <u>6.7(b)</u> to the Data Room to which Parent and its Representatives shall have continuous access through the Closing Date, and any failure by the Company to post and provide continuous access to such information in the Data Room shall be considered a failure by the Company to disclose such information and a breach of <u>Section</u> <u>6.7(b)</u>; provided that any break in the continuity of access not attributable to actions by the Company or its Representatives shall not be deemed a breach of <u>Section</u> <u>6.7(b)</u>. No investigation, notice or disclosure pursuant to <u>Section</u> <u>6.7(b)</u> shall (i) supplement or amend any representation or warranty in this Agreement of the Company (or cure any breach thereof), (ii) supplement or amend the Company Disclosure Letter or (iii) otherwise limit the rights or remedies available hereunder to Parent.

SECTION 6.8. <u>Access to Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) During the Pre-Closing Period, the Company shall, and shall cause the Company Subsidiaries and the Representatives of the Company and the Company Subsidiaries to, (i) afford to Parent, Merger Sub and their respective Representatives reasonable access to its officers, employees, agents, properties, facilities, books, records, Contracts and other assets, and (ii) promptly furnish to Parent, Merger Sub and their respective Representatives copies of all existing financial, operating and other data and information, in each case of the immediately preceding <u>clauses (i)</u> and <u>(ii)</u> of this <u>Section</u> <u>6.8(a)</u> as such Persons may from time to time reasonably request, for any reasonable business purpose in furtherance of the consummation of the Transactions, including for integration planning purposes; *provided* that any such access (including to employees) shall be conducted at Parent's expense, under the supervision of appropriate personnel of the Company or the Company Subsidiaries, at a reasonable time and in such a manner as to not interfere unreasonably with the normal operation of the business of the Company. During the Pre-Closing Period, the Company shall, and shall cause each Company Subsidiary to, use reasonable best efforts to, at the reasonable request of Parent, facilitate site visits by any of Parent, Merger Sub or their respective Representatives at any facility of a Third Party

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contract manufacturer of the Company or any Company Subsidiary. The Company shall instruct its Representatives to cooperate with Parent and Merger Sub in their investigation of the Company and the Company Subsidiaries in accordance with the terms of this <u>Section</u> <u>6.8(a)</u>. No additional investigations or disclosures shall affect the Company's representations and warranties contained herein, or limit or otherwise affect the remedies available to Parent and Merger Sub pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Nothing herein shall require the Company or any Company Subsidiary to disclose any information to (including by way of facilitating site visits by) Parent, Merger Sub or their respective Representatives if such disclosure would, in the Company's reasonable discretion (i) jeopardize any attorney client or other legal privilege (*provided* that the Company will nonetheless provide Parent and the applicable Representatives of Parent with appropriate information regarding the factual basis underlying any circumstances that resulted in the preparation of such privileged analyses so long as such privilege will not be jeopardized thereby) or (ii) contravene any applicable Law, fiduciary duty or binding agreement entered into prior to the date hereof, including any confidentiality agreement to which the Company or any Company Subsidiary is a party (*provided* that the Company shall use its reasonable best efforts to obtain the consent of any such agreement's counterparty to such inspection or disclosure). The Company and Parent will each use its reasonable best efforts to make appropriate substitute arrangements to permit reasonable disclosure under circumstances in which the restrictions of the preceding sentence apply. Notwithstanding the foregoing, nothing in this <u>Section</u> <u>6.8</u> shall require the Company nor any Company Subsidiary to disclose any information to Parent, Merger Sub or their respective Representatives if such information relates to the applicable portions of the minutes of the meetings of the Company Board or any committee thereof (including any presentations or other materials prepared by or for the Company Board or such committee thereof) where the Company Board or committee thereof discussed (x) the Transactions, or any similar transaction involving the Company, (y) any Acquisition Proposal or (z) a Company Adverse Recommendation Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The information disclosed pursuant to this <u>Section</u> <u>6.8</u> shall be treated in accordance with the provisions of the Confidentiality Agreement, which shall remain in full force and effect in accordance with its terms.

SECTION 6.9. <u>No Solicitation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At all times during the Pre-Closing Period, the Company shall not, shall cause the Company Subsidiaries not to, and shall not authorize or knowingly permit its or the Company Subsidiaries' respective Representatives to, directly or indirectly (other than with respect to Parent or Merger Sub): (i) solicit, initiate, propose or take any action to knowingly encourage any inquiries or the submission of any proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal or otherwise knowingly facilitate any effort or attempt to make an Acquisition Proposal, (ii) except as otherwise expressly permitted by this <u>Section</u> <u>6.9(a)</u>, enter into, continue or otherwise participate in any discussions or negotiations regarding, furnish to any Person or "group" (as defined under Section 13(d) of the Exchange Act) any non-public information or data relating to, afford access to the business, personnel, properties, assets, books or records of the Company and the Company Subsidiaries in connection with, or otherwise cooperate with any Person with respect to, any Acquisition Proposal or any inquiry,

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proposal or offer that could reasonably be expected to lead to an Acquisition Proposal, (iii) grant any waiver, amendment or release of or under, or fail to enforce, any confidentiality, standstill or similar agreement (or any confidentiality, standstill or similar provision of any other Contract); *<u>provided</u>* that, if the Company Board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable Law, the Company may waive any such standstill or similar provision solely to the extent necessary to permit the applicable Person (if such Person has not been solicited in breach of this <u>Section</u> <u>6.9(a)</u>) to make, on a confidential basis to the Company Board, an Acquisition Proposal, conditioned upon such Person agreeing that the Company shall not be prohibited from providing any information to Parent (including regarding any such Acquisition Proposal) in accordance with, and otherwise complying with, this <u>Section</u> <u>6.9(a)</u>, (iv) enter into any letter of intent, Contract, commitment or agreement in principle with respect to an Acquisition Proposal (other than an Acceptable Confidentiality Agreement) or enter into any Contract or commitment requiring the Company to abandon, terminate or fail to consummate the Transactions, (v) exempt any Person or "group" (as defined under Section 13(d) of the Exchange Act) from the restriction on "business combinations" or any similar provision contained in applicable Takeover Provisions or the Company Charter Documents or grant a waiver under Section 203 of the DGCL or (vi) resolve, propose or agree to do any of the foregoing. Notwithstanding anything in this Agreement to the contrary, if in response to an unsolicited *bona fide* written Acquisition Proposal made by a Person or "group" (as defined under Section 13(d) of the Exchange Act) after the date hereof in circumstances not involving a breach of this <u>Section</u> <u>6.9</u>, the Company Board determines in good faith (after consultation with outside legal counsel and a financial advisor of nationally recognized reputation) that such Acquisition Proposal constitutes, or could reasonably be expected to lead to, a Superior Proposal and, after consultation with outside legal counsel, that the failure to take such action would be inconsistent with the fiduciary duties of the Company Board under applicable Law, then the Company may, at any time prior to obtaining the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement (but in no event after such time), enter into a customary confidentiality agreement (A) containing confidentiality, non-use and other terms that are no less favorable to the Company in the aggregate than those contained in the Confidentiality Agreement and (B) that does not prevent the Company from providing any information to Parent in accordance with this Agreement or otherwise complying with its obligation under this Agreement (an "*Acceptable Confidentiality Agreement*") with such Person or "group" (as defined under Section 13(d) of the Exchange Act) making such an Acquisition Proposal and thereafter (1) furnish information and data with respect to the Company and the Company Subsidiaries and afford access to the business, personnel, properties, assets, books or records of the Company and the Company Subsidiaries, in each case, pursuant to such Acceptable Confidentiality Agreement, and (2) enter into, maintain and participate in discussions or negotiations with, the Person or "group" (as defined under Section 13(d) of the Exchange Act) making such Acquisition Proposal and its Representatives; *provided* that the Company will concurrently provide to Parent any information and data concerning the Company or any Company Subsidiary or access provided to such Person or "group" (as defined under Section 13(d) of the Exchange Act) that was not previously made available to Parent. The Company shall ensure that its Representatives are informed of the provisions of this <u>Section</u> <u>6.9(a)</u>. Without limiting the foregoing, it is agreed that any violation of the foregoing restrictions by any Company Subsidiary or any Representative of the Company or any Company Subsidiary shall be deemed to be a breach of this <u>Section</u> <u>6.9</u> by the Company. The Company shall provide Parent with an accurate and complete copy of any Acceptable Confidentiality Agreement as entered into as contemplated by this <u>Section</u> <u>6.9(a)</u> promptly (and in any event within 24 hours) following the execution thereof and the Company shall not terminate, waive, amend, release or modify any material provision of any Acceptable Confidentiality Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall, as promptly as practicable, and in any event no later than 24 hours after receipt thereof, notify Parent of any Acquisition Proposal or any inquiry, proposal or offer that expressly contemplates or could reasonably be expected to lead to an Acquisition Proposal, which notification shall include (i) a copy of the applicable written Acquisition Proposal, inquiry, proposal or offer (or, if oral, a summary of the material terms and conditions of such Acquisition Proposal, inquiry, proposal or offer) and (ii) the identity of the Person or "group" (as defined under Section 13(d) of the Exchange Act) making such Acquisition Proposal. The Company shall thereafter keep Parent reasonably informed on a reasonably current basis of the status of, or any material developments, discussions or negotiations regarding, any such Acquisition Proposal, or inquiry, proposal or offer that expressly contemplates or could reasonably be expected to lead to an Acquisition Proposal, and the material terms and conditions thereof (including any change in price or form of consideration or other material amendment thereto), including by providing a copy of material documentation and summary of substantive communications (which shall include any proposals or offers) relating thereto that is exchanged between the Person or "group" (as defined under Section 13(d) of the Exchange Act) (or its Representatives) making such Acquisition Proposal and the Company (or its Representatives) within 24 hours after the receipt or delivery thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as expressly permitted by <u>Section</u> <u>6.9(d)</u> or <u>Section</u> <u>6.9(e)</u>, neither the Company Board nor any committee thereof shall (i) (A) withhold, fail to include in (or remove from) the Proxy Statement, withdraw, qualify or modify (or publicly propose or resolve to withhold, fail to include in (or remove from) the Proxy Statement, withdraw, qualify or modify), in a manner adverse to Parent, the Company Recommendation, (B) adopt, approve, recommend, submit to the Stockholders or declare advisable or make any recommendation other than a rejection of (or publicly propose to adopt, approve, recommend, submit to the Stockholders or declare advisable, or make any recommendation other than a rejection of), any Acquisition Proposal, (C) fail to (1) reaffirm the Company Recommendation and (2) recommend against acceptance of a tender or exchange offer by the Stockholders pursuant to Rule 14d-2 under the Exchange Act for outstanding shares of Company Common Stock, in each case, within 10 Business Days after receipt of a written request of Parent following an Acquisition Proposal that has been publicly announced (in the case of <u>clause (1)</u>) or the commencement of such tender offer or exchange offer (in the case of <u>clause (2)</u>); *provided* that the taking of no position or a neutral position by the Company Board in respect of the acceptance of any such tender offer or exchange offer as of the end of such period shall constitute a failure to recommend against acceptance of any such offer, or (D) take any action to exempt any Person (other than Parent or its Subsidiaries) or any action taken by any Person (other than Parent or its Subsidiaries) from any Takeover Provision (any action described in this <u>Section</u> <u>6.9(c)</u> being referred to as a "*Company Adverse Recommendation Change*") or (ii) cause or allow the Company to enter into a Specified Agreement, or resolve or agree to take any such action described in the immediately preceding <u>clause (i)</u> or <u>(ii)</u> of this <u>Section</u> <u>6.9(c)</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything in this Agreement to the contrary, at any time prior to obtaining the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement, the Company Board may effect a Company Adverse Recommendation Change in connection with an Acquisition Proposal or terminate this Agreement to enter into a Specified Agreement, in each case if, and only if, (i) the Company is not in breach of this <u>Section</u> <u>6.9</u> with respect to the Acquisition Proposal that is the subject of such Company Adverse Recommendation Change or Specified Agreement, (ii) the Company Board determines in good faith, after consultation with the Company's outside legal counsel, that the failure to make the Company Adverse Recommendation Change or terminate this Agreement to enter into a Specified Agreement would be inconsistent with the fiduciary duties of the Company Board under applicable Law, (iii) the Company has given Parent written notice of the Company Board's intention to make a Company Adverse Recommendation Change or terminate this Agreement to enter into a Specified Agreement not earlier than 11:59 p.m. New York City time on the fourth Business Day after Parent receives such written notice and (iv) the Company shall have complied with <u>clauses (1)</u> through <u>(5)</u> of this <u>Section</u> <u>6.9(d)</u>, as follows: (1) prior to giving effect to <u>clauses (3)</u> through <u>(5)</u> of this <u>Section</u> <u>6.9(d)</u>, the Company Board shall have determined that such Acquisition Proposal is a Superior Proposal, (2) the Company shall have provided to Parent information with respect to such Acquisition Proposal in accordance with <u>Section</u> <u>6.9(b)</u>, (3) the Company shall have negotiated in good faith with Parent (and caused its Representatives to negotiate with Parent), to the extent that Parent desires to negotiate, during the four Business Day period provided in the foregoing <u>clause (iii)</u> of this <u>Section</u> <u>6.9(d)</u> with respect to such proposed revisions to this Agreement or other proposals made by Parent, if any, so that the Acquisition Proposal would no longer constitute a Superior Proposal, (4) after considering the results of negotiations with Parent and taking into account the proposals made by Parent, if any, after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation, the Company Board shall have determined in good faith that such Acquisition Proposal remains a Superior Proposal, and, after consultation with its outside legal counsel, that the failure to make the Company Adverse Recommendation Change or terminate this Agreement to enter into a Specified Agreement would be inconsistent with the fiduciary duties of the Company Board under applicable Law and (5) if the Company intends to terminate this Agreement to enter into a Specified Agreement, the Company shall only do so in compliance with <u>Section</u> <u>8.1(d)(i)</u>. For clarity, the provisions of this <u>Section</u> <u>6.9(d)</u> shall also apply to any amendment to the financial terms or any other material amendment to any Acquisition Proposal (except that any reference to four Business Days shall instead be three Business Days) or any successive Acquisition Proposals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding anything in this Agreement to the contrary, at any time prior to obtaining the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement, the Company Board may make a Company Adverse Recommendation Change with respect to an Intervening Event, if and only if: (i) the Company Board determines in good faith, after consultation with the Company's outside legal counsel, that the failure to make the Company Adverse Recommendation Change would be inconsistent with the fiduciary duties of the Company Board under applicable Law, (ii) Parent shall have received from the Company written notice not later than 11:59 p.m. New York City time on the fourth Business Day prior to the making of any Company Adverse Recommendation Change, describing the Intervening Event in reasonable detail, (iii) during the fourth Business Day period provided in the foregoing <u>clause (ii)</u>, the Company shall have negotiated in good faith with Parent (and caused its Representatives to negotiate with Parent), to the extent that Parent desires to

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negotiate, with respect to any proposed revisions to this Agreement or other proposals made by Parent, if any, that would obviate the requirement to make a Company Adverse Recommendation Change, and (iv) after considering the results of negotiations with Parent and taking into account the proposals made by Parent, if any, after consultation with its outside legal counsel, the Company Board shall have determined in good faith that the failure to make the Company Adverse Recommendation Change would be inconsistent with the fiduciary duties of the Company Board under applicable Law. For the avoidance of doubt, the provisions of this <u>Section</u> <u>6.9(e)</u> shall also apply to any material change to the facts and circumstances relating to such Intervening Event (except that any reference to four Business Days shall instead be three Business Days).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Nothing in this <u>Section</u> <u>6.9</u> shall prohibit the Company from taking and disclosing a position contemplated by Rule 14d-9 or Rule 14e-2(a) under the Exchange Act or complying with Item 1012(a) of Regulation M-A under the Exchange Act, or making any disclosure that constitutes a "stop, look and listen" communication pursuant to Rule 14d-9(f) under the Exchange Act, and none of the actions described in this <u>Section</u> <u>6.9(f)</u> shall be considered a Company Adverse Recommendation Change; *provided* that this <u>Section</u> <u>6.9(f)</u> shall not permit the Company Board to make a Company Adverse Recommendation Change, except to the extent permitted by <u>Section</u> <u>6.9(d)</u> or <u>Section</u> <u>6.9(e)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company shall, and shall cause the Company Subsidiaries and the Company's and the Company Subsidiaries' respective Representatives to, (i) immediately cease and cause to be terminated any existing solicitations, encouragements, facilitations, discussions or negotiations with any Person or "group" (as defined under Section 13(d) of the Exchange Act) conducted as of or prior to the execution and delivery of this Agreement by the Company, any Company Subsidiary or their respective Representatives with respect to an Acquisition Proposal, (ii) immediately terminate access to any physical or electronic data rooms relating to a possible Acquisition Proposal, and (iii) promptly (but in no event later than two Business Days following the execution of this Agreement) request and use reasonable best efforts to obtain the return from all such Persons, or cause the destruction, of all copies of confidential information previously provided to such Persons by or on behalf of the Company, any Company Subsidiary or their respective Representatives (and all analyses and other materials prepared by or on behalf of such Persons that contain, reflect or analyze such confidential information). The Company shall use its reasonable best efforts to enforce the terms of each confidentiality agreement entered into with any such Person or "group" (as defined under Section 13(d) of the Exchange Act).

SECTION 6.10. <u>Indemnification and Insurance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) After the Effective Time, the Surviving Corporation shall, and Parent shall cause the Surviving Corporation to, fulfill and honor all rights and obligations to indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time (whether asserted or claimed prior to, at or after the Effective Time) by the Company now existing in favor of each Person who is now or has been at any time prior to the date hereof or who becomes prior to the Effective Time an officer or director of the Company or any Company Subsidiary (each an "*Indemnified Party*") as provided in the Company Charter Documents, in each case as in effect on the date hereof, or pursuant to any other Contract in effect on the date hereof and set forth in <u>Section</u> <u>6.10</u> of the Company Disclosure

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Letter, accurate and complete copies of which Contracts have been made available to Parent. Without limiting the foregoing, after the Effective Time, Parent shall cause its Subsidiaries to, indemnify and hold harmless each Indemnified Party, against all claims, losses, liabilities, damages, Judgments, inquiries, fines and reasonable fees, costs and expenses, including attorneys' fees and disbursements, incurred in connection with any claim, action, suit or Proceeding, whether civil, criminal, administrative or investigative (including with respect to matters existing or occurring at or prior to the Effective Time, including this Agreement and the Transactions), arising out of or pertaining to the fact that the Indemnified Party is or was a director or officer of the Company or any Company Subsidiary or is or was serving at the request of Company or any Company Subsidiary as a director or officer of another Person, whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent provided in the Company Charter Documents, as in effect on the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Parent's and the Surviving Corporation's obligations under <u>Section</u> <u>6.10(a)</u> shall continue in full force and effect for a period of six years from the Effective Time; *provided*, *however*, that all rights to indemnification, exculpation and advancement of expenses in respect of any claim asserted or made within such period shall continue until the final disposition of such claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) From the Effective Time until the sixth anniversary of the Closing Date, the Surviving Corporation shall, and Parent shall cause the Surviving Corporation to, maintain officers' and directors' liability insurance in respect of acts or omissions occurring on or prior to the Effective Time covering each such Person currently covered by the Company's officers' and directors' liability insurance policies or provide substitute policies for such Persons currently covered by the Company's officers' and directors' liability insurance policies, in either case, on terms with respect to coverage and amount no less favorable than those of such policies in effect on the date hereof; *provided* that in satisfying its obligation under this <u>Section</u> <u>6.10(c)</u>, the Surviving Corporation shall not be obligated to pay an amount per year in excess of 300% of the last annual premium paid by the Company prior to the date hereof (the "*Maximum Amount*") and if such insurance is unavailable or the premiums for such insurance would at any time exceed the Maximum Amount, then the Surviving Corporation shall cause to be maintained policies of insurance that, in the Surviving Corporation's good faith judgment, provide the maximum coverage available at an annual premium equal to the Maximum Amount. The provisions of the immediately preceding sentence shall be deemed to have been satisfied if prepaid "tail" or "runoff" policies have been obtained by the Company prior to the Effective Time, which policies provide each such Person currently covered by the Company's officers' and directors' liability insurance policies with coverage in an amount not less than the existing coverage and with other terms not less favorable to the insured persons than the existing directors' and officers' liability insurance policies for an aggregate period of six years with respect to claims arising from acts or omissions that occurred on or before the Effective Time, including, in respect of the Transactions; *provided*, *however*, that the amount paid for such prepaid policies does not exceed the Maximum Amount. If such prepaid policies have been obtained by the Company prior to the Effective Time, the Surviving Corporation shall, and Parent shall cause the Surviving Corporation to, maintain such policies in full force and effect for their full term, and continue to honor the obligations thereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The provisions of this <u>Section</u> <u>6.10</u> are (i) intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, their heirs and their representatives and (ii) in addition to, and not in substitution for, any other rights to indemnification or contribution that any such individual may have under any certificate of incorporation or bylaws, by contract or otherwise. The obligations of Parent and the Surviving Corporation under this <u>Section</u> <u>6.10</u> shall survive the consummation of the Merger and shall not be terminated or modified in such a manner as to adversely affect any Indemnified Party to whom this <u>Section</u> <u>6.10</u> applies without the consent of such affected Indemnified Party (it being expressly agreed that the Indemnified Party to whom this <u>Section</u> <u>6.10</u> applies shall be third party beneficiaries of this <u>Section</u> <u>6.10</u>, each of whom may enforce the provisions of this <u>Section</u> <u>6.10</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In the event that the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all its properties and assets to any Person, or if Parent dissolves the Surviving Corporation, then, and in each such case, Parent shall cause proper provision to be made so that the successors and assigns of the Surviving Corporation assume the obligations set forth in this <u>Section</u> <u>6.10</u>.

SECTION 6.11. <u>Section 16 Matters</u>. Prior to the Effective Time, the Company and the Company Board shall take all such steps as may be required to cause any dispositions of equity securities of the Company (including derivative securities) in connection with this Agreement by each Company director or officer who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company's equity securities to be exempt under Rule 16b-3 under the Exchange Act.

SECTION 6.12. <u>Transaction Litigation</u>. The Company shall promptly (and in any event within two Business Days) advise Parent in writing upon becoming aware of any Transaction Litigation and shall keep Parent informed on a reasonably prompt basis regarding any such Transaction Litigation. The Company shall give Parent the opportunity to (a) participate in the defense, prosecution, settlement or compromise of any Transaction Litigation, and (b) consult with counsel to the Company regarding the defense, prosecution, settlement or compromise with respect to any such Transaction Litigation. For purposes of this <u>Section</u> <u>6.12</u>, "participate" means that Parent will be kept reasonably apprised on a reasonably prompt basis of proposed strategy and other significant decisions with respect to the Transaction Litigation (to the extent that the attorney-client privilege between the Company and its counsel is not undermined or otherwise adversely affected), and Parent may offer comments or suggestions with respect to such Transaction Litigation which the Company shall consider in good faith; *provided* that the Company shall not settle or compromise or agree to settle or compromise any Transaction Litigation without Parent's prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), and the Company shall not file any supplemental disclosures to moot or otherwise address the claims in any Proceeding without giving Parent the opportunity to offer comments or suggestions with respect thereto which the Company shall consider in good faith.

SECTION 6.13. <u>Deregistration; Stock Exchange Delisting</u>. Prior to the Effective Time, the Company shall cooperate with Parent and use its reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, necessary, proper or advisable on its part under applicable Law and rules and policies of Nasdaq to cause the delisting of the Company and of the Company Common Stock from Nasdaq as promptly as practicable after the Effective

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Time and deregistration of the Company Common Stock under the Exchange Act as promptly as practicable after such delisting, and in any event no more than 10 days after the Closing Date, which shall include providing Parent with substantially final drafts of any quarterly or annual periodic reports which the Company would be required to file pursuant to the Exchange Act during the 10 days after the Closing Date. The Company shall not cause the Company Common Stock to be delisted from Nasdaq prior to the Effective Time.

SECTION 6.14. <u>Takeover Provisions</u>. If any Takeover Provision becomes or is deemed to be applicable to the Company, Parent, Merger Sub, the Merger or any other Transaction, then each of the Company, Parent, Merger Sub, and their respective Boards of Directors shall grant such approvals and take such actions as are necessary so that the Transactions may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to render such Takeover Provision inapplicable to the foregoing.

SECTION 6.15. <u>Obligations of Merger Sub</u>. Parent shall cause Merger Sub to comply in all respects with each of the representations, warranties, covenants, obligations, agreements and undertakings made or required to be performed by Merger Sub in accordance with the terms of this Agreement, the Merger, and the other transactions contemplated by this Agreement.

SECTION 6.16. <u>Merger Sub Stockholder Consent</u>. Promptly following the execution of this Agreement, Parent shall execute and deliver, in accordance with Section 228 of the DGCL and in its capacity as the sole stockholder of Merger Sub, a written consent adopting this Agreement.

SECTION 6.17. <u>Certain Pre-Closing Actions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall use reasonable best efforts to deliver all notices and take all other actions that are required to terminate, in accordance with the terms thereof, the Common Stock Sales Agreement, dated as of August 9, 2024, between the Company and TD Securities (USA) LLC, prior to the Effective Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall take the actions set forth on <u>Section</u> <u>6.17(b)</u> of the Company Disclosure Letter.

SECTION 6.18. <u>Tax Matters</u>. Prior to the Effective Time, the Company shall reasonably cooperate with Parent if Parent undertakes a study to determine whether or not one or more Persons are in "control" (within the meaning of Section 304(c) of the Code) of both the Company and Parent.

SECTION 6.19. <u>Spin-Off Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On the terms and subject to the conditions of the Spin-Off Agreements and this Agreement and to compliance with applicable Law, immediately prior to the Closing, the Company will consummate, to the extent not previously consummated, the transactions contemplated as part of the Pre-Closing Reorganization (as such term is defined in the Separation and Distribution Agreement) and, unless the condition in <u>Section</u> <u>7.1(e)(ii)</u> has previously been satisfied, the Company will consummate the Spin-Off Distribution.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without limiting the foregoing, the Company will cause each condition set forth in Section 7.1 of the Separation and Distribution Agreement and, unless the condition in <u>Section</u> <u>7.1(e)(ii)</u> has previously been satisfied, in <u>Section</u> <u>7.1(d)</u> of this Agreement to be satisfied as promptly as practicable following the date hereof, including by preparing and (as may be determined by the Company) confidentially submitting or filing with the SEC, a registration statement on Form 10 (or Form S-1 if the Company so determines after consultation with Parent) (together with any amendments, supplements, prospectuses or information statements in connection therewith, the "*Spin-Off Registration Statement*") to register the common stock of SpinCo to be issued or retained in the Spin-Off, which the Company will use reasonable best efforts to submit or file with the SEC within 60 days after the date of this Agreement, and which will be submitted or filed with the SEC within 90 days after the date of this Agreement or such other date as is mutually agreed by the parties. The Company will (i) timely provide drafts of the Spin-Off Registration Statement (and any amendments or supplements thereto) to Parent for review and comment (which comments will be considered by the Company in good faith) and (ii) give Parent and its counsel a reasonable opportunity to review and comment on such drafts. Following such initial submission or filing of the Spin-Off Registration Statement, the Company shall use its reasonable best efforts to respond to all comments from the staff of the SEC and file all necessary amendments to the Spin-Off Registration Statement as promptly as possible following receipt of such comments and shall use its reasonable best efforts to have the Spin-Off Registration Statement declared effective as promptly as practicable. The Company shall promptly notify Parent upon the receipt of any comments (written or oral) from the SEC or its staff or any request from the SEC or its staff for amendments or supplements to the Spin-Off Registration Statement and shall furnish to Parent a copy of any written comments from the SEC or its staff. The Company will seek effectiveness of the Spin-Off Registration Statement as promptly as possible following resolution of the SEC staff's comments, and thereafter will use reasonable best efforts to maintain the effectiveness of the Spin-Off Registration Statement. The Company shall promptly notify Parent of the time when the Spin-Off Registration Statement has become effective and the issuance of any stop order or similar Proceeding under the Exchange Act or suspension of the qualification of the shares of SpinCo common stock issuable in the Spin-Off for offer or sale in any jurisdiction. As promptly as practicable after effectiveness of the Spin-Off Registration Statement, the Company shall cause the information statement and/or prospectus, as applicable, relating to the Spin-Off Distribution to be mailed or made available to Stockholders. Each of the Company and Parent will cooperate reasonably with each other, and will cause their respective Affiliates to so cooperate, to effectuate the Spin-Off. If, at any time prior to the Spin-Off, any information relating to the Company, Parent, SpinCo or any of their respective Affiliates, officers or directors is discovered by the Company or Parent that should be set forth in an amendment or supplement to the Spin-Off Registration Statement so that the Spin-Off Registration Statement does not contain any untrue statement of any material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading, the party that discovers such information shall promptly notify the other party and correct such information, and the Company shall file an appropriate amendment or supplement describing such information with the SEC and, to the extent required by applicable Law, disseminate such information to the Stockholders. Neither the Company nor any Company Subsidiary will amend, modify or supplement, or agree to amend, modify or supplement, any Spin-Off Agreement without the prior written consent of Parent. The Company shall use reasonable best efforts to cause Nasdaq to list the common stock of SpinCo prior to the Distribution Effective Time (as defined in the Separation and Distribution Agreement). This <u>Section</u> <u>6.19(b)</u> shall not apply if the condition set forth in <u>Section</u> <u>7.1(e)(ii)</u> has previously been satisfied.

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ARTICLE 7

CONDITIONS

SECTION 7.1. <u>Conditions to Each Party</u><u>'</u><u>s Obligation to Effect the Merger</u>. The respective obligations of each party to effect the Merger are subject to the satisfaction or, to the extent permitted by applicable Law, waiver on or prior to the Closing Date of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Requisite Company Vote</u>. This Agreement and the Separation and Distribution Agreement will have been duly adopted by Stockholders constituting the Requisite Company Vote in accordance with applicable Law and the Company Charter Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>No Injunctions or Restraints</u>. No Judgment preventing the consummation of the Merger shall have been issued by any Governmental Authority of competent jurisdiction and remain in effect, and there shall not be any Law enacted or deemed applicable to the Merger by any Governmental Authority of competent jurisdiction that makes consummation of the Merger illegal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Antitrust Approval</u>. Any waiting period (and any extension thereof entered into in compliance with this Agreement, including under any agreement between a party and a Governmental Authority agreeing not to consummate the Merger prior to a certain date entered into in compliance with this Agreement) applicable to the consummation of the Merger under the HSR Act shall have been terminated or shall have expired. No matter described in item 2 of Schedule I shall have occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Registration</u>. Unless the condition set forth in <u>Section</u> <u>7.1(e)(ii)</u> has been satisfied, the Spin-Off Registration Statement shall have become effective under the Exchange Act and will not be subject of any stop order or similar Proceeding under the Exchange Act and no Proceeding for that purpose will have been initiated or overtly threatened by the SEC and not concluded or withdrawn.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>The Spin-Off or Permitted Third Party Sale</u>. Either (i) the Spin-Off Distribution and the Pre-Closing Reorganization (as such term is defined in the Spin-Off Agreements) shall have been completed in accordance with the terms of Spin-Off Agreements, or (ii) a Permitted Third Party Sale shall have been consummated in accordance with definitive agreements entered into for such Permitted Third Party Sale, in the case of this <u>Section</u> <u>7.1(e)(ii)</u>, with the prior written consent of Parent, not to be unreasonably withheld, conditioned or delayed.

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SECTION 7.2. <u>Additional Conditions to Obligations of Parent and Merger Sub to Effect the Merger</u>. The obligations of Parent and Merger Sub to effect the Merger are subject to the satisfaction or, to the extent permitted by applicable Law, waiver on or prior to the Closing Date of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Antitrust Proceedings</u>. No matter described in item 1 of <u>Schedule I</u> shall have occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Representations and Warranties</u>. (i) The representations and warranties of the Company set forth in <u>Section</u> <u>4.1</u> (other than <u>clause (c)</u> in the first sentence therein), the third and fourth sentences of <u>Section</u> <u>4.2(a),</u> <u>Section</u> <u>4.3(a)</u>, <u>Section</u> <u>4.3(b)</u><u>(i)</u>, <u>Section</u> <u>4.4</u> (other than <u>clause (iii)</u> in the second sentence of <u>Section</u> <u>4.4(a)</u>), <u>Section</u> <u>4.10</u>, <u>Section</u> <u>4.13</u>, <u>Section</u> <u>4.16(p)</u>, <u>Section</u> <u>4.19(e)</u>, <u>Section</u> <u>4.19(g)(i)</u> and <u>(ii)</u>, <u>Section</u> <u>4.19(h)</u>, <u>Section</u> <u>4.24</u>, <u>Section</u> <u>4.29(a)</u> and <u>Section</u> <u>4.30</u> shall be true and correct (without giving effect to any limitation on any representation or warranty indicated by the words "Company Material Adverse Effect," "in all material respects," "in any material respect," "material" or "materially") in all material respects as of the date hereof and as of the Closing Date as though made on and as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), (ii) the representations and warranties of the Company set forth in <u>Section</u> <u>4.2</u> (other than the third and fourth sentences of <u>Section</u> <u>4.2(a)</u>) shall be true and correct in all respects (other than *de minimis* inaccuracies) as of the date hereof and as of the Closing Date as though made on and as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), (iii) the representations and warranties of the Company set forth in <u>Section</u> <u>4.7(a)</u> shall be true and correct in all respects as of the date hereof and as of the Closing Date as though made on and as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), or (iv) the other representations and warranties of the Company set forth in this Agreement (other than those listed in the preceding <u>clause</u> <u>(i)</u>, <u>clause (ii)</u>, or <u>clause (iii)</u>) shall be true and correct (without giving effect to any limitation on any representation or warranty indicated by the words "Company Material Adverse Effect," "in all material respects," "in any material respect," "material" or "materially") as of the date hereof and as of the Closing Date as though made on and as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except, in the case of this <u>clause (iv)</u>, where the failure of any such representations and warranties to be so true and correct would not, and would not be reasonably expected to, have, individually or in the aggregate, a Company Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Performance of Obligations of the Company</u>. The Company shall have performed or complied with in all material respects all obligations, agreements and covenants required to be performed or complied with by it under this Agreement prior to the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>No Company Material Adverse Effect</u>. Since the date hereof, there shall not have occurred any Effect that has had, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Closing Certificate</u>. Parent shall have received a certificate signed on behalf of the Company by the chief executive officer or chief financial officer of the Company, dated as of the Closing Date, to the effect that the conditions in <u>Section</u> <u>7.2(b)</u>, <u>Section</u> <u>7.2(c)</u> and <u>Section</u> <u>7.2(d)</u> have been satisfied.

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SECTION 7.3. <u>Additional Conditions to the Company</u><u>'</u><u>s Obligations to Effect the Merger</u>. The obligations of the Company to effect the Merger are subject to the satisfaction or, to the extent permitted by applicable Law, waiver on or prior to the Closing Date of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Representations and Warranties</u>. (i) The representations and warranties of Parent and Merger Sub set forth in <u>Section</u> <u>5.1</u>, <u>Section</u> <u>5.3(a)</u>, <u>Section</u> <u>5.3(b)(i)</u> and <u>Section</u> <u>5.8</u> shall be true and correct in all material respects as of the date hereof and as of the Closing Date as though made on and as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), and (ii) each other representation and warranty of Parent and Merger Sub set forth in this Agreement (other than those listed in the preceding <u>clause</u> <u>(i)</u>) shall be true and correct (without giving effect to any limitation on any representation or warranty indicated by the words "Parent Material Adverse Effect," "in all material respects," "in any material respect," "material" or "materially") as of the date hereof and as of the Closing Date as though made on and as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except, in the case of this <u>clause</u> <u>(ii)</u>, where the failure of any such representations and warranties to be so true and correct would not, and would not be reasonably expected to, have, individually or in the aggregate, a Parent Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Performance of Obligations of Parent</u>. Parent shall have performed or complied in all material respects with all of the obligations, agreements and covenants required to be performed or complied with by it under this Agreement prior to the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Closing Certificate</u>. The Company shall have received a certificate signed on behalf of Parent, dated as of the Closing Date, by an authorized representative of Parent to the effect that each of the conditions in <u>Section</u> <u>7.3(a)</u> and <u>Section</u> <u>7.3(b)</u> have been satisfied.

SECTION 7.4. <u>Frustration of Closing Conditions</u>. No party may rely on the failure of any condition set forth in <u>Article 7</u> to be satisfied if such failure was caused by such party's failure to act in good faith or use its reasonable best efforts to consummate the transactions contemplated by this Agreement.

ARTICLE 8

TERMINATION

SECTION 8.1. <u>Termination</u>. This Agreement may be terminated, and the Transactions may be abandoned at any time prior to the Effective Time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by mutual written consent of Parent and the Company at any time prior to the Effective Time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by either the Company or Parent by written notice to the other, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Effective Time shall not have occurred on or prior to 5:00 p.m. New York City time on July 27, 2026 (as it may be extended pursuant to the following proviso, the "*Outside Date*"); *provided* that the Outside Date shall be automatically extended for one additional period of three months, ending no later than 5:00 p.m. New York City time on October 26, 2026, in the event that as of the then-scheduled Outside Date all of the

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conditions in <u>Section</u> <u>7.1</u> (other than the Antitrust and Judgment/Illegality Conditions in each case solely in respect of the HSR Act or applicable pursuant to <u>Schedule I</u> of this Agreement, or the conditions set forth in <u>Section</u> <u>7.1(a)</u>, <u>Section</u> <u>7.1(d)</u> or <u>Section</u> <u>7.1(e)</u>) have been satisfied or waived by Parent or Merger Sub, to the extent waivable by Parent or Merger Sub (other than conditions that by their nature are to be satisfied at Closing, each of which is then capable of being satisfied); *provided further* that the right to terminate this Agreement pursuant to this <u>Section</u> <u>8.1(b)(i)</u> shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the primary cause of, or resulted in, the failure of the Effective Time to have occurred on or prior to the Outside Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any final, non-appealable Judgment preventing the consummation of the Merger shall have been issued by any Governmental Authority of competent jurisdiction and remain in effect, or there shall be any Law enacted or deemed applicable to the Merger by any Governmental Authority of competent jurisdiction that makes consummation of the Merger permanently illegal; *provided* that the right to terminate this Agreement pursuant to this <u>Section</u> <u>8.1(b)(ii)</u> shall not be available to any party if the Judgment or Law preventing or making permanently illegal the consummation of the Merger under this <u>Section</u> <u>8.1(b)(ii)</u> was primarily caused by or the result of the failure of such party to perform any of its obligations under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by Parent by written notice to the Company at any time prior to the Effective Time, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time prior to obtaining the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement, a Company Adverse Recommendation Change shall have occurred; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause the conditions in either of <u>Section</u> <u>7.2(b)</u> or <u>Section</u> <u>7.2(c)</u>, as applicable, not to be satisfied; *provided* that, for purposes of this <u>Section</u> <u>8.1(c)(ii)</u>, if such a breach is curable by the Company within the earlier of the Outside Date and 20 Business Days after the date Parent gives the Company notice of such breach, then Parent may not terminate this Agreement under this <u>Section</u> <u>8.1(c)(ii)</u> on account of such breach unless such breach shall remain uncured upon the earlier of the Outside Date and the expiration of such 20 Business Day period; *provided further* that Parent shall not be entitled to terminate this Agreement pursuant to this <u>Section</u> <u>8.1(c)(ii)</u> if either Parent or Merger Sub is in breach of its obligations under this Agreement such that the Company would be entitled to terminate this Agreement pursuant to <u>Section</u> <u>8.1(d)(ii)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by the Company by written notice to Parent at any time prior to the Effective Time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time prior to obtaining the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement, in order to accept a Superior Proposal and enter into the Specified Agreement relating to such Superior Proposal, if (A) such Superior

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Proposal shall not have resulted from any breach of <u>Section</u> <u>6.9</u> with respect to such Superior Proposal and any Acquisition Proposal that was a precursor thereto, (B) the Company Board, after satisfying all of the requirements set forth in <u>Section</u> <u>6.9(d)</u>, shall have authorized the Company to enter into a binding written definitive acquisition agreement providing for the consummation of a transaction constituting a Superior Proposal (a "*Specified Agreement*") and (C) the Company shall have paid the Termination Fee, and have entered into the Specified Agreement, substantially concurrently with the termination of this Agreement pursuant to this <u>Section</u> <u>8.1(d)(i)</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of Parent or Merger Sub set forth in this Agreement shall have occurred, which breach or failure to perform has a Parent Material Adverse Effect; *provided* that, for purposes of this <u>Section</u> <u>8.1(d)(ii)</u>, if such a breach is curable by Parent within the earlier of the Outside Date and 20 Business Days after the date the Company gives Parent notice of such breach, then the Company may not terminate this Agreement under this <u>Section</u> <u>8.1(d)(ii)</u> on account of such breach unless such breach shall remain uncured upon the earlier of the Outside Date and the expiration of such 20 Business Day period; *provided further* that the Company shall not be entitled to terminate this Agreement pursuant to this <u>Section</u> <u>8.1(d)(ii)</u> if the Company is in breach of its obligations under this Agreement such that Parent would be entitled to terminate this Agreement pursuant to <u>Section</u> <u>8.1(c)(i)</u> or <u>Section</u> <u>8.1(c)(ii)</u>.

Any written notice of termination pursuant to this <u>Section</u> <u>8.1</u> shall specify the provision of this <u>Section</u> <u>8.1</u> pursuant to which such termination is intended to be effected and, if such termination is pursuant to <u>Section</u> <u>8.1(c)(i)</u>, <u>Section</u> <u>8.1(c)(ii)</u> or <u>Section</u> <u>8.1(d)(ii)</u>, shall specify the nature of the breach in reasonable detail (whether or not curable).

SECTION 8.2. <u>Effect of Termination</u>. If terminated pursuant to <u>Section</u> <u>8.1</u>, this Agreement shall be of no further force or effect without liability of any party (or any stockholder or Representative of such party) to any other party; *provided* that the provisions of this <u>Section</u> <u>8.2</u>, <u>Section</u> <u>6.8(c)</u>, <u>Section</u> <u>8.3</u> and <u>Article 9</u> (and any related definitions contained in any such Section) shall survive any termination hereof pursuant to <u>Section</u> <u>8.1</u>. Notwithstanding the foregoing or any other provision of this Agreement to the contrary, none of Parent, Merger Sub or the Company shall be relieved or released from any liabilities or damages (which, in the case of liabilities or damages payable by Parent and Merger Sub, the parties acknowledge and agree may include, to the fullest extent permitted by Section 261(a)(1) of the DGCL, amounts representing, or based on the loss of, any premium or other economic entitlement the Stockholders would be entitled to receive under this Agreement if the Closing were to occur in accordance with the terms of this Agreement, which shall be deemed in such event to be damages of the Company) arising out of any common law fraud or Willful Breach of any provision of this Agreement or any other agreement delivered in connection herewith. For purposes of this Agreement, "*Willful Breach*" means an intentional and willful material breach, or an intentional and willful material failure to perform, in each case, that is the consequence of an act or omission by a party with the knowledge that the taking of such act or failure to take such act would cause a breach of this Agreement. The Confidentiality Agreement shall survive the termination of this Agreement and shall remain in full force and effect in accordance with its terms.

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SECTION 8.3. <u>Termination Fees and Expenses</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as otherwise set forth in this <u>Section</u> <u>8.3</u>, all Expenses incurred in connection with this Agreement and the Transactions shall be paid by the party incurring such Expenses, whether or not the Transactions are consummated; *provided* that Parent shall pay all filing fees required in connection with the Merger pursuant to the HSR Act or applicable pursuant to <u>Schedule I</u> to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) this Agreement is terminated by Parent pursuant to <u>Section</u> <u>8.1(c)(i)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) this Agreement is terminated by the Company pursuant to <u>Section</u> <u>8.1(d)(i)</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) (A) this Agreement is terminated by Parent or the Company pursuant to <u>Section</u> <u>8.1(b)(i)</u> or by Parent pursuant to <u>Section</u> <u>8.1(c)(ii)</u>, (B) after the date hereof, an Acquisition Proposal shall have been made to the Company or shall have been publicly made directly to the Stockholders or otherwise shall have been publicly disclosed and, in each case, not withdrawn (in the case of an Acquisition Proposal that has been communicated to the Stockholders or that shall have been publicly disclosed, publicly withdrawn) prior to the date of such termination, and (C) (1) the Company or any Company Subsidiary consummates such Acquisition Proposal within 12 months after such termination or (2) enters into a definitive agreement to effect such Acquisition Proposal within 12 months after such termination (in each case under this <u>clause (C)</u>, replacing "20%" in the definition of Acquisition Proposal with "50%");

then, in any such event under <u>clause (i)</u>, <u>(ii)</u> or <u>(iii)</u> of this <u>Section</u> <u>8.3(b)</u>, the Company shall pay to Parent, in cash at the time specified in the next sentence, a nonrefundable termination fee of $450,000,000 (the "*Termination Fee*"). Any payment of the Termination Fee required to be made pursuant to: (1) <u>Section</u> <u>8.3(b)(i)</u> shall be made to Parent within one Business Day after termination of this Agreement by Parent as set forth in <u>Section</u> <u>8.3(b)(i)</u>; (2) <u>Section</u> <u>8.3(b)(ii)</u> shall be made to Parent at the time set forth in <u>Section</u> <u>8.1(d)(i)</u>; and (3) <u>Section</u> <u>8.3(b)(iii)</u> shall be made to Parent concurrently with the occurrence of the applicable event described in <u>clause (C)</u> of <u>Section</u> <u>8.3(b)(iii)</u>. All payments under this <u>Section</u> <u>8.3(b)</u> shall be made by wire transfer of immediately available funds to an account to be designated by Parent. Except in the case of common law fraud or a Willful Breach, in the event that Parent receives full payment pursuant to this <u>Section</u> <u>8.3(b)</u> following the termination of this Agreement, receipt of the Termination Fee shall be deemed to be liquidated damages for any and all losses or damages suffered or incurred by Parent, Merger Sub, any of their respective Affiliates or any other Person in connection with this Agreement (and the termination hereof), the Transactions (and the abandonment thereof) or any matter forming the basis for such termination, and none of Parent, Merger Sub, any of their respective Affiliates or any other Person shall be entitled to bring or maintain any claim, action or Proceeding against the Company or any of its Affiliates for damages or any equitable relief arising out of or in connection

------

with this Agreement, any of the Transactions or any matters forming the basis for such termination. Notwithstanding the foregoing, nothing in this <u>Section</u> <u>8.3(b)</u> shall prevent, limit or otherwise restrict the right of Parent and Merger Sub to bring or maintain any claims arising out of the Company's common law fraud or Willful Breach of any provision of this Agreement or any other agreement or certificate delivered in connection herewith and any Termination Fee paid to Parent hereunder will be offset against any award for damages given to Parent pursuant to any claim for fraud or Willful Breach. For the avoidance of doubt, any payment made by the Company under this <u>Section</u> <u>8.3(b)</u> shall be payable only once with respect to this <u>Section</u> <u>8.3(b)</u> and not in duplication even though such payment may be payable under one or more provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) this Agreement is terminated by either Parent or the Company pursuant to <u>Section</u> <u>8.1(b)(ii)</u> as the result of a Judgment or Law imposed by any Governmental Authority having jurisdiction under any Antitrust Laws, in each case, solely to the extent such Judgment arises under any Antitrust Laws or such Law is an Antitrust Law; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) this Agreement is terminated by either Parent or the Company pursuant to <u>Section</u> <u>8.1(b)(i)</u> and (A) any of the Antitrust and Judgment/Illegality Conditions is not satisfied (as the result of a Judgment or Law imposed by any Governmental Authority having jurisdiction under any Antitrust Laws and, in each case, solely to the extent such Judgment arises under any Antitrust Laws or such Law is an Antitrust Law) and (B) all of the other conditions set forth in <u>Article 7</u> (other than the conditions that are by their nature to be satisfied at Closing) have been satisfied or waived (to the extent waivable);

then, in any such event under <u>clause (i)</u> or <u>(ii)</u> of this <u>Section</u> <u>8.3(c)</u>, Parent shall promptly, but in no event later than two Business Days after such termination, pay or cause to be paid to the Company, in cash, a nonrefundable termination fee of $600,000,000 (the "*Reverse Termination Fee*"). All payments under this <u>Section</u> <u>8.3(c)</u> shall be made by wire transfer of immediately available funds to an account to be designated by the Company. In the event that the Company receives full payment pursuant to this <u>Section</u> <u>8.3(c)</u> following the termination of this Agreement, receipt of the Reverse Termination Fee shall be deemed to be liquidated damages for any and all losses or damages suffered or incurred by the Company, its Affiliates or any other Person in connection with this Agreement (and the termination hereof), the Transactions (and the abandonment thereof) or any matter forming the basis for such termination, and none of the Company nor any of its Affiliates or any other Person shall be entitled to bring or maintain any claim, action or Proceeding against Parent, Merger Sub or any of their respective Affiliates or any of their respective Representatives for damages or any equitable relief arising out of or in connection with this Agreement, any of the Transactions or any matters forming the basis for such termination. Notwithstanding the foregoing, nothing in this <u>Section</u> <u>8.3(c)</u> shall prevent, limit or otherwise restrict the right of the Company to bring or maintain any claims arising out of Parent's or Merger Sub's common law fraud or Willful Breach of any provision of this Agreement and any Reverse Termination Fee paid to the Company hereunder will be offset against any award for damages given to the Company pursuant to any claim for fraud or Willful Breach. For the avoidance of doubt, any payment made by Parent under this <u>Section</u> <u>8.3(c)</u> shall be payable only once with respect to this <u>Section</u> <u>8.3(c)</u> and not in duplication even though such payment may be payable under one or more provisions hereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company and Parent acknowledge that the agreements contained in <u>Section</u> <u>8.3(b)</u> and <u>Section</u> <u>8.3(c)</u> are an integral part of the Transactions, and that, without those agreements, the Company, Parent and Merger Sub would not enter into this Agreement. Accordingly, (i) if the Company fails to make payment of any amount payable under <u>Section</u> <u>8.3(b)</u> within the applicable time period specified in <u>Section</u> <u>8.3(b)</u>, as the case may be, and Parent commences a Proceeding to collect such amount that results in a judgment against the Company, the Company shall reimburse Parent for its fees and expenses (including reasonable attorneys' fees and expenses) incurred in connection with such Proceeding and shall pay interest on the amount of the payment at the prime rate as published in *The Wall Street Journal* in effect on the date the amount was payable pursuant to <u>Section</u> <u>8.3(b)</u>, with such interest to accrue beginning on the date such amount first was payable pursuant to <u>Section</u> <u>8.3(b)</u>, to the date of payment; and (ii) if Parent fails to make payment of any amount payable under <u>Section</u> <u>8.3(c)</u> within the applicable time period specified in <u>Section</u> <u>8.3(c)</u>, as the case may be, and the Company commences a Proceeding to collect such amount that results in a judgment against Parent, Parent shall reimburse the Company for its reasonable and documented fees and expenses (including reasonable and documented attorneys' fees and expenses) incurred in connection with such Proceeding and shall pay interest on the amount of the payment at the prime rate as published in *The Wall Street Journal* in effect on the date the amount was payable pursuant to <u>Section</u> <u>8.3(c)</u>, with such interest to accrue beginning on the date such amount first was payable pursuant to <u>Section</u> <u>8.3(c)</u>, to the date of payment.

ARTICLE 9

GENERAL PROVISIONS

SECTION 9.1. <u>Notices</u>. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given and received (a) upon receipt, if delivered personally, (b) two Business Days after deposit in the mail, if sent by registered or certified mail, (c) on the next Business Day after deposit with an overnight courier, if sent by overnight courier, (d) upon transmission, if sent by email transmission and no "bounce back" or similar message of non-delivery is received with respect thereto; *provided* that the notice or other communication is sent to the address or email address set forth beneath the name of such party below (or to such other address or email address as such party shall have specified in a written notice to the other parties):

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if to Parent or Merger Sub (or, following the Effective Time, the Surviving Corporation):

Novartis AG

c/o Novartis International AG

Lichtstrasse 35

4056 Basel

Switzerland

Attention: [\*\*\*]

[\*\*\*]

Email: [\*\*\*]

[\*\*\*]

with a copy to (which shall not constitute notice):

Covington & Burling LLP

One CityCenter

850 Tenth Street, NW

Washington, DC 20001

Attention: Catherine J. Dargan

Michael J. Riella

Alicia Zhang

Email: cdargan@cov.com

mriella@cov.com

azhang@cov.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if to the Company (prior to the Effective Time):

Avidity Biosciences, Inc.

3020 Callan Road

San Diego, CA 92121

Attention: [\*\*\*]

Email: [\*\*\*]

with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP

200 Clarendon Street

Boston, MA 02116

Attention: Graham Robinson

Laura Knoll

Merric Kaufman

Greg Schuster

Email: graham.robinson@kirkland.com

laura.knoll@kirkland.com

merric.kaufman@kirkland.com

greg.schuster@kirkland.com

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SECTION 9.2. <u>Amendments and Waivers</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any provision of this Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective; *provided* that, after the Requisite Company Vote to approve the adoption of this Agreement and the Separation and Distribution Agreement is obtained, if any amendment requires further approval of the Stockholders under applicable Law, the effectiveness of such amendment shall be subject to such approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No failure or delay by any party in exercising any right, power, remedy or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege.

SECTION 9.3. <u>Representations and Warranties</u>. The representations and warranties contained in this Agreement or in any certificate or other writing delivered pursuant hereto shall not survive the Effective Time.

SECTION 9.4. <u>Governing Law; Jurisdiction</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by, and construed in accordance with, and all disputes arising out of or in connection with this Agreement or the Transactions shall be resolved under, the Law of the State of Delaware regardless of the Law that might otherwise govern under applicable principles of conflicts of laws thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The parties agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the Transactions (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties irrevocably consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) (the "*Delaware Courts*") in any such suit, action or proceeding and irrevocably and unconditionally waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in <u>Section</u> <u>9.1</u> shall be deemed effective service of process on such party.

SECTION 9.5. <u>WAIVER OF JURY TRIAL</u>. EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS.

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SECTION 9.6. <u>Counterparts; Effectiveness</u>. This Agreement may be executed (including by means of electronic signature) in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. The authorized release of executed signature pages to this Agreement by or on behalf of each party (in counterparts or otherwise) by email (in .pdf or .tiff format) shall be sufficient to bind the parties to the terms and conditions of this Agreement.

SECTION 9.7. <u>Assignment; Third Party Beneficiaries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. No party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party, except that Parent or Merger Sub may transfer or assign, in whole or in part, (i) its rights and obligations under this Agreement to any of its Affiliates and (ii) after the Effective Time, its rights and obligations under this Agreement to any Person; *provided* that such transfer or assignment shall not relieve Parent or Merger Sub of its obligations hereunder or enlarge, alter or change any obligation of any other party or due to Parent or Merger Sub and shall not result in additional withholding or deduction of, or any additional requirement to withhold or deduct, any amount of Tax pursuant to <u>Section</u> <u>3.7</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties or their respective heirs, successors, executors, administrators and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except for (i) the provisions of <u>Section</u> <u>6.10</u> with respect to the Indemnified Parties and (ii) if the Effective Time occurs, the right of the Stockholders to receive the Merger Consideration in accordance with the terms of this Agreement, the right of the holders of Company Stock Options to receive the payments contemplated by <u>Section</u> <u>3.4(a)</u>, the rights of the holders of Company RSUs to receive the payments contemplated by <u>Section</u> <u>3.4(b)</u>, and the right of participants in the ESPP to receive the applicable treatment pursuant to <u>Section</u> <u>3.5</u>, in each case which shall inure to the benefit of such Persons or holders, as applicable, benefiting therefrom who shall be third-party beneficiaries thereof and who may enforce the covenants contained therein. The representations and warranties in this Agreement are the product of negotiations among the parties. Any inaccuracies in such representations and warranties are subject to waiver by the parties in accordance with <u>Section</u> <u>9.2</u> without notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties of risks associated with particular matters regardless of the knowledge of any of the parties. Consequently, Persons other than the parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date hereof or as of any other date. The parties agree that the Company shall have the right, on its own behalf and, in accordance with and to the fullest extent permitted by Section 261(a)(2) of the DGCL, as representative on behalf of the Stockholders and the holders of Company Equity Awards to pursue specific performance as set forth in <u>Section</u> <u>9.10</u> or damages to the fullest extent permitted by Section 261(a)(1) of the DGCL. For the avoidance of doubt, (x) only the Company (and not the Stockholders or the holders of Company Equity Awards) may bring an action pursuing liability for such damages and (y) the Company may retain, without distribution to the Stockholders or the holders of Company Equity Awards, any damages received.

------

SECTION 9.8. <u>Severability</u>. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the Transactions be consummated as originally contemplated to the fullest extent possible.

SECTION 9.9. <u>Entire Agreement; No Reliance</u>. This Agreement (including the Company Disclosure Letter and all Exhibits, Annexes and Schedules referred to herein and therein) and the Confidentiality Agreement constitute the entire agreement between the parties with respect to the subject matter of this Agreement, and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

SECTION 9.10. <u>Enforcement</u>. The parties agree that irreparable damage would occur and that the parties would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, except as expressly provided in the following sentence. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Delaware Courts and, in any action for specific performance, each party waives the defense of adequacy of a remedy at law and waives any requirement for the securing or posting of any bond in connection with such remedy, this being in addition to any other remedy to which they are entitled at law or in equity (subject to the limitations set forth in this Agreement). The parties further agree that (a) by seeking the remedies provided for in this <u>Section</u> <u>9.10</u>, a party shall not in any respect waive its right to seek any other form of relief that may be available to a party under this Agreement (including monetary damages) for breach of any of the provisions of this Agreement or in the event that this Agreement has been terminated or in the event that the remedies provided for in this <u>Section</u> <u>9.10</u> are not available or otherwise are not granted, and (b) nothing set forth in this <u>Section</u> <u>9.10</u> shall require any party hereto to institute any Proceeding for (or limit any party's right to institute any Proceeding for) specific performance under this <u>Section</u> <u>9.10</u> prior to or as a condition to exercising any termination right under <u>Article 8</u> (and pursuing damages after such termination).

SECTION 9.11. <u>Remedies</u>. Except as otherwise provided in this Agreement, any and all remedies expressly conferred upon a party to this Agreement will be cumulative with, and not exclusive of, any other remedy contained in this Agreement, at law or in equity. The exercise by a party to this Agreement of any one remedy will not preclude the exercise by it of any other remedy.

[*The remainder of this page is intentionally blank.*]

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IN WITNESS WHEREOF, the Company, Parent, and Merger Sub have caused this Agreement to be executed as of the date first written above.

---

| | |
|:---|:---|
| AVIDITY BIOSCIENCES, INC. | AVIDITY BIOSCIENCES, INC. |
| By: | /s/ Sarah Boyce |
| Name: | Sarah Boyce |
| Title: | President & Chief Executive Officer |
| NOVARTIS AG | NOVARTIS AG |
| By: | /s/ David Quartner |
| Name: | David Quartner |
| Title: | Attorney-in-Fact |
| By: | /s/ Tanay Kanti Ghosh |
| Name: | Tanay Kanti Ghosh |
| Title: | Attorney |
| AJAX ACQUISITION SUB, INC. | AJAX ACQUISITION SUB, INC. |
| By: | /s/ Tariq ElRafie |
| Name: | Tariq ElRafie |
| Title: | Attorney |

---

[*Signature Page to Agreement and Plan of Merger*]

------

<u>EXHIBIT A</u> 

Form of Certificate of Incorporation of the Surviving Corporation

------

**Amended and Restated** 

**Certificate of Incorporation** 

**of** 

**Avidity Biosciences, Inc.** 

1. The name of the corporation is "Avidity Biosciences, Inc." (the
" **Corporation** ").

2. The address of the Corporation's registered office is Corporation Service Company, 251 Little Falls
Drive, Wilmington, New Castle County, Delaware 19808. The Corporation Service Company is the Corporation's registered agent at that address.

3. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware (the "**DGCL** "). The Corporation shall have all power necessary or convenient to the conduct, promotion or attainment of such acts and activities.

4. The Corporation shall have authority to issue a total of 1,000 shares of common stock, par value $0.001 per
share.

5. In furtherance and not in limitation of the powers conferred upon it by law, the Board of Directors of the
Corporation is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation.

6. The number of directors of the Corporation shall be such number as from time to time shall be fixed by, or
in the manner provided in, the Bylaws of the Corporation. The election of directors of the Corporation need not be by written ballot.

7. Except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for
breaches of fiduciary duty, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such
liability. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such
amendment or repeal. If the DGCL is amended to permit further elimination or limitation of the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the
DGCL as so amended.

8. Any repeal or modification of Article 7 shall be prospective and shall not affect the rights under Article 7
in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

9. The Corporation elects not to be governed by Section 203 of the DGCL.

## Exhibit 10.1

**Exhibit 10.1** 

**Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Such omitted information has been noted in this document with a placeholder identified by the mark "[\*\*\*]".** 

**LICENSE AGREEMENT** 

by and between

**AVIDITY BIOSCIENCES, INC.** 

and

**BRYCE THERAPEUTICS, INC.** 

**October 25, 2025** 

------

**<u>**TABLE OF CONTENTS**</u>**

---

| | |
|:---|:---|
|  **ARTICLE 1 DEFINITIONS; INTERPRETATION** | **2** |
|  **ARTICLE 2 LICENSES; EXCLUSIVITY** | **15** |
|  **ARTICLE 3 RIGHT OF FIRST NEGOTIATION** | **24** |
|  **ARTICLE 4 INTELLECTUAL PROPERTY** | **27** |
|  **ARTICLE 5 CONFIDENTIALITY; PUBLICATION** | **31** |
|  **ARTICLE 6 TERM AND TERMINATION** | **34** |
|  **ARTICLE 7 REPRESENTATIONS AND WARRANTIES; COVENANTS** | **34** |
|  **ARTICLE 8 INDEMNIFICATION; LIABILITY; INSURANCE** | **38** |
|  **ARTICLE 9 GENERAL PROVISIONS** | **41** |

---

**<u>EXHIBITS</u>** 

---

| | |
|:---|:---|
| EXHIBIT 1.73 – | LILLY TARGETS |
| EXHIBIT 1.114 – | REMAINCO SPECIFIED TARGETS |
| EXHIBIT 1.119 – | SPECIFIED LICENSE |
| EXHIBIT 1.128 – | SPINCO PLATFORM TECHNOLOGIES |
| EXHIBIT 1.142– | UPSTREAM LICENSES |
| EXHIBIT 7.2(D) – | SPINCO PATENTS |

---

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**<u>LICENSE AGREEMENT</u>**

This **LICENSE AGREEMENT** (this "**Agreement**") is made as of October 25, 2025 (the "**Execution Date**"), by and between Avidity Biosciences, Inc., a Delaware corporation ("**Company**" or "**RemainCo**") and Bryce Therapeutics, Inc., a Delaware corporation ("**SpinCo**"). RemainCo and SpinCo are referred to in this Agreement individually as a "**Party**" and collectively as the "**Parties**".

**RECITALS** 

**WHEREAS**, Novartis AG, a company limited by shares (*Aktiengesellschaft*) incorporated under the laws of Switzerland ("**Parent**"), Ajax Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("**Merger Sub**"), and the Company have, substantially contemporaneously with the execution and delivery of this Agreement, entered into that certain Agreement and Plan of Merger, dated as of October 25, 2025 (as may be amended from time to time, the "**Merger Agreement**"), pursuant to which, among other things, the parties agreed that the Merger Sub will be merged with the Company, with the Company surviving as a wholly owned subsidiary of Parent;

**WHEREAS**, in connection with the transactions contemplated by the Merger Agreement, Parent, Merger Sub and Company have, substantially contemporaneously with the execution and delivery of this Agreement, entered into that certain Separation and Distribution Agreement, dated as of October 25, 2025 (the "**Separation and Distribution Agreement**", and together with any other agreements executed and delivered in connection with the Merger Agreement, including the Transition Services Agreement (as defined in the Merger Agreement) and the Merger Agreement, the "**Transaction Documents**"), pursuant to which, among other things, the parties agreed to the separation of the SpinCo Business and SpinCo Assets, on the one hand, and the RemainCo Business and RemainCo Assets, on the other hand (each as defined in the Separation and Distribution Agreement);

**WHEREAS**, in connection with the transactions contemplated by the Transaction Documents, SpinCo owns or otherwise Controls certain Intellectual Property Rights that are necessary or useful for the RemainCo Business, including certain Intellectual Property Rights related to the SpinCo Platform, and SpinCo desires to grant to RemainCo, and RemainCo desires to obtain from SpinCo, certain rights with respect to such Intellectual Property Rights, including the right to obtain a future assignment of certain Intellectual Property Rights;

**WHEREAS**, such rights granted by SpinCo to RemainCo, including such right to obtain a future assignment of Intellectual Property Rights, are an integral part of the transactions contemplated by the Transaction Documents and the consideration thereunder; and

**WHEREAS**, in connection with the transactions contemplated by the Transaction Documents, SpinCo and RemainCo desire to enter into this Agreement for the purpose of setting forth the terms and conditions pursuant to which SpinCo will grant such rights to RemainCo and RemainCo will grant certain related rights to SpinCo.

------

**NOW, THEREFORE**, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt, sufficiency and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:

**ARTICLE 1** 

**DEFINITIONS; INTERPRETATION** 

Unless the context otherwise requires, the terms in this Agreement with initial letters capitalized shall have the meanings set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.1** "**AAA**" has the meaning set forth in Section 9.4(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.2** "**Acquiror**" shall have the meaning set forth in Section 2.8(c).<u> </u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.3** "**Act**" means the United States Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.4** "**Affiliate**" means, with respect to any Person, any other Person that now or hereinafter controls, is controlled by, or is under common control with, such Person, for so long as such control exists. For purposes of this definition, "control" shall mean direct or indirect ownership of at least fifty percent (50%) of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interest, in the case of any other type of legal entity, status as a general partner in any partnership or any other arrangement whereby the Person controls or has the right to control the board of directors or equivalent governing body of a corporation or other entity, or the ability to direct the management and policies of a corporation or other entity. The Parties acknowledge that, in the case of entities organized under the laws of certain countries where the maximum percentage ownership permitted by law for a foreign investor is less than fifty percent (50%), such lower percentage shall be substituted in the preceding sentence; *provided*, that such foreign investor has the power to direct the management and policies of such entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.5** "**Agreement**" has the meaning set forth in the Preamble.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.6** "**Applicable Laws**" means any national, international, supra-national, federal, state or local laws, treaties, statutes, ordinances, rulings, rules and regulations, including any rules, regulations, guidance or guidelines, or requirements of any regulatory authorities, national securities exchanges or securities listing organizations, governmental authorities, courts, tribunals, agencies, legislative bodies and commissions that are in effect from time to time during the Term and applicable to any particular activity hereunder, including GCP, GMP, GLP and GVP, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.7** "**Assignment Effective Date**" has the meaning set forth in Section 2.2(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.8** "**BLA**" means a Biologics License Application as defined in the Act and the regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.9** "**BMS**" has the meaning set forth in Section 1.10.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.10** "**BMS Agreement**" means that certain Research Collaboration and License Agreement entered into by and between the Company and Bristol-Myers Squibb Company ("**BMS**"), dated November 27, 2023, but excluding any subsequent amendments, modifications or restatements thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.11** [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.12** [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.13** "**Board**" has the meaning set forth in Section 3.2(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.14** "**Business Day**" means any day on which banks are not required or authorized by Applicable Laws to close in Basel, Switzerland, Zurich, Switzerland or New York, New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.15** "**Calendar Year**" means any calendar year ending on December 31 or the applicable part thereof during the first or last calendar year of the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.16** "**Cardiovascular Field**" means, with respect to a therapeutic, solely indications where such therapeutic is targeting cardiomyocytes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.17** "**Cardiovascular Product**" means any RNA therapeutic leveraging SpinCo Platform Technology where the therapeutic's primary effect is on cardiomyocytes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.18** "**Change of Control Transaction**" means, with respect to SpinCo or its Affiliate or, if such entity is controlled (within the meaning of Section 1.4), directly or indirectly (through one (1) or more intermediaries), by another Person, such ultimate controlling Person (the "**Controlling Person**"), a transaction with a Third Party(ies) involving, (a) the acquisition, merger or consolidation, directly or indirectly, of SpinCo or its Affiliate or, if there is a Controlling Person, such Controlling Person (rather than the SpinCo or its Affiliate), as applicable, and, immediately following the consummation of such transaction, the shareholders of SpinCo or its Affiliate or Controlling Person, as the case may be, immediately prior thereto holding, directly or indirectly, as applicable, shares of capital stock of the surviving or continuing company representing less than fifty percent (50%) of the outstanding shares of such surviving or continuing company, (b) the sale of all or substantially all of the assets or business of such Party or, if there is a Controlling Person, such Controlling Person (rather than such Party), as the case may be, or (c) a Person, or group of Persons acting in concert, acquiring, directly or indirectly, more than fifty percent (50%) of the voting equity securities or management control of such Party or, if there is a Controlling Person, such Controlling Person (rather than such Party), as the case may be. For the avoidance of doubt, a "Change of Control Transaction" includes a Sale (as defined in the Separation and Distribution Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.19** "**Claim**" means any demand, claim, action, litigation, arbitration or other proceeding brought by a Third Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.20** [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.21** "**Clinical Trial**" means any clinical study in humans that is conducted in accordance with GCP and is designed to generate data in support or maintenance of an NDA, MAA or other similar marketing application.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.22** "**CMC**" means chemistry, manufacturing and controls.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.23** "**CMO**" means a contract manufacturing organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.24** "**Code**" means the United States Bankruptcy Code, 11 U.S.C. § 101 et seq.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.25** "**Commercialize**" or "**Commercialization**" means any and all activities directed to branding, marketing, promoting, pricing, distributing, importing, exporting, offering to sell or selling a product or conducting other commercialization (or handling any such action taken on one's behalf), including any and all activities directed to obtaining Pricing Approvals and any and all Pre-Marketing Activities. For clarity, Commercialization shall not include Manufacturing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.26** "**Company**" has the meaning set forth in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.27** "**Competitive Business**" has the meaning set forth in Section 2.8(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.28** "**Confidential Information**" means, with respect to a Party, all Know-How and other proprietary information and data, including information of a financial, commercial or technical nature, that is disclosed by or on behalf of such Party or any of its Affiliates or otherwise made available to the other Party or any of its Affiliates, whether made available orally, in writing or in electronic form, in connection with this Agreement or the Transition Services Agreement on or after the Effective Date, including any such Know-How, proprietary information or data comprising or relating to concepts, discoveries, inventions, data, designs, information or formulae. Notwithstanding the foregoing, (a) the existence of, and the terms and conditions of, this Agreement and the Transition Services Agreement shall be deemed to constitute the Confidential Information of each Party and (b) all Know-How and other proprietary information with respect to the SpinCo Platform or SpinCo Platform Improvements (such Confidential Information, "**Platform Information**") shall be deemed to constitute the Confidential Information of RemainCo.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.29** "**Control**" or "**Controlled**" means, with respect to a Party and any Know-How, Patent Rights, other Intellectual Property Rights, including any proprietary or trade secret information, the legal authority or right (whether by ownership, license or otherwise, other than pursuant to a license granted under this Agreement) of such Party or any of its Affiliates to grant a license or a sublicense of or under, or access to or right to use, such Know-How, Patent Rights, or Intellectual Property Rights to another Person, or to otherwise disclose such proprietary or trade secret information to another Person, without breaching the terms of any agreement with a Third Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.30** "**Controlling Person**" has the meaning set forth in Section 1.18.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.31** "**CTA**" means clinical trial application.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.32** "**Develop**" or "**Development**" means any and all pre-clinical development activities (excluding discovery activities) and clinical drug development activities in connection with obtaining Regulatory Approval in the applicable country or regulatory jurisdiction for any product, in each case, whether alone or for use together, or in combination, with another active agent or pharmaceutical or other product, including test method development and stability testing, assay development and toxicology (including GLP toxicology studies), formulation, quality assurance/quality control development, technical development, process development, manufacturing scale-up, development-stage manufacturing, analytical method validation, manufacturing process validation, cleaning validation, statistical analysis, report writing, non-clinical and clinical studies, packaging development, regulatory affairs, and the preparation, filing and prosecution of BLAs, MAAs and other applications for Regulatory Approval for such pharmaceutical or other product, as well as any and all regulatory activities related to any of the foregoing and activities that are otherwise reasonably necessary or useful in anticipation of or in preparation of Commercialization of a product. For clarity, Development shall not include Manufacturing nor the conduct of any post-approval Clinical Trial. "Developing" shall be construed accordingly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.33** "**Development Candidate**" has the meaning set forth in Section 3.1(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.34** "**Development Candidate ROFN**" has the meaning set forth in Section 3.1(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.35** "**Development Candidate ROFN Exercise Notice**" has the meaning set forth in Section 3.1(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.36** "**Development Candidate ROFN Exercise Period**" has the meaning set forth in Section 3.1(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.37** "**Development Candidate ROFN Expiration**" has the meaning set forth in Section 3.1(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.38** "**Development Candidate ROFN Negotiation Period**" has the meaning set forth in Section 3.1(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.39** "**Development Candidate ROFN Notice**" has the meaning set forth in Section 3.1(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.40** "**Directed to**" means, with respect to (a) a compound, product, or therapy and (b) a Target, [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.41** "**Disclosing Party**" has the meaning set forth in Section 5.1(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.42** "**Dispute**" has the meaning set forth in Section 9.4(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.43** "**Dollar**" means the U.S. dollar, and "$" shall be interpreted accordingly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.44** "**Effective Date**" means the Distribution Date (as defined in the Separation and Distribution Agreement); *provided, however*, that, if the Distribution Date does not occur because SpinCo undergoes a Change of Control Transaction prior to the Distribution Date having occurred, then the Effective Date will be deemed to have occurred upon the completion of the Change of Control Transaction.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.45** "**Excluded Product**" means [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.46** "**Execution Date**" has the meaning set forth in the Preamble.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.47** "**Executive Officers**" means, (a) for SpinCo, the Chief Executive Officer or his/her designee, and (b) for RemainCo, the Chief Executive Officer or his/her designee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.48** "**Existing RemainCo Compounds and Products**" has the meaning set forth in Section 2.9(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.49** "**Existing Third Party Agreements**" means the BMS Agreement and the Lilly Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.50** "**Existing Third Party Rights**" means: (a) with respect to any SpinCo Patent that is licensed to BMS under the BMS Agreement, any rights granted to BMS with respect to the prosecution, enforcement or defense of such SpinCo Patent as of the Effective Date; (b) with respect to any SpinCo Patent that is licensed to Lilly under the Lilly Agreement, any rights granted to Lilly with respect to the prosecution, enforcement or defense of such SpinCo Patent as of the Effective Date; and (c) with respect to any SpinCo Patent that is Controlled by SpinCo pursuant to an Upstream License, any rights granted to or retained by the applicable Upstream Licensor with respect to the prosecution, enforcement or defense of such SpinCo Patent as of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.51** "**Exploit**" means, with respect to a product, to Research, have Researched, Develop, have Developed, make, have made, use, have used, import, have imported, Manufacture, have Manufactured, Commercialize, have Commercialized or otherwise exploit or have exploited such product. "**Exploitation**" and "**Exploiting**" will be construed accordingly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.52** "**Extensions**" has the meaning set forth in Section 4.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.53** "**FDA**" means the United States Food and Drug Administration or any successor entity thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.54** "**Field**" means all uses in humans and animals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.55** "**FTE**" means a full-time, dedicated, non-executive officer, non-administrative person year or, in the case of less than a full-time, dedicated, non-executive officer, non-administrative person year, a full-time equivalent person year, in each case, based upon a total of [\*\*\*] ([\*\*\*]) hours of activities under this Agreement per year. In the case that any full-time person works partially on activities under this Agreement and partially on other work in a given year, then the full-time equivalent to be attributed to such person's work hereunder shall be equal to the percentage of such person's total work time in such year or portion thereof that such person spent working on such activities under this Agreement. In no event shall any one (1) person be counted as more than one (1) FTE. For clarity, indirect personnel (including support functions such as managerial, financial, legal or business development) shall not constitute FTEs.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.56** "**FTE Rate**" means the rate of [\*\*\*] Dollars ($[\*\*\*]) per FTE per Calendar Year. For the avoidance of doubt, such rate is intended to cover the cost of salaries, benefits, infrastructure costs, travel, general laboratory or office supplies, postage, insurance, training and all other general expenses and overhead items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.57** "**GCP**" means the then-current good clinical practice standards for Clinical Trials for pharmaceutical products, as set forth in the Act or other Applicable Laws, and such standards of good clinical practice as are required by the applicable Regulatory Authority(ies) for which the applicable pharmaceutical product is intended to be developed, to the extent such standards are not less stringent than United States GCP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.58** "**GLP**" means the then-current good laboratory practice standards as promulgated or endorsed by FDA as defined in 21 C.F.R. Part 58 or the successor thereto, or comparable regulatory standards in jurisdictions outside the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.59** "**GMP**" means the then-current good manufacturing practices as specified in 21 C.F.R. Parts 11, 210 and 211, ICH Guideline Q7A, or equivalent laws, rules, or regulations of an applicable Regulatory Authority at the time of manufacture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.60** "**Governmental Authority**" means any national, international, federal, state, provincial or local government, or political subdivision thereof, any multinational organization or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or any tribunal (or any department, bureau or division thereof, or any governmental arbitrator or arbitral body).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.61** "**GVP**" means the then-current set of measures for: (a) the performance of pharmacovigilance; and (b) monitoring the safety of medicines on sale to the public in the U.S. and other countries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.62** "**IND**" means an Investigational New Drug application in the U.S. filed with the FDA or the corresponding application for the investigation of pharmaceutical products, including in Clinical Trials, in any other country or group of countries (including CTAs), as defined in the Applicable Laws and filed with the Regulatory Authority of such country or group of countries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.63** "**Indemnification Claim Notice**" has the meaning set forth in Section 8.3(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.64** "**Indemnified Party**" has the meaning set forth in Section 8.3(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.65** "**Indemnifying Party**" has the meaning set forth in Section 8.3(a).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.66** "**Insolvency Event**" means (a) the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, including such proceedings commenced by SpinCo seeking to have an order for relief entered with respect to SpinCo, seeking to adjudicate SpinCo as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to SpinCo or its debts; (b) the appointment of a receiver, trustee, custodian, conservator or other similar official over all or substantially all property of SpinCo; (c) an assignment of a substantial portion of the assets for the benefit of creditors by SpinCo; or (d) SpinCo taking any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the matters set forth in sub-clauses (a), (b), or (c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.67** "**Intellectual Property Rights**" means any Know-How, Patent Rights, copyrights, database rights, design rights, inventions, confidential information, applications for any of the above, and any similar right recognized from time to time in any jurisdiction including any applications for registration of the foregoing, together with all rights of action in relation to the infringement of any of the above as exist anywhere in the world.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.68** "**Invention**" means any invention, discovery, process or other Know-How that is discovered, generated, conceived or reduced to practice by or on behalf of a Party or its Affiliates or Sublicensees through activities conducted under this Agreement or the Transition Services Agreement, through the exercise of the licenses granted under this Agreement or, in the case of SpinCo or its Affiliates, through activities conducted using any SpinCo Platform Technology, including all right, title and interest in and to the Intellectual Property Rights thereof, including Patent Rights, therein and thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.69** "**Know-How**" means any and all commercial, technical, scientific and other types of (a) data (including datasets), documents, information, conclusions, inventions (whether patentable or not), discoveries, know-how, technology, protocols, assays, methods, processes, formulae, instructions, techniques, designs, drawings or specifications (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical, analytical, preclinical, clinical, safety, manufacturing and quality control data and information); and (b) Materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.70** "**Licensed SpinCo Technology**" means (a) any and all Patent Rights, Know-How or other Intellectual Property Rights, in each case, owned or Controlled by SpinCo or any of its Affiliates as of the Effective Date (including all SpinCo Intellectual Property, as defined in the Separation and Distribution Agreement), (b) any and all Patent Rights that claim or disclose any Know-How set forth in clause (a), whether existing as of the Effective Date or thereafter during the Term, and (c) any and all SpinCo Platform Technology not otherwise described in clauses (a) and (b) (with respect to any SpinCo Platform Technology in clauses (a) through (c), until such time as such SpinCo Platform Technology is assigned to RemainCo in accordance with Section 2.2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.71** "**Lilly**" has the meaning set forth in Section 1.72.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.72** "**Lilly Agreement**" means that certain Research Collaboration and License Agreement entered into by and between the Company and Eli Lilly and Company ("**Lilly**"), dated April 17, 2019, but excluding any subsequent amendments, modifications or restatements thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.73** "**Lilly Target**" means any Target set forth on **Exhibit 1.73**, for so long as such Target constitutes a "Collaboration Target" under the Lilly Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.74** "**Losses**" means any and all losses, liabilities, costs, damages and expenses, including reasonable attorneys' fees and costs.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.75** "**MAA**" means an application for the authorization to market a pharmaceutical product in any country or group of countries outside the United States, as defined in the Applicable Laws and filed with the Regulatory Authority of such country or group of countries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.76** "**Manufacture**" or "**Manufacturing**" means, with respect to a product (or any components or process steps involving any such product), any and all activities related to or undertaken in connection with the planning, sourcing and purchasing of materials, producing, manufacturing (including CMC, processing, compounding, filling, finishing, packing, primary packaging, secondary packaging and serialization), labeling, leafleting, assembly, serialization, quality assurance, quality control testing and release, shipping, storage, waste disposal, stability testing and sample retention of such product (or any components or process steps involving any such product) and such other matters as may be prescribed for the manufacture and supply of such product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.77** "**Manufacturing Know-How**" means any and all SpinCo Know-How that is used in or useful for or otherwise related to Manufacturing of any Existing RemainCo Compound or Product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.78** "**Manufacturing Process**" has the meaning set forth in Section 2.9(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.79** "**Manufacturing Technology Transfer**" has the meaning set forth in Section 2.9(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.80** "**Materials**" means any tangible compositions of matter, articles of manufacture, assays, chemical, biological or physical materials, and other similar materials, including raw ingredients, intermediates, excipients, processing aids, active pharmaceutical ingredients, packaging and labelling materials and components (including printed and non-printed components, where applicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.81** "**Merger Agreement**" has the meaning set forth in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.82** "**Merger Sub**" has the meaning set forth in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.83** "**Oligo**" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.84** "**Parent**" has the meaning set forth in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.85** "**Party**" or "**Parties**" has the meaning set forth in the Preamble.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.86** "**Patent Rights**" means all patents and patent applications, including all divisionals, continuations, substitutions, continuations-in-part, re-examinations, reissues, additions, renewals, extensions, registrations, supplemental protection certificates, utility models, design patents and the like of any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.87** "**Person**" means any individual, partnership, limited liability company, firm, corporation, association, trust, unincorporated organization, Governmental Authority or other entity.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.88** "**Platform Information**" has the meaning set forth Section 1.28.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.89** "**Pre-Marketing Activities**" means any and all marketing activities undertaken prior to and in preparation for the launch of a product, including activities relating to market research, key opinion leader development, advisory boards, medical education, disease-related public relations, health care economic studies, sales force training and other pre-launch activities prior to such launch.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.90** "**Pricing Approval**" means, in any country where a Governmental Authority, in parallel with or subsequent to the granting of Regulatory Approval, authorizes reimbursement for, or approves or determines pricing for, pharmaceutical products, receipt (or, if required to make such authorization, approval or determination effective, publication) of such reimbursement authorization or pricing approval or determination (as the case may be).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.91** "**Product Infringement**" has the meaning set forth in Section 4.3(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.92** [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.93** "**Prospective Transaction**" has the meaning set forth in Section 3.2(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.94** "**Prospective Transaction Event**" has the meaning set forth in Section 3.2(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.95** "**Prospective Transaction MFN Notice**" has the meaning set forth in Section 3.2(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.96** "**Prospective Transaction MFN Response Notice**" has the meaning set forth in Section 3.2(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.97** "**Prospective Transaction ROFN**" has the meaning set forth in Section 3.2(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.98** "**Prospective Transaction ROFN Exercise Notice**" has the meaning set forth in Section 3.2(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.99** "**Prospective Transaction ROFN Exercise Period**" has the meaning set forth in Section 3.2(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.100** "**Prospective Transaction ROFN Expiration**" has the meaning set forth in Section 3.2(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.101** "**Prospective Transaction ROFN Notice**" has the meaning set forth in Section 3.2(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.102** "**Prospective Transaction ROFN Negotiation Period**" has the meaning set forth in Section 3.2(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.103** "**Prospective Transaction ROFN Notice**" has the meaning set forth in Section 3.2(a).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.104** "**Publications**" has the meaning set forth in Section 5.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.105** "**Questionnaire for Third Parties**" means any questionnaire for Third Parties relating to compliance topics, including anti-bribery compliance that SpinCo has received from RemainCo or its representatives as part of its Third Party risk management processes at any time and any updates of such questionnaires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.106** "**Receiving Party**" has the meaning set forth in Section 5.1(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.107** "**Regulatory Approval**" means all licenses, registrations, authorizations and approvals (including approvals of BLAs and MAAs, supplements and amendments, pre- and post- approvals and labeling approvals) necessary for the Commercialization of a product in a given country or regulatory jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.108** "**Regulatory Authority**" means with respect to a country in the Territory, any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other Governmental Authority involved in assessing or granting Regulatory Approvals (including Pricing Approvals) for pharmaceutical products in such country.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.109** "**RemainCo**" has the meaning set forth in the Preamble.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.110** "**RemainCo Indemnitees**" has the meaning set forth in Section 8.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.111** "**RemainCo Licensed Technology**" means any and all RemainCo Intellectual Property (as defined in the Separation and Distribution Agreement) that (a) exists as of the Effective Date, (b) is not exclusively used in the RemainCo Business as of the Effective Date and (c) is owned by RemainCo as of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.112** "**RemainCo Product**" means any compound or product in or arising from any RemainCo Program, including any compound or product Directed to one or more RemainCo Specified Targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.113** "**RemainCo Program**" means any discovery, research or development program that is part of the RemainCo Business (as defined in the Separation and Distribution Agreement), including those programs for the discovery, research or development of compounds or products Directed to one or more RemainCo Specified Targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.114** "**RemainCo Specified Target**" means each Target set forth on **Exhibit 1.114**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.115** "**Research**" means any and all research and discovery activities, including molecular biology, biochemistry, and pre-clinical pharmacology, *in vitro* assays, *in vivo* assays, the identification of new biological agents, and activities related to the design, discovery, generation, identification, profiling, characterization, production, process development, cell line development, pre-clinical development or pre-clinical studies of drug candidates and products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.116** [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.117** "**Rules**" has the meaning set forth in Section 9.4(b).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.118** "**Separation and Distribution Agreement**" has the meaning set forth in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.119** "**Specified License**" has the meaning set forth in **Exhibit 1.119**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.120** "**Specified Licensor**" has the meaning set forth in **Exhibit 1.119**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.121** "**SpinCo**" has the meaning set forth in the Preamble.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.122** "**SpinCo Assigned Patents**" has the meaning set forth in Section 4.2(b)(i).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.123** "**SpinCo Assigned Technology**" means any and all SpinCo Platform Technology assigned to RemainCo pursuant to Section 2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.124** [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.125** "**SpinCo Indemnitees**" has the meaning set forth in Section 8.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.126** "**SpinCo Know-How**" means any and all Know-How within the Licensed SpinCo Technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.127** "**SpinCo Patents**" means any and all Patent Rights within the Licensed SpinCo Technology. Solely for purposes of Article 4, any and all Patent Rights within the SpinCo Assigned Technology will continue to be deemed a SpinCo Patent following the assignment thereof to RemainCo.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.128** "**SpinCo Platform**" means the Company's (as of the Execution Date) or SpinCo's (as of the Effective Date) platform technology relating to oligonucleotide-based therapeutics or delivery technologies, including all uses and processes involved in the use of such platform technologies, and all modifications thereto. Without limiting the foregoing, the SpinCo Platform includes those technologies described on **Exhibit 1.128**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.129** "**SpinCo Platform Improvements**" means any technology relating to oligonucleotide-based therapeutics or delivery technologies, including all uses and processes involved in the use of such platform technologies, and all modifications thereto, including all improvements, modifications or derivatives of the SpinCo Platform or other Know-How related to the SpinCo Platform, in each case, that are invented, reduced to practice, conceived or developed by or on behalf of SpinCo or its Affiliates following the Effective Date or otherwise Controlled by SpinCo or its Affiliates following the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.130** "**SpinCo Platform Technology**" means any and all (a) Scheduled Platform IP (as defined in the Separation and Distribution Agreement) and (b) other Patent Rights, Know-How or other Intellectual Property Rights, in each case, (i) owned or Controlled by SpinCo or any of its Affiliates as of the Effective Date or during the Term or (ii) invented, generated or otherwise developed by or on behalf of SpinCo or any of its Affiliates during the Term, in each case ((i) and (ii)), that (A) are used in the SpinCo Platform or the SpinCo Platform Improvements, (B) constitute or comprise (or, in the case of Patent Rights, claim or disclose) any component(s) of the SpinCo Platform or a SpinCo Platform Improvement, or (C) are otherwise necessary or useful for the use

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of the SpinCo Platform or the SpinCo Platform Improvements except, with respect to the Intellectual Property Rights in this subclause (b)(ii)(C), in the event of a Change of Control Transaction of SpinCo, any Patent Rights owned or controlled by the acquiror of SpinCo or any of the acquiror's affiliates (other than SpinCo and any Affiliates of SpinCo existing immediately prior to the consummation of such Change of Control Transaction) as of the date of such Change of Control Transaction or that come into the ownership or control of the acquiror or any such affiliate following such Change of Control Transaction through activities segregated through internal processes, policies and procedures and systems from any SpinCo Platform Technology, SpinCo Assigned Technology or RemainCo Licensed Technology (and personnel using or practicing any of such Intellectual Property Rights), shall not be deemed to be SpinCo Platform Technology unless (x) any such Patent Rights were, immediately prior to the consummation of such Change of Control Transaction, already SpinCo Platform Technology or (y) any invention claimed or disclosed in such Patent Rights was made through the use of SpinCo Platform Technology, SpinCo Assigned Technology or RemainCo Licensed Technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.131** "**Sublicensee**" means any Third Party (excluding distributors and wholesalers) to whom a Party or any of its Affiliates has granted a sublicense under any of the rights licensed to such Party or any of its Affiliates hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.132** "**Target**" means any gene [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.133** [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.134** "**Term**" has the meaning set forth in Section 6.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.135** "**Territory**" means worldwide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.136** "**Third Party**" means any Person other than a Party or an Affiliate of a Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.137** "**Third Party Acquiror Product**" has the meaning set forth in Section 2.8(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.138** "**Third Party Code**" has the meaning set forth in Section 7.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.139** "**Transaction Documents**" has the meaning set forth in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.140** "**Transition Services Agreement**" has the meaning set forth in the Merger Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.141** "**United States**" or "**U.S.**" means the United States of America, including its territories and possessions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.142** "**Upstream License**" means any agreement between SpinCo or any of its Affiliates, on the one hand, and a Third Party licensor (each, an "**Upstream Licensor**"), on the other hand, that exist as of the Effective Date under which SpinCo or any of its Affiliates Controls any Patent Rights or Know-How constituting Licensed SpinCo Technology. The Upstream Licenses in existence as of the Execution Date are set forth on **Exhibit 1.142**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.143** "**Upstream Licensor**" has the meaning set forth in Section 1.142.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.144 Interpretation**. The Parties agree that the terms and conditions of this Agreement are the result of negotiations between the Parties and that this Agreement shall not be construed in favor of or against any Party by reason of the extent to which any Party participated in the preparation of this Agreement. Except where the context expressly requires otherwise:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the Merger Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the word "will" will be construed to have the same meaning and effect as the word "shall";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) unless otherwise expressly provided herein, any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any reference herein to any Person shall be construed to include the Person's successors and assigns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) the word "or" is used in the inclusive sense ("and/or");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all references herein to Sections or Exhibits shall be construed to refer to Sections or Exhibits of this Agreement, and references to this Agreement include all Exhibits hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the word "notice" means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) when an item "is comprised of" or "comprises" one or more elements, it means that such item includes such elements, but it is not limited to only those elements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) for provisions that require request made in writing, email will suffice unless expressly stated otherwise;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) provisions that require that a Party or the Parties "agree," "consent" or "approve" or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding instant messaging);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) any data, information or documentation required to be transmitted by SpinCo to RemainCo under this Agreement shall be in a format and method reasonably acceptable to RemainCo (e.g., Securevault);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) the headings in this Agreement are for information only and shall not be considered in the interpretation of this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof.

**ARTICLE 2** 

**LICENSES; EXCLUSIVITY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1 License Grants to RemainCo.** All license grants in this Section 2.1 are subject to Section 2.7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Exclusive License Grant for Non-Cardiovascular Products**. Effective as of the Effective Date, SpinCo hereby grants, on behalf of itself and its Affiliates, to RemainCo and its Affiliates, an exclusive (even as to SpinCo and its Affiliates), royalty-free, fully paid-up, perpetual, irrevocable, sublicensable (subject to Section 2.4) and transferable (subject to Section 9.1) license, under the Licensed SpinCo Technology, for all purposes and uses in all fields including to Exploit any and all products in the Field in the Territory, but excluding the Exploitation of any Cardiovascular Product in the Cardiovascular Field or any Excluded Product in the Field.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Non-Exclusive License Grant for Cardiovascular Products**. Effective as of the Effective Date, SpinCo hereby grants, on behalf of itself and its Affiliates, to RemainCo and its Affiliates, a non-exclusive, royalty-free, fully paid-up, perpetual, irrevocable, sublicensable (subject to Section 2.4) and transferable (subject to Section 9.1) license, under the SpinCo Platform Technology, to Exploit any Cardiovascular Product (other than an Excluded Product) in the Cardiovascular Field in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2 Assignment.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **As of the Assignment Effective Date.** Immediately as of the earliest of (i) the [\*\*\*] (as defined in the [\*\*\*]), (ii) the effective date of termination of the [\*\*\*], (iii) the date immediately prior to the effectiveness of a Change of Control Transaction consummated after the Effective Date and (iv) the date of RemainCo's written request to SpinCo requesting such assignment (the "**Assignment Effective Date**"), SpinCo will, and does hereby, assign, and will cause its Affiliates to so assign, to RemainCo, without additional compensation, all right, title, and interest in and to any SpinCo Platform Technology existing as of the Assignment Effective Date. Notwithstanding the foregoing, if, pursuant to the Separation and Distribution Agreement, RemainCo is the owner of the Scheduled Platform IP (as defined in the Separation and Distribution Agreement) as of the Effective Date, then the "Assignment Effective Date" will be deemed to have occurred on the Effective Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Following the Assignment Effective Date.** As between the Parties, during the Term following the Assignment Effective Date, all SpinCo Platform Technology shall be solely owned by RemainCo regardless of inventorship and SpinCo shall, and, effective from and after the Assignment Effective Date, does hereby, assign to RemainCo all of SpinCo's right, title and interest in and to all SpinCo Platform Technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Cooperation.** SpinCo shall execute and deliver to RemainCo, or its designated Affiliate(s) or their respective Sublicensee(s), all instruments and documents reasonably requested by RemainCo for purposes of documenting or confirming the foregoing assignment in Sections 2.2(a) and 2.2(b). In the event that SpinCo is unable or unwilling for any reason to supply its signature to any document RemainCo reasonably requires to confirm or otherwise document such assignment set forth in Sections 2.2(a) or 2.2(b), SpinCo hereby irrevocably designates and appoints RemainCo and RemainCo's duly authorized officers and agents as SpinCo's agents and attorneys-in-fact to act for and on SpinCo's behalf and instead of SpinCo, to execute such document with the same legal force and effect as if executed by SpinCo. If for any reason, SpinCo or its Affiliates is unable to assign, or is delayed in assigning, any SpinCo Platform Technology to RemainCo, all rights granted to RemainCo under such SpinCo Platform Technology in Section 2.1 shall remain in effect until such assignment takes place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3 License Grants to SpinCo.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Exclusive License Grant for Excluded Products**. Effective as of the Effective Date, RemainCo hereby grants, on behalf of itself and its Affiliates, to SpinCo and its Affiliates, an exclusive (even as to RemainCo and its Affiliates), royalty-free, fully paid-up, sublicensable (subject to Section 2.4) and transferable (subject to Section 9.1) license, under the SpinCo Assigned Technology and the RemainCo Licensed Technology, to Exploit any Excluded Product in the Field in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Non-Exclusive License Grant for Cardiovascular Products**. Effective as of the Effective Date, RemainCo hereby grants, on behalf of itself and its Affiliates, to SpinCo and its Affiliates, a non-exclusive, royalty-free, fully paid-up, sublicensable (subject to Section 2.4) and transferable (subject to Section 9.1) license, under the SpinCo Assigned Technology and the RemainCo Licensed Technology, to Exploit any Cardiovascular Product in the Cardiovascular Field in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.4 Sublicenses**. Subject to the terms and conditions of this Agreement, each Party and its Affiliates shall have the right to grant sublicenses, under the licenses granted to such Party under Section 2.1 or Section 2.2, as applicable, to Sublicensees, in each case, through one (1) or more tiers; *provided*, that: (i) each sublicense agreement shall be consistent with the terms and conditions of this Agreement; (ii) the sublicensing Party and its Affiliates shall remain responsible for the performance of all of its Sublicensees to the same extent as if such activities were conducted by such sublicensing Party or its Affiliates; and (iii) in the case of a sublicense by SpinCo, such sublicense may only be granted in connection with the grant of a license by SpinCo or any of its Affiliates to Exploit one or more products or product candidates of SpinCo or its Affiliates.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5 No Implied Licenses.** Except as expressly set forth herein, neither Party shall acquire any license or other intellectual property interest, by implication or otherwise, under or to any Patent Rights, Know-How, or other Intellectual Property Rights Controlled by the other Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6 Specified Sublicenses.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If SpinCo wishes to receive a sublicense under the Patent Rights licensed to RemainCo pursuant to the Specified License, SpinCo shall provide written notice thereof to RemainCo. Following such notice, RemainCo shall grant a non-exclusive sublicense to SpinCo under such Patent Rights within the scope of the licenses granted to SpinCo under Section 2.3 (to the extent permitted under the terms of the Specified License); *provided*, that SpinCo agrees in writing, in a form satisfactory to Specified Licensor that complies with the sublicensing requirements of the Specified License, (i) to all terms of the Specified License applicable to sublicensees thereunder and (ii) to be solely responsible for, and to promptly pay, all amounts payable under the Specified License as a result of the exercise of such sublicenses by or on behalf of SpinCo (with such payment timing and reporting as may be required by RemainCo to comply with the terms of the Specified License). Any such sublicense shall be subject to and conditioned upon compliance with all applicable terms of the Specified License and shall not be further sublicensable without Specified Licensor's prior written consent. As between the Parties, SpinCo shall be and remain solely responsible for compliance with the terms of the Specified License by or on behalf of SpinCo or its Affiliates or any permitted further sublicensees, or any Third Party (sub)licensee of SpinCo that receives a direct sublicense from RemainCo under Section 2.6(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Solely to the extent that SpinCo has an obligation to sublicense rights under the Specified License under an Existing Third Party Agreement to a Third Party (sub)licensee as of the Execution Date, upon such Third Party (sub)licensee's written request in accordance with such Existing Third Party Agreement, RemainCo hereby covenants and agrees to either (i) seek to obtain Specified Licensor's consent for SpinCo to grant further sublicense(s) under the rights to be granted by RemainCo pursuant to Section 2.6(a) to such Third Party (sub)licensees of SpinCo or (ii) absent such consent, grant a direct sublicense under the Specified License to each such Third Party (sub)licensee, such direct sublicense to be identical in scope and terms as the sublicense granted under the applicable Existing Third Party Agreement to the extent permitted under the Specified License and in accordance with such Existing Third Party Agreement; *provided*, that, in either case ((i) or (ii)), such Third Party (sub)licensee agrees in writing, in a form satisfactory to Specified Licensor that complies with the sublicensing requirements of the Specified License, (A) to all terms of the Specified License applicable to sublicensees thereunder and (B) to be solely responsible for, and to promptly pay, all amounts payable under the Specified License as a result of the exercise of such sublicenses by or on behalf of such Third Party (sub)licensee (with such payment timing and reporting as may be required by RemainCo to comply with the terms of the Specified License); *provided, further*, that, if the applicable Existing Third Party Agreement provides that SpinCo will be responsible for such payments, SpinCo hereby agrees that SpinCo shall be and remain solely responsible for, and shall promptly pay, all amounts payable under the Specified License as a result of the exercise of such sublicenses by or on behalf of such Third Party (sub)licensee (with such payment timing and reporting as may be required by RemainCo to comply with the terms of the Specified License). Any such sublicense shall be subject to and conditioned upon compliance with all applicable terms of the Specified License and shall not be further sublicensable without Specified Licensor's prior written consent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.7 Target Clearance Process.<u> </u>** 

[\*\*\*]

[\*\*\*]

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[\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8 Exclusivity**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Exclusivity Obligations**. Subject to Sections 2.8(b) and 2.8(c), during the period commencing on the Effective Date and ending on the fifth anniversary of the Effective Date (or, if not enforceable for such period in any country under the relevant laws of such country, for such period as will be enforceable in such country under the relevant laws of such country), except as otherwise expressly contemplated in the Separation and Distribution Agreement, this Agreement or the Transition Services Agreement and except for the Exploitation of Excluded Products as expressly permitted or required pursuant to the BMS Agreement or the Lilly Agreement, as applicable, SpinCo and its Affiliates shall not, directly or indirectly, engage in the business of discovering, researching, developing, importing, exporting, manufacturing, marketing, distributing, promoting or selling anywhere in the world any RNA therapeutics other than Cardiovascular Products in the Cardiovascular Field (the "**Competitive Business**"), including, for clarity, collaborating with, enabling or otherwise authorizing, licensing or granting any right to any Third Party to, Research, Develop, Manufacture or Commercialize, any product in the Competitive Business anywhere in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Passive Investment Exception.** The obligations set forth in Section 2.8(a) shall not prevent SpinCo or its Affiliates from purchasing or acquiring, or being the holder or beneficial owner for passive investment purposes of, less than five percent (5%) of the outstanding equity securities of a Person that, directly or indirectly, engages in the Competitive Business.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Change of Control**. In the event that there is a Change of Control Transaction involving SpinCo (where SpinCo or its Controlling Person is the acquired entity), then the obligations of Section 2.8(a) will not apply to any product in a Competitive Business that: (i) is controlled by the relevant acquiror or its Affiliates existing immediately prior to the effective date of such Change of Control Transaction (collectively, the "**Acquiror**"); and (ii) is being Researched, Developed or Commercialized by the Acquiror immediately prior to the closing of such Change of Control Transaction or thereafter during the Term (such product, an "**Third Party Acquiror Product**"); *provided*, that, in each case ((i) and (ii)): (A) SpinCo and the Acquiror establish and enforce internal processes, policies, procedures and systems to segregate information relating to any such Third Party Acquiror Product, and any personnel conducting activities with respect to any such Third Party Acquiror Product, from any Confidential Information of RemainCo or its Affiliates; and (B) the Acquiror does not use, directly or indirectly, any Patent Rights, Know-How or Confidential Information of SpinCo (including any Patent Rights, Know-How or Confidential Information licensed or acquired from RemainCo under this Agreement) in the Exploitation of such Third Party Acquiror Product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9 Technology Transfer and Cooperation**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **SpinCo Know-How Transfer**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **Initial Technology Transfer**. Without limiting the other provisions of this Section 2.9, within [\*\*\*] following the Effective Date, SpinCo shall disclose and transfer to RemainCo or its designated Affiliate or their respective Sublicensees in English, including, as applicable, by providing hard and electronic copies thereof, all SpinCo Know-How existing as of the Effective Date (the "**Initial Technology Transfer**"). Following the Execution Date, the Parties will promptly negotiate in good faith and endeavor, prior to the Effective Date, to agree upon a technology transfer plan to govern such Initial Technology Transfer. Such Initial Technology Transfer shall be conducted in accordance with such agreed technology transfer plan, *provided*, that any failure of the Parties to agree upon a technology transfer plan will not excuse SpinCo's obligations to conduct the Initial Technology Transfer in accordance with this Section 2.9(a). Such disclosures and transfers shall include all data, information and documents in the possession or control of SpinCo or its Affiliates as of the Effective Date that may be necessary or reasonably useful for RemainCo to practice the licenses granted hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Ongoing Technology Transfer**. Following completion of the Initial Technology Transfer, on a continuing basis during the Term, SpinCo shall promptly disclose and transfer to RemainCo or its designated Affiliate or their respective Sublicensees in English, including, as applicable, by providing hard and electronic copies thereof, all SpinCo Know-How that comes into existence from time to time or that was not previously provided, including any SpinCo Know-How that constitutes SpinCo Platform Improvements. All such disclosures and transfers shall include all data, information and documents in the possession or control of SpinCo or its Affiliates that may be necessary or reasonably useful for RemainCo to practice the licenses granted hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Manufacturing Technology Transfer and Assistance**. Without limiting the provisions of Section 2.9(a), within [\*\*\*] following the Effective Date, SpinCo shall: (i) disclose and transfer, or shall cause to be disclosed and transferred, as applicable, to RemainCo or its designated Affiliate(s) or CMO(s), all Manufacturing Know-How necessary or reasonably useful for the Manufacture of the RemainCo Products that exist as of the Effective

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Date, or any component(s) thereof (such RemainCo Products and component(s) thereof, collectively, the "**Existing RemainCo Compounds and Products**"), which shall include the transfer of all Know-How Controlled by or in the possession of SpinCo or any of its Affiliates relating to the then-current specifications and process for the Manufacture of the Existing RemainCo Compounds and Products used in such process (the "**Manufacturing Process**"); and (ii) provide all reasonable assistance requested by RemainCo to enable RemainCo or its designated Affiliate(s) or its designated CMO, as applicable, to implement the applicable Manufacturing Process (including information of all Materials, consumables and their suppliers) at the facilities designated by RemainCo (collectively, (i) and (ii), the "**Manufacturing Technology Transfer**"). Following the Execution Date, the Parties will promptly negotiate in good faith and endeavor, prior to the Effective Date, to agree upon a manufacturing technology transfer plan to govern such Manufacturing Technology Transfer. The Manufacturing Technology Transfer shall be conducted in accordance with such agreed manufacturing technology transfer plan; *provided*, that any failure of the Parties to agree upon a manufacturing technology transfer plan will not excuse SpinCo's obligations to conduct the Manufacturing Technology Transfer in accordance with this Section 2.9(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **SpinCo Assistance**. Upon RemainCo's request, SpinCo shall provide reasonable assistance to RemainCo, its Affiliates and Sublicensees in connection with understanding and using the Know-How described in this Section 2.9, for purposes consistent with the licenses and rights granted to RemainCo and its Affiliates hereunder. Such cooperation and assistance shall include SpinCo making appropriate personnel available to assist RemainCo or its designee at any time and from time to time as reasonably requested by RemainCo, and providing the appropriate personnel of RemainCo or its designee with access to the personnel and Manufacturing and other operations of SpinCo and its Affiliates for such periods of time and in such manner as is reasonable in order to familiarize the personnel of RemainCo or its designee with the SpinCo Know-How. At RemainCo's reasonable request, such assistance shall be furnished on-site at the facilities of RemainCo or its designee. SpinCo shall keep complete and accurate records of the number of FTE hours that RemainCo or its designee has used and shall make such records available to RemainCo upon RemainCo's written request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Costs of Technology Transfer and Technical Assistance**. Each of the Initial Technology Transfer and the Manufacturing Technology Transfer shall be conducted at SpinCo's sole cost and expense, at no charge to RemainCo. With respect to technology transfer and technical assistance activities conducted under Section 2.9(a)(ii) or Section 2.9(c), SpinCo shall provide assistance and cooperation, as requested by RemainCo, on a [\*\*\*] in accordance with a mutually agreed work plan and budget therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Transition Services**. For the avoidance of doubt, the obligations of SpinCo under this Section 2.9 will be in addition to, and will not limit in any respect, the obligations of SpinCo to perform its activities under that certain Transition Services Agreement between the Parties or any other related agreement. Nothing in this Agreement will be deemed to alter the allocation of responsibilities or costs and expenses under any such agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.10 Rights in Insolvency**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Parties acknowledge and agree that this Agreement constitutes an executory contract under Section 365 of the Code for the license of "intellectual property" as defined under Section 101 of the Code and constitutes a license of "intellectual property" for purposes of any similar laws in any other country in the Territory. RemainCo, as licensee of such rights under this Agreement, will retain and may fully exercise all of its protections, rights and elections under the Code, including under Section 365(n) of the Code, or any similar laws in any other country in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) SpinCo shall, during the Term, create and maintain current and updated copies or, if not amenable to copying, detailed descriptions or other appropriate embodiments, to the extent feasible, of all intellectual property licensed to RemainCo under this Agreement. Each Party acknowledges and agrees that "embodiments" of intellectual property within the meaning of Section 365(n) include (i) copies of research data; (ii) laboratory samples; (iii) product samples and inventory; (iv) formulas; (v) laboratory notes and notebooks; (vi) data and results related to clinical studies; (vii) regulatory documentation (including regulatory approvals); (viii) rights of reference in respect of regulatory documentation (including regulatory approvals); (ix) pre-clinical research data and results; (x) tangible information (including Know-How); and (xi) marketing, advertising and promotional materials that relate to such intellectual property. Upon the occurrence of an Insolvency Event by or against SpinCo or any of its Affiliates under the Code or any similar laws in any other country in the Territory, RemainCo shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, and the same, if not already in its possession, will be promptly delivered to it: (A) upon any such commencement of an Insolvency Event upon its written request therefor, unless SpinCo elects to continue to perform all of its obligations under this Agreement; or (B) if not delivered under sub-clause (A) because SpinCo continues to perform, upon the rejection of this Agreement by or on behalf of SpinCo upon written request therefor by RemainCo. All rights, powers and remedies of RemainCo provided for in this Section 2.10(d) shall be in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including under the Code and any similar laws in any other country in the Territory). Unless and until SpinCo rejects this Agreement, SpinCo shall perform all of its obligations under this Agreement. SpinCo shall not, and shall cause each of its Affiliates not to, interfere with the rights of RemainCo to intellectual property as set forth in this Section 2.10, including the right to obtain the intellectual property from another entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parties intend and agree that any sale of SpinCo's assets under Section 363 of the Code shall be subject to RemainCo's rights under Section 365(n), that RemainCo cannot be compelled to accept a money satisfaction of its interests in the intellectual property licensed pursuant to this Agreement, and that any such sale therefore may not be made to a purchaser "free and clear" of RemainCo's rights under this Agreement and Section 365(n) without the express, contemporaneous written consent of RemainCo.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Upon the occurrence of an Insolvency Event in relation to SpinCo or any of its Affiliates, RemainCo, in addition to the rights, power and remedies expressly provided herein, shall be entitled to exercise all other such rights and powers and resort to all other such remedies as may now or hereafter exist at law or in equity (including under the Code). The Parties intend for the following RemainCo rights to extend to the maximum extent permitted by law, including for purposes of the Code: (i) the right of access to any intellectual property (including all

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embodiments thereof) of SpinCo or any of its Affiliates, or any Third Party with whom SpinCo or any such Affiliate contracts to perform an obligation of SpinCo under this Agreement which is reasonably necessary or useful for the Exploitation in the Territory of any product that RemainCo has a right to Exploit under this Agreement; (ii) the right to contract directly with any Third Party described in sub-clause (i) to complete the contracted work; and (iii) the right to cure any breach of or default under any such agreement with a Third Party and set off the costs thereof against amounts payable to SpinCo under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.11 Covenant Not to Sue**. Except to the extent not permitted under the Existing Third Party Agreements and except for any Excluded Products, SpinCo hereby covenants and agrees that neither SpinCo nor any of its Affiliates shall, anywhere in the world, institute or prosecute (or in any way aid any Third Party (other than to the extent required by law, regulation, court order or subpoena) in instituting or prosecuting), at law or in equity, any claim, demand, action or other proceeding for damages, costs, expenses or compensation, or for an enjoinment, injunction, or any other equitable remedy, against RemainCo, its Affiliates, (sub)licensees, suppliers, distributors, contractors, vendors or customers alleging the Exploitation by any such Person of any product of RemainCo or its Affiliates or (sub)licensees incorporating any SpinCo Platform Technology infringes any Patent Right owned or Controlled by SpinCo or its Affiliates at any time during the Term except that, in the event of a Change of Control Transaction of SpinCo, this covenant and agreement shall not extend to any Patent Right owned or controlled by the acquiror of SpinCo or any of the acquiror's affiliates (other than SpinCo and any Affiliates of SpinCo existing immediately prior to the consummation of such Change of Control Transaction) as of the date of such Change of Control Transaction or that come into the ownership or control of the acquiror or any such affiliate following such Change of Control Transaction through activities segregated through internal processes, policies and procedures and systems from any SpinCo Platform Technology, SpinCo Assigned Technology or RemainCo Licensed Technology (and personnel using or practicing any of such Intellectual Property Rights) unless (a) such Patent Right was, immediately prior to the consummation of such Change of Control Transaction, already owned or Controlled by SpinCo or its Affiliates or (b) any invention claimed or disclosed in such Patent Rights was made through the use of SpinCo Platform Technology, SpinCo Assigned Technology or RemainCo Licensed Technology. In SpinCo's or its Affiliates' agreements with each of its (sub)licensees of any such Patent Rights, SpinCo or its Affiliate, as applicable, shall use good faith efforts to include provisions requiring a covenant, materially identical to that which SpinCo is making in this Section 2.11, on the part of the (sub)licensee. Further, in the event of an assignment or transfer by SpinCo, its Affiliate or (sub)licensee of any such Patent Rights, such assignee or transferee shall be bound, and shall agree in writing to be bound, by the covenant set forth in this Section 2.11. The covenant set forth in this Section 2.11 shall be binding upon and inure to the benefit of the Parties and their respective Affiliates, successors, assigns, and transferees. SpinCo agrees that this covenant may be assigned or transferred by RemainCo to any Third Party, including successors in interest, without consent from SpinCo.

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**ARTICLE 3** 

**RIGHT OF FIRST NEGOTIATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1 Development Candidate ROFN**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **General**. During the period starting on the Effective Date and ending ten (10) years thereafter, on a Development Candidate-by-Development Candidate basis, SpinCo hereby grants to RemainCo a right of first negotiation (the "**Development Candidate ROFN**") with respect to SpinCo's or any of its Affiliates' product or product candidates, other than (i) a Cardiovascular Product in the Cardiovascular Field or (ii) an Excluded Product in the Field, that are approved by SpinCo's internal governance committee to progress, or otherwise are progressing, to IND-enabling studies (excluding (i) or (ii), each, a "**Development Candidate**"). SpinCo shall promptly (but in any event prior to initiating IND-enabling studies for such Development Candidate) notify RemainCo in writing of each Development Candidate and any other material information regarding such Development Candidate in SpinCo's possession that would be reasonably useful for RemainCo to determine its interest in receiving a grant from SpinCo or its Affiliates under rights to acquire, develop, commercialize, or promote such Development Candidate (each such notice, a "**Development Candidate ROFN Notice**"). Within [\*\*\*] from the receipt of the Development Candidate ROFN Notice for a Development Candidate (the "**Development Candidate ROFN Exercise Period**"), RemainCo may exercise its Development Candidate ROFN for such Development Candidate by providing SpinCo with written notice of RemainCo's intent to exercise its Development Candidate ROFN (the "**Development Candidate ROFN Exercise Notice**"). With respect to a Development Candidate, from the date of the Development Candidate ROFN Notice to the earlier of (A) the expiration of the Development Candidate ROFN Exercise Period and (B) the receipt by SpinCo from RemainCo of a Development Candidate ROFN Exercise Notice, in each case for such Development Candidate, SpinCo and its Affiliates, and their respective officers, agents and representatives, shall not engage in discussions with any Third Party (other than RemainCo, RemainCo's Affiliates or SpinCo's advisors) regarding a grant by SpinCo or its Affiliates of rights to acquire, develop, commercialize, or promote such Development Candidate or take any action with respect to such transaction for such Development Candidate with any such Third Party. Upon SpinCo's receipt of a Development Candidate ROFN Exercise Notice, SpinCo shall, or shall cause its applicable Affiliate to, negotiate in good faith on an exclusive basis with RemainCo or RemainCo's applicable Affiliate for a period of [\*\*\*] from the date of the Development Candidate ROFN Exercise Notice, unless such negotiations are earlier terminated by RemainCo or RemainCo's applicable Affiliate (the "**Development Candidate ROFN Negotiation Period**"), the terms of a grant by SpinCo or its Affiliates of exclusive rights to acquire, develop, commercialize, or promote such Development Candidate for the applicable Development Candidate with respect to which the parties would enter into a binding, definitive written agreement on terms mutually agreed between the parties. If SpinCo receives or prepares any additional material information with respect to a Development Candidate during the Development Candidate ROFN Exercise Period for such Development Candidate or, if applicable, during any Development Candidate ROFN Negotiation Period for such Development Candidate and such information was not previously shared with RemainCo as part of the Development Candidate ROFN Notice, then SpinCo shall promptly, and in any case within three Business Days of SpinCo's receipt or preparation of such information, share a copy of such information with RemainCo.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **ROFN Expiration**. If, with respect to a Development Candidate, (i) RemainCo notifies SpinCo prior to the expiration of the Development Candidate ROFN Exercise Period that RemainCo elects not to exercise its Development Candidate ROFN, (ii) RemainCo does not provide SpinCo with a Development Candidate ROFN Exercise Notice within the Development Candidate ROFN Exercise Period, or (iii) RemainCo provides SpinCo with a Development Candidate ROFN Exercise Notice within the Development Candidate ROFN Exercise Period but the Parties fail to reach a definitive agreement on the terms of the transaction for such Development Candidate during the Development Candidate ROFN Negotiation Period, then, in each case ((i)-(iii)), the Development Candidate ROFN for such Development Candidate will expire on the applicable expiration date ("**Development Candidate ROFN Expiration**", with respect to (i), on the date on which RemainCo notifies SpinCo of its intent not to exercise the Development Candidate ROFN; with respect to (ii), on the expiration date of the Development Candidate ROFN Exercise Period; and with respect to (iii), on the expiration date of the Development Candidate ROFN Negotiation Period).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2 Prospective Transaction ROFN.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **General**. During the period starting on the Effective Date and ending ten (10) years thereafter, SpinCo shall not, and shall cause its Affiliates not to, grant any rights or license, transfer any rights or enter into any agreement or arrangement pursuant to which a Third Party would be given a right to acquire, develop, commercialize or promote any pharmaceutical, biological or other drug product in the Field other than (i) a Cardiovascular Product in the Cardiovascular Field or (ii) an Excluded Product in the Field (excluding (i) and (ii), each, a "**Prospective Transaction**") without first offering RemainCo a right of first negotiation on the terms of this Section 3.2 ("**Prospective Transaction ROFN**"). Pursuant to the Prospective Transaction ROFN, in the event of (A) any determination of SpinCo's Board of Directors (the "**Board**") or authorization by the Board or any of the officers, agents, or representatives of SpinCo or any of its Affiliates to initiate a process to explore or pursue, or to explore or pursue, a Prospective Transaction, or (B) the receipt by SpinCo or any of its Affiliates of a bona fide written offer, proposal or indication of interest for a Prospective Transaction with respect to which the Board or any of the officers, agents, or representatives of SpinCo or any of its Affiliates intends to explore or pursue (any of the events described in clauses (A) or (B) of this Section 3.2(a), a "**Prospective Transaction Event**"), then SpinCo shall promptly (but in any event not later than [\*\*\*] after the Prospective Transaction Event) notify RemainCo in writing of the Prospective Transaction Event and provide RemainCo with any material information in SpinCo's possession related to such Prospective Transaction, including, without limitation and as applicable, a description of the transaction type, transaction structure, scope of rights involved, including field and geographic territory, the anticipated timing, key financial terms (if known), and any other material information regarding such Prospective Transaction in SpinCo's possession that would be reasonably useful for RemainCo to determine its interest in such Prospective Transaction ("**Prospective Transaction ROFN Notice**"). If SpinCo receives or prepares any additional material information with respect to such Prospective Transaction during the Prospective Transaction ROFN Exercise Period or, if applicable, during any Prospective Transaction ROFN Negotiation Period and such information was not previously shared with RemainCo as part of the Prospective Transaction ROFN Notice, then SpinCo shall promptly, and in any case within [\*\*\*] of SpinCo's receipt or preparation of such information, share a copy of such information with RemainCo. Within [\*\*\*] from the receipt of the Prospective Transaction ROFN Notice ("**Prospective Transaction ROFN Exercise Period**"), RemainCo may exercise its ROFN by providing SpinCo with written notice of RemainCo's intent to exercise its ROFN (the "**Prospective Transaction ROFN Exercise Notice**"). From the date of the Prospective Transaction Event to the earlier of (i) the expiration of

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the Prospective Transaction ROFN Exercise Period and (ii) the receipt by SpinCo from RemainCo of a Prospective Transaction ROFN Exercise Notice, SpinCo and its Affiliates, and their respective officers, agents and representatives, shall not engage in discussions with any Third Party (other than RemainCo, RemainCo's Affiliates or SpinCo's advisors, solely with respect to a Prospective Transaction with RemainCo or RemainCo's Affiliates) regarding a Prospective Transaction or take any action with respect to a Prospective Transaction with any such Third Party. Upon SpinCo's receipt of a Prospective Transaction ROFN Exercise Notice, SpinCo shall, or shall cause its applicable Affiliate to, negotiate in good faith on an exclusive basis with RemainCo or RemainCo's applicable Affiliate for a period of [\*\*\*] from the date of the Prospective Transaction ROFN Exercise Notice, unless such negotiations are earlier terminated by RemainCo or RemainCo's applicable Affiliate (the "**Prospective Transaction ROFN Negotiation Period**"), the terms of the Prospective Transaction upon which the parties would enter into a binding, definitive written agreement on terms mutually agreed between the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Prospective Transaction ROFN Expiration**. If (i) RemainCo notifies SpinCo prior to the expiration of the Prospective Transaction ROFN Exercise Period that RemainCo elects not to exercise its Prospective Transaction ROFN, (ii) RemainCo does not provide SpinCo with a Prospective Transaction ROFN Exercise Notice within the Prospective Transaction ROFN Exercise Period, or (iii) RemainCo provides SpinCo with a Prospective Transaction ROFN Exercise Notice within the Prospective Transaction ROFN Exercise Period but the Parties fail to reach a definitive agreement on the terms of the Prospective Transaction during the Prospective Transaction ROFN Negotiation Period, then, in each case ((i)-(iii)), the Prospective Transaction ROFN will expire on the applicable expiration date ("**Prospective Transaction ROFN Expiration**", with respect to (i), on the date on which RemainCo notifies SpinCo of its intent not to exercise the Prospective Transaction ROFN; with respect to (ii), on the expiration date of the Prospective Transaction ROFN Exercise Period; and with respect to (iii), on the expiration date of the Prospective Transaction ROFN Negotiation Period), and subject to Sections 3.2(c) and 3.2(d), SpinCo shall be permitted to pursue the Prospective Transaction with any Third Party (other than RemainCo or RemainCo's Affiliate).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Prospective Transaction MFN**. If the Prospective Transaction ROFN Expiration occurs solely as a result of the expiration of the Prospective Transaction ROFN Negotiation Period pursuant to Section 3.2(b)(iii), and if SpinCo or its Affiliates desires to enter into a Prospective Transaction in the [\*\*\*] following such Prospective Transaction ROFN Expiration with any Third Party on terms that are, taken as a whole, less favorable to SpinCo than the last written offer proposed by RemainCo (or RemainCo's applicable Affiliate) during the Prospective Transaction ROFN Negotiation Period, then SpinCo shall notify RemainCo in writing that it has received and is considering a bona fide written offer from a Third Party for such Prospective Transaction, and SpinCo shall offer to enter into the Prospective Transaction with RemainCo or its Affiliate on the terms of the last written offer proposed by RemainCo (or RemainCo's applicable Affiliate) during the Prospective Transaction ROFN Negotiation Period (a "**Prospective Transaction MFN Notice**"). Upon receiving such Prospective Transaction MFN Notice from SpinCo, RemainCo may do any of the following by providing written notice to SpinCo ("**Prospective Transaction MFN Response Notice**") within [\*\*\*] of receiving such Prospective Transaction MFN Notice from SpinCo: (i) accept such offer, (ii) make a revised offer, or (iii) respond that RemainCo (or its applicable Affiliate) is no longer interested in pursuing the Prospective Transaction negotiated with SpinCo during the Prospective

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Transaction ROFN Negotiation Period. If RemainCo's Prospective Transaction MFN Response Notice indicates that RemainCo (or its applicable Affiliate) is no longer interested in pursuing the Prospective Transaction as described in the foregoing clause (iii) or if RemainCo fails to provide a Prospective Transaction MFN Response Notice within [\*\*\*] of receiving a Prospective Transaction MFN Notice, then SpinCo may pursue with any Third Party the Prospective Transaction that gave rise to the Prospective Transaction MFN Notice provided to RemainCo and this Section 3.2(c) will no longer apply with respect to such Prospective Transaction previously negotiated between RemainCo (or its applicable Affiliate) and SpinCo (or its applicable Affiliate) during the Prospective Transaction ROFN Negotiation Period. If RemainCo's Prospective Transaction MFN Response Notice makes a revised offer as described in the foregoing clause (ii), then SpinCo will consider such revised offer in good faith and may also (in its sole discretion) pursue with any Third Party a Prospective Transaction that gave rise to the Prospective Transaction MFN Notice provided to RemainCo, but in such event RemainCo may (in its sole discretion) also pursue such Prospective Transaction with SpinCo in competition with any such Third Party and, in such event, SpinCo (or its applicable Affiliate) shall negotiate with RemainCo (or its applicable Affiliate) in good faith unless and until SpinCo or its applicable Affiliate has entered into a binding, definitive written agreement with such Third Party. If RemainCo's Prospective Transaction MFN Response Notice accepts SpinCo's offer to enter into a transaction on the terms of the last written offer proposed by RemainCo (or RemainCo's applicable Affiliate) as described in the foregoing clause (i), then SpinCo (or its applicable Affiliate) and RemainCo (or its applicable Affiliate) will, on an exclusive basis, negotiate in good faith and use reasonable efforts for a period of at least [\*\*\*] to enter into such Prospective Transaction on such terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **ROFN Renewal**. Notwithstanding anything to the contrary, the parties agree that the Prospective Transaction ROFN shall automatically renew for a Prospective Transaction if SpinCo does not enter into a binding, definitive written agreement for the Prospective Transaction with a Third Party within [\*\*\*] following the date of the Prospective Transaction ROFN Expiration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3 Change of Control Transaction.** None of the provisions of Sections 3.1 or 3.2 shall apply to a Change of Control Transaction with respect to SpinCo.

**ARTICLE 4** 

**INTELLECTUAL PROPERTY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1 Ownership of Inventions.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **In General**. Except as expressly set forth in Section 2.2, ownership of all Inventions and all Intellectual Property Rights therein shall be based on inventorship, as determined in accordance with the rules of inventorship under Applicable Laws in the United States, irrespective of where such Invention is made. To the extent that Applicable Laws in any jurisdiction other than the United States affects the ownership of Intellectual Property Rights, as a matter of law, in a manner that is inconsistent with the application of Applicable Laws in the United States, the Parties shall assign, transfer and otherwise convey to the other Party, without additional compensation, all such right, title and interest in and to any applicable Intellectual Property Right as is necessary to fully effect the ownership thereof as provided for in this Section 4.1(a), subject to Section 2.2.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Disclosure**. SpinCo shall promptly disclose to RemainCo all Inventions constituting SpinCo Platform Technology, including all invention disclosures or other similar documents submitted to SpinCo or its Affiliates', licensees, or Sublicensees', together with employees, agents, or contractors of SpinCo or its Affiliates, licensees, or Sublicensees relating to such Inventions, and shall also respond promptly to reasonable requests from RemainCo for additional information relating to such Inventions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2 Patent Prosecution and Maintenance**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **SpinCo Patents Other than SpinCo Assigned Patents**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the Existing Third Party Rights, as between the Parties, SpinCo shall have the first right, but not the obligation, to file, prosecute, and maintain all SpinCo Patents (excluding, after the Assignment Effective Date, the SpinCo Assigned Patents) throughout the world, and SpinCo shall be solely responsible for all costs and expenses incurred in connection with such filing, prosecution, and maintenance. SpinCo shall reasonably advise RemainCo of the filing information of such SpinCo Patents so that RemainCo may download prosecution correspondence from the relevant patent office. In addition, SpinCo shall promptly provide RemainCo with drafts of all proposed material filings and correspondence to any patent authorities with respect to such SpinCo Patents for RemainCo's review and comment prior to the submission of such proposed filings and correspondence. SpinCo shall confer with RemainCo and take into consideration RemainCo's comments prior to submitting such filings and correspondence; *provided*, that RemainCo provides such comments within [\*\*\*] ([\*\*\*]) Business Days of receiving the draft filings and correspondence from SpinCo. If RemainCo does not provide comments within such period of time, then RemainCo shall be deemed to have no comment to such proposed filings or correspondence. [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) SpinCo shall notify RemainCo of any decision to cease prosecution or maintenance of any SpinCo Patent in any country. SpinCo shall provide such notice at least [\*\*\*] days prior to any filing or payment due date, or any other due date that requires action in order to avoid loss of rights, in connection with such SpinCo Patent. In such event, subject to the Existing Third Party Rights, RemainCo may, at RemainCo's discretion and expense, continue prosecution or maintenance of such Patent Rights in such country.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **SpinCo Assigned Patents**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the Existing Third Party Rights, from and after the Assignment Effective Date, as between the Parties, RemainCo shall have the first right, but not the obligation, to file, prosecute, and maintain all Patent Rights within the SpinCo Assigned Technology (the "**SpinCo Assigned Patents**") throughout the world, and RemainCo shall be solely responsible for all costs and expenses incurred in connection with such filing, prosecution, and maintenance. RemainCo shall reasonably advise SpinCo of the filing information of such

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SpinCo Assigned Patents so that SpinCo may download prosecution correspondence from the relevant patent office. In addition, RemainCo shall promptly provide SpinCo with drafts of all proposed material filings and correspondence to any patent authorities with respect to such SpinCo Assigned Patents for SpinCo's review and comment prior to the submission of such proposed filings and correspondence. RemainCo shall confer with SpinCo and take into consideration SpinCo's comments prior to submitting such filings and correspondence; *provided*, that SpinCo provides such comments within [\*\*\*] of receiving the draft filings and correspondence from RemainCo. If SpinCo does not provide comments within such period of time, then SpinCo shall be deemed to have no comment to such proposed filings or correspondence. [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) RemainCo shall notify SpinCo of any decision to cease prosecution or maintenance of any SpinCo Assigned Patent in any country. RemainCo shall provide such notice at least [\*\*\*] prior to any filing or payment due date, or any other due date that requires action in order to avoid loss of rights, in connection with such SpinCo Assigned Patent. In such event, subject to the Existing Third Party Rights, SpinCo may, upon the prior written consent of RemainCo (not to be unreasonably withheld, conditioned, or delayed) and at SpinCo's discretion and expense, continue prosecution or maintenance of such Patent Rights in such country.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Cooperation**. Each Party shall provide the other Party, at the other Party's request and expense, all reasonable assistance and cooperation in the patent prosecution and maintenance efforts under this Section 4.2 and RemainCo's patent prosecution and maintenance efforts with respect to the RemainCo Licensed Technology including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3 Patent Enforcement**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Notification**. If either Party becomes aware of any infringement, misappropriation, administrative proceeding, or other violation anywhere in the world by a Third Party of any of the SpinCo Patents, including any notification pursuant to 42 U.S.C. § 262(k) for a Section 351(k) Biosimilar Application in the United States, or similar provisions in other jurisdictions, or of any request for declaratory judgment, opposition, nullity action, interference, *inter partes* reexamination, *inter partes* review, post-grant review, derivation proceeding, or similar action alleging the invalidity, unenforceability, or non-infringement of any of such SpinCo Patents (collectively, a "**Product Infringement**"), such Party shall promptly notify the other Party in writing to that effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Enforcement Rights**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **SpinCo Patents Other than SpinCo Assigned Patents**. For any Product Infringement of a SpinCo Patent (excluding, after the Assignment Effective Date, the SpinCo Assigned Patents), and subject to the Existing Third Party Rights, as between the Parties, (A) RemainCo shall have the first right, but not the obligation, to bring and control any legal action or proceeding under such SpinCo Patents against any Person engaged in Product Infringement related to the Exploitation of a product outside of the Cardiovascular Field and (B) SpinCo shall have the first right, but not the obligation, to bring and control any legal action or proceeding under such SpinCo Patents against any Person engaged in such Product Infringement in the Cardiovascular Field, in each case ((A) and (B)), at its own cost and expense as it reasonably determines appropriate and determine all litigation strategy and actions, including (1) naming the other Party as a party in suit, (2) deciding which such SpinCo Patents will be enforced or defended in such a legal action or proceeding and how such enforcement or defenses shall be pursued, and (3) settling any such action or proceeding under terms that may include the right to authorize the Third Party infringer to be non-exclusively licensed under any such SpinCo Patents or to agree not to further enforce such SpinCo Patents against the Third Party infringer on behalf of both RemainCo and SpinCo. Each Party not having the first right to enforce under this Section 4.3(b) shall provide to the other Party reasonable assistance in any action or proceeding brought under this Section 4.3(b), at such other Party's request and expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) **SpinCo Assigned Patents**. From and after the Assignment Effective Date, for any Product Infringement of a SpinCo Assigned Patent, and subject to the Existing Third Party Rights, as between the Parties, RemainCo shall have the first right, but not the obligation, to bring and control any legal action or proceeding under the SpinCo Assigned Patents against any Person engaged in such Product Infringement, at its own cost and expense as it reasonably determines appropriate and determine all litigation strategy and actions, including (A) naming SpinCo as a party in suit, (B) deciding what SpinCo Assigned Patents will be enforced or defended in such a legal action or proceeding and how such enforcement or defenses shall be pursued and (C) settling any such action or proceeding under terms that may include the right to authorize the Third Party infringer to be non-exclusively licensed under any SpinCo Assigned Patents or to agree not to further enforce the SpinCo Assigned Patents against the Third Party infringer on behalf of both RemainCo and SpinCo. SpinCo shall provide to RemainCo reasonable assistance in any action or proceeding brought under this Section 4.3(b), at RemainCo's request and expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Step-in Right**. Subject to the Existing Third Party Rights, in the event that the Party having the first right to enforce a SpinCo Patent under this Section 4.3(b) (the "**Enforcing Party**") does not exercise such right within [\*\*\*] after receiving notice of the applicable Product Infringement or prior to [\*\*\*] before the time limit, if any, set forth under Applicable Laws for the filing of such actions, whichever comes first, the other Party shall, upon the prior written consent of the Enforcing Party (not to be unreasonably withheld, conditioned, or delayed), have the right to bring and control any such action at its own expense and by counsel of its choice; *provided*, that such right of SpinCo with respect to any SpinCo Assigned Patent shall apply solely if the Product Infringement relates to the Development or Commercialization of a RNA therapeutic product in the Cardiovascular Field; and *provided*, *further*, that if the Enforcing Party notifies the other Party in writing prior to [\*\*\*] before such time limit for the filing of any such action that the Enforcing Party intends to file such action before the time limit, then the Enforcing Party shall be obligated to file such action before such time limit, and the other Party will not have the right to bring and control such action.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Expenses and Recoveries**. As between the Parties, the Party bringing an action under Section 4.3(b) with respect to SpinCo Patents shall be solely responsible for any expenses incurred by such Party as a result of such action. Subject to the Existing Third Party Rights, any recovery of monetary damages in connection with any such action shall be allocated as follows: first, to the reimbursement of any out-of-pocket costs incurred by the Party bringing such action; second, to the reimbursement of any out-of-pocket costs incurred by the other Party in such action; and third, any remaining amounts shall be: (i) in the event that RemainCo brought such action, retained by RemainCo; and (ii) in the event that SpinCo brought such action, divided equally between the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4 Patent Term Extension and Supplementary Protection Certificate**. Subject to the Existing Third Party Rights, as between the Parties, RemainCo shall have the sole right, but not the obligation, to seek patent term extensions, patent term restorations, and supplemental protection certificates or the like that are now or become available under Applicable Laws, including 35 U.S.C. § 156 and applicable foreign counterparts (collectively, "**Extensions**"), in any country in the Territory in relation to the SpinCo Patents. If RemainCo decides to seek any Extension for any SpinCo Patent, SpinCo shall cooperate with RemainCo in obtaining such Extension with respect to such SpinCo Patent in any country or region where applicable. SpinCo shall provide all reasonable assistance requested by RemainCo, including permitting RemainCo to proceed with applications for such any Extensions in the name of SpinCo, if deemed appropriate by RemainCo, and executing documents and providing any relevant information to RemainCo. RemainCo shall, in its sole discretion, determine which, if any, SpinCo Patents for which it will file applications for Extensions. If RemainCo decides not to seek any Extension with respect to the SpinCo Patents in any country or region where applicable, nothing in this Agreement is intended to, or shall be deemed to, give SpinCo authorization to apply for any Extensions without the express written permission of RemainCo. In particular, nothing in this Agreement creates an agency relationship of SpinCo on behalf of RemainCo for the purposes of filing for a patent term extension under 35 U.S.C. § 156.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5 Unitary Patent System**. Subject to the Existing Third Party Rights, as between the Parties, RemainCo shall be solely responsible for all strategies for the SpinCo Patents with respect to the EU Unitary Patent System, including the filing or withdrawal of any action to opt-in or opt-out from the EU Unitary Patent System for any SpinCo Patent and the validation of any SpinCo Patent as a unitary patent or a European patent.

**ARTICLE 5** 

**CONFIDENTIALITY; PUBLICATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1 Duty of Confidence**. Subject to the other provisions of this Article 5:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) during the Term and for [\*\*\*] thereafter, all Confidential Information of a Party or any of its Affiliates (the "**Disclosing Party**") shall be maintained in confidence and otherwise safeguarded by the other Party and its Affiliates (the "**Receiving Party**"), in the same manner and with the same protections as the Receiving Party maintains its own confidential information, but in no event with less than a reasonable standard of care, except with respect to any trade secrets, the foregoing obligation will continue for so long as such information remains a trade secret under Applicable Laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Receiving Party may only use Confidential Information of the Disclosing Party for the purposes of performing its obligations or exercising its rights under this Agreement; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Receiving Party may only disclose Confidential Information of the Disclosing Party to: (i) its Affiliates, licensees and Sublicensees; and (ii) employees, agents, contractors, consultants and advisers of the Receiving Party and its Affiliates, licensees and Sublicensees, in each case ((i) and (ii)), to the extent reasonably necessary for the purposes of performing its obligations or exercising its rights under this Agreement; *provided*, that (A) such Persons are bound by legally enforceable obligations to maintain the confidentiality and limit the use of the Confidential Information in a manner consistent with the confidentiality and non-use provisions of this Agreement; and (B) the actions and inactions of any such Person shall, with respect to such Confidential Information, be deemed to be the actions and inactions of such Receiving Party for all purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2 Exceptions**. The foregoing obligations with respect to particular Confidential Information of a Disclosing Party shall not apply to the extent that the Receiving Party can demonstrate that such Confidential Information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is known by the Receiving Party at the time of its receipt without an obligation of confidentiality, and not through a prior disclosure by the Disclosing Party, as documented by the Receiving Party's business records; *provided*, that the foregoing exception shall not apply with respect to Platform Information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) is in the public domain before its receipt from the Disclosing Party, or thereafter enters the public domain through no fault of the Receiving Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) is subsequently disclosed to the Receiving Party by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the Disclosing Party; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) is discovered or developed by the Receiving Party independently and without use of or reference to any Confidential Information of the Disclosing Party, as documented by the Receiving Party's business records; *provided*, that the foregoing exception shall not apply with respect to Platform Information.

Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the Receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the Receiving Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the Receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the Receiving Party unless the combination and its principles are in the public domain or in the possession of the Receiving Party.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3 Authorized Disclosures**. Notwithstanding the obligations set forth in Section 5.1, the Receiving Party may disclose the Disclosing Party's Confidential Information (including this Agreement and the terms herein) to the extent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) such disclosure is reasonably necessary, to such Party's directors, attorneys, independent accountants or financial advisors for the sole purpose of enabling such directors, attorneys, independent accountants or financial advisors to provide advice to such Party; *provided*, that such recipients are bound by confidentiality and non-use obligations that are at least as restrictive as those contained in this Agreement, except that the term of confidentiality for such recipients may be shorter than the period set forth in this Agreement as long as it is no less than [\*\*\*];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) such disclosure is to a Governmental Authority and necessary (i) to obtain or maintain INDs or Regulatory Approvals within the Territory for any product that the Receiving Party has a right to Exploit under this Agreement, (ii) in order to respond to inquiries, requests or investigations by such Governmental Authority relating to any such product or this Agreement or (iii) in connection with the filing, prosecution or maintenance of Patent Rights as permitted by this Agreement; *provided*, that Confidential Information that is disclosed pursuant to this Section 5.3(b) shall remain otherwise subject to the confidentiality and non-use provisions of this Article 5 (*provided*, that such disclosure is not a public disclosure);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) such disclosure is required by Applicable Laws or judicial or administrative process; *provided*, that (i) Confidential Information that is disclosed pursuant to this Section 5.3(c) shall remain otherwise subject to the confidentiality and non-use provisions of this Article 5 (*provided*, that such disclosure is not a public disclosure), and (ii) the Party disclosing Confidential Information shall cooperate with and reasonably assist the other Party (at the other Party's cost) if the other Party seeks a protective order or other remedy in respect of any such disclosure and furnish only that portion of the Confidential Information which, in the opinion of Party's legal counsel, is responsive to such requirement or request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) such disclosure is necessary in order to enforce its rights under this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) such disclosure is reasonably necessary or appropriate in connection with exercise of the licenses and other rights granted to the Receiving Party hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.4 Publications**. As between the Parties, each Party may publish peer reviewed manuscripts or make other forms of public disclosure such as abstracts and presentations (collectively, "**Publications**") regarding such Party's and its Affiliates' products; *provided*, that no such Publication discloses any Confidential Information of the other Party without such other Party's prior written consent. As between the Parties, RemainCo will have the sole right (but no obligation) to make Publications specifically regarding the SpinCo Platform and the SpinCo Platform Improvements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.5 Return of Confidential Information**. At any time upon the Disclosing Party's request, the Receiving Party and its Affiliates shall promptly, at the Receiving Party's election: (a) return to the other Party; or (b) destroy and provide proof of destruction, all tangible items bearing or containing any Confidential Information of the Disclosing Party (in each case, excluding those items which are deemed to be the Confidential Information of both Parties and any Confidential Information of the Disclosing Party to the extent the continued access to or use of such Confidential Information by the Receiving Party is permitted pursuant to the terms of the Separation and Distribution Agreement or this Agreement, including the rights and licenses granted in this

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Agreement), except for one (1) copy which may be retained in its confidential files for archive or compliance purposes. Each Party and its Affiliates will also be permitted to retain such additional copies of or any computer records or files containing the other Party's or any of its Affiliates' Confidential Information that have been created solely by automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with the retaining Party's standard archiving and back-up procedures, but not for any other use or purpose. All Confidential Information so retained shall continue to be subject to the terms of this Agreement.

**ARTICLE 6** 

**TERM AND TERMINATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1** Except for Sections 2.9(a)(i) (only as set forth therein), 2.9(b) (only as set forth therein), 7.1, 7.2(a), 7.2(k) and 9.13, which shall be effective upon the Execution Date, the remaining terms of this Agreement shall become effective upon the Effective Date and continue in full force and effect until the date the Parties mutually agree to terminate this Agreement in its entirety (the period from the Effective Date through such termination, the "**Term**").

**ARTICLE 7** 

**REPRESENTATIONS AND WARRANTIES; COVENANTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1 Mutual Representations and Warranties**. Each Party represents and warrants to the other Party, as of the Execution Date and the Effective Date, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) such Party (i) has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder and (ii) has taken all requisite action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) this Agreement has been duly executed on behalf of such Party and is a legal, valid and binding obligation on such Party, enforceable against such Party in accordance with its terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) all necessary consents, approvals and authorizations of all Governmental Authorities and other Persons required to be obtained by such Party in connection with the execution and delivery of this Agreement, the activities and transactions contemplated by this Agreement, or the performance by such Party of its obligations under this Agreement have been obtained, except, as of the Execution Date, as otherwise set forth in the Transaction Documents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the execution and delivery of this Agreement and the performance of such Party's obligations hereunder (i) do not conflict with or violate any requirement of Applicable Laws, regulations or orders of Governmental Authorities, (ii) do not conflict with, or constitute a breach or default under, any contractual obligation of such Party and (iii) do not conflict with or result in a breach of any provision of the organizational documents of such Party.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2 Covenants of SpinCo**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) SpinCo shall not, and shall cause its Affiliates not to: (i) grant any license or other interest to any Third Party under the Licensed SpinCo Technology, or effect or permit any corporate restructuring or enter into or amend any other agreement or transaction, in each case, that is or would be inconsistent with or otherwise diminishes or would diminish the rights or licenses granted or to be granted to RemainCo hereunder or take any other action that would cause any Patent Rights or Know-How that are Licensed SpinCo Technology to cease to be Licensed SpinCo Technology or that would be Licensed SpinCo Technology but for such grant, agreement or transaction; (ii) sell, assign, convey, or otherwise transfer any of its right, title or interest in or to any Licensed SpinCo Technology to any Third Party, except, for clarity, for the assignment to RemainCo of all SpinCo Platform Technology pursuant to and in accordance with Section 2.2; (iii) enter into or amend any agreement (including any Existing Third Party Agreement) in a manner that would impose additional obligations or liabilities on RemainCo or would diminish, limit or alter in any respect RemainCo's rights or otherwise adversely affect RemainCo or its Affiliates, in each case, without RemainCo's prior written consent; or (iv) incur or permit to incur any lien, security interest or other encumbrance, other than licenses entered into in the ordinary course of business, that are not and would not be inconsistent with and do not and would not otherwise diminish the rights or licenses granted or to be granted to RemainCo hereunder, on the Licensed SpinCo Technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) SpinCo shall make any and all payments owing by SpinCo or any of its Affiliates to any inventor of any Licensed SpinCo Technology owned by SpinCo or such Affiliate that is required in connection with the creation or exploitation of or transfer of rights to such Licensed SpinCo Technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) SpinCo will promptly notify RemainCo in the event that it or any of its Affiliates becomes aware of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any prior art or other facts that SpinCo believes would result in the invalidity or unenforceability of any of the claims included in any of the SpinCo Patents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any inequitable conduct or fraud on the patent office with respect to any of the SpinCo Patents; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any Person (other than Persons identified as inventors of inventions claimed in the SpinCo Patents) who claims to be an inventor of an invention claimed in SpinCo Patents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Exhibit 7.2(d)** sets forth a complete and accurate list of all of the SpinCo Patents that exist as of the Execution Date. SpinCo shall update **Exhibit 7.2(d)** from time to time to reflect additional Patent Rights that become SpinCo Patents prior to the Effective Date or during the Term;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) SpinCo shall not, and shall cause its Affiliates, licensees and Sublicensees not to use or practice any of the RemainCo Licensed Technology, the Licensed SpinCo Technology or the SpinCo Assigned Technology to Exploit a compound, product or product candidate in the Field in the Territory other than (i) an Excluded Product in the Field or (ii) a Cardiovascular Product in the Cardiovascular Field, in each case ((i) and (ii)), in the Territory;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) each employee, agent or contractor of SpinCo or its Affiliates, licensees, or Sublicensees shall be bound by invention assignment obligations, including: (i) promptly reporting any Invention or other Intellectual Property Right to SpinCo, its Affiliate, licensee or Sublicensee; (ii) presently assigning to SpinCo, its Affiliate, licensee or Sublicensee all of his or her right, title, and interest in and to any Invention or other Intellectual Property Right; (iii) cooperating in the preparation, filing, prosecution, maintenance and enforcement of any Patent Rights with respect to any Invention or other Intellectual Property Right; and (iv) performing all acts and signing, executing, acknowledging and delivering any and all documents required for effecting the obligations and purposes of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) without limiting Section 7.2(a) above, SpinCo shall, and shall cause its Affiliates to, maintain Control of all Patent Rights and Know-How sublicensed to RemainCo under each Upstream License;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) SpinCo shall not, and shall cause its Affiliates not to, modify, amend, or terminate or invalidate (or permit to be terminated or invalidated) any Upstream License or waive any right or obligation thereunder in any way that would adversely affect in any material respect RemainCo's rights or interests under this Agreement, in each case, without RemainCo's prior written consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) SpinCo shall not, and shall cause its Affiliates not to, breach any covenant, agreement or obligation under any Upstream License in a manner that would reasonably be expected to give the counterparty to any such agreement the right to terminate or otherwise alter (in a manner adverse to RemainCo or any of its Affiliates or their respective Sublicensees) SpinCo's rights or obligations under such Upstream License or otherwise diminish the scope or exclusivity of the sublicenses granted to RemainCo under applicable Licensed SpinCo Technology;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) (i) in the event that SpinCo or any of its Affiliates receives notice of an alleged breach by SpinCo or any of its Affiliates under any Upstream License, then SpinCo shall promptly, but in no event less than [\*\*\*] thereafter, provide written notice thereof to RemainCo and grant RemainCo the right (but not the obligation) to (A) either cure such alleged breach or enter into a direct license with such counterparty (in which case, SpinCo shall use reasonable efforts to assist RemainCo in entering into a direct license with such counterparty under terms no less favorable than those applicable to SpinCo under the Upstream License) and (B) offset any reasonable amounts incurred or paid by RemainCo in connection with the cure of such alleged breach or entry of such direct license, as applicable, against any amounts otherwise payable by RemainCo to SpinCo under this Agreement until fully offset; and (ii) in the event that SpinCo or any of its Affiliates receives notice of any breach by the other party of the applicable Upstream License in a manner that will or is likely to materially adversely affect RemainCo's rights or obligations under this Agreement, then SpinCo shall promptly, but in no event less than [\*\*\*] thereafter, provide written notice thereof to RemainCo and use commercially reasonable efforts to take such actions as reasonably requested by RemainCo to enforce such Upstream License. Without limiting the foregoing, in the event an Upstream License terminates during the Term, any sublicense(s) granted from SpinCo to RemainCo under any such Upstream License hereunder shall survive and any amounts that RemainCo shall pay to such Third Party under such sublicense(s) for activities performed in accordance with this Agreement may be offset against any and all amounts otherwise payable by RemainCo to SpinCo hereunder until fully offset; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Between the Execution Date and Effective Date, SpinCo will not, without the prior written consent of Parent, terminate, modify or amend, or waive, release or assign any rights, obligations or claims under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3 RemainCo Standards and Policies.** RemainCo or its Affiliates have put in place a Third Party risk management framework that is aimed at promoting the societal and environmental values of the United Nations Global Compact with specific Third Parties that RemainCo deals with (the "**Third Party Code**"). In connection with the rights granted to SpinCo under and pursuant to this Agreement, SpinCo shall, and shall cause its Affiliates to: (a) comply with the Third Party Code (and any published updates) which can be viewed and downloaded from https://www.novartis.com/esg/reporting/codes-policies-and-guidelines (SpinCo may request a copy free of charge from RemainCo); (b) having regard to Section 12.6 of the Third Party Code, upon RemainCo's reasonable request, provide information and documentation to RemainCo or its personnel to allow RemainCo to verify compliance with the Third Party Code in the form requested; (c) rectify identified non-compliances with the Third Party Code (where capable of remedy) and report remediation progress to RemainCo and/or its personnel on request; and (d) where required by RemainCo, fully co-operate (at its own expense) with RemainCo and RemainCo personnel in completing and returning, as reasonably instructed, any Questionnaire for Third Parties (and any requested updates to the same during the term of this Agreement). SpinCo represents and warrants that the information provided in any Questionnaire for Third Parties (whether provided before or during this Agreement, including updates to the same) is accurate and complete (and such information shall be treated as being part of this Agreement). SpinCo agrees that (x) its failure to comply with (A) the standards and requirements set out in the Third Party Code or (B) any other requirements set forth in this Section 7.3 or (y) its obstructing or refusing RemainCo's audit rights as set forth in the Third Party Code, in either case ((x) or (y)), shall constitute a material breach of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4 No Other Warranties**. EXCEPT AS EXPRESSLY STATED IN THIS ARTICLE 7 OR THE OTHER TRANSACTION DOCUMENTS, (A) NO REPRESENTATION, CONDITION OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF REMAINCO OR SPINCO; AND (B) ALL OTHER REPRESENTATIONS, CONDITIONS AND WARRANTIES WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE ARE HEREBY EXPRESSLY EXCLUDED, INCLUDING ANY REPRESENTATIONS, CONDITIONS AND WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. FOR THE AVOIDANCE OF DOUBT, EACH PARTY HEREBY DISCLAIMS ANY AND ALL DILIGENCE OBLIGATIONS, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO ANY PRODUCT OR TECHNOLOGY.

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**ARTICLE 8** 

**INDEMNIFICATION; LIABILITY; INSURANCE** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1 Indemnification by SpinCo**. SpinCo shall indemnify, defend and hold harmless RemainCo and its Affiliates and Sublicensees, and each of their respective directors, officers, employees, consultants and agents (collectively, "**RemainCo Indemnitees**"), from and against all Losses arising out of any Claim brought against any of them to the extent arising or resulting from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the breach of any representation, warranty or covenant by SpinCo under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the negligence or intentional misconduct of any SpinCo Indemnitees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any breach of the Specified License caused by the act or omission of SpinCo or its Affiliates or Sublicensees; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Exploitation of any product that SpinCo has a right to Exploit under this Agreement, whether before, during or after the Term, by or on behalf of SpinCo or its Affiliates or Sublicensees;

except, in each case ((a) – (d)), to the extent caused by the negligence or intentional misconduct of any RemainCo Indemnitee or a breach by RemainCo of any of its representations, warranties or covenants set forth in this Agreement. In no event shall SpinCo be required to indemnify, defend or hold harmless any RemainCo Indemnitees from and against any Losses to the extent such Losses relate to the matters set forth in [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2 Indemnification by RemainCo**. RemainCo shall indemnify, defend and hold harmless SpinCo and its Affiliates and Sublicensees, and each of their respective directors, officers, employees, consultants and agents (collectively, "**SpinCo Indemnitees**"), from and against all Losses arising out of any Claim brought against any of them to the extent arising or resulting from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the breach of any representation, warranty or covenant by RemainCo under this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the negligence or intentional misconduct of any RemainCo Indemnitees;

except, in each case ((a) – (b)), to the extent caused by the negligence or intentional misconduct of any SpinCo Indemnitee or a breach by SpinCo of any of its representations, warranties or covenants set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3 Indemnification Procedure.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If either Party is seeking indemnification under Section 8.1 or Section 8.2 (the "**Indemnified Party**"), it shall promptly inform the other Party (the "**Indemnifying Party**") in writing of the Claim giving rise to the obligation to indemnify pursuant to such Section 8.1 or Section 8.2, as applicable ("**Indemnification Claim Notice**") as soon as reasonably practicable after receiving notice of the Claim; *provided, however*, that failure or delay on the part of the Indemnified Party in providing the Indemnification Claim Notice to the Indemnifying Party shall not relieve the Indemnifying Party from any obligation hereunder, except to the extent that the Indemnifying Party demonstrates that its ability to defend or resolve such Claim is adversely

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affected thereby. The Indemnification Claim Notice shall contain a description of the Claim and the nature and amount of the Claim and any Losses related thereto (to the extent that the nature and amount of such Loss is known at such time). Upon the request of the Indemnifying Party, the Indemnified Party shall promptly furnish to the Indemnifying Party copies of all correspondence, communications and official documents (including court documents) received or sent with respect to any applicable Losses and Claims.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the provisions of Sections 8.3(c) and 8.3(d), the Indemnifying Party shall have the right, exercisable by written notice to the Indemnified Party within [\*\*\*] after receipt of the Indemnification Claim Notice, to assume the direction and control of the defense and handling of any such Claim, at the Indemnifying Party's expense, in which case Section 8.3(d) below shall govern. The assumption of the defense of a Claim by the Indemnifying Party shall not be construed as acknowledgement that the Indemnifying Party is liable to indemnify the Indemnified Party with respect to the Claim, nor shall it constitute a waiver by the Indemnifying Party of any defenses it may assert against any Indemnified Party's claim for indemnification. In the event that it is ultimately decided that the Indemnifying Party is not obligated to indemnify or hold the Indemnified Party harmless from and against the Claim, the Indemnified Party shall reimburse the Indemnifying Party for any and all costs and expenses (including attorneys' fees and costs of suit) and any losses incurred by the Indemnifying Party in its defense of the Claim. If the Indemnifying Party does not give written notice to the Indemnified Party, within [\*\*\*] after receipt of the Indemnification Claim Notice, of the Indemnifying Party's election to assume the defense and handling of such Claim, Section 8.3(d) shall govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Upon assumption of the defense of a Claim by the Indemnifying Party: (i) the Indemnifying Party shall have the right to and shall assume sole control and responsibility for dealing with the Claim; (ii) the Indemnifying Party may, at its own cost, appoint as counsel in connection with conducting the defense and handling of such Claim any law firm or counsel reasonably selected by the Indemnifying Party; (iii) the Indemnifying Party shall keep the Indemnified Party informed of the status of such Claim; and (iv) the Indemnifying Party shall have the right to settle the Claim on any terms the Indemnifying Party chooses; *provided, however*, that it shall not, without the prior written consent of the Indemnified Party, agree to a settlement of any Claim which could lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder or which admits any wrongdoing or responsibility for the Claim on behalf of the Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying Party and shall be entitled to participate in, but not control, the defense of such Claim with its own counsel and at its expense. In particular, the Indemnified Party shall furnish such records, information and testimony, provide witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during normal business hours by the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Claim, and making the Indemnified Party, the indemnitees and its and their employees and agents available on a mutually convenient basis to provide additional information and explanation of any records or information provided.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If the Indemnifying Party does not give written notice to the Indemnified Party as set forth in Section 8.3(b) or fails to conduct the defense and handling of any Claim in good faith after having assumed such, the Indemnified Party may, at the Indemnifying Party's expense, select counsel reasonably acceptable to the Indemnifying Party in connection with conducting the defense and handling of such Claim and defend or handle such Claim in such manner as it may deem appropriate. In such event, the Indemnified Party shall keep the Indemnifying Party timely apprised of the status of such Claim and shall not settle such Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed. If the Indemnified Party defends or handles such Claim, the Indemnifying Party shall cooperate with the Indemnified Party, at the Indemnified Party's request but at no expense to the Indemnified Party, and shall be entitled to participate in the defense and handling of such Claim with its own counsel and at its expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.4 Limitation of Liability**. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY IN CONTRACT, TORT, NEGLIGENCE BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES TO THE EXTENT ARISING FROM OR RELATING TO THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 8.4 IS INTENDED TO OR SHALL LIMIT OR RESTRICT (A) THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF A PARTY UNDER SECTION 8.1 OR SECTION 8.2, (B) A PARTY'S LIABILITY FOR BREACH OF ITS CONFIDENTIALITY OBLIGATIONS IN ARTICLE 5, (C) SPINCO'S BREACH OF ITS EXCLUSIVITY OBLIGATIONS IN SECTION 2.7, (D) SPINCO'S BREACH OF ITS INTELLECTUAL PROPERTY ASSIGNMENT OBLIGATIONS IN SECTION 2.2, (E) SPINCO'S BREACH OF THE ROFN RIGHTS GRANTED TO REMAINCO IN ARTICLE 3, OR (F) A PARTY'S LIABILITY FOR GROSS NEGLIGENCE, INTENTIONAL MISCONDUCT OR FRAUD UNDER OR IN CONNECTION WITH THIS AGREEMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.5 Insurance**. Each Party shall procure and maintain at its own cost, with financially stable and reputable insurers, adequate insurance protection that is usual and customary for its respective business operations, including general and products liability insurances, and reasonably necessary to cover its actual and potential insurable liabilities under this Agreement. Any deductible associated with a Party's third-party insurance policy shall be the responsibility of that Party and cannot be passed on to the other Party. SpinCo acknowledges and agrees that RemainCo may fulfill some or all of its foregoing obligations under this Section 8.5 by means of self-insurance to the same extent, where permitted by law. It is understood that such insurance, or self-insurance, shall not be construed to create a limit of either Party's liability, including with respect to its indemnification obligations under this Article 8. Each Party will be provided at least [\*\*\*] prior written notice of any cancellation or material decrease in the other Party's insurance coverage limits in the event such cancellation or material decrease impacts the obligations set forth under this Agreement.

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**ARTICLE 9** 

**GENERAL PROVISIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1 Assignment**. Neither Party may assign this Agreement or any of its rights or obligations hereunder without the other Party's prior written consent, except that (a) RemainCo may, without SpinCo's consent, assign this Agreement, or any of its rights or obligations under this Agreement, to one or more of its Affiliates; and (b) either Party may, without the other Party's consent, assign this Agreement in its entirety to a successor to all or substantially all of its business or assets to which this Agreement relates. Any permitted assignee will assume all obligations of its assignor under this Agreement (or related to the assigned portion in case of a partial assignment). Any attempted assignment in contravention of the foregoing will be null and void. Subject to the terms of this Agreement, this Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2 Severability**. Should one or more of the provisions of this Agreement become invalid, void or unenforceable as a matter of law, then this Agreement shall be construed as if such provision were not contained herein and the remainder of this Agreement shall be in full force and effect, and the Parties will use commercially reasonable efforts to substitute for the invalid, void or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original intent of the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.3 Notices**. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when: (a) delivered by hand (with written confirmation of receipt); or (b) when received by the addressee, if sent by an internationally recognized overnight delivery service (receipt requested), in each case, to the appropriate addresses set forth below (or to such other addresses as a Party may designate by notice):

If to the Company or SpinCo (prior to the Effective Date):

Avidity Biosciences, Inc.

3020 Callan Road

San Diego, CA 92121

Attention: [\*\*\*]

Email: [\*\*\*]

with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP

200 Clarendon Street

Boston, MA 02116

Attention: Graham Robinson

Laura Knoll

Merric Kaufman

Greg Schuster

Email: [\*\*\*]

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If to SpinCo (after the Effective Date):

Bryce Therapeutics, Inc.

10578 Science Center Drive, Suite 125

San Diego, CA 92121

Attention: [\*\*\*]

Email: [\*\*\*]

If to the Company (after the Effective Date):

Novartis AG

c/o Novartis International AG

Lichtstrasse 35

4056 Basel

Switzerland

Attention: [\*\*\*]

Email: [\*\*\*]

with a copy to (which shall not constitute notice):

Covington & Burling LLP

One CityCenter

850 Tenth Street, NW

Washington, DC 20001

Attention: Catherine J. Dargan

Michael J. Riella

Alicia Zhang

Email: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.4 Dispute Resolution**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event of any dispute, controversy or claim, whether statutory or sounding in tort, contract or equitable principles, arising out of, relating to or in any way concerning this Agreement or any term or condition thereof, including with respect to the formation, applicability, breach, termination, validity or enforceability thereof, or the performance by either Party of its obligations hereunder, whether before or after termination of this Agreement (each, a "**Dispute**"), either Party may refer the Dispute to the Executive Officers, who shall attempt in good faith to resolve such Dispute. If the Executive Officers cannot resolve such Dispute within [\*\*\*] of the matter being referred to them, either Party shall be free to initiate the arbitration proceedings outlined in Section 9.4(b) below for such Dispute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to Section 9.4(a), any Dispute shall be resolved solely and exclusively by final and binding arbitration conducted as set forth in this Section 9.4(b). Whenever a Party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other Party at least [\*\*\*] before commencing proceedings. The arbitration will be conducted by a panel of three (3) arbitrators bound by The Code of Ethics for

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Arbitrators in Commercial Disputes in accordance with the Commercial Arbitration Rules ("**Rules**") of the American Arbitration Association ("**AAA**"). The claimant shall nominate an arbitrator in its request for arbitration. The respondent shall nominate an arbitrator within [\*\*\*] of the receipt of the request for arbitration. The two (2) arbitrators nominated by the Parties shall together, within [\*\*\*] of the appointment of the later-nominated arbitrator, nominate a third arbitrator as the chairperson of the arbitration panel. If any of the three (3) arbitrators are not nominated within the time prescribed above, then the AAA shall appoint the arbitrator(s) in accordance with the Rules. The arbitrators shall have significant experience in the pharmaceutical industry and shall not include any current or former employee, consultant, officer or director of RemainCo or SpinCo (or their respective Affiliates), or otherwise have any current or previous relationship with RemainCo or SpinCo or their respective Affiliates. The seat of the arbitration shall be New York City, New York, and the language of the arbitration shall be English. The arbitrators shall issue their written reasoned opinion within [\*\*\*] of the close of the proceedings. No arbitrator (nor the panel of arbitrators) shall have the power to award punitive damages under this Agreement and such award is expressly prohibited. Decisions of the panel of arbitrators shall be final and binding on the Parties. Judgment on the award so rendered may be entered in any court of competent jurisdiction. The cost of the arbitration will be borne solely by the non-prevailing Party thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding any provision to the contrary set forth in this Agreement, if a dispute arises under this Agreement with respect to the validity, scope, enforceability, or ownership of any Patent Right or other intellectual property rights, and such dispute is not resolved in accordance with Section 9.4(a), then such dispute will be submitted to a court of competent jurisdiction in the jurisdiction in which such Patent Right or other intellectual property right was granted or arose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Nothing in this Section 9.4 shall preclude either Party from seeking interim or provisional relief, including a temporary restraining order, preliminary injunction or other interim equitable relief concerning a Dispute, in each case, if necessary to protect the interests of such Party without the necessity of posting bond.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The existence of the arbitration, any non-public information provided in the arbitration, and any submissions, orders or awards made in the arbitration shall not be disclosed to any non-party except the arbitrators, the AAA, the Parties, their counsel, experts, witnesses, accountants, auditors, insurers, reinsurers, and any other person necessary to the conduct of the arbitration except to the extent that disclosure may be required to fulfill a legal duty, protect or pursue a legal right, or enforce or challenge an award in bona fide legal proceedings; *provided*, that each Party, in any filing to confirm an award, shall not disclose any such information unless such confirmation is necessary in order for such Party to enforce a ruling under Section 9.4(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.5 Governing Law; Jurisdiction; Waiver of Jury Trial**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, U.S., without reference to any rules of conflict of laws; *provided*, that the United Nations Convention on Contracts for International Sale of Goods shall not apply.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAWS THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. THE PARTIES AGREE THAT EITHER OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT BETWEEN THE PARTIES IRREVOCABLY TO WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT, WHICH WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.6 Compliance with Law**. Each Party shall perform its obligations under this Agreement in accordance with all Applicable Laws. No Party shall, or shall be required to, undertake any activity under or in connection with this Agreement which violates, or which it believes, in good faith, may violate, any Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.7 Export Control.** This Agreement is made subject to any restrictions concerning the export of products or technical information from the United States or other countries which may be imposed upon or related to SpinCo or RemainCo from time to time, and both Parties agrees to comply with all such export control laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.8 Entire Agreement; Amendments**. This Agreement, including the Exhibits hereto, together with the other Transaction Documents, contains the entire agreement and understanding of the Parties with respect to the subject matter hereof. Any other express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, with respect to the subject matter hereof (except as set forth in the other Transaction Documents) are superseded by the terms of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representative(s) of both Parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.9 Independent Contractors**. It is expressly agreed that SpinCo and RemainCo shall be independent contractors and that the relationship between the Parties shall not constitute a partnership, joint venture or legal entity of any type. Neither SpinCo nor RemainCo shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party. Neither Party shall report this Agreement or the relationship between the Parties as a partnership for tax purposes unless required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.10 Waiver**. No provision of this Agreement shall be waived by any act, omission or knowledge of a Party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving Party. The waiver by either Party of any right hereunder, or of any failure of the other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by or failure of such other Party whether of a similar nature or otherwise.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.11 Cumulative Remedies**. No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.12 Further Actions**. RemainCo and SpinCo hereby covenant and agree, without the necessity of any further consideration, to execute, acknowledge and deliver any and all such other documents and take any such other action as may be reasonably necessary to carry out the intent and purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.13 No Third Party Beneficiary Rights**. The provisions of this Agreement are for the sole benefit of the Parties and their successors and permitted assigns, and they shall not be construed as conferring any rights to any Third Party (including any Third Party beneficiary rights), except (a) the Parties hereto acknowledge and agree that Parent is a third party beneficiary hereof and shall be entitled to the benefits of, and to enforce against SpinCo, SpinCo's obligations under this Agreement as if Parent was a Party to this Agreement and (b) with respect to certain RemainCo Indemnitees and certain SpinCo Indemnitees who are Third Parties solely with respect to Article 8; *provided*, that RemainCo and SpinCo shall have the sole right to exercise, claim, amend, waive, or modify the terms of Article 8 with respect to such RemainCo Indemnitees and such SpinCo Indemnitees, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.14 Extension to Affiliates**. RemainCo shall have the right to extend the rights, immunities and obligations granted in this Agreement to one or more of its Affiliates. All applicable terms and provisions of this Agreement shall apply to any such Affiliate to which this Agreement has been extended to the same extent as such terms and provisions apply to RemainCo. RemainCo shall remain primarily liable for any acts or omissions of its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.15 Expenses**. Except as otherwise expressly provided in this Agreement, each Party shall pay the fees and expenses of its respective lawyers and other experts and all other expenses and costs incurred by such Party incurred in connection with the negotiation, preparation, execution, delivery and performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.16 English Language**. This Agreement is written and executed in the English language. Any translation into any other language shall not be an official version of this Agreement and, in the event of any conflict in interpretation between the English version and such translation, the English version shall prevail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.17 Counterparts**. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail, including Adobe<sup>™</sup> Portable Document Format (PDF) or any electronic signature complying with the U.S. Federal ESIGN Act of 2000, and any counterpart so delivered will be deemed to be original signatures, will be valid and binding upon the Parties, and, upon delivery, will constitute due execution of this Agreement.

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**IN WITNESS WHEREOF**, the Parties intending to be bound have caused this License Agreement to be executed by their duly authorized representatives as of the Execution Date.

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| | | | |
|:---|:---|:---|:---|
| **Avidity Biosciences, Inc.** | **Avidity Biosciences, Inc.** | **Bryce Therapeutics, Inc.** | **Bryce Therapeutics, Inc.** |
| By: | /s/ Sarah Boyce | By: | /s/ Michael F. MacLean |
| Name: Sarah Boyce<br> Title: President & Chief Executive Officer | Name: Sarah Boyce<br> Title: President & Chief Executive Officer | Name: Michael F. MacLean<br> Title: President | Name: Michael F. MacLean<br> Title: President |

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*[Signature Page to License Agreement]* 

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**<u>EXHIBIT 1.73</u>**

[\*\*\*]

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**<u>EXHIBIT 1.114</u>**

[\*\*\*]

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**<u>EXHIBIT 1.119</u>**

[\*\*\*]

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**<u>EXHIBIT 1.128</u>**

[\*\*\*]

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**<u>EXHIBIT 1.142</u>**

[\*\*\*]

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**<u>EXHIBIT 7.2(d)</u>**

[\*\*\*]

## Exhibit 10.2

**Exhibit 10.2** 

**Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Such omitted information has been noted in this document with a placeholder identified by the mark "[\*\*\*]".** 

**FORM OF** 

**TRANSITION SERVICES AGREEMENT** 

**by and between** 

**Avidity Biosciences, Inc.** 

**and** 

**Atrium Therapeutics, Inc.** 

**Dated as of [•]** 

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**TABLE OF CONTENTS** 

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| | | |
|:---|:---|:---|
|  **ARTICLE 1** DEFINITIONS | **ARTICLE 1** DEFINITIONS | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 | Certain Defined Terms | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 | Construction | 3 |
|  **ARTICLE 2** SERVICES | **ARTICLE 2** SERVICES | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 | Provision of Services | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 | Duration of Services | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 | Additional Services | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 | Services Performed by Affiliates and Third-Parties | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 | Services Standard | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 | Maintenance; Modifications | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 | Transition Management | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 | Cooperation | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 | Third-Party Consents and Licenses | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 | IT Separation Plan | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 | Exclusions; Compliance with Law | 7 |
|  **ARTICLE 3** COMPENSATION | **ARTICLE 3** COMPENSATION | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 | Service Charges | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 | Invoicing | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 | Due Date | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 | Tax Matters | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 | Records; Audit | 10 |
|  **ARTICLE 4** INTELLECTUAL PROPERTY | **ARTICLE 4** INTELLECTUAL PROPERTY | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 | Ownership | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 | License to Intellectual Property | 11 |
|  **ARTICLE 5** CONFIDENTIALITY; DATA PROTECTION | **ARTICLE 5** CONFIDENTIALITY; DATA PROTECTION | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 | Confidentiality Obligations | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 | Data Processing Addendum | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 | Security of IT Assets and Data | 12 |
|  **ARTICLE 6** LIMITATION OF LIABILITY; INDEMNIFICATION | **ARTICLE 6** LIMITATION OF LIABILITY; INDEMNIFICATION | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 | Limitation of Liability | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 | Indemnification | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 | Indemnification Procedures | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 | Liability for Payment Obligations | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 | Exclusion of Other Remedies | 13 |

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| | | |
|:---|:---|:---|
|  **ARTICLE 7** TERM AND TERMINATION | **ARTICLE 7** TERM AND TERMINATION | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 | Term | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 | Termination of Services | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 | Effect of Termination | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 | Surviving Obligations | 15 |
|  **ARTICLE 8** MISCELLANEOUS | **ARTICLE 8** MISCELLANEOUS | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 | Force Majeure | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 | Independent Contractors | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 | Governing Law | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 | Dispute Resolution | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 | Notices | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 | No Benefit to Third-Parties | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 | Amendment | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8 | Waiver | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9 | Expenses | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.10 | Assignment | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.11 | Non-Recourse | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.12 | Severability | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.13 | No Setoff | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.14 | Conflicts | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.15 | Joint Drafting | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.16 | Counterparts | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.17 | Entire Agreement | 19 |

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**SCHEDULES** 

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| | |
|:---|:---|
| Schedule A | Services Provided by SpinCo to RemainCo |
| Schedule B | Services Provided by RemainCo to SpinCo |
| Schedule C | Excluded Services |

---

ii

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**TRANSITION SERVICES AGREEMENT** 

This Transition Services Agreement (as amended, modified or supplemented from time to time in accordance with its terms, this "**Agreement**") is made and executed as of [•] (the "**Effective Date**"), by and between Avidity Biosciences, Inc., a Delaware corporation ("**RemainCo**"), and Atrium Therapeutics, Inc., a Delaware corporation ("**SpinCo**"). RemainCo and SpinCo are sometimes referred to herein individually as a "**Party**" and collectively as the "**Parties**".

**WHEREAS**, Novartis AG, a company limited by shares (*Aktiengesellschaft*) incorporated under the laws of Switzerland ("**Parent**"), Ajax Acquisition Sub, Inc., a Delaware corporation ("**Merger Sub**"), and RemainCo are parties to that certain Agreement and Plan of Merger, dated as of October 25, 2025 (as amended, modified or supplemented from time to time in accordance with its terms, the "**Merger Agreement**"), pursuant to which, on the terms and subject to the conditions set forth therein, Merger Sub will be merged with and into RemainCo, with RemainCo surviving such merger as a wholly owned subsidiary of Parent;

**WHEREAS,** in connection with the transactions contemplated by the Merger Agreement, RemainCo, SpinCo, and, solely with respect to the sections specified therein, Parent, have entered into that certain Separation and Distribution Agreement, dated as of October 25, 2025 (as amended, modified or supplemented from time to time in accordance with its terms, the "**Separation Agreement**"), pursuant to which, on the terms and subject to the conditions set forth therein, the parties thereto will effect the separation of the SpinCo Business and the RemainCo Business; and

**WHEREAS**, in furtherance of the transactions contemplated by the Separation Agreement, the Parties desire that each Party shall provide or cause to be provided to the other Party certain services and other assistance on a transitional basis and in accordance with the terms and subject to the conditions set forth herein.

**NOW, THEREFORE**, in consideration of the foregoing and the representations, warranties, covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties, intending to be legally bound, agree as follows:

**ARTICLE 1** 

**DEFINITIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.1 Certain Defined Terms**. Unless otherwise defined herein, all capitalized terms used herein shall have the meanings ascribed thereto in the Separation Agreement or the Merger Agreement, as applicable. The following capitalized terms used in this Agreement shall have the meanings set forth below.

"**Affiliate**" has the meaning set forth in the Merger Agreement; *provided* that, for the avoidance of doubt, from and after the Effective Date, (a) none of Parent, RemainCo or any of their respective Subsidiaries shall be deemed to be an Affiliate of SpinCo or any of SpinCo's Subsidiaries and (b) none of SpinCo or any of its Subsidiaries shall be deemed to be an Affiliate of Parent, RemainCo or any of their respective Subsidiaries.

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"**Out-of-Pocket Costs**" means any reasonable and documented amounts paid by the Providing Party or its Affiliates to Third Parties in connection with the performance of Services, including (a) costs incurred by the Providing Party or its Affiliates under Contracts with Third Parties (with such costs being a reasonable proration if the Contract benefits both Parties' businesses); (b) subject to Section 2.9, fees associated with securing any Required Consents; and (c) travel-related costs.

"**Providing Party**" means, with respect to any Service, the Party providing such Service under this Agreement.

"**Receiving Party**" means, with respect to any Service, the Party receiving such Service under this Agreement.

"**Third Party**" means any Person other than RemainCo, SpinCo and their respective Affiliates and permitted successors and assigns.

The terms set forth below shall have the meanings ascribed thereto on the referenced page of this Agreement:

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| | |
|:---|:---|
| **Term** | **Page** |
|  Access Charges | 8 |
|  Accessing Party | 11 |
|  Additional Service | 4 |
|  Affiliate | 1 |
|  Agreement | 1 |
|  Data Processing Addendum | 11 |
|  Effective Date | 1 |
|  Excluded Services | 3 |
|  Force Majeure Event | 15 |
|  Granting Party | 11 |
|  Invoice | 8 |
|  IT Assets and Data | 11 |
|  Merger Agreement | 1 |
|  Merger Sub | 1 |
|  Nonparty Affiliates | 18 |
|  Notice of Disagreement | 8 |
|  Out-of-Pocket Costs | 1 |
|  Outside Date | 13 |
|  Parent | 1 |
|  Parties | 1 |

---

---

| | |
|:---|:---|
| **Term** | **Page** |
|  Party | 1 |
|  Providing Party | 2 |
|  Receiving Party | 2 |
|  RemainCo | 1 |
|  RemainCo Services | 3 |
|  Required Consents | 6 |
|  Security Policies | 11 |
|  Separation Agreement | 1 |
|  Service Charges | 8 |
|  Services | 3 |
|  Services Standard | 4 |
|  Services Taxes | 9 |
|  SpinCo | 1 |
|  SpinCo Services | 3 |
|  Termination Charges | 14 |
|  Third Party | 2 |
|  Transition Manager | 5 |
|  TSA Dispute | 16 |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.2 Interpretation**. Section 1.2 of the Separation Agreement is hereby incorporated by reference into this Agreement, *mutatis mutandis*.

**ARTICLE 2** 

**SERVICES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1 Provision of Services**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1.1** Upon the terms and subject to the conditions of this Agreement, (i) SpinCo shall provide, or cause to be provided, to RemainCo or its applicable Affiliates (as designated in writing by RemainCo) the services set forth on <u>Schedule A</u> (the "**SpinCo Services**"), and (ii) RemainCo shall provide, or cause to be provided, to SpinCo or its Affiliates (as designated in writing by SpinCo) the services set forth on <u>Schedule B</u> (the "**RemainCo Services**"). For purposes of this Agreement, "**Services**" means the RemainCo Services and SpinCo Services, individually or collectively, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1.2** Neither the Providing Party nor any of its Affiliates will be required to perform or to cause to be performed any of the Services for the benefit of any Person other than the Receiving Party and its designated Affiliates. If there is any inconsistency between the terms of <u>Schedule A</u> or <u>Schedule B</u>, on the one hand, and the terms of this Agreement, on the other hand, the terms of this Agreement shall govern. For the avoidance of doubt, the Services do not include, and the Providing Party shall have no obligation to provide, or cause to be provided, any services (a) set forth on <u>Schedule C</u> (the "**Excluded Services**") or (b) for use in or for any business other than the RemainCo Business or the SpinCo Business, as applicable. Subject to the terms in this Agreement, in providing its Services hereunder, the Providing Party may use any information systems, hardware, software, processes and procedures it deems necessary or desirable in its reasonable discretion, subject to Section 2.5.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2 Duration of Services**. Upon the terms and subject to the conditions of this Agreement, the Providing Party shall provide, or cause to be provided, to the Receiving Party and its designated Affiliates each applicable Service until the earliest to occur of, with respect to each such Service, (a) the expiration of the period of duration for such Service as set forth on <u>Schedule A</u> or <u>Schedule B</u>, as applicable (with respect to each Service, a "**Service Period**"); (b) the date on which such Service is terminated in accordance with Article 7; and (c) the date on which this Agreement is terminated in accordance with Article 7; *provided*, that the Receiving Party shall use commercially reasonable efforts in good faith to transition itself to a replacement service, system or facility with respect to each Service as soon as reasonably practicable prior to the end of the Service Period for each such Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3 Additional Services**. If, within 60 days following the Effective Date, the Receiving Party (a) identifies in writing any additional service (other than an Excluded Service) not set forth on <u>Schedule A</u> or <u>Schedule B</u>, as applicable, that was provided by the Company in support of the SpinCo Business or RemainCo Business, as

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applicable, during the 12 months immediately prior to the date of the Separation Agreement, and (b) reasonably and in good faith believes that such service is necessary or reasonably useful in order for the RemainCo Business or SpinCo Business, as applicable, to continue to operate following the Effective Date in substantially the same manner in which the Company operated such business during the 12 months immediately prior to the date of the Separation Agreement (such service, an "**Additional Service**"), then the Providing Party shall use commercially reasonable efforts to provide, or cause to be provided, such Additional Service in a manner consistent with the terms of this Agreement, subject to mutual agreement between the Parties regarding the service charge and applicable service period with respect to such Additional Service. For clarity, the Additional Services shall not include any Excluded Service or any service that would be prohibited by applicable Law, and no Party shall be required to provide, or cause to be provided, any Additional Service for a Service Period that extends beyond the Outside Date or the latest date permitted under any applicable Law. If any Additional Service is provided in accordance with this Section 2.3, <u>Schedule A</u> or <u>Schedule B</u>, as applicable, shall be amended to describe in reasonable detail the nature, scope, Service Period, Service Charge and other terms applicable to such Additional Service in a manner similar to that in which the Services are described in the then-existing version of such Schedule. Each such amendment to the applicable Schedule, as agreed to in writing by the Parties, will be deemed part of this Agreement as of the date of such agreement and each such Additional Service set forth therein will be deemed a "Service" provided under this Agreement, in each case subject to the terms and conditions of this Agreement and the relevant amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.4 Services Performed by Affiliates and Third Parties**. The Providing Party shall have the right to perform the Services either itself, through an Affiliate or through a subcontractor; *provided* that, subject to Section 6.1, the Providing Party shall in all cases remain responsible for the performance of its obligations hereunder, including for the performance and any breach of this Agreement by its Affiliates and subcontractors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5 Services Standard**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5.1** The Providing Party shall provide, or cause to be provided, the Services [\*\*\*] (the "**Services Standard**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5.2** Except as expressly set forth in Section 2.5.1 and subject to the limitations in Article 6, the Parties acknowledge and agree that the Services are provided on an as-is, where-is basis, that the Receiving Party assumes all risks and liability arising from or relating to its use of and reliance upon the Services and the Providing Party makes no representation or warranty with respect thereto. EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE PROVIDING PARTY HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY IN REGARD TO QUALITY, PERFORMANCE, COMMERCIAL UTILITY, MERCHANTABILITY, FITNESS OF THE SERVICES FOR A PARTICULAR PURPOSE OR USE, TITLE, NON-INFRINGEMENT, ACCURACY, AVAILABILITY, TIMELINESS, COMPLETENESS, THE RESULTS TO BE OBTAINED FROM SUCH SERVICES OR ARISING FROM COURSE OF PERFORMANCE, DEALING, USAGE OR TRADE, AND THE RECEIVING PARTY, ON ITS BEHALF AND ON BEHALF OF ALL OF ITS AFFILIATES, HEREBY ACKNOWLEDGES SUCH DISCLAIMER AND THE RECEIVING PARTY SPECIFICALLY DISCLAIMS THAT IT IS RELYING UPON OR HAS RELIED UPON ANY SUCH REPRESENTATION OR WARRANTY.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6 Maintenance; Modifications**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6.1** In the event that the Providing Party's, or its applicable Affiliates', facilities are temporarily shut down for reasons outside of the Providing Party's or such Affiliates' control, with respect to the Services dependent on the operation of such facilities or systems, the Providing Party shall be relieved of its obligations hereunder to provide such Services during the period that such facilities or systems are so shut down in compliance with this Agreement, but shall use commercially reasonable efforts to minimize any period of shutdown. The Receiving Party shall be relieved of its obligation hereunder to pay Service Charges for any Services that cannot be provided by the Providing Party for the duration of such shutdown.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6.2** The Providing Party may (a) subject to compliance with the Services Standard, modify the manner of performing a Service if the same modification is made with respect to the entirety of the Providing Party's provision of such Service to any of its Affiliates and any other Person to whom the Providing Party provides such Service; or (b) modify or terminate a Service if provision of such Service is prohibited or modify a Service if provision of such Service is restricted by applicable Law; *provided*, *however*, that, in each such event, the Providing Party shall use commercially reasonable efforts to limit the disruption to the business or operations of the Receiving Party caused by such modification. The Providing Party's responsibilities set forth herein shall be amended as reasonably necessary to conform to any such modifications made pursuant to this Section 2.6.2 and the Receiving Party shall use commercially reasonable efforts to comply with any such amendments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.7 Transition Management**. RemainCo hereby appoints and designates [\*\*\*], and SpinCo hereby appoints and designates [\*\*\*] (each such individual, a "**Transition Manager**"), who will have authority to act on the applicable Party's behalf with respect to all matters relating to this Agreement and will serve as a point of contact for all questions and issues relating to the Services. Either Party may, by written notice given to the other Party, replace its Transition Managers. During the term of this Agreement, the Transition Managers shall meet (a) once per week from the Effective Date to the date that is three months after the Effective Date, (b) once every two weeks from the date that is three months after the Effective Date to the date that is six months after the Effective Date, and (c) once per month thereafter, or on such other schedule as mutually agreed upon by the Parties, in person or telephonically in order to discuss the Services and the status of the transition and to manage any open issues relating to the Services. Notwithstanding the requirements of Section 8.5, all communications from one Party or any of its Affiliates to the other Party or any of its Affiliates pursuant to this Agreement regarding routine matters involving the Services shall be made through such other Party's Transition Manager(s), or such other Persons as specified by such Transition Manager(s) in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8 Cooperation**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8.1** Each of the Receiving Party and the Providing Party shall use commercially reasonable efforts to cooperate with one another in all matters relating to the provision and receipt of the Services (which cooperation may include exchanging necessary and reasonable information and, subject to Section 2.9, obtaining all consents, licenses, sublicenses or approvals, in each case, as necessary to permit each of the Receiving Party and the Providing Party to perform its obligations hereunder).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8.2** Each Party shall, and shall cause its Affiliates and subcontractors to, comply with all policies, procedures and codes of conduct of Parent and its Affiliates provided in advance in writing from time to time to the extent that they are reasonably necessary for the provision or receipt of the Services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9 Third Party Consents and Licenses**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9.1** With respect to any software license or access to software-based services that are provided under, or as part of, a Service, the Receiving Party shall, and shall cause its Affiliates and subcontractors to, comply with the terms and conditions of the vendor/licensor applicable to such software license or software-based Service, so long as such terms and conditions have been made available to the Receiving Party or are generally available to the public prior to the beginning of the Service Period for such Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9.2** The Providing Party shall use commercially reasonable efforts to obtain all Third Party consents, licenses (or other appropriate rights), sublicenses and approvals necessary for the Providing Party to provide or cause to be provided, or for the Receiving Party or its applicable Affiliates to receive, Services ("**Required Consents**"), and the Receiving Party shall, and shall cause its applicable Affiliates to, reasonably cooperate with the Providing Party in acquiring any such Required Consent; *provided*, *however*, that the Providing Party shall not be required to (a) commence or participate in any Proceeding by or before any Governmental Authority or offer to grant any accommodation (financial (subject to this Section 2.9.2) or otherwise), other than ministerial acknowledgements, to any Third Party to obtain any such Required Consent or (b) seek broader rights or more favorable terms for the Receiving Party than those applicable to the Company, as the case may be, prior to the Effective Date or as may be applicable to the Providing Party from time to time after the Effective Date; *provided further*, the Providing Party nevertheless shall acquire any such Required Consent if the only accommodation requested by the relevant Third Party is financial, and the Receiving Party agrees to advance the Providing Party therefor. Notwithstanding the foregoing or anything herein to the contrary, if the Providing Party complies with its obligations under this Section 2.9.2 but is unable to secure any Required Consent or the Receiving Party fails to comply with any of its obligations under this Section 2.9.2, then the Parties shall use commercially reasonable efforts to develop and implement commercially reasonable alternatives for the provision of the applicable Services, and the Providing Party shall use commercially reasonable efforts to supplement, modify, substitute or otherwise alter the applicable Services to provide such Services without such Required Consent. If the Parties are unable to identify such an alternative, the Providing Party shall not be obligated to provide, or cause to be provided, any such Service or to obtain replacement services therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.10 IT Separation Plan**. As soon as practicable following the Effective Date, each of the Parties shall use commercially reasonable efforts, and shall cooperate with one another, to agree upon a plan for the separation of their respective IT Assets. If not agreed by the Parties within 30 days of the Effective Date, such plan will be determined in Parent's reasonable discretion.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.11 Exclusions; Compliance with Law**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.11.1** Subject to the Services Standard, in no event will the Providing Party or any of its Affiliates be required to (a) hire or retain specific employees, (b) purchase, lease or license any additional equipment, software or other assets; (c) create or supply any documentation or information not currently existing or not reasonably contemplated to be created as part of the Services; (d) enter into new or additional Contracts with Third Parties or change the scope of current Contracts with Third Parties; *provided*, that this clause (d) shall not limit RemainCo's obligations under Section 2.2(a) of the Separation Agreement, nor limit RemainCo's maintenance of CMO Agreements (as defined in <u>Schedule B</u>) or renewal of CMO Agreements, if applicable, to the extent any such CMO Agreement constitutes a RemainCo Asset or a Commingled Contract to the extent relating to the RemainCo Business, in each case, existing as of the Effective Date and that are required for the provision of the Services set forth in Section D of <u>Schedule B</u>; *provided*, *however*, that, in connection with the renewal of any such CMO Agreement, RemainCo shall not be required to (i) commence or participate in any Proceeding by or before any Governmental Authority or offer to grant any accommodation (financial or otherwise) to any Third Party to obtain any such renewal, (ii) agree to any such renewal if the applicable CMO Agreement cannot be terminated within 12 months after the effective date of such renewal or if the applicable CMO Agreement requires aggregate payments by RemainCo or its Affiliates in excess of $500,000, (iii) seek broader rights or more favorable terms for RemainCo or SpinCo than those applicable to the Company, as the case may be, prior to the Effective Date or as may be applicable to RemainCo from time to time after the Effective Date, or (iv) agree to any such renewal if RemainCo determines, in its sole discretion, not to renew or to terminate such CMO Agreement based on its plans for the conduct of the RemainCo Business, unless, in the case of the foregoing clauses (ii) through (iv), SpinCo agrees to assume all obligations (financial or otherwise) under such CMO Agreement that contravene the foregoing clauses (ii) through (iv); or (e) convert or otherwise transform data in connection with the provision of any of the Services or provide Services with respect to any IT Assets other than those maintained and used by the Company with respect to the RemainCo Business or the SpinCo Business, as applicable, during the 12-month period immediately preceding the date of the Separation Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.11.2** Notwithstanding anything to the contrary contained in this Agreement or in any Schedule hereto, except to the extent required by applicable Law or to the extent it is expressly stated in <u>Schedule A</u> or <u>Schedule B</u>, as applicable, that a filing obligation exists, none of the Providing Party or any of its Affiliates or subcontractors will be obligated, pursuant to this Agreement or any Schedule hereto, as part of or in connection with the Services provided hereunder, as a result of storing or maintaining any data referred to herein or in any Schedule hereto, or otherwise, to prepare or deliver any notification or report to any Governmental Authority or other Person on behalf of the Receiving Party or any of its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.11.3** Each Party shall perform its obligations and exercise its rights hereunder in material compliance with all applicable Laws, and shall be responsible for its and its Affiliates' and subcontractors' own compliance with any and all Laws applicable to its and their performance under this Agreement. Notwithstanding anything to the contrary herein (but subject to Section 2.9.2), including in <u>Schedule A</u> and <u>Schedule B</u>, neither the Providing Party nor any of its Affiliates or subcontractors shall be required hereunder to take any action (including by providing any Services) that would constitute (a) a violation of applicable Law, (b) a breach of any of the Providing Party's or its applicable Affiliates' or subcontractors' contractual obligations to any Third Party, or (c) any violation of the intellectual property rights of any Third Party. In the event the Providing Party reasonably determines that there is a change in applicable Law that would restrict the delivery of any Service to be provided to the Receiving Party, the Providing Party shall promptly notify the Receiving Party and shall use, and cause its applicable Affiliates and subcontractors to use, commercially reasonable efforts in good faith to provide such Service in a manner as closely as possible to the Services Standard.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.12 Quality Management**. For so long as RemainCo is providing the Service set forth in Section D.1 of Schedule B during the term of this Agreement, SpinCo shall maintain its quality management system established pursuant to Section 2.2(a)(iv) of the Separation Agreement and shall not change such quality management system, *provided*, that if RemainCo makes any change to its equivalent quality management system and requests such change be made by SpinCo, SpinCo shall correspondingly incorporate such change to its quality management system (at RemainCo's cost and expense, in an amount not to exceed $25,000 per request) promptly upon such request.

**ARTICLE 3** 

**COMPENSATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1 Service Charges**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1.1** In consideration for the performance of the Services, the Receiving Party shall pay to the Providing Party, on a monthly basis, the applicable charges for the Services as set forth on <u>Schedule A</u> or <u>Schedule B</u>, as applicable (the "**Service Charges**"), and shall reimburse the Providing Party for any Out-of-Pocket Costs incurred by the Providing Party or its applicable Affiliates, unless otherwise set forth on <u>Schedule A</u> or <u>Schedule B</u>, as applicable, without markup (upon receipt of applicable receipts and other reasonable supporting documentation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1.2** To the extent that the Providing Party ceases providing Services during (but not at the end of) a calendar month, the Receiving Party shall be responsible for paying the full Service Charge for such calendar month; *provided* that, in respect of Services for the calendar month in which the Effective Date occurs, the Service Charge for such Services for such month will be prorated for such partial calendar month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2 Invoicing**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2.1** Except with respect to Access Charges (which will be invoiced in accordance with the immediately following sentence), no later than 30 days following the end of each calendar month, the Providing Party shall issue to the Receiving Party an invoice setting forth the Service Charges and Out-of-Pocket Costs for such calendar month. With respect to Service Charges designated on <u>Schedule B</u> as Access Charges (the "**Access Charges**"), no later than 15 days prior to the beginning of each calendar month during the applicable Service Period, RemainCo shall issue to SpinCo an invoice setting forth the Access Charges for such calendar month; *provided* that (a) the first such invoice shall include the prorated Access Charges for the partial calendar month in which the Effective Date occurs and (b) if the Effective Date occurs less than 15 days before the beginning of a calendar month, RemainCo shall issue the first such invoice on, or as promptly as practicable following, the Effective Date. Each invoice issued in accordance with this Section 3.2.1 is referred to herein as an "**Invoice**."

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2.2** In the event that either Party disagrees with any Invoice or any amount set forth therein, no later than 10 days after receipt of such Invoice, such Party shall give the other Party written notice thereof (a "**Notice of Disagreement**"), specifying in reasonable detail the nature and amount of any disagreement so asserted. During the 10-day period following the delivery of the Notice of Disagreement, the Parties shall seek in good faith to resolve the dispute. If the Parties cannot resolve the dispute set out in the Notice of Disagreement within this period, the TSA Dispute provisions in Section 8.4 shall apply. For the avoidance of doubt, this Agreement shall continue in full force and effect during the pendency of any such dispute, and each Party shall pay all amounts when due in accordance with Section 3.3. If after any dispute set out in a Notice of Disagreement is finally resolved or adjudicated in accordance with this Section 3.2.2 or, if applicable, Section 8.4, it is determined the Party that provided such Notice of Disagreement was not required to pay all or any portion of the applicable Invoice, then such Party shall invoice, and the other Party shall pay, such amount in accordance with the invoicing and payment procedures set forth in this Article 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3 Due Date**. Except with respect to an Invoice for Access Charges (which will be paid in accordance with the immediately following sentence), the Receiving Party shall pay to the Providing Party the amount set forth on each applicable Invoice (including, for the avoidance of doubt, any disputed amounts set forth on a Notice of Disagreement) promptly, but in no event later than 60 days, after the date of delivery of such Invoice. With respect to each Invoice for Access Charges, SpinCo shall pay to RemainCo the amount set forth on each such Invoice (including, for the avoidance of doubt, any disputed amounts set forth on a Notice of Disagreement) promptly, but in no event later than the first day of the calendar month to which such Access Charges apply. All payments to be made under this Agreement shall be made in United States dollars and paid by wire transfer of immediately available funds to such account designated by the Providing Party by written notice to the Receiving Party from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4 Tax Matters**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4.1** The Receiving Party shall bear any and all sales, use, excise, value added, indirect, goods and services and other similar taxes (and any related interest and penalties) imposed on, or payable with respect to, any Service Charges payable by the Receiving Party pursuant to this Agreement (such taxes, the "**Services Taxes**"). For the avoidance of doubt, this Section 3.4.1 shall not apply to, and RemainCo and SpinCo each shall pay and be responsible for, all Taxes based on their respective income, profits or assets, employment Taxes and all other Taxes not described in the previous sentence that are imposed on each of them or their respective Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4.2** The Receiving Party (and its applicable Affiliates) shall have the right to withhold or deduct Taxes from any payments made under this Agreement as required by applicable Law. To the extent such amounts are so deducted or withheld and remitted to the appropriate Governmental Authority, such amounts shall be treated for all purposes under this Agreement as having been paid to the Party to whom such amounts would otherwise have been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4.3** The Providing Party shall use commercially reasonable efforts to (a) minimize the amount of Services Taxes or amounts required to be withheld or deducted under applicable Law by the Receiving Party under Section 3.4.2 and (b) claim any available refunds or credits of Services Taxes or amounts withheld or deducted under applicable Law by the Receiving Party. The Providing Party shall promptly pay (or cause to be paid) to the Receiving Party any Services Taxes recovered by the Providing Party (or its Affiliates) pursuant to the previous sentence.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4.4** The Receiving Party and the Providing Party shall use commercially reasonable efforts to cooperate to minimize the imposition of, and the amount of, any taxes described in this Section 3.4 (including through the provision of any relevant forms or other documents). The Providing Party shall keep the Receiving Party reasonably informed with respect to (a) the reporting of Services Taxes, (b) any audit relating to Services Taxes, or (c) any assessment, refund, claim or legal proceeding relating to Services Taxes, including, in each instance, providing the Receiving Party with such information and documentation as is reasonably necessary. Without limiting the generality of the foregoing, upon entering into this Agreement, and at any time thereafter that the Receiving Party reasonably requests, the Providing Party shall provide the Receiving Party an IRS Form W-9 and any similar form reasonably requested by the Receiving Party under any applicable Law, in order to avail themselves of any exemptions from and to minimize any applicable withholding taxes and backup withholding on any amounts otherwise payable pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5 Records; Audit**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5.1** Each Party shall keep and maintain, and shall cause its Affiliates to keep and maintain, complete and accurate records and books of account documenting all expenses and all other data necessary for the calculation of the amounts payable by the other Party under this Agreement consistent with its standard procedures and policies in the ordinary course of business and, in any event, for as long as required by applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5.2** Each Party will have the right, by reasonable prior written notice given to the other Party, to retain an independent Third Party auditor to audit such other Party's and its applicable Affiliates' records and books of account maintained pursuant to Section 3.5.1 in order to confirm the Service Charges or Out-of-Pocket Costs levied by such other Party in connection with Services provided hereunder; *provided*, that no Party shall be entitled to exercise its audit rights under this Section 3.5.2 more than (a) once during the term of this Agreement (unless, in any case, any prior audit for the same period resulted in an adjustment to amounts due hereunder, in which case such Party shall be entitled to one additional audit during the term of this Agreement, so long as such additional audit is not conducted in the same calendar year as such prior audit), and (b) one year after the end of the period for which an audit is requested. Upon written request by the Party requesting an audit pursuant to this Section 3.5.2, the audited Party shall, or shall cause its applicable Affiliates to, within a reasonable period of time, provide access to all records reasonably requested by the auditing Party in responding to such audit, solely to the extent such records relate to Service Charges or Out-of-Pocket Costs in connection with Services provided hereunder; *provided*, *however*, that (i) the audited Party shall not be required to provide the auditing Party such access to the extent, in the audited Party's reasonable discretion, such access would reasonably be expected to waive any applicable privileges (including attorney client privilege), breach contractual confidentiality obligations or violate any applicable Law; *provided*, *further*, that the audited Party shall use its commercially reasonable efforts to provide such access in a manner that would not waive such privilege, breach such obligations or violate such Law, or would otherwise permit such access in a manner that would remove such objection, and (ii) such access shall not unreasonably interfere with the business or operations of the audited Party. All information disclosed pursuant to this Section 3.5 shall be subject to the confidentiality provisions set forth in Article 5.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5.3** The Party requesting an audit pursuant to Section 3.5.2 shall bear all out-of-pocket costs and expenses incurred in connection with such audit and any access provided by the audited Party in accordance with Section 3.5.2; *provided*, *however*, that the audited Party shall reimburse the Party requesting the audit for all reasonable costs and expenses incurred by such Party in connection with such audit or access if any such audit identifies an underpayment to the auditing Party or an overpayment to the audited Party hereunder in excess of the greater of 10% and $100,000 of the amounts actually payable.

**ARTICLE 4** 

**INTELLECTUAL PROPERTY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1 Ownership**. Ownership of any Inventions (as defined in the License Agreement) arising under this Agreement, and any Intellectual Property Right (as defined in the License Agreement) therein, shall be determined as set forth in Section 4.1 of the License Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2 License to Intellectual Property**. The Receiving Party, on behalf of itself and its Affiliates, hereby grants, and shall cause its permitted subcontractors to grant, to the Providing Party and its Affiliates, a limited, royalty-free, fully paid-up, worldwide, non-sublicensable (except to Third Parties solely to the extent required for the provision of the applicable Service), non-exclusive, non-transferable license, solely for the duration of any applicable Service, under any intellectual property rights controlled by the Receiving Party or any of its Affiliates that are necessary to perform such Service, for the sole purpose of providing such Service to the Receiving Party. Except as expressly identified in this Section 4.2, nothing contained in this Agreement shall be deemed to grant either Party or its Affiliates, by implication, estoppel or otherwise, any license rights, ownership rights or other rights in any intellectual property rights owned by or licensed to the other Party (or any Affiliate or permitted subcontractor of the other Party).

**ARTICLE 5** 

**CONFIDENTIALITY; DATA PROTECTION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1 Confidentiality Obligations**. The Parties acknowledge and agree that Article 5 of the License Agreement is hereby incorporated into this Agreement, and shall apply to the activities contemplated by this Agreement to the extent applicable, *mutatis mutandis*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2 Data Processing Addendum**. Each Party shall comply with this Agreement, including this Article 5 and the data processing addendum agreed upon by the Parties (the "**Data Processing Addendum**") and all applicable Laws (including applicable privacy laws (to be defined in the Data Processing Addendum)) that are or that may in the future be applicable to the provision of Services hereunder, including as related to any personal information (to be defined in the Data Processing Addendum). If not agreed by the Parties within 30 days of the Effective Date, the Data Processing Addendum will be determined in Parent's reasonable discretion. The provisions of the Data Processing Addendum shall govern the processing of personal information (to be defined in the Data Processing Addendum) in connection with the provision of Services under this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3 Security of IT Assets and Data**. If either Party or its Affiliates or Third Party service providers (including their respective personnel) (each, an "**Accessing Party**") is given access to the IT Assets or any data stored therein or processed thereby (collectively, "**IT Assets and Data**") of the other Party or its Affiliates (collectively, the "**Granting Party**") in connection with the provision or receipt of Services, each Accessing Party shall, and shall cause its Affiliates and subcontractors to, comply with all applicable Laws and with all policies and procedures of Parent and its Affiliates related to the privacy or security of IT Assets and Data (collectively, "**Security Policies**"). Each Accessing Party shall use and access the IT Assets and Data of the Granting Party for the sole purpose of providing or receiving, as applicable, the Services. Each Granting Party reserves the right to suspend access to any of its IT Assets and Data at any time if such Granting Party reasonably determines that (a) such access poses a security risk to its (or any of its customers' or vendors') IT Assets and Data or (b) the Accessing Party has violated applicable Security Policies. Such Granting Party shall restore such access upon remediation, to the sole satisfaction of such Granting Party, of the applicable foregoing circumstances. Each Party shall promptly notify the other Party of any known or reasonably suspected security breach or other security incident affecting the other Party's or its Affiliates' IT Assets and Data, and the Parties shall reasonably cooperate with each other in investigating the same and in taking all reasonable actions to remediate the same and to facilitate both Parties' compliance with applicable Laws (including with respect to any notices or responses relating to the same).

**ARTICLE 6** 

**LIMITATION OF LIABILITY; INDEMNIFICATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1 Limitation of Liability**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1.1** NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT FOR ANY SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, DAMAGES FOR LOST OR ANTICIPATED PROFITS OR REVENUES, DIMINUTION IN VALUE, BUSINESS INTERRUPTION OR LOST OR ANTICIPATED OPPORTUNITIES OR ANY DAMAGES CALCULATED BY REFERENCE TO A MULTIPLIER OF REVENUE, PROFITS, EBITDA OR SIMILAR METHODOLOGY, WHETHER OR NOT CAUSED BY OR RESULTING FROM THE ACTIONS BY SUCH PARTY OR THE BREACH OF ITS COVENANTS, AGREEMENTS, REPRESENTATIONS OR WARRANTIES HEREUNDER AND WHETHER OR NOT BASED ON OR IN WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1.2** The aggregate liability and indemnification obligations of each Party (a) in its capacity as a Providing Party (in each case, in connection with the provision of Services by such Providing Party) and (b) in its capacity as a Receiving Party (in each case, in connection with the receipt of Services by such Receiving Party), as applicable, with respect to this Agreement, the Services or the transactions contemplated by this Agreement shall not exceed, in the aggregate in the applicable calendar year, the aggregate amount of Services Charges (excluding any markup to Out-of-Pocket Costs charged by RemainCo in connection with providing the Services) actually paid hereunder to such Party (in its capacity as a Providing Party) or by such Party (in its capacity as a Receiving Party) during such calendar year.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2 Indemnification**. Subject to the limitations set forth in Section 6.1, each Party shall indemnify, defend and hold harmless the other Party, its Affiliates, and each of such other Party's and its Affiliates' respective directors and employees, from and against, and shall compensate and reimburse them for, any and all Losses, to the extent arising or resulting from (a) the gross negligence or willful misconduct of such indemnifying Party, its Affiliates, and each of their respective employees, agents, invitees or subcontractors in providing or using any Services rendered or to be rendered pursuant to this Agreement or (b) any material breach by such indemnifying Party of this Agreement. Notwithstanding anything to the contrary, this Article 6 shall not apply to Taxes which are exclusively governed by Section 3.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3 Indemnification Procedures**. The provisions set forth in 5.4 of the Separation Agreement shall apply *mutatis mutandis* to the indemnification provisions of this Agreement, with such conforming changes thereto as are necessary to apply the provisions, and preserve the effect, thereof to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.4 Liability for Payment Obligations**. Nothing in this Article 6 shall be deemed to eliminate or limit, in any respect, each Party's express obligation in this Agreement to pay Termination Charges (to the extent applicable) or Service Charges for Services rendered in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.5 Exclusion of Other Remedies**. Except for equitable remedies that may be available to a Party and claims for intentional fraud, to the maximum extent permitted by applicable Law, (a) each Party's and its Affiliates' sole and exclusive remedy with respect to any and all claims relating to this Agreement or the transactions contemplated by this Agreement shall be pursuant to the indemnification provisions set forth in this Article 6 and (b) each Party hereby waives any and all rights, claims and causes of action whether based on or in warranty, contract, tort (including negligence or strict liability) or otherwise that such Party or its Affiliates may have against the other Party or any of its Affiliates, arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Article 6.

**ARTICLE 7** 

**TERM AND TERMINATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1 Term**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1.1** This Agreement shall commence on the Effective Date and shall continue in full force and effect until the earlier to occur of (a) the date on which this Agreement is terminated in accordance with Section 7.2, (b) the expiration of the Service Period for all outstanding Services or termination by the Receiving Party of all outstanding Services pursuant to Section 7.2, such that neither Party is obligated to provide any further Services pursuant to this Agreement and (c) 12 months thereafter (the date set forth in this clause (c), the "**Outside Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1.2** Upon 60 days' advance written notice prior to the expiration of the Service Period for any Service, the Receiving Party may request a service extension. So long as the Receiving Party has been using good faith efforts to migrate off of or replace such Service prior to the end of the applicable Service Period, the Providing Party shall use commercially reasonable efforts to accommodate any such extension. If such a request is made, the Parties shall discuss in

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good faith the requested scope, duration and other terms, including applicable Service Charge, of such proposed extension. In no event will the term (meaning the initial term and extension period, including any extension periods previously permitted under this Agreement) of a particular Service (a) extend beyond the Outside Date or (b) exceed the maximum period permitted under any Third Party agreement(s) that are necessary to provide or support such Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2 Termination of Services**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.1** Both Parties may terminate this Agreement with respect to one or more of the Services immediately upon mutual written agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.2** The Receiving Party may at any time, upon 60 days' prior written notice to the Providing Party, terminate this Agreement with respect to any Service provided to such Receiving Party (in whole, but not in part); *provided*, that if termination of any Service materially inhibits or prevents the Providing Party's ability to provide any other Service (as agreed by the Parties in good faith, provided that the Providing Party has given the Receiving Party notice of the same prior to the effectiveness of any such termination), such other Service shall concurrently terminate or be deemed terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.3** Either Party may at any time terminate this Agreement with respect to one or more Services (in whole, but not in part) by giving written notice to the other Party if the other Party commits a material breach of any obligation under this Agreement with respect to any such Service and such material breach continues to exist 30 days after receipt of written notice from the non-breaching Party of such breach and of its intention to exercise its rights under this Section 7.2.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.4** Either Party may terminate this Agreement with respect to one or more of the Services immediately upon written notice to the other Party in the event that such other Party (a) commences, or has commenced against it, proceedings under bankruptcy, insolvency or debtor's relief Laws or similar Laws in any other jurisdiction, (b) makes a general assignment for the benefit of its creditors or (c) ceases operations or is liquidated or dissolved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.5** Either Party may terminate this Agreement to the extent provided in Section 8.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2.6** This Agreement will terminate automatically with respect to the Services set forth on <u>Schedule B</u> immediately prior to the consummation of a Change of Control Transaction (as defined in the License Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3 Effect of Termination**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3.1** Upon termination (for any reason other than expiration of the Service Period duration) or reduction of any Service (in whole or in part) pursuant to this Agreement, the Receiving Party shall bear any and all costs, fees or expenses payable by the Providing Party with respect to a Service to any Third Party provider as a result of the early termination or reduction of such Service ("**Termination Charges**"), other than Termination Charges with respect to the termination of any Service by the Receiving Party pursuant to Section 7.2.3 or Section 7.2.4. All Termination Charges shall be invoiced and paid as provided in Article 3.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3.2** Upon termination of any Service pursuant to this Agreement, the Providing Party shall have no further obligation to provide the terminated Service, and the Receiving Party shall have no obligation to pay any future Service Charges relating to any such Service; *provided* that the Receiving Party shall remain obligated to the Providing Party for the (a) Service Charges and other fees, costs and expenses (if any) owed and payable under the terms of this Agreement in respect of Services provided prior to the effective date of termination, including Service Charges that are billed in arrears, and (b) Termination Charges, only to the extent applicable, as invoiced by the Providing Party to the Receiving Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3.3** Termination or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration shall not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4 Surviving Obligations**. Without limiting the foregoing, Article 1, and Article 3<u> </u>(to the extent of any Invoices to be issued, or unpaid amounts due, thereunder), and all rights and obligations of each Party under Article 4, Article 5, Article 6, Section 7.2, Section 7.3, this Section 7.4 and Article 8 shall survive the termination or expiration of this Agreement for any reason.

**ARTICLE 8** 

**MISCELLANEOUS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1 Force Majeure**. Except for the obligation to pay monies due and owing, neither Party (nor any Person acting on its behalf) shall be liable for any failure to perform or any delays in performance, and no such Party shall be deemed to be in breach or default of its obligations set forth in this Agreement, if, to the extent and for so long as, such failure or delay is due to any causes that are beyond its reasonable control and without its fault or negligence, including such causes as acts of God, natural disasters, fire, flood, severe storm, earthquake, civil disturbance, lockout, riot, order of any court or administrative body, embargo, acts of government, war (whether or not declared), acts of terrorism, epidemics, pandemics, computer hacking, data breaches, ransom-ware, cybercrime or cyberterrorism or other similar causes ("**Force Majeure Event**"). In the event of a Force Majeure Event, the Party prevented from or delayed in performing, shall promptly give notice to the other Party and shall use commercially reasonable efforts to avoid or minimize the delay. In the event that the delay continues for a period of at least 15 days, such other Party may elect to suspend performance and extend the time for performance for the duration of the Force Majeure Event. In the event that the delay continues for a period of at least 60 days , such other Party may elect to terminate this Agreement without any liability to any Party. In the event that the Providing Party is unable to provide any Service due to a Force Majeure Event, the Receiving Party will be relieved of its obligation to pay for any such Service to the extent not provided; *provided* that a Force Majeure Event will not relieve the Receiving Party from its payment obligations under this Agreement with respect to Services actually performed hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2 Independent Contractors**. Nothing contained herein is intended or will be deemed to make any Party or its respective Affiliates the agent, employee, partner or joint venture of any other Party or its Affiliates or be deemed to provide such Party or its Affiliates with the power or authority to act on behalf of the other Party or its Affiliates or to bind the other Party or its Affiliates to any Contract, agreement or arrangement with any other Person. The Providing Party will act as an independent contractor and not as the agent of the Receiving Party in performing any Service, maintaining control over its employees, its subcontractors and their employees and complying with all withholding of income at source requirements, whether federal, state, local or foreign.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3 Governing Law**. This Agreement, and all TSA Disputes that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement, will be governed by, and enforced and construed in accordance with, the Laws of the State of Delaware, including its statutes of limitations, without regard to the conflict of Laws rules of such state that would result in the application of the Laws of another jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.4 Dispute Resolution**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.4.1** In the event of any dispute, controversy, claim or action arising out of or relating to the transactions contemplated by this Agreement, or the validity, interpretation, breach or termination of any provision of this Agreement, or calculation or allocation of the costs of any Service, including indemnification claims and claims seeking redress or asserting rights under any Law, whether in contract, tort, common law, statutory law, equity or otherwise, including any question regarding the negotiation, execution or performance of this Agreement (each, a "**TSA Dispute**"), the Parties agree that their respective Transition Managers (or such other Persons as each Party may designate) shall negotiate in good faith in an attempt to resolve such TSA Dispute promptly and amicably. If such TSA Dispute has not been resolved to the mutual satisfaction of the Parties within 30 days after the initial notice of the TSA Dispute (or such longer period as the Parties may agree in writing), then the authorized representatives of each of the Parties shall negotiate in good faith in an attempt to resolve such TSA Dispute amicably for an additional 20 days (or such longer period as the Parties may agree in writing). If, at the end of such time, such Persons are unable to resolve such TSA Dispute amicably, then such TSA Dispute shall be resolved in accordance with the dispute resolution process set forth in Section 8.11 of the Separation Agreement; *provided* that such dispute resolution process shall not modify or add to the remedies available to the Parties under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.4.2** In any TSA Dispute regarding the amount of a Service Charge or Termination Charge, if after such TSA Dispute is finally adjudicated pursuant to the dispute resolution or judicial process set forth in Section 8.4.1, it is determined that the Service Charge or Termination Charge that the Providing Party has invoiced to the Receiving Party, and that the Receiving Party has paid to the Providing Party, is greater or less than the amount that the applicable charge should have been, then (a) if it is determined that the Receiving Party has overpaid the Service Charge or Termination Charge, then the Receiving Party shall invoice, and the Providing Party shall pay, an amount equal to such overpayment in accordance with the invoicing and payment procedures provided in Article 3 and (b) if it is determined that the Receiving Party has underpaid the Service Charge or Termination Charge, then the Providing Party shall invoice, and the Receiving Party shall pay, an amount equal to such underpayment in accordance with the invoicing and payment procedures provided in Article 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.5 Notices**. Except with respect to routine communication by the Transition Managers under Section 2.7, any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement shall be made in accordance with Section 8.14 of the Separation Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6 No Benefit to Third Parties**. Except for the rights of any indemnified Person under Article 6, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing herein expressed or implied will give or be construed to give to any Person, other than the Parties and such successors and assigns, any legal or equitable rights hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.7 Amendment**. This Agreement (including all Exhibits and Schedules hereto) may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by both Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.8 Waiver**. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver will be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by any Party of any right hereunder or of the failure to perform or of a breach by the other Party will not be deemed a waiver of any other right hereunder or of any other breach or failure by said other Party whether of a similar nature or otherwise. No failure or delay by any Party in exercising any right, power or privilege hereunder, and no course of dealing between the Parties, will be effective to amend or waive any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.9 Expenses**. Except as otherwise specified herein, each Party shall pay its own legal, accounting and other fees and expenses incurred in connection with the preparation, execution and delivery of this Agreement and all documents and instruments executed pursuant hereto and the consummation of the transactions contemplated hereby and any other costs and expenses incurred by such Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.10 Assignment**. This Agreement will be binding upon and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the Parties. Except as otherwise provided for in this Agreement, neither this Agreement nor any right, interest or obligation arising under this Agreement will be assignable, in whole or in part, directly or indirectly, by either Party without the prior written consent of the other Party, and any attempt to assign any rights, interests or obligations arising under this Agreement without such consent shall be void; *provided* that (a) a Party may assign or delegate any or all of its rights, interests and obligations hereunder to an Affiliate of such Party, so long as such Affiliate agrees pursuant to an agreement in writing reasonably satisfactory to the other Party to be bound by the terms of this Agreement as if named a "Party" hereto, (b) the Providing Party may delegate its performance of the Services to any subcontractor pursuant to Section 2.4, (c) a Party may assign this Agreement or any or all of its rights, interests and obligations hereunder in connection with a merger, reorganization or consolidation transaction in which such Party is a constituent party but not the surviving entity or the sale by such Party of all or substantially all of its assets, so long as the surviving entity of such merger, reorganization or consolidation transaction or the transferee of such assets assumes all the obligations of the relevant Party by operation of law or pursuant to an agreement in writing, reasonably satisfactory to the other Party, to be bound by the terms of this Agreement as if named as a "Party" hereto, and (d) a Party may assign this Agreement or any or all of its rights, interests and obligations hereunder in connection with a sale or disposition of any

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assets or lines of business of such Party, so long as such assignee agrees pursuant to an agreement in writing reasonably satisfactory to the other Party, to be bound by the terms of this Agreement as if named a "Party" hereto, in each case, without the prior written consent of the other Party; *provided*, *further*, that (i) in the case of an assignment pursuant to the foregoing clause (c) or (d), the non-assigning Party will not be required to perform any obligation under this Agreement that would result in the breach or violation of any Third Party Contract by such Party or its Affiliates without the prior written consent of the non-assigning Party and (ii) in the case of each of the preceding clauses, no assignment permitted by this Section 8.10 will release the assigning Party from liability for the full performance of its obligations under this Agreement, unless agreed to in writing by the non-assigning Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.11 Non-Recourse**. All claims, obligations, liabilities, or causes of action (whether in contract or in tort, in law or in equity, or granted by statute) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement, or the negotiation, execution, or performance of this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), may be made only against (and are expressly limited to) the entities that are expressly identified as Parties to this Agreement. No Person who is not a Party, including any past, present or future director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney, or representative of, and any financial advisor or lender to, any Party, or any director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney, or representative of, and any financial advisor or lender to, any of the foregoing ("**Nonparty Affiliates**"), shall have any liability (whether in contract or in tort, in law or in equity, or granted by statute) for any claims, causes of action, obligations, or liabilities arising under, out of, in connection with, or related in any manner to, this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, execution, performance, or breach; and, to the maximum extent permitted by Law, each Party hereby waives and releases all such liabilities, claims, causes of action, and obligations against any such Nonparty Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.12 Severability**. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.13 No Setoff** . No Party shall have any right of setoff of any amounts due and payable, or any Losses arising, under this Agreement against any other amounts due and payable under this Agreement or any amounts due and payable, or any Losses arising, under the Merger Agreement, the Separation Agreement or any other agreement between RemainCo or SpinCo or any of their respective Affiliates. The payment obligations under this Agreement, the Merger Agreement, the Separation Agreement or any other agreement between RemainCo or SpinCo or any of their respective Affiliates, remain independent obligations of each Party, irrespective of any amounts owed to any other Party under this Agreement, the Merger Agreement, the Separation Agreement, or such other agreements.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.14 Conflicts**. In the event of any conflict between the terms and provisions of this Agreement, on the one hand, and the terms and provisions of the Separation Agreement or the License Agreement, on the other hand, the terms and provisions of the Separation Agreement or the License Agreement, as applicable, will control, without limiting either Party's rights under or the specific risk allocation provided within this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.15 Joint Drafting**. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.16 Counterparts**. This Agreement may be executed in any number of counterparts and manually or electronically, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Delivery of an executed counterpart of a signature page of this Agreement by electronic mail or other electronic transmission will be effective as delivery of a manually executed original counterpart of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.17 Entire Agreement**. This Agreement, together with each of the Separation Agreement and the Merger Agreement (including the Schedules and Exhibits expressly contemplated thereby and attached thereto), the Confidentiality Agreement, the Schedules expressly contemplated hereby or attached hereto, and the other agreements, certificates and documents delivered in connection herewith or therewith or otherwise in connection with the transactions contemplated hereby and thereby, contain the entire agreement between the Parties with respect to such transactions and supersede all prior agreements, understandings, promises and representations, whether written or oral, between the Parties with respect to the subject matter hereof and thereof.

[*Signature page follows*]

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**IN WITNESS WHEREOF**, the Parties have duly executed this Agreement as of the date first written above.

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| | |
|:---|:---|
| **AVIDITY BIOSCIENCES, INC.** | **AVIDITY BIOSCIENCES, INC.** |
| By: |  |
|  | Name: |
|  | Title: |
| **ATRIUM THERAPEUTICS, INC.** | **ATRIUM THERAPEUTICS, INC.** |
| By: |  |
|  | Name: |
|  | Title |

---

SIGNATURE PAGE TO TRANSITION SERVICES AGREEMENT

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**<u>Schedule A</u>**

[\*\*\*]

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**<u>Schedule B</u>**

[\*\*\*]

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**<u>Schedule C</u>**

[\*\*\*]

## Exhibit 10.3

**[\*\*\*] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.** 

**Exhibit 10.3** 

**EXECUTION VERSION** 

**RESEARCH COLLABORATION AND LICENSE AGREEMENT** 

**between** 

**ELI LILLY AND COMPANY** 

**and** 

**AVIDITY BIOSCIENCES, INC.** 

------

**TABLE OF CONTENTS** 

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| | | |
|:---|:---|:---|
|  |  | Page |
| ARTICLE 1 | DEFINITIONS | 1 |
| ARTICLE 2 | GOVERNANCE AND JOINT RESEARCH COMMITTEE | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 | Project Leader | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 | Alliance Manager | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 | Working Groups | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 | Joint Research Committee | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 | Function and Powers of the JRC | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 | Meetings | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 | Decisions | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 | Authority | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 | Discontinuation of JRC | 17 |
| ARTICLE 3 | LICENSES; EXCLUSIVITY | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 | License Grants | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 | Sublicenses | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 | Subcontracting | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 | Collaboration Materials Transfer | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 | Exclusivity | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 | No Other Rights; Retained Rights | 21 |
| ARTICLE 4 | RESEARCH ACTIVITIES | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 | Overview | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 | Collaboration Targets | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 | Research Plans | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 | Selection of Development Candidate | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 | Records; Reports | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 | Research Term Extension | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 | Discontinued Targets | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 | Diligence | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 | Research Funding | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 | Certain Standards Applicable to Work | 27 |

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i

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| | | |
|:---|:---|:---|
| ARTICLE 5 | DEVELOPMENT, MANUFACTURING, AND REGULATORY MATTERS | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 | Development and Manufacturing Responsibilities | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 | Diligence | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 | Reports | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 | Regulatory Responsibilities | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 | Adverse Event Reporting; Additional Agreement | 28 |
| ARTICLE 6 | COMMERCIALIZATION | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 | General | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 | Diligence | 29 |
| ARTICLE 7 | FEES, ROYALTIES, & PAYMENTS | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 | Upfront Payment | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 | Milestone Payments | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 | Royalties on Products | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 | Convertible Note | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 | Method of Payment; Currency Conversion | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 | Records and Audits | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 | Late Payments | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 | Taxes | 34 |
| ARTICLE 8 | INTELLECTUAL PROPERTY | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 | Ownership of Intellectual Property | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 | Patent Prosecution and Maintenance | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 | Infringement or Misappropriation by Third Parties | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 | Defense and Settlement of Third Party Claims | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 | Patent Extension | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 | CREATE Act | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 | Trademarks | 40 |
| ARTICLE 9 | REPRESENTATIONS, WARRANTIES AND COVENANTS | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 | Mutual Representations and Warranties | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 | Avidity Representations and Warranties | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 | Mutual Covenants | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 | Compliance | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 | Disclaimer | 45 |
| ARTICLE 10 | INDEMNIFICATION | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 | Indemnity | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 | Insurance | 46 |

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| | | |
|:---|:---|:---|
| ARTICLE 11 | CONFIDENTIALITY | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 | Confidential Proprietary Information | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 | Publicity | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 | Publication | 50 |
| ARTICLE 12 | TERM & TERMINATION | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 | Term | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 | Termination for Material Breach | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 | Termination by Lilly | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 | Termination for Patent Challenges | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 | Effects of Termination | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 | Survival | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 | Bankruptcy Code | 54 |
| ARTICLE 13 | GOVERNING LAW; DISPUTE RESOLUTION | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 | Governing Law | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 | Disputes | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 | Mediation | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 | Litigation; Equitable Relief | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 | Excluded Claims | 56 |
| ARTICLE 14 | MISCELLANEOUS | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 | Entire Agreement; Amendment | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 | Limitation of Liability | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3 | Independent Contractors | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4 | Notice | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5 | Severability | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.6 | Non-Use of Names | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.7 | Assignment | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.8 | Avidity Change of Control | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.9 | Waivers | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.10 | Force Majeure | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.11 | Interpretation | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.12 | Counterparts; Electronic Signatures | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.13 | Expenses | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.14 | Further Assurances | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.15 | No Third Party Beneficiary Rights | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.16 | Construction | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.17 | Cumulative Remedies | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.18 | Extension to Affiliates | 61 |

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**<u>Exhibits</u>**

<u>Exhibit 1.14</u> - Avidity Patents

<u>Exhibit 4.2.1</u> - Reserved Targets

<u>Exhibit 4.3</u> - Initial Research Plan

<u>Exhibit 4.10</u> - Part A: Eli Lilly and Company Good Research Practices

<u>Exhibit 4.10</u> - Part B: Eli Lilly and Company Animal Care and Use Requirement for Animal Researchers and Suppliers

<u>Exhibit 11.2</u> - Joint Press Release

iv

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**[\*\*\*] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.** 

**RESEARCH COLLABORATION AND LICENSE AGREEMENT** 

THIS **RESEARCH COLLABORATION AND LICENSE AGREEMENT** ("***Agreement***") is entered into as of April 17, 2019 (the "***Effective Date***") by and between **AVIDITY BIOSCIENCES, INC.**, a Delaware corporation having an address at 10975 N. Torrey Pines Rd., Suite 150, La Jolla, CA 92037 ("***Avidity***"), and **ELI LILLY AND COMPANY**, a corporation organized and existing under the laws of Indiana, with its principal business office located at Lilly Corporate Center, Indianapolis, Indiana 46285, U.S.A. ("***Lilly***"). Lilly and Avidity are each hereafter referred to individually as a "***Party***" and together as the "***Parties****.*"

**WHEREAS**, Avidity is a biotechnology company engaged in the research and development of therapeutics based on targeted delivery of nucleic acid molecules;

**WHEREAS**, Lilly is a pharmaceutical company engaged in the research, development, manufacturing, marketing and distribution of pharmaceutical products, including therapeutic products, for use in humans and animals;

**WHEREAS**, Avidity and Lilly desire to collaborate in the validation of certain biological Targets (as defined below) and the research and development of antibody-nucleic acid conjugates as therapeutics;

**WHEREAS**, Lilly desires to obtain from Avidity, and Avidity desires to grant to Lilly, an exclusive license to develop, manufacture, and commercialize Compounds and Products (as defined below), subject to the terms and conditions of this Agreement; and

**WHEREAS**, in connection with the above license grant, Lilly is purchasing a convertible promissory note from Avidity pursuant to that certain Convertible Note Purchase Agreement between the Parties of even date herewith.

**NOW, THEREFORE**, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:

**ARTICLE 1** 

**DEFINITIONS** 

Capitalized terms used in this Agreement and the Exhibits hereto shall have the following meanings (or as defined elsewhere in this Agreement):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 "***Acquirer***" has the meaning set forth in the definition of "Change of Control."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 "***Affiliate***" means, with respect to either Party, any entity that, at the relevant time (whether as of the Effective Date or thereafter), directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such Party, for so long as such control exists. As used in this Section 1.2, "control" means: (a) to possess, directly or indirectly, the power to direct or cause the direction of the management or policies of an entity, whether through ownership of voting securities or by contract relating to voting rights or corporate governance; or (b) direct or indirect ownership of fifty percent (50%) (or such lesser percentage that is the maximum allowed to be owned by a foreign entity in a particular jurisdiction) or more of the voting share capital or other equity interest in such entity.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 "***Agreement***" has the meaning set forth in the Preamble.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 "***Alliance Manager***" has the meaning set forth in Section 2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 "***Applicable Laws***" means the applicable provisions of any and all federal, national, supranational, regional, state and local laws, treaties, statutes, rules, regulations, guidelines or requirements, administrative codes, guidance, ordinances, judgments, decrees, directives, injunctions, orders, or permits of or from any court, arbitrator, Regulatory Authority, Governmental Authority, taxing authority, national securities exchange or exchange listing organization having jurisdiction over or related to the relevant subject item that may be in effect from time to time during the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 "***Antibody***" means a molecule comprising at least one complementarity determining region of an immunoglobulin domain, including variants, modifications or derivatives of such complementarity determining region.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 "***AOC***" means an Antibody-Oligo conjugate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8 "***Avidity***" has the meaning set forth in the Preamble.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9 "***Avidity-Controlled Patents***" has the meaning set forth in Section 8.2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.10 "***Avidity External Costs***" means costs, expenses, and charges paid to Third Parties (or payable to Third Parties and accrued in accordance with U.S. GAAP) by Avidity or its Affiliates in the performance of the Research under the applicable Research Plan for a Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.11 "***Avidity Indemnitee***" has the meaning set forth in Section 10.1.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.12 "***Avidity Internal Costs***" means Avidity's FTE costs (calculated at the FTE Rate) incurred by Avidity or any of its Affiliates in the performance of the Research under the applicable Research Plan for a Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.13 "***Avidity Know-How***" means all Know-How (including any Know-How that is Avidity Proprietary Technology) that Avidity or its Affiliate Controls as of the Effective Date or during the Term that is necessary or reasonably useful for the research, development, manufacturing, having made, use, keeping, importing, exporting, sale, offering for sale or other exploitation of Compounds and Products in the Field in the Territory. Notwithstanding the foregoing, if any Third Party becomes an Acquirer of Avidity after the Effective Date pursuant to a Change of Control, Avidity Know-How will exclude any Know-How that is Controlled by the Acquirer before the relevant Change of Control transaction or thereafter during the Term, *provided*, *however*, that Avidity Know-How will include any Know-How that would otherwise fall under the definition of Avidity Know-How that is contained in any Invention discovered, conceived of, or reduced to practice by or on behalf of the Acquirer in performing any activity under this Agreement or by using any Avidity Technology existing as of the closing of such Change of Control transaction or any Avidity Proprietary Technology regardless of when created.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.14 ***"Avidity Patent"*** means any Patent that Avidity or its Affiliate Controls as of the Effective Date or during the Term that: (a) claims Avidity Know-How; or (b) Covers the research, development, manufacturing, having made, use, keeping, importing, exporting, sale, offering for sale or other exploitation of Compounds and Products in the Field in the Territory; including those Patents set forth on <u>Exhibit 1.14</u>. Notwithstanding the foregoing, if any Third Party becomes an Acquirer of Avidity after the Effective Date pursuant to a Change of Control, Avidity Patents will exclude any Patent that is Controlled by the Acquirer before the relevant Change of Control transaction or thereafter during the Term, *provided*, *however*, that Avidity Patents will include any Patents that would otherwise be included in the definition of Avidity Patents that claim an Invention made or generated by the Acquirer in performing any activity under this Agreement or by using any Avidity Technology existing as of the closing of such Change of Control transaction or any Avidity Proprietary Technology regardless of when created.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.15 "***Avidity Proprietary Technology***" means Proprietary Technology of Avidity (or its Affiliate) that: (a) exists as of the Effective Date or is developed, acquired or in-licensed by Avidity and/or any of its Affiliates during the Term outside the scope of its activities under the Research Plan; and (b) is not the same as any Lilly Proprietary Technology, provided that in the case of Avidity Know-How (as opposed to Avidity Patents) that would otherwise be considered Avidity Proprietary Technology under this definition that is disclosed by Avidity or its Affiliate to Lilly (or its Affiliate), such Know-How shall only be considered Avidity Proprietary Technology to the extent it is marked or otherwise prominently designated to Lilly (or such Affiliate) as Avidity Proprietary Technology at the time of such disclosure or immediately thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.16 "***Avidity Research Costs***" means, individually or collectively, the Avidity Internal Costs and the Avidity External Costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.17 "***Avidity Technology***" means, individually or collectively, the Avidity Know-How and Avidity Patents. For clarity, "Avidity Technology" includes all Avidity Proprietary Technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.18 "***Biosimilar Product***" means, with respect to a Product, and on a Product-by-Product and country-by-country basis, any product (including a "generic product," "biogeneric," "follow-on biologic," "follow-on biological product," "follow-on protein product," "similar biological medicinal product," or "biosimilar product") approved by way of an abbreviated regulatory mechanism by the relevant Regulatory Authority in a country in reference to such Product, that in each case: (a) is sold in the same country (or is commercially available in the same country via import from another country) as such Product by any Third Party that is not a Sublicensee of Lilly or its Affiliates and that did not purchase such product in a chain of distribution that included any of Lilly or any of its Affiliates or its Sublicensees; and (b) meets the equivalency determination by the applicable Regulatory Authority in such country (including a determination that the product is "comparable," "interchangeable," "bioequivalent," "biosimilar" or other term of similar meaning, with respect to the Product), in each case, as is necessary to permit substitution of such product for the Product under Applicable Law in such country.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.19 ***"Business Day***" means any day other than Saturday, Sunday, or any day that banks are authorized or required to be closed in San Diego, California or Indianapolis, Indiana.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.20 "***Calendar Quarter***" means each respective period of three (3) consecutive months ending on March 31, June 30, September 30, and December 31 of any Calendar Year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.21 "***Calendar Year***" means each respective period of twelve (12) consecutive months commencing on January 1 and ending on December 31.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.22 "***Change of Control***" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect to either Party: (i) the acquisition by a Third Party, in one transaction or a series of related transactions, of direct or indirect beneficial ownership of more than fifty percent (50%) of the outstanding voting equity securities of such Party (excluding, for clarity, an acquisition by a Third Party where the stockholders of such acquired Person immediately prior to such transaction hold a majority of the voting shares of outstanding capital stock of the surviving entity immediately following such transaction); (ii) a merger or consolidation involving such Party, as a result of which a Third Party acquires direct or indirect beneficial ownership of more than fifty percent (50%) of the voting power of the surviving entity immediately after such merger, reorganization or consolidation; or (iii) a sale of all or substantially all of the assets of such Party in one transaction or a series of related transactions to a Third Party. The acquiring or combining Third Party in any of (i), (ii) or (iii), and any of such Third Party's Affiliates (whether in existence as of or any time following the applicable transaction, but other than the acquired Party and its Affiliates as in existence prior to the applicable transaction or Affiliates it controls after the applicable transaction) are referred to collectively herein as the "***Acquirer***"; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to the acquisition of Avidity by a Lilly Competitor, whether in one transaction or a series of related transactions, in addition to the items in (a) above, the acquisition of: (i) majority control of the board of directors or equivalent governing body of Avidity; (ii) the ability to cause the direction of the management or allocation of corporate resources of Avidity; or (iii) all or substantially all of the assets of Avidity related to the transactions contemplated by this Agreement; in which case such Lilly Competitor and its Affiliates (other than Avidity and its Affiliates in existence prior to the applicable transaction) shall also be considered an Acquirer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.23 "***Claim***" has the meaning set forth in Section 10.1.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.24 "***Clinical Trial***" means a Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial, or any post-Regulatory Approval human clinical trial, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.25 "***Collaboration Materials***" means any tangible documents (whether in paper or electronic form) or other materials generated or Controlled by a Party that are delivered to the other Party to conduct Research as set forth in the Research Plans. For avoidance of doubt, "Collaboration Materials," as used in this Agreement, does not include any intellectual property rights in the foregoing.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.26 ***"Collaboration Target***" means (a) the Initial Collaboration Targets and (b) any Replacement Targets selected by Lilly and approved by Avidity pursuant to Section 4.2.2. Collaboration Targets exclude any Discontinued Targets, and any Reserved Targets not selected as Initial Collaboration Targets pursuant to Section 4.2.1 unless and until selected as Replacement Targets pursuant to Section 4.2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.27 "***Combination Product***" has the meaning set forth in the definition of "Net Sales."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.28 "***Commercial Milestone Event***" has the meaning set forth in Section 7.2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.29 "***Commercialization***" means any and all activities directed to the offering for sale and sale of a Compound, Product, or other compound, product or therapy including: (a) activities directed to storing, marketing, promoting, detailing, distributing, importing, exporting, selling and offering to sell that Compound, Product, or other compound, product or therapy; (b) conducting Clinical Trials after Marketing Authorization of a Compound, Product, or other compound, product or therapy with respect to such Compound, Product, or other compound, product or therapy; (c) interacting with Regulatory Authorities regarding the foregoing; and (d) seeking pricing approvals and reimbursement approvals (as applicable) for that Compound, Product, or other compound, product or therapy in the Field in the Territory. When used as a verb, "to **Commercialize**" and "**Commercializing**" means to engage in Commercialization and "**Commercialized**" has a corresponding meaning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.30 "***Commercially Reasonable Efforts***" of a Party means that level of efforts and resources commonly applied by such Party [**\* \* \***].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.31 "***Competing Program***" has the meaning set forth in Section 3.5.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.32 "***Compound***" means any AOC that: (a) is Directed Against a Collaboration Target; and (b) is selected, discovered, used, generated, optimized or identified by either Party during the Term in the course of its activities under a Research Plan or otherwise under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.33 "***Confidential Disclosure Agreement***" means that certain Confidential Disclosure Agreement entered into between the Parties as of March 5, 2018, as amended.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.34 ***"Confidential Proprietary Information***" has the meaning set forth in Section 11.1.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.35 "***Control***" or "***Controlled***" means, with respect to any Know-How, Patents, or other intellectual property rights, that a Party has the legal authority or right (whether by ownership, license, or otherwise) to grant to the other Party a license, covenant not to sue, sublicense, access, or right to use (as applicable) under such Know-How, Patents, or other intellectual property rights, on the terms and conditions set forth herein, in each case without violating any obligations of the granting Party owed to a Third Party, breaching the terms of any agreement with a Third Party or subjecting the granting Party to any additional fee or charge; provided that the Know-How, Patents or intellectual property rights will be excluded from being considered "Controlled" by virtue of any such fee or charge only if the first Party notifies the other Party of the fee or charge and the other Party does not agree to reimburse the first Party for or otherwise bear the fee or charge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.36 "***Cover***" means, with respect to a claim of a Patent and a relevant Compound or Product, that such claim would be infringed, absent a license, by the research, development, making, having made, use, keeping, importation, exportation, offering for sale, sale, or other exploitation of such Compound or Product (considering claims of patent applications to be issued as then pending).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.37 "***Data Package***" means, on a Collaboration Target-by-Collaboration Target basis, the package of data to be generated and any success criteria for the determination as to whether any Development Candidate directed to such Collaboration Target should be further developed as a Product, all of which shall be determined by the JRC and set forth in the applicable Research Plan for the applicable Collaboration Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.38 "***Development Candidate***" has the meaning set forth in Section 4.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.39 "***Development Milestone Event***" has the meaning set forth in Section 7.2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.40 "***Development Milestone Payment***" has the meaning set forth in Section 7.2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.41 "***Directed Against***" means, with respect to a compound or product and a Target, that the Oligo contained in such compound or product binds to and modulates such Target as its primary mechanism of action. For clarity, "Directed Against" requires direct Target interaction, and does not include pathway effects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.42 "***Disclosing Party***" has the meaning set forth in Section 11.1.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.43 "***Discontinued Target***" means: (a) a Collaboration Target for which Lilly discontinues Research pursuant to Section 4.2.3; (b) a Collaboration Target for which the JRC determines not to develop further a Development Candidate pursuant to Section 4.4; or (c) a Collaboration Target for which the period in Section 4.4 lapses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.44 "***Dispute***" has the meaning set forth in Section 13.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.45 "***Dollar***" means a U.S. dollar, and "***$***" is to be interpreted accordingly.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.46 ***"Effective Date***" has the meaning set forth in the preamble to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.47 "***Eli Lilly and Company Animal Care and Use Requirement for Animal Researchers and Suppliers*"** has the meaning set forth in Section 4.10.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.48 "***Eli Lilly and Company Good Research Practices*"** has the meaning set forth in Section 4.10.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.49 "***Excluded Claims***" has the meaning set forth in Section 13.5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.50 "***Excluded Technologies***" means any Patents Covering or Know-How directed to Antibody engineering, manufacturing (including expression vectors, cell lines, culture media and feeds), formulations, or devices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.51 "***Executive Officers***" means: (a) with respect to Avidity, its Chief Executive Officer; and (b) with respect to [**\* \* \***] or any other person that such officer designates from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.52 "***FDA***" means the United States Food and Drug Administration or any successor agency thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.53 "***Field***" means all uses, including any and all uses for the diagnosis, prevention, amelioration, and treatment of any disease or medical condition in humans and animals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.54 "***First Commercial Sale***" means the first sale of a Product by Lilly or its Affiliates or their Sublicensees to a Third Party (excluding any Sublicensee) for end use or consumption of such Product in a given country after Regulatory Approval required to market and sell the Product has been granted with respect to such Product in such country in which such Product is sold. Furthermore, for purposes of clarity, the term "First Commercial Sale" as used in this Agreement shall not include: (a) sales for purposes of testing any Product, or of any Product samples; (b) any distribution or other sale solely for so-called treatment investigational new drug sales, named patient sales, compassionate or emergency use sales or pre-license sales, in each case provided that such Product is distributed without charge or sold at or below cost; (c) any sale of a Product by Lilly to its Affiliate (or their Sublicensees), unless there is a subsequent resale of the Product by such Affiliate or Sublicensee; nor (d) other similar non-commercial sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.55 "***First Commercial Sale Milestone Event***" has the meaning set forth in Section 7.2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.56 "***FTE***" means the equivalent of a full-time Avidity employee's work performing activities under a Research Plan, which is at least [**\* \* \***] per Calendar Year. If any such individual works partially on work under a Research Plan for a Program and partially on other work in a Calendar Quarter, then the "FTE" to be attributed to such individual's work hereunder shall be calculated based upon the percentage of such individual's total work time in such Calendar Quarter that such individual spent working under a Research Plan for such Program based on [**\* \* \***] per Calendar Year, applied consistently throughout the Calendar Year. Overtime, and work on weekends, holidays and the like will not be counted with any multiplier (*e.g.*, time-and-a-half or double time) toward the number of hours that are used to calculate the FTE contribution. For clarity, no individual person can ever constitute more than a single FTE.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.57 ***"FTE Rate***" means the rate of FTE costs incurred by Avidity, which for the purpose of this Agreement is [**\* \* \***] Dollars ($[**\* \* \***]) per FTE per Calendar Year, subject to annual increases beginning on [**\* \* \***] to reflect percentage increases in the Consumer Price Index for the US City Average (all times) from [**\* \* \***] and similarly calculated year to year increases each subsequent Calendar Year. The FTE Rate includes costs of salaries, benefits, other human resources-related costs associated with the employment of employees, supplies (other than supplies specifically identified as separate costs to be reimbursed by Lilly in the Research Plan), and supporting overhead and administrative allocations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.58 "***Good Laboratory Practices***" or "***GLPs***" means all applicable Good Laboratory Practice standards, including, as applicable: (a) as set forth in the then-current good laboratory practice standards promulgated or endorsed by the FDA as defined in 21 C.F.R. Part 58; and (b) the equivalent Applicable Laws in any relevant country, each as may be amended and applicable from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.59 "***Good Manufacturing Practices***" or "***GMPs***" means all applicable Good Manufacturing Practices including, as applicable: (a) the principles detailed in the US Current Good Manufacturing Practices, 21 C.F.R. Parts 4, 210, 211, 601, 610 and 820; (b) European Directive 2003/94/EC and Eudralex 4; (c) the principles detailed in the WHO TRS 986 Annex 2, TRS 961 Annex 6 and TRS 957 Annex 2; (d) ICH Q7 guidelines; and (d) the equivalent Applicable Laws in any relevant country, each as may be amended and applicable from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.60 "***Good Research Practices***" or "***GRP***" means research practices consistent with: (a) the research quality standards defining how Lilly's research laboratories conduct good science for non-regulated work as set forth in <u>Exhibit 4.10 Part A</u> of this Agreement; and (b) the Research Quality Association (RQA), 2014 Quality in Research Guidelines for Working in Non-Regulated Research, each as may be amended and applicable from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.61 "***Governmental Authority***" means any national, international, federal, state, provincial or local government, or political subdivision thereof, or any multinational organization or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, and any court or tribunal (or any department, bureau or division thereof, or any governmental arbitrator or arbitral body).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.62 "***IND***" means an investigational new drug application filed with the FDA or any similar application filed with a Regulatory Authority in a country other than the U.S. required to commence Clinical Trials of a pharmaceutical product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.63 "***Indemnitee***" has the meaning set forth in Section 10.1.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.64 "***Indemnitor***" has the meaning set forth in Section 10.1.3.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.65 ***"Infringement***" has the meaning set forth in Section 8.3.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.66 "***Initial Collaboration Targets***" has the meaning set forth in Section 4.2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.67 "***Initial Data Package***" has the meaning set forth in Section 4.3.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.68 "***Initiation***" means, with respect to a Clinical Trial, the first dosing in the first human subject in such Clinical Trial.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.69 "***Inventions***" means all discoveries and inventions, whether or not patentable, that are discovered, conceived of, or reduced to practice by or on behalf of a Party (whether solely or jointly by the Parties) in the course of performing activities under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.70 "***JRC***" has the meaning set forth in Section 2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.71 "***JRC Chair***" has the meaning set forth in Section 2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.72 "***Know-How***" means any proprietary scientific or technical information, inventions, discoveries, results and data of any type whatsoever, in any tangible or intangible form, including inventions, discoveries, databases, safety information, practices, methods, instructions, techniques, processes, drawings, documentation, specifications, formulations, formulae, knowledge, know-how, trade secrets, materials, skill, experience, test data and other information and technology applicable to formulations, compositions or products or to their manufacture, development, registration, use, marketing or sale or to methods of assaying or testing them, including pharmacological, pharmaceutical, medicinal chemistry, biological, chemical, biochemical, toxicological and clinical test data, physical and analytical, safety, quality control data, manufacturing, and stability data, materials, studies and procedures, and manufacturing process and development information, results and data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.73 "***Lilly***" has the meaning set forth in the Preamble.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.74 "***Lilly Competitor***" means a company that has consummated a Change of Control transaction with Avidity and that: (a) [**\* \* \***]; and (b) either (i) [**\* \* \***], or (ii) [**\* \* \***].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.75 "***Lilly Indemnitee***" has the meaning set forth in Section 10.1.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.76 "***Lilly Know-How***" means all Know-How (including any Know-How that is Lilly Proprietary Technology) that Lilly or its Affiliate Controls as of the Effective Date or during the Term that is necessary or reasonably useful for Research or that is used or generated by or on behalf of Lilly or its Affiliates in the course of conducting activities for a Program. Notwithstanding the foregoing, if any Third Party becomes an Acquirer of Lilly after the

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Effective Date pursuant to a Change of Control, Lilly Know-How will exclude any Know-How that is Controlled by the Acquirer before the relevant Change of Control transaction or thereafter during the Term, *provided*, *however*, that Lilly Know-How will include any Know-How that would otherwise fall under the definition of Lilly Know-How that is contained in any Invention that is discovered, conceived of, or reduced to practice by or on behalf of the Acquirer in performing any activity under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.77 "***Lilly Patent***" means any Patent that is Controlled by Lilly or its Affiliate as of the Effective Date or during the Term that claims Lilly Know-How. Notwithstanding the foregoing, if any Third Party becomes an Acquirer of Lilly after the Effective Date pursuant to a Change of Control, Lilly Patents will exclude any Patent that is Controlled by the Acquirer before the relevant transaction or thereafter during the Term, *provided*, *however*, that Lilly Patents will include any Patent that would otherwise fall under the definition of Lilly Patents that claims an Invention that is made or generated by the Acquirer in performing any activity under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.78 "***Lilly Proprietary Technology***" means Proprietary Technology of Lilly (or its Affiliates) that: (a) exists as of the Effective Date or is developed, acquired or in-licensed by Lilly and/or any of its Affiliates during the Term outside the scope of its activities under the Research Plan; and (b) is not the same as any Avidity Proprietary Technology, provided that in the case of Lilly Know-How (as opposed to Lilly Patents) that would otherwise be considered Lilly Proprietary Technology under this definition that is disclosed by Lilly or its Affiliate to Avidity (or its Affiliate), such Know-How shall only be considered Lilly Proprietary Technology to the extent it is marked or otherwise prominently designated to Avidity (or such Affiliate) as Lilly Proprietary Technology at the time of such disclosure or immediately thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.79 "***Lilly Technology***" means the Lilly Know-How and Lilly Patents. For clarity, "Lilly Technology" includes all Lilly Proprietary Technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.80 "***Losses***" has the meaning set forth in Section 10.1.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.81 "***Marketing Authorization***" means, collectively, all Regulatory Approvals (including any pricing, reimbursement or access approvals) from the relevant Regulatory Authority necessary to initiate marketing and selling a Product in any country or jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.82 "***Milestone Events***" means, individually or collectively, the Development Milestone Events, First Commercial Sale Milestone Events, and Commercial Milestone Events.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.83 "***Milestone Payments***" has the meaning set forth in Section 7.2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.84 "***Net Sales***" means, with respect to a particular Product, the gross amount invoiced by Lilly, its Affiliates, or any Sublicensee to Third Parties (excluding any Sublicensee) for such Product in the Territory, less the following deductions to the extent included in the gross amount invoiced for such Product:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) [**\* \* \***];

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [**\* \* \***];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) [**\* \* \***];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) [**\* \* \***];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) [**\* \* \***];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) [**\* \* \***];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) [**\* \* \***]; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) [**\* \* \***].

Such amounts shall be determined from the books and records of Lilly or applicable Sublicensee, maintained in accordance with U.S. GAAP or, in the case of Sublicensees, such similar accounting principles, consistently applied. Lilly further agrees in determining such amounts, it will use Lilly's then current standard procedures and methodology, including Lilly's then current standard exchange rate methodology for the translation of foreign currency sales into Dollars or, in the case of Sublicensees, such similar methodology, consistently applied. In no event will any particular amount identified above be deducted more than once in calculating Net Sales.

Upon any sale or other disposition of a Product that should be included within Net Sales for any consideration other than exclusively monetary consideration on *bona fide* arms'-length terms, then for purposes of calculating Net Sales under this Agreement, such Product is deemed to be sold exclusively for money at the average sales price during the applicable reporting period generally achieved for such Product in the country in which such sale or other disposition occurred. 

In the event that the Product is sold as part of a Combination Product (where "***Combination Product***" means any pharmaceutical product which comprises the Product and other active compound(s) or ingredient(s)), the Net Sales of the Product, for the purposes of determining royalty payments, shall be determined by [**\* \* \***]. ****

In the event that the weighted average sale price of the Product can be determined but the weighted average sale price of the other compound(s) or ingredient(s) cannot be determined, Net Sales for purposes of determining royalty payments shall be calculated by [**\* \* \***].

In the event that the weighted average sale price of the other compound(s) or ingredient(s) can be determined but the weighted average sale price of the Product cannot be determined, Net Sales for purposes of determining royalty payments shall be calculated by [**\* \* \***].

In the event that the weighted average sale price of both the Product and the other compound(s) or ingredient(s) in the Combination Product cannot be determined, the Net Sales of the Product shall be [**\* \* \***].

The weighted average sale price for a Product, other compound(s) or ingredient(s), or Combination Product shall be calculated [**\* \* \***] and such price shall be used during all applicable royalty-reporting periods for [**\* \* \***]. When determining the weighted average sale price of a Product, other compound(s) or ingredient(s), or Combination Product, the weighted average sale price shall be calculated by [**\* \* \***]. In the initial [**\* \* \***], a forecasted weighted average sale price will be used for the Product, other compound(s) or ingredient(s), or Combination Product. Any over or under payment due to a difference between forecasted and actual weighted average sale prices will be paid or credited in the first royalty payment of the following [**\* \* \***].

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.85 ***"Oligo***" means a polymer consisting of either natural or synthetic nucleotide units that is designed to hybridize to an RNA target by Watson and Crick base pairing rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.86 "***Party***" and "***Parties***" has the meaning set forth in the Preamble.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.87 "***Patents***" mean: (a) pending patent applications, issued patents, utility models and designs; (b) reissues, substitutions, confirmations, registrations, validations, re-examinations, additions, continuations, continued prosecution applications, continuations-in-part, or divisions of or to any of the foregoing; and (c) extensions, renewals or restorations of any of the foregoing by existing or future extension, renewal or restoration mechanisms, including supplementary protection certificates or the equivalent thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.88 "***Person***" means any corporation, limited or general partnership, limited liability company, joint venture, trust, unincorporated association, governmental body, authority, bureau or agency, any other entity or body, or an individual.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.89 "***Phase I Clinical Trial***" means a clinical trial of a Product generally consistent with 21 C.F.R. § 312.21(a) (or the non-United States equivalent thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.90 "***Phase II Clinical Trial***" means a clinical trial of a Product generally consistent with 21 C.F.R. § 312.21(b) (or the non-United States equivalent thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.91 "***Phase III Clinical Trial***" means a clinical trial of a Product generally consistent with 21 C.F.R. § 312.21(c) (or the non-United States equivalent thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.92 "***Pricing and Reimbursement Approval***" means, with respect to a Product, the approval, agreement, determination or decision of any Regulatory Authority establishing the price or level of reimbursement for such Product, as required in a given country or jurisdiction prior to sale of such Product in such country or jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.93 "***Product***" means any pharmaceutical or biologic product in any dosage form or formulation that contains or comprises a Compound.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.94 "***Product-Specific Patent***" has the meaning set forth in Section 8.2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.95 "***Program***" means, on a Collaboration Target-by-Collaboration Target basis, any and all Research, development, manufacturing, and commercialization activities conducted under this Agreement with respect to any Compounds and Products that are Directed Against such Collaboration Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.96 "***Program Patent***" means a Patent that claims a Program Invention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.97 "***Program Invention***" has the meaning set forth in Section 8.1.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.98 "***Project Leader***" has the meaning set forth in Section 2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.99 "***Proprietary Technology***" of a Party means: (a) Patent rights Controlled by the Party and (b) Know-How that is Controlled by the Party.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.100 ***"Prosecute and Maintain***" or "***Prosecution and Maintenance***" with respect to a particular Patent, means all activities associated with the preparation, filing, prosecution and maintenance of such Patent, together with the conduct of interferences, derivation proceedings, *inter partes* review and post-grant review, the defense of oppositions and other similar proceedings with respect to that Patent, including any activities associated with claims, including as a counterclaim or declaratory judgment action, of unpatentability, invalidity or unenforceability of such Patent that are brought by a Third Party in connection with an Infringement under Section 8.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.101 "***Prosecuting Party***" has the meaning set forth in Section 8.2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.102 "***Receiving Party***" has the meaning set forth in Section 11.1.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.103 "***Regulatory Approval***" means, collectively, any and all approvals (including supplements, amendments, pre- and post-approvals, pricing and reimbursement approvals), licenses, registrations, permits, notifications, and authorizations (including marketing and labeling authorizations) or waivers of any Regulatory Authority that are necessary for the testing, Research, development, registration, manufacture (including formulation), use, storage, import, export, transport, promotion, marketing, distribution, offer for sale, sale or other commercialization of a pharmaceutical product (including any Compound or Product) in any country or jurisdiction, including Pricing and Reimbursement Approval, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.104 "***Regulatory Authority***" means any Governmental Authority that has responsibility in its applicable jurisdiction over the testing, Research, development, registration, manufacture (including formulation), use, storage, import, export, transport, promotion, marketing, distribution, offer for sale, sale or other commercialization of pharmaceutical products (including any Compound or Product) in a given jurisdiction. For countries where governmental approval is required for pricing or reimbursement for a pharmaceutical product (including any Compound or Product) to be reimbursed by national health insurance (or its local equivalent), Regulatory Authority includes any Governmental Authority whose review or approval of pricing or reimbursement of such product is required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.105 "***Regulatory Filing***" means, collectively, any and all applications, filings, submissions, approvals (including supplements, amendments, pre- and post-approvals, pricing and reimbursement approvals), licenses, registrations, permits, notifications, and authorizations (including marketing and labeling authorizations) or waivers with respect to the testing, Research, development, registration, manufacture (including formulation), use, storage, import, export, transport, promotion, marketing, distribution, offer for sale, sale or other commercialization of a Product made to or received from any Regulatory Authority in a given country, including INDs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.106 "***Replacement Target***" has the meaning set forth in Section 4.2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.107 "***Research***" means, with respect to a Collaboration Target and a Compound, any research and pre-clinical activities through delivery of a Data Package for such Collaboration Target, as set forth in the applicable Research Plan for such Collaboration Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.108 "***Research Budget***" has the meaning set forth in Section 4.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.109 "***Research Plan***" has the meaning set forth in Section 4.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.110 "***Research Term***" means the period of [**\* \* \***] from the Effective Date, as may be extended by Lilly pursuant to Section 4.6.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.111 ***"Reserved Target***" has the meaning set forth in Section 4.2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.112 "***Residual***" has the meaning set forth in Section 11.1.5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.113 "***Royalty Term***" has the meaning set forth in Section 7.3.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.114 "***Selection Period***" has the meaning set forth in Section 4.2.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.115 "***Sublicensee***" means a Third Party that is granted a license or sublicense to research, develop, make, have made, use, keep, import, export, offer for sale, sell, or otherwise exploit Compounds and Products in the Field in the Territory, beyond the mere right to purchase Products from Lilly and its Affiliates, and excludes Lilly's Affiliates or Third Party subcontractors that act solely for Lilly or its Affiliates in the supply chain or that perform discrete services (as opposed to being granted broad rights or responsibilities) on behalf of Lilly or its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.116 "***Target***" means: (a) a polynucleotide sequence corresponding to a sequence identified in a publicly available curated database such as GenBank<sup>®</sup> by an accession number or similar information that uniquely identifies that sequence; (b) all variants of the identified sequence in human and other species; (c) all post-transcriptional material encoded by the identified sequence and all variants, including all naturally-occurring, disease-associated, and non-naturally occurring truncations, mutations, variants, fragments and post-transcriptional modifications thereof (including splice variants); (d) all post-translational material encoded by such post-transcriptional material including amino acid sequences and proteins; and/or (e) all multimeric forms of (a) through (d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.117 "***Term***" has the meaning set forth in Section 12.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.118 "***Terminated Product***" means the relevant terminated Product as described in Section 12.5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.119 "***Terminated Target***" means the relevant terminated Collaboration Target as described in Section 12.5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.120 "***Territory***" means the entire world.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.121 "***Third Party***" means a Person other than: (a) Lilly or its Affiliates; and (b) Avidity or its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.122 "***U.S.***" means the United States of America and its territories and possessions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.123 "***Valid Claim***" means a claim of the composition of matter or the method of use of a Compound or Product (or any component thereof) for an approved use of such Product contained in: (a) an issued and unexpired patent that has not been revoked or held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction that is not appealable or has not been appealed within the time allowed for appeal, and that has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise; or (b) a pending patent application that has not been cancelled, withdrawn or abandoned or finally rejected by an administrative agency action from which no appeal can be taken and that has not been pending for more than [**\* \* \***] from the date of its earliest priority date (provided that upon the issuance of a claim from such patent application, such claim shall again be deemed to be a Valid Claim (subject to Section 1.123(a))).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.124 ***"Working Group***" has the meaning set forth in Section 2.3.

**ARTICLE 2** 

**GOVERNANCE AND JOINT RESEARCH COMMITTEE** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 **Project Leader**. Within [**\* \* \***] following the Effective Date, Lilly and Avidity shall each assign one (1) employee to serve as the primary point of contact between the Parties with respect to each Collaboration Target being prosecuted under the Programs (each, a "***Project Leader***"). The Project Leaders shall regularly communicate with each other to address Program-related issues, needs and updates and facilitate communications and organization of Working Groups associated with the Research Plan. Either Party, upon prior notice to the other Party, may change its Project Leader.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 **Alliance Manager**. Within [**\* \* \***] following the Effective Date, each Party shall also appoint an individual to act as the Alliance Manager for such Party (each, an "***Alliance Manager***"). Each Alliance Manager shall thereafter be permitted to attend meetings of the JRC and any sub-committee as a nonvoting observer. The Alliance Managers shall be the primary point of contact for the Parties regarding the collaboration activities contemplated by this Agreement (other than the activities/responsibilities of the Project Leader outlined in Section 2.1) and shall help facilitate all such activities hereunder. For avoidance of doubt, the individual appointed by a Party to act as an Alliance Manager may, but need not, be the same individual appointed by such Party as a Project Leader.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 **Working Groups**. The Parties shall establish working groups (each, a "***Working Group***") to oversee the activities of the Research Plan. In addition, from time to time, the Parties may establish a Working Group to oversee particular additional projects or activities. Each Working Group shall undertake the activities delegated to it by the JRC. During the process of establishing each Working Group, such Working Group and the JRC shall agree regarding which matters such Working Group will resolve on its own and which matters such Working Group will advise the JRC regarding (and with respect to which such advice-specific matters the JRC will resolve). In addition to the Collaboration Target-specific Working Groups overseen by the respective Project Leaders, the Parties shall, at a minimum, establish three (3) additional Working Groups to oversee, respectively, (i) Collaboration Materials transfer pursuant to Section 3.4, (ii) the manufacturing supply chain for the Products, and (iii) the strategy for prosecution and maintenance of Patents that claim Program Inventions or that are Controlled by Avidity and exclusively licensed to Lilly under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 **Joint Research Committee**. Within [**\* \* \***] after the Effective Date, the Parties shall establish a cross-functional, joint research committee (the "***JRC***") composed of three (3) senior representatives from each Party that will oversee and manage the collaboration between the Parties with respect to each Program during the Research Term. The JRC may, from time to time, establish subcommittees as it deems necessary to further the purposes of this Agreement. Each Party shall appoint its respective representatives to the JRC from time to time, and may change its representatives, in its sole discretion, effective upon notice to the other Party designating such change. The representatives from each Party shall have appropriate technical credentials, experience and knowledge pertaining to and ongoing familiarity with the Research and applicable Programs. One (1) of the Lilly representatives on the JRC shall be designated the JRC Chair (the "***JRC Chair***"). The JRC Chair will be responsible for calling meetings of the JRC, circulating agendas and performing administrative tasks required to assure efficient operation of the JRC but shall not have any extra or additional vote.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 **Function and Powers of the JRC**. The JRC will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) prepare, discuss, and approve initial Research Plans for each Program and prepare, review, discuss, and approve any amendments that may be necessary or desired to the Research Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) oversee the generation and implementation of the Research Plans, including the timing and deliverables thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) discuss the progress of the Research and the selection, validation and development of the Collaboration Targets, Compounds, and Products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) make determinations as to whether a Development Candidate should be further optimized by the Parties under and pursuant to the Research Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) provide a forum for the Parties to share and discuss information relating to the research and validation of the Collaboration Targets (including Replacement Targets), Compounds and Products, including the results of the activities being carried out under the Research Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) address issues arising in the performance of the Research Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) establish subcommittees, direct and oversee any operating subcommittee on all significant issues, and resolve disputed matters that may arise at the subcommittees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) facilitate the exchange of Know-How and Collaboration Materials as required hereunder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) perform any and all tasks and responsibilities that are expressly attributed to the JRC under this Agreement or as otherwise agreed by the Parties in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 **Meetings**. The JRC will meet at least [**\* \* \***] during the Research Term. The JRC may conduct such meetings by telephone, videoconference, or in person. Each Party may call special meetings of the JRC with at least [**\* \* \***] prior written notice, or a shorter time period in exigent circumstances, to resolve particular matters requested by such Party that are within the purview of the JRC. Meetings of the JRC are effective only if at least one (1) representative of each Party participates in such meeting. Each Party may invite a reasonable number of participants, in addition to its representatives, to attend JRC meetings in a non-voting capacity; provided that if either Party intends to have any Third Party (including any consultant) attend such a meeting, such Party shall provide prior written notice to the other Party. Such Party shall ensure that such Third Party is bound by confidentiality and non-use obligations consistent with the terms of this Agreement. Each Party is responsible for its own expenses incurred in connection with participating in and attending all such meetings. The JRC Chair or his/her designee shall keep minutes of each JRC meeting that records in writing all decisions made, action items assigned or completed and other appropriate matters. The JRC Chair shall send meeting minutes to all members of the JRC promptly after a meeting for review. Each member shall have [**\* \* \***] from receipt in which to comment on and to approve the minutes (such approval not to be unreasonably withheld, conditioned or delayed). If a member, within such time period, does not notify Lilly that s/he does not approve of the minutes, the minutes shall be deemed to have been approved by such member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 **Decisions**. The JRC will endeavor to make decisions by consensus, with the representatives of each Party having, collectively, one (1) vote on behalf of that Party. If the JRC cannot reach consensus or a dispute arises that cannot be resolved within the JRC, either Party may refer such dispute to the Executive Officers for resolution. If consensus cannot be reached with respect to a decision

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within [**\* \* \***] after attempted resolution by the Executive Officers, then: (a) [**\* \* \***] has the final decision-making authority with respect to all matters within the purview of the JRC relating to [**\* \* \***], including matters relating to [**\* \* \***] and [**\* \* \***] and [**\* \* \***] (including whether [**\* \* \***]), with respect to which [**\* \* \***] and [**\* \* \***]; and (b) all other matters within the purview of the JRC require the mutual agreement of the Parties; *provided*, *however*, that [**\* \* \***] shall not resolve any such a matter in a manner that: (i) would require [**\* \* \***], in each case, other than as is included in [**\* \* \***]; (ii) excuses, reduces, or delays [**\* \* \***] obligations under this Agreement, including with respect to payments; (iii) negates any consent right or other rights specifically granted or allocated to [**\* \* \***] under this Agreement; (iv) amends, modifies, or waives compliances with the terms of this Agreement; or

(v) materially increases [**\* \* \***] obligations (including payment obligations) as a result. Further, [**\* \* \***] shall have the right to [**\* \* \***], provided such implementation is consistent with [**\* \* \***].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 **Authority**. The JRC, the JRC Chair, and each subcommittee has only the powers assigned expressly to it in this Article 2 and elsewhere in this Agreement, and does not have any power to amend, modify, or waive compliance with this Agreement. Each Party retains the rights, powers, and discretion granted to it under this Agreement and neither Party may delegate or vest such rights, powers, or discretion in the JRC or subcommittee unless expressly provided for in this Agreement or the Parties expressly so agree in writing. The JRC shall not have the power to amend, waive or modify any term of this Agreement, and no decision of the JRC shall be in contravention of any terms and conditions of this Agreement. It is understood and agreed that issues to be formally decided by the JRC are limited to those specific issues that are expressly provided in this Agreement to be decided by the JRC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 **Discontinuation of JRC**. The JRC will continue until the expiration of the Research Term, at which time the JRC shall be promptly disbanded with immediate effect.

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**ARTICLE 3** 

**LICENSES; EXCLUSIVITY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 **License Grants**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.1 **Grant to Lilly**. Subject to the terms and conditions of this Agreement, Avidity (on behalf of itself and its Affiliates) hereby grants to Lilly an exclusive (even as to Avidity and its Affiliates), worldwide, royalty-bearing license, with the right to grant sublicenses (through multiple tiers) as provided in Section 3.2, under the Avidity Technology to research, develop, make, have made, use, keep, import, export, offer for sale, sell, or otherwise exploit Products in the Field in the Territory. For clarity, the license granted to Lilly under this Section 3.1.1 does not include the right of Lilly to practice the Avidity Technology to research, develop, make, have made, use, keep, import, export, offer for sale, sell, or otherwise exploit any compounds or products other than the Compounds and Products (or compounds or products intended to become Compounds or Products) under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.2 **Grant to Avidity**. Subject to the terms and conditions of this Agreement, Lilly hereby grants to Avidity a worldwide, fully paid, royalty-free, non-sub-licensable (except to Affiliates and Third Party subcontractors solely as needed to perform services for Avidity under this Agreement), non-exclusive license under the Lilly Technology, solely as and to the extent necessary to conduct Research pursuant to the Research Plans during the Research Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 **Sublicenses**. Lilly and its Affiliates may grant one or more sublicenses under the rights and licenses granted to Lilly under Section 3.1.1, in full or in part, to Third Parties (with the right to sublicense through multiple tiers); *provided*, *however*, that: (a) any such permitted sublicense is consistent with and subject to the terms and conditions of this Agreement; and (b) Lilly shall remain responsible for performance of Lilly's obligations under this Agreement and shall be responsible for all actions of each such Sublicensee as if such Sublicensee were Lilly hereunder. Lilly shall provide Avidity with prompt written notice of any grant of sublicense to a Third Party in the United States or Japan of the rights and licenses granted to Lilly under Section 3.1.1 that includes the right for such Third Party to (i) manufacture and (ii) sell or offer to sell, the Product in the applicable jurisdiction (but excluding any sublicenses solely for the distribution, marketing or promotion of Products), and shall provide Avidity with an executed copy of any such sublicense promptly after execution of such sublicense, redacted solely as necessary to protect confidential or commercially sensitive information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 **Subcontracting**. Subject to the terms of this Section 3.3 and Section 9.3, Lilly may engage its Affiliates or Third Party subcontractors (including contract research organizations and contract manufacturing organizations) to perform its obligations under this Agreement, and Avidity may engage its Affiliates or Third Party subcontractors (including contract research organizations and contract manufacturing organizations) to perform such portions of its Research obligations under this Agreement that it customarily engages for its other similar research activities. The activities of any such Third Party subcontractors will be considered activities of such subcontracting Party under this Agreement. The subcontracting Party shall ensure compliance by such Third Party subcontractors with the terms of this Agreement, including any applicable Research Plans. The subcontracting Party shall ensure, prior to engaging any Third Party subcontractor, that such Third Party subcontractor is subject to written agreements containing terms and conditions that: (a) protect the rights of the Parties under this Agreement, including by imposing obligations of confidentiality on each such Third Party subcontractor that are no less than the obligations of confidentiality on each Party under this Agreement; (b) do not under any circumstance impose any payment obligations or liability on the non-subcontracting Party; and (c) are otherwise consistent with the terms of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 **Collaboration Materials Transfer**. If either Party is required to transfer to the other Party any Collaboration Materials pursuant to the Research Plan, the terms of this Section 3.4 shall apply. The transferring Party shall provide the other Party with the applicable Collaboration Materials in accordance with the Research Plan. The receiving Party shall use the Collaboration Materials solely to conduct the activities contemplated under the Research Plan and for no other purpose. The receiving Party shall not sell, transfer, disclose or otherwise provide access to the Collaboration Materials without the written consent of the providing Party, except that the receiving Party may allow access to the Collaboration Materials to its Affiliates and its and their respective employees and officers who require such access to perform its activities under this Agreement and solely for purposes consistent with this Agreement; *provided* that the receiving party binds such Affiliates, employees and officers by written agreement to retain and use the Collaboration Materials only in a manner that is consistent with the terms of this Agreement. THE COLLABORATION MATERIALS ARE PROVIDED "AS IS." WITHOUT LIMITING SECTIONS 9.1 AND 9.2, NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND, ARE GIVEN BY THE PROVIDING PARTY WITH RESPECT TO ANY OF THE COLLABORATION MATERIALS, INCLUDING THEIR CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. The receiving Party acknowledges the experimental nature of the Collaboration Materials and that accordingly, not all characteristics of the Collaboration Materials are necessarily known. The Collaboration Materials transfer to be undertaken under this Section 3.4 shall be overseen by a Working Group established for such purposes, which Working Group may put in place a Collaboration Materials transfer plan expressly identifying Collaboration Materials to be transferred and the timing for such transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 **Exclusivity**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5.1 **General**. Except in connection with the performance of activities under this Agreement, Avidity shall not (by itself or through any Third Party) and shall cause its Affiliates (by themselves or through any Third Party) not to during (a) the [**\* \* \***] (with respect to any Reserved Target that [**\* \* \***]), (b) the [**\* \* \***] (with respect to [**\* \* \***]), or (c) the Term (with respect to a given Collaboration Target), in each case: (i) research, develop, manufacture, commercialize or otherwise exploit any compound or product that is [**\* \* \***]; or (ii) sell, assign, transfer, convey, license, sublicense, covenant not to assert or otherwise grant, or transfer to, any Third Party, any rights or immunities to or under the Avidity Technology to conduct such activities described in Section 3.5.1(a).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5.2 **Avidity Acquisition of Existing Competing Program**. Notwithstanding Section 3.5.1, if after the Effective Date any Third Party becomes an Affiliate of Avidity that Avidity controls (as such term is defined in the definition of "Affiliate") as a result of a merger, acquisition, consolidation, asset sale, or other similar transaction (whether in a single transaction or series of related transactions), and, as of the closing date of such transaction, such Third Party is engaged in: (a) the research, development, manufacture, commercialization, or other exploitation of a compound or product; or (b) the licensing, conveyance, sublicensing or other grant of rights in Patents and Know-How with respect to such a compound or product, in each case of (a) and (b) that would cause Avidity to breach its exclusivity obligations set forth in Section 3.5.1 (such activities, a "***Competing Program***"), then Avidity shall notify Lilly of such transaction within [**\* \* \***] after the closing date of such transaction, and Avidity shall (or shall cause such Affiliate to), within [**\* \* \***] after the closing of such transaction, either: (i) complete a Divestiture of such Competing Program; or (ii) cease and terminate the Competing Program. "***Divestiture***," as used in this Section 3.5.2 and Section 3.5.3, means the sale or transfer of rights to the Competing Program by Avidity to a Third Party without receiving a continuing share of profit, royalty payment, or other economic interest in the success of such Competing Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5.3 **Existing Competing Program of an Acquirer**. Subject to Section 14.8 and notwithstanding Section 3.5.1, if after the Effective Date any Third Party becomes an Acquirer of Avidity as a result of a Change of Control of Avidity, and, as of the closing date of such transaction, such Third Party is engaged in a Competing Program, then Avidity shall notify Lilly of such transaction within [**\* \* \***] after the closing date of such transaction, and Avidity shall (or shall cause its Acquirer or successor entity to), within [**\* \* \***] after the closing of such transaction, either: (a) continue such Competing Program and implement and enforce effective walls and screens between personnel working in the business of Avidity related to the transactions contemplated by this Agreement, on the one hand, and the Competing Program, on the other hand, to ensure that no information relating to any Compounds or Products or the transactions contemplated by this Agreement is accessible by such Acquirer (or any of its Affiliates) in connection with the Competing Program; (b) complete a Divestiture of such Competing Program; or (c) cease and terminate the Competing Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5.4 **Other Activities**. Except as expressly provided in this Article 3, each Party may: (a) engage in research, manufacturing, development or commercialization activities that utilize technologies similar to or involve products competitive with those contemplated by this Agreement; and (b) use any publicly available information and research results (including any publicly available information of the other Party) to the same extent as Third Parties generally are legally permitted to do so. Except as expressly provided in this Agreement, nothing in this Agreement, including any obligation to promote Products or any restriction on the use of Confidential Proprietary Information, shall create: (i) any obligation not to research, develop, manufacture, commercialize or otherwise exploit any product; or (ii) any obligation to utilize a sales force for Products separate from sales forces for other products. Each Party has limited resources, and as a result it is anticipated that personnel assigned to the activities contemplated by this Agreement may also participate in other activities that may utilize technologies similar to or involve products competitive with those contemplated by this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5.5 **Active Development**. Notwithstanding anything to the contrary, including Section 3.5.4, if Lilly is researching, developing, manufacturing, commercializing or otherwise exploiting any compound or product comprising an AOC that is Directed Against a Collaboration Target during the Term and Lilly is not Actively Developing any Compound or Product that is Directed Against such Collaboration Target, then such Collaboration Target will be deemed a Discontinued Target and the terms of Section 4.7 will apply; provided, however, that the foregoing shall cease to apply following the First Commercial Sale of a Product Directed Against such Collaboration Target. "***Actively Developing***" means that Lilly or any of its Affiliates or Sublicensees are engaging in or have engaged within the preceding [**\* \* \***] in one or more of the following activities for a Compound or Product: pre-clinical research and development; formulation development; study/protocol design activity; protocol preparation; vendor selection; awaiting protocol approval from the applicable institutional review board or Regulatory Authority; patient recruitment; patient enrollment; patient treatment, evaluation and monitoring in Clinical Trials; data collection and analysis; auditing of vendors, clinical sites, manufacturing facilities and storage facilities; report writing for any pre-clinical or clinical study or manufacturing activity; communicating or negotiating with Regulatory Authorities; regulatory file(s) being drafted or pending (including preparation of one or more applications for Regulatory Approval); awaiting a response from the applicable Regulatory Authorities (including with respect to pending applications for Regulatory Approval); pricing or reimbursement approvals pending; manufacturing investment work; packaging development; manufacturing scale-up and validation; awaiting go/no go decision from a formal research and development committee within Lilly or such Affiliate or Sublicensee to initiate or continue any of the preceding activities; negotiating contracts with Third Parties to implement any of the foregoing activities (*e.g.*, clinical trial agreements, services agreements, manufacturing and supply agreements); publication writing; seeking licensing partners; endeavoring to overcome circumstances outside of Lilly's or its Affiliate's, or Sublicensee's reasonable control (including supply, regulatory and other issues) that impair the ability of Lilly or its Affiliate or Sublicensee to perform any of the foregoing activities; reasonable, good faith planning or preparation for any of the foregoing activities; and reasonable, good faith evaluation of the results of any of the foregoing activities with the goal of making a timely recommendation for next steps.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 **No Other Rights; Retained Rights**. Except as set forth herein, neither Party shall be granted, by implication or otherwise: (a) any license or other intellectual property interest under any trademarks, Know-How, or Patents of the other Party; or (b) any Proprietary Technology of the other Party. Except as expressly granted under Section 3.1.1 and as limited by Section 3.5.1, Avidity and its Affiliates retain all other right, title, and interest in and to practice and exploit the Avidity Technology. Furthermore, notwithstanding anything to the contrary in this Agreement, by entering into this Agreement, neither Party is forfeiting any rights that such Party may have to perform research activities in compliance with 35 U.S.C. § 271(e)(1) or any experimental or research use exemption that may apply under Applicable Law or in any country.

**ARTICLE 4** 

**RESEARCH ACTIVITIES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 **Overview**. During the Research Term, the Parties shall conduct Research for each Program to: (a) during the Selection Period described in Section 4.2, perform activities to determine the feasibility of researching and developing compounds directed to each Reserved Target to permit Lilly to select Collaboration Targets pursuant to Section 4.2.1; (b) pursuant to the applicable Research Plan, validate Collaboration Targets selected pursuant to Section 4.2.1; (c) pursuant to the applicable Research Plan, identify, develop, optimize, and select development candidates, each consisting of a Compound that is Directed Against a Collaboration Target (a

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"***Development Candidate***"); and (d) pursuant to the applicable Research Plan, formulate Products following selection of Development Candidates for further research and development pursuant to Section 4.4. Lilly may select up to six (6) Collaboration Targets and may replace up to [**\* \* \***] Collaboration Targets pursuant to Section 4.2. Avidity shall provide Lilly with the deliverables described in each Research Plan pursuant to Section 4.3. Following receipt of the Data Package, as further described in Section 4.4, the JRC shall select one or more Development Candidates for the applicable Collaboration Target. Both Parties acknowledge and agree that, during the Research Term, the Parties may collaborate to combine their respective Proprietary Technologies to optimize the desired pharmaceutical, CMC or safety profile of the Compound or Product. Notwithstanding anything to the contrary in the Research Plan, Lilly shall have sole control and responsibility for the research of Antibodies to be used in Compounds and any research of Antibodies shall be outside the scope of the Research Plans. In addition, Lilly is free to perform Research on Compounds (or compounds intended to become Compounds) outside the scope of the Research Plan using its own resources.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 **Collaboration Targets**. Lilly may select and replace Collaboration Targets pursuant to this Section 4.2. The number of Collaboration Targets under active Research at any given time shall be: (a) no fewer than [**\* \* \***] during each of the first [**\* \* \***] of the Research Term; and (b) no more than [**\* \* \***] at any time during the Research Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.1 **Selection of Initial Collaboration Targets**. As of the Effective Date, the Parties have identified the Targets set forth in <u>Exhibit 4.2.1</u> as Targets to be reserved under this Agreement (the "***Reserved Targets***"). Within the period between the Effective Date and [\* **\*** \*] following the Effective Date (the "***Selection Period***"), Lilly shall identify to Avidity in writing at least [\* \* \*] and up to [\* \* \*] of the Reserved Targets as the initial Targets to be Researched under Research Plans subject to this Agreement (the "***Initial Collaboration Targets***"). During the applicable timeframe described in this sentence, Lilly may propose additional Targets (excluding [\* \* \*] Targets) during: (a) the [\* \* \*] of the Selection Period with respect to any Reserved Targets that are not [\* \* \*]; and (b) the Selection Period, with respect to any Reserved Targets that are [\* \* \*]; Lilly may propose additional Targets to be added as Reserved Targets. If such Target(s) satisfy the requirements of being a "Replacement Target" under Section 4.2.2, such Target(s) shall be deemed Reserved Target(s) and <u>Exhibit 4.2.1</u> shall be deemed to be updated to include such Target(s) as Reserved Target(s). Following: (a) the [\* \* \*] of the Selection Period, with respect to any Reserved Targets that are not [\* \* \*]; and (b) the Selection Period, with respect to any Reserved Targets that are[\* \* \*]; any such Reserved Targets not selected as Initial Collaboration Targets shall cease to be Reserved Targets and shall no longer be subject to this Agreement (including Section 3.5), except that such Targets may be selected as Replacement Targets of Collaboration Targets to the extent they otherwise satisfy the requirements of Section 4.2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.2 **Replacement of Collaboration Targets**. Lilly may, at any time during the Research Term, replace a Collaboration Target with another Target (excluding [**\* \* \***] Targets) (a "***Replacement Target***") up to [**\* \* \***] times upon written notice to Avidity and with Avidity's written approval, which approval Avidity may withhold only if Avidity or any of its Affiliates: (a) has commenced or is actively conducting a *bona fide* internal program consisting of research and development activities to research and develop any compound or product that is Directed Against the proposed Replacement Target[**\* \* \***]; (b) has an [\*\*\*] that would conflict with the inclusion of the Replacement Target as a Collaboration Target under this Agreement or would prevent or conflict with the exclusivity that Lilly would otherwise have under Section 3.5 with respect to such Target if included as a Collaboration Target hereunder; or (c) has an [**\* \* \***] and [**\* \* \***]. Upon Avidity's written approval, the previous Collaboration Target shall cease to be a Collaboration Target and become a Discontinued

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Target, and the Replacement Target shall become a Collaboration Target. If Avidity disapproves of a proposed Replacement Target for one of the reasons specified above, and at a later time that reason no longer applies to the Replacement Target (because, for example, Avidity has discontinued an internal program to research and develop a compound or product Directed Against the proposed Replacement Target), Avidity shall promptly notify Lilly and if Lilly has not yet selected its maximum number of Replacement Targets, Lilly may select the Target subject to the notification as a Replacement Target. For clarity, Lilly may exercise such replacement right up to a total of [**\* \* \***] times for all Collaboration Targets, and the maximum number of Replacement Targets that may become Collaboration Targets is [**\* \* \***] total. For further clarity, any Targets that are chosen as replacements of Reserved Targets during the Selection Period shall not be considered Replacement Targets and shall not count towards the [**\* \* \***] maximum number of Replacement Targets (except with respect to any Target that is not selected as an Initial Collaboration Target but is subsequently chosen as a Replacement Target for a Target selected as a Collaboration Target).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.3 **Research Discontinuance**. Without limiting Sections 12.3.1 and 12.3.2, subject to Lilly maintaining a Program for at least [**\* \* \***] Collaboration Targets during the first [**\* \* \***] after the Effective Date, Lilly may discontinue the Research with respect to a Collaboration Target at any time upon [**\* \* \***] prior written notice to Avidity. Upon expiration of such [**\* \* \***] period, such Target shall cease to be a Collaboration Target and become a Discontinued Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 **Research Plans**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.1 **Content**. The Parties shall conduct Research for each Collaboration Target pursuant to a comprehensive written research plan (each, a "***Research Plan***") that sets forth, for each Program: (a) the objective of the applicable Research Plan and the non-clinical Research activities to be conducted by each of the Parties to validate such Collaboration Target and to identify, develop, optimize, and select a Development Candidate, and the allocation of activities between the Parties; (b) the expected resources to be allocated to and the anticipated number of FTEs to be dedicated to performing such Research; (c) a budget setting out by Calendar Quarter the anticipated Avidity Internal Costs and the Avidity External Costs to be

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incurred by Avidity and its Affiliates in the conduct of the Research for such Program (the "***Research Budget***"); (d) the timeline and milestones of such activities; and (e) the Data Package. The Research Plans shall, in form and substance, substantially follow the form of Research Plan, in form and substance, as set forth on <u>Exhibit 4.3</u>, including with respect to the general principles for allocation of responsibilities set forth therein, except to the extent the Parties agree to any deviations from such form with respect to any particular Collaboration Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.2 **Approval and Amendments**. Within [**\* \* \***] of the selection of a Collaboration Target (including any Replacement Target selected under Section 4.2.2), the Parties shall prepare, discuss, and mutually agree on the Research Plan for such Collaboration Target, and shall determine the Data Package specific for such Collaboration Target that constitutes a collection of information and pre-clinical results necessary to determine whether a particular Development Candidate Directed to such Collaboration Target will be further developed in IND-enabling studies (the "**Initial Data Package**"). The JRC shall regularly review the Research Plans and the progress of activities being conducted under the Research Plans, in no event less frequently than [**\* \* \***]. Either Party may propose amendments to the Research Plan for a Program from time to time as appropriate, to take into account completion, commencement, or cessation of activities contemplated in the then-current Research Plan for such Program or any newly available information related to such Program. Such amendments shall be effective upon JRC approval and subject to the decision making in accordance with Section 2.7, provided that any amendment to the Data Package (including the Initial Data Package) shall be subject to the mutual agreement of the Parties, and neither Party shall unreasonably withhold such agreement for any amendment to the Data Package as a result of new scientific findings unless amendment based on such scientific findings would be necessary or consistent with the general practices customarily followed by Lilly. Notwithstanding the foregoing, if the Parties are unable to agree on an amendment to a Data Package (including whether or not such amendment is necessary or useful) despite their good faith efforts, [**\* \* \***] determination shall control. The Parties shall update the Research Plan and/or Research Budget as appropriate to account for the change in activities thereunder as a result of any amendment to the Data Package.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 **Selection of Development Candidate**. Within [**\* \* \***] after Avidity delivers a complete Data Package (which the Parties agree is accurate and complete in all material respects) to the JRC, the JRC shall determine whether a Development Candidate should be further optimized by the Parties under and pursuant to the Research Plan. Upon designation of a Development Candidate for further development under this Agreement, the Parties shall perform such additional Research allocated to them under the applicable Research Plan for formulation of a Product and further optimization of such Product. If the [**\* \* \***] time period lapses without a decision by the JRC, then the dispute resolution provisions of Section 2.7 shall apply, with [**\* \* \***] having the final authority on the determination of whether a Development Candidate should not be further developed under this Agreement. If the JRC (or the Executive Officers or [**\* \* \***], in the case of the preceding sentence where the [**\* \* \***] time period lapses without a decision by the JRC) determines that a Development Candidate should not be further developed under this Agreement, the applicable Collaboration Target will cease to be a Collaboration Target and will be a Discontinued Target subject to Section 4.7. Subject to Section 4.2.2 (including the maximum number of Replacement Targets set forth in Section 4.2.2), Lilly may elect to replace such Discontinued Target with a Replacement Target.

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For avoidance of doubt, if Lilly has expressed in such [**\* \* \***] period its intention to pursue a Development Candidate for further optimization, then the end of the [**\* \* \***] period shall not itself result in the Collaboration Target becoming a Discontinued Target unless and until determined by the JRC (or the Executive Officers or [**\* \* \***]).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 **Records; Reports**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5.1 **Records**. Avidity (and Lilly, to the extent any Research is assigned to Lilly under a Research Plan) shall maintain, or cause to be maintained, during the Research Term and for a reasonable period of time thereafter that is consistent with industry standards, complete and accurate records of its Research for each Program in sufficient detail and in a good scientific manner appropriate for scientific, patent, and regulatory purposes, which records will reasonably reflect all work performed by or on behalf of such Party under the Research Plan for each Program. Lilly may request a copy of any such records of Avidity, except that Avidity may redact any portion of such records that Avidity reasonably determines to constitute Confidential Proprietary Information that is not licensed to Lilly hereunder, or to which Lilly does not otherwise have a right hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5.2 **Reports and Data Package**. Avidity (and Lilly, to the extent any research is assigned to Lilly under a Research Plan) shall report to Lilly (or Avidity, if applicable) through the JRC (or its designated subcommittee) its results in conducting Research under the Research Plan for each Program. For each Program, Avidity shall provide the JRC with: (a) the deliverables set forth in the Research Plan for such Program in accordance with such Research Plan, including a written report summarizing the data and information generated under each Program within [**\* \* \***] after the completion of Avidity's Research for such Program; and (b) on a periodic basis during the Research Term, all data generated by or on behalf of Avidity in performance of the Research for such Program under this Agreement. In no event will Avidity be required to provide Lilly or the JRC any data, results, or information outside the scope of the Research Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 **Research Term Extension**. Notwithstanding anything to the contrary, Lilly may, in its sole discretion, extend the Research Term in up to [**\* \* \***] additional increments of no less than [**\* \* \***] each, for up to a total of [**\* \* \***] of additional extension each upon written notice to Avidity at least [\* \* \*] prior to the expiration of the existing Research Term. The Research Term may not exceed [\* \* \*] after the Effective Date without Avidity's prior written consent. If Lilly desires that Avidity conduct additional research or development activities after the expiration of the Research Term and Avidity agrees, in its sole discretion, to conduct such additional activities, the Parties shall negotiate in good faith the terms and conditions of Avidity's conduct of such additional activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 **Discontinued Targets**. Once a Collaboration Target becomes a Discontinued Target: (a) all rights and licenses granted under this Agreement will terminate with respect to such Discontinued Target; and (b) either Party may develop and commercialize compounds and products that are Directed Against such Discontinued Target at its own cost. For clarity, the exclusivity obligations of Section 3.5 do not apply to a Discontinued Target. If such Discontinued Target or the Compound Directed Against such Discontinued Target is Covered by a Lilly Patent, the Parties shall reasonably cooperate to discuss in good faith a potential separate

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agreement detailing the transition to Avidity of Lilly's rights and obligations (or portions thereof) with respect to such Discontinued Target or Compound Directed Against such Discontinued Target, which shall at least include the obligation for Avidity to assume applicable obligations to Third Parties, and may provide for the payment of royalties or other compensation by Avidity to Lilly for the Commercialization by Avidity of any Compound that includes any Lilly Patent; and provided, however, that Lilly shall have no obligation to grant Avidity a license to any Excluded Technologies or to discuss any such license as part of such good faith discussions. Notwithstanding the foregoing, if the Parties are unable to agree on the terms of such a separation agreement within [**\* \* \***] of commencement of discussions with respect thereto despite their good faith efforts, Lilly shall have no further obligation to enter into such an agreement or negotiate with Avidity with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 **Diligence**. Each Party shall use Commercially Reasonable Efforts to execute and to perform, or cause to be performed, the Research assigned to it in each Research Plan in a good scientific manner and in compliance with Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 **Research Funding.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9.1 Avidity Research Costs. Lilly shall reimburse Avidity for all Avidity Research Costs for each Program, *provided*, that such Avidity Research Costs do not exceed [\* \* \*] percent ([\* \* \*]%) of the applicable Research Budget for such Program. If Avidity reasonably anticipates that it will exceed [\* \* \*] percent ([\* \* \*]%) of the applicable Research Budget for a Program, Avidity shall notify Lilly in writing and the Parties shall discuss in good faith whether to amend the Research Budget to address such overrun, provided that Avidity shall maintain the Avidity Research Costs to avoid such budget overrun absent any change in the Research Plan or any scientific or regulatory reasons beyond the reasonable control of Avidity (taking into account matters of objectively reasonable calculation and efficiency of application of Avidity Research Costs); *further provided* that (subject to the foregoing provision) Avidity shall not be required to perform any research activities or other development activities if such activities would result in any Avidity Research Costs that would not be reimbursed by Lilly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9.2 **Cost Calculation Mechanism**. The Avidity Research Costs, and any other costs for which this Agreement requires Lilly reimburse or be responsible for Avidity's costs, shall be calculated in accordance with this Section 4.9.2 as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Lilly shall compensate Avidity for Avidity Research Costs, provided that the nature and scope of the work performed by Avidity:

(i) is set forth in the Research Plan; or (ii) has otherwise been approved in advance in writing by Lilly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Avidity shall invoice Lilly for reimbursement of Avidity Internal Costs for each Program on a [**\* \* \***] within [**\* \* \***] following the end of the applicable Calendar Quarter. Lilly shall then have [**\* \* \***] after its receipt of such invoice to review such invoice and raise any disputed amounts to Avidity. If Lilly does not dispute any amounts payable under an applicable invoice during such [**\* \* \***] period, then Lilly shall pay the amounts payable under any such invoice in arrears and within [**\* \* \***] following such [**\* \* \***] review period (*i.e.*, [**\* \* \***] after its receipt of such invoice). Avidity shall submit with each invoice information and documentation detailing the FTE costs applicable to Avidity's efforts for such applicable Calendar Quarter period, including the work packages of the Research Plan items worked on and the number of FTEs assigned to each work package;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding the foregoing, Avidity External Costs incurred by Avidity in accordance with the Research Plan shall be invoiced separately by Avidity upon Avidity's receipt of the applicable Third Party's invoice. Irrespective of whether such payments are made in advance or in arrears, Lilly shall then have [**\* \* \***] after its receipt of such invoice to review such invoice and raise any disputed amounts to Avidity. If Lilly does not dispute any amounts payable under an applicable invoice during such [**\* \* \***] period, Lilly shall pay the amounts payable under any such invoice within [**\* \* \***] following such [**\* \* \***] review period (*i.e.*, [**\* \* \***] following its receipt of such invoice); *provided*, that, if Lilly reimburses Avidity for advance payments made by Avidity to any Third Party, Avidity shall provide the final actual cost per invoiced period and a true up of actual cost compared to advance payment (planned cost) to Lilly. If the advance payment(s) turn out to be higher than the actual cost incurred by Avidity, Avidity shall credit the respective amount of the advance payment to the next invoice or invoices payable by Lilly, and in the event there are no further invoices anticipated, shall reimburse Lilly within [**\* \* \***] of such true up;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) As long as Avidity provides development support to Lilly and for a period of [**\* \* \***] thereafter, Avidity shall maintain complete and accurate books and records regarding the Avidity Internal Costs and Avidity External Costs invoiced to Lilly. Lilly shall have the right to have an accounting firm inspect Avidity's records solely for purposes of determining the accuracy of the Avidity Internal Costs and the Avidity External Costs in accordance with Section 7.6 applied *mutatis mutandis* (subject only to replacing references to "Lilly" with references to "Avidity," and vice versa, and other analogous changes, including changes related to the subject matter of the audit); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Lilly shall bear its own internal costs and out-of-pocket expenses with respect to any Research that Lilly conducts for each

Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 **Certain Standards Applicable to Work**. All Research and development done by either Party for non-regulated work under this Agreement will be conducted in accordance with the Research Plans, Eli Lilly and Company Good Research Practices, Eli Lilly and Company Animal Care and Use Requirement for Animal Researchers and Suppliers and all Applicable Laws, including those regarding data privacy and data security laws and regulations. For purposes of this Agreement, "***Eli Lilly and Company Good Research Practices***" means the compiled set of shared research quality standards defining how Lilly's research laboratories conduct good science for non-regulated work as set forth in <u>Exhibit 4.10 Part A</u>. For purposes of this Agreement, "***Eli Lilly and Company Animal Care and Use Requirement for Animal Researchers and Suppliers***" means the guidelines relating to animal care and use for research done on behalf of Lilly as set forth in <u>Exhibit 4.10 Part B</u>. If Lilly reasonably requests, Avidity will complete a self-assessment examination form based on such quality standards. If it has not done so prior to the Effective Date, a duly authorized representative of Lilly may make an on-site visit to Avidity for the purpose of conducting a quality assessment or quality audit for non-regulated work. Lilly may conduct compliance audits of Avidity during business hours, for a duration consistent with the quantity of material to be reviewed, and no more than [\* \* \*], except in the case of audits for cause, in accordance with the procedures set forth in Section 7.6 to ensure compliance with applicable GLP, GRP or GMP, provided Lilly has requested such audit with written notice of at least [**\* \* \***] and such audit does not unreasonably interfere with Avidity's operations. All such audits shall be done at Lilly's cost and expense.

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**ARTICLE 5** 

**DEVELOPMENT, MANUFACTURING, AND REGULATORY MATTERS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 **Development and Manufacturing Responsibilities**. Except with respect to Research activities conducted by Avidity pursuant to a Research Plan for a Program, Lilly shall be responsible for, and shall bear all costs associated with, the development and manufacture of Compounds and Products for such Program. Subject to the terms of this Agreement, all decisions concerning the development of Compounds and Products following Research, including the clinical and regulatory strategy of Compounds and Products covered under this Agreement, is within the sole discretion of Lilly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 **Diligence**. Lilly shall use Commercially Reasonable Efforts to develop and to obtain Regulatory Approval for [**\* \* \***] per Collaboration Target in [**\* \* \***].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 **Reports**. Lilly shall keep Avidity reasonably informed as to the progress and results of its and its Affiliates' and Sublicensees' development activities under this Agreement. Without limiting the foregoing, on [**\* \* \***] Lilly shall provide Avidity with a written report summarizing its development activities and the results thereof. In addition, Lilly shall make available to Avidity such additional information about its development activities as may be reasonably requested by Avidity from time to time. Lilly's obligations under this Section 5.3 shall cease upon the First Commercial Sale of a Product in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 **Regulatory Responsibilities**. Except as provided under a Research Plan, as between the Parties, Lilly shall be responsible for the preparation, submission, and maintenance of all Regulatory Filings and obtaining Regulatory Approvals (including the preparation and submission of the IND filing and for seeking IND approval) with respect to Compounds and Products developed and shall have sole control over all interactions with the applicable Regulatory Authority. Avidity shall reasonably cooperate with Lilly, at Lilly's reasonable request and expense, with respect to any regulatory matters related to Compounds or Products. Lilly will own all right, title and interest in and to any and all Regulatory Filings and Regulatory Approvals for Compounds and Products and, as between the Parties, all such Regulatory Filings and Regulatory Approvals will be held in the name of Lilly, and Avidity shall execute all documents and take all actions as are necessary or reasonably requested by Lilly to vest such title in Lilly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 **Adverse Event Reporting; Additional Agreement**. Lilly shall establish, hold, and maintain the global safety database for Compounds and Products with respect to information on adverse events concerning the Compounds and Products, as and to the extent required by Applicable Law. Upon request of either Party, the Parties shall negotiate and agree on any additional agreements necessary for the development of Compounds and Products, including a pharmacovigilance agreement.

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**ARTICLE 6** 

**COMMERCIALIZATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 **General**. Lilly shall have the sole right and be responsible for, and shall bear all costs associated with, the Commercialization of Products, including manufacturing, distribution, marketing, and sales activities. Subject to the terms of this Agreement, all decisions concerning Commercialization of Products, including the marketing and sales of Products, and the design, price, and promotion of Products, is within the sole discretion of Lilly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 **Diligence**. Lilly shall use Commercially Reasonable Efforts to achieve a First Commercial Sale for each Product for which it obtains Regulatory Approval in [**\* \* \***].

**ARTICLE 7** 

**FEES, ROYALTIES, & PAYMENTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 **Upfront Payment**. As partial consideration for the rights granted by Avidity to Lilly pursuant to the terms of this Agreement, Lilly shall pay to Avidity a non-refundable, non-creditable payment equal to Twenty Million Dollars ($20,000,000) within [**\* \* \***] of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 **Milestone Payments**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.1 **General**. Lilly shall pay to Avidity certain non-refundable and non-creditable milestone payments ("***Milestone Payments***") set forth in this Section 7.2: (a) within [**\* \* \***] following each of: (i) the first Product for each Collaboration Target achieving the development milestone event set forth in Section 7.2.2 (the "***Development Milestone Events***"); and (ii) the first Product for each Collaboration Target achieving the First Commercial Sale milestone event set forth in Section 7.2.3 (the "***First Commercial Sale Milestone Events***"); and (b) within [**\* \* \***] following the end of the Calendar Quarter of the first occurrence of all Products in each Program collectively achieving the commercial milestone events set forth in Section 7.2.4 (the "***Commercial Milestone Events***"). For clarity, no Milestone Payment is payable for subsequent or repeated achievements of the same Milestone Event with respect to the same Product, or any subsequent Products with respect to a Collaboration Target for which a Milestone Event has occurred. For avoidance of doubt, the maximum number of each of the Milestone Events achievable is up to six (6) (*i.e.,* only once per each Collaboration Target subject to this Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.2 **Development Milestones**. The Milestone Payments to be made by Lilly to Avidity pursuant to Section 7.2.1 with respect to the first Product for each Collaboration Target to achieve a below Development Milestone Event during the Term are as follows (each such Milestone Payment, a "***Development Milestone Payment***"):

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| | |
|:---|:---|
| **Development Milestone Event** | **Milestone Payment** |
|  [**\*\*\***] | $[**\*\*\***] |
|  [**\*\*\***] | $[**\*\*\***] |
|  [**\*\*\***] | $[**\*\*\***] |

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The maximum total amount payable under this Section 7.2.2 shall not exceed [**\* \* \***] Dollars ($[**\* \* \***]) (*i.e.* [**\* \* \***] Dollars ($[**\* \* \***]) for each of up to six (6) Collaboration Targets). Notwithstanding the foregoing, if a Product for a particular Collaboration Target is discontinued prior to the First Commercial Sale of such Product, then [**\* \* \***]. For illustration purposes only, assume [**\* \* \***]. If (a) a Development Milestone Event for a Product Directed To a Collaboration Target is achieved and payment with respect to any previous Development Milestone Event for such Collaboration Target has not been made by Lilly to Avidity, then all previous Development Milestone Events for such Collaboration Target shall be deemed to have occurred; or (b) Lilly achieves Regulatory Approval for a Product Directed To a Collaboration Target and payment with respect to any Development Milestone Event for such Collaboration Target has not been made by Lilly to Avidity then all Development Milestone Events for such Collaboration Target shall be deemed to have occurred; and in each case of (a) and (b) Lilly shall pay Avidity all such unpaid payments with respect to such previous Development Milestone Events for such Collaboration Target at the same time that the Milestone Payment for the later Development Milestone Event is paid or within [**\* \* \***] of such Regulatory Approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.3 **First Commercial Sale Milestones**. The Milestone Payments to be made by Lilly to Avidity pursuant to Section 7.2.1 with respect to the first Product for each Collaboration Target to achieve a below First Commercial Sale Milestone Event during the Term are as follows:

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| | |
|:---|:---|
| **First Commercial Sale Milestone Event** | **Milestone Payment** |
|  [**\*\*\***] | $[**\*\*\***] |
|  [**\*\*\***] | $[**\*\*\***] |
|  [**\*\*\***] | $[**\*\*\***] |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.4 **Commercial Milestones**. The Milestone Payments to be made by Lilly to Avidity pursuant to Section 7.2.1 with respect to each Collaboration Target to achieve the below Commercial Milestone Events are as follows:

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| | |
|:---|:---|
| **Commercial Milestone Event** | **Milestone Payment** |
|  First Calendar Year in which annual Net Sales of all Products for such Collaboration Target exceed [**\*\*\***] Dollars ($[**\*\*\***]) | $[**\*\*\***] |
|  First Calendar Year in which annual Net Sales of all Products for such Collaboration Target exceed [**\*\*\***] Dollars ($[**\*\*\***]) | $[**\*\*\***] |
|  First Calendar Year in which annual Net Sales of all Products for such Collaboration Target exceed [**\*\*\***] Dollars ($[**\*\*\***]) | $[**\*\*\***] |
|  First Calendar Year in which annual Net Sales of all Products for such Collaboration Target exceed [**\*\*\***] Dollars ($[**\*\*\***]) | $[**\*\*\***] |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 **Royalties on Products**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.1 **Royalty Term**. Lilly shall pay Avidity royalties as set forth in this Section 7.3 on a Product-by-Product and country-by-country basis in the Territory during the period of time beginning on the First Commercial Sale of such Product in such country and continuing until the later of: (a) the expiration or abandonment of the last-to-expire Valid Claim in such country Covering such Product; or (b) ten (10) years after the First Commercial Sale of such Product in such country (the ***"Royalty Term***").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.2 **Royalty Rates**. Lilly shall pay Avidity non-refundable, non-creditable royalties as set forth below on aggregate annual Net Sales of all Products for each Collaboration Target in the Territory during the Royalty Term, as calculated by multiplying the applicable royalty rate set forth below by the corresponding portion of aggregate Net Sales of all Products for such Collaboration Target in such Calendar Year.

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| | |
|:---|:---|
| **Aggregate Annual Net Sales of all Products for a Collaboration Target in the Territory** | **Royalty Rate** |
|  [**\*\*\***] Dollars ($[**\*\*\***]) | [**\*\*\***]% |
|  [**\*\*\***] Dollars ($[**\*\*\***]) | [**\*\*\***]% |
|  [**\*\*\***] Dollars ($[**\*\*\***]) | [**\*\*\***]% |
|  [**\*\*\***] Dollars ($[**\*\*\***]) | [**\*\*\***]% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.3 **Valid Claim**. In any Calendar Quarter during the Royalty Term for a Product for which there is no longer a Valid Claim of an Avidity Patent that Covers such Product in a country, the royalty rates provided in Section 7.3.2 for the Product will be reduced in such country by [**\* \* \***] percent ([**\* \* \***]%) for such Calendar Quarter (in addition to Sections 7.3.4 and 7.3.5, but subject to Section 7.3.6).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.4 **Biosimilar Products**. On a country-by-country and Product-by-Product basis: (a) upon the first commercial sale of one or more Biosimilar Products with respect to a Product in any country in the Territory during the Royalty Term, the royalty rates provided in Section 7.3.2 for the Product will be reduced in such country by [**\* \* \***] percent ([**\* \* \***]%) (in addition to Sections 7.3.3 and 7.3.5, but subject to Section 7.3.6); and (b) from and after the first Calendar Quarter in which Biosimilar Products (individually or in the aggregate) have a market share of [**\* \* \***] percent ([**\* \* \***]%) or more in a given country (measured in local currency, over the Calendar Quarter, as reported by a customary market intelligence service used by Lilly), the royalty rates provided in Section 7.3.2 for the Product will be reduced in such country to [**\* \* \***] percent ([**\* \* \***]%) of the royalties otherwise payable under Section 7.3.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.5 **Third Party Payments**. Lilly may deduct from any royalty payments to Avidity under this Section 7.3 for each Product (after application of Sections 7.3.3 and 7.3.4, but subject to Section 7.3.6) an amount equal to [**\* \* \***] percent ([**\* \* \***]%) of any royalties paid by Lilly to a Third Party in consideration for a right or license under such Third Party's interest in any Patents that would, absent such a right or license, be infringed by the researching, developing, making, having made, using, keeping, importing, exporting, offering for sale, sale, or other exploitation of the Compounds in the Field in the Territory.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.6 **Cumulative Limit on Deductions**. Notwithstanding anything to the contrary, in no circumstances will the royalties payable to Avidity under this Section 7.3 in any Calendar Quarter be reduced, as a result of Section 7.3.3, Section 7.3.4 and Section 7.3.5 in the aggregate below [**\* \* \***] percent ([**\* \* \***]%) of the royalties otherwise payable under Section 7.3.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.7 **Payment; Reports**. Royalty payments due by Lilly to Avidity under this Section 7.3 will be calculated and reported [**\* \* \***]. All royalty payments due under this Section 7.3 shall be paid within [**\* \* \***] after the end of each Calendar Quarter and shall be accompanied by a report setting forth Net Sales and royalty for each Product by Lilly and its Affiliates and Sublicensees in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 **Convertible Note**. Pursuant to the terms of the Convertible Note Purchase Agreement between the Parties, Lilly will purchase a convertible promissory note from Avidity in the amount of Fifteen Million Dollars ($15,000,000); *provided, that*, in no event shall Lilly own more than twenty percent (20%) of the voting securities of Avidity or its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 **Method of Payment; Currency Conversion**. Unless otherwise agreed by the Parties, all payments due under this Agreement shall be paid in Dollars by wire transfer or electronic funds transfer of immediately available funds to an account designated by the payee; provided however, that Lilly shall only be required to disburse funds to the payee's jurisdiction of incorporation or to a jurisdiction in which the payee has a significant business presence. When conversion of payments from any currency other than Dollars is required, Lilly's then-current standard exchange rate methodology will be employed for the translation of foreign currency sales into Dollars; *provided*, that this methodology is used by Lilly in the translation of its foreign currency operating results, is consistent with U.S. GAAP, is audited by Lilly's independent certified public accountants in connection with the audit of the consolidated financial statements of Lilly, and is used for external reporting of foreign currency operating results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 **Records and Audits**. Lilly shall keep, and shall cause its Affiliates and Sublicensees to keep, complete and accurate records which may be necessary to ascertain properly and to verify the royalty payments due hereunder. Such records shall be kept for such period of time required by Applicable Laws, but no less than [**\* \* \***] following the end of the Calendar Quarter to which they pertain. Within the Term, Avidity shall not more than once each year have the right to have a "Big 4" accounting firm (*i.e.,* KPMG, PwC, Deloitte or Ernst & Young) reasonably acceptable to Lilly inspect Lilly's records for the purpose of determining the accuracy of royalty payments for a period covering not more than [**\* \* \***] following the Calendar Quarter to which they pertain. No period will be audited more than once and each audit must be reasonable in scope. The independent, certified public accountant selected shall keep confidential any information obtained during such inspection and shall report to Avidity and Lilly only the amounts of Net Sales and royalties due and payable. Such audits may be exercised during normal business hours upon reasonable prior written notice to Lilly. Avidity shall bear the full cost of such audit unless such audit discloses an underpayment by Lilly of more than [**\* \* \***] percent ([**\* \* \***]%), and which underpayment is also at least [**\* \* \***] Dollars ($[**\* \* \***]), of the amount of royalties or other payments due under this Agreement for any applicable Calendar Quarter, in which case, Lilly shall bear the cost of such audit and shall remit to Avidity the amount of any underpayment within [**\* \* \***] of the date the auditor's written report is received. Any overpayment by Lilly revealed by an audit shall be credited against future payments owed by Lilly to Avidity (and if no further payments are due, shall be refunded by Avidity at the request of Lilly within [**\* \* \***] of the receipt of the request).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 **Late Payments**. If any payment due under this Agreement is not paid when due in accordance with the applicable provisions of this Agreement, the payment shall accrue interest from the date due at the rate of prime (as reported in *The Wall Street Journal* (Eastern U.S. edition)) [\* \* \*] or the maximum rate allowable by Applicable Law, whichever is less. The payment of such interest shall not limit the Party entitled to receive payment from exercising any other rights it may have as a consequence of the lateness of any payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 **Taxes**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8.1 **Cooperation and Coordination**. The Parties acknowledge and agree that it is their mutual objective and intent to minimize, to the extent feasible and in compliance with Applicable Laws, taxes payable with respect to their collaborative efforts under this Agreement and that they shall use reasonable efforts to cooperate and coordinate with each other to achieve such objective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8.2 **Payment of Tax**. The upfront, milestones, royalties and other amounts payable by Lilly to Avidity to this Agreement (each, a "**Payment**") shall be paid free and clear of any and all taxes, except for any withholding taxes required by Applicable Law. Except as provided in this Section 7.8.2. Avidity shall be solely responsible for paying any and all taxes (other than withholding taxes required by Applicable Law to be deducted from Payments and remitted by Lilly) levied on account of, or measured in whole or in part by reference to, any Payments it receives. Lilly shall deduct or withhold from the Payments any taxes that it is required by Applicable Law to deduct or withhold. Notwithstanding the foregoing, if Avidity is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, applicable withholding tax, it may deliver to Lilly or the appropriate Governmental Authority (with the assistance of Lilly to the extent that this is reasonably required and is expressly requested in writing) the prescribed forms necessary to reduce the applicable rate of withholding or to relieve Lilly of its obligation to withhold such tax and Lilly shall apply the reduced rate of withholding or dispense with withholding as the case may be; provided that Lilly has received evidence, in a form satisfactory to Lilly, of Avidity's delivery of all applicable forms (and, if necessary, its receipt of appropriate governmental authorization) at least [**\* \* \***] prior to the time Payments are due. If in accordance with the foregoing, Lilly withholds any amounts of tax, it shall pay to Avidity the balance when due, make timely payment to the proper tax authority of the withheld amount and send to Avidity proof of such payment within [**\* \* \***] following such payments.

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**ARTICLE 8** 

**INTELLECTUAL PROPERTY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 **Ownership of Intellectual Property**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1.1 **Proprietary Technology**. As between the Parties, and subject to the licenses granted under this Agreement, Avidity retains all of its rights, title and interests in and to the Avidity Technology existing as of the Effective Date (including the Avidity Proprietary Technology) and any Avidity Proprietary Technology created or acquired thereafter, and Lilly retains all of its rights, title and interests in and to the Lilly Technology existing as of the Effective Date (including the Lilly Proprietary Technology) and any Lilly Proprietary Technology created or acquired thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1.2 **Inventorship***.* Inventorship as between the Parties will be determined in accordance with U.S patent laws. All such determinations shall be documented to ensure that the Patent claims in any divisional or continuation patent applications reflect appropriate inventorship.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1.3 **Program Inventions**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Ownership**. The Parties anticipate to both contribute Proprietary Technology under the Research Plan to facilitate the innovation of technology and optimization of Compounds and Products under this Agreement. The Parties shall jointly own an undivided one-half interest in and to all Inventions and Know-How made during the Research Term in the course of performing the activities under the Research Plan ("***Program Inventions***"), regardless of inventorship and whether or not patentable. The Party making each such Program Invention shall and hereby does assign to the other Party an undivided one-half interest in such first Party's right, title, and interest in and to all Program Inventions made by or on behalf of such first Party. The inventing Party shall take (and cause its employees, agents, contractors and Sublicensees (if applicable) to take) such further actions reasonably requested by the other Party to evidence such assignment and to obtain Patent and other intellectual property rights protection for such Program Inventions. Subject to the licenses granted hereunder, each Party has full rights to exploit and license such Program Inventions (and any Patent rights therein), without any obligation or requirement of an accounting to the other Party and each Party hereby consents to such exploitation and licensing of the other Party for Program Inventions, provided, for clarity, that this consent does not extend to the practice of other Patent rights Controlled by the consenting Party. Furthermore, notwithstanding the foregoing, each Party agrees to hold Program Inventions (and any Know-How therein) in confidence subject to the same permitted disclosures set forth in Section 11.1.4 (applied *mutatis mutandis* to the Program Inventions consistent with each Party's rights to exploit the Program Inventions) and shall not disclose such Know-How to a Third Party unless under terms of confidentiality that preserve the Parties' ability to pursue Patent rights as set forth under Section 8.2.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**Independent Development**. Nothing in this Agreement shall be construed as limiting either Party's right to research, develop, improve and in-license technology related to its Proprietary Technology outside the scope of this Agreement in its ordinary course of business, and any resulting inventions made by such Party outside the scope of this Agreement in its ordinary course of business shall be deemed such Party's Proprietary Technology and solely owned by such Party, and not be deemed Program Inventions. [**\* \* \***] shall not use its final decision making authority to expand the scope of the Research Plan to include activities that would ordinarily be conducted by [**\* \* \***] to improve the [**\* \* \***] except when the inclusion of such activities under the Research Plan is consistent with the objective(s) of the applicable Research Plan (as set forth in such Research Plan).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Contribution of Licensed Proprietary Technology**. Each Party shall inform the other Party in writing, prior to contributing to Research to be conducted under any Research Plan, any portion of its Proprietary Technology that is in-licensed from a Third Party, the contribution of which would prevent or conflict with the ownership and use rights with respect to Patents and Know-How contemplated by this Agreement; however, for avoidance of doubt, this Section 8.1.3 shall not limit or modify Lilly's ability to license Patents pursuant to Section 7.3.5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1.4 Assignment Obligation**. Each Party shall cause all employees, independent contractors, consultants, and others who perform activities for such Party under this Agreement to be under an obligation to assign (or, if such Party is unable to cause such person or entity to agree to such assignment obligation despite such Party using reasonable efforts to negotiate such assignment obligation, provide a license, preferably exclusive, under) to such Party their rights in and to any Inventions and all intellectual property rights therein, except where Applicable Law requires otherwise and except in the case of governmental, not-for-profit and public institutions that have standard policies against such an assignment (in which case a Party shall obtain a suitable license, preferably exclusive, or right to obtain such a license). Each Party shall use reasonable efforts to promptly disclose to the other Party all Inventions, including any invention disclosures, or other similar documents, submitted to it by its employees, agents or independent contractors describing such Inventions, and all information relating to such Inventions to the extent necessary or useful for the preparation, filing and maintenance of any Patent with respect to such Invention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 **Patent Prosecution and Maintenance**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2.1 **Patent Representatives**. Each Party shall designate to the other Party in writing a patent Prosecution and Maintenance representative to liaise with the other Party's Prosecution and Maintenance representative with respect to the Prosecution and Maintenance of Patents under this Section 8.2. Each Party may update its patent Prosecution and Maintenance representative at any time upon written notice to the other Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2.2 Product-Specific Patents**. As between the Parties: (a) Lilly has the first right, but not the obligation, to Prosecute and Maintain any Avidity Patents that include a specific claim to a Compound or a Product and/or the specific component of the Avidity Proprietary Technology that is incorporated in such Compound or Product (the "***Product-Specific Patents***") at Lilly's sole cost and expense; and (b) Avidity has the first right, but not the obligation, to Prosecute and Maintain any Avidity Patents that are not Product-Specific Patents (the "***Avidity-Controlled Patents***"). For clarity, Product-Specific Patents include, but are not limited to composition of matter, uses, formulations, doses, dosing regimens, and manufacturing

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patents. The Party handling the Prosecution and Maintenance of a given Avidity Patent under this Section 8.2.2 (the "***Prosecuting Party***") shall keep the other Party reasonably informed of the status of the applicable Avidity Patent and shall promptly provide the other Party with all material correspondence received from any patent authority in connection therewith. In addition, the Prosecuting Party shall promptly provide the other Party with drafts of all proposed material filings and correspondence to any patent authority with respect to the applicable Avidity Patent for the other Party's review and comment prior to the submission of such proposed filings and correspondences, and the Prosecuting Party shall consider the other Party's reasonable comments in good faith. If Lilly is the Prosecuting Party, Lilly shall Prosecute and Maintain any Avidity Patents in a manner that is consistent with Lilly's overall patent strategy. The Prosecuting Party shall notify the other Party of its intention to suspend or cease any Prosecution and Maintenance of any Avidity Patent. The Prosecuting Party shall provide such notice at least [**\* \* \***] prior to any filing or payment due date, or any other due date that requires action, in connection with such Avidity Patent. In such event, the Prosecuting Party shall permit the other Party, at the other Party's discretion and at its sole expense, to continue Prosecution and Maintenance of such Avidity Patent; provided, that in the case where Lilly is the Prosecuting Party and Avidity desires to continue Prosecution and Maintenance of such Avidity Patent, Avidity shall not continue such Prosecution and Maintenance if Lilly reasonably objects to such Prosecution or Maintenance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2.3 Program Patents**. Subject to [\* \* \*] final decision making authority pursuant to Section 2.7, the Working Group for patent prosecution shall determine which Party has the first right, but not the obligation, to Prosecute and Maintain the Program Patents other than Product-Specific Patents, at such Party's sole cost and expense. The Prosecuting Party shall keep the other Party reasonably informed of the status of the Program Patents and shall promptly provide such other Party with all material correspondence received from any patent authority in connection therewith. In addition, the Prosecuting Party shall promptly provide the other Party with drafts of all proposed material filings and correspondence to any patent authority with respect to the Program Patents for such other Party's review and comment prior to the submission of such proposed filings and correspondences, and the Prosecuting Party shall consider the other Party's reasonable comments in good faith. The Prosecuting Party shall notify the other Party of its intention to suspend or cease any Prosecution and Maintenance of any Program Patent at least [\* \* \*] prior to any filing or payment due date, or any other due date that requires action, in connection with such Program Patent. In such event, the Prosecuting Party shall permit the other Party, at its discretion and at its sole expense, to continue Prosecution and Maintenance of such Program Patent; provided, that in the case where Lilly is the Prosecuting party and Avidity desires to continue Prosecution and Maintenance of such Program Patent, Avidity shall not continue such prosecution and maintenance if Lilly reasonably objects to the prosecution or maintenance by Avidity of such Program Patent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2.4 Lilly Patents**. As between the Parties, Lilly has the sole responsibility, at Lilly's discretion and at Lilly's sole cost and expense, to Prosecute and Maintain all Lilly Patents.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2.5 Separation of Patent Claims**. If a Party determines that an application for a Patent filed, or sought to be filed, by the other Party contains a claim or claims that Cover both such determining Party's Proprietary Technology and/or any Program Invention, the Parties agree that, to the extent practicable, such application shall be divided into two (2) or more Patent applications, so that each application shall contain claims that cover only one of Avidity Proprietary Technology or Lilly Proprietary Technology (as applicable), on the one hand, or the Program Invention(s), on the other hand. If such division is not practicable, or a single claim covers both Lilly Proprietary Technology or Avidity Proprietary Technology (as applicable), on the one hand, and a Program Invention, on the other hand, such Patent application shall be deemed to be within the Program Inventions and subject to the provisions of Section 8.1.3(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2.6 **Cooperation of the Parties**. Each Party shall cooperate fully with the other Party, through the patent prosecution Working Group, in the Prosecution and Maintenance of Patents under this Section 8.2 at its own cost (except as expressly set forth otherwise in this Article 8), including by: (a) executing all papers and instruments, or requiring its employees or contractors, to execute such papers and instruments, to enable the other Party to apply for and to Prosecute and Maintain such Patents in any country as permitted by this Section 8.2; and (b) promptly informing the other Party of any matters coming to such Party's attention that may affect the Prosecution and Maintenance of any such Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 **Infringement or Misappropriation by Third Parties**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3.1 **Notice**. Each Party shall notify the other within [**\* \* \***] of becoming aware of any alleged or threatened infringement by a Third Party of any of the Avidity Patents, Lilly Patents, or Program Patents, which infringing activity involves the using, making, importing, offering for sale, or selling a Compound or Product, in each case in the Field in the Territory, and any related declaratory judgment, opposition, or similar action alleging the invalidity, unenforceability or non-infringement of any of the Avidity Patents, Lilly Patents, or Program Patents (collectively "***Infringement***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3.2 **Avidity-Controlled Patents**. As between the Parties, Avidity has the sole right to bring and control any legal action in connection with any Infringement of the Avidity-Controlled Patents at its own expense. Avidity shall keep Lilly reasonably informed of the status of the applicable Avidity-Controlled Patents. Lilly may, at its own expense, be represented in any such action by counsel of its own choice. If Avidity does not bring such legal action within [**\* \* \***] after the notice provided pursuant to Section 8.3.1, Lilly may bring and control any legal action in connection with such Infringement of such Avidity-Controlled Patent at its own expense as it reasonably determines appropriate so long as Avidity does not reasonably object to such action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3.3 Product-Specific Patents**. As between the Parties, Lilly has the first right to bring and control any legal action in connection with any Infringement of any Product-Specific Patents at its own expense. Lilly shall keep Avidity reasonably informed of the status of such enforcement efforts for the Product-Specific Patents and shall consider in good faith Avidity's comments thereon. Lilly shall provide Avidity with drafts of all material papers to be filed with the court and shall in good faith consider all reasonable comments thereto by Avidity before filing such papers. Avidity may, at its own expense, be represented in any such action by counsel of its own choice. If Lilly does not bring such legal action within [\* \* \*] after the notice provided pursuant to Section 8.3.1, Avidity may bring and control any legal action in connection with such Infringement of such Product-Specific Patent at its own expense as it reasonably determines appropriate so long as Lilly does not reasonably object to such action.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3.4 Program Patents.** As between the Parties, Lilly has the first right to bring and control any legal action in connection with any Infringement of any Program Patents at its own expense as it reasonably determines appropriate. Lilly shall keep Avidity reasonably informed of the status of such enforcement efforts for the Program Patents and shall consider in good faith Avidity's comments thereon. Lilly shall provide Avidity with drafts of all material papers to be filed with the court and shall in good faith incorporate all reasonable comments thereto by Avidity before filing such papers. Avidity may, at its own expense, be represented in any such action by counsel of its own choice. If Lilly does not bring such legal action within [\* \* \*] after the notice provided pursuant to Section 8.3.1, Avidity may bring and control any legal action in connection with such Infringement of any Program Patents at its own expense as it reasonably determines appropriate so long as Lilly does not reasonably object to such action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3.5 Lilly Patents.** Lilly has the sole right to initiate any proceedings or take other appropriate actions against an Infringement of any Lilly Patent (excluding the Program Patents, which are separately addressed in Section 8.3.4) or to defend against any challenge of a Lilly Patent (excluding the Program Patents, which are separately addressed in Section 8.3.4).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3.6 Allocation of Recoveries.** Any recoveries resulting from enforcement action relating to a claim of Infringement shall be first applied against payment of each Party's costs and expenses in connection therewith. The enforcing Party will retain any such recoveries in excess of such costs and expenses, provided that if Lilly is the enforcing Party, then such excess recoveries are deemed [\* \* \*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3.7 Cooperation.** At the request and expense of the Party bringing an action under this Section 8.3, the other Party shall provide reasonable assistance in connection therewith, including by executing reasonably appropriate documents, cooperating in discovery and joining as a party to the action if required by Applicable Law to pursue such action. In connection with any such enforcement action, the Party bringing the action shall not enter into any settlement admitting the invalidity or non-infringement of, or otherwise impairing the other Party's rights in the applicable Patents without the prior written consent of the other Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 **Defense and Settlement of Third Party Claims**. Each Party shall promptly notify the other in writing of: (a) any allegation by a Third Party that the activity of either of the Parties pursuant to this Agreement infringes or may infringe the intellectual property rights of such Third Party; or (b) any declaratory judgment action that is brought naming either Party as a defendant and alleging invalidity of any of the Lilly Patents, Avidity Patents, or Program Patents. Avidity has the sole right to control any defense of any such claim involving alleged infringement of Third Party rights by Avidity's activities at its own expense and by counsel of its own choice, and Lilly may, at its own expense, to be represented in any such action by counsel of its own choice. Lilly has the sole right to control any defense of any such claim involving alleged infringement of Third Party rights by Lilly's activities at its own expense and by counsel of its own choice, and Avidity may, at its own expense, to be represented in any such action by counsel of its own choice. Neither Party may settle any patent infringement litigation under this Section 8.4 in a manner that admits the invalidity or unenforceability of the other Party's Patents or a Program Patent or imposes on the other Party restrictions or obligations or other liabilities, without the written consent of such other Party, which consent shall not be unreasonably withheld, conditioned, or delayed.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 **Patent Extension**. The Parties shall cooperate in determining which Patent claiming or covering a Compound or Product should be extended, and thereafter the Parties shall cooperate in obtaining patent term restorations, supplemental protection certificates or their equivalents, and other forms of patent term extensions for a given Compound or Product with respect to any applicable Avidity Patent, Lilly Patent, or Program Patent in any country or region where applicable. [**\* \* \***] shall have final decision making authority with respect to decisions regarding patent term extension with respect to Product-Specific Patents, Lilly Patents and Program Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 **CREATE Act**. It is the Parties' intention that this Agreement is a "joint research agreement" as that phrase is defined in 35 U.S.C. § 102(c) as amended by the Cooperative Research and Technology Enhancement (CREATE) Act, including the provisions of 35 U.S.C. § 102(b)(2)(c). The Parties agree to cooperate and to take reasonable actions to maximize the protections available for the Compounds and Products under such safe harbor provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 **Trademarks**. Lilly shall have the right to select, and will be free, in its sole discretion, to use and to register in any trademark office in the Territory, any trademark for use with a Compound or Product. As between the Parties, Lilly shall own all right, title and interest in and to any such trademarks adopted by Lilly for use with a Compound and Product, and is responsible for the registration, filing, maintenance and enforcement thereof.

**ARTICLE 9** 

**REPRESENTATIONS, WARRANTIES AND COVENANTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 **Mutual Representations and Warranties**. Each of Lilly and Avidity represent and warrant, as of the Effective Date, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.1 it is duly organized and validly existing under in the Applicable Laws of the jurisdiction of its incorporation or formation, as applicable, has full corporate, limited liability company or other power and authority, as applicable, to enter into this Agreement and to carry out the provisions hereof, and has sufficient facilities, experienced personnel or other capabilities (including via Affiliates and/or Third Parties) to enable it to perform its obligations under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.2 it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the individual executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate, limited liability company or other action, as applicable; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.3 this Agreement is legally binding upon it and enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, bank moratorium or similar laws affecting creditors' rights generally and laws restricting the availability of equitable remedies and may be subject to general principles of equity whether or not such enforceability is considered in a proceeding at law or in equity) and the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate action and do not and will not: (a) conflict with, or constitute a default or result in a breach under, any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, or violate any Applicable Law; or (b) require any consent or approval of its stockholders or similar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 **Avidity Representations and Warranties**. Avidity represents and warrants to Lilly that, as of the Effective Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.1 **No Targets Encumbered**. There are no Targets that are subject to an executed agreement between Avidity and a Third Party or Avidity's commitment to negotiate an agreement with a Third Party that would prevent or conflict with the inclusion of the Target as a Collaboration Target under this Agreement on an exclusive basis as set forth in Section 3.5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.2 **No Grants that Conflict with this Agreement**. Avidity and its Affiliates have not granted, and will not grant during the Term, any rights (or other encumbrances) to any Third Party to Avidity Technology that prevent or conflict with the rights granted to Lilly hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.3 **Control over Know-How and Patents**. Avidity has Control over all Know-How and Patent rights owned by it or its Affiliates as of the Effective Date that are necessary or reasonably useful for the Research, development, registration, manufacturing (including formulation) or Commercialization of the Compounds and Products as known to be contemplated by this Agreement as of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.4 **Existing Patents**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All Patent rights contained in the Avidity Technology existing as of the Effective Date that are issued or subject to a pending application for issuance (the <u>"</u>**Existing Patents**") are listed on <u>Exhibit 1.14</u> and all such Existing Patents are: (i) to the extent issued (unless otherwise indicated on <u>Exhibit 1.14</u>), subsisting and not invalid or unenforceable, in whole or in part; (ii) solely and exclusively owned or exclusively licensed to Avidity, free of any encumbrance, lien or claim of ownership by any Third Party; (iii) to the extent subject to a pending application for issuance, being diligently prosecuted in the respective patent offices in which such applications have been filed in accordance with Applicable Law and, to Avidity's knowledge, Avidity and its Affiliates have presented all relevant references, documents and information to the relevant patent examiner at the relevant patent office; and (iv) to Avidity's knowledge, filed and maintained properly and correctly, and all applicable fees applicable thereto have been paid on or before the due date for payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To Avidity's knowledge, neither Avidity nor any of its Affiliates have taken any action that would render any invention claimed in the Existing Patents unpatentable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Existing Patents represent all Avidity Patents that relate to the Avidity Technology or the exploitation thereof as of the Effective Date.

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(d)To Avidity's knowledge, other than the rights granted under this Agreement, no rights or licenses are required under any Patent rights to practice the Avidity Technology as contemplated in the Research Plan as of the Effective Date, or to Research, develop, manufacture (including to formulate), Commercialize or otherwise exploit the Products as contemplated herein by reason of the incorporation of Avidity Technology in such Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.5 **No Third Party Agreements**. There are no license or other agreements with Third Parties regarding the exploitation of any Avidity Technology or other materials contemplated to be provided by Avidity to Lilly hereunder, to which Avidity or its Affiliate is a party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.6 **Litigation and Actions Relating to Intellectual Property**. Avidity: (a) has not received any written notice of any threatened claims or litigation seeking to invalidate or otherwise challenge the Avidity Technology, including the Avidity Patents, or Avidity's or its Affiliates' rights therein; and (b) is not aware of any pending or threatened action, suit, proceeding or claim by a Third Party asserting that Avidity or any of its Affiliates is infringing or has misappropriated or otherwise is violating any Patent right, trade secret or other proprietary right of any Third Party as would reasonably be expected to impair the ability of Avidity to fulfill any of its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.7 **Other Material Claims and Actions**. There are no claims, actions, or proceedings pending or, to Avidity's knowledge, threatened by any Third Party; nor, to Avidity's knowledge, are there any formal inquiries initiated or written notices received that may lead to the institution of any such legal proceedings, in each case (or in aggregate) against Avidity or its properties, assets or business, which if adversely decided, would, individually or in the aggregate, have a material adverse effect on, or prevent Avidity's ability to conduct the Research or to grant the licenses or rights granted to Lilly under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.8 **Assignment by Employees, Agents and Consultants**. Avidity has obtained from each of its current employees, consultants and contractors, and will obtain from each of its future employees, consultants and contractors, in each case who perform research or development activities pursuant to this Agreement, written agreements containing obligations of confidentiality and non-use and an assignment to Avidity of all inventions (and all of such Person's rights thereto) for which Avidity or Lilly is intended to have ownership or license rights under this Agreement such that no such employee, contractor or consultant shall retain any rights to such inventions that would prevent or conflict with Lilly's rights of ownership or use of such inventions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.9 **No Government Funding**. The inventions claimed or covered by the Avidity Patents: (a) were not conceived, discovered, developed or otherwise made in connection with any research activities funded, in whole or in part, by the federal government of the United States of America or any agency thereof; (b) are not a "subject invention" as that term is described in 35 U.S.C. Section 201(e) and (c) are not otherwise subject to the provisions of the Patent and Trademark Law Amendments Act of 1980, as amended, codified at 35 U.S.C. §§ 200-212, as amended, as well as any regulations promulgated pursuant thereto, including in 37 C.F.R. Part 401.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.10 **Regulatory Documentation**. Avidity and its Affiliates have generated, prepared, maintained and retained all Regulatory Documentation that is required to be maintained or retained pursuant to and in accordance with, to the extent applicable, good laboratory and clinical practice and Applicable Law and all such information is true, complete and correct in all material respects and what it purports to be. "**Regulatory Documentation**" means all: (a) applications (including all INDs and applications for Regulatory Approval), registrations, licenses, authorizations and approvals (including Regulatory Approvals); (b) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents with respect thereto, including all adverse event files and complaint files; (c) supplements or changes to any of the foregoing following Regulatory Approval; and (d) clinical and other data, including Clinical Trial data, contained or relied upon in any of the foregoing; in each case ((a), (b), (c) and (d)) relating to a Collaboration Target and Compounds Directed Against a Collaboration Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.11 **Balance Sheet**. Avidity has less than sixteen million nine hundred thousand Dollars ($16,900,000) of total assets as stated on Avidity's last regularly prepared balance sheet dated December 31, 2018.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 **Mutual Covenants**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.1 **Employees, Consultants and Contractors**. Each Party covenants that it has obtained or will obtain written agreements from each of its employees, consultants and contractors who perform research or development activities pursuant to this Agreement, which agreements will obligate such persons to obligations of confidentiality and non-use and to assign inventions in a manner consistent with the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.2 **Debarment**. Each Party represents, warrants and covenants to the other Party that neither it nor its officers, employees, agents, consultants or any other person used by such Party in the performance of the respective research and development activities under this Agreement is: (a) debarred or disqualified under the U.S. Federal Food, Drug and Cosmetic Act; (b) listed by any government or regulatory agencies as ineligible to participate in any government healthcare programs or government procurement or non-procurement programs (as that term is defined in 42 U.S.C. § 1320a-7b(f)), or excluded, debarred, suspended or otherwise made ineligible to participate in any such program; or (c) convicted of a criminal offense related to the provision of healthcare items or services, or is subject to any such pending action. Each Party will not during the Term knowingly, employ or use, directly or indirectly, including through Affiliates the services of any such person. In the event that either Party becomes aware of the debarment or disqualification or threatened debarment or disqualification of any person providing services to such Party, directly or indirectly, including through Affiliates or, in the case of Lilly, Sublicensees, which directly or indirectly relate to activities contemplated by this Agreement, such Party shall promptly notify the other Party in writing and such Party shall cease employing, contracting with, or retaining any such person to perform any such services.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 **Compliance**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.1 **Compliance with this Agreement**. Each of the Parties shall, and shall cause their respective Affiliates to, comply in all material respects with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.2 **Compliance with Applicable Laws**. Each Party covenants to the other that in the performance of its obligations under this Agreement, such Party shall comply with, and shall cause its Affiliates and its and its Affiliates' employees and contractors to comply, with all Applicable Laws. No Party shall, or shall be required to, undertake any activity under or in connection with this Agreement which violates, or which it believes, in good faith, may violate, any Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.3 **Compliance with Party Specific Regulations**. In carrying out their respective obligations under this Agreement, the Parties agree to cooperate with each other as may reasonably be required to help ensure that each is able to fully meet its obligations with respect to all judgments, decrees, orders or similar decisions issued by any Governmental Authority specific to a Party, and all consent decrees, corporate integrity agreements, or other agreements or undertakings of any kind by a Party with any Governmental Authority, in each case as the same may be in effect from time to time and applicable to a Party's activities contemplated by this Agreement (the "***Party Specific Regulations***"). Neither Party shall be obligated to pursue any course of conduct that would result in such Party being in material breach of any Party Specific Regulation applicable to it; provided that in the event that a Party refuses to fulfill its obligations under this Agreement in any material respect on such basis, the other Party shall have the right to terminate this Agreement in accordance with Section 12.2; however, under such circumstances, such termination shall be the sole remedy for such terminating Party and such terminating Party shall not be entitled to any other remedy under law or equity. All Party Specific Regulations are binding only in accordance with their terms and only upon the Party to which they relate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.4 **Compliance with Internal Compliance Codes**. All Internal Compliance Codes shall apply only to the Party to which they relate. The Parties agree to cooperate with each other to help insure that each Party is able to comply with the substance of its respective Internal Compliance Codes and, to the extent practicable, each Party shall operate in a manner consistent with its Internal Compliance Codes applicable to its performance under this Agreement. "***Internal Compliance Codes***," as used in this Section 9.4.4, means a Party's internal policies and procedures intended to ensure that a Party complies with Applicable Laws, Party Specific Regulations, and such Party's internal ethical, medical and similar standards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.5 **Compliance with Anti-Corruption Laws**. In connection with this Agreement, the Parties shall comply with all applicable local, national, and international laws, regulations, and industry codes dealing with government procurement, conflicts of interest, corruption or bribery, including, if applicable, the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any laws enacted to implement the Organisation of Economic Cooperation and Development Convention on Combating Bribery of Foreign Officials in International Business Transactions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.6 **Prohibited Conduct**. Without limiting the other obligations of the Parties set forth in this Section 9.4, each Party covenants to the other that, as of the Effective Date and in the performance of its obligations under this Agreement through the expiration and termination of this Agreement, such Party and, to its knowledge, its Affiliates and its and its Affiliates' employees and contractors, in connection with the performance of their respective obligations under this Agreement, have not made, offered, given, promised to give, or authorized, and will not make, offer, give, promise to give, or authorize, any bribe, kickback, payment or transfer of anything of value, directly or indirectly through Third Parties, to any Government Official for the purpose of: (a) improperly influencing any act or decision of the Person or Government Official; (b) inducing the Person or Government Official to do or omit to do an act in violation of a lawful or otherwise required duty; (c) securing any improper advantage; or (d) inducing the Person or Government Official to improperly influence the act or decision of any organization, including any government or government instrumentality, to assist any Party in obtaining or retaining business. For the purpose of this Section "***Government Official***" means: (x) any officer, employee (including physicians, hospital administrators, or other healthcare professionals), agent, representative, department, agency, de facto official, representative, corporate entity, instrumentality or subdivision of any government, military or international organization, including any ministry or department of health or any state-owned or affiliated company or hospital; (y) any candidate for political office, any political party or any official of a political party, in each case for the purpose of obtaining or retaining business for or with, or directing business to, any Person, including either Party; or (z) any Person acting in an official capacity on behalf of any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 **Disclaimer**. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS Article 9, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR VALIDITY OF PATENT CLAIMS. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY EITHER PARTY THAT EITHER PARTY WILL BE SUCCESSFUL IN OBTAINING ANY PATENTS OR THAT ANY PATENTS WILL ISSUE BASED ON A PENDING APPLICATION. WITHOUT LIMITING THE RESPECTIVE RIGHTS AND OBLIGATIONS OF THE PARTIES EXPRESSLY SET FORTH HEREIN, EACH PARTY SPECIFICALLY DISCLAIMS ANY GUARANTEE THAT THE PRODUCTS WILL BE SUCCESSFUL, IN WHOLE OR IN PART.

**ARTICLE 10** 

**INDEMNIFICATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 **Indemnity**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.1 **By Avidity**. Subject to Section 10.1.3, Avidity shall defend, indemnify and hold harmless Lilly and its Affiliates, and their respective directors, officers, employees, and agents (each, a "***Lilly Indemnitee***") from and against any and all costs, fees, expenses, losses, liabilities, and damages, including reasonable legal expenses and attorneys' fees (collectively, "***Losses***") to which any Lilly Indemnitee may become subject as a result of any claim, demand,

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action or other proceeding by any Third Party (a "***Claim***") to the extent such Losses arise out of: (a) the gross negligence or willful misconduct of Avidity or its Affiliates in connection with its activities under this Agreement; (b) the breach of this Agreement or the representations, warranties, and covenants made hereunder by Avidity; or (c) the research, development, or use of any Compound or Product by or on behalf of Avidity or its Affiliates (including from product liability and intellectual property infringement claims, but except to the extent resulting from the incorporation of Lilly Proprietary Technology therein); except, in each case, to the extent such Losses result from matters subject to clause (a), (b), or (c) of Section 10.1.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.2 **By Lilly**. Subject to Section 10.1.3, Lilly shall defend, indemnify and hold harmless Avidity, its Affiliates, and their respective directors, officers, employees and agents (each, an "***Avidity Indemnitee***") from and against any and all Losses to which any Avidity Indemnitee may become subject as a result of any Claim to the extent such Losses arise out of: (a) the gross negligence or willful misconduct of Lilly, its Affiliates, or their respective Sublicensees in connection with its activities under this Agreement; (b) the breach of this Agreement or the representations, warranties and covenants made hereunder by Lilly; or (c) the research, development, manufacture, use, offer for sale, sale, or other exploitation of any Compound or Product by or on behalf of Lilly, its Affiliates, or their respective Sublicensees (including from product liability and intellectual property infringement claims, but except to the extent resulting from the incorporation of Avidity Proprietary Technology therein); except, in each case, to the extent such Losses result from matters subject to clause (a), (b) or (c) of Section 10.1.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.3 **Procedure**. A Party that intends to claim indemnification under this Article 10 (the "***Indemnitee***") shall promptly notify the Indemnitor (the "***Indemnitor***") in writing of any Claim in respect of which the Indemnitee intends to claim such indemnification. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any action with respect to a Claim shall only relieve the Indemnitor of its indemnification obligations under this Article 10 if and to the extent the Indemnitor is actually and materially prejudiced thereby. The Indemnitor has sole control of the defense or settlement thereof. The Indemnitee shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Claim covered by this indemnification. The Indemnitee may participate at its expense in the Indemnitor's defense of and settlement negotiations for any Claim with counsel of the Indemnitee's own selection. The Indemnitor shall not settle any Claim without the prior written consent of the Indemnitee, not to be unreasonably withheld. So long as the Indemnitor is actively defending the Claim in good faith, the Indemnitee shall not settle or compromise any such Claim without the prior written consent of the Indemnitor. If the Indemnitor does not assume and conduct the defense of the Claim as provided above: (a) the Indemnitee may defend against, consent to the entry of any judgment, or enter into any settlement with respect to such Claim in any manner the Indemnitee may deem reasonably appropriate (and the Indemnitee need not consult with, or obtain any consent from, the Indemnitor in connection therewith); and (b) the Indemnitor shall remain responsible to indemnify the Indemnitee as provided in this Article 10.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 **Insurance**. During the Term, each Party shall maintain such types and amounts of liability insurance (including self-insurance) as is normal and customary in the industry generally for similarly situated parties and adequate to cover its obligations under this Agreement, and Avidity will upon request provide Lilly with a certificate of insurance in that regard, along with any amendments and revisions thereto.

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**ARTICLE 11** 

**CONFIDENTIALITY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 **Confidential Proprietary** Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1.1 **Confidential Proprietary Information**. In connection with this Agreement, Lilly may disclose certain confidential information that is Lilly Proprietary Technology to Avidity and Avidity may disclose certain confidential information that is Avidity Proprietary Technology to Lilly (such confidential information, "***Confidential Proprietary Information***"). Without limiting the foregoing, the terms of this Agreement are the Confidential Proprietary Information of both Parties and shall be treated confidentially by each of the Parties, subject to the exceptions set forth in Section 11.1.6. Information exchanged by the Parties pursuant to the Confidential Disclosure Agreement shall be governed by such Confidential Disclosure Agreement, provided that any such information that is subsequently exchanged by the Parties under this Agreement shall, from that time, be governed by the terms of this Agreement (including the requirement to mark or prominently designate Avidity Proprietary Technology or Lilly Proprietary Technology as such, in accordance with Sections 1.15 and 1.78, at the time of the subsequent exchange or immediately thereafter).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1.2 **Restrictions**. A Party (the "***Receiving Party***") that receives Confidential Proprietary Information from the other Party (the "***Disclosing Party***") shall keep all the Disclosing Party's Confidential Proprietary Information in confidence with the same degree of care with which the Receiving Party holds its own confidential information (but in no event less than a commercially reasonable degree of care). A Receiving Party shall not use the Disclosing Party's Confidential Proprietary Information except in connection with the performance of its obligations and exercise of its rights under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1.3 **Exceptions**. The obligations of confidentiality and restriction on use of Confidential Proprietary Information under Section 11.1.2 do not apply to any information that the Receiving Party can prove by competent written evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party, generally known or available to the public; (b) is known by the Receiving Party at the time of receiving such information, other than by previous disclosure of the Disclosing Party, or its Affiliates, employees, agents, consultants, or contractors; (c) is hereafter furnished to the Receiving Party without restriction by a Third Party who has no obligation of confidentiality or limitations on use with respect thereto, as a matter of right; or (d) is independently discovered or developed by the Receiving Party without the use of Confidential Proprietary Information belonging to the Disclosing Party. Specific information shall not be deemed to be within any of the foregoing exclusions merely because it is embraced by more general information falling within those exclusions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1.4 **Permitted Disclosures**. The Receiving Party may disclose Confidential Proprietary Information belonging to the Disclosing Party as expressly permitted by this Agreement or if and to the extent such disclosure is reasonably necessary in the following instances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Prosecution and Maintenance of Patents as permitted by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Regulatory Filings for Product that such Party has a license or right to develop hereunder in a given country or jurisdiction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) prosecuting or defending litigation as permitted by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) complying with applicable court orders or governmental regulations, including mutually recognized securities laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) in response to a valid request by a U.S., state, foreign, provincial, or local tax authority, in which case either Party may disclose, a copy of this Agreement (including any Exhibits, schedules, ancillary agreements, and amendments hereto);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) disclosure to its and its Affiliates' employees, consultants, contractors and agents, and to Sublicensees (in the case of Lilly), in each case on a need-to-know basis in connection with the research, development, making, having made, use, keeping, import, export, offering for sale, selling, or otherwise exploiting Products in the Field in the Territory, and commercialization of the Product in accordance with the terms of this Agreement, in each case under written obligations of confidentiality and non-use at least as stringent as those herein; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) disclosure to potential and actual investors, acquirers, licensees and other financial or commercial partners solely for the purpose of evaluating or carrying out an actual or potential investment, acquisition, or collaboration, in each case under written obligations of confidentiality and non-use at least as stringent as those herein; *provided*, *however*, that with respect to disclosure to actual or bona fide potential investors, such disclosure is under a written obligation of confidentiality that is consistent with market terms, including a shorter period of time during which such information must be held confidential.

Notwithstanding the foregoing, if a Party is required to make a disclosure of the other Party's Confidential Proprietary Information pursuant to Section 11.1.4(c) or (d), it shall, except where impracticable, give reasonable advance notice to the other Party of such disclosure and use efforts to secure confidential treatment of such Confidential Proprietary Information at least as diligent as such Party would use to protect its own Confidential Proprietary Information, but in no event less than reasonable efforts. Any information disclosed pursuant to Section 11.1.4(c) or (d) remains Confidential Proprietary Information and subject to the restrictions set forth in this Agreement, including the foregoing provisions of this Article 11.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1.5 **Public Domain Information and Residual Knowledge**. Nothing in this Agreement shall prevent a Party from using any Know-How that is in the public domain. A Party shall also not be restricted under, and shall not be in breach of, this Agreement from using, within or outside this Agreement and for any purpose, any general knowledge, skill, and expertise acquired by its employees (or its Affiliates' employees) in their performance of this

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Agreement ("***Residuals***") solely to the extent such Residuals shall have been retained in the unaided memory (without intentional memorization) of such employees in intangible form and without use by the Party or such employees of tangible copies of any Confidential Proprietary Information of the other Party; provided that this provision will not be deemed in any event to provide any right to infringe the Patent rights of the other Party or of Third Parties that have licensed or provided materials to the other Party; provided, further, that a Party's use of such Residuals is on an "as is, where is" basis, with all faults and all representations and warranties disclaimed and at such Party's sole risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1.6 **Disclosure of Agreement**. Notwithstanding the foregoing, either Party or its Affiliates may disclose the relevant terms of this Agreement: (a) to the extent required or advisable to comply with the rules and regulations promulgated by the U.S. Securities and Exchange Commission or any equivalent governmental agency in any country in the Territory, provided that such Party shall submit a confidential treatment request in connection with such disclosure and shall submit with such confidential treatment request only such redacted form of this Agreement as may be mutually agreed in writing by the Parties; (b) upon request from a Governmental Authority (such as a tax authority), provided the disclosing Party uses reasonable efforts to ensure the Governmental Authority maintains such terms as confidential; (c) to applicable licensors, to the extent necessary to comply with the terms of any Third Party license agreement, the rights under which are sublicensed to the other Party under this Agreement; and (d) to the extent necessary to perform obligations or exercise rights under this Agreement, to any Sublicensee, collaborator or potential Sublicensee or potential collaborator of such Party, provided that any Sublicensee, collaborator or potential Sublicensee or collaborator agree in writing to be bound by obligations of confidentiality and non-use no less protective of the Disclosing Party than those set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1.7 **Survival**. Each Party's obligations under this Section 11.1 apply during the Term and continue for [**\* \* \***] thereafter with respect to Confidential Proprietary Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 **Publicity**. The Parties shall issue a joint press release in the form attached hereto as <u>Exhibit 11.2</u> promptly after the Effective Date. Thereafter, either Party may make subsequent public disclosure of the contents of such press release and, except as permitted under Section 11.1.4 and this Section 11.2, neither Party shall issue any subsequent press release or public statement disclosing information relating to this Agreement or the transactions contemplated hereby or the terms hereof without the prior written consent of the other Party, not to be unreasonably withheld, conditioned, or delayed; provided however, that neither Party will be prevented from complying with any duty of disclosure it may have pursuant to Applicable Laws or pursuant to the rules of any recognized stock exchange or quotation system subject to the restrictions set forth in Sections 11.1.4 and 11.1.5. If either Party desires to issue a press release or other public statement disclosing information relating to this Agreement or the transactions contemplated hereby or the terms hereof, the issuing Party will provide the other Party with a copy of the proposed press release or public statement. The issuing Party shall specify with each such proposed press release or public statement, taking into account the urgency of the matter being disclosed, a reasonable period of time within which the Receiving Party may provide any comments on such proposed press release or public statement. If the reviewing Party provides any comments, the Parties shall consult with one another on such proposed press release or public statement and work in good faith to prepare a mutually acceptable press release or public statement. Each Party may repeat any information relating to this Agreement that has already been publicly disclosed in accordance with this Section 11.2, provided such information continues as of such time to be accurate.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 **Publication**. Lilly shall be entitled to issue scientific publications and make presentations with respect to the Compounds, the Products, the Programs, or their testing in accordance with Lilly's internal guidelines without approval by Avidity, and Lilly shall be in control of any publications or scientific presentations regarding the Products or their testing subject to this Section 11.3. Avidity shall not issue any scientific publications regarding the Compounds, the Products or their testing without Lilly's prior written consent. With respect to any paper or presentation proposed for disclosure by Lilly or its Affiliates that includes Confidential Proprietary Information of Avidity (excluding any information that falls under the exceptions of Section 11.1.3), Avidity may review and comment on such proposed paper or presentation. Lilly shall submit to Avidity the proposed publication or presentation (including posters, slides, abstracts, manuscripts, marketing materials and written descriptions of oral presentations) at least [**\* \* \***] prior to the date of submission for publication or the date of presentation, whichever is earlier, of any of such submitted materials. Avidity shall review such submitted materials and respond to Lilly as soon as reasonably possible, but in any case, within [**\* \* \***] after receipt thereof. At the option of Avidity, Lilly shall: (a) delete from such proposed publication or presentation any Confidential Proprietary Information of Avidity; and (b) upon a determination that such publication contains patentable material, delay the date of such submission for publication or the date of such presentation for [**\* \* \***] to permit the appropriate Party to seek appropriate patent protection.

**ARTICLE 12** 

**TERM & TERMINATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 **Term**. This Agreement commences on the Effective Date and, unless terminated earlier as provided in this Article 12, shall continue on a Product-by-Product basis until the expiration of the last Royalty Term in the Territory for such Product (the "***Term***"). Upon the expiration of the Royalty Term for a Product in a particular country, the licenses granted by Avidity to Lilly under Section 3.1.1 with respect to such Product and such country shall survive and become perpetual, fully-paid, and royalty-free, and shall remain exclusive (even as to Avidity and its Affiliates).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 **Termination for Material Breach**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2.1 **Termination**. Either Party may terminate this Agreement upon written notice to the other Party if such other Party materially breaches its obligations under this Agreement and, after receiving written notice from the non-breaching Party identifying such material breach in reasonable detail, fails to cure such material breach within thirty (30) days from the date of such notice; *provided* that if such non-payment related breach is not reasonably capable of cure within such thirty (30)-day period, the breaching Party may submit, prior to the end of such thirty (30)-day period, a reasonable plan to cure the breach within an additional sixty (60) days, in which case the other Party may not terminate this Agreement for so long as the breaching Party is using Commercially Reasonable Efforts to implement such cure plan within such additional sixty (60) days.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2.2 **Dispute**. If the alleged breaching Party disputes in good faith the existence or materiality of a breach specified in a notice provided by the other Party in accordance with Section 12.2.1, and such alleged breaching Party provides the other Party notice of such dispute within such thirty (30)-day period, then the non-breaching Party may not terminate this Agreement under Section 12.2.1 unless and until it has been finally determined pursuant to Article 13 that the alleged breaching Party has materially breached this Agreement and such Party fails to cure such breach within thirty (30) days following such court's decision. During the pendency of such dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2.3 **Lilly Option to Continue Agreement**. Notwithstanding anything to the contrary under this Agreement, after the Research Term, Lilly shall have the right, at its option and by written notice to Avidity, in lieu of exercising its right to terminate this Agreement under this Section 12.2, to instead continue this Agreement in accordance with its terms subject to Lilly's making all payments due from Lilly to Avidity (offset by any damages resulting from Avidity's material breach, as finally determined under Article 13, that are not otherwise previously paid directly to Lilly by Avidity), and in which case: (a) the JRC will disband; and (b) Avidity will have no further right; (i) under Section 8.2.2 and Section 8.3.3, to receive information with respect to, be represented by counsel in, object to the commencement of, share in recoveries from, or otherwise participate in enforcement of Product-Specific Patents by Lilly; or (ii) under Section 8.4, to participate and be represented in any claim of infringement that the commercialization of a Product infringes the Patent rights of a Third Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.2.4 Know-How Transfer.** Within thirty (30) days following Lilly's election not to terminate this Agreement under Section 12.2.3, Avidity shall disclose or deliver to Lilly, to the extent not previously provided, copies of all data and information in Avidity's (or its Affiliates') possession relating to the Avidity Know-How which is reasonably necessary for Lilly's Research, development or Commercialization of such Product (including for regulatory purposes). Upon Lilly's reasonable request, Avidity will: (a) provide reasonable technical assistance to Lilly during such disclosure or delivery set forth in the preceding sentence; and (b) make its employees and non-employee consultants reasonably available at their respective places of employment to consult with Lilly on issues arising in the course of Lilly's Research, development or Commercialization and in connection with any request related to a Product from any Regulatory Authority, including regulatory, scientific, technical and clinical testing issues. The Know-How transfer to be undertaken under this Section 12.2.4 shall be overseen by a Working Group established for such purposes, which Working Group may put in place a technology transfer plan expressly identifying Know-How owned or Controlled by Avidity or its Affiliates to be transferred and the timing for such transfer.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 **Termination by Lilly**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3.1 **Partial Termination**. Lilly may, at any time in its sole discretion and without cause, terminate this Agreement on a Collaboration Target-by-Collaboration Target basis upon at least; (a) sixty (60) days' prior written notice to Avidity if a First Commercial Sale has not occurred for the lead Product with respect to such Collaboration Target; or (b) one hundred eighty (180) days' prior written notice to Avidity if a First Commercial Sale of the lead Product for such Collaboration Target has occurred. Notwithstanding the foregoing, but without limiting Lilly's right to terminate this Agreement in its entirety pursuant to Section 12.2.1, Lilly may not exercise its rights under this Section 12.3.1 to terminate this Agreement on a Collaboration Target-by-Collaboration Target basis prior to the third anniversary of the Effective Date if the effect of such termination is to cause there to be Programs for fewer than three (3) Collaboration Targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3.2 **Entire Agreement**. Lilly may, in its sole discretion, terminate this Agreement in its entirety at any time and without cause upon at least: (a) sixty (60) days' prior written notice to Avidity if a First Commercial Sale has not occurred for any Product; or (b) one hundred eighty (180) days' prior written notice to Avidity if a First Commercial Sale of any Product has occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 **Termination for Patent Challenges**. Except to the extent the following is unenforceable under the Applicable Law of a jurisdiction, then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4.1 if Lilly, its Affiliates, or Sublicensees, directly or indirectly: (a) initiate or request an interference or opposition proceeding with respect to any Avidity Patents; (b) make, file, or maintain any claim, demand, lawsuit, or cause of action to challenge the validity or enforceability of any Avidity Patents; or (c) oppose any extension of, or the grant of a supplementary protection certificate with respect to, any Avidity-Controlled Patent, in each case other than in response to a threat of an infringement claim or as necessary to secure allowance of an Avidity-owned patent claim, then Avidity may terminate this Agreement solely with respect to the challenged Avidity Patent(s) with respect to any Programs or Products to which such patent challenge relates upon thirty (30) days' prior written notice to Lilly; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4.2 if Avidity, its Affiliates, or Sublicensees, directly or indirectly, (a) initiate or request an interference or opposition proceeding with respect to any Lilly Patents, (b) make, file, or maintain any claim, demand, lawsuit, or cause of action to challenge the validity or enforceability of any Lilly Patents, or (c) oppose any extension of, or the grant of a supplementary protection certificate with respect to, any Lilly Patents, in each case other than in response to a threat of an infringement claim or as necessary to secure allowance of a Lilly-owned patent claim, then Lilly may terminate this Agreement with respect to the challenged Lilly Patent(s) with respect to any Programs or Products to which such patent challenge relates upon thirty (30) days' prior written notice to Avidity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 **Effects of Termination**. The following shall apply upon termination of this Agreement made in accordance with this Article 12. If this Agreement is terminated with respect to a Collaboration Target, such Collaboration Target is a Terminated Target. Each Product and any Compounds contained in such Product that were Directed Against such Terminated Target are Terminated Products*.* If this Agreement is terminated in its entirety, all Collaboration Targets are Terminated Targets and all Products are Terminated Products.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5.1 **Termination of Licenses**. All licenses for Terminated Products granted under Article 3 terminate automatically as of the termination effective date; provided that, if Lilly (or its Affiliates or Sublicensees) has inventory of usable Product(s) as of the effective date of termination, then Lilly (and its Affiliates and Sublicensees) may continue to sell off such inventory of Products in the Field in the Territory (and fulfill customer orders therefor) until the earlier to occur of one hundred eighty (180) days after the effective date of termination and the date on which Lilly (or its Affiliates or Sublicensees) no longer has such inventory of Product(s) and shall pay Avidity any applicable royalties due based on such sales. Any permitted sublicense granted by Lilly or its Affiliate to a Third Party under the licenses granted to Lilly under this Agreement shall survive the termination of this Agreement, provided that, in the case where termination of this Agreement for Lilly's uncured material breach pursuant to Section 12.2, such Sublicensee did not cause such uncured material breach. If permitted under such a surviving sublicense, effective upon termination of this Agreement, such sublicense shall become a direct license from Avidity to such Sublicensee, provided, that, if assignment of the sublicense or such conversion of the sublicense to a direct license is not permitted under the applicable sublicense, Lilly shall be entitled to retain its right to payment thereunder and shall remain liable for royalties under Section 7.3 of this Agreement with respect to sales by such Sublicensee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5.2 **Destruction of Confidential Proprietary Information**. Subject to the potential transfer of any data and information covered below in Section 12.5.3, each Receiving Party shall destroy (at the Disclosing Party's written request) all such Confidential Proprietary Information of the Receiving Party in its possession as of the effective date of expiration or termination (with the exception of one copy of such Confidential Proprietary Information, which may be retained by the legal department of the Receiving Party to confirm compliance with the non-use and non-disclosure provisions of this Agreement), and any Confidential Proprietary Information of the Disclosing Party contained in its laboratory notebooks or databases, provided that each Receiving Party may retain and continue to use such Confidential Proprietary Information of the Disclosing Party to the extent necessary to exercise any surviving rights, licenses or obligations under this Agreement. Notwithstanding the foregoing, a Receiving Party shall not be required to destroy any computer files created during automatic system back up that are subsequently stored securely by it and not readily accessible to its employees, consultants, or others who received the Disclosing Party's Confidential Proprietary Information under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5.3 **Reversion**. In the event of any termination of this Agreement in its entirety or with respect to a Program, if requested by Avidity, the Parties shall negotiate in good faith to enter into a separate agreement detailing the potential transition to Avidity of Lilly's rights and obligations (or portions thereof) with respect to any Terminated Target or Terminated Product, in each case that is Covered by a Lilly Patent, which agreement may provide for the payment of royalties or other compensation by Avidity to Lilly for the Commercialization by Avidity of any such Terminated Target or Terminated Product; and provided that: (a) Lilly shall have no obligation to negotiate or grant a license to any Excluded Technologies; (b) Lilly shall have no obligation to provide Avidity any Excluded Technology (including any Antibody) used in such Terminated Targets or Terminated Products (or any rights to any such Excluded Technology or Antibody); and (c) with respect to any Lilly Technology that is licensed to Lilly from a Third Party, Lilly shall have no obligation to negotiate with such Third Party for, or grant, any sublicense rights to Avidity, but shall advise Avidity of the identity of such Third Party licensor and the nature of the relevant Lilly Technology, and Avidity shall be solely responsible, at its sole cost and expense, for obtaining and negotiating for any rights to such Third Party's technology or intellectual property. Notwithstanding the foregoing, if the Parties are unable to agree on the terms of such a transition agreement within thirty (30) days of commencement of discussions with respect thereto despite their good faith efforts, Lilly shall have no further obligation to enter into such an agreement or negotiate with Avidity with respect thereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 **Survival**. Expiration or termination of this Agreement shall not relieve the Parties of any obligation or right accruing prior to such expiration or termination. Except as set forth below or elsewhere in this Agreement, the obligations and rights of the Parties under the following provisions of this Agreement shall survive expiration or termination of this Agreement: Article 1 (to the extent such definitions are used in surviving provisions), Article 10 (with respect to claims for which the cause of action arose prior to the effective date of termination), and Article 13, and Section 4.5.1, Section 4.7 (provided that such provision shall only survive for [**\* \* \***] after expiration or termination of this Agreement), Section 7.1 (unless terminated by Lilly pursuant to Section 12.2), Section 7.2 (with respect to Milestone Events reached prior to such expiration or termination), Section 7.3 (with respect to sales of Product made before such expiration or termination or pursuant to Section 12.2.3), Section 7.5, Section 7.6, Section 7.7, Section 7.8, Section 8.1, Section 8.2, Section 8.3 (except for Sections 8.3.2 and 8.3.3), Section 8.4 (except with regard to Lilly Patents or Avidity Patents), Section 8.6, Section 11.1 (for the [**\* \* \***] survival period in Section 11.1.7), Section 12.5, this Section 12.6, Section 14.1, Section 14.2, Section 14.5, Section 14.9, Section 14.11, Section 14.16, and Section 14.17.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 **Bankruptcy Code**. If this Agreement is rejected by a Party as a debtor under Section 365 of the United States Bankruptcy Code or similar provision in the bankruptcy laws of another jurisdiction (the "***Code***"), then, notwithstanding anything else in this Agreement to the contrary, all licenses and rights to licenses granted under or pursuant to this Agreement by the Party in bankruptcy to the other Party are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Code (or similar provision in the bankruptcy laws of the jurisdiction), licenses of rights to "intellectual property" as defined under Section 101(35A) of the Code (or similar provision in the bankruptcy laws of another applicable jurisdiction). The Parties agree that a Party that is a licensee of rights under this Agreement shall retain and may fully exercise all of its rights and elections under the Code, and that upon commencement of a bankruptcy proceeding by or against a Party under the Code, the other Party shall be entitled to a complete duplicate of, or complete access to (as such other Party deems appropriate), any such intellectual property and all embodiments of such intellectual property, if not already in such other Party's possession, shall be promptly delivered to such other Party: (a) upon any such commencement of a bankruptcy proceeding upon written request therefor by such other Party, unless the bankrupt Party elects to continue to perform all of its obligations under this Agreement; or (b) if not delivered under the foregoing subclause (a), upon the rejection of this Agreement by or on behalf of the bankrupt Party upon written request therefor by the other Party. The foregoing provisions of this Section 12.7 are without prejudice to any rights a Party may have arising under the Code.

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**ARTICLE 13** 

**GOVERNING LAW; DISPUTE RESOLUTION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 **Governing Law**. This Agreement is governed by and will be construed in accordance with the laws of the State of New York, without reference to its conflict of laws principles. The United Nations Convention of International Contracts on the Sale of Goods (the Vienna Convention) does not apply to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 **Disputes**. The Parties recognize that controversies or claims arising out of, relating to, or in connection with this Agreement may arise from time to time. It is the objective of the Parties to establish procedures to facilitate the resolution of disputes in an expedient manner by mutual cooperation and without resort to litigation. To accomplish this objective, the Parties shall follow the procedures set forth in this Article 13 to resolve any dispute. If any dispute, claim or controversy of any nature arising out of or relating to this Agreement, including any action or claim based on tort, contract or statute, or concerning the interpretation, effect, termination, validity, performance or breach of this Agreement (each, a "***Dispute***"), arises between the Parties, either Party may refer the Dispute to Executive Officers of each Party for resolution within [**\* \* \***] of a written request by either Party to the other Party. Each Party, within [**\* \* \***] after a Party has received such written request from the other Party to so refer such Dispute, shall notify the other Party in writing of the Executive Officer to whom such Dispute is referred. If, after an additional [**\* \* \***] after the notice of Dispute, such Executive Officers have not succeeded in negotiating a resolution of the Dispute, and a Party wishes to pursue the matter, each such Dispute, controversy or claim that is not an "Excluded Claim" (defined in Section 13.5) may, subject to each Party consenting, be submitted for nonbinding mediation administered by the American Arbitration Association ("***AAA***") pursuant to its Commercial Mediation Procedures in effect at the time such Dispute arises (the "***AAA Mediation Procedures***"), or the Parties may seek to resolve the Dispute in any federal court having jurisdiction thereof located in New York, New York as further described in Section 13.4. The option to mediate under this Article 13 shall extend to any claims by or against the Parties and their respective Affiliates and any agents, principals, officers, directors, or employees of either of the Parties or their respective Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 **Mediation**. Any mediation that the Parties decide to pursue shall be conducted by a single neutral mediator experienced in the business of pharmaceuticals. If the issues in dispute involve scientific, technical or commercial matters, the mediator chosen hereunder may engage experts that have educational training or industry experience sufficient to demonstrate a reasonable level of relevant scientific, medical and industry knowledge, as necessary to help resolve the dispute. The Parties shall select the mediator promptly following the initiation of the mediation. If the Parties are unable or fail to agree upon the mediator within [**\* \* \***] following the initiation of mediation, the mediator shall be appointed by AAA. The mediation shall be conducted in New York, New York, and all proceedings and communications shall be in English. Except to the extent necessary to enforce a legal right or as may be required by law, neither a Party nor a mediator may disclose the existence, content, or results of a mediation without the prior written consent of both Parties. In no event shall a mediation be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable New York statute of limitations. Each

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Party shall bear its own costs and expenses and attorneys' fees and an equal share of the mediator's fees and any administrative fees of mediation. For clarity, notwithstanding anything to the contrary in this Agreement or as set forth in the AAA Mediation Procedures, under no circumstance shall any such mediation findings or rulings be binding on either Party, unless the Parties subsequently mutually agree to the contrary in writing. No agreement to mediate shall preclude either Party from subsequently withdrawing from the mediation and commencing an action as described in Section 13.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 **Litigation; Equitable Relief**. The Federal courts located in New York, New York shall have exclusive jurisdiction over, and shall be the exclusive venue for resolution of, any Dispute not resolved through the informal Dispute-resolution procedures described above. If, within [**\* \* \***] following (a) a notice by either Party to the other that it does not believe the Dispute can be resolved through the Executive Officers when the Parties do not agree to mediation or (b) if the Parties agree to mediation, termination of such mediation, neither Party has commenced proceedings seeking to resolve such Dispute in any federal court having jurisdiction, then such Dispute and all related rights, demands, claims, actions, causes of action, suits, proceedings and Losses of every kind and nature shall be deemed to have been irrevocably waived and released, to the fullest extent permitted under Applicable Laws. Either Party may, at any time and without waiving any remedy under this Agreement, seek from any court having jurisdiction any temporary injunctive or provisional relief necessary to protect the rights or property of that Party. Any final judgment resolving a Dispute may be enforced by either Party in any court having appropriate jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 **Excluded Claims**. As used in this Article 13, the term "***Excluded Claim***" means any dispute, controversy or claim that concerns: (a) the validity, enforceability or infringement of any patent, trademark or copyright; or (b) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory. Any Excluded Claim may be submitted by either Party to any court of competent jurisdiction over such Excluded Claim.

**ARTICLE 14** 

**MISCELLANEOUS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 **Entire Agreement; Amendment**. This Agreement, including the Exhibits hereto, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto with respect to the subject matter hereof and supersedes, as of the Effective Date, all prior and contemporaneous agreements and understandings between the Parties with respect to the subject matter hereof, including the Confidential Disclosure Agreement. The foregoing may not be interpreted as a waiver of any remedies available to either Party as a result of any breach, prior to the Effective Date, by the other Party of its obligations under the Confidential Disclosure Agreement. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 **Limitation of Liability**. NEITHER PARTY MAY RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES; *PROVIDED*, *HOWEVER*, THAT THIS SECTION 14.2 SHALL NOT BE CONSTRUED TO LIMIT EITHER PARTY'S INDEMNIFICATION OBLIGATIONS UNDER Article 10.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4 **Notice**. Any notice required or permitted to be given by this Agreement must be in writing, in English. Any and all notices or other communications or deliveries required or permitted to be provided hereunder must be in writing and will be deemed given and effective if: (a) delivered by hand or by overnight courier with tracking capabilities; (b) mailed postage prepaid by first class, registered, or certified mail; or (c) delivered by facsimile or electronic mail followed by delivery via either of the methods set forth in clauses (a) and (b) of this Section 14.4, in each case, addressed as set forth below unless changed by notice so given:

If to Avidity: Avidity Biosciences, Inc.

10975 N. Torrey Pines Rd.

Suite 150

La Jolla, CA 92037

Attn: Chief Business Officer

[\* \* \*]

[**\* \* \***]

with a copy (which shall not constitute notice) to:

Cooley LLP

3175 Hanover Street

Palo Alto, CA 94304

[\* \* \*]

[**\* \* \***]

[**\* \* \***]

If to Lilly: Eli Lilly and Company

Lilly Corporate Center

Indianapolis, Indiana 46285

Attn: Senior Vice President, Corporate Business Development

[\* \* \*]

with a copy (which shall not constitute notice) to:

Eli Lilly and Company

Lilly Corporate Center

Indianapolis, IN 46285

Attn: General Counsel

[\* \* \*]

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Avidity shall also provide a copy of any notice (via e-mail if available) to Lilly's Alliance Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5 **Severability**. If, for any reason, any part of this Agreement is adjudicated invalid, unenforceable, or illegal by a court of competent jurisdiction, such adjudication shall not, to the extent feasible, affect or impair, in whole or in part, the validity, enforceability, or legality of any remaining portions of this Agreement. All remaining portions will remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.6 **Non-Use of Names**. Avidity shall not use the name, trademark, logo, or physical likeness of Lilly or its respective officers, directors or employees, or any adaptation of any of them, in any advertising, promotional or sales literature, without Lilly's prior written consent. Avidity shall require its Affiliates to comply with the foregoing. Lilly shall not use the name, trademark, logo, or physical likeness of Avidity or its officers, directors or employees, or any adaptation of any of them, in any advertising, promotional or sales literature, without Avidity's prior written consent. Lilly shall require its Affiliates and Sublicensees to comply with the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.7 **Assignment**. Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other, except that a Party may make such an assignment or transfer without the other Party's consent to: (a) its Affiliate, provided that such Party shall remain primarily liable for any acts or omissions of such Affiliate; or (b) to an Acquirer in connection with a Change of Control, subject to Section 14.8. Any permitted assignee shall, in writing to the non-assigning Party, expressly assume performance of such assigning Party's rights and obligations. Any permitted assignment is binding on the successors of the assigning Party. Any assignment or attempted assignment by either Party in violation of the terms of this Section 14.7 is null, void and of no legal effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.8 **Avidity Change of Control**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.8.1** <u>Notification of Change of Control</u>. Avidity shall provide Lilly with prompt written notice of any Change of Control of Avidity, which notice shall describe in reasonable detail the nature of the transaction and the identity of the Acquirer. If not prohibited under Applicable Law or by the terms of any written agreement between Avidity and any Third party, Avidity shall provide such notice to Lilly prior to execution of any agreement(s) that would result in the Change of Control of Avidity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.8.2** <u>Change of Control with Lilly Competitor</u>. If Avidity undergoes a Change of Control involving a Lilly Competitor, then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Lilly may, by written notice delivered to Avidity within [**\* \* \***] following the earlier of first public announcement of such Change of Control or Avidity's written notice to Lilly (pursuant to Section 14.8.1), elect to retain its rights to Compounds or Products under this Agreement, in which case: (i) the JRC shall be immediately disbanded, and

------

all approval rights of the JRC shall become approval rights of the corresponding Party (i.e., mutual agreement by the Parties or final decision making authority by a Party); (ii) Avidity shall only have the right to receive high level summary reports from Lilly under Section 5.3 without the inclusion of any Lilly Confidential Proprietary Information; (iii) Lilly shall have the option, upon written notice to Avidity, to transfer all [**\* \* \***]; (iv) any expenses [**\* \* \***]; and (v) Avidity shall thereafter have no right (A) under Section 8.2.2 to take over and continue the filing, prosecution, maintenance and defense of a Product-Specific Patent proposed to be abandoned by Lilly, (B) under Section 8.2.2 and Section 8.3.3, to receive information with respect to, be represented by counsel in, object to the commencement of, share in recoveries from, or otherwise participate in enforcement of Product-Specific Patents by Lilly, (C) under Section 8.5 to consult with respect to Lilly's decision to seek patent term extensions, supplemental protection certificates and the like for Product-Specific Patents, or (D) under Section 8.4, to participate and be represented in any claim of infringement that the commercialization of a Product infringes the Patent rights of a Third Party; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Avidity shall implement and enforce effective walls and screens between personnel working on the business of Avidity related to the transactions contemplated by this Agreement, on the one hand, and the business of Avidity collaborating with the Lilly Competitor, on the other hand, to ensure that no information directly relating to any Compounds or Products or the transactions contemplated by this Agreement is accessible by such Lilly Competitor and that the same level of diligence is applied to such activities after the consummation of such Change of Control as compared to prior to the consummation of such Change of Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.8.3** <u>Acquirer with [**\* \* \***]</u>. Following any Change of Control of Avidity to an Acquirer that owns or controls any Patent rights directed to Avidity Proprietary Technology or inventions, Avidity shall [**\* \* \***], provided that such requirement shall not apply (a) to any Antibody-related Patent rights that may be owned or controlled by such Acquirer if such Patent rights would not otherwise be considered Avidity Patents, or (b) to the extent Lilly is in material breach of this Agreement and has failed to cure such breach in the applicable time period set forth in Section 13.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.9 **Waivers**. The failure of a Party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Other than any deemed waiver and release under Section 13.4, any waiver by a Party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such Party.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.10 **Force Majeure**. Neither Party shall be responsible to the other for any failure or delay in performing any of its obligations under this Agreement or for other nonperformance hereunder (excluding, in each case, the obligation to make payments when due) if such delay or nonperformance is caused by strike, fire, flood, earthquake, accident, war, act of terrorism, act of God or of the government of any country or of any local government, or by any other cause unavoidable or beyond the control of any Party hereto. In such event, such affected Party shall use Commercially Reasonable Efforts to resume performance of its obligations and will keep the other Party informed of actions related thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.11 **Interpretation**. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections, Schedules or Exhibits mean the particular Articles, Sections, Schedules or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. In the event of any conflict between the main body of this Agreement and any Exhibit hereto, the main body of this Agreement shall prevail. Unless context otherwise clearly requires, whenever used in this Agreement: (a) the words "include" or "including" shall be construed as incorporating, also, "but not limited to" or "without limitation"; (b) the word "day" or "year" means a calendar day or year unless otherwise specified; (c) the word "notice" means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement; (d) the words "hereof," "herein," "hereby" and derivative or similar words refer to this Agreement as a whole and not merely to the particular provision in which such words appear; (e) the words "shall" and "will" have interchangeable meanings for purposes of this Agreement; (f) provisions that require that a Party, the Parties or a committee hereunder "agree," "consent" or "approve" or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (g) words of any gender include the other gender; (h) words using the singular or plural number also include the plural or singular number, respectively; (i) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement law, rule or regulation thereof; (j) the phrase "non-refundable" shall not prohibit, limit or restrict either Party's right to obtain damages in connection with a breach of this Agreement; and (k) neither Party shall be deemed to be acting on behalf of the other Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.12 **Counterparts; Electronic Signatures**. This Agreement may be executed in any number of counterparts, each of which is deemed an original, but all of which together constitute one instrument. This Agreement may be executed and delivered electronically and upon such delivery such electronic signature will be deemed to have the same effect as if the original signature had been delivered to the other Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.13 **Expenses**. Each Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.14 **Further Assurances**. Lilly and Avidity hereby covenant and agree without the necessity of any further consideration, to execute, acknowledge and deliver any and all documents and take any action as may be reasonably necessary to carry out the intent and purposes of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.15 **No Third Party Beneficiary Rights**. This Agreement is not intended to and shall not be construed to give any Third Party any interest or rights (including any Third Party beneficiary rights) with respect to or in connection with any agreement or provision contained herein or contemplated hereby, except as otherwise expressly provided for in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.16 **Construction**. The Parties hereto acknowledge and agree that: (a) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (b) the rule of construction to the effect that any ambiguities are resolved against the drafting Party shall not be employed in the interpretation of this Agreement; and (c) the terms and provisions of this Agreement shall be construed fairly as to all Parties hereto and not in a favor of or against any Party, regardless of which Party was generally responsible for the preparation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.17 **Cumulative Remedies**. No remedy referred to in this Agreement is intended to be exclusive unless explicitly stated to be so, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.18 **Extension to Affiliates**. Except as expressly set forth otherwise in this Agreement, each Party shall have the right to extend the rights and immunities granted in this Agreement to one or more of its Affiliates. All applicable terms and provisions of this Agreement, except this right to extend, shall apply to any such Affiliate to which this Agreement has been extended to the same extent as such terms and provisions apply to the Party extending such rights and immunities. For clarity, Lilly extending the rights and immunities granted hereunder shall remain primarily liable for any acts or omissions of its Affiliates.

*[signature page follows]* 

------

**IN WITNESS WHEREOF**, the Parties have caused this Agreement to be executed as of the Effective Date by their duly authorized representatives.

---

| | |
|:---|:---|
| **AVIDITY BIOSCIENCES, INC.** | **AVIDITY BIOSCIENCES, INC.** |
| By: | /s/ Kent Hawryluk |
| Name: | Kent Hawryluk |
| Title: Authorized Officer | Title: Authorized Officer |
| **ELI LILLY AND COMPANY** | **ELI LILLY AND COMPANY** |
| By: | /s/ David A. Ricks |
| Name: | David A. Ricks |
| Title: Chairman and CEO | Title: Chairman and CEO |

---

[*Signature page to Research Collaboration and License Agreement*]

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**<u>Exhibit 1.14</u>**

**<u>Avidity Patents</u>**

[**\* \* \***]

*Exhibit 1.14 - 1* 

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[**\* \* \***]

*Exhibit 1.14 - 2* 

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[**\* \* \***]

*Exhibit 1.14 - 3* 

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[**\* \* \***]

*Exhibit 1.14 - 4* 

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**<u>Exhibit 4.2.1</u>**

**<u>Reserved Targets</u>**

[**\* \* \***]

*Exhibit 4.2.1 - 1* 

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**<u>Exhibit 4.3</u>**

**<u>Initial Research Plan</u>**

[**\* \* \***]

*Exhibit 4.3 - 1* 

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[**\* \* \***]

*Exhibit 4.3 - 2* 

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[**\* \* \***]

*Exhibit 4.3 - 3* 

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[**\* \* \***]

*Exhibit 4.3 - 4* 

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[**\* \* \***]

*Exhibit 4.3 - 5* 

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[**\* \* \***]

*Exhibit 4.3 - 6* 

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[**\* \* \***]

*Exhibit 4.3 - 7* 

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**<u>Exhibit 4.10</u>**

**<u>Part A: Eli Lilly and Company Good Research Practices</u>**

[**\* \* \***]

*Exhibit 4.10 - 1* 

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[**\* \* \***]

*Exhibit 4.10 - 2* 

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**<u>Exhibit 4.10</u>**

**<u>Part B: Eli Lilly and Company Animal Care and Use Requirement for Animal Researchers and Suppliers</u>**

[**\* \* \***]

*Exhibit 4.10 - 3* 

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**<u>Exhibit 11.2</u>**

**<u>Joint Press Release</u>**

---

| | |
|:---|:---|
| ![LOGO](g42675dsp088.jpg) | ![LOGO](g42675dsp88a.jpg) |

---

April XX, 2019

**For Release:** Draft B

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| | |
|:---|:---|
| **Refer** | **to:** Mark Taylor; mark.taylor@lilly.com; (317) 276-5795 (Lilly Media)  |

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Kevin Hern; hern_kevin_r@lilly.com; (317) 277-1838 (Lilly Investors)

Leslie Ann Kerins; leslie@aviditybio.com; (858) 401-7900 (Avidity)

Ian Stone; ian@canalecomm.com; (619) 849-5388 (Avidity Media)

**Lilly and Avidity Biosciences Announce Licensing and Research Collaboration** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* *Collaboration will utilize Avidity's antibody-oligonucleotide conjugate (AOC) technology to pursue therapeutic targets initially focused on immunology and other indications* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* *Avidity to receive an upfront payment of $20 million and an investment of $15 million* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* *Avidity eligible to receive up to approximately $405 million per target in development and commercialization milestones, plus royalties* 

INDIANAPOLIS, IN, LA JOLLA, CA — Eli Lilly and Company (NYSE: LLY) and Avidity Biosciences, Inc. today announced a global licensing and research collaboration focused on the discovery, development and commercialization of potential new medicines in immunology and other select indications.

The companies will utilize Avidity's proprietary Antibody-Oligonucleotide Conjugate (AOC™) technology platform to progress new therapeutic approaches toward clinical development and commercialization. AOCs combine the tissue selectivity of monoclonal antibodies and the precision of oligonucleotide-based therapeutics to overcome barriers to the delivery of oligonucleotides and target genetic drivers of disease.

*Exhibit 11.2 - 1* 

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"We are excited to expand our oligonucleotide research and development efforts through this strategic collaboration with Avidity," said Andrew C. Adams, Ph.D., chief scientific officer for RNA therapeutics at Lilly. "Their expertise in studying the combination of monoclonal antibodies and oligonucleotide-based therapies represent a promising avenue of research toward development of the next generation of RNA based medicines"

"This collaboration with Lilly provides an exceptional opportunity to leverage Avidity's proprietary AOC platform in order to generate new therapeutic targets in disease areas that have been challenging to pursue using oligonucleotide-based approaches," said Kent Hawryluk, Avidity's chief business officer. "Lilly's extensive research, development, regulatory, and commercial capabilities make them an ideal partner, and we look forward to a long and productive relationship."

Under the terms of the agreement, Avidity will receive an upfront payment of $20 million, as well as an investment of $15 million. Avidity is also eligible to receive up to approximately $405 million per target for development, regulatory and commercialization milestones, as well as tiered royalties ranging from the mid-single to low-double digits on product sales.

This transaction is subject to clearance under customary closing conditions. The transaction will be reflected in Lilly's reported results and financial guidance according to Generally Accepted Accounting Principles (GAAP). There will be no change to Lilly's 2019 non-GAAP earnings per share guidance as a result of this transaction.

**About Avidity's AOC™ Technology Platform** 

Avidity's Antibody Oligonucleotide Conjugate (AOC™) technology utilizes antibodies to target cells and tissues of interest and facilitate the uptake and internalization of oligonucleotide payloads. By combining the cellular and tissue selectivity of antibodies with the selectivity and efficiency of oligo-based approaches, Avidity has demonstrated modulation of disease-related RNAs in diverse cell types and tissues including muscle, heart, liver, tumors and immune cells.

*Exhibit 11.2 - 2* 

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**About Avidity Biosciences, Inc.** 

Avidity Biosciences, Inc. is a privately-held biotech company pioneering Antibody Oligonucleotide Conjugates (AOC™). AOCs combine the tissue selectivity of monoclonal antibodies and the precision of oligonucleotide-based therapeutics to overcome barriers to the delivery of oligonucleotides and target genetic drivers of disease. Avidity has raised $30 million in venture financing from a top-tier group of investors, including Takeda Ventures, Alethea Capital, Alexandria Real Estate Equities, Brace Pharma, EcoR1 Capital, F-Prime Capital, Moore Venture Partners, and Boxer Capital of Tavistock Group.

**About Eli Lilly and Company** Lilly is a global healthcare leader that unites caring with discovery to create medicines that make life better for people around the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and volunteerism. To learn more about Lilly, please visit us at <u>www.lilly.com</u> and <u>http://newsroom.lilly.com/social-channels</u>. C-LLY

**Lilly Forward-Looking Statement** This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) about the benefits of a collaboration between Lilly and Avidity, and reflects Lilly's current beliefs. However, as with any such undertaking, there are substantial risks and uncertainties in the process of drug development and commercialization. Among other things, there can be no guarantee that Lilly will realize the expected benefits of the collaboration, or that the collaboration will yield commercially successful products. For a further discussion of these and other risks and uncertainties that could cause actual results to differ from Lilly's expectations, please see Lilly's most recent Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission. Lilly undertakes no duty to update forward-looking statements.

\# \# \#

*Exhibit 11.2 - 3*

## Exhibit 10.4

**Exhibit 10.4** 

***Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Such omitted information has been noted in this document with a placeholder identified by the mark "[\*\*\*]".***

**RESEARCH COLLABORATION AND LICENSE AGREEMENT** 

**between** 

**AVIDITY BIOSCIENCES, INC.** 

**and** 

**BRISTOL MYERS SQUIBB COMPANY** 

**Dated as of November 27, 2023** 

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**TABLE OF CONTENTS** 

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| | | |
|:---|:---|:---|
|  |  | **Page** |
| ARTICLE 1 | DEFINITIONS | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 | Additional Avidity Platform Technology | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 | Additional Licensed Target | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 | Affiliate | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 | Antibody | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 | AOC | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 | Applicable Law | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 | Avidity AOC Platform Technology | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8 | Avidity CoC Competing Product | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9 | Avidity Competitive Product | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.10 | Avidity Exclusivity Period | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.11 | Avidity In-License Agreements | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.12 | Avidity Know-How | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.13 | Avidity Manufacturing Process | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.14 | Avidity Outside Product | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.15 | Avidity Patents | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.16 | Avidity Platform Invention | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.17 | Avidity Platform Invention Patent | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.18 | Avidity Platform Patent | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.19 | Avidity Product Patent | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.20 | Avidity Research Collaboration Costs | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.21 | Avidity Specified Research Activities | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.22 | Biosimilar Product | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.23 | BLA | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.24 | BMS CoC Competing Product | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.25 | BMS Competitive Field | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.26 | BMS Competitive Product | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.27 | BMS Contributed Collaboration Invention | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.28 | BMS Contributed Collaboration Patents | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.29 | BMS Contributed Collaboration Technology | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.30 | BMS Exclusivity Period | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.31 | BMS Manufacturing Invention | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.32 | BMS Manufacturing Know-How | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.33 | BMS Patents | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.34 | BMS Sole Invention | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.35 | BMS Sole Patent | 4 |

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| | | |
|:---|:---|:---|
|  |  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.36 | Business Day | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.37 | Calendar Quarter | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.38 | Calendar Year | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.39 | Change of Control | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.40 | Claims | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.41 | Clinical Trial | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.42 | Collaboration Activities | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.43 | Combination Product | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.44 | Commercialize | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.45 | Commercially Reasonable Efforts | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.46 | Compulsory License | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.47 | Control | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.48 | Covers | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.49 | Criteria | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.50 | Damages | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.51 | Data Package | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.52 | Develop | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.53 | Development Candidate | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.54 | Development Candidate Criteria | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.55 | Directed | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.56 | Distributor | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.57 | Divestiture | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.58 | Dollar | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.59 | Drug Approval Application | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.60 | EMA | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.61 | EU | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.62 | Executive Officers | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.63 | Existing Avidity In-License Agreements | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.64 | Exploit | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.65 | FDA | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.66 | Field | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.67 | Final Offer (Baseball) Arbitration | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.68 | First Commercial Sale | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.69 | First Licensed Target | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.70 | FTE | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.71 | FTE Costs | 7 |

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| | | |
|:---|:---|:---|
|  |  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.72 | FTE Rate | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.73 | Gatekeeper Agreement | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.74 | GCP | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.75 | GLP | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.76 | GMP | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.77 | Governmental Authority | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.78 | IND | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.79 | Indication | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.80 | Initiation | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.81 | Intellectual Property Rights | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.82 | Invention | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.83 | Know-How | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.84 | Knowledge | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.85 | Lead Compound | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.86 | Lead Criteria | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.87 | Licensed Compound | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.88 | Licensed IP | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.89 | Licensed Other Modality Compound | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.90 | Licensed Product | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.91 | Licensed Product Trademarks | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.92 | Licensed Target | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.93 | Manufacture | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.94 | Materials | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.95 | Net Sales | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.96 | New Avidity In-License Agreement | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.97 | Oligonucleotide | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.98 | Other Major Markets | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.99 | Out-of-Pocket Costs | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.100 | Party | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.101 | Patent | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.102 | Person | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.103 | Phase 1 Trial | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.104 | Phase 2 Trial | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.105 | PMO | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.106 | Post-Research Collaboration AOC Platform Improvement | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.107 | Pricing Approval | 10 |

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| | | |
|:---|:---|:---|
|  |  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.108 | Registrational Trial | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.109 | Regulatory Approval | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.110 | Regulatory Authority | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.111 | Regulatory Documentation | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.112 | Regulatory Exclusivity | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.113 | Replacement Target End Date | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.114 | Research Agreement | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.115 | Research Budget | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.116 | Research Collaboration Activities | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.117 | Research Collaboration Data | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.118 | Research Collaboration Invention | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.119 | Research Collaboration Patents | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.120 | Research Plan | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.121 | Research Program | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.122 | Research Term | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.123 | Reserved Target | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.124 | Reserved Target Maximum | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.125 | Reversion Product | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.126 | Right of Reference | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.127 | Safety Concern | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.128 | Securities Purchase Agreement | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.129 | Sublicensee | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.130 | Successful Achievement | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.131 | Target | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.132 | Technical Infeasibility | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.133 | Territory | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.134 | Third Party | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.135 | Trademark | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.136 | Transferrin | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.137 | U.S. | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.138 | Valid Claim | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.139 | Violation | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.140 | Additional Definitions | 13 |
|  ARTICLE 2 | GOVERNANCE | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 | Alliance Managers | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 | Joint Steering Committee | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 | Subcommittees and Working Groups | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 | Resolution of Working Group and JSC Disputes | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 | Limitations on Authority | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 | Oversight Periods of Committees | 19 |

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| | | |
|:---|:---|:---|
|  |  | **Page** |
|  ARTICLE 3 | TARGET NOMINATION | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 | Licensed Targets | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 | Reserved Targets | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 | Designation of Additional Licensed Targets; Replacement Targets | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 | Excluded Targets | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 | Third Party Gatekeeper Verification of Excluded Target | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 | Infeasible Targets | 20 |
|  ARTICLE 4 | RESEARCH PROGRAM | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 | Research Programs | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 | Research Plans | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 | Selection of Lead Compounds and Development Candidates | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 | End of Research Program | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 | Records, Reports and Documentation; Inspections | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 | Regulatory Responsibility | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 | Compliance Provisions | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 | Use of Materials | 25 |
|  ARTICLE 5 | LICENSES; EXCLUSIVITY; NEGATIVE COVENANTS | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 | License Grants to BMS | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 | License to Avidity | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 | Retained Rights by the Parties | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 | Avidity In-License Agreements | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 | Subcontracting | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 | No Implied Licenses | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 | Exclusivity | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 | Confirmatory Patent License | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9 | Rights in Bankruptcy | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10 | Information Sharing to Enable Exploitation of Licensed Compounds and Licensed Products | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11 | Additional Avidity Platform Technology | 31 |
|  ARTICLE 6 | FURTHER DEVELOPMENT, REGULATORY, MANUFACTURING, AND COMMERCIALIZATION OF LICENSED PRODUCTS | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 | Development | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 | Regulatory | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 | Manufacture | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 | Manufacturing Transition | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 | Commercialization | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 | Development Reports | 36 |
|  ARTICLE 7 | PAYMENTS; ROYALTIES AND REPORTS | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 | Upfront Payment | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 | Equity Investment | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 | Milestone Payments | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 | Royalties | 39 |

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| | | |
|:---|:---|:---|
|  |  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 | Economics for Non-AOC Licensed Compounds | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 | [\*\*\*] | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 | Payment Date | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 | Blocked Payments | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 | Audits | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 | Tax Matters | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 | Payment Method and Exchange Rate | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 | Cost of Avidity Support Services | 43 |
|  ARTICLE 8 | CONFIDENTIALITY AND PUBLICATION | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 | Confidential Information | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 | Product Information | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 | Nondisclosure Obligation | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 | Exceptions | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 | Permitted Disclosure | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 | Survival | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 | Publicity | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8 | Terms of Agreement | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9 | Publications | 46 |
|  ARTICLE 9 | INTELLECTUAL PROPERTY | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 | Background IP | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 | Inventions | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 | Filing, Prosecution and Maintenance of Patents | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 | Enforcement and Defense | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 | Defense Against Claims of Infringement of Third Party Patents | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 | BMS Contributed Collaboration Technology | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 | IP Committee | 51 |
|  ARTICLE 10 | REPRESENTATIONS, WARRANTIES AND COVENANTS | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 | Representations and Warranties of Each Party | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 | Avidity Representation and Warranties | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 | Other Covenants | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 | Warranty Disclaimer | 54 |
|  ARTICLE 11 | TERM AND TERMINATION | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 | Term and Expiration | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 | Termination at Will | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 | Termination for Cause | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 | Termination for Patent Challenge | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 | Termination for Bankruptcy | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 | [\*\*\*] | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 | Consequence of Termination | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 | Effect of Expiration or Termination Generally; Survival | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9 | Full Force and Effect During Notice Period | 57 |

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| | | |
|:---|:---|:---|
|  |  | **Page** |
|  ARTICLE 12 | INDEMNIFICATION | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 | Indemnification by BMS | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 | Indemnification by Avidity | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 | Procedure | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 | Insurance | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 | LIMITATION OF LIABILITY | 59 |
|  ARTICLE 13 | MISCELLANEOUS | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 | Force Majeure | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 | Assignment | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 | Severability | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 | Notices | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 | Applicable Law | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6 | Dispute Resolution | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.7 | Entire Agreement; Amendments | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.8 | Independent Contractors | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.9 | Performance by Affiliates | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.10 | Further Actions | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.11 | Severability | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.12 | Waiver | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.13 | Cumulative Remedies | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.14 | Rule of Construction | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.15 | Interpretation | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.16 | Counterparts | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.17 | No Third Party Beneficiaries | 64 |

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**SCHEDULES** 

Schedule 1.18 Avidity Platform Patents

Schedule 1.63 Existing Avidity In-License Agreements

Schedule 1.67 Final Offer (Baseball Arbitration)

Schedule 1.92 Licensed Targets

Schedule 1.128 Securities Purchase Agreement

Schedule 2.4.3(a) Resolution by Expert

Schedule 4.2.1(a) Initial Research Plan

Schedule 4.2.1(b) Initial Research Budget

Schedule 8.7 [\*\*\*]

Schedule 10.2.2 Existing Patents

vii

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**RESEARCH COLLABORATION AND LICENSE AGREEMENT** 

This Research Collaboration and License Agreement (this "<u>Agreement</u>"), effective as of November 27, 2023 (the "<u>Effective Date</u>"), is entered into by and between Bristol Myers Squibb Company, a Delaware corporation having a place of business at Route 206 and Province Line Road, Lawrenceville, NJ 08540 ("<u>BMS</u>"), and Avidity Biosciences, Inc., a Delaware corporation having a place of business at 10578 Science Center Drive, Suite 125, San Diego, CA 92121 ("<u>Avidity</u>"). BMS and Avidity are referred to individually as a "<u>Party</u>" and collectively as the "<u>Parties.</u>"

**RECITALS** 

WHEREAS, Avidity is a biotechnology company engaged in the research and development of therapeutics based on targeted delivery of antibody oligonucleotide conjugates or AOCs (as defined below);

WHEREAS, BMS is a biopharmaceutical company engaged in the research, development, manufacture, and commercialization of human therapeutic products, including treatments of cardiovascular diseases;

WHEREAS, BMS's subsidiary, MyoKardia, Inc. ("<u>MyoKardia</u>") and Avidity are parties to the Research and Option Agreement dated December 22, 2020, as amended on December 1, 2022 ("<u>Research Agreement</u>") [\*\*\*];

WHEREAS, BMS and Avidity mutually agree to hereby terminate the Research Agreement in its entirety, and enter into a research collaboration to [\*\*\*] advance Licensed Compounds (as defined below), upon the terms and conditions set forth herein;

WHEREAS, BMS desires to obtain a license under certain of Avidity's intellectual property for the further research, development, and commercialization of Licensed Products (as defined below), and Avidity desires to grant such a license, upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the foregoing premises and the covenants herein contained, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1.

<u>DEFINITIONS</u>

Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, have the respective meanings set forth below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 "<u>Additional Avidity Platform Technology</u>" means any proprietary Know-How that comes under the Control of Avidity during the Research Term outside the conduct of Research Collaboration Activities (for clarity, excluding the Initial Avidity Platform Technology) that [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 "<u>Additional Licensed Target</u>" means any Target designated as a Licensed Target pursuant to Section 3.3 (Designation of Additional Licensed Targets; Replacement Targets) [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 "<u>Affiliate</u>" means, with respect to a Party, any Person that, directly or indirectly (through one or more intermediaries), controls, is controlled by or is under common control with such Party for so long as such Person controls, is controlled by or is under common control with a Party, and regardless of whether such Person is or becomes an Affiliate on or after the Effective Date. For purposes of this definition, "control" and, with correlative meanings, the terms "controlled by" and "under common control with" means (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise; or (b) the ownership, directly or indirectly, of more than 50% of the voting securities or other ownership interest of a Person (or, with respect to a limited partnership or other similar entity, of its general partner or other controlling entity). The Parties

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acknowledge that in the case of certain entities organized under the laws of certain countries outside of the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than 50%, and that in such case such lower percentage shall be substituted in the preceding sentence; *provided* that such foreign investor has the power to direct the management or policies of such entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 "<u>Antibody</u>" means any antibody or any fragment, variant, derivative or construct thereof, or antibody fusion protein produced therefrom [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 "<u>AOC</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 "<u>Applicable Law</u>" means applicable federal, state, local, national, and supra-national laws, statutes, rules and regulations of a Governmental Authority that may be in effect from time to time during the Term and applicable to a Party (or its Affiliates or agents) and its (or their) particular activity hereunder, including well as GLPs, GCPs and GMPs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 "<u>Avidity AOC Platform Technology</u>" means (a) the proprietary Know-How within the Avidity Know-How as of the Effective Date consisting of [\*\*\*]. The Avidity AOC Platform Technology excludes any (A) AOCs or Oligonucleotides and (B) Know-How specifically related to any Licensed Target, Licensed Compound, or Licensed Product, or the composition, formulation, combination, product by process, method of use, manufacture, preparation or administration, or Exploitation of any of the foregoing. For clarity, Avidity AOC Platform Technology does not include any Research Collaboration Inventions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8 "<u>Avidity CoC Competing Product</u>" means, [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9 "<u>Avidity Competitive Product</u>" means, on an Infeasible Target-by-Infeasible Target, Licensed Target-by-Licensed Target, or Reserved Target-by-Reserved Target basis, any product containing a compound Directed to such Infeasible Target, Licensed Target, or Reserved Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.10 "<u>Avidity Exclusivity Period</u>" means (a) with respect to a given Infeasible Target, expiration of all Research Terms, (b) with respect to a given Licensed Target, the Term applicable to such Licensed Target, and (c) with respect to a given Reserved Target, the period commencing on the Effective Date until the expiration of the Replacement Target End Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.11 "<u>Avidity In-License Agreements</u>" means (a) New Avidity In-License Agreements and (b) the Existing Avidity In-License Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.12 "<u>Avidity Know-How</u>" means any and all Know-How that is Controlled by Avidity or any of its Affiliates as of the Effective Date or at any time during the Term (including any Know-How related to a Licensed Target) that is necessary or reasonably useful for the Exploitation of Licensed Compounds or Licensed Products in the Field, including, subject to Section 5.11 (Additional Avidity Platform Technology), Know-How within the Avidity AOC Platform Technology. Notwithstanding the foregoing, Avidity Know-How does not include Avidity's interest in the Research Collaboration Inventions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.13 "<u>Avidity Manufacturing Process</u>" means, with respect to a Licensed Compound or Licensed Product, the process used by or on behalf of Avidity to Manufacture such Licensed Compounds or Licensed Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.14 "<u>Avidity Outside Product</u>" means any product comprising or containing any AOC, in each case, researched, developed or commercialized by Avidity or its Affiliate, in each case, directly, or indirectly by or with a Third Party, but excluding any Licensed Compound or Licensed Product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.15 "<u>Avidity Patents</u>" means any and all Patents that are Controlled by Avidity or any of its Affiliates as of the Effective Date or at any time during the Term that (a) claim (i) any Licensed Compound or Licensed Product (including in each case its composition, formulation, combination, product by process, or method of use, manufacture, preparation or administration or Exploitation of the foregoing), or (ii) Avidity Know-How or (b) are otherwise necessary or reasonably useful for the

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Exploitation of Licensed Compounds or Licensed Products in the Field, including the Avidity Product Patents and the Avidity Platform Patents. Notwithstanding the foregoing, Avidity Patents do not include Avidity's interest in Research Collaboration Patents. For clarity, the Avidity Patents include the Existing Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.16 "<u>Avidity Platform Invention</u>" means any Invention discovered, conceived, or otherwise developed in the performance of Research Collaboration Activities that (a) generally applicable to one or more Targets that is not a Licensed Targets (*i.e.*, is not specifically related to a Licensed Target) and (b) is an improvement, modification, or enhancement of (i) Initial Avidity Platform Technology or (ii) Additional Avidity Platform Technology. Notwithstanding the foregoing, the Avidity Platform Inventions exclude any [\*\*\*], (B) Know-How specifically related to any Licensed Target, Licensed Compound, or Licensed Product, or the composition, formulation, combination, product by process, method of use, manufacture, preparation or administration, or Exploitation of any of the foregoing, and (C) BMS Contributed Collaboration Technology, BMS Contributed Collaboration Invention, BMS Manufacturing Know-How, BMS Sole Invention or other Intellectual Property Rights Controlled by BMS (or any of its Affiliates) from outside this Agreement that are utilized in the conduct of Collaboration Activities hereunder. For clarity, Avidity Platform Inventions do not include any Research Collaboration Inventions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.17 "<u>Avidity Platform Invention Patent</u>" means any Patent Controlled by Avidity or its Affiliates that claims any Avidity Platform Invention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.18 "<u>Avidity Platform Patent</u>" means (a) those Patents set forth on <u>Schedule 1.18</u> as of the Effective Date, (b) any Patent Controlled by Avidity or its Affiliates that claims any Additional Avidity Platform Technology, or (c) any Avidity Platform Invention Patent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.19 "<u>Avidity Product Patent</u>" means any Avidity Platform Invention Patent that includes at least one claim that covers any Licensed Compound or Licensed Product, including in each case the composition, formulation, combination, product by process, or method of use, manufacture, preparation or administration or Exploitation of a Licensed Compound or Licensed Product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.20 "<u>Avidity Research Collaboration Costs</u>" means, subject to Section 4.2.6 (Research Costs for Research Collaboration Activities), all Out-of-Pocket Costs and FTE Costs incurred by Avidity after the Effective Date and during the Research Term for the performance of Avidity's Research Collaboration Activities under the Research Programs pursuant to the applicable Research Plan in accordance with the Research Budget.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.21 "<u>Avidity Specified Research Activities</u>" means, with respect to a Research Program[\*\*\*]; in each case, as set forth in the Research Plan for such Research Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.22 "<u>Biosimilar Product</u>" means in a particular country with respect to a Licensed Product that contains a Licensed Compound, any pharmaceutical product that: [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.23 "<u>BLA</u>" means a Biological License Application (as defined by the FDA), or any successor application having substantially the same function.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.24 "<u>BMS CoC Competing Product</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.25 "<u>BMS Competitive Field</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.26 "<u>BMS Competitive Product</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.27 "<u>BMS Contributed Collaboration Invention</u>" means any and all Inventions discovered, conceived, or otherwise developed in the performance of Research Collaboration Activities that are improvements, modifications or enhancements to any BMS Contributed Collaboration Technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.28 "<u>BMS Contributed Collaboration Patents</u>" means Patents that claim BMS Contributed Collaboration Inventions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.29 "<u>BMS Contributed Collaboration Technology</u>" means (a) any Know-How Controlled by BMS (or its Affiliate) that BMS makes available and specifically contributes for use by Avidity in the performance of the Research Programs pursuant to this Agreement for the Development of the Licensed Products that is (i) specifically identified in the applicable Research Plan, or (ii) otherwise approved by the JSC and recorded in the definitive minutes of the JSC, and (b) any Patents that are Controlled by BMS (or its Affiliate) that specifically claim the Know-How in the foregoing clause (a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.30 "<u>BMS Exclusivity Period</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.31 "<u>BMS Manufacturing Invention</u>" means an Invention discovered, conceived, or otherwise developed by or on behalf of Avidity (or jointly by or on behalf of the Parties) in reliance on BMS Manufacturing Know-How that is disclosed in writing by BMS to Avidity (including through the JSC or JTTSSC) (a) as BMS Contributed Collaboration Technology, (b) as BMS Manufacturing Know-How, or (c) specifically for use by Avidity in the performance of (or to otherwise enable) technology transfer as set forth in Section 5.10 (Information Sharing to Enable Exploitation of Licensed Compounds and Licensed Products) or Section 6.4.2 (Manufacturing Technology Transfer).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.32 "<u>BMS Manufacturing Know-How</u>" means any Know-How Controlled by BMS (or its Affiliate) necessary or reasonably useful to the Manufacture of the Licensed Compounds or Licensed Products that BMS utilizes in the performance of Collaboration Activities for the Manufacture of the Licensed Compounds or Licensed Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.33 "<u>BMS Patents</u>" means (a) BMS Sole Patents and (b) BMS Contributed Collaboration Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.34 "<u>BMS Sole Invention</u>" means (a) any Invention discovered, conceived, or otherwise developed solely by or on behalf of BMS in the performance of Collaboration Activities other than Research Collaboration Activities or (b) any BMS Manufacturing Invention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.35 "<u>BMS Sole Patent</u>" means any Patent Controlled by BMS or its Affiliates (other than a Research Collaboration Patent) that claims any BMS Sole Invention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.36 "<u>Business Day</u>" means any day other than (a) a Saturday, (b) a Sunday or (c) as it any day on which banks in the State of California (as it applies to Avidity) or New York (as it applies to BMS) are permitted or required to close by Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.37 "<u>Calendar Quarter</u>" means each successive period of three calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date, and the last Calendar Quarter shall end on the last day of the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.38 "<u>Calendar Year</u>" means each successive period of 12 calendar months commencing on January 1 and ending on December 31, except that the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Calendar Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.39 "<u>Change of Control</u>" means, with respect to a Party or, if such Party is controlled (within the meaning of "Affiliate" as defined in Section 1.3), directly or indirectly (through one or more intermediaries), by another Person, such ultimate controlling Person (the "<u>Parent</u>"), a transaction with a Third Party(ies) involving, (a) the acquisition, merger or consolidation, directly or indirectly, of such Party or, if there is a Parent, such Parent (rather than such Party), as applicable, and, immediately following the consummation of such transaction, the shareholders of such Party or Parent, as the case may be, immediately prior thereto holding, directly or indirectly, as applicable, shares of capital stock of the surviving or continuing company representing less than 50% of the outstanding shares of such surviving or continuing company, (b) the sale of all or substantially all of the assets or business of such Party or, if

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there is a Parent, such Parent (rather than such Party), as the case may be, or (c) a Person, or group of Persons acting in concert, acquiring, directly or indirectly, more than 50% of the voting equity securities or management control of such Party or, if there is a Parent, such Parent (rather than such Party), as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.40 "<u>Claims</u>" means any and all suits, claims, actions, proceedings or demands brought by a Third Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.41 "<u>Clinical Trial</u>" means a human clinical trial.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.42 "<u>Collaboration Activities</u>" means all activities undertaken by either Party under this Agreement, including all activities related to the Exploitation of Licensed Compounds and Licensed Products. Collaboration Activities include the Research Collaboration Activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.43 "<u>Combination Product</u>" means (a) a product that contains at least one Licensed Compound and at least one additional therapeutically active ingredient that is not a Licensed Compound; or (b) a product consisting of one or more separate active ingredients, devices, tests, or kits, and sold together with a Licensed Product in a single package or as a unit at a single price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.44 "<u>Commercialize</u>" means any and all activities directed to the preparation for sale of, offering for sale of, or sale of a drug or product, including activities related to marketing, promoting, distributing, importing or exporting such drug or product, and interacting with Regulatory Authorities regarding any of the foregoing. "<u>Commercializing</u>" and "<u>Commercialization</u>" shall have correlative meanings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.45 "<u>Commercially Reasonable Efforts</u>" means (a) with respect BMS's obligations under this Agreement [\*\*\*], and (b) with respect to Avidity's obligations under this Agreement [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.46 "<u>Compulsory License</u>" means, with respect to a Licensed Product in a jurisdiction within the Territory, a license or rights granted to a Third Party through the order, decree, or grant of a Governmental Authority within such jurisdiction to use, sell (or offer for sale or contract to sell), import, export or otherwise Commercialize such Licensed Product in such jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.47 "<u>Control</u>" or "<u>Controlled</u>" means, with respect to any item of Know-How, Regulatory Documentation, Patent, or other Intellectual Property Right, the possession of the right, whether directly or indirectly, and whether by ownership, license, or otherwise (other than by operation of the license and other grants in this Agreement), to grant a license, sublicense or other right to or under such Know-How, Regulatory Documentation, Patent, or other Intellectual Property Right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be required hereunder to grant the other Party such license, sublicense or other right. Notwithstanding the foregoing: (a) Avidity and its Affiliates will not be deemed to "Control" any item of Know-How, Regulatory Documentation, Patent, or other Intellectual Property Right that is licensed to Avidity pursuant to a New Avidity In-License Agreement unless and until BMS provides written notice to Avidity that BMS elects to become a sublicensee under a such New Avidity In-License Agreement as set forth in Section 5.4.2 (New Avidity In-License Agreements); and (b) in the event that a Party undergoes a Change of Control, such Party and its Affiliates will *not* be deemed to Control any Know-How, Regulatory Documentation, Patent, or other Intellectual Property Right to the extent such Know-How, Regulatory Documentation, Patent, or other Intellectual Property Right was owned or controlled by the Third Party described in the definition of "Change of Control," or any Person that was an affiliate of such Third Party immediately prior to the consummation of the Change of Control transaction (but excluding, for clarity, the applicable Party and any Person that was an Affiliate of such Party immediately prior to the consummation of the Change of Control), *except* to the extent that any such Know-How, Patent, or other Intellectual Property Right (i) is used or practiced by or on behalf of such Party or any of its Affiliates in the performance of its activities under this Agreement, or (ii) was otherwise included in the Avidity Patents or Avidity Know-How prior to such Change of Control (including (A) any patents that issue from any of such Avidity Patents, as well as any divisionals, continuations, continuations-in-part, reissues, renewals, substitutions, registrations, re-examinations, revalidations, extensions, supplementary protection certificates and the like of any such Avidity Patents, as well as any other Patents that claim priority to any such Avidity Patents and (B) any Know-How that is an improvement to such Avidity Know-How).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.48 "<u>Covers</u>" means, with respect to a given Licensed Product in a given country and an Avidity Patent or Research Collaboration Patent that (a) such Patent has a Valid Claim in such country that claims the composition of matter (including sequence) of the Licensed Compound in such Licensed Product and (b) absent ownership of, or a license to, such Patent, the sale of such Licensed Product in such country would infringe such Valid Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.49 "<u>Criteria</u>" means, with respect to a Research Program, [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.50 "<u>Damages</u>" means all damages, losses, liabilities, penalties, fines and costs (including reasonable legal expenses, costs of litigation and reasonable attorney's fees) payable to a Third Party as a result of a Claim; *provided*, *however*, that, notwithstanding the foregoing, Damages include, if any, the reasonable legal expenses, costs of litigation, and reasonable attorney's fees incurred by a Party as a result of a Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.51 "<u>Data Package</u>" means, with respect to a given Licensed Target, a data package that includes [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.52 "<u>Develop</u>" means any and all activities related to research and development of a drug or product, including all such activities necessary or reasonably useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval. "Development" shall include (a) activities to design, characterize, generate, clone, produce, validate and optimize Licensed Compounds, as well as activities to modify, enhance and improve Licensed Products, (b) producing Licensed Compounds and Licensed Products for the conduct of Development activities, and (c) performing manufacturing feasibility activities and manufacturing process development (including for GMP manufacturing) for Licensed Compounds and Licensed Products. "<u>Developing</u>," "<u>Developed</u>" and "<u>Development</u>" shall have correlative meanings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.53 "<u>Development Candidate</u>" means any Lead Compound that Successfully Achieves the Development Candidate Criteria set forth in the Research Plan with respect to such Research Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.54 "<u>Development Candidate Criteria</u>" means with respect to a Research Program, the target criteria set forth in the Research Plan for a Lead Compound to be designated as a "development candidate."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.55 "<u>Directed</u>" means, with respect to (a) a compound, product, or therapy and (b) a Target [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.56 "<u>Distributor</u>" means a Third Party engaged by BMS or its Affiliates or Sublicensees to distribute and sell Licensed Product, in circumstances where such Third Party purchases its requirements of Licensed Product from BMS or its Affiliates or Sublicensees, as applicable, but does not otherwise make any royalty, profit share, or other similar payment to BMS or its Affiliates or Sublicensees, as applicable, for the license of Intellectual Property Rights with respect to the distribution or sale of such Licensed Product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.57 "<u>Divestiture</u>" means, with respect to a Distracting Product, (a) the divestiture of such Distracting Product through (i) an outright sale or assignment of all rights in and to such Distracting Product to a Third Party or (ii) an exclusive out-license to a Third Party of all research, development, manufacturing and commercialization rights with respect to such Distracting Product, in each case of (i) and (ii), with Avidity and its Affiliates having no further rights or role or ability to influence or control, directly or indirectly, such Distracting Product or (b) the complete cessation of all research, development, manufacturing and commercialization activities with respect to such Distracting Product. For clarity, the right of Avidity (or its Affiliate) to receive royalties, milestones or other payments in connection with the Third Party acquirer's or licensee's development, manufacture or commercialization of a Distracting Product pursuant to clause (a) above, shall be permitted for any such Divestiture. When used as a verb, "<u>Divest</u>" and "<u>Divested</u>" means to cause a Divestiture.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.58 "<u>Dollar</u>" "<u>dollar</u>" or "<u>$</u>" means the legal tender of the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.59 "<u>Drug Approval Application</u>" means an application for Regulatory Approval to market and sell a drug or product in a country or region, including (a) a BLA, (b) any corresponding foreign application in the Territory, including, with respect to the European Union, a Marketing Authorization Application filed with the EMA or with the applicable Regulatory Authority of a country in the EU with respect to the mutual recognition or any other national approval procedure, and (c) all supplements, amendments, variations, extensions and renewals thereof that may be filed with respect to the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.60 "<u>EMA</u>" means the European Medicines Agency, or any successor thereof performing substantially the same functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.61 "<u>EU</u>" means the European Union, as its membership may be altered from time to time, any successor thereto and any country included therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.62 "<u>Executive Officers</u>" means the Chief Executive Officer of Avidity and the Executive Vice President, Chief Research Officer, Head of Research of BMS, or their designees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.63 "<u>Existing Avidity In-License Agreements</u>" means the agreements existing as of the Effective Date between Avidity (or its Affiliates, as applicable) and any Third Party, pursuant to which such Third Party licenses to Avidity (or its Affiliates, as applicable) any Patents or Know-How included in the Licensed IP, as may be amended (but subject to the terms of this Agreement with respect to the amendment thereof). The Existing Avidity In-License Agreements are set forth on <u>Schedule 1.63</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.64 "<u>Exploit</u>" or "<u>Exploitation</u>" means to research, develop, make, have made, modify, enhance, improve, import, export, use, have used, sell, have sold, or offer for sale a drug or product, including to Develop, Commercialize, Manufacture, or have Manufactured such drug or product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.65 "<u>FDA</u>" means the United States Food and Drug Administration, or any successor entity thereof performing substantially the same functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.66 "<u>Field</u>" means all uses, including the prevention, treatment or control of any diseases, disorder or condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.67 "<u>Final Offer (Baseball) Arbitration</u>" means arbitration pursuant to the process set forth in <u>Schedule 1.67</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.68 "<u>First Commercial Sale</u>" means, with respect to a Licensed Product in a given country in the Territory, the first commercial sale of such Licensed Product by BMS, its Affiliate, or Sublicensee to a non-sublicensee Third Party for end use or consumption of such Licensed Product in the Field in such country following Regulatory Approval of such Licensed Product in such country. [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.69 "<u>First Licensed Target</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.70 "<u>FTE</u>" means a full-time employee who performs [\*\*\*] per year devoted to the conduct of (a) Research Collaboration Activities (as set forth in the Research Plan(s)) or (b) services provided pursuant to Section 6.4.3 (Cost of Manufacturing Technology Transfer) or Section 7.12 (Cost of Avidity Support Services), in each case ((a) and (b)), in accordance with this Agreement (*provided* that [\*\*\*] may be carried out by one or more employees of Avidity). No individual may be charged at greater than one FTE in a given Calendar Year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.71 "<u>FTE Costs</u>" means, for a given period, the FTE Rate multiplied by the number of FTEs utilized by Avidity in such period for the performance of (a) its Research Collaboration Activities as set forth in the Research Plan(s), in each case solely to the extent set forth in and in accordance with the applicable Research Budget, or (b) services provided pursuant to Section 6.4.3 (Cost of Manufacturing Technology Transfer) or Section 7.12 (Cost of Avidity Support Services).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.72 "<u>FTE Rate</u>" means (a) a rate set forth in the applicable Research Budget per FTE or (b) a rate mutually agreed in writing by the Parties pursuant to Section 6.4.3 (Cost of Manufacturing Technology Transfer) or Section 7.12 (Cost of Avidity Support Services) (which rate in each case ((a) and (b)), represents the fully burdened cost for each such FTE and includes [\*\*\*]. Notwithstanding the foregoing for any Calendar Year during the Term that is less than a full year, the above referenced rate shall be proportionately reduced to reflect such portion of such full Calendar Year. Beginning on [\*\*\*], the FTE Rate is subject to annual adjustment by a [\*\*\*] percent increase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.73 "<u>Gatekeeper Agreement</u>" means the Gatekeeper Agreement among [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.74 "<u>GCP</u>" or "<u>Good Clinical Practices</u>" means the applicable then-current ethical and scientific quality standards for designing, conducting, recording, and reporting trials that involve the participation of human subjects as are required by applicable Regulatory Authorities or Applicable Law in the relevant jurisdiction, including in the U.S., Good Clinical Practices established through FDA guidances, and, outside the U.S., Guidelines for Good Clinical Practice - ICH Harmonized Tripartite Guideline (ICH E6).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.75 "<u>GLP</u>" or "<u>Good Laboratory Practices</u>" means the applicable then-current good laboratory practice standards as are required by applicable Regulatory Authorities or Applicable Law in the relevant jurisdiction, including in the U.S., those promulgated or endorsed by the FDA in U.S. 21 C.F.R. Part 58, or the equivalent thereof as promulgated or endorsed by the applicable Regulatory Authorities outside of the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.76 "<u>GMP</u>" or "<u>Good Manufacturing Practices</u>" means the applicable then-current standards relating to manufacturing practices for fine chemicals, intermediates, bulk products or finished pharmaceutical products, as are required by applicable Regulatory Authorities or Applicable Law in the relevant jurisdiction, including, as applicable, (a) all applicable requirements detailed in the FDA's current Good Manufacturing Practices regulations, U.S. 21 C.F.R. Parts 210 and 211, (b) all applicable requirements detailed in the EMA's "The Rules Governing Medicinal Products in the European Community, Volume IV, Good Manufacturing Practice for Medicinal Products," and (c) all Applicable Laws promulgated by any Governmental Authority having jurisdiction over the manufacture of the applicable compound or pharmaceutical product, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.77 "<u>Governmental Authority</u>" means any court, agency, department, authority, or other instrumentality of any national, supra-national, state, county, city or other political subdivision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.78 "<u>IND</u>" means any investigational new drug application filed with the FDA pursuant to Part 312 of Title 21 of the U.S. Code of Federal Regulations, including any amendments thereto. References herein to IND shall include, to the extent applicable, any comparable filing(s) outside of the U.S. (such as a CTA in the European Union).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.79 "<u>Indication</u>" means, with respect to a particular Licensed Compound or Licensed Product, the use of that Licensed Compound or Licensed Product [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.80 "<u>Initiation</u>" means with respect to a Clinical Trial, the administration of the [\*\*\*] dose of the Licensed Product being studied under such Clinical Trial to the first human subject in such Clinical Trial. "<u>Initiated</u>" shall have a correlative meaning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.81 "<u>Intellectual Property Rights</u>" means any and all proprietary Know-How, Patents, trade secrets, Trademarks, registered designs, design rights, copyrights (including rights in computer software and database rights), whether registered or not, and all legal means of registering or otherwise establishing rights in and to the aforesaid rights, in any part of the world.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.82 "<u>Invention</u>" means all Know-How, whether or not patentable, including any inventions, that are discovered, conceived, or otherwise developed by or on behalf of either Party (or jointly by or on behalf of the Parties) in the performance of activities under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.83 "<u>Know-How</u>" means [\*\*\*], but excluding any of the foregoing to the extent claimed in any Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.84 "<u>Knowledge</u>" means, the actual knowledge of the following officers of Avidity as of the Effective Date [\*\*\*] (a) Chief Executive Officer, (b) Chief Financial and Business Officer, (c) General Counsel, (d) Chief Patent Counsel (or equivalent), and (e) Vice President, Business Development.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.85 "<u>Lead Compound</u>" means any Licensed Compound [\*\*\*] in the course of performing activities under a Research Program that Successfully Achieves the Lead Criteria set forth in the Research Plan with respect to such Research Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.86 "<u>Lead Criteria</u>" means with respect to a Research Program, the target criteria set forth in the Research Plan with respect to such Research Program for a Licensed Compound [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.87 "<u>Licensed Compound</u>" means, with respect to a Licensed Target, any compound that is (a) [\*\*\*] and (b) Directed to such Licensed Target. For clarity, all Lead Compounds and Development Candidates are a subset of Licensed Compounds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.88 "<u>Licensed IP</u>" means the Avidity Patents, Avidity Know-How, and Avidity's rights and interest in and to the Research Collaboration Inventions and the Research Collaboration Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.89 "<u>Licensed Other Modality Compound</u>" means, for a given Licensed Target, any compound that is owned or controlled (through license or otherwise) by Avidity or its Affiliates as of the Effective Date or during the Term that is not (a) related to an AOC and (b) otherwise identified, designed, characterized, generated, produced or otherwise Developed in the course of performing activities under a Research Program. For clarity, Licensed Other Modality Compounds expressly exclude all Lead Compounds and Development Candidates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.90 "<u>Licensed Product</u>" means any product containing one or more Licensed Compounds [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.91 "<u>Licensed Product Trademarks</u>" means the Trademark(s) designated by BMS or its Affiliates or its or their respective Sublicensees for a Licensed Product in the Territory (including any registrations thereof or any pending applications relating thereto in the Territory).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.92 "<u>Licensed Target</u>" means (a) the First Licensed Target and (b) each Additional Licensed Target. The First Licensed Target is set forth in <u>Schedule 1.92</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.93 "<u>Manufacture</u>" means all activities related to the synthesis, making, production, processing, purifying, formulating, testing and release, filling, finishing, packaging, labeling, shipping, and holding of a drug or product, or any intermediate thereof, including process and formulation development, process qualification and validation, supply chain identification, implementation and management, scale-up, pre-clinical, clinical and commercial production and analytic development, product characterization, stability testing, quality assurance and quality control. "<u>Manufacturing</u>" and "<u>Manufactured</u>" shall have correlative meaning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.94 "<u>Materials</u>" means any proprietary compounds, cell lines, animals, biological materials, research tools, or other tangible materials (including any such materials that constitute or are directly related to a Licensed Target) that are owned or controlled (through license or otherwise) by a Party or its Affiliates and that are used in connection with the performance of the Research Plan(s) under this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.95 "<u>Net Sales</u>" means, with respect to a Licensed Product [\*\*\*]. In the case of any other sale or other disposal for value, such as barter or counter trade, of any Licensed Product, or part thereof, other than in an arm's length transaction exclusively for money, Net Sales shall be calculated [\*\*\*] on the fair market value of the consideration given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.96 "<u>New Avidity In-License Agreement</u>" means any agreement entered into after the Effective Date between Avidity (or its Affiliates, as applicable) and any Third Party [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.97 "<u>Oligonucleotide</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.98 "<u>Other Major Markets</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.99 "<u>Out-of-Pocket Costs</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.100 "<u>Party</u>" or "<u>Parties</u>" has the meaning set forth in the preamble of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.101 "<u>Patent</u>" means (a) all patents and patent applications, including provisional patent applications and international (PCT) applications, (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from any of these, including divisionals, continuations, continuations-in-part, converted provisionals, and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications in (a) and (b), including utility models, petty patents and design patents and certificates of invention, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including adjustments, revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications in (a), (b) and (c), and (e) any similar rights, including so-called pipeline protection, or any importation, revalidation, confirmation or introduction patent or registration patent or patents of addition to any of such foregoing patent applications and patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.102 "<u>Person</u>" means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department, or agency of a government.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.103 "<u>Phase 1 Trial</u>" means Clinical Trial of a Licensed Product in any country that would satisfy the requirements of 21 C.F.R. § 312.21(a), or its foreign equivalent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.104 "<u>Phase 2 Trial</u>" means a Clinical Trial of a Licensed Product in any country that would satisfy the requirements of 21 C.F.R. § 312.21(b), or its foreign equivalent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.105 "<u>PMO</u>" means phosphorodiamidate morpholino oligomers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.106 "<u>Post-Research Collaboration AOC Platform Improvement</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.107 "<u>Pricing Approval</u>" means, in any country where a Governmental Authority authorizes reimbursement for, or approves or determines pricing for, pharmaceutical products, receipt (or publication, if required to make such authorization, approval, or determination effective) of such reimbursement authorization or pricing approval or determination (as the case may be).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.108 "<u>Registrational Trial</u>" means a Clinical Trial of a Licensed Product that is designed (at the time the Clinical Trial is Initiated) to obtain (as reasonably determined by BMS) results and data sufficient to support the filing of a Drug Approval Application and identified by BMS as a pivotal registration study in its development plans.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.109 "<u>Regulatory Approval</u>" means, with respect to a country or other jurisdiction in the Territory, any and all approvals (including Drug Approval Applications), licenses, registrations, or authorizations of any Regulatory Authority necessary to Commercialize a drug or product in such country or other jurisdiction, including, (a) Pricing Approval in such country or other jurisdiction, (b) marketing authorizations, and (c) approval of product labeling, in each case of (a), (b) and (c), to the extent applicable in such country or other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.110 "<u>Regulatory Authority</u>" means any applicable supra-national, federal, national, regional, state, provincial, or local governmental or regulatory authority, agency, department, bureau, commission, council, or other entity (*e.g.*, the FDA and EMA) regulating or otherwise exercising authority with respect to pharmaceutical products, including the Exploitation of Licensed Compounds or Licensed Products in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.111 "<u>Regulatory Documentation</u>" means all (a) applications (including all INDs and Drug Approval Applications), registrations, licenses, authorizations, and approvals (including Regulatory Approvals), and all data contained in any of the foregoing, and (b) correspondence and reports submitted to or received from Regulatory Authorities (including adverse event files and complaint files, as well as minutes and official contact reports relating to any communications with any Regulatory Authority), in each case ((a) and (b)) for a Licensed Compound or Licensed Product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.112 "<u>Regulatory Exclusivity</u>" means, with respect to any country in the Territory and a Licensed Product, an exclusive marketing protection, other than Patent protection, granted by a Regulatory Authority for such Licensed Product in such country which confers an exclusive Commercialization period during which period BMS or its Affiliates or Sublicensees have the exclusive right to market and sell such Licensed Product in such country through a regulatory exclusivity right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.113 "<u>Replacement Target End Date</u>" means the earliest of (a) the date on which a Licensed Compound for the second Additional Licensed Target (*i.e.*, the fifth Licensed Target) [\*\*\*] (b) the date on which BMS has substituted two Reserved Targets for Licensed Targets pursuant to Section 3.3 (Designation of Additional Licensed Targets; Replacement Targets), or (c) the date [\*\*\*] prior to the expiration of all then-current Research Terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.114 "<u>Research Agreement</u>" has the meaning set forth in the recitals to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.115 "<u>Research Budget</u>" means, with respect to a given Research Program, the budget for the Avidity Research Collaboration Costs for Avidity's Research Collaboration Activities to be conducted under such Research Program in accordance with the Research Plan, including the estimated number of Avidity's FTEs performing the activities assigned to Avidity in support of the Research Plan and the applicable FTE Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.116 "<u>Research Collaboration Activities</u>" means, with respect to a given Research Program, the activities to be conducted under the Research Plan for such Research Program during the Research Term as set forth in the Research Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.117 "<u>Research Collaboration Data</u>" means all data (including raw data) related to a Licensed Compound or Licensed Product made, collected, or otherwise generated in the conduct of Research Collaboration Activities under this Agreement, including any data, reports, and results with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.118 "<u>Research Collaboration Invention</u>" means any and all Inventions discovered, conceived, or otherwise developed by or on behalf of either Party (or jointly by or on behalf of the Parties) in the performance of Research Collaboration Activities, other than Avidity Platform Inventions, BMS Contributed Collaboration Inventions, and BMS Manufacturing Inventions. For clarity, Research Collaboration Inventions include Research Collaboration Data, but do not include BMS Sole Inventions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.119 "<u>Research Collaboration Patents</u>" means any and all Patents that claim Research Collaboration Inventions. For clarity, Research Collaboration Patents do not include any Avidity Platform Invention Patent, BMS Contributed Collaboration Patents or BMS Sole Patent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.120 "<u>Research Plan</u>" means, with respect to a given Research Program, the JSC-approved research plan (as it may be amended from time to time by the JSC) with respect to such Research Program detailing the responsibilities and activities of Avidity and BMS in carrying out such Research Program, setting forth, among other things, (a) a description of the activities, with respective responsibilities of each of the Parties, to be conducted for such Research Program, including a timeline for the conduct of such activities, and (b) desirable therapeutic attributes and other required Criteria for a Licensed Compound to [\*\*\*] as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.121 "<u>Research Program</u>" means, on a Licensed Target-by-Licensed Target basis, a collaborative program of activities to be conducted by the Parties in accordance with the terms and conditions of this Agreement as set forth in the applicable Research Plan with the goal of [\*\*\*], including for potential selection by BMS as Development Candidates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.122 "<u>Research Term</u>" means, with respect to a given Research Program, the period starting as of the Effective Date and ending on the later of (a) [\*\*\*] of the Effective Date and (b) the date of completion of all activities in the Research Plan for such Research Program; *provided* that, in all cases, unless otherwise mutually agreed to by the Parties in writing (including pursuant to Section 4.5 (Records, Reports and Documentation; Inspections)), this clause (b) shall end for a given Research Plan no later than [\*\*\*] of the Effective Date. Notwithstanding the foregoing, (i) if a given Research Program is terminated in accordance with this Agreement, then the Research Term for such Research Program shall end upon the date of such termination, and (ii) in all cases, the Research Term shall end if the Term ends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.123 "<u>Reserved Target</u>" means any Target set forth on the Reserved List pursuant to Section 3.2 (Reserved Targets) [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.124 "<u>Reserved Target Maximum</u>" means, at any particular time during the Term prior to the Replacement Target End Date, the difference between (a) [\*\*\*] *less* (b) the total number of Licensed Targets at such time. As of the Replacement Target End Date, there will no longer be any Reserved Targets, all then-included Reserved Targets will no longer be deemed Reserved Targets, and the Reserved Target Maximum will equal [\*\*\*] Targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.125 "<u>Reversion Product</u>" means, on a Licensed Target-by-Licensed Target basis, (a) the Licensed Product that [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.126 "<u>Right of Reference</u>" means the right to cross reference, incorporate by reference or rely upon any regulatory documentation, investigation or information previously submitted to a Regulatory Authority solely for the purpose of submitting, supporting, obtaining or maintaining INDs, Drug Approval Applications and Regulatory Approvals, including a "right of reference or use" as that term is defined in 21 C.F.R. §314.3(b) and incorporation of information by reference as descried in 21 C.F.R. §312.23(b) in the United States, and any equivalents thereof outside the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.127 "<u>Safety Concern</u>" means, with respect to any Licensed Product, BMS's reasonable determination after consultation with Avidity (including sharing reasonable evidence in support of such determination) based upon any information or analysis of any information that is available to BMS at any time, that the medical risk/benefit of further Development or Commercialization of such Licensed Product is so unfavorable as to be incompatible with the welfare of patients for the Indication(s) for which the Licensed Product is being Developed or Commercialized in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.128 "<u>Securities Purchase Agreement</u>" means the Securities Purchase Agreement, attached as <u>Schedule 1.128</u>, under which BMS shall purchase shares of Common Stock, par value $0.0001 per share, of Avidity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.129 "<u>Sublicensee</u>" means a Person, other than an Affiliate or a Distributor, that is granted a sublicense by BMS under the license grants in Section 5.1 (License Grants to BMS).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.130 "<u>Successful Achievement</u>" means the determination by the JSC (or by the Executive Officers or the Expert, as applicable) pursuant to Section 2.4 (Resolution of Working Group and JSC Disputes), with respect to a given Licensed Compound [\*\*\*] in the course of performing activities under a Research Program, that such Licensed Compound meets [\*\*\*] as applicable, set forth in the Research Plan with respect to such Research Program. "<u>Successfully Achieves</u>" will have correlative meaning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.131 "<u>Target</u>" means any gene [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.132 "<u>Technical Infeasibility</u>" means, with respect to a given Target proposed as a Reserved Target or Additional Licensed Target by BMS pursuant to Section 3.2 (Reserved Targets) or Section 3.3 (Designation of Additional Licensed Targets; Replacement Targets), as applicable, the JSC's determination [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.133 "<u>Territory</u>" means worldwide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.134 "<u>Third Party</u>" means any Person other than BMS, Avidity and their respective Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.135 "<u>Trademark</u>" means any word, name, symbol, color or designation, or any combination thereof, that functions as a source identifier, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo, business symbol or domain name, whether or not registered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.136 "<u>Transferrin</u>" means [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.137 "<u>U.S.</u>" or "<u>United States</u>" means the United States of America and all of its territories and possessions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.138 "<u>Valid Claim</u>" means (a) a claim of any issued and unexpired Patents whose validity, enforceability, or patentability has not been affected by: (i) irretrievable lapse, abandonment, revocation, dedication to the public, or disclaimer; or (ii) a holding, finding, or decision of invalidity, unenforceability, or non-patentability by a court, government authority, national or regional patent office, or other appropriate body that has competent jurisdiction, such holding, finding, or decision being final and unappealable or unappealed within the time allowed for appeal, or (b) a pending claim of an unissued, pending patent application that has been filed and continues to be prosecuted in good faith and that not been (i) cancelled, withdrawn or abandoned or finally rejected by an administrative agency action from which no appeal can be taken and (ii) pending for [\*\*\*]. For clarity, a holding, finding or decision being final and unappealable or unappealed means a holding, finding or decision from which no appeal (other than a petition to the United States Supreme Court for a writ of certiorari or a similar appeal the consideration of which is subject to the discretion of the higher court) can be or has been taken.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.139 "<u>Violation</u>" means that Avidity or any of its Affiliates, or any of its or their respective officers or directors, or any other Avidity personnel (or other permitted agents of Avidity performing activities hereunder, including Third Party subcontractors and their respective officers and directors) has been: (a) convicted of any of the felonies identified among the exclusion authorities listed on the U.S. Department of Health and Human Services, Office of Inspector General (OIG) website, including 42 U.S.C. § 1320a-7(a) (http://oig.hhs.gov/exclusions/authorities.asp); (b) identified in the OIG List of Excluded Individuals/Entities (LEIE) database (http://exclusions.oig.hhs.gov/) or otherwise excluded from contracting with the federal government (see the System for Award Management (formerly known as the Excluded Parties Listing System) at http://sam.gov/portal/public/SAM/); or (c) listed by any U.S. federal agency as being suspended, debarred, excluded or otherwise ineligible to participate in federal procurement or non-procurement programs, including under 21 U.S.C. § 335a (http://www.fda.gov/ora/compliance_ref/debar/) (each of (a), (b) and (c), collectively, the "<u>Exclusions Lists</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.140 <u>Additional Definitions</u>. Each of the following terms has the meaning described in the corresponding Section of this Agreement indicated below:

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| | | |
|:---|:---|:---|
| **Definition:** |  | **Section:** |
| Acquisition Transaction | 5.7.3 |  |
| [\*\*\*] | | [\*\*\*] |

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------

---

| | | |
|:---|:---|:---|
| Additional Licensed Targets Notification | 3.3.1 |  |
| Agreement |  | Preamble |
| Alliance Manager | 2.1 |  |
| Audit Team | 7.9.1 |  |
| Avidity |  | Preamble |
| Avidity Additional Platform IP Notification | 5.11.1 |  |
| Avidity Free Support Services FTE Cap | 7.12 |  |
| Avidity Indemnitees | 12.1 |  |
| Avidity Licensor | 10.2.10(c) | 10.2.10(c) |
| [\*\*\*] | 7.6 |  |
| Avidity Target Notice | 3.2 |  |
| BMS |  | Preamble |
| BMS Indemnitees | 12.2 |  |
| BMS Third Party Payments | 7.4.5(a) |  |
| Competitive Infringement | 9.4.1 |  |
| Confidential Information | 8.1 |  |
| Cumulative Research Funding Cap | 4.2.6(e) |  |
| Disclosing Party | 8.1 |  |
| Dispute | 13.6.1 |  |
| Distracting Product | 5.7.3 |  |
| Effective Date |  | Preamble |
| Excluded Target | 3.4 |  |
| Exclusions List | 1.139 |  |
| Existing Patents | 10.2.2 |  |
| Expert | Schedule 2.4.3(a) | Schedule 2.4.3(a) |
| Final Offer (Baseball) Arbitration Expert | Schedule 1.67 | Schedule 1.67 |
| Force Majeure | 13.1 |  |
| Indemnified Party | 12.3 |  |
| Indemnifying Party | 12.3 |  |
| Infeasible Target | 3.6 |  |
| Infeasible Target Dispute | 2.4.3(a) |  |
| Initial Avidity Platform Technology | 1.7 |  |
| Initial Research Budget | 4.2.1 |  |
| Initial Research Plan | 4.2.1 |  |
| IP Committee | 9.7 |  |
| IP Expert | 5.11.2 |  |
| JAMS | Schedule 1.67 | Schedule 1.67 |
| JSC | 2.2 |  |
| JTTSSC | 6.4.1 |  |
| Licensed Program Assets | 10.2.13 |  |
| Manufacturing Technology Transfer | 6.4.2 |  |
| Manufacturing Technology Transfer Plan | 6.4.2 |  |
| Manufacturing Transition Period | 6.4.2 |  |
| Materials Provider | 4.8 |  |
| Materials Receiver | 4.8 |  |

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| | | |
|:---|:---|:---|
| Milestone Events | 7.3 |  |
| Milestone Payments | 7.3 |  |
| MyoKardia |  | Recitals |
| New Avidity In-Licensed Technology | 5.4.2(a) | 5.4.2(a) |
| Overlap Patents | 9.3.4(b) | 9.3.4(b) |
| Parent | 1.39 |  |
| Party, Parties |  | Preamble |
| Patent Challenge | 11.4 |  |
| Personal Data | 4.7.3 |  |
| [\*\*\*] |  | [\*\*\*] |
| Product Information | 8.2 |  |
| Receiving Party | 8.1 |  |
| Rejection Period | 3.6 |  |
| Replacement Target | 3.3.2 |  |
| Research Agreement |  | Recitals |
| Reserved List | 3.2 |  |
| Reversion Agreement | 11.7.6(a) | 11.7.6(a) |
| Reversion License | 11.7.6(a)(i) | 11.7.6(a)(i) |
| Reversion Notice | 11.7.6(a) | 11.7.6(a) |
| RNA | 1.97 |  |
| Royalties | 7.4.1 |  |
| Royalty Term | 7.4.2 |  |
| Sales Milestone | 7.3.2 |  |
| Sales Milestone Payment | 7.3.2 |  |
| Substitution Limitation | 3.3.2 |  |
| Successful Achievement Dispute | 2.4.3(a) | 2.4.3(a) |
| Supply Agreement | 6.3.3(a) | 6.3.3(a) |
| Term | 11.1 |  |
| Third Party Gatekeeper | 1.73 |  |
| Upfront Payment | 7.1 |  |
| Withholding Tax Action | 7.10.2 |  |
| Working Group | 2.3 |  |

---

ARTICLE 2.

<u>GOVERNANCE</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Alliance Managers</u>. Within [\*\*\*] after the Effective Date, each Party shall appoint one of its employees to act as alliance manager for such Party under this Agreement during the Research Term (each, an "<u>Alliance Manager</u>"). The Alliance Managers will assist the JSC in performing its oversight responsibilities. In particular, each Alliance Manager shall (a) identify and bring disputes to the attention of the JSC (or the Parties, as applicable) in a timely manner and be the point of first referral in all matters of conflict resolution; (b) provide a single point of communication for seeking consensus both internally within the Parties' respective organizations and between the Parties regarding issues that arise in the performance of the Research Program(s); (c) plan and coordinate cooperative efforts and internal and external communications; and (d) take responsibility for ensuring that governance activities, such as the conduct of JSC meetings and drafting and securing approval of meeting minutes, occur as set forth in this Agreement and that relevant action items resulting from such meetings are appropriately carried out or otherwise addressed.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Joint Steering Committee.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.1 <u>Establishment.</u> No later than [\*\*\*] after the Effective Date, the Parties shall establish a joint steering committee to oversee the Research Programs and activities under the Research Plans, in each case during the Research Term(s) (the "<u>JSC</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.2 <u>Composition of the JSC.</u> The JSC shall consist of [\*\*\*] Avidity representatives and [\*\*\*] BMS representatives. Each Party shall designate its JSC representatives within [\*\*\*] after the Effective Date. A Party may change one or more of its JSC representatives from time to time in its sole discretion, effective upon written notice to the other Party of such change. A Party's representatives to the JSC shall have appropriate technical credentials, experience and knowledge, and ongoing familiarity with the Research Program(s) and the Research Plan(s), and shall have supervisory responsibilities within such Party's organization with respect to performance of the Research Plan(s). The Parties respective Alliance Managers may also attend all JSC meetings as non-voting observers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.3 <u>Scope of JSC Oversight</u>. Except as otherwise provided herein, the JSC shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) provide oversight and coordinate the activities under the Research Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) review, discuss, and determine whether a given proposed Replacement Target or Additional Licensed Target, as applicable, should be rejected as an Infeasible Target during the Rejection Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) review and approve the initial Research Plans for the Research Program with respect to any Additional Licensed Target or any Replacement Target;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) at least on a [\*\*\*] basis, review and determine whether to approve any proposed amendments to the Research Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) determine whether to use any BMS Contributed Collaboration Technology in any Research Program;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) discuss and review Avidity Additional Platform IP Notification in accordance with Section 5.11 (Additional Avidity Platform Technology);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) prioritize Research Plan experiments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) review data generated in the course of the Research Program by the Parties and to consider and advise on any technical issues that arise in the course of the Research Program;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) review, discuss, and determine whether a given Licensed Compound has Successfully Achieved[\*\*\*] , as applicable, and determine whether the Research Program activities assigned to Avidity under the Research Plans that are to be completed, have been completed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) monitor the Parties' progress under the Research Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) provide a forum for the Parties to share and discuss information relating to any deliverables, Licensed Compounds and Licensed Products, and facilitate the exchange of Know-How, deliverables, or materials as required hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) establish Working Groups as necessary to coordinate and conduct the Research Programs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) provide oversight of Working Groups, including the JTTSSC;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) resolve disputes arising at any Working Groups, including the JTTSSC; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) perform such other obligations as are necessary for the conduct of the Research Plan or that are expressly delegated to the JSC under this Agreement, or as otherwise agreed by the Parties in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.4 <u>JSC Meetings</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The JSC shall meet at least once every [\*\*\*] during the Research Term in accordance with a schedule agreed to by the Parties. No later than [\*\*\*] prior to any meeting of the JSC, the Alliance Managers will jointly prepare and circulate an agenda for such meeting; *provided*, *however*, that either Party may propose additional topics to be included on such agenda, prior to such meeting so long as the other Party consents to such later additional of such agenda items. The JSC may meet in person or by means of teleconference, Internet conference, videoconference or other similar communications equipment. Each Party shall bear its own travel, lodging and telecommunication expenses related to participation in and attendance at such meetings by its JSC representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Party may invite to attend any JSC meeting; *provided* that any such [\*\*\*] may only attend with the prior written consent of the other Party, which consent shall not be unreasonably withheld. All such [\*\*\*] shall be bound by confidentiality and non-use obligations similar to those contained in Article 8 (Confidentiality and Publication), or which are otherwise acceptable to both Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Avidity's Alliance Manager and BMS's Alliance Manager shall alternate responsibility for preparing written reasonably detailed draft minutes of each meeting of the JSC, and shall provide the draft minutes to the Alliance Manager of the other Party within [\*\*\*] after such meeting to coordinate review and approval by such other Party's JSC members, which such JSC members will provide any comments within [\*\*\*] of receipt of such written draft minutes. The Parties shall limit the content of such minutes to factual statements regarding the status and results of work under the Research Plans and of any actions proposed or decisions made by the JSC. The Parties shall refrain from including any opinions or other extraneous content in such minutes. The JSC minutes shall become official when approved by the JSC at the next regularly scheduled JSC meeting, it being understood that actionable items approved and directed by the JSC shall commence notwithstanding the formal approval of JSC minutes. Any discrepancies or disputes with respect to the content of JSC minutes shall be resolved by the Parties prior to being presented at a JSC meeting for approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Subcommittees and Working Groups</u>. From time to time, either Party may propose that the JSC may establish and delegate duties to other joint committees, subcommittees or directed teams (each, a "<u>Working Group</u>") on an "as needed" basis to oversee particular projects or activities, which may include activities under a Research Plan for a given Licensed Target, which delegations shall be reflected in the minutes of the meetings of the JSC. Such Working Groups may be established on an *ad hoc* basis for purposes of a specific project, for the life of the Research Term or on such other basis as the JSC may determine, and shall be constituted and shall operate as the JSC may determine; *provided* that each Working Group shall have equal representation from each Party and decision making shall be by consensus. Each Working Group and its activities shall be subject to the direction, review and approval of, and shall report to, the JSC. The Alliance Managers will prepare for approval by the JSC a charter for each Working Group, which charter will reflect the agreed upon scope of activities for each Working Group. In no event shall the authority of the Working Group exceed that specified for the JSC in this Section 2.2 (Joint Steering Committee).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Resolution of Working Group and JSC Disputes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.1 <u>Within any Working Group</u>. If any Working Group does not reach agreement with respect to a matter within [\*\*\*] after first attempting to resolve such matter, it will be elevated to the JSC, which shall meet as soon as possible thereafter for discussion and resolution of the matter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.2 <u>Within the JSC</u>. At the JSC, each Party shall have collectively one vote in all decisions within the JSC's purview, and the JSC shall make all decisions by unanimous vote; *provided* that in the event that the JSC cannot reach, despite using good faith efforts, a unanimous vote with respect to any decision within its purview within [\*\*\*] after first attempting to resolve such matter at the JSC, then either Party may refer such dispute to the Executive Officers for resolution, and the Executive Officers will attempt to resolve the matter in good faith. If consensus cannot be reached with respect to such matter within [\*\*\*] after the date on which the matter is referred to the Executive Officers (unless a longer period is agreed to by the Parties), then, except as set forth in Section 2.4.3 (Limitations on BMS Final Decision-Making), BMS shall have the final decision-making authority with respect to such matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.3 <u>Limitations on BMS Final Decision-Making</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Without Avidity's prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), in exercise of its final decision-making authority on any such matters pursuant to Section 2.4.2 (JSC Meetings), BMS may not [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) BMS shall have the final decision-making authority with respect to [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If consensus cannot be reached with respect to any Successful Achievement Dispute within [\*\*\*] after the date on which the matter is referred to the Executive Officers (unless a longer period is agreed to by the Parties), either Party shall have the right to refer the matter to the Expert for resolution, and such matter shall be settled, pursuant to the expedited arbitration procedure set forth in <u>Schedule 2.4.3(a)</u>; *provided* that with respect to any such Successful Achievement Dispute, Avidity has performed the Research Collaboration Activities allocated to it under the Research Plan(s) that are to be performed up to the applicable Successful Achievement [\*\*\*]as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If consensus cannot be reached with respect to any Infeasible Target Dispute within [\*\*\*] after the date on which the matter is referred to the Executive Officers (unless a longer period is agreed to by the Parties), Avidity shall have the final decision-making authority with respect to such matter. For clarity, in the event any such proposed Replacement Target or proposed Additional Licensed Target is determined by the JSC or by Avidity via its final decision-making authority to be an Infeasible Target, Avidity shall be bound by the exclusivity provisions of Section 5.7.1 (Avidity Exclusivity) with respect to such Infeasible Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any decisions solely with respect to Avidity's day-to-day operational performance of Research Collaboration Activities allocated to it under the Research Plan(s) shall be within the decision-making authority of Avidity, in which case Avidity would have decision-making authority with respect thereto; *provided* that subject to the terms of this Section 2.4 (Resolution of Working Group and JSC Disputes) and Section 4.2.6 (Research Costs for Research Collaboration Activities) [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Limitations on Authority</u>. For clarity, and notwithstanding the creation of the JSC and any Working Group, each Party shall retain the rights, powers, and discretion granted to it under this Agreement and no such rights, powers, or discretion shall be delegated to or vested in the JSC or any Working Group unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing. For clarity, no decision of the JSC, any Working Groups or of a Party via its final decision-making authority shall (a) finally determine any interpretation of this Agreement or the Parties' rights or obligations hereunder or (b) conflict with any terms and conditions of this Agreement, nor be in contravention of Applicable Law. The JSC, any Working Group or a Party via exercise of its final decision-making authority shall not have any authority beyond the specific matters set forth in this Agreement, including not having the authority to amend, modify, terminate or waive compliance with this Agreement. It is understood and agreed that the issues to be formally decided by the JSC are limited to those specific issues that are expressly provided in Section 2.2.3 (Scope of JSC Oversight), and disputes arising between the Parties in connection with or relating to this Agreement or any document or instrument delivered in connection herewith, and that are outside of the jurisdiction of the JSC, shall be resolved pursuant to Article 13 (Miscellaneous).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>Oversight Periods of Committees</u>. The activities to be performed by the JSC shall solely relate to governance under this Agreement. The JSC (and any Working Group thereof) shall continue to exist until the expiration of all Research Terms.

ARTICLE 3.

<u>TARGET NOMINATION</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Licensed Targets</u>. In addition to the First Licensed Target, BMS has the right, by providing written notice of the applicable Target to Avidity (which notice may be given after notice is given to the Third Party Gatekeeper pursuant to Section 3.5 (Third Party Gatekeeper Verification of Excluded Target)) to designate up to four Additional Licensed Targets as Licensed Targets during the Research Term(s), for a total of five Licensed Targets; *provided* that there shall be no more than (a) five total Research Programs (*i.e.*, one for each Licensed Target, subject to the immediately subsequent sentence this Section 3.1 (Licensed Targets)) and (b) [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Reserved Targets</u>. BMS shall have the right, from time to time during the Term prior to the Replacement Target End Date, by providing written notice of the applicable Target to Avidity (or to the Third Party Gatekeeper pursuant to Section 3.5 (Third Party Gatekeeper Verification of Excluded Target)), to add a Target that is not an Excluded Target to a reserved list (the "<u>Reserved List</u>"); *provided* that there shall be no more than the Reserved Target Maximum on the Reserved List at any given time. In addition, BMS shall have the right, from time to time during the Term prior to the Replacement Target End Date, by providing written notice of the applicable Target to Avidity (or to the Third Party Gatekeeper pursuant to Section 3.5 (Third Party Gatekeeper Verification of Excluded Target)), to substitute a given Reserved Target on the Reserved List with another Target; *provided* that such Target is not an Excluded Target. For clarity, substituting a given Reserved Target on the Reserved List with another Target shall not count towards the Substitution Limitation. BMS and the Third Party Gatekeeper shall maintain an up-to-date Reserved List. The Reserved List shall be the Confidential Information of BMS, and, subject to this Section 3.2 (Reserved Targets), the Third Party Gatekeeper shall not disclose the list of Reserved Targets to Avidity. Prior to [\*\*\*] Avidity shall provide the Third Party Gatekeeper with a confidential written description of such Target ("<u>Avidity Target Notice</u>"). Within [\*\*\*] following the Third Party Gatekeeper's receipt of the Avidity Target Notice, the Third Party Gatekeeper shall verify whether such Target is on the Reserved List and notify Avidity in writing whether such proposed Target is or is not on the Reserved List. If such notice from the Third Party Gatekeeper indicates that the Target is on the Reserved List, the Parties will remain subject to all rights and obligations hereunder in connection with such Reserved Target (including exclusivity in accordance with Section 5.7.1 (Avidity Exclusivity)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Designation of Additional Licensed Targets; Replacement Targets</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3.1 <u>Designation of Additional Licensed Targets</u>. At any time prior to [\*\*\*] prior to the expiration of all then-current Research Terms, BMS shall have the right, by providing written notice of the applicable Target to Avidity (which notice may be given after notice is given to the Third Party Gatekeeper pursuant to Section 3.5 (Third Party Gatekeeper Verification of Excluded Target)), to designate a Reserved Target or any other Target that is not an Excluded Target as an Additional Licensed Target up to [\*\*\*] Additional Licensed Targets. Subject to Section 3.6 (Infeasible Targets), designation of the proposed Additional Licensed Target as an Additional Licensed Target will be automatic if the proposed Additional Licensed Target is on the Reserved List (and such Target will be removed from the Reserved List upon designation by BMS). For clarity, any designation of an Additional Licensed Target that was on the Reserved List shall not count towards the Substitution Limitation. Within [\*\*\*] following the Effective Date, BMS will provide written notice of the applicable Targets to Avidity (or to the Third Party Gatekeeper pursuant to Section 3.5 (Third Party Gatekeeper Verification of Excluded Target)) to designate [\*\*\*] as Additional Licensed Targets ("<u>Additional Licensed Targets Notification</u>").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3.2 <u>Replacement Targets</u>. On a Licensed Target-by-Licensed Target basis, from time to time during the Research Term prior to the Replacement Target End Date, BMS shall have the right, at BMS's sole discretion for any reason, to replace such Licensed Target with a given Reserved Target by providing Avidity with written notice thereof, including the identity of the Reserved Target replacing such Licensed Target; *provided* that (a) such written notice must be provided prior to the JSC's (or the Expert's, as applicable) determination that [\*\*\*]has been achieved by a Licensed Compound Directed to such Licensed Target, (b) BMS shall only have the right to make [\*\*\*] with respect to such Licensed Target, and (c) BMS shall only have the right to make [\*\*\*] such substitutions in total (clause (iii), the "<u>Substitution Limitation</u>"). Upon such written notice, subject to Section 3.6 (Infeasible Targets), such Reserved Target shall automatically become a Licensed Target (and such Target shall be automatically removed from the Reserved List) (such Target, the "<u>Replacement Target</u>") and the replaced Target shall no longer be a Licensed Target (for purposes of this Agreement), but may, at BMS's discretion, be moved back onto the Reserved List as a Reserved Target; *provided* that there shall be no more than the Reserved Target Maximum on the Reserved List at any given time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3.3 <u>Licensed Target List</u>. The Parties will update <u>Schedule 1.92</u> with the complete, updated list of Licensed Targets each time an Additional Licensed Target is selected or a Licensed Target is replaced by BMS in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Excluded Targets</u>. A Target that is not a Licensed Target or a Reserved Target shall be designated as an excluded Target and not eligible to become a Licensed Target or a Reserved Target, as applicable, if such Target at the time of designation by BMS (either as a Licensed Target or as a Reserved Target, as applicable) [\*\*\*] (each, an "<u>Excluded Target</u>"); *provided* that Avidity shall promptly provide written notice to the Third Party Gatekeeper in the event that (i) any Target is designated an Excluded Target in accordance with this Section 3.4 (Excluded Targets) (subject to the Third Party Gatekeeper's determination whether such Target is on the Reserved List pursuant to Section 3.2 (Reserved Targets)) or (ii) any Target that was previously an Excluded Target is no longer an Excluded Target, in which case, the Third Party Gatekeeper will notify BMS that an update has been made to the Excluded Targets (without disclosing such Target itself) and BMS shall have the right to designate such Target as a Licensed Target or Reserved Target, as applicable, subject to applicable terms of this Article 3 (Target Nomination). At BMS's election, BMS may provide the identity of the proposed Reserved Target or proposed Additional Licensed Target (A) to Avidity, or (B) to the Third Party Gatekeeper under the Gatekeeper Agreement so that such Third Party Gatekeeper (rather than Avidity) will make the determination as to whether any such proposed Target is an Excluded Target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Third Party Gatekeeper Verification of Excluded Target</u>. In the event that BMS desires not to disclose the identity of a given proposed Reserved Target or proposed Additional Licensed Target to Avidity, BMS may provide such proposed Reserved Target or proposed Additional Licensed Target to the Third Party Gatekeeper and provide a written request to Avidity that the Third Party Gatekeeper determine whether such Target is an Excluded Target. Upon such request, Avidity will send to the Third Party Gatekeeper a list of its then-current Excluded Targets. If the Third Party Gatekeeper determines that the requested Target is included on Avidity's list of Excluded Targets, then Avidity will provide the Third Party Gatekeeper with reasonable records and documentation with respect to such Target as necessary to confirm such Target is an Excluded Target. The Third Party Gatekeeper shall notify BMS whether such proposed Target is an Excluded Target, in each case without disclosing to BMS, if applicable, the Third Party with which Avidity is working on the Excluded Target or the nature or details of the internal Avidity program or negotiations. If the Third Party Gatekeeper notifies BMS that such proposed Target is an Excluded Target, then such proposed Target shall not be added to the Reserved List or become an Additional Licensed Target, as applicable. Nothing in this Agreement shall require Avidity to inform BMS of the identity of any of the Excluded Targets, the Indication for which any of the Excluded Targets are being evaluated or developed by Avidity, any data associated with such Excluded Targets, or the development stage of any of the Excluded Targets. Within [\*\*\*] of the Effective Date, the Parties will negotiate in good faith an amendment to the Gatekeeper Agreement for consistency between the terms of the Gatekeeper Agreement and the applicable terms of this Article 3 (Target Nomination).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 <u>Infeasible Targets</u>. At any time within [\*\*\*] of BMS's designation of a proposed Replacement Target or proposed Additional Licensed Target as a Licensed Target, subject to Section 3.5 (Third Party Gatekeeper Verification of Excluded Target) ("<u>Rejection Period</u>"), Avidity may notify the JSC that[\*\*\*], in which event the JSC will promptly meet to determine whether such Target should be rejected for such reason. Any Target rejected by the JSC pursuant to this Section 3.6 (Infeasible Targets)

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(or by Avidity via its final decision-making authority pursuant to Section 2.4.3(d)), is referred to in this Agreement as an "<u>Infeasible Target</u>". Any such proposed Replacement Target or proposed Additional Licensed Target that is not determined by the JSC to be an Infeasible Target shall become a Replacement Target or Additional Licensed Target, as applicable, after the Rejection Period, or upon the earlier approval by the JSC [\*\*\*] of such Target as a Replacement Target or Additional Licensed Target, as applicable. If such proposed Replacement Target or proposed Additional Licensed Target is determined by the JSC [\*\*\*] to be an Infeasible Target, then Avidity shall be bound by the exclusivity provisions of Section 5.7.1 (Avidity Exclusivity) with respect to such Infeasible Target. Without limiting the foregoing, following BMS's designation of a proposed Replacement Target or proposed Additional Licensed Target as a Licensed Target and prior to the determination by the JSC [\*\*\*] whether such Target is an Infeasible Target, BMS shall have the right to provide Avidity, via the JSC, a presentation on such proposed Replacement Target or Additional Licensed Target, and Avidity shall take such presentation into consideration in good faith in determining the likelihood of Technical Infeasibility. In the event that, at the time of the Additional Licensed Targets Notification, the JSC has not been established pursuant to Section 2.2.1 (Establishment), the role of the JSC under this Section 3.6 (Infeasible Targets) shall be replaced by the designees of each Party solely with respect to the proposed Additional Licensed Targets designated by BMS pursuant to the Additional Licensed Targets Notification.

ARTICLE 4.

<u>RESEARCH PROGRAM</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Research Programs</u>. During the applicable Research Term, on a Research Program-by-Research Program basis, the Parties shall conduct Research Collaboration Activities in accordance with applicable Research Plan for such Research Program and terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Research Plans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.1 <u>Research Plans</u>. On a Research Program-by-Research Program basis, all Research Collaboration Activities under this Agreement shall be conducted pursuant to a comprehensive Research Plan for such Research Program, with the goal of [\*\*\*] conducting other activities as set forth in the Research Plan, in order to generate Lead Compounds from such Research Program for potential selection by BMS as Development Candidates for further advancement towards IND approval. Each Research Plan shall allocate responsibility for the Research Collaboration Activities between the Parties, and the Parties shall develop a corresponding Research Budget for each Research Plan. The initial Research Plan for the initial Research Program with respect to the First Licensed Target is attached hereto as <u>Schedule 4.2.1(a)</u> (the "<u>Initial Research Plan</u>") and the corresponding Research Budget for the Initial Research Plan is attached hereto as <u>Schedule 4.2.1(b)</u> (the "<u>Initial Research Budget</u>"). The Initial Research Plan and Initial Research Budget are hereby deemed approved by the JSC (or Parties, as applicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.2 <u>Amendments to Research Plans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On at least a [\*\*\*] basis, the JSC will review and update (if applicable) the Research Plan for each Research Program, and such updated Research Plan shall supersede the previous Research Plan for the applicable Research Program once approved by the JSC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without limiting Section 4.2.2(a), either Party may propose to the JSC amendments to the then-current Research Plan for a given Research Program from time to time, as such Party deems appropriate. If approved by the JSC, the amended Research Plan shall become effective for the applicable period on the date approved by the JSC (or such other date as the JSC shall specify). Any JSC-approved amended Research Plan shall supersede the then-current Research Plan for the applicable Research Program for the applicable period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) As part of any amendment to a Research Plan by the JSC, the JSC members of each Party shall inform the JSC members of the other Party of any potential Third Party Patents or proprietary Know-How known to such Party that may be required to perform any activity to be added to the Research Plan as a result of such amendment, and the Parties shall discuss in good faith, and take into consideration and agree on a strategy on such Third Party Patents or proprietary Know-How in finalizing the amendment to such Research Plan. ****

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.3 <u>Research Plans for Additional Licensed Targets</u>. Upon designation of (a) a Target as an Additional Licensed Target in accordance with Section 3.3.1 (Designation of Additional Licensed Targets), or (b) a Reserved Target as a Licensed Target in accordance with Section 3.3.2 (Replacement Targets), the Parties will collaboratively generate the Research Plan for the Research Program directed to such Licensed Target; *provided* that (i) such Research Plan shall be based on the Initial Research Plan attached hereto as of the Effective Date, but accounting for differences between the applicable Licensed Targets and (ii) such Research Plan shall be subject to the JSC's approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.4 <u>Performance Efforts</u>. Each Party shall conduct the activities allocated to such Party in the Research Plans in accordance with such Research Plans and the terms of this Agreement. Without limiting the foregoing, during the Research Term for a given Research Program, Avidity and BMS shall each commit sufficient resources, staffing, equipment, facilities, materials, and other resources to timely perform all the activities allocated to it under the Research Plans. Each Party shall be fully responsible for its respective research efforts and shall bear all corresponding costs and expenses, subject to Section 4.2.6 (Research Costs for Research Collaboration Activities). In addition, at the request of BMS, Avidity shall consult with BMS with respect to, and provide reasonable assistance (including technical assistance) to BMS in connection with, BMS's performance of its activities under a given Research Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.5 <u>BMS Contributed Collaboration Technology for use in the Performance of the Research Programs</u>. Pursuant to Section 4.2.2 (Amendments to Research Plan), BMS may, in its sole discretion, propose to the JSC for inclusion in any Research Program any BMS Contributed Collaboration Technology that BMS reasonably believes may be necessary or reasonably useful for the generation of Licensed Compounds and Lead Compounds under any Research Program. If the JSC determines to use such BMS Contributed Collaboration Technology in the Research Collaboration Activities under a Research Program, then Avidity shall use the BMS Contributed Collaboration Technology solely to perform the activities for BMS with respect to the Licensed Compounds and Licensed Products in accordance with the applicable Research Plan and for no other uses or purposes. At the request of BMS, the JSC shall discuss firewalls and other protections to be put in place by Avidity to ensure that (a) the BMS Contributed Collaboration Technology is disclosed by Avidity only to those Avidity personnel performing activities under the applicable Research Program and who need to know such BMS Contributed Collaboration Technology to perform such activities, and (b) the BMS Contributed Collaboration Technology is not used for any uses or purposes other than to perform the activities for BMS with respect to the Licensed Compounds and Licensed Products in accordance with the applicable Research Plan, and Avidity shall promptly implement and maintain such firewalls and other protections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.6 <u>Research Costs for Research Collaboration Activities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon designation of (i) a Target as an Additional Licensed Target in accordance with Section 3.3.1 (Designation of Additional Licensed Targets), or (ii) a Reserved Target as a Licensed Target in accordance with Section 3.3.2 (Reserved Targets), Avidity will collaboratively generate the Research Budget for the Research Program directed to such Licensed Target. Either Party may propose amendments to the then-current Research Budget for a given Research Program from time to time, as such Party deems appropriate. If approved by the Parties, the amended Research Budget shall become effective for the applicable period on the date approved by the Parties (or such other date as the Parties shall specify). Any such amended Research Budget approved by the Parties shall supersede the then-current Research Budget for the applicable Research Program for the applicable period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Party shall be responsible for any and all costs and expenses it (or its Affiliate) incurs in connection with the Research Collaboration Activities, subject to Section 4.2.6(e). Avidity shall use reasonable and good faith efforts to minimize any Avidity Research Collaboration Costs.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) From and after the Effective Date until the end of the last Research Term, on a [\*\*\*] basis, Avidity will submit to BMS within [\*\*\*] after the end of each [\*\*\*], a report (in a form agreed to by the JSC) setting forth the Avidity Research Collaboration Costs actually incurred by Avidity in such just-completed [\*\*\*] with a summary setting forth in reasonable detail activities performed and costs incurred (broken down by activity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Avidity will keep and maintain accurate and complete records regarding Avidity Research Collaboration Costs during the Research Term. BMS shall have the right to conduct an audit of Avidity and its Affiliates with respect to any Avidity Research Collaboration Costs by way of Section 7.9 (Audits), applied *mutatis mutandis* (with appropriate substitution/replacement of relevant Party and subject matter).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If the aggregate Avidity Research Collaboration Costs are likely to exceed, or actually exceed the cumulative amount of $40,000,000 (the "<u>Cumulative Research Funding Cap</u>"), Avidity will provide BMS promptly with a written notice thereof. Upon receipt of such written notice, the Parties shall discuss in good faith and agree on a mutually agreeable resolution on how the Research Collaboration Activities will be managed to maintain the Cumulative Research Funding Cap. Without limiting the foregoing, BMS shall have the right, in its sole discretion, to provide additional funding to Avidity for Avidity to perform additional Research Collaboration Activities which would result in the Avidity Research Collaboration Costs exceeding the Cumulative Research Funding Cap.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Selection of Lead Compounds and Development Candidates</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.1 <u>Information for Lead Compounds and Development Candidates</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On a regular basis, and in all cases reasonably in advance of each regularly scheduled meeting of the JSC (but at least [\*\*\*] prior to each such JSC meeting), Avidity shall provide an update in writing to BMS with respect to the Research Collaboration Activities conducted by or on behalf of Avidity under the Research Plan, which update from Avidity shall contain Research Collaboration Data (or a summary thereof), the identity of any Licensed Compounds, information about material developments under the Research Program, and analysis of the results of its Research Collaboration Activities, and such other information as BMS may reasonably request. In addition, Avidity shall provide BMS such other data and information in Avidity's (or its Affiliate's) Control regarding the Research Collaboration Activities and Licensed Compounds as BMS may reasonably request from time to time; *provided* that Avidity will not be required to transfer any information specifically relating to the Licensed Other Modality Compounds or the exploitation thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) On a Research Program-by-Research Program basis, within [\*\*\*] following (i) with respect to the determination whether a Licensed Compound Successfully Achieves [\*\*\*] with respect to a given Research Program, the completion of all activities under the Research Plan with respect to such Research Program necessary or reasonably useful in determining whether [\*\*\*]with respect to such Research Program has been Successfully Achieved (such determination to be based on objective criteria as set forth in the applicable Research Program), and (ii) with respect to the determination whether a Licensed Compound Successfully Achieves [\*\*\*]with respect to a given Research Program, the earliest of (A) the JSC's determination that a Licensed Compound Successfully Achieves [\*\*\*]with respect to such Research Program or (B) the completion of all activities under the Research Plan with respect to such Research Program, in each case of (i) and (ii), Avidity will deliver to BMS a corresponding complete Data Package for such Research Program. Upon receipt of such Data Package for a given Research Program, BMS shall review such Data Package, and BMS shall notify Avidity, no later than [\*\*\*] after receiving such Data Package, of any reasonable requests for additional information and records related to such Research Program that is within Avidity's (or its Affiliate's) Control, and Avidity shall respond to such requests within [\*\*\*] thereof. The Parties will discuss the Data Package at a JSC meeting to be organized no later than [\*\*\*] from delivery of such Data Package to BMS and determine whether the proposed Licensed Compound Successfully Achieves [\*\*\*], as applicable, and whether the applicable Data Package is complete.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.2 <u>Technology Transfer for Development Candidates</u>. Without limiting the generality of Section 4.3.1 (Information for Lead Compounds and Development Candidates), upon BMS's request, following the determination that a given Licensed Compound has Successfully Achieved [\*\*\*], Avidity shall promptly conduct the technology transfers as set forth in Section 5.10 (Information Sharing to Enable Exploitation of Licensed Compounds and Licensed Products) with respect to[\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>End of Research Program</u>. Each Research Program shall end at the end of the Research Term for such Research Program unless such Research Program is earlier discontinued in accordance with this Section 4.4 (End of Research Program). BMS shall have the right to discontinue a given Research Program prior to the end of the Research Term by providing [\*\*\*] prior written notice thereof to Avidity. If BMS exercises its right to discontinue a given Research Program pursuant to this Section 4.4 (End of Research Program), then BMS will be deemed to have terminated at will such Research Program pursuant to Section 11.2 (Termination at Will), and the Parties shall wind-down all activities thereunder as soon as reasonably practicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Records, Reports and Documentation; Inspections</u>. Each Party shall maintain complete, current and accurate reports and records and all related documentation with respect to its activities under a Research Plan in good scientific manner and in compliance with Applicable Law, and each Party shall retain the same for a time period of no less than such time period as may be required by Applicable Law. Such reports, records and documentation shall fully and properly reflect all work done and results achieved in the performance of such activities in good scientific manner and appropriate for regulatory and patent purposes, and shall be prepared and maintained in accordance with Applicable Law, including, to the extent applicable, GLP, GCP and GMP recordkeeping requirements. Upon the written request of BMS and at BMS's sole cost and expense, (a) Avidity shall provide BMS with reasonable access to the foregoing records, reports, and documentation as reasonably requested by BMS to determine whether the Research Collaboration Activities have been performed in accordance with this Agreement, and for any other reason in connection with the Exploitation of Licensed Products and (b) BMS shall have the right to, and Avidity shall afford BMS the right to, reasonably inspect at reasonable times during normal business hours any facilities being used by or on behalf of Avidity to conduct Research Collaboration Activities solely for the purpose of determining whether the Research Collaboration Activities have been performed in accordance with this Agreement; *provided* that (i) such inspections may not be conducted more than [\*\*\*]in any Calendar Year (unless for cause or as a follow-up to confirm satisfactory completion of corrective actions to address observations from a prior inspection, in which case additional inspections during such Calendar Year may be conducted), (ii) if such inspection involves any facilities of a Third Party, then such inspection would be subject to Avidity's rights with such Third Party, and (iii) any such inspection shall not be performed in such a manner as to unduly delay the performance of the services hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 <u>Regulatory Responsibility</u>. If any Regulatory Documentation will need to be prepared, filed or maintained in connection with the conduct of the Research Collaboration Activities hereunder, or if there will be any other meetings or interactions with any Regulatory Authorities related to the conduct of the Research Collaboration Activities, BMS shall be responsible for such activities as set forth in Section 6.2 (Regulatory); *provided*, *however*, that, subject to Section 7.12 (Cost of Avidity Support Services), Avidity shall assist BMS in connection therewith as reasonably requested by BMS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 <u>Compliance Provisions</u>. With respect to any activities conducted by or on behalf Avidity under this Agreement, including all activities under the Research Program, the following shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7.1 <u>General</u>. Avidity shall, and shall require its Affiliates, licensees and Sublicensees to, conduct activities under this Agreement in compliance with all Applicable Laws (including, to the extent applicable, GCP, GLP and GMP), in good scientific manner and consistent with good business ethics, and Avidity will promptly notify BMS in writing after it becomes aware of any deviations from any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7.2 <u>No Use of Debarred Person</u>. Within [\*\*\*] following the Effective Date, Avidity will screen against the Exclusions List each person employed or engaged by Avidity or its Affiliates (including pursuant to a Third Party subcontract) as of the Effective Date who it anticipates will perform Research Collaboration Activities, and thereafter will screen against the Exclusions List all additional persons who it intends or desires to engage to perform Research Collaboration Activities prior to their commencing such Research Collaboration Activities. Subject to the foregoing, Avidity, its Affiliates, and

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any Third Party subcontracts performing on Avidity's behalf hereunder, will not employ or otherwise use in any capacity, the services of any Person, including any employee, officer, director, consultant or subcontractor, (i) who is (or has been) on the Exclusions List, or who is (or has been) in Violation or otherwise debarred under U.S. law (including Section 21 U.S.C. § 335a) or any foreign equivalent thereof or (ii) that is the subject of an FDA debarment investigation or proceeding (or similar proceeding by any Regulatory Authority outside the U.S.), in each case, in performing any portion of the activities hereunder. If at any point during the Term, Avidity is, or learns that any of its Affiliates or its or their respective officers or directors, or any Person performing on behalf of Avidity under this Agreement is in Violation, Avidity will promptly notify BMS and will prohibit such Person from performing any such activities, function or capacity related to any such activities under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7.3 <u>Personal Data</u>. Avidity shall ensure that all Personal Data is processed in accordance with Applicable Laws, including the fair and lawful collection and processing of such Personal Data, the disclosure of such Personal Data to BMS in accordance with this Agreement and the transfer of such Personal Data (including any transfer from inside the EU to outside the EU). Avidity shall promptly notify BMS if it becomes aware that any data provided to BMS is inaccurate or has been unlawfully obtained or processed or, where consent to process Personal Data has been provided, consent is withdrawn or Avidity becomes aware that consent may not be reliable. "<u>Personal Data</u>" means any information relating to an identified or identifiable individual or otherwise as defined under Applicable Laws. ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 <u>Use of Materials</u>. In connection with each Research Plan, and subject to the timing and further terms specified in such Research Plan, each Party (the "<u>Materials Provider</u>") may transfer certain Materials to the other Party (the "<u>Materials Receiver</u>") that are not otherwise delivered under a supply, Material transfer, or other separate agreement between the Parties or their Affiliates. In each such case, the Parties will mutually agree on the terms of such Material transfer. In the event of such transfer, unless otherwise agreed in writing, the Materials Provider shall be responsible for obtaining all necessary approvals or filings as required under Applicable Laws for the exportation of any Materials to the Materials Receiver, and the Materials Receiver shall be responsible for obtaining all necessary approvals or filings as required under Applicable Laws for their importation and use by the Materials Receiver. The Materials Receiver will use such Materials only for the purposes of conducting the Collaboration Activities under this Agreement and for no other purpose. Without limiting Article 10 (Representations, Warranties and Covenants), (a) any such Materials will be supplied to Materials Receiver "as is" with no warranties, express or implied, and Materials Provider expressly disclaims any warranty of merchantability or fitness for particular purpose, and (b) the Materials Receiver hereby acknowledges that any such Materials are experimental in nature and may have unknown characteristics and therefore the Materials Receiver agrees to use prudence and reasonable care in the use, handling, storage, transportation and disposition and containment of the Materials. Other than as expressly provided under this Agreement and under the applicable Research Plan, the Materials Provider does not grant to the Materials Receiver or its Affiliates any rights or licenses in or to Materials Provider's Materials. Following the end of the applicable Research Term, the Materials Receiver must destroy any and all records, copies and other tangible embodiments of Materials specific to the corresponding Research Plan and still in its possession, and shall certify such destruction to the Materials Provider in a written notice within [\*\*\*] of the end of such applicable Research Term, excluding, for clarity, any Materials in the possession, custody, or control of BMS that incorporate or embody the Licensed Compounds or Licensed Products or other deliverables.

ARTICLE 5.

<u>LICENSES; EXCLUSIVITY; NEGATIVE COVENANTS</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>License Grants to BMS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1 <u>License Grant</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions of this Agreement, Avidity hereby grants, on behalf of itself and its Affiliates (and hereby causes its Affiliates to grant), to BMS and its Affiliates an exclusive (including with regard to Avidity and its Affiliates), worldwide, royalty-bearing license, with the right to grant and authorize sublicenses in accordance with Section 5.1.3 (Right to Sublicense), under the Licensed IP to Develop, Manufacture, Commercialize and otherwise Exploit Licensed Compounds and Licensed Products (including as a single agent, for combination use or otherwise) in the Field in the Territory.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the terms and conditions of this Agreement, Avidity hereby grants, on behalf of itself and its Affiliates (and hereby causes its Affiliates to grant), to BMS and its Affiliates a non-exclusive, worldwide, fully paid-up, royalty-free license, with the right to grant and authorize sublicenses (through multiple tiers [\*\*\*]), under (a) any Avidity Platform Inventions that were discovered, conceived, or otherwise developed in the performance of Research Collaboration Activities [\*\*\*] and assigned to Avidity pursuant to Section 9.2.2(a) (Avidity Platform Inventions) and (b) any Patents that claim such Avidity Platform Inventions in the foregoing clause (a), for any and all uses and purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2 <u>Right of Reference</u>. Subject to the terms and conditions of this Agreement, Avidity hereby grants, on behalf of itself and its Affiliates (and hereby causes its Affiliates to grant), to BMS and its Affiliates (and their designees) a Right of Reference to the Regulatory Documentation Controlled by Avidity or any of its Affiliates. BMS may use such right of reference to Avidity's Regulatory Documentation solely to seek, obtain, support, and maintain INDs, Drug Approval Applications, and Regulatory Approvals for Licensed Compounds and Licensed Products in the Field for the Territory. In furtherance thereof, at the reasonable request of BMS, Avidity shall provide to BMS a cross-reference letter or similar communication to the applicable Governmental Authority or other applicable documentation to effectuate or support such Right of Reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.3 <u>Right to Sublicense</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Sublicense</u>. Subject to the terms of Section 5.1.3(b) (Sublicense Requirements), BMS, without the prior consent of Avidity, may grant sublicenses (including the right to grant further sublicenses in multiple tiers) under the exclusive license it receives under Section 5.1.1(a) to any of its Affiliates or any Third Party without the prior written consent of Avidity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Sublicense Requirements</u>. BMS will ensure that all permitted sublicenses granted under the license it receives under Section 5.1.1(a) (i) are consistent with the applicable terms of this Agreement, including (A) [\*\*\*] an obligation of such Sublicensee to account for and report its Net Sales (in local currency and United States dollars) on a country-by-country and Licensed Product-by-Licensed Product basis and to provide any other information necessary for BMS to comply with its obligation to provide royalty reports in accordance with Section 7.4.8 (Reports; Payment of Royalty), and (B) the confidentiality and non-use obligations set forth in Article 8 (Confidentiality and Publication). BMS will remain responsible and liable for the performance of all Affiliates and Sublicensees under their respective sublicensed rights to the same extent as if such activities were conducted by BMS. In no event will any sublicense relieve BMS of any of its obligations under this Agreement. No later than [\*\*\*] following the execution of any sublicense agreement by BMS of the licenses BMS receives under Section 5.1.1(a), [\*\*\*] BMS will deliver to Avidity notice of, and, upon Avidity's written request, a copy of, any executed sublicense agreement (redacted as necessary to protect confidential information that is not necessary to confirm compliance with this Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>License to Avidity</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.1 <u>License Grants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions of this Agreement, BMS hereby grants to Avidity a limited, non-exclusive, sublicensable (in accordance with Section 5.2.2 (Right to Sublicense)), under (a) the BMS Contributed Collaboration Technology, BMS Contributed Collaboration Inventions, and BMS Contributed Collaboration Patents, and (b) the Licensed IP exclusively licensed to BMS pursuant to Section 5.1.1(a), in each case ((a) and (b)), solely to (i) conduct, during the Research Term, the Research Collaboration Activities allocated to Avidity under the applicable Research Plan and Manufacture Licensed Compounds and Licensed Products to support such Research Collaboration Activities and (ii) Manufacture and supply Licensed Compounds and Licensed Products to BMS to support its Development activities (solely to the extent any such BMS Contributed Collaboration Technology or BMS Contributed Collaboration Inventions are specifically contributed for use by Avidity in the performance of such Manufacturing) in accordance with the terms and conditions of this Agreement, including the applicable Research Plan, or with respect to Manufacturing, the applicable Supply Agreement, and not for any other purpose.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the terms and conditions of this Agreement [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.2 <u>Right to Sublicense</u>. Avidity may only grant sublicenses under the licenses granted to it in Section 5.2.1(a) (License Grants) with the prior written consent of BMS; *provided* that no such consent shall be required for a sublicense to a permitted subcontractor as set forth in Section 5.5 (Subcontracting) to conduct the applicable Research Collaboration Activities on behalf of Avidity in accordance with the Research Plan. Promptly following the execution of any sublicense by Avidity (or its Affiliate) of the licenses granted to Avidity in Section 5.2.1(a) (License Grants), Avidity shall provide BMS with a true and complete copy of such sublicense agreement. Avidity shall remain responsible and liable for its sublicensee's compliance with the applicable terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Retained Rights by the Parties</u>. For clarity, each Party retains all rights, including all rights under Know-How and Patents Controlled by such Party, not expressly granted to the other Party pursuant to this Agreement. Neither Party will practice the issued Patents and Know-How licensed by the other Party to it under this Agreement other than expressly licensed herein; *provided* that a Party will not be in violation of the foregoing if such Party practices such Patents as permitted under Applicable Law, including within the safe harbor protections under 35 U.S.C. § 271(e).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Avidity In-License Agreements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4.1 <u>Avidity Existing In-License Agreements</u>. During the Term [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4.2 <u>New Avidity In-License Agreements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to Section 5.4.2(b), if either Party or their respective Affiliates reasonably determines in good faith that any Intellectual Property Rights Controlled by any Third Party are, or would be necessary or useful for the Development, Manufacture, or Commercialization of other Exploitation any Licensed Product, then such Party will promptly provide notice to the other Party of such Intellectual Property Right. [\*\*\*] then Avidity or its Affiliate shall have the right to negotiate and acquire rights to such Intellectual Property Rights (through a license or otherwise, including pursuant to any settlement agreement) (the "<u>New Avidity In-Licensed Technology</u>"), subject to BMS's prior written consent, such consent not to be unreasonably withheld, conditioned or delayed. If Avidity or its Affiliate acquires rights to any such Intellectual Property Rights (through a license or otherwise) and if BMS elects to become a sublicensee under such New Avidity In-License Agreement, then BMS will reimburse Avidity for the cost such rights within [\*\*\*] of receiving an invoice therefor from Avidity [\*\*\*] such costs are directly attributable to its Exploitation of Licensed Compounds and Licensed Products. Such reimbursement payments from BMS to Avidity shall be BMS Third Party Payments for the purposes of this Agreement, and BMS shall be entitled to offset a portion of such payments pursuant to Section 7.4.5 (Stacking).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, if either Party or their respective Affiliates reasonably determine in good faith that any Intellectual Property Right Controlled by any Third Party [\*\*\*], then such Party will promptly provide notice to the other Party of such Intellectual Property Right. If Avidity then notifies BMS in writing within [\*\*\*] that Avidity or its Affiliate is in the process of pursuing or will pursue an acquisition or in-license of such Intellectual Property Right, then: (i) Avidity or its Affiliate will negotiate in good faith towards such an acquisition or in-license on commercially reasonable terms; and (ii) during such negotiation or the term of any such acquisition or in-license agreement, BMS and its Affiliates will not pursue, directly or indirectly, an acquisition or in-license of such Intellectual Property Rights without Avidity's prior written consent. If (A) Avidity does not notify BMS in writing within [\*\*\*] that Avidity or its Affiliate is in the process of pursuing or will pursue an acquisition or in-license of such Intellectual Property Rights or (B) if any Avidity In-License Agreement is terminated through no fault of BMS, then (in each case (A) and (B)) BMS or its Affiliate shall have the right to negotiate and acquire rights to such Intellectual Property Rights (through a license or otherwise,

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including pursuant to any settlement agreement). If Avidity or its Affiliate acquires rights to any such Intellectual Property Rights (through a license or otherwise, including pursuant to any settlement agreement) under this 5.4.2(b) and if BMS elects to become a sublicensee under such New Avidity In-License Agreement, then [\*\*\*]. Such reimbursement payments from BMS to Avidity shall be BMS Third Party Payments for the purposes of this Agreement, and BMS shall be entitled to offset a portion of such payments pursuant to Section 7.4.5 (Stacking).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In all cases, if Avidity (or its Affiliate) determines to take a license to or acquire any such New Avidity In-Licensed Technology pursuant to a New Avidity In-License Agreement, Avidity shall negotiate such New Avidity In-License Agreement in good faith and, except to the extent such New Avidity In-License Agreement solely relates to Avidity AOC Platform Technology, shall (i) keep the JSC apprised of such negotiations, (ii) take into account any reasonable concerns or suggestions expressed by BMS's members of the JSC with respect thereto, (iii) keep the JSC apprised of the terms of the agreement during the course of negotiations (including, in all cases, prior to entering into such agreement), and (iv) take into account any reasonable concerns or suggestions expressed by BMS's members of the JSC with respect to such terms. [\*\*\*] Without limiting the foregoing, Avidity shall use reasonable efforts to include in any New Avidity In-License Agreement a provision such that if the license is terminated for breach by Avidity (or its Affiliate), BMS, at its discretion, has the right to cure the breach and obtain a license on substantially the same terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If Avidity (or its Affiliate) enters into an New Avidity In-License Agreement, then Avidity shall (i) promptly (but in all cases within [\*\*\*] after entering into such license) notify BMS thereof in writing (including providing BMS a true, correct and complete copy of the New Avidity In-License Agreement) and (ii) at the request of BMS, engage in good faith discussions with BMS in order to allow BMS to determine whether BMS desires to become a sublicensee thereunder. If BMS notifies Avidity in writing that it desires to become a sublicensee under such New Avidity In-Licensed Technology, then such New Avidity In-Licensed Technology will be deemed to be Controlled by Avidity and will be included as Avidity Know-How and Avidity Patents, as applicable, hereunder and shall be subject to the terms of this Agreement. If Avidity enters into a New Avidity In-License Agreement for any New Avidity In-Licensed Technology, but BMS does not notify Avidity in writing that it desires to be a sublicensee under such New Avidity In-License Agreement, then such New Avidity In-Licensed Technology shall not be deemed to be Controlled by Avidity and will not be included within the Avidity Know-How or Avidity Patents hereunder (and Avidity shall not use any such New Avidity In-Licensed Technology in the conduct of the Research Programs hereunder). Notwithstanding anything to the contrary contained herein, Avidity agrees that it (and its Affiliates and permitted contractors) shall not (A) use or practice any Patents and Know-How under any Avidity In-License Agreement in the performance of any Research Program or in the Development, Manufacture or other Exploitation of any Licensed Compound or Licensed Product hereunder or (B) disclose to BMS or its Affiliates, Sublicensees or contractors any confidential or proprietary information of any Third Party, in each case ((A) and (B)), without the prior written consent of BMS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If BMS or its Affiliate acquires rights to any Intellectual Property Rights (through a license or otherwise, including pursuant to any settlement agreement) under this Section 5.4.2 (New Avidity In-License Agreements), then BMS will bear all costs for such rights; *provided* that BMS's payments for such rights will be subject to Section 7.4.5 (Stacking).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Subcontracting</u>. Subject to the terms of this Section 5.5 (Subcontracting), each Party may engage its Affiliates or Third Party subcontractors to perform its activities hereunder without the other Party's consent. The Party engaging a subcontractor shall remain responsible for the performance of its activities by such Affiliates and subcontractors in accordance with the applicable terms of this Agreement. In all cases, any such subcontracts shall require the subcontractor to comply with confidentiality and non-use provisions no less stringent than those contained in this Agreement with respect to Confidential Information of the other Party and to comply with intellectual property provisions that assign to the subcontracting Party the rights in Inventions made from the performance of Research Collaboration Activities as set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>No Implied Licenses</u>. Except as specifically set forth in this Agreement, neither Party shall acquire any license, intellectual property interest or other rights, by implication or otherwise, in any Know-How disclosed to it under this Agreement or under any Patents Controlled by the other Party or its Affiliates.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Exclusivity</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7.1 <u>Avidity Exclusivity</u>. Except for the conduct of (a) the Research Collaboration Activities allocated to Avidity under a Research Program as set forth in, and in accordance with, this Agreement (including the applicable Research Plan), and (b) Manufacturing activities for the benefit of BMS as specifically required pursuant to, and in accordance with, Section 6.3.2 (Supply of Licensed Compounds and Licensed Products), during the Avidity Exclusivity Period, Avidity shall not, and shall cause its Affiliates not to, either itself or with, through or on behalf of a Third Party, engage directly or indirectly in the discovery or other Development, Commercialization, or other Exploitation anywhere in the Territory of any Avidity Competitive Product in the Field.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7.2 <u>BMS Exclusivity</u>. On a Licensed Target-by-Licensed Target basis, except for the conduct of the Development of Licensed Compounds and Licensed Products pursuant to this Agreement, during the BMS Exclusivity Period for a given Research Program, BMS shall not [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7.3 <u>Acquisition of Distracting Product</u>. Notwithstanding the provisions of Section 5.7.1 (Avidity Exclusivity) or Section 5.7.2 (BMS Exclusivity), if a Party or any of its Affiliates acquires rights to develop or commercialize a product in the Field through the acquisition of a Third Party (whether by merger or acquisition of all or substantially all of the stock or assets of a Third Party) (each, an "<u>Acquisition Transaction</u>") and, on the date of the closing of such Acquisition Transaction, such product is being developed or commercialized and such activities would, but for the provisions of this Section 5.7.3 (Acquisition of Distracting Product), constitute a breach of Section 5.7.1 (Avidity Exclusivity) or Section 5.7.2 (BMS Exclusivity) (each, a "<u>Distracting Product</u>"), such Party shall not be deemed to be in breach of Section 5.7.1 (Avidity Exclusivity) or Section 5.7.2 (BMS Exclusivity), as applicable, so long as such Party is in compliance with the following clause (a) (with respect to Avidity) or clause (b) (with respect to BMS):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Avidity will, within [\*\*\*] after the closing of such Acquisition Transaction notify BMS in writing of such acquisition and either: (i) request that such Distracting Product be included in this Agreement on terms to be negotiated, in which case, the Parties will discuss the matter in good faith for a period of no less than [\*\*\*] (or such longer period as may be agreed by the Parties) and, if unable to reach agreement on the terms on which such Distracting Product would be included hereunder within such period, then neither Party shall have the right to pursue development or commercialization of such Distracting Product and Avidity or its Affiliate will take the action specified in clause (ii) below; *provided* that the time periods specified in clause (ii) will be tolled for so long as the Parties are engaged in discussion under this clause (i); or (ii) (A) notify BMS in writing that Avidity or its Affiliate will promptly, but in any event within [\*\*\*] of the date of closing of the Acquisition Transaction, Divest such Distracting Product and (B) at all times prior to such Divestiture (x) any commercialization or development of any such Distracting Product are conducted independently of the activities under this Agreement [\*\*\*] and without use of any Licensed IP, BMS Contributed Collaboration Technology, or BMS Manufacturing Know-How, (y) Confidential Information of BMS, is provided to, or shared with any personnel working on the Distracting Product, and (z) Avidity puts in place firewalls and other protections reasonably acceptable to BMS that are reasonably designed to ensure that the foregoing clauses (x) and (y) are complied with.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) BMS and its Affiliates will ensure that [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7.4 <u>Change of Control</u>. If either Party undergoes a Change of Control with a Third Party who owns or has rights to develop or commercialize an Avidity CoC Competing Product or BMS CoC Competing Product, as applicable, such Party (or its Affiliates) shall not be in breach of the provisions of Section 5.7.1 (Avidity Exclusivity) or Section 5.7.2 (BMS Exclusivity), as applicable, as a result of the continued commercialization or development of any such Avidity CoC Competing Product or BMS CoC Competing Product, as applicable, during the Term by the Third Party acquiror or its Affiliate (other than Avidity and its Affiliates in existence immediately prior to the Change of Control); so long as such Party is in compliance with the following clause (a) (with respect to Avidity) or clause (b) (with respect to BMS):

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) such activities are conducted independently of the activities under this Agreement (including maintaining separate lab notebooks and personnel from individuals performing technical, scientific or other similar activities under this Agreement) and without use of any Licensed IP, BMS Contributed Collaboration Technology, or BMS Manufacturing Know-How; (ii) no Confidential Information of BMS, is provided to, or shared with any personnel working on the Avidity CoC Competing Product; and (iii) Avidity puts in place firewalls and other protections reasonably acceptable to BMS that are reasonably designed to ensure that the foregoing clauses (i) and (ii) are complied with.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 <u>Confirmatory Patent License</u>. Each Party shall, if requested to do so by the other Party, promptly enter into confirmatory license agreements in a form reasonably requested by the other Party for purposes of recording the licenses granted to the other Party under this Agreement with such patent offices in the Territory as the other Party considers appropriate. Until the execution of any such confirmatory licenses, so far as may be legally possible, Avidity and BMS shall have the same rights in respect of the Avidity Patents and Avidity Know-How, and be under the same obligations to each other in all respects, in each case in accordance with this Agreement, as if the said confirmatory licenses had been executed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9 <u>Rights in Bankruptcy</u>. All rights and licenses granted under or pursuant to this Agreement by BMS or Avidity are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, licenses of right to "intellectual property" as defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree that the Parties, as licensees of such rights under this Agreement, shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the Party that is not a party to such proceeding shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, which, if not already in the non-subject Party's possession, shall be promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon the non-subject Party's written request therefor, unless the Party subject to such proceeding elects to continue to perform all of its obligations under this Agreement, or (b) if not delivered under clause (a) above, following the rejection of this Agreement by or on behalf of the Party subject to such proceeding upon written request therefor by the non-subject Party. The Parties agree that all payments due pursuant to Section 7.3 (Milestone Payments) and Section 7.4 (Royalties) constitute "royalties" within the meaning of Section 365(n) of the U.S. Bankruptcy Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10 <u>Information Sharing to Enable Exploitation of Licensed Compounds and Licensed Products</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10.1 <u>General</u>. With respect to each Research Program, as soon as reasonably practicable following the commencement of such Research Program (but in all cases within [\*\*\*] after such commencement or such other period of time as agreed to by the Parties), and thereafter from time to time on a prompt and timely basis (and in all cases reasonably in advance of each regularly scheduled meeting of the JSC, but at least [\*\*\*] prior to each such JSC meeting) until the expiration of the Research Term for such Research Program (and as otherwise reasonably requested by BMS from time to time during the Research Term), Avidity shall disclose and provide to BMS (or its designee) in English (in writing and in an electronic format) all physical embodiments of Avidity Know-How necessary or reasonably useful for the completion of BMS's activities under such Research Program; *provided* that Avidity will not be obligated to disclose additional Know-How within the Additional Avidity Platform Technology unless and until approved by BMS in accordance with Section 5.11 (Additional Avidity Platform Technology). Notwithstanding the foregoing, and without limiting the foregoing or the provisions of Section 6.4.2 (Manufacturing Technology Transfer), within [\*\*\*] of the Effective Date, Avidity shall provide to BMS (or its designee) [\*\*\*]. For clarity, (a) Avidity will not be required to transfer any information specifically relating to the Licensed Other Modality Compounds or the exploitation thereof, and (b) in no event shall the foregoing activities be subject to Section 7.12 (Cost of Avidity Support Services).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10.2 <u>Assistance</u>. At the request of BMS during the Term and subject to Section 7.12 (Cost of Avidity Support Services), Avidity shall provide BMS (and its designees) with any additional assistance as reasonably requested by BMS to effectuate the transfer to, and implementation and use by, BMS of the information, documentation and materials set forth in Section 5.10.1 (General), or any other Avidity Know-How necessary or reasonably useful for the Exploitation of Lead Compounds and Development Candidates and other Licensed Compounds, in each case, in a timely manner; *provided* that Avidity will not be required to transfer any information specifically relating to the Licensed Other Modality Compounds or the exploitation thereof. Without limiting the generality of the foregoing and subject to Section 7.12 (Cost of Avidity Support Services), if BMS requests visits or other assistance from Avidity's representatives for purposes of effectuating such transfer, implementation or use, or for purposes of BMS (or its designees) acquiring expertise on the application of such information, documentation or materials, Avidity shall send appropriate representatives to BMS's (or its designee's) facilities and otherwise make such representatives reasonably available to BMS (or its designee) to provide such assistance, including answering questions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11 <u>Additional Avidity Platform Technology</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11.1 <u>Evaluation of Additional Avidity Platform Technology</u>. During the Research Term, Avidity shall promptly (and in all cases no later than [\*\*\*]) notify the JSC in writing of the existence of any proposed Additional Avidity Platform Technology that has not been previously disclosed to BMS under this Agreement (each such notice, an "<u>Avidity Additional Platform IP Notification</u>"). Each Avidity Additional Platform IP Notification shall (a) describe (i) the applicable Know-How in reasonable detail, including whether any such Know-How is licensed to Avidity by a Third Party, and (ii) any Third Party Intellectual Property Rights known to Avidity that may be necessary to practice such Know-How and (b) disclose any Patent owned or controlled by Avidity or its Affiliates claiming such proposed Additional Avidity Platform Technology. The JSC shall discuss and review such Avidity Additional Platform IP Notification, and BMS, in its sole discretion, may decline to have any such Know-How (and such Patents to the extent claiming such Know-How) included as Avidity Know-How and Avidity Patents under this Agreement by providing Avidity with written notice of such determination within [\*\*\*] of receiving such Avidity Additional Platform IP Notification, in which case such Know-How and Patents (to the extent declined by BMS) will be excluded from the definitions of Avidity Patents, Avidity Know-How and Licensed IP. If BMS does not so decline to have any such Know-How or Patent included as Avidity Know-How or an Avidity Patent under this Agreement, the JSC shall promptly notify the IP Committee of such Avidity Additional Platform IP Notification. The IP Committee shall discuss and review such Know-How and Patents[\*\*\*] then such Know-How shall be deemed to be "Additional Avidity Platform Technology" for purposes of this Agreement (subject to Section 5.11.3 (BMS Decline of Additional Avidity Platform Technology)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11.2 <u>Disputes</u>.[\*\*\*] then BMS will, within [\*\*\*] of the IP Committee's receipt of the applicable Avidity Additional Platform IP notification, in its sole discretion, either (a) decline to have any such Know-How or Patent included under this Agreement by providing Avidity with written notice of such determination (in which case such Know-How and Patents will be excluded from the definitions of Avidity Patents, Avidity Know-How, and Licensed IP) or (b) [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11.3 <u>BMS Decline of Additional Avidity Platform Technology</u>. [\*\*\*] BMS may, in its sole discretion, nonetheless decline to have any such Know-How included as Additional Avidity Platform Technology under this Agreement by providing Avidity with written notice of such determination within [\*\*\*] of receiving such Avidity Additional Platform IP Notification [\*\*\*]. If BMS provides Avidity with such written notice within such applicable period, then such Know-How will not become Additional Avidity Platform Technology under this Agreement, and instead such Know-How and Patents to the extent claiming such Know-How will be excluded from the definitions of Avidity Patents, Avidity Know-How, and Licensed IP [\*\*\*].

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11.4 <u>Records</u>. The IP Committee shall keep a running list of all Additional Avidity Platform Technology.

ARTICLE 6.

<u>FURTHER DEVELOPMENT, REGULATORY, MANUFACTURING, AND COMMERCIALIZATION OF LICENSED PRODUCTS</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Development</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.1 <u>General</u>. Except for the Research Collaboration Activities allocated to Avidity under a Research Plan, BMS (and its Affiliates), either itself or with or through Third Party(ies), shall have the sole right to Develop (and shall control all aspects of the Development of) Licensed Compounds and Licensed Products in the Field in the Territory. For the avoidance of doubt, during the applicable Research Term, BMS shall not conduct any research activities with respect to Licensed Compounds and Licensed Products outside of the Research Plan applicable to such Licensed Compounds and Licensed Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.2 <u>Diligence</u>. Subject to Avidity's compliance with this Agreement, including the performance of the Research Collaboration Activities allocated to Avidity, on a Licensed Target-by-Licensed Target basis, BMS (itself or with or through its Affiliates or Third Parties) shall use Commercially Reasonable Efforts to Develop, and to seek Regulatory Approval for, at least one Licensed Product Directed to such Licensed Target in the U.S. and at least one of the Other Major Markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.3 <u>Assistance by Avidity</u>. Subject to Section 6.4.3 (Cost of Manufacturing Technology Transfer), to the extent not otherwise set forth in this Agreement or in a Research Plan, at the reasonable request of BMS, Avidity shall consult with BMS with respect to, and provide reasonable assistance (including technical assistance) to BMS in connection with, BMS's Development (including manufacturing process development) and Manufacture of Licensed Compounds and Licensed Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Regulatory</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1 <u>Regulatory Activities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BMS (or its Affiliates or other designees) shall have the sole right to (i) prepare, obtain, and maintain INDs, Drug Approval Applications, Regulatory Approvals and other regulatory submissions and applications for Licensed Compounds and Licensed Products (including as a single agent, for combination use or otherwise) in the Field in the Territory (including the setting of the overall regulatory strategy therefor), and (ii) conduct communications with Regulatory Authorities for Licensed Compounds and Licensed Products (including as a single agent, for combination use or otherwise) in the Field in the Territory. Without limiting Avidity's obligations set forth in a Research Plan, Avidity shall provide support and assistance to BMS, as may be reasonably requested by BMS and subject to Section 7.12 (Cost of Avidity Support Services), in preparing, obtaining and maintaining INDs, Drug Approval Applications and Regulatory Approvals for Licensed Products, and in the activities in support thereof, including (A) providing documents or other materials required by Applicable Law or requested by a Regulatory Authority, (B) otherwise assisting BMS with preparing such Regulatory Documentation and answering questions from Regulatory Authorities (including, if requested by BMS, attending meetings with Regulatory Authorities), (C) filing (or using Commercially Reasonable Efforts to cause its contract manufacturers to file) regulatory documentation with Regulatory Authorities such that such documentation may be referenced in Regulatory Documentation submitted by BMS (or its Affiliates or other designees) for Licensed Compounds and Licensed Products if applicable, and (D) providing (and using Commercially Reasonable Efforts to cause its contract manufacturers to provided) CMC and other Manufacturing-related information and assistance. As between the Parties, all Regulatory Documentation (including all Regulatory Approvals) for any Licensed Compound or Licensed Product shall be owned by, and shall be the sole property and held in the name of, BMS (or its Affiliate or other designee).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without limiting the foregoing, at no cost to BMS (i) reasonably in advance of any preparation of an IND submission for Licensed Compounds and Licensed Products by BMS, the Parties will meet to discuss the information to be included in such IND submission that specifically relates to the Avidity AOC Platform Technology, and Avidity will provide such information in its Control that it believes to be useful, and (ii) prior to any IND submissions for Licensed Compounds and Licensed Products by BMS, to the extent such IND submissions specifically relates to the Avidity AOC Platform Technology, BMS shall provide Avidity a draft copy of the portions of such IND that specifically relate to the Avidity AOC Platform Technology to allow Avidity to review to ensure consistency of language and information previously known to Regulatory Authorities regarding the Avidity AOC Platform Technology, and BMS shall reasonably consider any comments provided by Avidity within [\*\*\*] of Avidity's receipt of such draft copy that specifically relate to the Avidity AOC Platform Technology, and BMS will also provide Avidity with a final copy of the portion of such IND submissions that specifically relate to the Avidity AOC Platform Technology as filed with the Regulatory Authority. For clarity, in no event shall the foregoing discussions, support, and assistance provided by Avidity be subject to Section 7.12 (Cost of Avidity Support Services).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In addition, prior to any submission of regulatory documentation relating to the Avidity AOC Platform Technology by Avidity, to the extent such submissions specifically relates to any Licensed Compound or Licensed Product, Avidity shall provide BMS a draft copy of such documentation to allow BMS to review to ensure consistency of language and information previously known to Regulatory Authorities regarding the Licensed Compound or Licensed Product, and Avidity shall consider any comments timely provided by BMS in good faith; *provided* that (x) Avidity may redact any information that is not specifically related to the Licensed Compound or Licensed Product and (y) Avidity will not have to provide BMS with any regulatory documentation, information or materials related to a compound or product being Developed or Commercialized by a Third Party licensee of Avidity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2 <u>Interactions with Regulatory Authorities</u>. As between the Parties, BMS (or its Affiliates or other designees) shall have the sole right to communicate and otherwise interact with Regulatory Authorities with respect to any Licensed Compound or Licensed Product, including with respect to any INDs, Drug Approval Applications and other Regulatory Approvals in connection therewith. Except to the extent required by Applicable Law (in which case Avidity shall notify BMS of such legal requirement in writing and shall, to the extent permitted by Applicable Law, consult with, and follow the reasonable direction of BMS in making the filings or otherwise interacting with Regulatory Authorities), Avidity (and its Affiliates) shall have no right to, and shall not, make any regulatory filings related to any Licensed Compound or Licensed Product or otherwise interact with any Regulatory Authorities with respect to any Licensed Compound or Licensed Product; *provided* that as and to the extent reasonably requested by BMS in writing, Avidity shall interact with Regulatory Authorities (including making such regulatory filings and performing such other regulatory functions) in connection with Licensed Compounds and Licensed Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3 <u>Global Safety Database; Pharmacovigilance</u>. BMS (itself or through its designee) shall be responsible for establishing, holding and maintaining the global safety database for any Licensed Product with respect to information on adverse events concerning any Licensed Product, as and to the extent required by Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.4 <u>Safety Information Exchange</u>. Prior to the first Licensed Product entering clinical Development, the Parties will negotiate in good faith and agree on processes and procedures for sharing safety information and ensuring compliance with reporting requirements to Regulatory Authorities relating to Licensed Products. The agreed upon processes and procedures will be set forth in a pharmacovigilance agreement containing mutually agreed terms and conditions that are customary for agreements of this type.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Manufacture</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3.1 <u>Supply of Licensed Compounds and Licensed Products</u>. BMS (and its Affiliates), either itself or with or through Third Party(ies), shall have the sole right to Manufacture (and shall control all aspects of the Manufacturing of) Licensed Compounds and Licensed Products for use in the Field in the Territory (including for use in Clinical Trials) subject to the terms of this Agreement, and for clarity, except as specifically required pursuant to and in accordance with Section 6.3.2 (Supply of Licensed

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Compounds and Licensed Products), Avidity (and its Affiliates) shall have no right to do so. For clarity, at all times during the Term, BMS shall have the right to conduct applicable pre-Manufacturing activities (including Developing the Manufacturing process), together with any Third Party with respect to such Licensed Compound or Licensed Product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3.2 <u>Supply of Licensed Compounds and Licensed Products for the Research Programs</u>. Avidity shall Manufacture (or have Manufactured) and supply to BMS Licensed Compounds (including Lead Compounds or Development Candidates, as applicable) and Licensed Products containing such Licensed Compounds for use in the conduct of activities under the Research Programs. The supply requirements requested by BMS shall be set forth in the applicable Research Plan and the cost for such requirements shall be included in the applicable Research Budget. For clarity, during the Research Term, Avidity will only Manufacture non-GMP Materials pursuant to this Section 6.3.2; provided, however, that, upon BMS's request, the Parties shall discuss in good faith Avidity's Manufacture and supply of GMP Materials to BMS where BMS determines (in BMS's sole discretion) that comparability studies are required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3.3 <u>Supply of Licensed Compounds and Licensed Products following the Research Programs</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If and to the extent requested by BMS, Avidity will Manufacture (or have Manufactured) and supply Licensed Compounds (or Licensed Products containing such Licensed Compounds, as requested by BMS) (and placebo) Directed to the First Licensed Target for BMS's use in clinical Development for Phase 1 Trials and Phase 2 Trials, following the completion of the Research Program with respect thereto. However, if BMS desires for Avidity to Manufacture and supply such Licensed Compounds and Licensed Products (and placebo) for use in Phase 1 Trials or Phase 2 Trials, then BMS must provide to Avidity a written request for such supply no later than the Successful Achievement of the Development Candidate Criteria with respect to such Research Program for the First Licensed Target. If so requested by BMS in accordance with this Section 6.3.2 (Supply of Licensed Compounds and Licensed Products), the Parties shall negotiate in good faith and shall enter into a supply agreement and associated quality agreement (collectively, the "<u>Supply Agreement</u>"), which shall include customary provisions to address the forecasting, order, delivery, and other customary provisions applicable to the supply of such Licensed Compounds and Licensed Products for BMS's such Development purposes; *provided* that Avidity will not be required to Manufacture (or have Manufactured) and supply any Licensed Compounds or Licensed Products until the Parties have executed a Supply Agreement. Any supply pursuant to this Section 6.3.3(a) (and for clarity, not provided pursuant to Section 6.3.2 (Supply of Licensed Compounds and Licensed Products for the Research Programs) for use in the conduct of Research Collaboration Activities) shall be charged to BMS at Avidity's actual fully-burdened cost of goods plus a [\*\*\*]% mark-up. In all cases, BMS shall have the right to review, and coordinate with Avidity with respect to, the supply chain to be used by Avidity to Manufacture and supply Development Candidates and Licensed Products hereunder. Except as provided in this Section 6.3.3(a), unless otherwise agreed by the Parties, BMS will be responsible for the Manufacture of Licensed Compounds and Licensed Products for BMS's use in Development following the completion of the Research Program with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing provisions of this Section 6.3.3 (Supply of Licensed Compounds and Licensed Products following the Research Programs), upon written notice to Avidity, BMS shall have the right, in its discretion, on a Licensed Compound-by-Licensed Compound or Licensed Product-by-Licensed Product basis, as applicable, to take over responsibility for Manufacturing (or having Manufactured) the applicable Licensed Compound or Licensed Product. If BMS provides such written notice, then BMS shall have full control, responsibility, and decision making authority in connection with such Manufacture and supply (and, if requested by BMS, Avidity shall commence the Manufacturing technology transfers and provide such other assistance with respect to the Manufacture of the applicable Development Candidate or Licensed Product in accordance with Section 5.10 (Information Sharing to Enable Exploitation of Licensed Compounds and Licensed Products) and Section 6.4.2 (Manufacturing Technology Transfer)).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Manufacturing Transition</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4.1 <u>Generally</u>. The JSC shall establish a joint technology transfer and supply steering committee ("<u>JTTSSC</u>") of duly qualified Manufacturing personnel to facilitate supply of, and development of the Avidity Manufacturing Process for, the relevant Licensed Compound and Licensed Products hereunder and Manufacturing Technology Transfer. The JTTSSC will be responsible for monitoring the progress of the Research Collaboration Activities under the Research Plans to anticipate, and plan for, the transition of Manufacturing responsibilities for the Licensed Compounds and Licensed Products to BMS. Avidity will regularly provide updates to the JTTSSC with respect to the status of the Manufacture and supply of, and development of the Avidity Manufacturing Process for, the relevant Licensed Compound and Licensed Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4.2 <u>Manufacturing Technology Transfer</u>. Without limiting the provisions of Section 5.10 (Information Sharing to Enable Exploitation of Licensed Compounds and Licensed Products), on a Research Program-by-Research Program basis, at the request of BMS, Avidity shall provide, and shall use Commercially Reasonable Efforts to cause its Third Party manufacturers to provide to BMS (or its designee), a full manufacturing technology transfer (including providing assistance as reasonably requested by BMS in connection with such transfer) of Avidity Know-How to enable BMS (or its Affiliate or designated Third Party manufacturer, as applicable) to implement the Avidity Manufacturing Process for, and to otherwise Manufacture, Licensed Products (including any Licensed Compound contained therein) from such Research Program at the facilities designated by BMS (each, a "<u>Manufacturing Technology Transfer</u>"). Prior to initiating such Manufacturing Technology Transfer, the Parties (through the JTTSSC) will promptly develop and agree upon a plan for conducting such Manufacturing Technology Transfer, including a timeline for completing activities set forth therein (the "<u>Manufacturing Technology Transfer Plan</u>"). Avidity shall initiate such requested Manufacturing Technology Transfer promptly (and in all cases within [\*\*\*]) after the Manufacturing Technology Transfer Plan is agreed upon by the Parties and shall complete such transfer in accordance with the Manufacturing Technology Transfer Plan on the timeline set forth therein. If requested by BMS, such Manufacturing Technology Transfer Plan shall include (a) facilitating BMS (or its Affiliate) entering into agreements with applicable Third Party suppliers relating to Licensed Compounds or Licensed Products, and (b) Avidity (and its Affiliates and Third Party manufacturers) providing to BMS (or its Affiliate or designated Third Party manufacturer, as applicable) all test results, records and other documentation related to the Manufacture of Licensed Compounds and Licensed Products, which shall be provided in English. Without limiting the generality of the foregoing, until such time as BMS (or its designee) is able to Manufacture GMP-grade clinical quantities of the applicable Licensed Compound or Licensed Product, as applicable (the "<u>Manufacturing Transition Period</u>"), (i) at the request of BMS, Avidity shall make available its (and its Affiliates') employees (subject to the reasonable availability of such employees) and consultants (including using Commercially Reasonable Efforts to cause personnel of its Third Party contract manufacturers to be made available) to BMS (and its designees) to provide reasonable consultation and technical assistance (including visitation to facilities) in order to assist with the implementation of the Manufacture (including with respect to the Avidity Manufacturing Process) of such Licensed Compound and Licensed Product by BMS (or its designee) and to assist BMS (or its designee) in the start-up of its Manufacture of such Licensed Compound and Licensed Product, as applicable, as well as Manufacturing process development for such Licensed Compound and Licensed Product and (ii) in addition to the foregoing clause (i), at the request of BMS, [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4.3 <u>Cost of Manufacturing Technology Transfer</u>. With respect to the Manufacturing Technology Transfer and assistance provided under Section 6.4.2 (Manufacturing Technology Transfer), Avidity will provide BMS with a cumulative maximum of [\*\*\*] FTE hours at no charge and, once such [\*\*\*] FTE hours has been hit, BMS will pay Avidity for the FTE Costs of such Manufacturing Technology Transfer and assistance at a mutually agreed FTE Rate. In addition, BMS shall reimburse Avidity for all documented Out-of-Pocket Costs incurred by Avidity in providing such support; *provided* that BMS must pre-approve any individual Out-Of-Pocket Cost that is not contemplated by the <u>Schedule 6.4.2</u> and exceeds [\*\*\*]. BMS will reimburse to Avidity for the FTE Costs and Out-Of-Pocket Costs set forth in this Section 6.4.3 (Cost of Manufacturing Technology Transfer) within [\*\*\*] of receiving an invoice therefor.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Commercialization</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5.1 <u>General</u>. BMS (and its Affiliates), either itself or with or through Third Party(ies), shall have the sole right to Commercialize (and shall control all aspects of the Commercialization of) Licensed Compounds and Licensed Products in the Field in the Territory, subject to the terms of this Agreement. Without limiting the foregoing, BMS (and its Affiliates), either itself or with or through Third Party(ies), shall have the sole right to (a) invoice and book sales, establish all terms of sale (including pricing and discounts), warehouse and distribute the Licensed Products in the Field in the Territory and to perform or cause to be performed all related services and (b) handle all returns, recalls, or withdrawals, order processing, invoicing, collection, distribution, and inventory management with respect to the Licensed Products in the Field in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5.2 <u>Diligence</u>. Subject to Avidity's compliance with this Agreement, on a Licensed Target-by-Licensed Target basis, BMS (itself or with or through its Affiliates or Third Parties) shall [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5.3 <u>Licensed Product Trademarks</u>. BMS and its Affiliates shall have the sole right to use any Trademark it owns or controls for Licensed Products in the Territory at its sole discretion. BMS shall have the sole right to control the name generation, selection, and clearance process relating to the creation of names and logos that become Licensed Product Trademarks. BMS shall also have the sole right to prosecute, enforce, and defend one or more Licensed Product Trademark(s). As between the Parties, BMS and its Affiliates shall own all rights to such Licensed Product Trademarks and all goodwill associated therewith, and the rights to any Internet domain names incorporating the applicable Licensed Product Trademarks or any variation or part of such Licensed Product Trademarks or the Licensed Product's generic name used as its URL address or any part of such address, throughout the Territory. Avidity shall not, and shall cause its Affiliates and (sub)licensees not to, (a) use in their respective businesses, any Trademark that is confusingly similar to, misleading or deceptive with respect to or that dilutes any (or any part) of the Licensed Product Trademarks (other than nominative fair use of such License Product Trademarks), and (b) do any act that endangers, destroys, or similarly affects, in any material respect, the value of the goodwill pertaining to the Licensed Product Trademarks. Avidity shall not, and shall cause its Affiliates and (sub)licensees not to, attack, dispute, or contest the validity of or ownership of any Licensed Product Trademark anywhere in the Territory or any registrations issued or issuing with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5.4 <u>Avidity Co-Promotion Discussion</u>. [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 <u>Development Reports</u>. On a Research Program-by-Research Program basis, following the end of the Research Term for such Research Program and until First Commercial Sale of a Licensed Product Directed to the Licensed Target with respect to such Research Program, on a [\*\*\*] basis, BMS shall provide Avidity with a high-level written summary of any material clinical Development activities resulting from BMS's, its Affiliate's or Sublicensee's clinical Development of applicable Licensed Compounds and Licensed Products under this Agreement (a) since the last written summary and (b) that are planned for the next [\*\*\*]. All such information shall be Confidential Information of BMS.

ARTICLE 7.

<u>PAYMENTS; ROYALTIES AND REPORTS</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Upfront Payment</u>. In consideration for the rights and licenses granted to BMS by Avidity under this Agreement, BMS shall pay Avidity a one-time payment in the amount of $60,000,000 within 30 days after the Effective Date (the "<u>Upfront Payment</u>"). The Upfront Payment will be nonrefundable and noncreditable against any other payments due hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Equity Investment</u>. The Parties are entering into the Securities Purchase Agreement as of the Effective Date pursuant to which BMS shall purchase certain shares of Common Stock of Avidity, all as set forth therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Milestone Payments</u>. In consideration for the rights and licenses granted to BMS by Avidity under this Agreement, BMS shall pay to Avidity the one-time, non-refundable, non-creditable milestone payments set forth in this Section 7.3 (Milestone Payments) (collectively, "<u>Milestone</u> <u>Payments</u>") upon the first achievement of the corresponding milestone event set forth in this Section 7.3 (Milestone Payments) (collectively, "<u>Milestone Events</u>"), in each case within the period of time set forth herein.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.1 <u>Development and Regulatory Event Milestones</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Following the first achievement by BMS, its Affiliates or Sublicensees hereunder of the corresponding Milestone Event listed in this Section 7.3.1(a) and set forth in the table below by a Licensed Product Directed to the First Licensed Target in the Field, BMS shall pay Avidity the one-time, non-refundable, non-creditable, Milestone Payments listed in this Section 7.3.1(a) and set forth in the table below, in each case in accordance with the procedure set forth in Section 7.3.3 (Notice of Event Milestone Achievement).

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;First Licensed Target Milestone | Milestone Payment due<br>upon 1<sup>st</sup> Indication to<br>Achieve such Milestone | Milestone Payment due<br>upon 2<sup>nd</sup> Indication to<br>Achieve such Milestone |
| &nbsp;&nbsp;&nbsp; Successful Achievement of Development Candidate Criteria for the first Licensed Compound contained in a Licensed Product Directed to the First Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; Initiation of first Phase 1 Trial for the first Licensed Product Directed to the First Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; Initiation of first Phase 2 Trial for the first Licensed Product Directed to the First Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; Initiation of first Registrational Trial for the first Licensed Product Directed to the First Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; First approval of Drug Approval Application in U.S. for the first Licensed Product Directed to the First Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; First approval of Drug Approval [\*\*\*] for the first Licensed Product Directed to the First Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; First approval of Drug Approval Application [\*\*\*] for the first Licensed Product Directed to the First Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp;Maximum potential Milestone Payments for First Licensed Target | [\*\*\*] | [\*\*\*] |

---

For clarity, the Milestone Payments listed above shall be made only once upon the first achievement of each relevant Milestone Event by a Licensed Product Directed to the First Licensed Target, regardless of the number of Licensed Products that achieve any particular Milestone Event. Further, each Milestone Event will be deemed to be achieved by a Licensed Product for the first Indication to achieve such Milestone Event regardless of whether a prior Milestone Event was achieved by a Licensed Product in a different Indication.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except with respect to the First Licensed Target, on a Licensed Target-by-Licensed Target basis, following the first achievement by BMS, its Affiliates or Sublicensees hereunder of the corresponding Milestone Event listed in this Section 7.3.1(b) and set forth in the table below by a Licensed Product Directed to such Licensed Target in the Field in the Territory, BMS shall, pay Avidity the one-time, non-refundable, non-creditable, Milestone Payments listed in this Section 7.3.1(b) and set forth in the table below, in each case in accordance with the procedure set forth in Section 7.3.3 (Notice of Event Milestone Achievement).

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;Licensed Target Milestone (excluding First Licensed Target) | Milestone Payment due<br>upon 1<sup>st</sup> Indication to<br>Achieve such Milestone | Milestone Payment due<br>upon 2<sup>nd</sup> Indication to<br>Achieve such Milestone |
| &nbsp;&nbsp;&nbsp; Successful Achievement of Lead Criteria for the first Licensed Compound contained in a Licensed Product Directed to a given Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; Successful Achievement of Development Candidate Criteria for the first Licensed Compound contained in a Licensed Product Directed to a given Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; Initiation of first Phase 1 Trial for the first Licensed Product Directed to a given Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; Initiation of first Phase 2 Trial for the first Licensed Product Directed to a given Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; Initiation of first Registrational Trial for the first Licensed Product Directed to a given Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; First approval of Drug Approval Application in U.S. for the first Licensed Product Directed to a given Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; First approval of Drug Approval Application [\*\*\*] for the first Licensed Product Directed to a given Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; First approval of Drug Approval Application [\*\*\*] for the first Licensed Product Directed to a given Licensed Target | [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp;Maximum potential Milestone Payments per Licensed Target (excluding First Licensed Target) | [\*\*\*] | [\*\*\*] |

---

For clarity, the Milestone Payments listed above shall be made only once for each Licensed Target (excluding the First Licensed Target) upon the first achievement of each relevant Milestone Event by a Licensed Product Directed to a particular Licensed Target (excluding the First Licensed Target), regardless of the number of Licensed Products that achieve any particular Milestone Event. Further, each Milestone Event will be deemed to be achieved by a Licensed Product for the first Indication to achieve such Milestone Event regardless of whether a prior Milestone Event was achieved by a Licensed Product in a different Indication.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.2 <u>Commercial Sales Milestones</u>. On a Licensed Target-by-Licensed Target basis, BMS shall pay to Avidity the following one-time, non-refundable, non-creditable sales-based milestone payment listed in this Section 7.3.2 (Commercial Sales Milestones) and set forth in the table below following the first achievement hereunder by Licensed Products Directed to such Licensed Target in a given Calendar Year, whether Net Sales are made by BMS, its Affiliates or Sublicensees (each such sales milestone event, a "<u>Sales Milestone</u>" and its corresponding milestone payment, a "<u>Sales Milestone Payment</u>"). Each Sales Milestone Payment shall be in accordance with the procedure set forth in Section 7.3.3 (Notice of Event Milestone Achievement).

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---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial Sales Milestone | Commercial Sales Milestone<br> Payment |
| &nbsp;&nbsp;&nbsp; Aggregate Net Sales of all Licensed Products Directed to a given Licensed Target in the Field in the Territory in a single Calendar Year greater than or equal to [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; Aggregate Net Sales of all Licensed Products Directed to a given Licensed Target in the Field in the Territory in a single Calendar Year greater than or equal to [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp; Aggregate Net Sales of all Licensed Products Directed to a given Licensed Target in the Field in the Territory in a single Calendar Year greater than or equal to [\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;&nbsp;Maximum potential Sales Milestone Payments for all Licensed Products Directed to a given Licensed target | [\*\*\*] |

---

For clarity, each Sales Milestone Payments shall be paid only once for each Licensed Target upon the first achievement of the corresponding Sales Milestone by Licensed Products Directed to a particular Licensed Target in a single Calendar Year. If no royalty is payable on a given unit of Licensed Product (*e.g.*, following the Royalty Term for such Licensed Product in a given country), then the Net Sales of such unit of Licensed Product shall not be included for purposes of determining whether a Sales Milestone is achieved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.3 <u>Notice of Event Milestone Achievement</u>. BMS shall notify Avidity in writing within 10 Business Days following the achievement of each Milestone Event set forth in Section 7.3.1 (Development and Regulatory Event Milestones) and BMS shall, within 60 days following the achievement of each such Milestone Event, pay Avidity the appropriate Milestone Payment. BMS shall notify Avidity in writing within [\*\*\*] following the Calendar Quarter in which any Sales Milestone was achieved, and BMS shall, within [\*\*\*] following such Calendar Quarter, pay Avidity the appropriate Milestone Payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.4 <u>Skipped Milestones</u>. If the Milestone Event for Initiation of a Phase 2 Trial for a Licensed Product set forth in Section 7.3.1(a) or Section 7.3.1(b) has failed to be achieved and BMS (or any of its Affiliates or Sublicensees) achieves the Initiation of a Registrational Trial, then such Milestone Event shall be deemed achieved and BMS shall pay to Avidity the Milestone Payment corresponding to Initiation of the Phase 2 Trial for a Licensed Product set forth in Section 7.3.1(a) or Section 7.3.1(b), as applicable. Similarly, if the Milestone Event for Initiation of the first Registrational Trial for a Licensed Product set forth in Section 7.3.1(a) or Section 7.3.1(b) has failed to be achieved and BMS (or any of its Affiliates or Sublicensees) achieves the first approval of Drug Approval Application in U.S. with respect to the same Licensed Product then such Milestone Event shall be deemed achieved and BMS shall pay to Avidity the Milestone Payment corresponding to Initiation of the first Registrational Trial for a Licensed Product set forth in Section 7.3.1(a) or Section 7.3.1(b), as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Royalties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.1 <u>Royalties for Products</u>. As further consideration for the rights granted to BMS under this Agreement, subject to Section 7.4.3 (Royalty Reduction Due to No Valid Claim), Section 7.4.4 (Royalty Reduction Due to Generic/Biosimilar Competition), Section 7.4.5 (Stacking), and Section 7.4.6 (Cumulative Cap on Royalty Reductions), and Section 7.4.7 (Compulsory Licenses), during the applicable Royalty Term with respect to a given Licensed Product, on a Licensed Target-by-Licensed Target basis, BMS shall pay to Avidity, for each Calendar Year, a tiered royalty (the "<u>Royalties</u>") on annual Net Sales of all Licensed Products Directed to such Licensed Target in the Field in the Territory (but excluding Net Sales of any such Licensed Product in any country for which the Royalty Term for such Licensed Product in such country has expired), based on the royalty rates as set forth in the table below:

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---

| | |
|:---|:---|
| Portion of Annual Net Sales of all Licensed Products Directed to a given Licensed Target in a given<br>Calendar Year in the Territory | Royalty Rate |
| On the portion of annual Net Sales of all Licensed Products Directed to a given Licensed Target in a given Calendar Year in the Territory that is less than or equal to [\*\*\*] | [\*\*\*] |
| On the portion of annual Net Sales of all Licensed Products Directed to a given Licensed Target in a given Calendar Year in the Territory that is greater than or equal to [\*\*\*] but less than or equal to [\*\*\*] | [\*\*\*] |
| On the portion of annual Net Sales of all Licensed Products Directed to a given Licensed Target in a given Calendar Year in the Territory that greater than [\*\*\*] | [\*\*\*] |

---

By way of example, if the annual Net Sales of all Licensed Products Directed to a given Licensed Target in the Territory in a given [\*\*\*] are [\*\*\*], the amount of Royalties payable hereunder for such Licensed Target shall be calculated as follows (subject to any applicable reductions under this Article 7 (Payments; Royalties and Reports)): ([\*\*\*]) + ([\*\*\*]) + ([\*\*\*]) = [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.2 <u>Royalty Term</u>. On a Licensed Product-by-Licensed Product and country-by-country basis, BMS's royalty payment obligation shall commence beginning on the date of the First Commercial Sale of such Licensed Product in such country and expire on the later of: [\*\*\*] (such period, the "<u>Royalty Term</u>"). With respect to a given Licensed Product in a given country in the Territory, from and after the expiration of the Royalty Term for such Licensed Product in such country, Net Sales of such Licensed Product in such country shall be excluded for purposes of calculating the Net Sales (including the thresholds and tiers) set forth in this Section 7.4 (Royalties). After expiration of the Royalty Term, no further Royalties will be payable in respect of sales of such Licensed Product in such country and thereafter all licenses granted by Avidity to BMS under this Agreement with respect to such Licensed Product in such country shall automatically become fully paid-up, royalty-free, perpetual, and irrevocable licenses; *provided* that, upon the date that is [\*\*\*] following the expiration of the Term, such license shall become be non-exclusive with respect to Know-How. For clarity, no Royalties shall be due or payable on Licensed Product held in inventory and not sold to Third Parties on the date of expiration or termination of the Royalty Term, subject to Section 11.7.1 (Termination of License Grants).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.3 <u>Royalty Reduction Due to Lack of Valid Claims</u>. On a Licensed Product-by-Licensed Product basis, with respect to any [\*\*\*] during the Royalty Term, if a Licensed Product is sold in a country where there is no Valid Claim of any (a) Avidity Patent or (b) Research Collaboration Patent, in each case ((a) and (b)), that Covers such Licensed Product in such country, then the royalty rates set forth in Section 7.4.1 (Royalties for Products) for such Licensed Product for such country in such Calendar Quarter shall be reduced by [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.4 <u>Royalty Reduction Due to Generic/Biosimilar Competition</u>. If during any [\*\*\*] during the Royalty Term for a Licensed Product there are one or more Biosimilar Products being sold in a country with respect to such Licensed Product, then the royalty rates payable under this Agreement with respect to such Licensed Product in such country for such [\*\*\*] shall be reduced as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by [\*\*\*], in the event that in any [\*\*\*] such Biosimilar Product(s), by unit equivalent volume in such country, exceed [\*\*\*]; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by [\*\*\*], in the event that in any [\*\*\*] such Biosimilar Product(s), by unit equivalent volume in such country, exceed [\*\*\*].

[\*\*\*].

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.5 <u>Stacking</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>BMS Third Party Payments</u>. If BMS (or any of its Affiliates or Sublicensees) (i) obtains a license under Patents (or Patents and related Know-How) of a Third Party (whether prior to, or after, the Effective Date) that are necessary for the development, making, using, selling, offering for sale, or importing of any Licensed Product (or any Licensed Compound with respect to such Licensed Product) (other than Patents of which Avidity provided written notice to BMS through the IP Committee pursuant to a common interest agreement at or before the time at which BMS selected a particular Licensed Target) and (ii) under the terms of such license, the development, making, using, selling, offering for sale, or importing of any Licensed Product (or any Licensed Compound with respect to such Licensed Product) by or on behalf of BMS (or any of its Affiliates or Sublicensees) would result in a payments to such Third Party, then BMS shall be entitled to deduct from the Royalties due to Avidity with respect to Net Sales of such Licensed Product in a particular Calendar Quarter, an amount equal to [\*\*\*] of the amount of any such payments (including payments for obtaining such right or license, royalties, milestones and any other amounts) paid by BMS (or any of its Affiliates or Sublicensees) to such Third Party for license (or the exercise thereof) ("<u>BMS Third Party Payments</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>[\*\*\*]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.6 <u>Cumulative Cap on Royalty Reductions</u>. [\*\*\*] on a country-by-country and Licensed Product-by-Licensed Product basis, during the Royalty Term, in no event shall the royalty reductions described in Sections 7.4.3 (Royalty Reduction Due to Lack of Valid Claims), 7.4.4 (Royalty Reduction due to Generic/Biosimilar Competition), and Section 7.4.5(a) (BMS Third Party Patents), alone or together, reduce the Royalties payable by BMS for such Licensed Product in such country in any given [\*\*\*] to less than [\*\*\*] of the royalty amounts otherwise payable by BMS for such Licensed Product in such country in such [\*\*\*]. BMS may carry over and apply any such royalty reductions that are incurred or accrued in a [\*\*\*] and are not deducted in such [\*\*\*] due to the limitation set forth in the first sentence of this Section 7.4.6 (Cumulative Cap on Royalty Reductions), to any subsequent [\*\*\*] and shall begin applying such reductions to such royalties as soon as practicable and continue applying such reductions on a [\*\*\*] basis thereafter until fully deducted, in all cases subject to the limitation set forth in the first sentence of this Section 7.4.6 (Cumulative Cap on Royalty Reductions).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.7 <u>Compulsory Licenses</u>. If a Compulsory License is granted to a Third Party with respect to a Licensed Product in any country in the Territory with a royalty rate lower than the royalty rate that otherwise would be applicable under Section 7.4.1 (Royalties for Products) to such Licensed Product in such country (as adjusted pursuant to Section 7.4.2 (Royalty Term), Sections 7.4.3 (Royalty Reduction Due to Exclusivity Expiring), 7.4.4 (Royalty Reduction due to Generic/Biosimilar Competition) and Section 7.4.5 (Stacking)), then the royalty rate to be paid by BMS on Net Sales in such country under Section 7.4.1 (Royalties for Products) shall be reduced [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.8 <u>Reports; Payment of Royalty</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Abbreviated Reports</u>. During the Royalty Term, following the First Commercial Sale of a Licensed Product, BMS shall, within [\*\*\*] after the end of each [\*\*\*], provide to Avidity an abbreviated written sales report setting forth the Net Sales (in Dollars) of Licensed Products during such [\*\*\*] on a country-by-country basis. It is understood that final reported Net Sales for purposes of calculating the royalty owed under this Section 7.4 (Royalties) may vary from such abbreviated sales report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Quarterly Reports</u>. During the Royalty Term, following the First Commercial Sale of a Licensed Product, BMS shall, within [\*\*\*] after the end of each Calendar Quarter, provide to Avidity a written report for such Calendar Quarter setting forth, on a Licensed Product-by-Licensed Product and country-by-country basis, (i) the amount of Net Sales and gross sales of each Licensed Product made by BMS and its Affiliates and Sublicensees during such Calendar Quarter for which Royalties are payable, (ii) the number of Licensed Products sold, (iii) Royalties (in Dollars) due on Net Sales for such Calendar Quarter, and (iv) the exchange rate used to calculate the Royalty amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Royalty Payments</u>. BMS shall pay all Royalties due under this Agreement with respect to a [\*\*\*] within [\*\*\*] after the end of each [\*\*\*].

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Economics for Non-AOC Licensed Compounds</u>. The Parties stipulate and agree that the economic terms reflected in this Agreement assume that all Licensed Compounds will be AOCs and that the value of any non-AOC platform technology that may in the future be developed by Avidity is not reflected in this Agreement. Accordingly, and notwithstanding anything in this Agreement to the contrary, if BMS desires to include in a Research Plan for a Licensed Target the research and Development of a non-AOC compound Directed to such Licensed Target, then the Parties will discuss in good faith the additional economic terms that will apply to such non-AOC Licensed Compound to fairly compensate Avidity for the value that would be provide by such future non-AOC platform technology, and Avidity will have no obligation to enter into such a Research Plan unless and until such additional economic terms have been agreed upon by the Parties and set forth in an amendment to this Agreement or other written agreement between the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <u>Payment Date</u>. Any payments that are not paid on or before the date such payments are due under this Agreement shall bear interest at an annual rate equal to the lesser of (a) [\*\*\*], or (b) the highest rate permitted by Applicable Law, in each case calculated on the number of days such payment is delinquent, compounded monthly; except that, with respect to any disputed payments, no interest payment will be due on the disputed amount until such dispute is resolved and the interest that will be payable thereon will be based on the finally-resolved amount of such payment, calculated from the original date on which the disputed payment was due through the date on which payment is actually made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 <u>Blocked Payments</u>. In the event that, by reason of Applicable Law in any country, it becomes impossible or illegal for BMS to transfer, or have transferred on its behalf, payments owed to Avidity hereunder, BMS will promptly notify Avidity of the conditions preventing such transfer and such payments will be deposited in local currency in the relevant country to the credit of Avidity in a recognized banking institution designated by Avidity or, if none is designated by Avidity within a period of [\*\*\*] after Avidity receives such notice, in a recognized banking institution selected by BMS and identified in a written notice given to Avidity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 <u>Audits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9.1 <u>Audit Team</u>. Avidity may, upon Avidity's request and at Avidity's expense (except as provided for herein), cause an internationally recognized independent accounting firm selected by Avidity (except one to whom BMS has a reasonable objection) (the "<u>Audit Team</u>") to audit, during ordinary business hours, the books and records of BMS and its Affiliates and the correctness of any payment made or required to be made, and any report underlying any such payment (or lack thereof), pursuant to the terms of this Agreement. Prior to commencing its work pursuant to this Agreement, the Audit Team will enter into an appropriate confidentiality agreement with BMS obligating the Audit Team to be bound by obligations of confidentiality and restrictions on use of BMS's Confidential Information that are no less restrictive than the obligations set forth in Article 8 (Confidentiality and Publication).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9.2 <u>Limitations</u>. In respect of each audit of BMS's and its Affiliates' books and records: (a) BMS and each of its Affiliates may be audited only once per Calendar Year, (b) no books and records for any given Calendar Year may be audited more than once, but BMS's and its Affiliates' books and records shall still be made available if such records impact another Calendar Year being audited, and (c) Avidity shall only be entitled to audit books and records of BMS from the three Calendar Years prior to the Calendar Year in which the audit request is made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9.3 <u>Audit Notice</u>. In order to initiate an audit for a particular Calendar Year, Avidity must provide written notice of such audit to BMS. Avidity shall provide BMS with notice of one or more proposed dates of the audit not less than [\*\*\*] prior to the first proposed date. BMS shall, and shall ensure that its Affiliates, reasonably accommodate the scheduling of such audit. BMS shall, and shall ensure that its Affiliates, provide the Audit Team(s) with full access to the applicable books and records and otherwise reasonably cooperate with such audit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9.4 <u>Payments</u>. If the audit shows any under-reporting or underpayment, or overpayment by BMS, that under-reporting, underpayment or overpayment shall be reported to Avidity,

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and (a) BMS shall remit any underpayment (together with interest at the rate set forth in Section 7.7 (Payment Date)) to Avidity within [\*\*\*] after receiving the audit report and (b) BMS may credit any overpayment (together with interest at the rate set forth in Section 7.7 (Payment Date)) to BMS against future payments owed by BMS to Avidity under this Agreement (and if no further payments are due, such overpayment (together with interest at the rate set forth in Section 7.7 (Payment Date)) shall be refunded by Avidity at the request of BMS within [\*\*\*] of the receipt of the request). Further, if the audit for any Calendar Year shows an under-reporting or underpayment by BMS for that Calendar Year in excess of [\*\*\*] of the amounts properly determined, and which underpayment is also at least [\*\*\*], BMS shall reimburse Avidity for its reasonable out-of-pocket costs in connection with such audit, which reimbursement shall be made within [\*\*\*] after receiving appropriate invoices and other support for such audit-related costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 <u>Tax Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10.1 <u>Withholding Taxes</u>. Avidity will pay any and all income taxes levied on account of all payments it receives under this Agreement. BMS shall be entitled to deduct and withhold from any amounts payable under this Agreement such taxes as are required to be deducted or withheld therefrom under any provision of Applicable Law. BMS shall: (a) deduct those taxes from such payment, (b) timely remit the taxes to the proper taxing authority, and (c) send evidence of the obligation, together with proof of tax payment, to Avidity on a timely basis following that tax payment. BMS agrees to cooperate with Avidity in claiming refunds or exemptions from, or reductions in, such deductions or withholdings under any Applicable Law or treaty to ensure that any amounts required to be withheld pursuant to this Section 7.10 (Tax Matters) are reduced to the fullest extent permitted by Applicable Law. Notwithstanding the foregoing, BMS shall not withhold or deduct amounts without providing commercially reasonable notice and the opportunity to provide necessary certifications to reduce or eliminate such withholding or deductions. In addition, the Parties shall cooperate to minimize withholding taxes and indirect taxes (such as value added tax, sales tax, consumption tax and other similar taxes) in connection with this Agreement, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10.2 <u>Taxes Resulting from BMS Action</u>. If, as a result of any action by BMS, including any assignment, sublicense, or transfer of this Agreement or rights thereunder, change in the residence or domicile of BMS for tax purposes, or a failure of BMS to comply with Applicable Law (each, a "<u>Withholding Tax Action</u>"), BMS is required by Applicable Law to withhold taxes that would not have otherwise been due hereunder with respect to payments under this Agreement, then BMS shall pay additional amounts (including with respect to deductions and withholding on such amounts) to the extent necessary to ensure that Avidity receives a net amount equal to the sum that Avidity would have received had no such Withholding Tax Action occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10.3 <u>Tax Documentation</u>. Each Party has provided or will provide a properly completed and duly executed IRS Form W-9 or applicable Form W-8 to the other Party. Each Party shall provide to the other Party, at the time or times reasonably requested by such other Party, or as required by Applicable Law, such properly completed and duly executed documentation (for example, IRS Forms W-8 or W-9) as will permit payments made under this Agreement to be made without, or at a reduced rate of, withholding for taxes, and the applicable payment shall be made without (or at a reduced rate of) withholding to the extent permitted by such documentation, as reasonably determined by BMS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 <u>Payment Method and Exchange Rate</u>. BMS shall pay all amounts due hereunder in United States dollars via electronic funds transfer of immediately available funds to the bank account Avidity designates in writing from time to time. Conversion of sales recorded in local currencies to United States dollars shall be performed in a manner consistent with BMS's normal practices used to prepare its audited financial statements for internal and external reporting purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 <u>Cost of Avidity Support Services</u>. With respect to any support services that are expressly designated pursuant to this Agreement to be subject to this Section 7.12 (Cost of Avidity Support Services), Avidity will provide BMS with a cumulative maximum of [\*\*\*] FTE hours of such support services at no charge ("<u>Avidity Free Support Services FTE Cap</u>"). Once the Avidity Free Support Services FTE Cap has been hit, then BMS will pay Avidity for the FTE Costs of support services that are expressly designated pursuant to this Agreement to be subject to this Section 7.12 (Cost of Avidity

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Support Services) at a mutually agreed FTE Rate. In addition, BMS shall reimburse Avidity for all documented Out-of-Pocket Costs incurred by Avidity in providing such support; *provided* that BMS must pre-approve any individual Out-Of-Pocket Cost that exceeds [\*\*\*]. BMS shall reimburse Avidity for such FTE Costs and Out-of-Pocket Costs within [\*\*\*] or receiving an invoice therefor.

ARTICLE 8.

<u>CONFIDENTIALITY AND PUBLICATION</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Confidential Information</u>. "<u>Confidential Information</u>" means any data, information or material disclosed by one Party (the "<u>Disclosing Party</u>") in writing, visually, orally or in electronic medium to the other Party (the "<u>Receiving Party</u>") under this Agreement. Except as expressly set forth herein, the terms of this Agreement shall be the Confidential Information of both Parties (with each Party being deemed to be the Receiving Party with respect thereto) and both Parties shall have the obligations set forth in this Article 8 (Confidentiality and Publication) with respect thereto. In addition, the Parties agree and acknowledge that, in all cases, all BMS Contributed Collaboration Technology, BMS Contributed Collaboration Inventions, BMS Sole Inventions, BMS Manufacturing Know-How (to the extent any is disclosed to Avidity), and the identity of the Licensed Targets are the Confidential Information of BMS, and the Avidity AOC Platform Technology and the Avidity Manufacturing Process are the Confidential Information of Avidity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Product Information</u>. Notwithstanding Section 8.1 (Confidential Information), Avidity recognizes that by reason of, *inter alia*, BMS's status as an exclusive licensee pursuant to the grants under Section 5.1.1(a) (License Grant), BMS has an interest in Avidity's maintaining the confidentiality of certain information of Avidity and certain information of both Parties. Accordingly, during the Term, Avidity shall, and shall cause its Affiliates and its and their respective officers, directors, employees, and agents to, keep confidential, and not publish, disclose, or use for any purpose (other than to fulfill Avidity's obligations, or exercise Avidity's rights (including all rights retained by Avidity) hereunder), any [\*\*\*], collectively, the "<u>Product Information</u>"), except to the extent (i) the Product Information is in the public domain through no fault of Avidity, its Affiliates or any of its or their respective officers, directors, employees, or agents, (ii) disclosure of the Product Information is expressly permitted under Section 8.5 (Permitted Disclosures), or (iii) such disclosure or use is otherwise expressly permitted by the terms of this Agreement (which, for clarity, shall be interpreted as if Avidity was the Receiving Party with respect thereto). For purposes of Section 8.3 (Nondisclosure Obligation) and Section 8.5 (Permitted Disclosures), BMS shall be deemed to be the disclosing Party with respect to Product Information under Section 8.3 (Nondisclosure Obligation) and Section 8.5 (Permitted Disclosures) and Avidity shall be deemed to be the receiving Party with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>Nondisclosure Obligation</u>. Subject to Section 8.4 (Exceptions) and Section 8.5 (Permitted Disclosure), unless the Disclosing Party provides prior written consent, the Receiving Party shall maintain in confidence all Confidential Information of the Disclosing Party using at least the same degree of care with which the Receiving Party holds its own confidential information (but in no event less than a commercially reasonable degree of care), shall not disclose such Confidential Information to any Third Party and shall not use such Confidential Information for any purpose except to exercise such Party's rights or fulfill its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>Exceptions</u>. Each Party's confidentiality and non-use obligations under this Agreement shall not apply to any portion of the Confidential Information of the Disclosing Party that the Receiving Party can demonstrate with competent written proof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4.1 is known by the Receiving Party at the time of its receipt, without obligation of confidentiality or non-use, and not through a prior disclosure by the Disclosing Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4.2 is in the public domain before its receipt from the Disclosing Party, or thereafter enters the public domain through no fault of the Receiving Party or with the consent of the Disclosing Party;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4.3 is subsequently disclosed to the Receiving Party, without obligation of confidentiality or non-use, by a Third Party who may lawfully do so and who is not under an obligation of confidentiality to the Disclosing Party; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4.4 is developed by the Receiving Party independently of Confidential Information received from the Disclosing Party and without the aid, application or use of the Disclosing Party's Confidential Information.

Any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the Receiving Party unless the combination itself and principle of operation are published or available to the general public or in the rightful possession of the Receiving Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 <u>Permitted Disclosure</u>. Nothing in this Article 8 (Confidentiality and Publication) shall restrict the Receiving Party from disclosing Confidential Information of the Disclosing Party or Product Information to the extent that such disclosure:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5.1 is made to governmental or other regulatory agencies in order to obtain patents addressed in this Agreement or to gain or maintain authorizations to conduct Clinical Trials or to market Licensed Products; *provided* that such disclosure is limited to the extent reasonably necessary to obtain such patents or authorizations and the Receiving Party takes reasonable measures to obtain confidential treatment from regulatory agencies for such information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5.2 is made to (a) the Receiving Party's Affiliates, potential and actual Sublicensees (with respect to BMS), employees, officers, directors, agents, consultants, or other Third Parties for purposes the Receiving Party reasonably deems necessary or advisable for the exploitation of its rights (including its retained rights) or fulfillment of its obligations under this Agreement, or (b) *bona fide* potential or actual acquirors, investors, financing sources (including in any potential royalty financing), strategic partners, royalty purchasers, and their counsel (*provided* that, in each case, disclosure by Avidity as the Receiving Party of Confidential Information under this clause (b) shall be (A) limited[\*\*\*] and (B) on a need to know basis as may be necessary in connection with their evaluation of such potential acquisition, investment, or collaboration); *provided* that, in each case ((a) and (b)), (i) all such recipients agree to be bound by, or are otherwise bound by, confidentiality and non-use obligations that are no less stringent than those confidentiality and non-use provisions contained in this Agreement and obligations of invention assignment sufficient for such Party to obtain rights from such personnel to meet its obligation to grant licenses to the other Party under this Agreement and (ii) the Receiving Party shall be responsible for and liable under this Agreement with respect to any breach of its confidentiality and non-use obligations caused by such recipients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5.3 is required to comply with Applicable Law, valid order of a court of competent jurisdiction, or other judicial or administrative process of governmental authority or agency, including of the United States Securities and Exchange Commission or similar regulatory agency in other countries; *provided* that the Receiving Party shall (a) promptly inform the Disclosing Party of the disclosure that is being sought in order to provide the Disclosing Party, where possible, an opportunity to challenge, limit or receive confidential treatment for the required disclosure, (b) upon request, reasonably cooperate with any efforts by the Disclosing Party to challenge, limit, or receive confidential treatment for, the required disclosure, and (c) only disclose the minimum Confidential Information necessary to comply, as determined by the Receiving Party's legal counsel. Confidential Information or Product Information that is disclosed by judicial or administrative process, or through operation of Applicable Law or rules of a securities exchange shall remain otherwise subject to the confidentiality and non-use provisions set forth in this Article 8 (Confidentiality and Publication) unless released into the public domain through such process or operation of Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 <u>Survival</u>. Each Party's obligations under this Article 8 (Confidentiality and Publication) shall apply during the Term and continue for [\*\*\*] thereafter with respect to Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 <u>Publicity</u>. [\*\*\*].

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8 <u>Terms of Agreement</u>. If a Party is required by Applicable Law, valid order of a court of competent jurisdiction, or other judicial or administrative process of governmental authority or agency, including of the United States Securities and Exchange Commission or similar regulatory agency in other countries, to submit a description of the terms of this Agreement to or file a copy of this Agreement with any Governmental Authority as aforesaid, such Party shall not disclose any terms or conditions of this Agreement, except as follows: such Party shall (a) promptly notified the other Party in writing of such requirement and any respective timing constraints, (b) provided written copies of the proposed disclosure or filing to the other Party reasonably in advance of such filing or other disclosure (in all cases at least [\*\*\*] prior to the anticipated date of disclosure, unless such shorter period is reasonably necessary to comply with Applicable Law), (c) if requested by such other Party, seek, or cooperate with such Party's efforts to obtain, confidential treatment or a protective order with respect to any such disclosure to the extent available, (d) give the other Party a reasonable time under the circumstances to comment upon and request confidential treatment for such disclosure, and (e) make such disclosure or filing solely at the time and in the manner reasonably determined by its counsel to be required by Applicable Law or the applicable Governmental Authority. If a Party seeks to make a disclosure or filing as set forth in this Section 8.8 (Terms of Agreement) and the other Party provides comments within the respective time periods or constraints specified herein, the Party seeking to make such disclosure or filing will reasonably consider such comments and use good faith efforts to incorporate such comments in the disclosure or filing; *provided* that prior to making any such filing of this Agreement, the Parties shall reasonably cooperate and use good faith efforts to agree on a redacted form of this Agreement to be so filed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9 <u>Publications</u>. BMS shall have the right to publish manuscripts, abstracts, presentations or other articles in scientific journals or at scientific conferences relating to any Licensed Target, Licensed Compound or Licensed Product without obtaining the prior written consent of Avidity*; provided, however,* that (a) if a Avidity employee is also named as an author or (b) if such manuscripts, abstracts, presentations or other articles contain information relating to Avidity AOC Platform Technology, then Avidity shall have the right to review and comment upon each such manuscript, abstract, presentation or other article in which and BMS shall consider such comments in good faith. Avidity may not publish manuscripts, abstracts, presentations or other articles in scientific journals or at scientific conferences related to any Licensed Target, Licensed Compound or Licensed Product, without the prior written consent of BMS. If BMS desires to make a publication pursuant to this Section 8.9 for which Avidity has the right to comment, BMS shall provide a copy of the proposed publication (including abstracts, or presentation to a journal, editor, meeting, seminar or other third party) to Avidity for at least [\*\*\*] prior to submission of such proposed manuscript for publication; the object being to prevent either the endangerment of applications for the protection of property rights by premature publications detrimental to their novelty or the disclosure of Confidential Information. If, during the [\*\*\*] specified above Avidity notifies BMS that a proposed publication contains patentable subject matter directed to Avidity Platform Inventions that requires protection, Avidity may by written notice delay the publication for a period of time not to exceed [\*\*\*] from the date of such written notice to seek appropriate patent protection for any subject matter in such publication that it reasonably believes may be patentable. BMS shall delete from the proposed publication prior to submission all Confidential Information of Avidity that Avidity identifies in good faith and requests to be deleted.

ARTICLE 9.

<u>INTELLECTUAL PROPERTY</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Background IP</u>. Except as expressly set forth herein, as between the Parties, each Party is and shall remain the owner of all Intellectual Property Rights and Confidential Information that it owns as of the Effective Date or that it develops or acquires thereafter pursuant to activities independent of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Inventions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.1 <u>Disclosure</u>. Each Party will disclose to the other Party all Inventions discovered, conceived, or otherwise developed in the performance of Research Collaboration Activities, whether solely or jointly by or on behalf of such Party or its Affiliates [\*\*\*], and such disclosures shall (a) be made promptly and in any event reasonably prior to the filing of any patent application with respect to such Invention, as applicable, and (b) include all invention disclosures or other similar documents submitted to such Party by its or its Affiliates' employees, agents or independent contractors relating thereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2.2 <u>Ownership</u>. Subject to this Section 9.2.2 (Ownership), as between the Parties, each Party shall solely own and retain all right, title, and interest in and to any and all Inventions that are discovered, conceived, or otherwise developed solely by or on behalf of such Party under this Agreement, whether or not patented or patentable, and any and all Patents and other Intellectual Property Rights with respect thereto. Inventorship shall be determined in accordance with U.S. patent law. Notwithstanding the foregoing, the following will apply with respect to certain Inventions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Avidity Platform Inventions</u>. Any Invention that is an Avidity Platform Invention shall be owned by Avidity. Avidity's ownership rights to the Avidity Platform Inventions include all Intellectual Property Rights with respect thereto, including any Patents and the right to pursue the same. BMS (and its Affiliates) shall, and hereby does, assign all rights worldwide to the Avidity Platform Inventions to Avidity; *provided* that if such assignment is prohibited by Applicable Law or otherwise delayed, then pending the completion of such assignment BMS shall grant, and hereby does grant, to Avidity, a perpetual, irrevocable, exclusive, worldwide, royalty-free, fully paid-up license, with the right to grant sublicenses through multiple tiers, under such Avidity Platform Inventions. BMS shall reasonably assist Avidity in recording and perfecting Avidity's rights in and to Avidity Platform Inventions. Avidity shall be entitled to record in its own name relevant patent applications and to own resultant Patents claiming any Avidity Platform Invention. Avidity Platform Inventions shall be Confidential Information of Avidity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>BMS Contributed Inventions; BMS Manufacturing Inventions</u>. Any Invention that is an BMS Contributed Collaboration Invention or BMS Manufacturing Invention shall be owned by BMS. BMS's ownership rights to the BMS Contributed Collaboration Inventions and BMS Manufacturing Inventions include all Intellectual Property Rights with respect thereto, including any Patents and the right to pursue the same. Avidity (and its Affiliates) shall, and hereby does, assign all rights worldwide to the BMS Contributed Collaboration Invention and BMS Manufacturing Invention to BMS; *provided* that if such assignment is prohibited by Applicable Law or otherwise delayed, then pending the completion of such assignment Avidity shall grant, and hereby does grant, to BMS, a perpetual, irrevocable, exclusive, worldwide, royalty-free, fully paid-up license, with the right to grant sublicenses through multiple tiers, under such BMS Contributed Collaboration Invention and BMS Manufacturing Invention. Avidity shall reasonably assist BMS in recording and perfecting BMS's rights in and to BMS Contributed Collaboration Invention and BMS Manufacturing Invention. BMS shall be entitled to record in its own name relevant patent applications and to own resultant BMS Contributed Collaboration Invention Patents and Patents that cover BMS Manufacturing Inventions. BMS Contributed Collaboration Inventions and BMS Manufacturing Inventions shall be Confidential Information of BMS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Research Collaboration Inventions</u>. [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Employee Assignment</u>. Each Party shall cause its and its Affiliates' employees, consultants, sublicensees, agents and contractors performing activities hereunder to assign to the applicable Party, such Person's right, title and interest in and to any and all Avidity Platform Inventions, BMS Contributed Collaboration Inventions, BMS Manufacturing Inventions, Research Collaboration Inventions, and Intellectual Property Rights therein, as is necessary to effect the intent of this Section 9.2.2 (Ownership).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Filing, Prosecution and Maintenance of Patents</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.1 <u>Avidity Product Patents and Research Collaboration Patents</u>. As between the Parties, subject to Section 9.3.4 (Cooperation), BMS shall have the first right, at its discretion and expense, to prepare, file, prosecute and maintain the Avidity Product Patents and Research Collaboration Patents. BMS shall promptly notify Avidity if it intends to discontinue the prosecution and maintenance of an Avidity Product Patent or a Research Collaboration Patent prior to the irrevocable abandonment of such Patent in any jurisdiction where filed, in which case, Avidity shall have the secondary right, subject to Section 9.3.4 (Cooperation), to prosecute and maintain such Patent at its sole cost and expense. [\*\*\*].

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.2 <u>BMS Patents</u>. As between the Parties, BMS shall have the sole right, at its discretion and expense, to prepare, file, prosecute, and maintain all BMS Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.3 <u>Avidity Platform Patents</u>. As between the Parties, subject to Section 9.3.4 (Cooperation), Avidity shall have the first right, at its discretion and expense, to prepare, file, prosecute and maintain all Avidity Platform Patents (other than Avidity Product Patents). Avidity shall promptly notify BMS if it intends to discontinue the prosecution and maintenance of any such Avidity Platform Patent, at least [\*\*\*] prior to the irrevocable abandonment of any such Patent in any jurisdiction where filed, and BMS shall have the secondary right, subject to Section 9.3.4 (Cooperation), to prosecute and maintain any such Avidity Platform Patent that could cover a Licensed Compound or Licensed Product, at its sole cost and expense; *provided* that in the event that Avidity's decision to not prosecute and maintain such Avidity Platform Patent was made for *bona fide* strategic reasons, then the Parties promptly meet and discuss the strategic reason for such abandonment prior to the irrevocable abandonment of such Patent in any jurisdiction where filed (provided, for clarity, Avidity shall have the right, in its sole discretion, not to prosecute and maintain such Avidity Platform Patent (other than an Avidity Product Patent) for a *bona fide* strategic reason).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.4 <u>Cooperation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In connection with the preparation, filing, prosecution, and maintenance of Patents under Section 9.3.1 (Avidity Product Patents and Research Collaboration Patents) and Section 9.3.3 (Avidity Platform Patents), each Party shall have a reasonable opportunity to review, prior to filing, the draft text of each such Patent application, and the draft text of the proposed response to each office action or substantive prosecution document (after the initial application is filed) for each such Patent. Each Party shall consult with respect thereto, and each Party's reasonable comments will be taken into account when finalizing any such documents; *provided* that such comments are provided in a timely manner. Each Party shall, as requested by the prosecuting Party, cooperate in filing and prosecuting such Patent, including executing all necessary paperwork. The prosecuting Party shall keep each Party advised of the status of each such Patent, and shall promptly give notice to each Party of the grant, lapse, revocation, surrender, invalidation, or abandonment of any such Patent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Party shall use reasonable efforts, in consultation with the other Party, during the Term to minimize the existence of Patents claiming Inventions discovered, conceived, or otherwise developed by or on behalf of either Party (or jointly by or on behalf of the Parties) in the performance of Research Collaboration Activities that claim or disclose both (i) Research Collaboration Inventions and (ii) Avidity Platform Inventions or Additional Avidity Platform Technology ("<u>Overlap Patents</u>"). The IP Committee will review all Patent filings claiming Research Collaboration Inventions and Avidity Platform Inventions before they are filed for the purpose of (A) avoiding to the extent possible the filing of Overlap Patents, and (B) avoiding to the extent possible the creation of prior art detrimental to the prosecution of either Patents solely claiming (I) Licensed Compounds and Licensed Products, on the one hand, or (II) Avidity AOC Platform Technology on the other hand. If, despite the Parties' efforts, any such Overlap Patent is filed, each Party shall use reasonable efforts, in consultation with the other Party, to divide claims of such Overlap Patents such that they become either Research Collaboration Patents or Avidity Platform Patents (that are not Avidity Product Patents) [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.5 <u>Certain Actions</u>. All interferences, post-grant reviews, *inter partes* reviews, *ex parte* reviews, supplemental examinations, oppositions, appeals or petitions to any Board of Appeals in the patent office, the Patent Trial and Appeal Board, appeals to any court for any patent office decisions, reissue proceedings and re-examination proceedings with respect to a Patent shall be considered patent prosecution matters and shall be handled in accordance with this Section 9.3 (Filing, Prosecution and Maintenance of Patents).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.6 <u>Data Exclusivity and Patent Listing</u>. [\*\*\*]

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Enforcement and Defense</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.1 <u>Notice</u>. Each Party shall give the other Party written notice of any actual or threatened infringement of (a) any Avidity Product Patents or Avidity Platform Patents by an unlicensed Third Party through the making, having made, using, selling, offering for sale or importing of any product that competes with, or would reasonably be expected to compete with any Licensed Product or (b) any Research Collaboration Patents (in each case ((a) or (b)), a "<u>Competitive Infringement</u>"), within [\*\*\*] after such Party has knowledge of such Competitive Infringement. Without limiting, and subject to Section 9.4.2 (Competitive Infringements), with respect to any Competitive Infringement, Avidity shall (i) consult with BMS as to the strategy for the prosecution of any claim, suit or proceeding planned or initiated by Avidity with respect to such Competitive Infringement, (ii) consider in good faith any comments from BMS and (iii) keep BMS reasonably informed of any material steps taken and provide copies of all material documents filed, in connection with such claim, suit or proceeding. For clarity, Avidity retains all rights to enforce the Avidity Patents against any infringement or threatened infringement by a Third Party other than a Competitive Infringement; *provided* that Avidity shall give BMS written notice of any such actual or threatened infringement of any (A) Avidity Product Patent and (B) Avidity Platform Patent that covers any Licensed Compound or Licensed Product in the event Avidity reasonably determines to commence a legal action to terminate any such actual or threatened infringement, which written notice shall be provided in any event prior to (1) commencement of such legal action by Avidity to terminate any such infringement and (2) any provision of written notice to such Third Party in connection with any such legal action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.2 <u>Competitive Infringements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) With respect to any Competitive Infringement, BMS and Avidity shall thereafter consult and cooperate to determine a course of action, including the commencement of legal action by either or both BMS and Avidity, to terminate any such Competitive Infringement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During the Term, BMS, upon notice to Avidity, shall have the first right to initiate and prosecute such legal action at its expense and in the name of Avidity or BMS, or to control the defense of any declaratory judgment action relating to such Competitive Infringement of Avidity Product Patents and Research Collaboration Patents, at BMS's sole discretion and BMS's sole cost and expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event that BMS elects not to initiate and prosecute an action pertaining to a Competitive Infringement of Avidity Product Patents or Research Collaboration Patents, subject to BMS's prior written consent, Avidity shall have the right to do so; *provided* that each Party shall bear its own costs of any agreed-upon course of action to terminate such Competitive Infringement with respect to Avidity Product Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) During the Term, Avidity, upon notice to BMS, shall have the first right, to initiate and prosecute such legal action at its expense and in the name of Avidity or BMS, or to control the defense of any declaratory judgment action relating to such Competitive Infringement of Avidity Platform Patents (other than Avidity Product Patents), at Avidity's sole discretion and Avidity's sole cost and expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Party prosecuting the legal action would bear all costs of the enforcement or defense of a Competitive Infringement and all recoveries would be treated in accordance with Section 9.4.6 (Recoveries).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.3 <u>Cooperation</u>. In connection with any action under this Section 9.4 (Enforcement and Defense), BMS and Avidity will reasonably cooperate and will provide each other with any information or assistance that either Party may reasonably request. Each Party shall keep the other informed of developments in any such action or proceeding, including, to the extent permissible by Applicable Law, consultation on and approval of any settlement, the status of any settlement negotiations and the terms of any offer related thereto. Each Party shall have the right to be represented by counsel of its own choice at its own expense for any action set forth in this Section 9.4 (Enforcement and Defense).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.4 <u>Joinder</u>. If a Party desires to bring an enforcement action under a Research Collaboration Patent, but is unable to do so solely in its own name, the other Party will, at the request of the enforcing Party, join such action as a party and will reasonably cooperate and cause its Affiliates to reasonably cooperate to execute all documents necessary for the enforcing Party to initiate litigation to prosecute and maintain such action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.5 <u>Settlement</u>. A settlement or consent judgment or other voluntary final disposition of a suit with respect to a Competitive Infringement under this Section 9.4 (Enforcement and Defense) may be entered into without the consent of the Party not bringing suit; *provided*, *however*, that any such settlement, consent judgment or other disposition of any action or proceeding by Avidity shall not, without the prior written consent of BMS, such consent not to be unreasonably withheld, conditioned or delayed, (a) impose any liability or obligation on BMS or any of its Affiliates, (b) conflict with or reduce the scope of the subject matter claimed in the applicable Patent, (c) include the grant of any license, covenant or other rights to any Third Party that would conflict with or reduce the scope of the rights or licenses granted to BMS under this Agreement, or (d) otherwise adversely affect the rights granted to BMS hereunder with respect to such Avidity Product Patents, Avidity Platform Patents, or Research Collaboration Patents, or Avidity Know-How or Research Collaboration Inventions, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4.6 <u>Recoveries</u>. Any recovery obtained by either or both BMS and Avidity in connection with or as a result of any action contemplated by this Section 9.4 (Enforcement and Defense), whether by settlement or otherwise, shall be shared in order as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Party that initiated and prosecuted the action shall recoup all of its costs and expenses incurred in connection with the action;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The other Party shall then, to the extent possible, recover its costs and expenses incurred in connection with the action; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Party initiating such action shall retain any remainder, and in the event BMS is such Party, the portion of such remainder, to the extent damages are attributable as lost sales of Licensed Products, shall be deemed Net Sales and subject to the royalty payments to Avidity under Section 7.4 (Royalties).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 <u>Defense Against Claims of Infringement of Third Party Patents</u>. Each Party shall give the other Party written notice in the event such Party has knowledge of any actual or potential infringement of any Third Party Patents through the making, having made, using, selling, offering for sale or importing of any Licensed Compound or Licensed Product. If a Third Party asserts that a Patent or other right owned or otherwise controlled by it is or has been infringed by the manufacture, use, sale, offer for sale or import of a Licensed Compound or Licensed Product, the Party first obtaining knowledge of such a claim shall promptly provide the other Party written notice of such claim along with the related facts in reasonable detail. In such event, unless the Parties otherwise agree, as between the Parties, BMS shall have the first right, but not the obligation, at its expense, to control the defense of such claim with respect to such Licensed Compound, or Licensed Product. If BMS does not wish to defend such claim, or wishes to cease defending such claim, it shall notify Avidity of such decision at least [\*\*\*] before any deadline for any action or filing that is required in order to preserve any rights. Thereafter, Avidity shall have the right, but not the obligation, at its expense, to control the defense of such claim. Each Party shall cooperate with the defending Party, at the defending Party's reasonable request and expense, and shall have the right to be represented separately by counsel of its own choice, but at its own expense. The defending Party shall also control settlement of such claim; *provided*, *however*, that no settlement shall be entered into without the prior consent of the other Party if such settlement would adversely affect the rights and benefits of, or impose or adversely affect any obligations on, the other Party, such consent not to be unreasonably withheld, delayed or conditioned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 <u>BMS Contributed Collaboration Technology</u>. Notwithstanding anything to the contrary contained herein, as between the Parties, BMS shall have the sole rights (in its discretion and without consultation with, or any obligations to, Avidity) to prepare, file, prosecute and maintain the BMS Contributed Collaboration Technology and to bring any enforcement action with respect to infringement or misappropriation of any BMS Contributed Collaboration Technology (including retaining all recoveries in connection therewith), and to seek and obtain patent term restoration or supplemental protection certificates or the like or their equivalents to BMS Contributed Collaboration Technology, in each case at its sole cost and expense, and Avidity shall have no rights in connection therewith.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 <u>IP Committee</u>. Within [\*\*\*] following the Effective Date, the Parties shall form and intellectual property committee (the "<u>IP Committee</u>"), composed of at least one representative from each Party that are employees or consultants of such Party or its Affiliates having relevant expertise and qualifications in intellectual property matters. The IP Committee shall meet in-person or by means of telephone or video conference at least once every [\*\*\*] or in accordance with a schedule agreed to by the Parties. Each Party may replace its representative on the IP Committee at any time by providing notice in writing to the other Party. The IP Committee will continue until termination or expiration or expiration of this Agreement or such earlier date as the Parties agree in writing. The purpose of the IP Committee shall be to facilitate cooperation between the Parties with respect to intellectual property matters under this Agreement, including to [\*\*\*] perform other obligations specifically delegated to it under this Agreement. The rights and responsibilities (including decision making authority) delegated to each of the Parties with respect to the preparation, filing, prosecution and maintenance (including with respect to any patent term extensions and patent listings), enforcement and defense (including with respect to retaining recoveries) of such intellectual property shall be as set forth in the provisions of this Article 9 (Intellectual Property) and the IP Committee shall not have the right to exercise or amend such rights and responsibilities.

ARTICLE 10.

<u>REPRESENTATIONS, WARRANTIES AND COVENANTS</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 <u>Representations and Warranties of Each Party</u>. Each Party represents and warrants to the other Party that as of the Effective Date that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.1 It has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.2 This Agreement has been duly executed by it and is legally binding upon it, enforceable against such Party in accordance with its terms, except as such enforceability may be subject to applicable bankruptcy, reorganization, insolvency, moratorium and similar Applicable Laws affecting the enforcement of creditors' rights generally and by general principles of equity; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.3 The execution and delivery by such Party of this Agreement does not conflict in any material fashion with the terms of any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 <u>Avidity Representation and Warranties</u>. Avidity represents, warrants, and covenants (as applicable) to BMS that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.1 <u>Sufficient Rights</u>. It has the full right, power and authority to grant the rights and licenses granted under this Agreement, and it will not be subject to, any right granted to any Person or any other encumbrance that would conflict with the rights granted to BMS or its Affiliates hereunder or the performance of Avidity's obligations hereunder. Other than the rights granted by Avidity to BMS under this Agreement, no rights or licenses are required under any Intellectual Property Rights owned or controlled (through license or otherwise) by Avidity or its Affiliates to perform the activities contemplated in the Research Plans as of the Effective Date, or to Exploit the Licensed Compounds or Licensed Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.2 <u>Licensed IP</u>. All Patents contained in the Licensed IP existing as of the Effective Date that are issued or subject to a pending application for issuance (the "<u>Existing Patents</u>") are listed on <u>Schedule 10.2.2</u> and all such Existing Patents are: (a) to the extent issued, subsisting and, to Avidity's Knowledge, not invalid or unenforceable, in whole or in part, or confer a valid right to claim priority thereto; (b) solely and exclusively owned by Avidity, free of any encumbrance, lien or claim of ownership by any Third Party; (c) to the extent subject to a pending application for issuance, being diligently prosecuted in the respective patent offices in which such applications have been filed in accordance with Applicable Law; and (d) filed and maintained properly and correctly, and all applicable fees applicable thereto have been paid on or before the due date for payment. None of the Avidity Patents are subject to any pending re-examination, opposition, interference or litigation proceedings. For clarity, all such Existing Patents are Avidity Platform Patents.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.3 <u>Proceedings</u>. There are no claims, litigations, suits, actions, disputes, arbitrations or legal, administrative or other proceedings or governmental investigations pending or, to Avidity's Knowledge, threatened against Avidity, nor is Avidity a party to any judgment or settlement, in each case that would be reasonably expected to adversely affect or restrict the ability of Avidity to consummate the transactions contemplated under this Agreement and to perform its obligations under this Agreement, or that would be reasonably expected to adversely affect the Licensed IP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.4 <u>Inventors</u>. No person, other than former or current employees or consultants of Avidity who are obligated in writing to assign his/her inventions to Avidity, respectively, is an inventor of any of the inventions claimed in the Avidity Patents existing as of the Effective Date. All inventors of any inventions included within the Avidity Patents have assigned or have a contractual obligation to assign their entire right, title and interest in and to such inventions and the corresponding Patent rights to Avidity, as the case may be. No present or former employee or consultant of Avidity owns or has any proprietary, financial or other interest, direct or indirect, in the Avidity Patents. There are no claims that have been asserted in writing challenging the inventorship of the Avidity Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.5 <u>Due Diligence</u>. (a) Avidity provided to BMS all material information and data, and all material correspondences to or from any Regulatory Authority, in each case, that was in the possession or control of Avidity or its Affiliates and was responsive to the requests provided by or on behalf of BMS for due diligence purposes, (b) all written information, data, and correspondence provided by Avidity to BMS (i) constituted true, correct, and complete copies of all such information, data, and material correspondence, and (ii) to Avidity's Knowledge, is accurate in all material respects, and (c) to Avidity's Knowledge, Avidity has not omitted to provide BMS any reasonably relevant information, data or correspondence in its possession concerning any Licensed IP. To Avidity's Knowledge, there are no scientific or technical facts or circumstances that have not been disclosed to BMS, and that would materially adversely affect the scientific, therapeutic, or commercial potential of the Avidity AOC Platform Technology or other Licensed IP, the Licensed Compounds, or Licensed Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.6 <u>Infringement</u>. It has not received written notice from any Third Party nor is there any legal proceeding pending or, to Avidity's Knowledge, threatened against Avidity alleging that the use of the Licensed IP as permitted to be used under this Agreement infringes any Intellectual Property Rights of any Third Party. To Avidity's Knowledge, the practice of the Avidity Patents or Avidity Know-How as contemplated under this Agreement does not (a) infringe any claims of any Patents of any Third Party or (b) misappropriate any Know-How of any Third Party. Neither Avidity nor its Affiliates have issued a claim against a Third Party alleging that a Third Party is infringing or has infringed or misappropriated any Licensed IP, and, to Avidity's and its Affiliates' Knowledge, no issued Patents within the Licensed IP are being infringed and no trade secrets within the Licensed IP are being misappropriated by any Third Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.7 <u>Encumbrances</u>. Avidity has not used, and during the Research Terms will not use, any Know-How in the Research Programs that is encumbered by any contractual right of, or obligation to, a Third Party that conflicts or interferes with any of the rights or licenses granted or to be granted to BMS hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.8 <u>Listing of Additional Avidity Patents</u>. Avidity shall promptly notify BMS in writing if any Patents in the Licensed IP that claim or cover any Licensed Target, Licensed Compound, or Licensed Product, including the composition, manufacture, or use of any of the foregoing, becomes known to Avidity that are not listed on <u>Schedule 10.2.2</u>. Such Patents will be listed under separate headings indicating which are Avidity Platform Patents and which are Avidity Product Patents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.9 <u>Third Parties</u>. Avidity has not granted as of the Effective Date, and during the Term Avidity will not grant, any right or license to any Third Party relating to any of the Intellectual Property Rights Avidity or its Affiliates owns or otherwise control (including Licensed IP), that conflicts with or limits the scope of the rights or licenses granted, or to be granted, to BMS hereunder. Other than the Existing Avidity In-License Agreements, as of the Effective Date, there are no license or other agreements with Third Parties regarding the exploitation of any Licensed IP or other materials contemplated to be provided by Avidity to BMS hereunder, to which Avidity or its Affiliate is a party.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.10 <u>Avidity In-License Agreements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As of the Effective Date, with respect to each Existing Avidity In-License Agreement, (i) it is in full force and effect; (ii) Avidity (or its Affiliate, as applicable) is not in breach thereof; (iii) Avidity (or its Affiliate, as applicable) has not received any written notice from the counterparty to such Existing Avidity In-License Agreement, as applicable, of Avidity's (or its Affiliate's, as applicable) breach or notice of threatened breach by Avidity (or its Affiliate, as applicable) thereof; and (iv) Avidity has provided BMS with a true, correct and complete copy of each Existing Avidity In-License Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to the Avidity In-License Agreements, (i) Avidity (and its Affiliates, as applicable) shall not breach or commit any other acts or permit the occurrence of any other omissions that would cause the termination of any Avidity In-License Agreement and (ii) Avidity shall (and shall cause its Affiliates to, as applicable) satisfy all of its obligations under each Avidity In-License Agreement in all material respects, and Avidity shall, and shall cause its Affiliates to, as applicable, maintain each Avidity In-License Agreement in full force and effect. Avidity shall, and shall cause its Affiliates to, as applicable, enforce its rights under each Avidity In-License Agreement to preserve BMS's rights under this Agreement. Avidity shall not, and shall cause its Affiliates not to, amend, modify, terminate, assign or transfer any Avidity In-License Agreement in a manner that adversely affects BMS's rights under this Agreement unless Avidity obtains BMS's prior written consent. Avidity will provide BMS with prompt written notice of any claim of a breach of which it is aware under any of the Avidity In-License Agreements or notice of termination of any Avidity In-License Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At the written request of BMS on case-by-case basis, Avidity shall (or shall cause its Affiliates to, as applicable) use reasonable efforts to promptly negotiate and execute a written agreement, in a form reasonably acceptable to BMS, with each Third Party that is a counterparty to the applicable Avidity In-License Agreement (each such counterparty, an "<u>Avidity Licensor</u>"), pursuant to which (i) in the event of an early termination of such Avidity In-License Agreement not otherwise resulting from the material breach of this Agreement by BMS, at the request of BMS, such Avidity Licensor shall grant a direct license to BMS with respect to the intellectual property licensed to Avidity under such Avidity In-License Agreement, on the same terms under which such Avidity Licensor grants such license to Avidity (or its Affiliate, as applicable) under such Avidity In-License Agreement for the applicable Licensed Products, (ii) such Avidity Licensor agrees to and acknowledges the rights granted to BMS hereunder with respect to any intellectual property licensed to Avidity (or its Affiliate, as applicable) under such Avidity In-License Agreement, including the rights as set forth in this Section 10.2.10(c), and (iii) BMS is a party to such written agreement and have the right to enforce such agreement directly against the counterparties thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.11 <u>Material Claims and Actions</u>. As of the Effective Date, there are no claims, actions, or proceedings pending or threatened by any Third Party; nor are there any formal inquiries initiated or written notices received that may lead to the institution of any such legal proceedings, in each case (or in aggregate) against Avidity or its properties, assets, or business, which if adversely decided, would, individually or in the aggregate, have a material adverse effect on, or prevent Avidity's ability to conduct the Research Programs contemplated by the Research Plans or to grant the licenses or rights granted to BMS under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.12 <u>Payment Obligations</u>. As of the Effective Date, Avidity and its Affiliates are not subject to any payment obligations to any Third Party as a result of the execution or performance of this Agreement, including the research, Development, Manufacture, Commercialization or other Exploitation of any Licensed Target, Licensed Compound or Licensed Product.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.13 <u>Maintenance of Exclusively Licensed Assets</u>. Commencing on the Effective Date until the end of the Term, Avidity shall not and shall cause its Affiliates not to assign, transfer, convey, encumber (including through a lien, charge, security interest, mortgage or similar encumbrance) or dispose of, or enter into any agreement with any Third Party to assign, transfer, convey, encumber (including through a lien, charge, security interest, mortgage or similar encumbrance) or dispose of, any Licensed IP (or any intellectual property that would otherwise be included in the Licensed IP), including any of its (or its Affiliate's) rights to any Licensed Target, Licensed Compounds or Licensed Products in the Territory (collectively, the "<u>Licensed Program Assets</u>"), except to the extent such assignment, transfer, conveyance, encumbrance or disposition would not conflict with, be inconsistent with or prohibit or limit in any respect any of the rights or licenses granted to BMS hereunder. During the Term, Avidity shall ensure that the Licensed Program Assets are and remain Controlled by Avidity such that Avidity has the full rights to grant the rights and licensed thereto to BMS hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.14 <u>No Government Funding</u>. The inventions claimed or covered by the Avidity Product Patents or Avidity Platform Patents: (a) were not, and will not be, conceived, discovered, developed or otherwise made in connection with any research activities funded, in whole or in part, by the federal government of the United States of America or any agency thereof; (b) are not, and will not be, a "subject invention" as that term is described in 35 U.S.C. Section 201(e) and (c) are not, and will not be, otherwise subject to the provisions of the Patent and Trademark Law Amendments Act of 1980, as amended, codified at 35 U.S.C. §§ 200-212, as amended, as well as any regulations promulgated pursuant thereto, including in 37 C.F.R. Part 401.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.15 No Other Uses. Except for (a) the performance by Avidity of the research activities allocated to it under a Research Program in accordance with this Agreement and the applicable Research Plan, (b) the performance by Avidity of its Manufacturing obligations for BMS as specifically set forth in Section 6.3 (Manufacture), and (c) as otherwise expressly agreed to by BMS in writing, neither Avidity nor its Affiliates shall use (and neither shall grant any Third Party the right to use) any Licensed Compounds or Licensed Products for any purposes in the Field in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 <u>Other Covenants</u>. During the Research Term, neither Party will knowingly use any material, technology or intellectual property rights in the conduct of the Research Plan that, to its knowledge, is encumbered by any Third Party restriction or any Third Party right or obligation that would conflict or interfere with any of the rights or licenses granted to, or to be granted to, the other Party hereunder without disclosing to the other Party and obtaining such Party's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 <u>Warranty Disclaimer</u>. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY PATENTS, KNOW-HOW, LICENSES, TECHNOLOGY, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING.

ARTICLE 11.

<u>TERM AND TERMINATION</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 <u>Term and Expiration</u>. The term of this Agreement (the "<u>Term</u>") shall commence on the Effective Date and, unless terminated earlier pursuant to this Article 11 (Term and Termination), shall expire (a) on a Licensed Product-by-Licensed Product and country-by-country basis upon the expiration of the Royalty Term for such Licensed Product in such country and (b) in its entirety upon expiration of all applicable Royalty Terms under this Agreement with respect to all Licensed Products in all countries in the Territory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 <u>Termination at Will</u>. (a) BMS shall have the right, in its sole discretion, to terminate this Agreement (i) in its entirety, (ii) on a Licensed Target-by-Licensed Target or country-by-country basis, or (iii) on a Research Program-by-Research Program basis pursuant to Section 4.4 (End of Research Program), in each case of (i) through (iii), without cause at any time during the Term, by giving Avidity [\*\*\*] days' prior written notice. (b) In addition, [\*\*\*] then Avidity may, at its election, terminate this Agreement solely with respect to such Licensed Target upon [\*\*\*] days' prior written notice to BMS. Termination of this Agreement pursuant to this clause (b) will be treated for all purposes under this Agreement as a termination by BMS pursuant to this Section 11.2 (Termination at Will).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 <u>Termination for Cause</u>. In addition to any other remedies conferred by this Agreement or by law, either Party may terminate this Agreement at any time during the Term upon written notice by either Party if the other Party is in material breach of its obligations hereunder and has not cured such breach within [\*\*\*] days after such notice; *provided*, *however*, in the event of a good faith dispute with respect to the existence of a material breach, the [\*\*\*] cure period shall be tolled until such time as the dispute is resolved pursuant to Section 13.6 (Dispute Resolution). If such alleged breach is contested in good faith by the breaching Party in writing within the applicable cure period, then the dispute resolution procedure pursuant to Section 13.6 (Dispute Resolution) may be initiated by either Party to determine whether a material breach has actually occurred. If such breach is confirmed in accordance with the procedure set forth in Section 13.6 (Dispute Resolution) and not cured within [\*\*\*] after the receipt of a decision by the arbitrators confirming such breach, the non-breaching Party shall have the right, on written notice to the breaching Party, to terminate this Agreement effective immediately. Notwithstanding the foregoing, in the event that the material breach of this Agreement solely relates to a given Research Program or Licensed Target, then this Agreement may only be terminated with respect to such Research Program or Licensed Target and this Agreement will remain in full force and effect with respect to all other Research Programs or Licensed Targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 <u>Termination for Patent Challenge</u>. Except to the extent unenforceable under Applicable Law, Avidity may terminate this Agreement in its entirety upon [\*\*\*] written notice of termination to BMS if BMS, any of its Affiliates or Sublicensees commences (or assists a Third Party to commence) any interference or opposition proceeding with respect to the scope, validity, or enforceability of any Avidity Patent in the Territory that Covers a Licensed Product in any court, tribunal, arbitration proceeding, or other proceeding (a "<u>Patent Challenge</u>"); *provided* that, if BMS or its Affiliate or Sublicensee withdraws (or causes to be withdrawn) such Patent Challenge within [\*\*\*] after being requested to do so by Avidity in writing (which termination notice will be deemed a request), then Avidity will have no right to terminate this Agreement pursuant to this Section 11.4 (Termination for Patent Challenge). For the avoidance of doubt, Avidity may not terminate this Agreement pursuant to this Section 11.4 (Termination for Patent Challenge) if BMS or its Affiliate or Sublicensee is required by legal process to be joined as a party in any Patent Challenge by a Third Party. In the event of such a Patent Challenge, Avidity will provide prompt written notice of such Patent Challenge to BMS. In addition, notwithstanding the foregoing, Avidity shall have no right to terminate this Agreement pursuant to this Section 11.4 (Termination for Patent Challenge) with respect to: (a) any affirmative defense or other validity, enforceability, or non-infringement challenge, whether in the same action or in any other agency or forum of competent jurisdiction advanced by BMS, or any of its Affiliates or Sublicensees in response to any claim or action brought in the first instance by, on behalf of, Avidity or any of its Affiliates or licensees; (b) any Patent Challenge to the extent commenced by a Third Party that, after the Effective Date, acquires or is acquired by BMS or any of its Affiliates or its of their business or assets, whether by stock purchase, merger, asset purchase or otherwise; *provided* that such proceeding commenced prior to the closing of such acquisition; or (c) any Patent Challenge that is commenced by a Sublicensee; *provided* that BMS demands that such Sublicensee withdraw such Patent Challenge promptly after BMS becomes aware of such Patent Challenge and terminates the sublicense agreement with the applicable Sublicensee if such Sublicensee does not withdraw such Patent Challenge within 60 days after receipt of notice from BMS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 <u>Termination for Bankruptcy</u>. Either Party may terminate this Agreement, if, at any time, the other Party shall file in any court or agency pursuant to any Applicable Law, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of the Party or of substantially all of its assets, or if the other Party proposes a written agreement of composition or extension of substantially all of its debts, or if the other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within 90 days after the filing thereof, or if the other Party shall propose or be a party to any dissolution or liquidation, or if the other Party shall make an assignment of substantially all of its assets for the benefit of creditors. All rights and licenses granted under or pursuant to any section of this Agreement are and shall otherwise be deemed to be for purposes of 11 U.S.C. § 365(n) licenses of rights to "intellectual property" as defined in 11 U.S.C. § 101(35A). The Parties shall retain and may fully exercise all of their respective rights and elections under the Bankruptcy Code of the United States. Upon the bankruptcy of any Party, the non-bankrupt Party shall further be entitled to a complete duplicate of, or complete access to, any such Intellectual Property Rights, and such, if not already in its possession, shall be promptly delivered to the non-bankrupt Party, unless the bankrupt Party elects to continue, and continues, to perform all of its obligations under this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 <u>Consequence of Termination</u>. The following shall apply upon termination of this Agreement made in accordance with this Article 11 (Term and Termination).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7.1 <u>Termination of License Grants</u>. All rights and licenses granted to BMS under Section 5.1 (License Grants to BMS) shall terminate automatically as of the termination of this Agreement in its entirety (or with respect to the terminated Licensed Target(s) or country(ies), if terminated for specific Licensed Target(s) or country(ies)); *provided* that (a) if following Regulatory Approval in one or more countries, BMS (or its Affiliates or Sublicensees) has inventory of usable Licensed Product(s) as of the effective date of termination in such countries, then BMS (and its Affiliates and Sublicensees) may continue to sell off such inventory of Licensed Products in the Field in such countries in the Territory (and fulfill customer orders therefor) until [\*\*\*] and shall pay Avidity any applicable royalties due based on such sales, and (b) the licenses granted pursuant to Section 5.1.1(b) and Section 5.2.1(b) shall survive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7.2 <u>Sublicenses</u>. Except with respect to a termination of this Agreement by BMS pursuant to Section 11.2 (Termination at Will), any permitted sublicense granted by BMS or its Affiliate to a Sublicensee under the licenses granted to BMS under this Agreement shall survive the termination of this Agreement; *provided* that, in the case where termination of this Agreement for BMS's uncured material breach pursuant to Section 11.3 (Termination for Cause) or as a result of a Patent Challenge pursuant to Section 11.4 (Termination for Patent Challenge), such Sublicensee did not cause such uncured material breach or initiate such Patent Challenge, as applicable. If permitted under such a surviving sublicense, effective upon termination of this Agreement, such sublicense shall become a direct license from Avidity to such Sublicensee; *provided* that (a) Avidity will not be obligated to perform contractual obligations under such sublicense greater than those set forth herein, and (b) such Sublicensee will be required to pay to Avidity appropriate amounts in consideration (taking into account any difference in license scope, territory and duration) for such direct grant as Avidity would have received from BMS pursuant to this Agreement on account of such Sublicensee's Exploitation of Licensed Compounds or Licensed Products had this Agreement not been terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7.3 <u>Wind-Down</u>. The Parties shall cooperate, and use Commercially Reasonable Efforts, to wind-down and cease, in accordance with Applicable Law and industry standards, all activities then being performed by the Parties and their Affiliates hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7.4 <u>Return of Confidential Information</u>. No later than [\*\*\*] (as extended upon mutual agreement between the Parties) after the termination of this Agreement, each Receiving Party shall return to the Disclosing Party (or, at the Disclosing Party's request, shall destroy) all of the Disclosing Party's Confidential Information (including all copies thereof) that are in such Party's possession; *provided*, *however*, that the Receiving Party may retain one archival copy of the Disclosing Party's Confidential Information in its confidential files solely for purposes of identifying its continuing obligations under this Agreement with respect thereto; *provided*, *further*, that such Receiving Party shall not be required to destroy electronic files containing Disclosing Party's Confidential Information that are made in the ordinary course of its business information back-up procedures pursuant to its electronic record retention and destruction practices that apply to its own general electronic files and information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7.5 <u>Exclusivity</u>. If this Agreement expires or terminates in its entirety, the obligations under Section 5.7 (Exclusivity) shall terminate (*provided* that, for clarity, if this Agreement does not expire or terminate in its entirety, then the obligations under 5.7 (Exclusivity) shall remain in full force and effect to the extent applicable). Notwithstanding the foregoing, in the event BMS terminates this Agreement in accordance with Section 11.3 (Termination for Cause) for Avidity's failure to perform, in any material respect, the activities allocated to Avidity under the applicable Research Plan, then the obligations under Section 5.7.1 (Avidity Exclusivity) with respect to such Research Program and Licensed Target shall remain in full force and effect until the eighth anniversary of the Effective Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7.6 <u>Product Reversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Reversion Agreement</u>. Except with respect to a termination of this Agreement by BMS pursuant to Section 11.3 (Termination for Cause) or by BMS pursuant to Section 11.2 (Termination at Will) as a result of a Safety Concern, at Avidity's request in writing ("<u>Reversion Notice</u>"), the Parties will negotiate in good faith and enter into a written agreement ("<u>Reversion Agreement</u>") pursuant to which: [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Exclusions from Reversion License</u>. Notwithstanding the foregoing, in no event shall the Reversion Agreement grant to Avidity any rights to (i) any Manufacturing-related Intellectual Property Rights Controlled by BMS or its Affiliates, including any proprietary cell lines, any proprietary cell culture media and any Know-How associated with such cell lines and cell culture media or (ii) any BMS Sole Patents Controlled by BMS or its Affiliates to the extent that they cover or claim a Combination Product or any BMS Sole Inventions Controlled by BMS or its Affiliates to the extent relating to a Combination Product.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Agreement on Reversion License</u>. If the Parties have not agreed to the royalty(ies) (if applicable) and entered into a Reversion Agreement within [\*\*\*] of the effective date of such termination, then either Party may refer the matter to Final Offer (Baseball) Arbitration for determination of such royalty(ies) and other unagreed terms and conditions of such Reversion Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 <u>Effect of Expiration or Termination Generally; Survival</u>. Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. Any expiration or termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement prior to expiration or termination. The provisions set forth in Article 1 (Definitions) (to the extent the definitions are used in other surviving provisions), Section 4.5 (Records, Reports and Documentation; Inspections) (provided that inspections thereunder may not be conducted [\*\*\*] following the effectiveness of such termination or expiration), Section 5.1.1(b) (License Grant), Section 5.2.1(b) (License Grant), Section 5.6 (No Implied Licenses), Section 5.9 (Rights in Bankruptcy), Section 7.3 (Milestone Payments) (with respect to any payment obligations accrued but unpaid prior to the effectiveness of such termination or expiration, subject to Section 11.9 (Full Force and Effect During Notice Period)), Section 7.4 (Royalties) (with respect to any payment obligations accrued but unpaid prior to the effectiveness of such termination or expiration, provided that the third sentence of Section 7.4.2 (Royalty Term) shall survive in its entirety), Section 7.9 (Audits) (for the time period set forth therein), Section 7.10 (Tax Matters) (with respect to any payment obligations accrued but unpaid prior to the effectiveness of such termination or expiration), Section 7.11 (Payment Method and Exchange Rate) (with respect to any payment obligations accrued but unpaid prior to the effectiveness of such termination or expiration), Article 8 (Confidentiality and Publication) (for the time period specified in Section 8.6), Section 9.1 (Background IP), Section 9.2 (Inventions), Section 9.3 (Filing, Prosecution and Maintenance of Patents) (solely with respect to Research Collaboration Patents, provided that Section 9.3.2 (BMS Patents) shall survive in its entirety), 9.4 (Enforcement and Defense) (solely with respect to Research Collaboration Patents), Section 9.6 (BMS Contributed Collaboration Technology), Section 10.4 (Warranty Disclaimer), Section 11.7 (Consequence of Termination) (together with those Sections referenced therein), this Section 11.8 (Effect of Expiration or Termination Generally; Survival) (together with those Sections referenced therein), Article 12 (Indemnification) (except Section 12.4 (Insurance)) (provided that with respect to Section 12.1(c), only with respect to units of Licensed Product sold or administered by or on behalf of BMS or its Affiliates or Sublicensees during the Term or during the sell off period set forth in Section 11.7.1 (Termination of License Grants) or following expiration of the Term), and Article 13 (Miscellaneous) shall survive any expiration or termination of this Agreement for the time periods set forth therein and if no time period is specified, then indefinitely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9 <u>Full Force and Effect During Notice Period</u>. This Agreement shall remain in full force and effect during the period commencing on the date of notice of termination of this Agreement and ending on the effective date of termination of this Agreement [\*\*\*].

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ARTICLE 12.

<u>INDEMNIFICATION</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Indemnification by BMS</u>. BMS shall indemnify, defend and hold harmless Avidity and its Affiliates, and its and their respective directors, officers, employees, agents, successors and assigns (collectively, the "<u>Avidity Indemnitees</u>"), from and against any and all Damages arising out of any Claim to the extent arising out of or relating to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the negligence or willful misconduct of BMS or its Affiliates or its or their respective directors, officers, employees or agents, in connection with BMS's performance of its obligations under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach by BMS of any of its representations, warranties, covenants, agreements or obligations under this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Exploitation of Licensed Compounds and Licensed Products in the Field in the Territory by or on behalf of BMS or its Affiliates or Sublicensees (other than Avidity or its Affiliates or (sub)licensees);

in each case of (a) through (c), *provided*, *however*, that such indemnity shall not apply to the extent Avidity has an indemnification obligation pursuant to Section 12.2(a), 12.2(b) or 12.2(c) for such Damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>Indemnification by Avidity</u>. Avidity shall indemnify, defend and hold harmless BMS, its Affiliates and its and their respective directors, officers, employees, agents, successors and assigns (collectively, the "<u>BMS Indemnitees</u>"), from and against any and all Damages arising out of any Claim to the extent arising out of or relating to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the negligence or willful misconduct of Avidity or its Affiliates or its or their respective directors, officers, employees or agents, in connection with Avidity's performance of its obligations under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach by Avidity of any of its representations, warranties, covenants, agreements or obligations under this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Exploitation of Licensed Compounds and Licensed Products (i) anywhere in the Territory prior to the Effective Date or (ii) after the effective date of termination by or on behalf of Avidity or its Affiliates or (sub)licensees (other than BMS or its Affiliates or (sub)licensees);

in each case of (a) through (c), *provided*, *however*, that such indemnity shall not apply to the extent BMS has an indemnification obligation pursuant to Section 12.1(a), 12.1(b) or 12.1(c) for such Damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u>Procedure</u>. In order for a Party claiming indemnity under this Article 12 (Indemnification) (the "<u>Indemnified Party</u>") to be entitled to any indemnification provided for under this Article 12 (Indemnification), the Indemnified Party shall give written notice to the Party from whom indemnity is being sought (the "<u>Indemnifying Party</u>") within [\*\*\*] after learning of the Claim for which indemnity is being sought (it being understood and agreed, however, that the failure or delay by an Indemnified Party to give such notice of a Claim shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure or delay to give such notice). If the Indemnifying Party is not contesting the indemnity obligation, the Indemnified Party shall permit the Indemnifying Party to control and assume the defense of any litigation relating to such claim and disposition of any such Claim unless the Indemnifying Party is also a party (or likely to be named a party) to the proceeding in which such claim is made and the Indemnified Party gives notice to the Indemnifying Party that it may have defenses to such claim or proceeding that are in conflict with the interests of the Indemnifying Party, in which case the Indemnifying Party shall not be so entitled to assume the defense of the case. If the Indemnifying Party does assume the defense of any Claim, it (a) shall act diligently and in good faith with respect to all matters relating to the settlement or disposition of any Claim as the settlement or disposition relates to the Persons being indemnified under this Article 12 (Indemnification), (b) shall cause such defense to be conducted by counsel reasonably

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acceptable to the Indemnified Party, (c) shall keep the Indemnified Party reasonably advised of the status of such Claim and the defense thereof and shall consider recommendations made by the Indemnified Party with respect thereto and (d) shall not settle or otherwise resolve any Claim without prior notice to the Indemnified Party and the consent of the Indemnified Party if such settlement (i) involves anything other than the payment of money by the Indemnifying Party, (ii) will result in the Indemnified Party (or other Avidity Indemnitees or BMS Indemnitees, as applicable) becoming subject to injunctive or other similar type of relief, (iii) requires an admission by the Indemnified Party (or other Avidity Indemnitees or BMS Indemnitees, as applicable) and (iv) if Avidity is the Indemnifying Party, adversely affect the rights or licenses granted to BMS (or its Affiliate) under this Agreement. The Indemnified Party shall reasonably cooperate with the Indemnifying Party in its defense of any claim for which the Indemnifying Party has assumed the defense in accordance with this Section 12.3 (Procedure), and shall have the right (at its own expense) to participate in, but not control, the defense of such Claim and to engage counsel of its choice for such purpose. So long as the Indemnifying Party is diligently defending the Claim in good faith, the Indemnified Party shall not settle any such Claim without the prior written consent of the Indemnifying Party. If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, (A) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to the Claim in any manner the Indemnified Party may deem reasonably appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith), and (B) the Indemnifying Party will remain responsible to indemnify the Indemnified Party as provided in this Article 12 (Indemnification). If the Parties cannot agree as to the application of Section 12.1 (Indemnification by BMS) or Section 12.2 (Indemnification by Avidity), as applicable, to any claim, pending resolution of the dispute pursuant to Section 13.6 (Dispute Resolution), the Parties may conduct separate defenses of such claims, with each Party retaining the right to claim indemnification from the other Party in accordance with Section 12.1 (Indemnification by BMS) or Section 12.2 (Indemnification by Avidity), as applicable, upon resolution of the underlying claim. In each case, the Indemnified Party shall reasonably cooperate with the Indemnifying Party, and shall make available to the Indemnifying Party all pertinent information under the control of the Indemnified Party, which information shall be subject to Article 8 (Confidentiality and Publication).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u>Insurance</u>. During the Term, each Party shall maintain such types and amounts of liability insurance (including in the case of BMS, self-insurance) as is normal and customary in the industry generally for similarly situated parties and adequate to cover its obligations under this Agreement, and Avidity will upon request provide BMS with a certificate of insurance in that regard, along with any amendments and revisions thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u>LIMITATION OF LIABILITY</u>. EXCEPT (A) TO SATISFY A PARTY'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 12.1 (INDEMNIFICATION BY BMS) OR SECTION 12.2 (INDEMNIFICATION BY AVIDITY), (B) FOR A PARTY'S BREACH OF SECTION 5.7 (EXCLUSIVITY) OR ARTICLE 8 (CONFIDENTIALITY AND PUBLICATION), (C) AVIDITY'S MATERIAL BREACH OF ITS OBLIGATION TO PERFORM THE ACTIVITIES ALLOCATED TO AVIDITY UNDER THE APPLICABLE RESEARCH PLAN OR (D) DAMAGES AVAILABLE TO EITHER PARTY FOR THE OTHER PARTY'S FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES (INCLUDING ANY CLAIMS FOR LOST PROFITS, SALES, REVENUES OR OPPORTUNITIES) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (OR THE EXERCISE OF ITS RIGHTS HEREUNDER) UNDER ANY THEORY OF LIABILITY, AND REGARDLESS OF ANY NOTICE OR KNOWLEDGE OF THE POSSIBILITY OF SUCH DAMAGES.

ARTICLE 13.

<u>MISCELLANEOUS</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 <u>Force Majeure</u>. Neither Party shall be held liable to the other Party, nor be deemed to have defaulted under or breached this Agreement, for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including embargoes, war, acts of war (whether war be declared or not), acts of terrorism, sabotage, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, epidemics, pandemics, fire, floods, earthquake, or other acts of God, or acts,

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omissions or delays in acting by any governmental authority, and that is not caused by the gross negligence or intentional misconduct of such Party (each such event or cause referred to as "<u>Force Majeure</u>"). The affected Party shall notify the other Party in writing of such Force Majeure circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts necessary to cure such Force Majeure circumstances and resume performance of its obligations under this Agreement. If circumstances constituting Force Majeure exist for more than [\*\*\*], the Parties shall meet to discuss and agree upon a resolution to the problem, if practicable. The foregoing notwithstanding, nothing herein shall require a Party to settle on terms unsatisfactory to such Party any strike, lock-out or other labor difficulty, or any investigation or proceeding by any public authority, or any litigation by any Third Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 <u>Assignment</u>. Except as provided in this Section 13.2 (Assignment), neither Party may assign or otherwise transfer this Agreement or any right or obligation hereunder, without the prior written consent of the other Party. Notwithstanding the foregoing and subject to Section 7.10 (Tax Matters), either Party may, without consent of the other Party, assign this Agreement or any of its rights or obligations hereunder in whole or in part to: (a) an Affiliate of such Party; or (b) its successor in interest in connection with a Change of Control transaction; *provided*, *however*, that in the case of assignment to an Affiliate, the assigning Party shall, notwithstanding such assignment, remain responsible for the performance such Affiliate under this Agreement. Any attempted assignment not in accordance with this Section 13.2 (Assignment) shall be null and void and of no legal effect. The terms and conditions of this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respected successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 <u>Severability</u>. If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect by a court or other governmental authority of competent jurisdiction, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of one or both of the Parties. The Parties shall in such an instance cooperate and use good faith efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) that, insofar as practical, implements the purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 <u>Notices</u>. All notices that are required or permitted hereunder shall be in writing and sufficient if (a) delivered personally, (b) sent by internationally recognized express courier, (c) sent by registered or certified mail, postage prepaid, return receipt requested, or (d) delivered by electronic mail followed by delivery via either of the methods set forth in clauses (a) through (c) of this Section 13.4, in each case, addressed as follows:

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| | |
|:---|:---|
| If to Avidity, to: | Avidity Biosciences, Inc.<br> 10578 Science Center Drive, Suite 125<br> San Diego, CA 92121<br> Attention: General Counsel<br> Email: [\*\*\*] |
| With a copy to: | Ropes & Gray LLP<br> 800 Boylston Street; Prudential Tower<br> Boston, MA 02199<br> Attention: David McIntosh<br> Email: [\*\*\*] |
| <br>If to BMS, to: | Bristol-Myers Squibb Company<br> Route 206 and Province Line Road<br> Princeton, NJ 08543-4000<br> Attention: VP, Business Development<br> Email: [\*\*\*] |
| With a copy to: | Bristol-Myers Squibb Company<br> Route 206 and Province Line Road<br> Princeton, NJ 08543-4000<br> Attention: VP & Assistant General Counsel, Licensing and Business Development |

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or to such other address(es) as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such notice shall be deemed to have been given: (i) when delivered, if personally delivered on a Business Day (or if delivered or sent on a non-Business Day, then on the next Business Day); (ii) on the Business Day of scheduled delivery, if sent by internationally recognized express courier; (iii) on the [\*\*\*] Business Day following the date of mailing, if sent by mail; or (iv) if delivered by electronic mail, the date of confirmation of receipt if during the recipient's normal business hours, otherwise, on the next Business Day following delivery.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 <u>Applicable Law</u>. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to any rules of conflict of laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6 <u>Dispute Resolution</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6.1 <u>Executive Officers</u>. The Parties shall negotiate in good faith and use reasonable efforts to amicably settle any dispute, controversy, or claim arising from or related to this Agreement or the breach thereof that is outside the scope of authority of the JSC (each, a "<u>Dispute</u>"). Either Party shall refer any Dispute to the Executive Officers (or their respective designees) who shall attempt in good faith to resolve such Dispute over a period of [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6.2 <u>Litigation</u>. Any unresolved dispute which was subject to Section 13.6.1 (Executive Officers) must be brought exclusively in a court of competent jurisdiction, federal or state, located in the State of New York, and in no other jurisdiction. Each Party hereby consents to personal jurisdiction and venue in, and agrees to service of process issued or authorized by, such court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6.3 <u>Jurisdiction</u>. Each Party to this Agreement, by its execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York and state courts located in New York, New York for the purpose of any and all unresolved Disputes, (b) hereby waives to the extent not prohibited by Applicable Law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one of the above-named courts in such

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jurisdiction should be dismissed on grounds of forum *non conveniens*, should be transferred to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court, and (c) hereby agrees not to commence any such action other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action to any court other than one of the above-named courts whether on the grounds of inconvenient forum or otherwise. Notwithstanding the foregoing, application may be made to any court of competent jurisdiction with respect to the enforcement of any judgment or award. Notwithstanding the foregoing, this Section 13.6 (Dispute Resolution) shall not apply to (i) any decision for which a Party has final decision-making authority as expressly provided under Section 2.4 (Resolution of Working Group and JSC Disputes), (ii) any matter that this Agreement specifies is to be resolved in accordance with <u>Schedule 2.4.3(a)</u> or (iii) any matter that this Agreement specifies is to be resolved by Final Offer (Baseball) Arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.7 <u>Entire Agreement; Amendments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.7.1 This Agreement, together with the Exhibits and Schedules hereto, constitutes the entire understanding of the Parties with respect to the subject matter hereof and supersedes and cancels all previous express or implied agreements [\*\*\*], and understandings, negotiations, writings and commitments, either oral or written, in respect to the subject matter hereof. For clarity, all information [\*\*\*] shall be considered Confidential Information under this Agreement and such obligated Party shall be considered the Receiving Party under this Agreement with respect to such Confidential Information, and any inventions (if any) made by the Parties in the course of evaluating or discussing the collaboration hereunder prior to the Effective Date (including in the course of generating the Research Plan) shall be deemed inventions arising from the conduct of the Research Plan. The Exhibits and Schedules to this Agreement are incorporated herein by reference and are part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.7.2 The Parties acknowledge and agree that, as of the Effective Date, all Confidential Information disclosed pursuant to the Research Agreement by a Party or its Affiliates shall be included in the Confidential Information that is deemed to have been disclosed by such Party under and subject to this Agreement and the Research Agreement is hereby superseded in its entirety; *provided* that the foregoing shall not relieve any Person of any right or obligation accruing under the Research Agreement prior to the Effective Date. Each Party shall ensure that the other Party's Confidential Information is maintained in accordance with Article 8 (Confidentiality and Publication). Without limiting Section 4.8 (Use of Materials), the Parties further acknowledge and agree that, prior to the Effective Date, certain materials were transferred between the Parties under the Research Agreement and that, as of the Effective Date, such materials shall only be used hereunder as specified in, and in accordance with, the applicable Research Plan; *provided* that the foregoing shall not relieve any Person of any right or obligation accruing under the Research Agreement prior to the Effective Date. Without limiting the foregoing, BMS, on behalf of MyoKardia, and Avidity hereby terminate the Research Agreement in its entirety and notwithstanding anything to the contrary therein; *provided*, that those provisions of the Research Agreement that, by its terms are to survive such termination and are not superseded by the terms of this Agreement, will so survive, as applicable. The Parties hereby acknowledge and agree that the Research Agreement, and all rights, obligations and licenses of each of the Parties under the Research Agreement, shall be deemed to be superseded in all respects as of the Effective Date by this Agreement; *provided* that any dispute or alleged breach by a Party of any of the terms of the Research Agreement during the period that the Research Agreement was in effect shall be governed solely by the terms of the Research Agreement and the terms and conditions of the Research Agreement shall survive solely for the limited purpose set forth in this Section 13.7.2 (Entire Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.8 <u>Independent Contractors</u>. It is expressly agreed that Avidity and BMS shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture, or agency, and neither Party will treat the relationship between the Parties as a partnership, joint venture, or other entity for any purposes. Neither Avidity nor BMS shall have the authority to make any statements, representations, or commitments of any kind on behalf of, or otherwise bind or obligate the other Party, without the prior written consent of such other Party.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.9 <u>Performance by Affiliates</u>. Each Party may discharge any obligations and exercise any right hereunder through any of its Affiliates. Each Party hereby guarantees the performance by its Affiliates of such Party's obligations under this Agreement and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by a Party's Affiliate of any of such Party's obligations under this Agreement shall be deemed a breach by such Party, and the other Party may proceed directly against such Party without any obligation to first proceed against such Party's Affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.10 <u>Further Actions</u>. Each Party agrees to execute, acknowledge, and deliver such further instruments, and to do all such other acts, as are reasonably necessary to carry out the purposes and intent of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.11 <u>Severability</u>. If any court of competent jurisdiction shall hold any one or more of the provisions of this Agreement invalid or unenforceable, which holding neither Party appeals or may not be appealed, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.12 <u>Waiver</u>. No waiver or release of any obligation under or provision of this Agreement shall be valid or effective unless in writing and signed by the waiving Party. The failure of any Party to insist on the performance of any obligation hereunder shall not be deemed to be a waiver of such obligation. Waiver of any provision hereunder or of any breach of any provision hereof shall not be deemed to be a continuing waiver or a waiver of any other breach of such provision (or any other provision) on such occasion or any succeeding occasion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.13 <u>Cumulative Remedies</u>. Unless as specified, no remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.14 <u>Rule of Construction</u>. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.15 <u>Interpretation</u>. The captions to the Articles and Sections of this Agreement are included only for convenience of reference and shall not in any way affect the construction of, or be taken into consideration in interpreting, this Agreement. Any reference in this Agreement to an Article, Section, subsection, clause, Exhibit or Schedule shall be deemed to be a reference to an Article, Section, subsection, clause, Exhibit or Schedule, of or to, as the case may be, this Agreement, unless otherwise indicated. In this Agreement, unless the context requires otherwise, (a) the words "including," "include," "includes," "such as" and "*e.g.*" shall be deemed to be followed by the phrase "without limitation" or like expression, whether or not followed by the same; (b) references to the singular shall include the plural and vice versa; (c) references to masculine, feminine and neuter pronouns and expressions shall be interchangeable; (d) the words such as "herein", "hereof", and "hereunder" refer to this Agreement as a whole and not merely to the particular provision in which such words appear; (e) the word "or" is used in the inclusive sense that is typically associated with the phrase "and/or", unless the context is clear that only one of the options described may apply; (f) the word "will" shall be construed to have the same meaning and effect as the word "shall"; (g) all references to "dollars" or "$" herein shall mean Dollars; (h) the phrases "non-refundable, non-creditable" or "non-refundable and non-creditable" shall not prohibit, limit or restrict either Party's right to obtain damages in connection with a breach of this Agreement; and (i) a capitalized term not defined herein but reflecting a different part of speech from that of a capitalized term which is defined herein shall be interpreted in a correlative manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.16 <u>Counterparts</u>. The Parties may execute this Agreement in counterparts by digital or telephonic facsimile transmission (including PDF), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.17 <u>No Third Party Beneficiaries</u>. The Parties agree that no provision of this Agreement shall be for the benefit of, or shall be enforceable by any Third Party, including any creditor of either Party.

[*Signature Page Follows*]

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IN WITNESS WHEREOF, the Parties have caused this Research Collaboration and License Agreement to be executed by their duly authorized representatives as of the Effective Date.

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| | |
|:---|:---|
| BRISTOL MYERS SQUIBB COMPANY |  |
|  | AVIDITY BIOSCIENCES, INC. |
| By: <u>/s/ David Elkins</u>  |  |
| Name: <u>David Elkins</u> <br>Title: <u>Executive Vice President and Chief Financial Officer</u> | By: <u>/s/ Sarah Boyce</u> <br>Name: <u>Sarah Boyce</u> <br>Title: <u>President and Chief Executive Officer</u>  |

---

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**Schedule 1.18** 

**Avidity Platform Patents** 

**[\*\*\*]** 

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**Schedule 1.63** 

**Existing Avidity In-License Agreements** 

**[\*\*\*]** 

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**Schedule 1.67** 

**Final Offer (Baseball) Arbitration** 

**[\*\*\*]** 

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**Schedule 1.92** 

**Licensed Targets** 

**[\*\*\*]** 

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**Schedule 1.128** 

**Securities Purchase Agreement** 

Filed as a separate exhibit to this Annual Report on Form 10-K.

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**Schedule 2.4.3(a)** 

**Resolution by Expert** 

[\*\*\*]

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**Schedule 4.2.1(a)** 

**Initial Research Plan** 

[\*\*\*]

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**Schedule 4.2.1(b)** 

**Initial Research Budget** 

[\*\*\*]

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**Schedule 8.7** 

[\*\*\*]

[\*\*\*]

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**Schedule 10.2.2** 

**Existing Patents** 

[\*\*\*]

## Exhibit 10.5

**Exhibit 10.5** 

**ATRIUM THERAPEUTICS, INC.** 

**2026 INCENTIVE AWARD PLAN** 

**ARTICLE I.** 

**PURPOSE** 

The Plan's purpose is to enhance the Company's ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities. Capitalized terms used in the Plan are defined in Article XI.

**ARTICLE II.** 

**ELIGIBILITY** 

Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein.

**ARTICLE III.** 

**ADMINISTRATION AND DELEGATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Administration. The Plan is administered by the Administrator. The Administrator has authority to determine which Service Providers receive Awards, grant Awards and set Award terms and conditions, subject to the conditions and limitations in the Plan. The Administrator also has the authority to take all actions and make all determinations under the Plan, to interpret the Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable. The Administrator may correct defects and ambiguities, supply omissions and reconcile inconsistencies in the Plan or any Award as it deems necessary or appropriate to administer the Plan and any Awards. The Administrator's determinations under the Plan are in its sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or any Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Appointment of Committees. To the extent Applicable Laws permit, the Board may delegate any or all of its powers under the Plan to one or more Committees or officers of the Company or any of its Subsidiaries. The Board may abolish any Committee or re-vest in itself any previously delegated authority at any time.

**ARTICLE IV.** 

**STOCK AVAILABLE FOR AWARDS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Number of Shares. Subject to adjustment under Article VIII and the terms of this Article IV, Awards may be made under the Plan covering up to the Overall Share Limit. Shares issued under the Plan may consist of authorized but unissued Shares, Shares purchased on the open market or treasury Shares.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 Share Recycling. If all or any part of an Award expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring) paid by the Participant for such Shares or not issuing any Shares covered by the Award, the unused Shares covered by the Award will, as applicable, become or again be available for Award grants under the Plan. Further, Shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an Award and/or to satisfy any applicable tax withholding obligation (including Shares retained by the Company from the Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award grants under the Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not count against the Overall Share Limit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 Incentive Stock Option Limitations. Notwithstanding anything to the contrary herein, no more than [•] Shares may be issued pursuant to the exercise of Incentive Stock Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 Substitute Awards. In connection with an entity's merger or consolidation with the Company or the Company's acquisition of an entity's property or stock, the Administrator may grant Awards in substitution for any options or other stock, or stock-based awards granted before such merger or consolidation by such entity or its affiliate. Substitute Awards may be granted on such terms as the Administrator deems appropriate, notwithstanding limitations on Awards in the Plan. Substitute Awards will not count against the Overall Share Limit (nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under the Plan as provided above), except that Shares acquired by exercise of substitute Incentive Stock Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards shall not be added to the Shares available for Awards under the Plan as provided above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Directors prior to such acquisition or combination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 Non-Employee Director Compensation. Notwithstanding any provision to the contrary in the Plan, the Administrator may establish compensation for non-employee Directors from time to time, subject to the limitations in the Plan. The Administrator will from time to time determine the terms, conditions and amounts of all such non-employee Director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such

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factors, circumstances and considerations as it shall deem relevant from time to time, provided that the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of Awards granted to a non-employee Director as compensation for services as a non-employee Director during any fiscal year of the Company may not exceed $750,000, increased to $1,000,000 in the fiscal year of a non-employee Director's initial service as a non-employee Director. The Administrator may make exceptions to this limit for individual non-employee Directors in extraordinary circumstances, as the Administrator may determine in its discretion, provided that the non-employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee Directors.

**ARTICLE V.** 

**STOCK OPTIONS AND STOCK APPRECIATION RIGHTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 General. The Administrator may grant Options or Stock Appreciation Rights to Service Providers subject to the limitations in the Plan, including any limitations in the Plan that apply to Incentive Stock Options. The Administrator will determine the number of Shares covered by each Option and Stock Appreciation Right, the exercise price of each Option and Stock Appreciation Right and the conditions and limitations applicable to the exercise of each Option and Stock Appreciation Right. A Stock Appreciation Right will entitle the Participant (or other person entitled to exercise the Stock Appreciation Right) to receive from the Company upon exercise of the exercisable portion of the Stock Appreciation Right an amount determined by multiplying the excess, if any, of the Fair Market Value of one Share on the date of exercise over the exercise price per Share of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may impose and payable in cash, Shares valued at Fair Market Value or a combination of the two as the Administrator may determine or provide in the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 Exercise Price. The Administrator will establish each Option's and Stock Appreciation Right's exercise price and specify the exercise price in the Award Agreement. The exercise price will not be less than 100% of the Fair Market Value on the grant date of the Option or Stock Appreciation Right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 Duration. Each Option or Stock Appreciation Right will be exercisable at such times and as specified in the Award Agreement, provided that the term of an Option or Stock Appreciation Right will not exceed ten years. Notwithstanding the foregoing and unless determined otherwise by the Company, in the event that on the last business day of the term of an Option or Stock Appreciation Right (other than an Incentive Stock Option) (i) the exercise of the Option or Stock Appreciation Right is prohibited by Applicable Law, as determined by the Company, or (ii) Shares may not be purchased or sold by the applicable Participant due to any Company insider trading policy (including blackout periods) or a "lock-up" agreement undertaken in connection with an issuance of securities by the Company, the term of the Option or Stock Appreciation Right shall be extended until the date that is thirty days after the end of the legal prohibition, black-out period or lock-up agreement, as determined by the Company; provided, however, in no event shall the extension last beyond the ten year term of the applicable Option or Stock Appreciation Right. Notwithstanding the foregoing, if the Participant, prior to the end of the

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term of an Option or Stock Appreciation Right, violates the non-competition, non-solicitation, confidentiality or other similar restrictive covenant provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company or any of its Subsidiaries, the right of the Participant and the Participant's transferees to exercise any Option or Stock Appreciation Right issued to the Participant shall terminate immediately upon such violation, unless the Company otherwise determines. In addition, if, prior to the end of the term of an Option or Stock Appreciation Right, the Participant is given notice by the Company or any of its Subsidiaries of the Participant's Termination of Service by the Company or any of its Subsidiaries for Cause, and the effective date of such Termination of Service is subsequent to the date of the delivery of such notice, the right of the Participant and the Participant's transferees to exercise any Option or Stock Appreciation Right issued to the Participant shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant's service as a Service Provider will not be terminated for Cause as provided in such notice or (ii) the effective date of the Participant's Termination of Service by the Company or any of its Subsidiaries for Cause (in which case the right of the Participant and the Participant's transferees to exercise any Option or Stock Appreciation Right issued to the Participant will terminate immediately upon the effective date of such termination of Service).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 Exercise. Options and Stock Appreciation Rights may be exercised by delivering to the Company a written notice of exercise, in a form the Administrator approves (which may be electronic), signed by the person authorized to exercise the Option or Stock Appreciation Right, together with, as applicable, payment in full (i) as specified in Section 5.5 for the number of Shares for which the Award is exercised and (ii) as specified in Section 9.5 for any applicable taxes. Unless the Administrator otherwise determines, an Option or Stock Appreciation Right may not be exercised for a fraction of a Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 Payment Upon Exercise. Subject to Section 10.8, any Company insider trading policy (including blackout periods) and Applicable Laws, the exercise price of an Option must be paid by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) cash, wire transfer of immediately available funds or by check payable to the order of the Company, provided that the Company may limit the use of one of the foregoing payment forms if one or more of the payment forms below is permitted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (A) delivery (including electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to pay the exercise price, or (B) the Participant's delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be required by the Administrator;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to the extent permitted by the Administrator, surrendering Shares then issuable upon the Option's exercise valued at their Fair Market Value on the exercise date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) to the extent permitted by the Administrator, delivery of a promissory note or any other property that the Administrator determines is good and valuable consideration; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) to the extent permitted by the Company, any combination of the above payment forms approved by the Administrator.

**ARTICLE VI.** 

**RESTRICTED STOCK; RESTRICTED STOCK UNITS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 General. The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to the Company's right to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant (or to require forfeiture of such shares) if conditions the Administrator specifies in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes for such Award. In addition, the Administrator may grant to Service Providers Restricted Stock Units, which may be subject to vesting and forfeiture conditions during the applicable restriction period or periods, as set forth in an Award Agreement. The Administrator will determine and set forth in the Award Agreement the terms and conditions for each Restricted Stock and Restricted Stock Unit Award, subject to the conditions and limitations contained in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 Restricted Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Dividends. Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such Shares, unless the Administrator provides otherwise in the Award Agreement. In addition, unless the Administrator provides otherwise, if any dividends or distributions are paid in Shares, or consist of a dividend or distribution to holders of Common Stock of property other than an ordinary cash dividend, the Shares or other property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Stock Certificates. The Company may require that the Participant deposit in escrow with the Company (or its designee) any stock certificates issued in respect of shares of Restricted Stock, together with a stock power endorsed in blank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 Restricted Stock Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Settlement. The Administrator may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practicable after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participant's election, in a manner intended to comply with Section 409A.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Stockholder Rights. A Participant will have no rights of a stockholder with respect to Shares subject to any Restricted Stock Unit unless and until the Shares are delivered in settlement of the Restricted Stock Unit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Dividend Equivalents. If the Administrator provides, a grant of Restricted Stock Units may provide a Participant with the right to receive Dividend Equivalents. Dividend Equivalents may be paid currently or credited to an account for the Participant, settled in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Restricted Stock Units with respect to which the Dividend Equivalents are granted and subject to other terms and conditions as set forth in the Award Agreement.

**ARTICLE VII.** 

**OTHER STOCK OR CASH BASED AWARDS** 

Other Stock or Cash Based Awards may be granted to Participants, including Awards entitling Participants to receive Shares to be delivered in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified Performance Criteria or otherwise), in each case subject to any conditions and limitations in the Plan. Such Other Stock or Cash Based Awards will also be available as a payment form in the settlement of other Awards, as standalone payments and as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock or Cash Based Awards may be paid in Shares, cash or other property, as the Administrator determines. Subject to the provisions of the Plan, the Administrator will determine the terms and conditions of each Other Stock or Cash Based Award, including any purchase price, performance goal (which may be based on the Performance Criteria), transfer restrictions, and vesting conditions, which will be set forth in the applicable Award Agreement.

**ARTICLE VIII.** 

**ADJUSTMENTS FOR CHANGES IN COMMON STOCK** 

**AND CERTAIN OTHER EVENTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 Equity Restructuring. In connection with any Equity Restructuring, notwithstanding anything to the contrary in this Article VIII, the Administrator will equitably adjust each outstanding Award as it deems appropriate to reflect the Equity Restructuring, which may include adjusting the number and type of securities subject to each outstanding Award and/or the Award's exercise price or grant price (if applicable), granting new Awards to Participants, and making a cash payment to Participants. The adjustments provided under this Section 8.1 will be nondiscretionary and final and binding on the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 Corporate Transactions. In the event of any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), reorganization, merger, consolidation, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, Change of Control, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction or event affecting the Company or its financial statements or any change in any Applicable Laws

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or accounting principles, the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event (except that action to give effect to a change in Applicable Law or accounting principles may be made within a reasonable period of time after such change) and either automatically or upon the Participant's request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) to facilitate such transaction or event or (z) give effect to such changes in Applicable Laws or accounting principles:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant's rights under the vested portion of such Award, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant's rights, in any case, is equal to or less than zero, then the Award may be terminated without payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To provide that such Award shall vest and, to the extent applicable, be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and/or applicable exercise or purchase price, in all cases, as determined by the Administrator;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Awards and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article IV hereof on the maximum number and kind of shares which may be issued) and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To replace such Award with other rights or property selected by the Administrator; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 Effect of Non-Assumption in a Change of Control. Notwithstanding the provisions of Section 8.2, if a Change of Control occurs and a Participant's Awards are not continued, converted, assumed, or replaced with a substantially similar award by (a) the Company, or (b) a successor entity or its parent or subsidiary (an "***Assumption***"), and provided that the Participant has not had a Termination of Service, then, immediately prior to the Change of Control, such

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Awards may become fully vested, exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on such Awards shall lapse, in which case, such Awards shall be canceled upon the consummation of the Change of Control in exchange for the right to receive the Change of Control consideration payable to other holders of Common Stock (i) which may be on such terms and conditions as apply generally to holders of Common Stock under the Change of Control documents (including, without limitation, any escrow, earn-out or other deferred consideration provisions) or such other terms and conditions as the Administrator may provide, and (ii) determined by reference to the number of shares subject to such Awards and net of any applicable exercise price; provided that to the extent that any Awards constitute "nonqualified deferred compensation" that may not be paid upon the Change of Control under Section 409A without the imposition of taxes thereon under Section 409A, the timing of such payments shall be governed by the applicable Award Agreement (subject to any deferred consideration provisions applicable under the Change of Control documents); and provided, further, that if the amount to which a Participant would be entitled upon the settlement or exercise of such Award at the time of the Change of Control is equal to or less than zero, then such Award may be terminated without payment. The Administrator shall determine whether an Assumption of an Award has occurred in connection with a Change of Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 Administrative Stand Still. In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other extraordinary transaction or change affecting the Shares or the share price of Common Stock, including any Equity Restructuring or any securities offering or other similar transaction, for administrative convenience, the Administrator may refuse to permit the exercise of any Award for up to sixty days before or after such transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 General. Except as expressly provided in the Plan or the Administrator's action under the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase or decrease in the number of Shares of any class or dissolution, liquidation, merger, or consolidation of the Company or other corporation. Except as expressly provided with respect to an Equity Restructuring under Section 8.1 or the Administrator's action under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment will be made regarding, the number of Shares subject to an Award or the Award's grant or exercise price. The existence of the Plan, any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Company's right or power to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, (ii) any merger, consolidation dissolution or liquidation of the Company or sale of Company assets or (iii) any sale or issuance of securities, including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares. The Administrator may treat Participants and Awards (or portions thereof) differently under this Article VIII.

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**ARTICLE IX.** 

**GENERAL PROVISIONS APPLICABLE TO AWARDS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 Transferability. Except as the Administrator may determine or provide in an Award Agreement or otherwise for Awards other than Incentive Stock Options, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered, either voluntarily or by operation of law, except by will or the laws of descent and distribution, or, subject to the Administrator's consent, pursuant to a domestic relations order, and, during the life of the Participant, will be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, will include references to a Participant's authorized transferee that the Administrator specifically approves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 Documentation. Each Award will be evidenced in an Award Agreement, which may be written or electronic, as the Administrator determines. Each Award may contain terms and conditions in addition to those set forth in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 Discretion. Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 Termination of Status. The Administrator will determine how the Disability, death, retirement, authorized leave of absence or any other change or purported change in a Participant's Service Provider status affects an Award and the extent to which, and the period during which, the Participant, the Participant's legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 Withholding. Each Participant must pay the Company or make provision satisfactory to the Administrator for payment of, any taxes required by law to be withheld in connection with such Participant's Awards by the date of the event creating the tax liability. The Company may deduct an amount sufficient to satisfy such tax obligations based on the applicable statutory withholding rates (or such other rate as may be determined by the Company after considering any accounting consequences or costs) from any payment of any kind otherwise due to a Participant. In the absence of a contrary determination by the Company (or, with respect to withholding pursuant to clause (ii) below with respect to Awards held by individuals subject to Section 16 of the Exchange Act, a contrary determination by the Administrator), all tax withholding obligations will be calculated based on the minimum applicable statutory withholding rates. Subject to Section 10.8 and any Company insider trading policy (including blackout periods), Participants may satisfy such tax obligations (i) in cash, by wire transfer of immediately available funds, by check made payable to the order of the Company, provided that the Company may limit the use of the foregoing payment forms if one or more of the payment forms below is permitted, (ii) to the extent permitted by the Administrator, in whole or in part by delivery of Shares, including Shares delivered by attestation and Shares retained from the Award creating the tax obligation, valued at their Fair Market Value on the date of delivery, (iii) if there is a public market for Shares at the time the tax obligations are satisfied, unless the Company otherwise determines, (A) delivery (including electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to satisfy the tax obligations, or (B) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to satisfy the tax withholding; provided that such amount is paid to the Company at such time as may be required by the Administrator, or (iv) to the extent permitted by the Company, any

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combination of the foregoing payment forms approved by the Administrator. Notwithstanding any other provision of the Plan, the number of Shares which may be so delivered or retained pursuant to clause (ii) of the immediately preceding sentence shall be limited to the number of Shares which have a Fair Market Value on the date of delivery or retention no greater than the aggregate amount of such liabilities based on the maximum individual statutory tax rate in the applicable jurisdiction at the time of such withholding (or such other rate as may be required to avoid the liability classification of the applicable award under generally accepted accounting principles in the United States of America)); provided, however, to the extent such Shares were acquired by Participant from the Company as compensation, the Shares must have been held for the minimum period required by applicable accounting rules to avoid a charge to the Company's earnings for financial reporting purposes; provided, further, that, any such Shares delivered or retained shall be rounded up to the nearest whole Share to the extent rounding up to the nearest whole Share does not result in the liability classification of the applicable Award under generally accepted accounting principles in the United States of America. If any tax withholding obligation will be satisfied under clause (ii) above by the Company's retention of Shares from the Award creating the tax obligation and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the applicable Participant's behalf some or all of the Shares retained and to remit the proceeds of the sale to the Company or its designee, and each Participant's acceptance of an Award under the Plan will constitute the Participant's authorization to the Company and instruction and authorization to such brokerage firm to complete the transactions described in this sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 Amendment of Award; Repricing. The Administrator may amend, modify or terminate any outstanding Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, and converting an Incentive Stock Option to a Non-Qualified Stock Option. The Participant's consent to such action will be required unless (i) the action, taking into account any related action, does not materially and adversely affect the Participant's rights under the Award, or (ii) the change is permitted under Article VIII or pursuant to Section 10.6. Notwithstanding the foregoing or anything in the Plan to the contrary, the Administrator may, without the approval of the stockholders of the Company, reduce the exercise price per share of outstanding Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards or Options or Stock Appreciation Rights with an exercise price per share that is less than the exercise price per share of the original Options or Stock Appreciation Rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 Conditions on Delivery of Stock. The Company will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (i) all Award conditions have been met or removed to the Company's satisfaction, (ii) as determined by the Company, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary or appropriate to satisfy any Applicable Laws. The Company's inability to obtain authority from any regulatory body having jurisdiction, which the Administrator determines is necessary to the lawful issuance and sale of any securities, will relieve the Company of any liability for failing to issue or sell such Shares as to which such requisite authority has not been obtained.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 Acceleration. The Administrator may at any time provide that any Award will become immediately vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9 Additional Terms of Incentive Stock Options. The Administrator may grant Incentive Stock Options only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code. If an Incentive Stock Option is granted to a Greater Than 10% Stockholder, the exercise price will not be less than 110% of the Fair Market Value on the Option's grant date, and the term of the Option will not exceed five years. All Incentive Stock Options will be subject to and construed consistently with Section 422 of the Code. By accepting an Incentive Stock Option, the Participant agrees to give prompt notice to the Company of dispositions or other transfers (other than in connection with a Change of Control) of Shares acquired under the Option made within (i) two years from the grant date of the Option or (ii) one year after the transfer of such Shares to the Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property, assumption of indebtedness or other consideration, in such disposition or other transfer. Neither the Company nor the Administrator will be liable to a Participant, or any other party, if an Incentive Stock Option fails or ceases to qualify as an "incentive stock option" under Section 422 of the Code. Any Incentive Stock Option or portion thereof that fails to qualify as an "incentive stock option" under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Non-Qualified Stock Option.

**ARTICLE X.** 

**MISCELLANEOUS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 No Right to Employment or Other Status. No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 No Rights as Stockholder; Certificates. Subject to the Award Agreement, no Participant or Designated Beneficiary will have any rights as a stockholder with respect to any Shares to be distributed under an Award until becoming the record holder of such Shares. Notwithstanding any other provision of the Plan, unless the Administrator otherwise determines or Applicable Laws require, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). The Company may place legends on stock certificates issued under the Plan that the Administrator deems necessary or appropriate to comply with Applicable Laws.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 Effective Date and Term of Plan. Unless earlier terminated by the Board, the Plan will become effective upon the approval of the Plan by the Company's stockholder, and will remain in effect until the tenth anniversary of the earlier of (i) the date the Board adopted the Plan or (ii) the date the Company's stockholder approved the Plan, but Awards previously granted may extend beyond that date in accordance with the Plan. If the Plan is not approved by the Company's stockholder, the Plan will not become effective and no Awards will be granted under the Plan. The Plan will be submitted for the approval of the Company's stockholder within twelve (12) months after the date of the Board's adoption of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 Amendment of Plan. The Administrator may amend, suspend or terminate the Plan at any time; provided that no amendment, other than an increase to the Overall Share Limit, may materially and adversely affect any Award outstanding at the time of such amendment without the affected Participant's consent. No Awards may be granted under the Plan during any suspension period or after the Plan's termination. Awards outstanding at the time of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension or termination. The Board will obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 Provisions for Foreign Participants. The Administrator may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to address differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) General. The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply. Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participant's consent, amend this Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions intended to (A) exempt this Plan or any Award from Section 409A, or (B) comply with Section 409A, including regulations, guidance, compliance programs and other interpretative authority that may be issued after an Award's grant date. The Company makes no representations or warranties as to an Award's tax treatment under Section 409A or otherwise. The Company will have no obligation under this Section 10.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant "nonqualified deferred compensation" subject to taxes, penalties or interest under Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Separation from Service. If an Award constitutes "nonqualified deferred compensation" under Section 409A, any payment or settlement of such Award upon a termination of a Participant's Service Provider relationship will, to the extent necessary to avoid taxes under Section 409A, be made only upon the Participant's "separation from service" (within the meaning of Section 409A), whether such "separation from service" occurs upon or after the termination of the Participant's Service Provider relationship. For purposes of this Plan or any Award Agreement relating to any such payments or benefits, references to a "termination," "termination of employment" or like terms means a "separation from service."

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Payments to Specified Employees. Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of "nonqualified deferred compensation" required to be made under an Award to a "specified employee" (as defined under Section 409A and as the Administrator determines) due to his or her "separation from service" will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following such "separation from service" (or, if earlier, until the specified employee's death) and will instead be paid (as set forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter (without interest). Any payments of "nonqualified deferred compensation" under such Award payable more than six months following the Participant's "separation from service" will be paid at the time or times the payments are otherwise scheduled to be made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7 Limitations on Liability. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, other employee or agent of the Company or any Subsidiary will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, and such individual will not be personally liable with respect to the Plan because of any contract or other instrument executed in his or her capacity as an Administrator, director, officer, other employee or agent of the Company or any Subsidiary. The Company will indemnify and hold harmless each director, officer, other employee and agent of the Company or any Subsidiary that has been or will be granted or delegated any duty or power relating to the Plan's administration or interpretation, against any cost or expense (including attorneys' fees) or liability (including any sum paid in settlement of a claim with the Administrator's approval) arising from any act or omission concerning this Plan unless arising from such person's own fraud or bad faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.8 Lock-Up Period. The Company may, at the request of any underwriter representative or otherwise, in connection with registering the offering of any Company securities under the Securities Act, prohibit Participants from, directly or indirectly, selling or otherwise transferring any Shares or other Company securities during a period of up to one hundred eighty days following the effective date of a Company registration statement filed under the Securities Act, or such longer period as determined by the underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.9 Data Privacy. As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this section by and among the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Participant's participation in the Plan. The Company and its Subsidiaries and affiliates may hold certain personal information about a Participant, including the Participant's name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or its Subsidiaries and affiliates; and Award details, to implement, manage and administer the Plan and Awards (the "***Data***"). The Company and its Subsidiaries and affiliates may transfer the Data amongst themselves as necessary to implement, administer and

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manage a Participant's participation in the Plan, and the Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Participant's country, or elsewhere, and the Participant's country may have different data privacy laws and protections than the recipients' country. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant's participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participant's participation in the Plan. A Participant may, at any time, view the Data that the Company holds regarding such Participant, request additional information about the storage and processing of the Data regarding such Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 10.9 in writing, without cost, by contacting the local human resources representative. The Company may cancel a Participant's ability to participate in the Plan and, in the Administrator's discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 10.9. For more information on the consequences of refusing or withdrawing consent, Participants may contact their local human resources representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.10 Severability. If any portion of the Plan or any action taken under it is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.11 Governing Documents. If any contradiction occurs between the Plan and any Award Agreement or other written agreement between a Participant and the Company (or any Subsidiary) that the Administrator has approved, the Plan will govern, unless it is expressly specified in such Award Agreement or other written document that a specific provision of the Plan will not apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.12 Governing Law. The Plan and all Awards will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state's choice-of-law principles requiring the application of a jurisdiction's laws other than the State of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.13 Claw-back Provisions. All Awards (including, without limitation, any proceeds, gains or other economic benefit actually or constructively received by a Participant upon any receipt or exercise of any Award or upon the receipt or resale of any shares of Common Stock underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with Applicable Laws (including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder) as and to the extent set forth in such claw-back policy or the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.14 Titles and Headings. The titles and headings in the Plan are for convenience of reference only and, if any conflict, the Plan's text, rather than such titles or headings, will control.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.15 Conformity to Securities Laws. Participant acknowledges that the Plan is intended to conform to the extent necessary with Applicable Laws. Notwithstanding anything herein to the contrary, the Plan and all Awards will be administered only in conformance with Applicable Laws. To the extent Applicable Laws permit, the Plan and all Award Agreements will be deemed amended as necessary to conform to Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.16 Relationship to Other Benefits. No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except as expressly provided in writing in such other plan or an agreement thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.17 Broker-Assisted Sales. In the event of a broker-assisted sale of Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including amounts to be paid under the final sentence of Section 9.5: (a) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (c) the applicable Participant will be responsible for all broker's fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of such sale that exceed the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company and its designees are under no obligation to arrange for such sale at any particular price; and (f) in the event the proceeds of such sale are insufficient to satisfy the Participant's applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant's obligation.

**ARTICLE XI.** 

**DEFINITIONS** 

As used in the Plan, the following words and phrases will have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 "***Administrator***" means the Board or a Committee to the extent that the Board's powers or authority under the Plan have been delegated to such Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 "***Applicable Laws***" means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 "***Award***" means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units or Other Stock or Cash Based Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 "***Award Agreement***" means a written agreement evidencing an Award, which may be electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and conditions of the Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 "***Board***" means the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 "***Cause***" with respect to a Participant, means "Cause" (or any term of similar effect) as defined in such Participant's employment or consulting agreement with the Company if such an agreement exists and contains a definition of Cause (or term of similar effect), or, if no such agreement exists or such agreement does not contain a definition of Cause (or term of similar effect), then Cause shall include, but not be limited to: (i) the Participant's unauthorized use or disclosure of confidential information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company or any willful breach of a written agreement or covenant between the Participant and the Company, including without limitation a material breach of any employment, confidentiality, non-compete, non-solicit or similar agreement; (ii) the Participant's commission of, indictment for or the entry of a plea of guilty or nolo contendere by the Participant to, a felony under the laws of the United States or any state thereof or any crime involving dishonesty or moral turpitude (or any similar crime in any jurisdiction outside the United States); (iii) the Participant's gross negligence or willful misconduct or the Participant's willful or repeated failure or refusal to substantially perform duties and responsibilities to the Company or deliberate violation of a Company policy; (iv) any act of fraud, embezzlement, misappropriation or dishonesty committed by the Participant against the Company; or (v) any acts, omissions or statements by a Participant which the Company reasonably determines to be materially detrimental or damaging to the reputation, operations, prospects or business relations of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 "***Change of Control***" means and includes each of the following, to the extent occurring following the Distribution:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (i) and (ii) of subsection (c) below) whereby any "person" or related "group" of "persons" (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee benefit plan maintained by the Company or any of its Subsidiaries or a "person" that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company's securities outstanding immediately after such acquisition; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in subsections (a) or (c)) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company's assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) which results in the Company's voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company's assets or otherwise succeeds to the business of the Company (the Company or such person, the "***Successor Entity***")) directly or indirectly, at least a majority of the combined voting power of the Successor Entity's outstanding voting securities immediately after the transaction, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

Notwithstanding the foregoing, if a Change of Control constitutes a payment event with respect to any Award (or portion of any Award) that provides for the deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b) or (c) with respect to such Award (or portion thereof) shall only constitute a Change of Control for purposes of the payment timing of such Award if such transaction also constitutes a "change in control event," as defined in Treasury Regulation Section 1.409A-3(i)(5).

The Administrator shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change of Control has occurred pursuant to the above definition, the date of the occurrence of such Change of Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change of Control is a "change in control event" as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 "***Code***" means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9 "***Committee***" means one or more committees or subcommittees of the Board, which may include one or more Company directors or executive officers, to the extent Applicable Laws permit. To the extent required to comply with the provisions of Rule 16b-3, it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a "non-employee director" within the meaning of Rule 16b- 3; however, a Committee member's failure to qualify as a "non-employee director" within the meaning of Rule 16b-3 will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.10 "***Common Stock***" means the common stock of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.11 "***Company***" means Atrium Therapeutics, Inc., a Delaware corporation, or any successor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.12 "***Consultant***" means any person, including any adviser, engaged by (a) the Company or its parent or Subsidiary or (b) only through the Distribution, Avidity Biosciences, Inc. or its subsidiaries, to render services to such entity if the consultant or adviser: (i) renders bona fide services to the Company, or, only through the Distribution, Avidity Biosciences, Inc. or its subsidiaries; (ii) renders services not in connection with the offer or sale of securities in a capital-raising transaction and does not directly or indirectly promote or maintain a market for the Company's securities; and (iii) is a natural person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.13 "***Designated Beneficiary***" means the beneficiary or beneficiaries the Participant designates, in a manner the Administrator determines, to receive amounts due or exercise the Participant's rights if the Participant dies or becomes incapacitated. Without a Participant's effective designation, "***Designated Beneficiary***" will mean the Participant's estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.14 "***Director***" means (a) any Board member and (b) only through the Distribution, any member of the Board of Directors of Avidity Biosciences, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.15 "***Disability***" means a permanent and total disability under Section 22(e)(3) of the Code, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.16 "***Distribution***" means the consummation of the distribution by Avidity Biosciences, Inc. of all of the issued and outstanding Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.17 "***Dividend Equivalents***" means a right granted to a Participant under the Plan to receive the equivalent value (in cash or Shares) of dividends paid on Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.18 "***Employee***" means (a) any employee of the Company or its Subsidiaries and (b) only through the Distribution, any employee of Avidity Biosciences, Inc. or its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.19 "***Equity Restructuring***" means, as determined by the Administrator, a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of shares of Common Stock (or other securities of the Company) or the share price of Common Stock (or other securities of the Company) and causes a change in the per share value of the Common Stock underlying outstanding Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.20 "***Exchange Act***" means the Securities Exchange Act of 1934, as amended.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.21 "***Fair Market Value***" means, as of any date, the value of a share of Common Stock determined as follows: (a) if the Common Stock is listed on any established stock exchange, its Fair Market Value will be the closing sales price for such Common Stock as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (b) if the Common Stock is not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (c) without an established market for the Common Stock, the Administrator will determine the Fair Market Value in its discretion. Notwithstanding the foregoing, with respect to any Award granted on the pricing date of the Company's initial public offering, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company's final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.22 "***Good Reason***" means (a) if a Participant is a party to a written employment or consulting agreement with the Company or any of its Subsidiaries or an Award Agreement in which the term "good reason" is defined, "Good Reason" as defined in such agreement, and (b) if no such agreement exists, (i) a change in the Participant's position with the Company (or its Subsidiary employing the Participant) that materially reduces the Participant's authority, duties or responsibilities or the level of management to which he or she reports; provided that it shall not constitute Good Reason if such reduction is a mere change of title alone or change in reporting relationship, (ii) a material diminution in the Participant's base compensation or retainer, unless pursuant to a salary or retainer reduction program applicable generally to the Company's similarly situated personnel, or (iii) a relocation of the Participant's place of employment or service by more than fifty miles, provided that such change, reduction or relocation is effected by the Company (or its Subsidiary employing or engaging the Participant) without the Participant's consent. Participant shall only be deemed to have resigned for Good Reason pursuant to the foregoing definition if (x) the Company is given written notice from the Participant within thirty days following the first occurrence of the condition that the Participant considers to constitute Good Reason describing the condition and the Company fails to satisfactorily remedy such condition within thirty days following such written notice, and (y) the Participant terminates employment within ninety days following the end of the period within which the Company was entitled to remedy the condition constituting Good Reason but failed to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.23 "***Greater Than 10% Stockholder***" means an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporation, as defined in Section 424(e) and (f) of the Code, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.24 "***Incentive Stock Option***" means an Option intended to qualify as an "incentive stock option" as defined in Section 422 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.25 "***Non-Qualified Stock Option***" means an Option not intended or not qualifying as an Incentive Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.26 "***Option***" means an option to purchase Shares, which will either be an Incentive Stock option or a Non-Qualified Stock Option.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.27 "***Other Stock or Cash Based Awards***" means cash awards, awards of Shares, and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property awarded to a Participant under Article VII.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.28 "***Outstanding Shares***" means the sum of (a) the number of Shares outstanding and (b) the number of Shares issuable pursuant to the exercise of any outstanding, pre-funded warrants to acquire Shares for a nominal exercise price, each as of the final day of the immediately preceding calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.29 "***Overall Share Limit***" means the sum of (a) [•] Shares; and (b) an annual increase on the first day of each calendar year beginning January 1, 2027 and ending on and including January 1, 2036, equal to the lesser of (i) 5% of the aggregate number of Outstanding Shares and (ii) such smaller number of Shares as is determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.30 "***Participant***" means a Service Provider who has been granted an Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.31 "***Performance Criteria***" mean the criteria (and adjustments) that the Administrator may select for an Award to establish performance goals for a performance period, which may include (but are not limited to) the following: net earnings or losses (either before or after one or more of interest, taxes, depreciation, amortization, and non-cash equity-based compensation expense); gross or net sales or revenue or sales or revenue growth; net income (either before or after taxes) or adjusted net income; profits (including but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); cash flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested capital; cost of capital; return on stockholders' equity; total stockholder return; return on sales; costs, reductions in costs and cost control measures; expenses; working capital; earnings or loss per share; adjusted earnings or loss per share; price per share or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth; customer service; employee satisfaction; recruitment and maintenance of personnel; human resources management; supervision of litigation and other legal matters; strategic partnerships and transactions; financial ratios (including those measuring liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions; cash on hand; acquisition activity; investment sourcing activity; and marketing initiatives, any of which may be measured in absolute terms or as compared to any incremental increase or decrease. Such performance goals also may be based solely by reference to the Company's performance or the performance of a Subsidiary, division, business segment or business unit of the Company or a Subsidiary or based upon performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance of other companies. The Administrator may provide for exclusion of the impact of an event or occurrence which the Administrator determines

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should appropriately be excluded, including, but not limited to (a) restructurings, discontinued operations, extraordinary items, and other unusual, infrequently occurring or non-recurring charges or events, (b) asset write-downs, (c) litigation or claim judgments or settlements, (d) acquisitions or divestitures, (e) reorganization or change in the corporate structure or capital structure of the Company, (f) an event either not directly related to the operations of the Company, Subsidiary, division, business segment or business unit or not within the reasonable control of management, (g) foreign exchange gains and losses, (h) a change in the fiscal year of the Company, (i) the refinancing or repurchase of bank loans or debt securities, (j) unbudgeted capital expenditures, (k) the issuance or repurchase of equity securities and other changes in the number of outstanding shares, (l) conversion of some or all of convertible securities to Common Stock, (m) any business interruption event (n) the cumulative effects of tax or accounting changes in accordance with U.S. generally accepted accounting principles, or (o) the effect of changes in other laws or regulatory rules affecting reported results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.32 "***Plan***" means this 2026 Incentive Award Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.33 "***Public Trading Date***" means the first date upon which the Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system, or, if earlier, the date on which the Company becomes a "publicly held corporation" for purposes of Treasury Regulation Section 1.162-27(c)(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.34 "***Restricted Stock***" means Shares awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.35 "***Restricted Stock Unit***" means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal value as of such settlement date awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.36 "***Rule 16b-3***" means Rule 16b-3 promulgated under the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.37 "***Section 409A***" means Section 409A of the Code and all regulations, guidance, compliance programs and other interpretative authority thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.38 "***Securities Act***" means the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.39 "***Service Provider***" means an Employee, Consultant or Director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.40 "***Shares***" means shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.41 "***Stock Appreciation Right***" means a stock appreciation right granted under Article V.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.42 "***Subsidiary***" means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.43 "***Substitute Awards***" shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.44 "***Termination of Service***" means the date the Participant ceases to be a Service Provider.

\* \* \* \*

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**ATRIUM THERAPEUTICS, INC.** 

**2026 INCENTIVE AWARD PLAN** 

**STOCK OPTION GRANT NOTICE** 

Capitalized terms not specifically defined in this Stock Option Grant Notice (the "***Grant Notice***") have the meanings given to them in the 2026 Incentive Award Plan (as amended from time to time, the "***Plan***") of Atrium Therapeutics, Inc. (the "***Company***").

The Company hereby grants to the participant listed below ("***Participant***") the stock option described in this Grant Notice (the "***Option***"), subject to the terms and conditions of the Plan and the Stock Option Agreement attached hereto as Exhibit A (the "***Agreement***"), both of which are incorporated into this Grant Notice by reference.

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| | |
|:---|:---|
| **Participant:** |  |
| **Grant Date:** |  |
| **Exercise Price per Share:** |  |
| **Shares Subject to the Option:** |  |
| **Final Expiration Date:** |  |
| **Vesting Commencement Date:** |  |
| **Vesting Schedule:** | To be specified in individual award agreements |
| **Type of Option** | ☐ Incentive Stock Option<br>☐ Non-Qualified Stock Option |

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By Participant's signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.

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| | |
|:---|:---|
| **ATRIUM THERAPEUTICS, INC.** | **PARTICIPANT** |
| By: | By: |
| Print Name: | Print Name: |
| Title: | Title: |

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**EXHIBIT A** 

**STOCK OPTION AGREEMENT** 

Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.

**ARTICLE I.** 

**GENERAL** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 Grant of Option. The Company has granted to Participant the Option effective as of the grant date set forth in the Grant Notice (the "***Grant Date***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

**ARTICLE II.** 

**PERIOD OF EXERCISABILITY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 Commencement of Exercisability. The Option will vest and become exercisable according to the vesting schedule in the Grant Notice (the "***Vesting Schedule***"), except that any fraction of a Share as to which the Option would be vested or exercisable will be accumulated and will vest and become exercisable only when a whole Share has accumulated. The Option shall not be exercisable with respect to fractional Shares. Notwithstanding anything in the Grant Notice, the Plan or this Agreement to the contrary, unless the Administrator otherwise determines, the Option will immediately expire and be forfeited as to any portion that is not vested and exercisable as of Participant's Termination of Service for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Duration of Exercisability. The Vesting Schedule is cumulative. Any portion of the Option which vests and becomes exercisable will remain vested and exercisable until the Option expires. The Option will be forfeited immediately upon its expiration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 Expiration of Option. Subject to Section 5.3 of the Plan, the Option may not be exercised to any extent by anyone after, and will expire on, the first of the following to occur:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The final expiration date in the Grant Notice, which shall in no event be more than ten (10) years from the Grant Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If this Option is designated as an Incentive Stock Option and the Participant, at the time the Option was granted, was a Greater Than 10% Stockholder, the expiration of five (5) years from the Grant Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as the Administrator may otherwise approve, the expiration of three (3) months from the date of Participant's Termination of Service, unless Participant's Termination of Service is for Cause or by reason of Participant's death or Disability; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as the Administrator may otherwise approve, the expiration of one (1) year from the date of Participant's Termination of Service by reason of Participant's death or Disability.

**ARTICLE III.** 

**EXERCISE OF OPTION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Person Eligible to Exercise. During Participant's lifetime, only Participant may exercise the Option, unless it has been disposed of, with the consent of the Administrator, pursuant to a domestic relations order. After Participant's death, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 2.3 hereof, be exercised by the Participant's Designated Beneficiary or by any person empowered to do so under the deceased Participant's will or under the then applicable laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised, in whole or in part, according to the procedures in the Plan at any time prior to the time the Option or portion thereof expires, except that the Option may only be exercised for whole Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 Tax Withholding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has the right and option, but not the obligation, to treat Participant's failure to provide timely payment in accordance with the Plan of any withholding tax arising in connection with the Option as Participant's election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise issuable under the Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the Option, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Option. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale of Shares. The Company and the Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminate Participant's tax liability.

**ARTICLE IV.** 

**OTHER PROVISIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Adjustments. Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company's Secretary at the Company's principal office or the Secretary's then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the person entitled to exercise the Option) at Participant's last known mailing address, email address or facsimile number in the Company's personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 Conformity to Securities Laws. The Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended to the extent necessary to conform to such Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth in the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Option will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 Entire Agreement. The Plan, the Grant Notice and this Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 Limitation on Participant's Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the Option, as and when exercised pursuant to the terms hereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 Not a Contract of Employment. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 Incentive Stock Options. If the Option is designated as an Incentive Stock Option:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Participant acknowledges that to the extent the aggregate fair market value of shares (determined as of the time the option with respect to the shares is granted) with respect to which stock options intended to qualify as "incentive stock options" under Section 422 of the Code, including the Option, are exercisable for the first time by Participant during any calendar year exceeds $100,000 or if for any other reason such stock options do not qualify or cease to qualify for treatment as "incentive stock options" under Section 422 of the Code, such stock options (including the Option) will be treated as non-qualified stock options. Participant further acknowledges that the rule set forth in the preceding sentence will be applied by taking the Option and other stock options into account in the order in which they were granted, as determined under Section 422(d) of the Code. Participant acknowledges that amendments or modifications made to the Option pursuant to the Plan that would cause the Option to become a Non-Qualified Stock Option will not materially or adversely affect Participant's rights under the Option, and that any such amendment or modification shall not require Participant's consent. Participant also acknowledges that if the Option is exercised more than three (3) months after Participant's Termination of Service as an Employee, other than by reason of death or Disability, the Option will be taxed as a Non-Qualified Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Participant will give prompt written notice to the Company of any disposition or other transfer of any Shares acquired under this Agreement if such disposition or other transfer is made (a) within two (2) years from the Grant Date or (b) within one (1) year after the transfer of such Shares to Participant. Such notice will specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.

\* \* \* \* \*

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**ATRIUM THERAPEUTICS, INC.** 

**2026 INCENTIVE AWARD PLAN** 

**RESTRICTED STOCK UNIT GRANT NOTICE** 

Capitalized terms not specifically defined in this Restricted Stock Unit Grant Notice (the "***Grant Notice***") have the meanings given to them in the 2026 Incentive Award Plan (as amended from time to time, the "***Plan***") of Atrium Therapeutics, Inc. (the "***Company***").

The Company hereby grants to the participant listed below ("***Participant***") the Restricted Stock Units described in this Grant Notice (the "***RSUs***"), subject to the terms and conditions of the Plan and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the "***Agreement***"), both of which are incorporated into this Grant Notice by reference.

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| | |
|:---|:---|
| **Participant:** |  |
| **Grant Date:** |  |
| **Number of RSUs:** |  |
| **Vesting Commencement Date:** |  |
| **Vesting Schedule:** | *[Insert Vesting Schedule]* |

---

If the Company uses an electronic capitalization table system (such as E\*Trade, Shareworks or Carta) and the fields in this Grant Notice are blank or the information is otherwise provided in a different format electronically, the blank fields and other information will be deemed to come from the electronic capitalization system and is considered part of this Grant Notice.

By electronically accepting this document, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice. Participant has reviewed the Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Agreement and the Plan. Participant has been provided with a copy or electronic access to a copy of the prospectus for the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or relating to the RSUs. Furthermore, by approving the Agreement and this Grant Notice, the Board hereby approves that this Award is approved under the Company's insider trading policy.

**Mandatory Sell-to-Cover**: By accepting this Award, Participant understands and agrees that as a condition of the grant of the RSUs, Participant is required to (1) sell that number of Shares determined in accordance with Section 3.1 of the Agreement as may be necessary to satisfy all applicable Tax Withholding Obligations (as defined in the Agreement), and (2) to allow the brokerage firm determined acceptable to the Company to pay the cash proceeds of such sale(s) to the Company to satisfy such Tax Withholding Obligations. Furthermore, Participant acknowledges that the Company will make a cash payment equal to the Tax Withholding Obligations from the cash proceeds of such sale(s) directly to the appropriate taxing authorities. Participant agrees that he or she has carefully reviewed Section 3.1 of the Agreement and that the representations and warranties set forth therein are accurate and true as of the date hereof.

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**Internet Availability of Plan Materials**: The Company will furnish Plan materials (including the Plan, prospectus, annual report on Form 10-K and proxy statement and other information provided to the Company's stockholders) relating to the Plan to Participant electronically, instead of mailing printed copies of these materials to each person eligible to participate in the plans. This process is designed to expedite Participant's receipt of the plan materials, reduce the costs of printing and distributing these materials, and help conserve natural resources. These materials are available through the Company's electronic capitalization table system (such as E\*Trade, Shareworks or Carta) and the annual report on Form 10-K and proxy statement and other information provided to our stockholders is also available on the Company's website at www.atriumtherapeutics.com. The Plan is available through the Company's electronic capitalization table system (such as E\*Trade, Shareworks or Carta). However, if Participant would prefer to receive printed copies of the Plan materials or information provided to the Company's stockholders without charge, please contact: Atrium Therapeutics, Inc., Attn: Stock Administration, 10578 Science Center Drive, Suite 125, San Diego, CA 92121, Telephone: (619) 876-0700.

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**EXHIBIT A** 

**RESTRICTED STOCK UNIT AGREEMENT** 

Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.

**ARTICLE I.** 

**GENERAL** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 Award of RSUs. The Company has granted the RSUs to Participant effective as of the grant date set forth in the Grant Notice (the "***Grant Date***"). Each RSU represents the right to receive one Share, as set forth in this Agreement. Participant will have no right to the distribution of any Shares until the time (if ever) the RSUs have vested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 Unsecured Promise. The RSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company's general assets.

**ARTICLE II.** 

**VESTING; FORFEITURE AND SETTLEMENT** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 Vesting; Forfeiture. The RSUs will vest according to the vesting schedule in the Grant Notice (the "***Vesting Schedule***"), except that any fraction of an RSU that would otherwise be vested will be accumulated and will vest only when a whole RSU has accumulated. Except as provided in the Grant Notice, in the event of Participant's Termination of Service for any reason, all unvested RSUs will immediately and automatically be cancelled and forfeited, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant and the Company. Unless and until the RSUs have vested in accordance with the Vesting Schedule set forth in the Grant Notice, Participant will have no right to any distribution with respect to such RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Settlement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) RSUs will be paid in Shares as soon as administratively practicable after the vesting of the applicable RSU, but in no event more than sixty (60) days after the applicable vesting date. Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)), provided the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All distributions shall be made by the Company in the form of whole shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Neither the time nor form of distribution of Shares with respect to the RSUs may be changed, except as may be permitted by the Administrator in accordance with the Plan and Section 409A of the Code and the Treasury Regulations thereunder.

**ARTICLE III.** 

**TAXATION AND TAX WITHHOLDING** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Tax Withholding; Mandatory Sell-to-Cover.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall not be obligated to deliver any certificate representing Shares issuable with respect to the RSUs to Participant or his or her legal representative unless and until Participant or his or her legal representative will have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes required by Applicable Law to be withheld in connection with the vesting, exercise or settlement of the RSUs, the distribution of the Shares issuable with respect thereto, or any other taxable event related to the RSUs (the "***Tax Withholding Obligation***"). Subject to Section 9.5 of the Plan, the Company will have the authority and the right to deduct or withhold, or require Participant to remit to the Company, an amount sufficient to satisfy any Tax Withholding Obligation, including, without limitation, the authority to deduct such amounts from other compensation payable to Participant by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) Notwithstanding anything to the contrary contained in the Plan or this Section 3.1, the Tax Withholding Obligation shall automatically, and without further action by Participant, be satisfied by having the Company withhold taxes from the proceeds of the sale of the Shares through a mandatory sale arranged by the Company on Participant's behalf. In the event Participant's Tax Withholding Obligation will be satisfied under this Section 3.1(b), then the Company shall instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant's behalf a whole number of Shares, at the then-prevailing market price, from those Shares issuable to Participant upon settlement of the RSUs as is required to generate cash proceeds sufficient to satisfy Participant's Tax Withholding Obligation (with such Tax Withholding Obligation to be calculated based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes as of the date of delivery). Such sale shall occur on the date on which Participant first becomes subject to the Tax Withholding Obligation (or as soon as practicable thereafter) and proceeds from each such sale will be made to the Company as soon as reasonably practicable upon settlement thereof. Participant hereby acknowledges that the broker is under no obligation to arrange for such sale at any particular price, and the proceeds of any such sale pursuant to this provision may not be sufficient to satisfy the Tax Withholding Obligation. Participant hereby appoints the Company as Participant's agent and attorney-in-fact to cooperate and communicate with the broker and to instruct the broker with respect to the number of Shares to be sold under this provision. Participant acknowledges that it may not be possible to sell Shares pursuant to this provision due to (A) a legal or contractual restriction

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applicable to Participant or to the broker, (B) a market disruption, (C) rules governing order execution priority on the stock exchange on which the Shares are traded, (D) a sale effected pursuant to this provision that fails to comply (or in the reasonable opinion of the broker's counsel is likely not to comply) with Rule 144 under the Securities Act or would result in a short-swing profit under Section 16 of the Exchange Act, or (E) the Company's determination that sales may not be effected under this provision. In the event of the broker's inability to sell Shares, Participant will continue to be responsible for the timely payment to the Company and/or its affiliates of the Tax Withholding Obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Participant represents that (A) Participant shall have full responsibility for compliance with (1) any reporting requirements under Rule 144 of the Securities Act and Section 13 or 16 of the Exchange Act, (2) the short-swing profit recovery provisions under Section 16 of the Exchange Act, and (3) any federal, state or foreign securities laws or regulations concerning trading while aware of material nonpublic information; and (B) Participant is not subject to any legal, regulatory or contractual restriction or undertaking that would prevent the broker from conducting the sales pursuant to this provision and shall immediately notify the Company if he or she becomes subject to a legal, regulatory or contractual restriction or undertaking that would prevent the broker from making such sales pursuant to this provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Participant acknowledges that: (A) Participant will be responsible for all broker's fees and other costs of sales pursuant to this Section 3.1(b), and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sales or for any failure to perform or for any delay in performance that results from a cause or circumstance that is beyond the broker's or the Company's reasonable control; (B) sales pursuant to this Section 3.1(b) will be made as part of a block trade with other participants of the Plan in which all participants receive an average price; and (C) if the proceeds of a sale pursuant to this Section 3.1(b) exceed the amount owed, the Company will pay such excess in cash to Participant as soon as reasonably practicable. Participant hereby agrees to execute and deliver to the broker any other agreements or documents as the broker reasonably deems necessary or appropriate to carry out the purposes and intent of this Section 3.1(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To the extent that the Tax Withholding Obligation is not fully satisfied pursuant to Section 3.1(b) or Section 3.1(b) does not apply, as set forth in Section 9.5 of the Plan, the Company will have the right, but not the obligation, with respect to the Tax Withholding Obligation arising as a result of the vesting, exercise or settlement of the RSUs, to treat Participant's failure to provide timely payment in accordance with Section 9.5 of the Plan as Participant's election to satisfy the Tax Withholding Obligation by requesting the Company to withhold a net number of vested Shares otherwise issuable pursuant to the RSUs having a then-current fair market value not exceeding the amount necessary to satisfy the Tax Withholding Obligation (with such Tax Withholding Obligation to be calculated based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes as of the date of delivery) (provided, however, that if Participant is subject to Section 16 of the Exchange Act at the time the Tax Withholding Obligation arises, any such action by the Company will require the prior approval of the Administrator) in accordance with Section 9.5 of the Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Participant Responsibility; No Company Liability. Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Subsidiary takes with respect to any Tax Withholding Obligations that arise in connection with the RSUs. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the tax treatment to Participant in connection with the awarding, vesting or settlement of the RSUs or the subsequent sale of Shares. The Company and its Subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant's tax liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 Representation. Participant represents to the Company that Participant has reviewed with Participant's own tax advisors the tax consequences of this Award and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.

**ARTICLE IV.** 

**OTHER PROVISIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Award Not Transferable; Other Restrictions. Without limiting the generality of any other provision hereof, the Award will be subject to the restrictions on transferability set forth in Section 9.1 of the Plan. Without limiting the generality of any other provision hereof, Participant hereby expressly acknowledges that Section 10.8 ("***Lock-Up Period***") and Section 10.13 ("***Claw-back Provisions***") of the Plan are expressly incorporated into this Agreement and are applicable to the Shares issued pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 Adjustments. Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company's Secretary at the Company's principal office or the Secretary's then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant at Participant's last known mailing address, email address or facsimile number in the Company's personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended to the extent necessary to conform to such Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 Entire Agreement. The Plan, the Grant Notice and this Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. This Agreement may be amended by the Company in accordance with Section 9.6 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 Limitation on Participant's Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the RSUs, as and when settled pursuant to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 Rights as a Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such Shares.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 Not a Contract of Employment. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13 Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14 Governing Law. The provisions of the Plan and all Awards made thereunder, including the RSUs, shall be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding choice-of-law principles of the law of any state that would require the application of the laws of a jurisdiction other than such state.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15 Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding any other provision of the Plan, this Agreement or the Grant Notice, the Plan, this Agreement and the Grant Notice shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date, "***Section 409A***"). The Administrator may, in its discretion, adopt such amendments to the Plan, this Agreement or the Grant Notice or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate to comply with the requirements of Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement is not intended to provide for any deferral of compensation subject to Section 409A of the Code, and, accordingly, the Shares issuable pursuant to the RSUs hereunder shall be distributed to Participant no later than the later of: (A) the fifteenth (15th) day of the third month following Participant's first taxable year in which such RSUs are no longer subject to a substantial risk of forfeiture, and (B) the fifteenth (15th) day of the third month following first taxable year of the Company in which such RSUs are no longer subject to substantial risk of forfeiture, as determined in accordance with Section 409A and any Treasury Regulations and other guidance issued thereunder.

\* \* \* \* \*

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**ATRIUM THERAPEUTICS, INC.** 

**2026 INCENTIVE AWARD PLAN** 

**PERFORMANCE RESTRICTED STOCK UNIT GRANT NOTICE** 

Capitalized terms not specifically defined in this Performance Restricted Stock Unit Grant Notice (the "***Grant Notice***") have the meanings given to them in the 2026 Incentive Award Plan (as amended from time to time, the "***Plan***") of Atrium Therapeutics, Inc. (the "***Company***").

The Company hereby grants to the participant listed below ("***Participant***") the Performance Restricted Stock Units described in this Grant Notice (the "***PSUs***"), subject to the terms and conditions of the Plan and the Performance Restricted Stock Unit Agreement attached hereto as Exhibit A (the "***Agreement***"), both of which are incorporated into this Grant Notice by reference.

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| | |
|:---|:---|
| **Participant:** |  |
| **Grant Date:** |  |
| **Number of PSUs:** |  |
| **Vesting Commencement Date:** | *Not Applicable* |
| **Vesting Schedule:** | The PSUs shall vest as follows, subject to the Participant's continuous status as a Service Provider through the applicable vesting date: *[Insert Vesting Schedule]*<br>In addition, the PSUs shall vest in the event of a Change in Control (as defined in the Plan). |

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If the Company uses an electronic capitalization table system (such as E\*Trade, Shareworks or Carta) and the fields in this Grant Notice are blank or the information is otherwise provided in a different format electronically, the blank fields and other information will be deemed to come from the electronic capitalization system and is considered part of this Grant Notice.

By electronically accepting this document, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice. Participant has reviewed the Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Agreement and the Plan. Participant has been provided with a copy or electronic access to a copy of the prospectus for the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or relating to the PSUs. Furthermore, by approving the Agreement and this Grant Notice, the Board hereby approves that this Award is approved under the Company's insider trading policy.

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**Mandatory Sell-to-Cover**: By accepting this Award, Participant understands and agrees that as a condition of the grant of the PSUs, Participant is required to (1) sell that number of Shares determined in accordance with Section 3.1 of the Agreement as may be necessary to satisfy all applicable Tax Withholding Obligations (as defined in the Agreement), and (2) to allow the brokerage firm determined acceptable to the Company to pay the cash proceeds of such sale(s) to the Company to satisfy such Tax Withholding Obligations. Furthermore, Participant acknowledges that the Company will make a cash payment equal to the Tax Withholding Obligations from the cash proceeds of such sale(s) directly to the appropriate taxing authorities. Participant agrees that he or she has carefully reviewed Section 3.1 of the Agreement and that the representations and warranties set forth therein are accurate and true as of the date hereof.

**Internet Availability of Plan Materials**: The Company will furnish Plan materials (including the Plan, prospectus, annual report on Form 10-K and proxy statement and other information provided to the Company's stockholders) relating to the Plan to Participant electronically, instead of mailing printed copies of these materials to each person eligible to participate in the plans. This process is designed to expedite Participant's receipt of the plan materials, reduce the costs of printing and distributing these materials, and help conserve natural resources. These materials are available through the Company's electronic capitalization table system (such as E\*Trade, Shareworks or Carta) and the annual report on Form 10-K and proxy statement and other information provided to our stockholders is also available on the Company's website at www.atriumtherapeutics.com. The Plan is available through the Company's electronic capitalization table system (such as E\*Trade, Shareworks or Carta). However, if Participant would prefer to receive printed copies of the Plan materials or information provided to the Company's stockholders without charge, please contact: Atrium Therapeutics, Inc., Attn: Stock Administration, 10578 Science Center Drive, Suite 125, San Diego, CA 92121, Telephone: (619) 876-0700.

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**EXHIBIT A** 

**PERFORMANCE RESTRICTED STOCK UNIT AGREEMENT** 

Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.

**ARTICLE I.** 

**GENERAL** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 Award of PSUs. The Company has granted the PSUs to Participant effective as of the grant date set forth in the Grant Notice (the "***Grant Date***"). Each PSU represents the right to receive one Share, as set forth in this Agreement. Participant will have no right to the distribution of any Shares until the time (if ever) the PSUs have vested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 Incorporation of Terms of Plan. The PSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 Unsecured Promise. The PSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company's general assets.

**ARTICLE II.** 

**VESTING; FORFEITURE AND SETTLEMENT** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 Vesting; Forfeiture. The PSUs will vest according to the vesting schedule in the Grant Notice (the "***Vesting Schedule***"), except that any fraction of a PSU that would otherwise be vested will be accumulated and will vest only when a whole PSU has accumulated. Except as provided in the Grant Notice, in the event of Participant's Termination of Service for any reason, all unvested PSUs will immediately and automatically be cancelled and forfeited, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant and the Company. Unless and until the PSUs have vested in accordance with the Vesting Schedule set forth in the Grant Notice, Participant will have no right to any distribution with respect to such PSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Settlement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) PSUs will be paid in Shares as soon as administratively practicable after the vesting of the applicable PSU, but in no event more than sixty (60) days after the applicable vesting date. Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)), provided the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All distributions shall be made by the Company in the form of whole shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Neither the time nor form of distribution of Shares with respect to the PSUs may be changed, except as may be permitted by the Administrator in accordance with the Plan and Section 409A of the Code and the Treasury Regulations thereunder.

**ARTICLE III.** 

**TAXATION AND TAX WITHHOLDING** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Tax Withholding; Mandatory Sell-to-Cover.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall not be obligated to deliver any certificate representing Shares issuable with respect to the PSUs to Participant or his or her legal representative unless and until Participant or his or her legal representative will have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes required by Applicable Law to be withheld in connection with the vesting, exercise or settlement of the PSUs, the distribution of the Shares issuable with respect thereto, or any other taxable event related to the PSUs (the "***Tax Withholding Obligation***"). Subject to Section 9.5 of the Plan, the Company will have the authority and the right to deduct or withhold, or require Participant to remit to the Company, an amount sufficient to satisfy any Tax Withholding Obligation, including, without limitation, the authority to deduct such amounts from other compensation payable to Participant by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) Notwithstanding anything to the contrary contained in the Plan or this Section 3.1, the Tax Withholding Obligation shall automatically, and without further action by Participant, be satisfied by having the Company withhold taxes from the proceeds of the sale of the Shares through a mandatory sale arranged by the Company on Participant's behalf. In the event Participant's Tax Withholding Obligation will be satisfied under this Section 3.1(b), then the Company shall instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant's behalf a whole number of Shares, at the then-prevailing market price, from those Shares issuable to Participant upon settlement of the PSUs as is required to generate cash proceeds sufficient to satisfy Participant's Tax Withholding Obligation (with such Tax Withholding Obligation to be calculated based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes as of the date of delivery). Such sale shall occur on the date on which Participant first becomes subject to the Tax Withholding Obligation (or as soon as practicable thereafter) and proceeds from each such sale will be made to the Company as soon as reasonably practicable upon settlement thereof. Participant hereby acknowledges that the broker is under no obligation to arrange for such sale at any particular price, and the proceeds of any such sale pursuant to this provision may not be sufficient to satisfy the Tax Withholding Obligation. Participant hereby appoints the Company as Participant's agent and attorney-in-fact to cooperate and communicate with the broker and to instruct the broker with respect to the number of Shares to be sold under this

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provision. Participant acknowledges that it may not be possible to sell Shares pursuant to this provision due to (A) a legal or contractual restriction applicable to Participant or to the broker, (B) a market disruption, (C) rules governing order execution priority on the stock exchange on which the Shares are traded, (D) a sale effected pursuant to this provision that fails to comply (or in the reasonable opinion of the broker's counsel is likely not to comply) with Rule 144 under the Securities Act or would result in a short-swing profit under Section 16 of the Exchange Act, or (E) the Company's determination that sales may not be effected under this provision. In the event of the broker's inability to sell Shares, Participant will continue to be responsible for the timely payment to the Company and/or its affiliates of the Tax Withholding Obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Participant represents that (A) Participant shall have full responsibility for compliance with (1) any reporting requirements under Rule 144 of the Securities Act and Section 13 or 16 of the Exchange Act, (2) the short-swing profit recovery provisions under Section 16 of the Exchange Act, and (3) any federal, state or foreign securities laws or regulations concerning trading while aware of material nonpublic information; and (B) Participant is not subject to any legal, regulatory or contractual restriction or undertaking that would prevent the broker from conducting the sales pursuant to this provision and shall immediately notify the Company if he or she becomes subject to a legal, regulatory or contractual restriction or undertaking that would prevent the broker from making such sales pursuant to this provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Participant acknowledges that: (A) Participant will be responsible for all broker's fees and other costs of sales pursuant to this Section 3.1(b), and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sales or for any failure to perform or for any delay in performance that results from a cause or circumstance that is beyond the broker's or the Company's reasonable control; (B) sales pursuant to this Section 3.1(b) will be made as part of a block trade with other participants of the Plan in which all participants receive an average price; and (C) if the proceeds of a sale pursuant to this Section 3.1(b) exceed the amount owed, the Company will pay such excess in cash to Participant as soon as reasonably practicable. Participant hereby agrees to execute and deliver to the broker any other agreements or documents as the broker reasonably deems necessary or appropriate to carry out the purposes and intent of this Section 3.1(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To the extent that the Tax Withholding Obligation is not fully satisfied pursuant to Section 3.1(b) or Section 3.1(b) does not apply, as set forth in Section 9.5 of the Plan, the Company will have the right, but not the obligation, with respect to the Tax Withholding Obligation arising as a result of the vesting, exercise or settlement of the PSUs, to treat Participant's failure to provide timely payment in accordance with Section 9.5 of the Plan as Participant's election to satisfy the Tax Withholding Obligation by requesting the Company to withhold a net number of vested Shares otherwise issuable pursuant to the PSUs having a then-current fair market value not exceeding the amount necessary to satisfy the Tax Withholding Obligation (with such Tax Withholding

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Obligation to be calculated based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes as of the date of delivery) (provided, however, that if Participant is subject to Section 16 of the Exchange Act at the time the Tax Withholding Obligation arises, any such action by the Company will require the prior approval of the Administrator) in accordance with Section 9.5 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Participant Responsibility; No Company Liability. Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the PSUs, regardless of any action the Company or any Subsidiary takes with respect to any Tax Withholding Obligations that arise in connection with the PSUs. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the tax treatment to Participant in connection with the awarding, vesting or settlement of the PSUs or the subsequent sale of Shares. The Company and its Subsidiaries do not commit and are under no obligation to structure the PSUs to reduce or eliminate Participant's tax liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 Representation. Participant represents to the Company that Participant has reviewed with Participant's own tax advisors the tax consequences of this Award and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.

**ARTICLE IV.** 

**OTHER PROVISIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Award Not Transferable; Other Restrictions. Without limiting the generality of any other provision hereof, the Award will be subject to the restrictions on transferability set forth in Section 9.1 of the Plan. Without limiting the generality of any other provision hereof, Participant hereby expressly acknowledges that Section 10.8 ("***Lock-Up Period***") and Section 10.13 ("***Claw-back Provisions***") of the Plan are expressly incorporated into this Agreement and are applicable to the Shares issued pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 Adjustments. Participant acknowledges that the PSUs and the Shares subject to the PSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company's Secretary at the Company's principal office or the Secretary's then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant at Participant's last known mailing address, email address or facsimile number in the Company's personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended to the extent necessary to conform to such Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the PSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 Entire Agreement. The Plan, the Grant Notice and this Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. This Agreement may be amended by the Company in accordance with Section 9.6 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 Limitation on Participant's Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the PSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the PSUs, as and when settled pursuant to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 Rights as a Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such Shares.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 Not a Contract of Employment. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13 Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14 Governing Law. The provisions of the Plan and all Awards made thereunder, including the PSUs, shall be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding choice-of-law principles of the law of any state that would require the application of the laws of a jurisdiction other than such state.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15 Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding any other provision of the Plan, this Agreement or the Grant Notice, the Plan, this Agreement and the Grant Notice shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date, "***Section 409A***"). The Administrator may, in its discretion, adopt such amendments to the Plan, this Agreement or the Grant Notice or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate to comply with the requirements of Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement is not intended to provide for any deferral of compensation subject to Section 409A of the Code, and, accordingly, the Shares issuable pursuant to the PSUs hereunder shall be distributed to Participant no later than the later of: (A) the fifteenth (15th) day of the third month following Participant's first taxable year in which such PSUs are no longer subject to a substantial risk of forfeiture, and (B) the fifteenth (15th) day of the third month following first taxable year of the Company in which such PSUs are no longer subject to substantial risk of forfeiture, as determined in accordance with Section 409A and any Treasury Regulations and other guidance issued thereunder.

\* \* \* \* \*

## Exhibit 10.7

**Exhibit 10.7** 

**ATRIUM THERAPEUTICS, INC.** 

**2026 EMPLOYEE STOCK PURCHASE PLAN** 

**ARTICLE I.** 

**PURPOSE** 

The purposes of this Atrium Therapeutics, Inc. 2026 Employee Stock Purchase Plan (as it may be amended or restated from time to time, the "***Plan***") are to assist Eligible Employees of Atrium Therapeutics, Inc., a Delaware corporation (the "***Company***"), and its Designated Subsidiaries in acquiring a stock ownership interest in the Company pursuant to a plan which is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423(b) of the Code, and to help Eligible Employees provide for their future security and to encourage them to remain in the employment of the Company and its Designated Subsidiaries.

**ARTICLE II.** 

**DEFINITIONS AND CONSTRUCTION** 

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates. Masculine, feminine and neuter pronouns are used interchangeably and each comprehends the others.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 "***Administrator***" means the entity that conducts the general administration of the Plan as provided in Article XI. The term "Administrator" shall refer to the Committee unless the Board has assumed the authority for administration of the Plan as provided in Article XI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 "***Applicable Law***" means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where rights under this Plan are granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 "***Board***" means the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 "***Change of Control***" means and includes each of the following, to the extent occurring following the Public Trading Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (i) and (ii) of subsection (c) below) whereby any "person" or related "group" of "persons" (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee benefit plan maintained by the Company or any of its Subsidiaries or a "person" that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company's securities outstanding immediately after such acquisition; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in subsections (a) or (c)) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company's assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) which results in the Company's voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company's assets or otherwise succeeds to the business of the Company (the Company or such person, the "***Successor Entity***")) directly or indirectly, at least a majority of the combined voting power of the Successor Entity's outstanding voting securities immediately after the transaction, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; <u>provided</u>, <u>however</u>, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

The Administrator shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change of Control has occurred pursuant to the above definition, the date of such Change of Control and any incidental matters relating thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 "***Code***" means the Internal Revenue Code of 1986, as amended and the regulations issued thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 "***Common Stock***" means the common stock of the Company and such other securities of the Company that may be substituted therefor pursuant to Article VIII.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 "***Company***" means Atrium Therapeutics, Inc., a Delaware corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 "***Compensation***" of an Eligible Employee means the gross base compensation received by such Eligible Employee as compensation for services to the Company or any Designated Subsidiary, including prior week adjustment and overtime payments but excluding vacation pay, holiday pay, jury duty pay, funeral leave pay, military leave pay, commissions, incentive compensation, one-time bonuses (e.g., retention or sign on bonuses), education or tuition reimbursements, travel expenses, business and moving reimbursements, income received in connection with any stock options, stock appreciation rights, restricted stock, restricted stock units or other compensatory equity awards, fringe benefits, other special payments and all contributions made by the Company or any Designated Subsidiary for the Employee's benefit under any employee benefit plan now or hereafter established.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 "***Designated Subsidiary***" means any Subsidiary designated by the Administrator in accordance with Section 11.3(b).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 "***Director***" means a Board member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 "***Effective Date***" means the day prior to the Public Trading Date, provided that the Board has adopted the Plan prior to or on such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 "***Eligible Employee***" means an Employee who does not, immediately after any rights under this Plan are granted, own (directly or through attribution) stock possessing 5% or more of the total combined voting power or value of all classes of Common Stock and other stock of the Company, a Parent or a Subsidiary (as determined under Section 423(b)(3) of the Code). For purposes of the foregoing sentence, the rules of Section 424(d) of the Code with regard to the attribution of stock ownership shall apply in determining the stock ownership of an individual, and stock that an Employee may purchase under outstanding options shall be treated as stock owned by the Employee; <u>provided</u>, <u>however</u>, that the Administrator may provide in an Offering Document that an Employee shall not be eligible to participate in an Offering Period if: (a) such Employee is a highly compensated employee within the meaning of Section 423(b)(4)(D) of the Code, (b) such Employee has not met a service requirement designated by the Administrator pursuant to Section 423(b)(4)(A) of the Code (which service requirement may not exceed two years), (c) such Employee's customary employment is for twenty hours or less per week, (d) such Employee's customary employment is for less than five months in any calendar year and/or (e) such Employee is a citizen or resident of a foreign jurisdiction and the grant of a right to purchase Common Stock under the Plan to such Employee would be prohibited under the laws of such foreign jurisdiction or the grant of a right to purchase Common Stock under the Plan to such Employee in compliance with the laws of such foreign jurisdiction would cause the Plan to violate the requirements of Section 423 of the Code, as determined by the Administrator in its sole discretion; provided, further, that any exclusion in clauses (a), (b), (c), (d) or (e) shall be applied in an identical manner under each Offering Period to all Employees, in accordance with Treasury Regulation Section 1.423-2(e).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 "***Employee***" means any officer or other employee (as defined in accordance with Section 3401(c) of the Code) of the Company or any Designated Subsidiary. "Employee" shall not include any director of the Company or a Designated Subsidiary who does not render services to the Company or a Designated Subsidiary as an employee within the meaning of Section 3401(c) of the Code. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company or Designated Subsidiary and meeting the requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of leave exceeds three months and the individual's right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the first day immediately following such three-month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 "***Enrollment Date***" means the first day of each Offering Period (or, with respect to the Initial Offering Period, such date set forth in the Offering Document approved by the Administrator with respect to the Initial Offering Period).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 "***Exchange Act***" means the Securities Exchange Act of 1934, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 "***Fair Market Value***" means, as of any date, the value of a share of Common Stock determined as follows: (a) if the Common Stock is listed on any established stock exchange, its Fair Market Value will be the closing sales price for such Common Stock as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (b) if the Common Stock is not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on such date, or if no sales occurred on such date, then on the last date preceding such date

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during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (c) without an established market for the Common Stock, the Administrator will determine the Fair Market Value in its discretion; or (d) with respect to the Grant Date for the Initial Offering Period, the Fair Market Value as specified in the Offering Document approved by the Administrator with respect to the Initial Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 "***Grant Date***" means the first Trading Day of an Offering Period (or, with respect to the Initial Offering Period, such date set forth in the Offering Document approved by the Administrator with respect to the Initial Offering Period).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 "***Initial Offering Period***" shall mean the period commencing on the initial Enrollment Date set forth in the Offering Document approved by the Administrator with respect to the Initial Offering Period and ending the date set forth in the Offering Document approved by the Administrator with respect to the Initial Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19 "***Offering Document***" shall have the meaning given to such term in Section 4.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20 "***Offering Period***" shall have the meaning given to such term in Section 4.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21 "***Outstanding Shares***" means the sum of (a) the number of Shares outstanding and (b) the number of Shares issuable pursuant to the exercise of any outstanding, pre-funded warrants to acquire Shares for a nominal exercise price, each as of the final day of the immediately preceding calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22 "***Parent***" means any corporation, other than the Company, in an unbroken chain of corporations ending with the Company if, at the time of the determination, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23 "***Participant***" means any Eligible Employee who has executed a subscription agreement and been granted rights to purchase Common Stock pursuant to the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24 "***Plan***" means this Atrium Therapeutics, Inc. 2026 Employee Stock Purchase Plan, as it may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25 "***Public Trading Date***" means the first date upon which the Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system, or, if earlier, the date on which the Company becomes a "publicly held corporation" for purposes of Treasury Regulation Section 1.162-27(c)(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26 "***Purchase Date***" means the last Trading Day of each Purchase Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.27 "***Purchase Period***" shall refer to one or more periods within an Offering Period, as designated in the applicable Offering Document; provided, however, that, in the event no Purchase Period is designated by the Administrator in the applicable Offering Document, the Purchase Period for each Offering Period covered by such Offering Document shall be the same as the applicable Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28 "***Purchase Price***" means the purchase price designated by the Administrator in the applicable Offering Document (which purchase price shall not be less than 85% of the Fair Market Value of a Share on the Grant Date or on the Purchase Date, whichever is lower); provided, however, that, in the event no purchase price is designated by the Administrator in the applicable Offering Document, the purchase price for the Offering Periods covered by such Offering Document shall be 85% of the Fair Market Value of a Share on the Grant Date or on the Purchase Date, whichever is lower; provided, further, that the Purchase Price may be adjusted by the Administrator pursuant to Article VIII and shall not be less than the par value of a Share.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.29 "***Securities Act***" means the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.30 "***Share***" means a share of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.31 "***Subsidiary***" means any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the time of the determination, each of the corporations other than the last corporation in an unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain; provided, however, that a limited liability company or partnership may be treated as a Subsidiary to the extent either (a) such entity is treated as a disregarded entity under Treasury Regulation Section 301.7701-3(a) by reason of the Company or any other Subsidiary that is a corporation being the sole owner of such entity, or (b) such entity elects to be classified as a corporation under Treasury Regulation Section 301.7701-3(a) and such entity would otherwise qualify as a Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.32 "***Trading Day***" means a day on which national stock exchanges in the United States are open for trading.

**ARTICLE III.** 

**SHARES SUBJECT TO THE PLAN** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Number of Shares</u>. Subject to Article VIII, the aggregate number of Shares that may be issued pursuant to rights granted under the Plan shall be [•] Shares. In addition to the foregoing, subject to Article VIII, on the first day of each calendar year beginning on January 1, 2027 and ending on and including January 1, 2036, the number of Shares available for issuance under the Plan shall be increased by that number of Shares equal to the lesser of (a) 1% of the aggregate number of Outstanding Shares, and (b) such smaller number of Shares as determined by the Board. If any right granted under the Plan shall for any reason terminate without having been exercised, the Common Stock not purchased under such right shall again become available for issuance under the Plan. Notwithstanding anything in this Section 3.1 to the contrary, the number of Shares that may be issued or transferred pursuant to the rights granted under the Plan shall not exceed an aggregate of [•] Shares, subject to Article 8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Stock Distributed</u>. Any Common Stock distributed pursuant to the Plan may consist, in whole or in part, of authorized and unissued Common Stock, treasury stock or Common Stock purchased on the open market.

**ARTICLE IV.** 

**OFFERING PERIODS; OFFERING DOCUMENTS; PURCHASE DATES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Offering Periods</u>. The Administrator may from time to time grant or provide for the grant of rights to purchase Common Stock under the Plan to Eligible Employees during one or more periods (each, an "***Offering Period***") selected by the Administrator. The terms and conditions applicable to each

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Offering Period shall be set forth in an "***Offering Document***" adopted by the Administrator, which Offering Document shall be in such form and shall contain such terms and conditions as the Administrator shall deem appropriate and shall be incorporated by reference into and made part of the Plan and shall be attached hereto as part of the Plan. The Administrator shall establish in each Offering Document one or more Purchase Periods during such Offering Period during which rights granted under the Plan shall be exercised and purchases of Shares carried out during such Offering Period in accordance with such Offering Document and the Plan. The provisions of separate Offering Periods under the Plan need not be identical.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Offering Documents</u>. Each Offering Document with respect to an Offering Period shall specify (through incorporation of the provisions of this Plan by reference or otherwise):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the length of the Offering Period, which period shall not exceed twenty-seven months;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the length of the Purchase Period(s) within the Offering Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the maximum number of Shares that may be purchased by any Eligible Employee during such Offering Period, which, in the absence of a contrary designation by the Administrator, shall be 50,000 Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) in connection with each Offering Period that contains more than one Purchase Period, the maximum aggregate number of shares which may be purchased by any Eligible Employee during each Purchase Period, which, in the absence of a contrary designation by the Administrator, shall be 50,000 Shares; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) such other provisions as the Administrator determines are appropriate, subject to the Plan.

**ARTICLE V.** 

**ELIGIBILITY AND PARTICIPATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Eligibility</u>. Any Eligible Employee who shall be employed by the Company or a Designated Subsidiary on a given Enrollment Date for an Offering Period shall be eligible to participate in the Plan during such Offering Period, subject to the requirements of this Article V and the limitations imposed by Section 423(b) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Enrollment in Plan</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as otherwise set forth in an Offering Document or determined by the Administrator, an Eligible Employee may become a Participant in the Plan for an Offering Period by delivering a subscription agreement to the Company by such time prior to the Enrollment Date for such Offering Period (or such other date specified in the Offering Document) designated by the Administrator and in such form as the Company provides.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each subscription agreement shall designate a whole percentage of such Eligible Employee's Compensation to be withheld by the Company or the Designated Subsidiary employing such Eligible Employee on each payday during the Offering Period as payroll deductions under the Plan or, if permitted by the Administrator, contributions to be made by such Eligible Employee. The designated percentage may not be less than 1% and may not be more than the maximum percentage specified by the Administrator in the applicable Offering Document (which percentage shall be 15% in the absence of any such designation). The payroll deductions or, if permitted by the Administrator, contributions made for each Participant shall be credited to an account for such Participant under the Plan and shall be deposited with the general funds of the Company.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A Participant may increase or decrease the percentage of Compensation designated in his or her subscription agreement, subject to the limits of this Section 5.2, or may suspend his or her payroll deductions, or, if permitted by the Administrator, contributions, at any time during an Offering Period; provided, however, that the Administrator may limit the number of changes a Participant may make to his or her payroll deduction elections or, if permitted by the Administrator, contributions, during each Offering Period in the applicable Offering Document (and in the absence of any specific designation by the Administrator, a Participant shall be allowed one change to his or her payroll deduction elections or, if permitted by the Administrator, contributions, during each Offering Period). Any such change or suspension of payroll deductions, or, if permitted by the Administrator, contributions, shall be effective with the first full payroll period that is at least five business days after the Company's receipt of the new subscription agreement (or such shorter or longer period as may be specified by the Administrator in the applicable Offering Document). In the event a Participant suspends his or her payroll deductions or contributions, such Participant's cumulative payroll deductions or contributions prior to the suspension shall remain in his or her account and shall be applied to the purchase of Shares on the next occurring Purchase Date and shall not be paid to such Participant unless he or she withdraws from participation in the Plan pursuant to Article VII.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as set forth in Section 5.8, as otherwise set forth in an Offering Document or determined by the Administrator, a Participant may participate in the Plan only by means of payroll deduction and may not make contributions by lump sum payment for any Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Payroll Deductions</u>. Except as otherwise provided in the applicable Offering Document or Section 5.8, payroll deductions for a Participant shall commence on the first payroll following the Enrollment Date and shall end on the last payroll in the Offering Period to which the Participant's authorization is applicable, unless sooner terminated by the Participant as provided in Article VII or suspended by the Participant or the Administrator as provided in Section 5.2 and Section 5.6, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Effect of Enrollment</u>. A Participant's completion of a subscription agreement will enroll such Participant in the Plan for each subsequent Offering Period on the terms contained therein until the Participant either submits a new subscription agreement, withdraws from participation under the Plan as provided in Article VII or otherwise becomes ineligible to participate in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Limitation on Purchase of Common Stock</u>. An Eligible Employee may be granted rights under the Plan only if such rights, together with any other rights granted to such Eligible Employee under "employee stock purchase plans" of the Company, any Parent or any Subsidiary, as specified by Section 423(b)(8) of the Code, do not permit such employee's rights to purchase stock of the Company or any Parent or Subsidiary to accrue at a rate that exceeds $25,000 of the fair market value of such stock (determined as of the time which such rights are granted) for each calendar year in which such rights are outstanding at any time. This limitation shall be applied in accordance with Section 423(b)(8) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>Decrease or Suspension of Payroll Deductions or Contributions</u>. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 5.5 or the other limitations set forth in this Plan, a Participant's payroll deductions or contributions may be suspended or discontinued by the Administrator at any time during an Offering Period. The balance of the amount credited to the account of each Participant that has not been applied to the purchase of Shares by reason of Section 423(b)(8) of the Code, Section 5.5 or the other limitations set forth in this Plan shall be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the Purchase Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Foreign Employees</u>. In order to facilitate participation in the Plan, the Administrator may provide for such special terms applicable to Participants who are citizens or residents of a foreign jurisdiction, or who are employed by a Designated Subsidiary outside of the United States, as the Administrator may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Such special terms may not be more favorable than the terms of rights granted under the Plan to Eligible Employees who are residents of the United States. Moreover, the Administrator may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan as in effect for any other purpose. No such special terms, supplements, amendments or restatements shall include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 <u>Leave of Absence</u>. During leaves of absence approved by the Company meeting the requirements of Treasury Regulation Section 1.421-1(h)(2) under the Code, a Participant may continue participation in the Plan by making cash payments to the Company on his or her normal payday equal to his or her authorized payroll deduction.

**ARTICLE VI.** 

**GRANT AND EXERCISE OF RIGHTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Grant of Rights</u>. On the Grant Date of each Offering Period, each Eligible Employee participating in such Offering Period shall be granted a right to purchase the maximum number of Shares specified under Section 4.2, subject to the limits in Section 5.5, and shall have the right to buy, on each Purchase Date during such Offering Period (at the applicable Purchase Price), such number of whole Shares as is determined by dividing (a) such Participant's payroll deductions or permitted contributions accumulated prior to such Purchase Date and retained in the Participant's account as of the Purchase Date, by (b) the applicable Purchase Price (rounded down to the nearest Share). The right shall expire on the earlier of: (x) the last Purchase Date of the Offering Period, (y) last day of the Offering Period and (z) the date on which the Participant withdraws in accordance with Section 7.1 or Section 7.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Exercise of Rights</u>. On each Purchase Date, each Participant's accumulated payroll deductions or permitted contributions and any other additional payments specifically provided for in the applicable Offering Document will be applied to the purchase of whole Shares, up to the maximum number of Shares permitted pursuant to the terms of the Plan and the applicable Offering Document, at the Purchase Price. No fractional Shares shall be issued upon the exercise of rights granted under the Plan, unless the Offering Document specifically provides otherwise. Any cash in lieu of fractional Shares remaining after the purchase of whole Shares upon exercise of a purchase right will be credited to a Participant's account and returned to the Participant in one lump sum payment in a subsequent payroll check as soon as practicable after the Exercise Date, unless the Administrator provides that such amounts should be rolled over to the next occurring Offering Period in the applicable Offering Document. Shares issued pursuant to the Plan may be evidenced in such manner as the Administrator may determine and may be issued in certificated form or issued pursuant to book-entry procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Pro Rata Allocation of Shares</u>. If the Administrator determines that, on a given Purchase Date, the number of Shares with respect to which rights are to be exercised may exceed (a) the number of Shares that were available for issuance under the Plan on the Enrollment Date of the applicable Offering Period, or (b) the number of Shares available for issuance under the Plan on such Purchase Date, the Administrator may in its sole discretion provide that the Company shall make a pro rata allocation of the Shares available for purchase on such Enrollment Date or Purchase Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all Participants for whom rights to purchase Common Stock are to be exercised pursuant to this Article VI on

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such Purchase Date, and shall either (i) continue all Offering Periods then in effect, or (ii) terminate any or all Offering Periods then in effect pursuant to Article IX. The Company may make pro rata allocation of the Shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company's stockholders subsequent to such Enrollment Date. The balance of the amount credited to the account of each Participant that has not been applied to the purchase of Shares shall be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the Purchase Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Withholding</u>. At the time a Participant's rights under the Plan are exercised, in whole or in part, or at the time some or all of the Common Stock issued under the Plan is disposed of, the Participant must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, that arise upon the exercise of the right or the disposition of the Common Stock. At any time, the Company may, but shall not be obligated to, withhold from the Participant's compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Conditions to Issuance of Common Stock</u>. The Company shall not be required to issue or deliver any certificate or certificates for, or make any book entries evidencing, Shares purchased upon the exercise of rights under the Plan prior to fulfillment of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The admission of such Shares to listing on all stock exchanges, if any, on which the Common Stock is then listed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The completion of any registration or other qualification of such Shares under any state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, that the Administrator shall, in its absolute discretion, deem necessary or advisable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The payment to the Company of all amounts that it is required to withhold under federal, state or local law upon exercise of the rights, if any; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The lapse of such reasonable period of time following the exercise of the rights as the Administrator may from time to time establish for reasons of administrative convenience.

**ARTICLE VII.** 

**WITHDRAWAL; CESSATION OF ELIGIBILITY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Withdrawal</u>. A Participant may withdraw all but not less than all of the payroll deductions or contributions credited to his or her account and not yet used to exercise his or her rights under the Plan at any time by giving written notice to the Company in a form acceptable to the Company no later than one week prior to the end of the Offering Period (or such shorter or longer period specified by the Administrator in the Offering Document). All of the Participant's payroll deductions credited to his or her account or contributions made by the Participant during an Offering Period shall be paid to such Participant as soon as reasonably practicable after receipt of notice of withdrawal and such Participant's rights for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of Shares shall be made or contributions accepted for such Offering Period. If a Participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the next Offering Period unless the Participant timely delivers to the Company a new subscription agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Future Participation</u>. A Participant's withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or a Designated Subsidiary or in subsequent Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Cessation of Eligibility</u>. Upon a Participant's ceasing to be an Eligible Employee for any reason, he or she shall be deemed to have elected to withdraw from the Plan pursuant to this Article VII and the payroll deductions credited to such Participant's account or contributions made by such Participant during the Offering Period shall be paid to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 12.4, as soon as reasonably practicable, and such Participant's rights for the Offering Period shall be automatically terminated.

**ARTICLE VIII.** 

**ADJUSTMENTS UPON CHANGES IN STOCK** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Changes in Capitalization</u>. Subject to Section 8.3, in the event that the Administrator determines that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), Change of Control, reorganization, merger, amalgamation, consolidation, combination, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event, as determined by the Administrator, affects the Common Stock such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any outstanding purchase rights under the Plan, the Administrator shall make equitable adjustments, if any, to reflect such change with respect to (a) the aggregate number and type of Shares (or other securities or property) that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 and the limitations established in each Offering Document pursuant to Section 4.2 on the maximum number of Shares that may be purchased); (b) the class(es) and number of Shares and price per Share subject to outstanding rights; and (c) the Purchase Price with respect to any outstanding rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Other Adjustments</u>. Subject to Section 8.3, in the event of any transaction or event described in Section 8.1 or any unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate (including without limitation any Change of Control), or of changes in Applicable Law or accounting principles, the Administrator, in its discretion, and on such terms and conditions as it deems appropriate, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any right under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To provide for either (i) termination of any outstanding right in exchange for an amount of cash, if any, equal to the amount that would have been obtained upon the exercise of such right had such right been currently exercisable or (ii) the replacement of such outstanding right with other rights or property selected by the Administrator in its sole discretion;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To provide that the outstanding rights under the Plan shall be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar rights covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To make adjustments in the number and type of Shares (or other securities or property) subject to outstanding rights under the Plan and/or in the terms and conditions of outstanding rights and rights that may be granted in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To provide that Participants' accumulated payroll deductions or contributions may be used to purchase Common Stock prior to the next occurring Purchase Date on such date as the Administrator determines in its sole discretion and the Participants' rights under the ongoing Offering Period(s) shall be terminated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To provide that all outstanding rights shall terminate without being exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>No Adjustment Under Certain Circumstances</u>. No adjustment or action described in this Article VIII or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to fail to satisfy the requirements of Section 423 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>No Other Rights</u>. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to outstanding rights under the Plan or the Purchase Price with respect to any outstanding rights.

**ARTICLE IX.** 

**AMENDMENT, MODIFICATION AND TERMINATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Amendment, Modification and Termination</u>. The Administrator may amend, suspend or terminate the Plan at any time and from time to time; <u>provided</u>, <u>however</u>, that approval of the Company's stockholders shall be required to amend the Plan to: (a) increase the aggregate number, or change the type, of shares that may be sold pursuant to rights under the Plan under Section 3.1 (other than an adjustment as provided by Article VIII); (b) change the corporations or classes of corporations whose employees may be granted rights under the Plan; or (c) change the Plan in any manner that would cause the Plan to no longer be an "employee stock purchase plan" within the meaning of Section 423(b) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Certain Changes to Plan</u>. Without stockholder consent and without regard to whether any Participant rights may be considered to have been adversely affected, to the extent permitted by Section 423 of the Code, the Administrator shall be entitled to change or terminate the Offering Periods, limit the frequency and/or number of changes in the amount withheld from Compensation during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company's processing of payroll withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant's Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion to be advisable that are consistent with the Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Actions In the Event of Unfavorable Financial Accounting Consequences</u>. In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) shortening any Offering Period so that the Offering Period ends on a new Purchase Date, including an Offering Period underway at the time of the Administrator action; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) allocating Shares.

Such modifications or amendments shall not require stockholder approval or the consent of any Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Payments Upon Termination of Plan</u>. Upon termination of the Plan, the balance in each Participant's Plan account shall be refunded as soon as practicable after such termination, without any interest thereon.

**ARTICLE X.** 

**TERM OF PLAN** 

The Plan shall be effective on the Effective Date. The effectiveness of the Plan shall be subject to approval of the Plan by the stockholders of the Company within twelve months following the date the Plan is first approved by the Board. No right may be granted under the Plan prior to such stockholder approval. The Plan shall be in effect until terminated under Section 9.1 hereof. No rights may be granted under the Plan during any period of suspension of the Plan or after termination of the Plan.

**ARTICLE XI.** 

**ADMINISTRATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 <u>Administrator</u>. Unless otherwise determined by the Board, the Administrator of the Plan shall be the Human Capital Management Committee of the Board (or another committee or a subcommittee of the Board to which the Board delegates administration of the Plan) (such committee, the "***Committee***"). The Board may at any time vest in the Board any authority or duties for administration of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 <u>Action by the Administrator</u>. Unless otherwise established by the Board or in any charter of the Administrator, a majority of the Administrator shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present and, subject to Applicable Law and the Bylaws of the Company, acts approved in writing by a majority of the Administrator in lieu of a meeting, shall be deemed the acts of the Administrator. Each member of the Administrator is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Designated Subsidiary, the Company's independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 <u>Authority of Administrator</u>. The Administrator shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To determine when and how rights to purchase Common Stock shall be granted and the provisions of each offering of such rights (which need not be identical).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To designate from time to time which Subsidiaries of the Company shall be Designated Subsidiaries, which designation may be made without the approval of the stockholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Administrator, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To amend, suspend or terminate the Plan as provided in Article IX.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Generally, to exercise such powers and to perform such acts as the Administrator deems necessary or expedient to promote the best interests of the Company and its Subsidiaries and to carry out the intent that the Plan be treated as an "employee stock purchase plan" within the meaning of Section 423 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 <u>Decisions Binding</u>. The Administrator's interpretation of the Plan, any rights granted pursuant to the Plan, any subscription agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

**ARTICLE XII.** 

**MISCELLANEOUS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Restriction upon Assignment</u>. A right granted under the Plan shall not be transferable other than by will or the applicable laws of descent and distribution, and is exercisable during the Participant's lifetime only by the Participant. Except as provided in Section 12.4 hereof, a right under the Plan may not be exercised to any extent except by the Participant. The Company shall not recognize and shall be under no duty to recognize any assignment or alienation of the Participant's interest in the Plan, the Participant's rights under the Plan or any rights thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>Rights as a Stockholder</u>. With respect to Shares subject to a right granted under the Plan, a Participant shall not be deemed to be a stockholder of the Company, and the Participant shall not have any of the rights or privileges of a stockholder, until such Shares have been issued to the Participant or his or her nominee following exercise of the Participant's rights under the Plan. No adjustments shall be made for dividends (ordinary or extraordinary, whether in cash securities, or other property) or distribution or other rights for which the record date occurs prior to the date of such issuance, except as otherwise expressly provided herein or as determined by the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u>Interest</u>. No interest shall accrue on the payroll deductions or contributions of a Participant under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u>Designation of Beneficiary</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A Participant may, in the manner determined by the Administrator, file a written designation of a beneficiary who is to receive any Shares and/or cash, if any, from the Participant's account under the Plan in the event of such Participant's death subsequent to a Purchase Date on which the Participant's rights are exercised but prior to delivery to such Participant of such Shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant's account under the Plan in the event of such Participant's death prior to exercise of the Participant's rights under the Plan. If the Participant is married and resides in a community property state, a designation of a person other than the Participant's spouse as his or her beneficiary shall not be effective without the prior written consent of the Participant's spouse.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Such designation of beneficiary may be changed by the Participant at any time by written notice to the Company. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant's death, the Company shall deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u>Notices</u>. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 <u>Equal Rights and Privileges</u>. Subject to Section 5.7, all Eligible Employees will have equal rights and privileges under this Plan so that this Plan qualifies as an "employee stock purchase plan" within the meaning of Section 423 of the Code. Subject to Section 5.7, any provision of this Plan that is inconsistent with Section 423 of the Code will, without further act or amendment by the Company, the Board or the Administrator, be reformed to comply with the equal rights and privileges requirement of Section 423 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 <u>Use of Funds</u>. All payroll deductions or contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions or contributions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 <u>Reports</u>. Statements of account shall be given to Participants at least annually, which statements shall set forth the amounts of payroll deductions or contributions, the Purchase Price, the number of Shares purchased and the remaining cash balance, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 <u>No Employment Rights</u>. Nothing in the Plan shall be construed to give any person (including any Eligible Employee or Participant) the right to remain in the employ of the Company or any Parent or Subsidiary or affect the right of the Company or any Parent or Subsidiary to terminate the employment of any person (including any Eligible Employee or Participant) at any time, with or without cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 <u>Notice of Disposition of Shares</u>. Each Participant shall give prompt notice to the Company of any disposition or other transfer of any Shares purchased upon exercise of a right under the Plan if such disposition or transfer is made: (a) within two years from the Grant Date of the Offering Period in which the Shares were purchased or (b) within one year after the Purchase Date on which such Shares were purchased. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Participant in such disposition or other transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.11 <u>Governing Law</u>. The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.12 <u>Electronic Forms</u>. To the extent permitted by Applicable Law and in the discretion of the Administrator, an Eligible Employee may submit any form or notice as set forth herein by means of an electronic form approved by the Administrator. Before the commencement of an Offering Period, the Administrator shall prescribe the time limits within which any such electronic form shall be submitted to the Administrator with respect to such Offering Period in order to be a valid election.

\* \* \* \*

## Exhibit 99.1

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**Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating<br> to these securities has been filed with the U.S. Securities and Exchange Commission.** 

**Exhibit 99.1<br>**

<br> **PRELIMINARY INFORMATION STATEMENT** 

**SUBJECT TO COMPLETION, DATED JANUARY 29, 2026** 

**INFORMATION STATEMENT** 

**Atrium Therapeutics, Inc.** 

**Distribution of** 

**Common Stock** 

**$0.001 par value** 

This information statement is being furnished to existing stockholders of Avidity Biosciences, Inc. ("Avidity") in connection with the pro rata distribution (the "Distribution") by Avidity of all the issued and outstanding shares of common stock, par value $0.001 ("our common stock" or "Company Common Stock"), of Atrium Therapeutics, Inc. ("we," "us," "our," or the "Company") to holders of Avidity common stock, par value $0.0001 per share ("Avidity Common Stock"), as of the Record Date (as defined below). Prior to such Distribution, Avidity will effect a pre-closing reorganization (the "Separation"), with such reorganization generally resulting in the Company owning, assuming or retaining all assets and liabilities of Avidity and its subsidiaries exclusively related to its early stage precision cardiology programs, including ATR 1086 and ATR 1072, which (as described in more detail below) target rare genetic cardiomyopathies, including phospholamban and Protein Kinase AMP-activated non-catalytic subunit Gamma 2 Syndrome, respectively, and certain collaboration agreements, including those with Bristol-Myers Squibb Company and Eli Lilly and Company (the "Company Assets"), and Avidity owning, assuming or retaining all other assets and liabilities (the "RemainCo Business"). As described in this information statement, the consummation of the Distribution (the "Spin-Off") is subject to the satisfaction or waiver by Avidity and the Company of certain conditions set forth in the Separation and Distribution Agreement, dated as of October 25, 2025 (the "Separation Agreement"), among Avidity, the Company and Novartis AG, a company limited by shares (*Aktiengesellschaft*) incorporated under the laws of Switzerland ("Novartis") (with respect to certain sections therein), including (i) the satisfaction or waiver of certain conditions precedent included in the Agreement and Plan of Merger, dated as of October 25, 2025 (the "Merger Agreement"), among Novartis, Ajax Acquisition Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Novartis ("Merger Sub"), and Avidity, pursuant to which, on the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into Avidity (the "Merger"), with Avidity surviving the Merger as an indirect wholly owned subsidiary of Novartis, (ii) the absence of any judgment, ruling, order, writ, injunction, award, decision, assessment or decree of any governmental authority preventing the consummation of the Separation, the Distribution or the Merger and any law enacted or deemed applicable to any such transaction by any governmental authority of competent jurisdiction that makes consummation of the Separation, the Distribution or the Merger illegal, and (iii) the execution of documentation effecting transfer of the Third Party Agreements (as defined below) from Avidity to the Company, in form reasonably satisfactory to Novartis, among others.

Pursuant to the terms of the Merger Agreement and the Separation Agreement, Avidity may also consummate a sale of all of the Company to a third party (including to the ROFN Holder, as defined below) (a "Permitted Third Party Sale"), after which, the Distribution would not be effected and cash proceeds received by Avidity, any of its affiliates or the Company from such sale, net of expenses incurred in connection with or related to the authorization, preparation, negotiation, execution and performance of such transaction and any definitive agreements related thereto would be distributed to Avidity's stockholders and holders of options to purchase shares of Avidity Common Stock (the "Avidity Stock Options") and holders of restricted stock units denominated in shares of Avidity Common Stock, whether subject to time-based or performance-based vesting, that are granted under any equity plans, agreements or arrangements of the Company ("Avidity RSUs" and together with the Avidity Stock Options, the "Avidity Equity Awards"). In addition, the transfer of assets to the Company includes certain Avidity assets (the "ROFN Assets") that triggered a right of first negotiation ("ROFN") with an existing collaboration partner of Avidity (the "ROFN Holder"). Avidity is permitted to

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negotiate the sale of Avidity assets subject to the ROFN with the ROFN Holder, and, if an agreement is reached, consummate the sale of all or a portion of such assets. If such a sale is consummated (a "ROFN Sale"), the Company may receive less than all of the Company Assets.

Shares of Company Common Stock will be distributed to holders of Avidity Common Stock as of the close of business, Eastern Time, on (the "Record Date"). Each such holder will receive one share of Company Common Stock for every ten shares of Avidity Common Stock held on the Record Date (the "Distribution Ratio"). We anticipate that the Distribution will become effective in the first half of 2026, subject to the satisfaction or waiver of the conditions included in the Merger Agreement and the Separation Agreement. For Avidity stockholders who own shares of Avidity Common Stock in registered form on the Record Date, the transfer agent will credit their shares of Company Common Stock to book entry accounts established in their names to hold their shares of Avidity Common Stock. Our distribution agent will send these stockholders a statement reflecting their ownership of shares of Company Common Stock shortly after the date on which the Distribution takes place (the "Distribution Date"). For stockholders who own shares of Avidity Common Stock through a broker or other nominee, their shares of Company Common Stock will be delivered to the broker or other nominee and credited to their accounts by such broker or other nominee. Avidity stockholders will receive cash in lieu of fractional shares of the Company. The Distribution will be taxable. See "*The Separation and Distribution—Material U.S. Federal Income Tax Consequences*."

Although stockholder approval of the Distribution is not required, such approval is being sought in connection with transactions described in Avidity's Preliminary Proxy Statement on Schedule 14A, which was initially filed with the Securities and Exchange Commission ("SEC") on November 24, 2025 (File No. 001-39321) (the "Proxy Statement"). We are not asking you for any other proxy, and you are requested not to send us any proxy. Avidity stockholders will not be required to pay for Company Common Stock to be received by them in the Distribution, or to surrender or to exchange Avidity Common Stock in order to receive Company Common Stock, or to take any other action in connection with the Distribution. There is currently no trading market for Company Common Stock. We have applied to list Company Common Stock on The Nasdaq Global Market ("Nasdaq") under the symbol "RNA."

IN REVIEWING THIS INFORMATION STATEMENT, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DESCRIBED UNDER THE CAPTION "[RISK FACTORS](#toc42675_4)" BEGINNING ON PAGE 18.

WE ARE AN EMERGING GROWTH COMPANY AS DEFINED IN THE JUMPSTART OUR BUSINESS STARTUPS ACT OF 2012 AND A SMALLER REPORTING COMPANY AND WE CANNOT BE CERTAIN IF THE REDUCED REPORTING REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES AND SMALLER REPORTING COMPANIES WILL MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS. REFER TO "RISK FACTORS—RISKS RELATED TO OUR COMMON STOCK."

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS INFORMATION STATEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

Avidity stockholders with inquiries related to the Distribution should contact our distribution agent, Computershare Trust Company N.A., at (800) 564 6253.

The date of this information statement is , 2026.

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**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
|  | **Page** |
|  [PRESENTATION OF INFORMATION](#toc42675_1) | 1 |
|  [QUESTIONS AND ANSWERS ABOUT THE SEPARATION AND DISTRIBUTION](#toc42675_2) | 2 |
|  [INFORMATION STATEMENT SUMMARY](#toc42675_3) | 9 |
|  [RISK FACTORS](#toc42675_4) | 18 |
|  [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS](#toc42675_5) | 80 |
|  [THE SEPARATION AND DISTRIBUTION](#toc42675_6) | 82 |
|  [BUSINESS](#toc42675_7) | 105 |
|  [DIVIDEND POLICY](#toc42675_8) | 137 |
|  [CAPITALIZATION](#toc42675_9) | 138 |
|  [UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION](#toc42675_10) | 139 |
|  [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#toc42675_10a) | 146 |
|  [CORPORATE GOVERNANCE AND MANAGEMENT](#toc42675_11) | 158 |
|  [EXECUTIVE COMPENSATION](#toc42675_12) | 164 |
|  [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#toc42675_13) | 174 |
|  [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#toc42675_14) | 175 |
|  [SHARES ELIGIBLE FOR FUTURE SALE](#toc42675_15) | 177 |
|  [DESCRIPTION OF SECURITIES](#toc42675_16) | 178 |
|  [INDEMNIFICATION OF DIRECTORS AND OFFICERS](#toc42675_17) | 182 |
|  [WHERE YOU CAN FIND MORE INFORMATION](#toc42675_18) | 183 |
|  [CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM](#toc42675_19) | 184 |
|  [INDEX TO COMBINED FINANCIAL STATEMENTS](#toc42675_20) | F-1 |

---

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**PRESENTATION OF INFORMATION** 

The Company Business (as defined below) has not historically operated as a standalone business, and the financial information of the Company Business contained in this information statement is derived from the consolidated financial statements and accounting records of Avidity. All historical financial information included within this information statement is that of the Company Business and not of the Company as the Company has had no operations or activity as described below.

In connection with the Separation and the Distribution, Avidity expects to assign to the Company, the agreements, leases, licenses and other contracts and assets necessary for the Company to conduct the business described in this information statement.

The Company was incorporated on September 30, 2025 as a wholly owned subsidiary of Avidity and has had no significant operations or activity other than its initial issuance of shares of Company Common Stock for a nominal consideration and entry into the Separation Agreement and the RemainCo License Agreement (as defined below). Prior to the Distribution, and pursuant to the Separation, Avidity will undergo an internal reorganization that will generally (as described in more detail below) result in (a) the Company owning, assuming or retaining all assets and liabilities of Avidity and its subsidiaries exclusively related to Avidity's early stage precision cardiology programs, and certain collaboration agreements, including those with Bristol-Myers Squibb Company and Eli Lilly and Company (the "Third Party Agreements"), and (b) RemainCo (as defined below) owning, assuming or retaining all other assets and liabilities of Avidity and its subsidiaries.

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**QUESTIONS AND ANSWERS ABOUT THE SEPARATION AND DISTRIBUTION** 

The following is a brief summary of the terms of the Separation and Distribution. Please see "*The Separation and Distribution*" for a more detailed description of the matters described below.

**Q: What are the Separation and Distribution?** 

A: The Separation is the method by which Avidity will separate the Company Business from Avidity's other businesses, creating two separate companies. The Separation will generally result in (i) the Company owning, assuming or retaining all assets and liabilities of Avidity and its subsidiaries exclusively related to Avidity's early stage precision cardiology programs, including ATR 1086 and ATR 1072, which target rare genetic cardiomyopathies, including phospholamban and Protein Kinase AMP-activated non-catalytic subunit Gamma 2 Syndrome, respectively, and the Third Party Agreements, and (ii) Avidity owning, assuming or retaining all other assets and liabilities of Avidity and its subsidiaries (Avidity following the Separation and Distribution, "RemainCo").

In the Distribution, Avidity will distribute to its stockholders as of the Record Date, on a pro rata basis, all of our common stock that it owns. Following the Separation and Distribution, we will be a separate company from RemainCo, and RemainCo will not retain any ownership interest in us. The number of shares of Avidity Common Stock you own will not change as a result of the Distribution.

**Q: What is being distributed in the Distribution?** 

A: 15,447,887 shares of our common stock will be distributed in the Distribution, based upon 154,478,871 shares of Avidity Common Stock outstanding on January 21, 2026. Company Common Stock to be distributed by Avidity in the Distribution and the shares of Company Common Stock issuable upon vesting of the Make Whole Awards (as defined below) to holders of Avidity Equity Awards pursuant to the Merger Agreement and Separation Agreement will constitute all of our issued and outstanding common stock immediately after the Separation and Distribution. Fractional shares will be aggregated into whole shares of Company Common Stock and sold in the public market by the distribution agent and stockholders will receive a cash payment in lieu of a fractional share. For more information on the shares being distributed in the Distribution, see "*Description of Securities*."

**Q: What will I receive in the Distribution?** 

A: Holders of Avidity Common Stock will receive a distribution of Company Common Stock equal to one share of Company Common Stock for every ten shares of Avidity Common Stock held by them on the Record Date. As a result of the Distribution, you will own the same percentage of equity securities and voting power in the Company as you did in Avidity. For a more detailed description, see "*The Separation and Distribution*."

**Q: What is the record date for the Distribution?** 

A: Ownership of Avidity Common Stock will be determined as of the close of business, Eastern Time, on , 2026, which we refer to as the "Record Date". The person who beneficially owns the shares of Avidity Common Stock at the close of business on the Record Date is the person to whom the Company Common Stock will be delivered in the Distribution.

**Q: When will the Distribution occur?** 

A: We expect that our common stock will be distributed by the distribution agent, on behalf of Avidity, in the first half of 2026, subject to the conditions to the Spin-Off described below.

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**Q: What will the relationship between RemainCo and us be following the Distribution?** 

A: Following the Distribution, we will be a public company and RemainCo will have no continuing ownership interest in us. We and Avidity entered into the Separation Agreement for the purpose of accomplishing, among other things, the Separation of the Company Business and the Distribution of shares of Company Common Stock to stockholders of Avidity. On October 25, 2025, we entered into the License Agreement with Avidity (the "RemainCo License Agreement"), pursuant to which we granted to Avidity certain exclusive and non-exclusive licenses under our platform technology and other intellectual property, and Avidity granted to us certain exclusive and non-exclusive licenses under certain RemainCo intellectual property, in each case taking effect upon the effective date of the earlier to occur of any Permitted Third Party Sale and the Distribution. Concurrently with the Distribution, we will enter into a transition services agreement with RemainCo (the "Transition Services Agreement"), pursuant to which we will provide certain transition services to RemainCo, and RemainCo will provide certain transition services to us. Under the Separation Agreement, Avidity and the Company agreed to indemnify, defend and hold harmless the other party, and its affiliates and certain representatives, from and after the Distribution Date, from losses in connection with, among other things, (i) the liabilities assigned to, or retained by, the other party, as applicable, and the failure to pay, perform or otherwise discharge such liabilities, (ii) the breach by such party of the Separation Agreement, and (iii) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the registration statement of which this information statement forms a part (the "Registration Statement"), this information statement or the proxy statement filed by Avidity in connection with the Merger (including any amendments or supplements) or any other filings with the SEC made in connection with the transactions contemplated by the Separation Agreement (in the case of Novartis, only with respect to any such liability arising from information supplied by Novartis or Merger Sub in writing expressly for inclusion in such filings, and in the case of the Company, excluding any such liability to the extent relating to information supplied by Novartis or Merger Sub in writing expressly for inclusion in such filings). Avidity and the Company, each on behalf of itself and its subsidiaries, and, to the extent permitted by law, all persons who at any time prior to the Distribution were stockholders, directors, officers, agents or employees of Avidity or the Company or their respective subsidiaries, in each case, together with their respective heirs, executors, administrators, successors and assigns, agreed to release the other party from, among other things, any and all liabilities existing or arising from any acts or events occurring or failing to occur on or prior to the Distribution, including in connection with the Separation, the Distribution or any other transactions contemplated under the Separation Agreement, the RemainCo License Agreement and the Transition Services Agreement, and each of Avidity and the Company agreed not to bring any proceeding or claim against the other party in respect of such liabilities.

See "*Certain Relationships and Related Party Transactions—Related Person Transaction Policy*" for a discussion of the policy that will be in place for dealing with potential conflicts of interest that may arise from our ongoing relationship with RemainCo.

**Q: What conditions must be satisfied to complete the Spin-Off?** 

A: The Spin-Off is subject to the satisfaction or waiver by Avidity and the Company on or prior to the Distribution Date, as applicable, of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• satisfaction or, to the extent permitted therein, waiver of the conditions precedent in the Merger Agreement
(with certain exceptions) to the Merger;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the absence of any judgment or law prohibiting or making illegal the consummation of the Separation, the
Distribution or the Merger;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• execution of documentation effecting transfer of the Third Party Agreements from Avidity to the Company, in a
form reasonably satisfactory to Novartis;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• continued effectiveness of the RemainCo License Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• execution and delivery of the Transition Services Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Separation having been effected in all material respects.

The Separation Agreement provides that Avidity may waive any of the conditions to the Distribution and proceed with the Distribution even if all such conditions have not been met. Notwithstanding Avidity's contractual ability to waive the conditions in the Separation Agreement, Avidity cannot proceed with the Distribution if there is a stop order, injunction or law preventing the consummation of the Separation or the Distribution, if the Registration Statement is not declared effective by the SEC or if the Registration Statement does not remain effective. However, Avidity could still proceed with the Distribution even if there is a stop order, injunction or law preventing the consummation of the Merger. See "*The Separation and Distribution—The Separation Agreement—Conditions to the Spin-Off" for more information.*

**Q: What are the reasons for the Spin-Off?** 

A: Avidity's board of directors has determined that the separation of our businesses from Avidity's other business is in the best interests of Avidity and its stockholders. The Avidity board of directors considered the following in making the determination to consummate the Distribution:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that stockholders of Avidity would have the opportunity to receive securities of the Company under the
terms and conditions of the Merger Agreement, in addition to the consideration being paid in the Merger, allowing stockholders of Avidity to continue to recognize value from Avidity's assets and liabilities related to its early stage precision
cardiology programs and the Third Party Agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Avidity's board of directors' recognition of the potential value in the assets to be transferred to
the Company in the Separation and that the Distribution provides an attractive option for these assets, including with respect to the potential development and commercialization and future profitability of the early stage precision cardiology
programs and the potential achievement of specified milestones and royalties under the Third Party Agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the overall value of the Merger and the Spin-Off in the context of
Avidity's current and historical financial condition and results of operations, competitive position, assets, business and prospects and the risks and uncertainties inherent to the research, development, manufacture and commercialization of
Avidity's three late-stage clinical programs, delpacibart etedesiran ("del-desiran"), delpacibart braxlosiran ("del-brax") and delpacibart zotadirsen ("del-zota") as well as the further research,
development, manufacture and commercialization of its other product candidates and platform, and that the certainty of value and immediate liquidity to Avidity's stockholders was compelling;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that the Merger Agreement that was negotiated between Avidity and Novartis contemplated completion of
the Separation and the Spin-Off or the consummation of a Permitted Third Party Sale as a condition to the Merger;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that the Separation, in combination with the Merger, provides Avidity's stockholders with more after-tax value as compared to a direct sale of the del-desiran, del-brax and del-zota assets by Avidity because the Separation, in combination with the Merger, avoids subjecting the proceeds paid by Novartis for del-desiran, del-brax and del-zota to the corporate-level income tax that would otherwise apply if Avidity, as opposed to its
stockholders, had received such proceeds on a direct sale of the del-desiran, del-brax and del-zota assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the allocation of certain assets and liabilities related to Avidity's early stage precision cardiology
programs and the Third Party Agreements to the Company (subject to exceptions);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the tax treatment of the Separation, including that the Separation will be a taxable distribution to Avidity
stockholders and that the Company generally will provide a tax indemnity to RemainCo for the Company Indemnified Taxes (as defined below) and RemainCo generally will provide a tax indemnity to the Company for any RemainCo Indemnified Taxes (as
defined below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that the parties have agreed to make an election under Section 336(e) of the Internal Revenue Code of 1986,
as amended (the "Code"), with respect to the Company, which is expected to result in the Company receiving a fair market value tax basis in its assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that, immediately prior to the effective time of the Distribution, Avidity will pay and contribute to
the Company an amount in cash equal to $270 million, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any bank and brokerage accounts owned by the Company as of the close of business on the day
prior to the effective time of the Distribution (such net amount, the "Company Funding"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the guaranty by Novartis of the performance by RemainCo of its obligations under the Separation Agreement, the
RemainCo License Agreement, the Transition Services Agreement and the occupancy license agreement which RemainCo and the Company may enter into for purposes of shared lab services on or following the effective time of the Distribution (the
"Occupancy License Agreement") following the effective time of the Merger.

See "*The Separation and Distribution—Reasons for the Distribution*" for more information.

**Q: How will the Company be financed?** 

A: In the event of the Distribution, and not in the event of a Permitted Third Party Sale, immediately prior to the effective time of the Distribution, Avidity will pay and contribute to the Company an amount in cash equal to the Company Funding. However, if the aggregate amount of marketable securities and cash and cash equivalents contained in any bank and brokerage accounts owned by Avidity and its subsidiaries as of the close of business on the day prior to the effective time of the Distribution is less than the Company Funding (such difference, the "Company Funding Shortfall"), then Novartis will cause RemainCo to pay, or pay on behalf of RemainCo, the Company Funding Shortfall to the Company concurrently with the closing of the Merger. In the event Avidity consummates a Permitted Third Party Sale, Avidity will not be obligated to pay the Company Funding.

RemainCo's liabilities under the Separation Agreement include payment of certain transaction expenses in connection with the Distribution and the Merger. Except as otherwise set forth in the Separation Agreement, the Transition Services Agreement or the Occupancy License Agreement, RemainCo and the Company will each bear its own costs and expenses incurred after the Distribution.

**Q: In what event would the Distribution not occur?** 

A: Following the Separation, Avidity may consummate a Permitted Third Party Sale, subject to the terms and conditions specified in the Merger Agreement and the Separation Agreement, in place of effecting the Distribution. In the event that Avidity consummates a Permitted Third Party Sale, Avidity will still effect the Separation, and, generally, the provisions of the Separation Agreement would remain unchanged, except that, among other things, the Distribution would be replaced by consummation of the Permitted Third Party Sale.

If Avidity consummates a Permitted Third Party Sale, cash proceeds received by Avidity, any of its affiliates or the Company from such sale, net of expenses incurred in connection with or related to the authorization, preparation, negotiation, execution and performance of such transaction and any definitive agreements related thereto (any such proceeds and/or any such proceeds received in connection with a Permitted Third Party Sale or

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ROFN Sale, as applicable, the "Permitted Sale Proceeds"), will be distributed to holders of Avidity Common Stock as of the record date used by Avidity for such distribution, on a pro rata basis and subject to applicable tax withholding. In addition, in the event of a Permitted Third Party Sale, the holders of Avidity Stock Options and Avidity RSUs as of the record date used by Avidity for such distribution will receive a cash payment from the Permitted Sale Proceeds, subject to applicable tax withholding, equal to the product of the per share amount payable to holders of Avidity Common Stock in such distribution and the number of Avidity Common Stock underlying each such Avidity Equity Award. See *"Executive Compensation—Executive Compensation Following the Distribution—Make Whole Awards"* for additional information relating to the treatment of outstanding Avidity Equity Awards in the Distribution.

**Q: In what event would the Company hold less than the Company Business following the Separation and Distribution?** 

A: The transfer of assets to the Company in connection with the Separation includes the ROFN Assets that triggered the ROFN with an existing collaboration partner of Avidity that was notified concurrently with Avidity's announcement of the Merger Agreement. Avidity is permitted to negotiate the sale of the Avidity assets subject to the ROFN with the ROFN Holder and, if an agreement is reached, consummate the sale of all or a portion of such assets to the ROFN Holder. If a ROFN Sale is consummated the Company may receive less than all of the Company Assets. The Avidity assets subject to the ROFN may be sold to the ROFN Holder prior to or following the Spin-Off.

If Avidity or the Company consummates a ROFN Sale, the Permitted Sale Proceeds will be distributed to holders of Avidity Common Stock as of the record date used by Avidity for such distribution, on a pro rata basis and subject to applicable tax withholding. In addition, in the event of a ROFN Sale, the holders of Avidity Equity Awards as of the record date used by Avidity for such distribution will receive a cash payment from the Permitted Sale Proceeds, subject to applicable tax withholding, equal to the product of the per share amount payable to holders of Avidity Common Stock in such distribution and the number of Avidity Common Stock underlying each such Avidity Equity Award. See *"Executive Compensation—Executive Compensation Following the Distribution—Make Whole Awards"* for additional information relating to the treatment of outstanding Avidity Equity Awards in the Distribution.

**Q: What do I have to do to participate in the Distribution?** 

A: No action is required on your part. Stockholders of Avidity on the Record Date are not required to pay any cash or deliver any other consideration, including any Avidity Common Stock, for our common stock distributable to them in the Distribution.

**Q: What is the Merger and what effects will it have on RemainCo?** 

A: The Merger is the acquisition of RemainCo by Novartis following the Separation and Distribution, whereupon Merger Sub will be merged with and into RemainCo, the separate existence of Merger Sub will cease, and RemainCo will continue as the surviving corporation and a wholly owned subsidiary of Novartis.

If the proposal to adopt the Merger Agreement and the Separation Agreement are approved by Avidity's stockholders and the other closing conditions under the Merger Agreement and the Separation Agreement have been satisfied or waived, (i) you will own one share of Company Common Stock for every ten shares of Avidity Common Stock you hold as of the Record Date, and (ii) each share of Avidity Common Stock issued and outstanding immediately prior to the closing of the Merger (excluding each share of Avidity Common Stock (a) held in the treasury of Avidity, (b) owned by Novartis or Merger Sub, or owned by any direct or indirect wholly owned subsidiary of Avidity or Novartis immediately prior to the effective time of the Merger, or (c) held by any stockholder who is entitled to demand and has properly and validly demanded their statutory appraisal

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right of such shares ("Avidity Appraisal Shares") pursuant to, and who complies in all respects with, Section 262 of the General Corporation Law of the State of Delaware (the "DGCL") and who, as of the effective time of the Merger, has neither effectively withdrawn nor lost such appraisal and payment rights with respect to such Avidity Appraisal Shares), will be cancelled and converted automatically into the right to receive an amount in cash equal to $72.00, without interest and subject to any applicable tax withholdings (the "Merger Consideration"). RemainCo will no longer be a publicly held company and the current holders of Avidity Common Stock will no longer have any interest in the future earnings or growth of RemainCo. In addition, following the completion of the Merger, Avidity Common Stock will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and RemainCo will no longer file periodic reports with the SEC. The Company will be a separate, publicly held company following the Distribution subject to reporting obligations under the Exchange Act. We have applied to list the Company Common Stock on Nasdaq under the symbol "RNA." For more information on the treatment of Avidity Common Stock in the Merger, see the Proxy Statement.

**Q: How will fractional shares be treated in the Distribution?** 

A: If you would be entitled to receive a fractional share of our common stock in the Distribution, you will instead receive a cash payment. See "*The Separation and Distribution—Manner of Effecting the Distribution*" for an explanation of how the cash payments will be determined.

**Q: Can holders of Company Common Stock demand appraisal rights of their shares in connection with the Distribution?** 

A: Holders of Company Common Stock will not be entitled to exercise appraisal rights under the DGCL in connection with the Distribution.

**Q: What will govern my rights as a holder of Company Common Stock?** 

A: Your rights as a stockholder will be governed by Delaware law, as well as the Certificate of Incorporation and Bylaws (each as defined below). A description of these rights is included in this information statement under the heading "*Description of Securities*". The Certificate of Incorporation will be substantially in the form attached as Exhibit 3.4 to the Registration Statement and is incorporated by reference into this information statement. The Bylaws will be substantially in the form attached as Exhibit 3.5 to the Registration Statement and is incorporated by reference into this information statement.

**Q: How will Avidity distribute Company Common Stock to me?** 

A: Holders of Avidity Common Stock as of the Record Date will receive Company Common Stock in book-entry form. Stockholders who own Avidity Common Stock through a broker or other nominee will receive a credit to their accounts by the broker or other nominee for their shares. See "*The Separation and Distribution—Manner of Effecting the Distribution*" for a more detailed explanation.

**Q: What are the material U.S. federal income tax consequences to me of the Distribution?** 

A: Under U.S. federal income tax laws, a U.S. holder (as defined in "*The Separation and Distribution—Material U.S. Federal Income Tax Consequences*") must include in its income as a taxable dividend the fair market value of the Company Common Stock distributable by Avidity to the extent of its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Avidity has not calculated earnings and profits in accordance with U.S. federal income tax principles. Accordingly, U.S. holders should expect to treat the Distribution as a dividend. Avidity or other applicable withholding agents may be required or permitted to withhold at the applicable rate on all or a portion of the Distribution payable to Non-U.S. holders (as defined in

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"*The Separation and Distribution—Material U.S. Federal Income Tax Consequences*") of the shares of Company Common Stock, and any such withholding would be satisfied by Avidity or such agent by withholding and selling a portion of the shares of Company Common Stock that otherwise would be distributable to the Non-U.S. holders or by withholding from other property held in the Non-U.S. holder's account with the withholding agent. See "*The Separation and Distribution—Material U.S. Federal Income Tax Consequences*" for further information.

**Q: Does the Company intend to pay cash dividends?** 

A: We do not expect to pay any cash dividends on our common stock in the foreseeable future. All decisions regarding the payment of dividends will be made by our board of directors (the "Board of Directors") from time to time in accordance with applicable law.

**Q: How will Company Common Stock trade?** 

A: There is not currently a public market for shares of Company Common Stock. We have applied to list our common stock on Nasdaq under the symbol "RNA". Assuming that such listing application is approved, it is anticipated that trading will commence on a when-issued basis prior to the Distribution. On the first trading day following the Distribution Date, when-issued trading in respect of our common stock will end and regular-way trading will begin. See "*The Separation and Distribution—Listing and Trading of Our Common Stock"* for more information on the listing and trading of shares of Company Common Stock following the Distribution.

**Q: How will Avidity Common Stock trade between the Record Date and the Distribution Date?** 

A: Beginning on , and continuing until the occurrence of the Distribution on the Distribution Date, Avidity Common Stock will trade with an entitlement to the Distribution under the symbol " " following the Distribution and Spin-Off. Any holders of Avidity Common Stock who sell shares on or before the Distribution Date will also be selling their right to receive Company Common Stock. Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling Avidity Common Stock on or before the Distribution Date. The combined trading prices of Avidity Common Stock and Company Common Stock after the Distribution may be lower than the trading price of Avidity Common Stock prior to the Distribution. See "*Risk Factors*" beginning on page 18.

**Q: Who is the distribution agent for Company Common Stock?** 

A: Computershare Trust Company, N.A., will be the distribution agent for Company Common Stock.

**Q: Where can I get more information?** 

A: If you have questions relating to the mechanics of the Distribution of Company Common Stock, you should contact the distribution agent:

If you have any other questions relating to the Distribution or the Company, you should contact:

Atrium Therapeutics, Inc.

Investor Relations

10578 Science Center Drive, Suite 125

San Diego, CA

92121

Telephone: (619) 876-0700

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**INFORMATION STATEMENT SUMMARY** 

The following is a summary of certain of the information contained in this information statement. This summary is included for convenience only and should not be considered complete. This summary is qualified in its entirety by more detailed information contained elsewhere in this information statement, which should be read in its entirety. Please refer to the section entitled "*Risk Factors*" for a discussion of risks related to the Company and the Distribution.

Unless the context otherwise requires, all references to "we", "us", "our", or the "Company" refer to Atrium Therapeutics, Inc. Where we describe our business activities in this information statement, we do so as if the Separation and Distribution have already occurred. All historical financial information included within this information statement is that of the Company Business, and not of the Company as the Company has had no operations or activity. Furthermore, we describe our business activities in this information statement assuming neither a Permitted Third Party Sale nor a ROFN Sale has occurred or will occur.

**Company Overview** 

We are a biopharmaceutical company pioneering the delivery of ribonucleic acid ("RNA") therapeutics to the heart to transform the standard of care for people living with cardiomyopathies. Our proprietary technology leverages the targeted RNA delivery platform initially developed at Avidity (the "RNA delivery platform"), which combines the tissue selectivity of monoclonal antibodies ("mAbs") and other targeted delivery ligands with the precision of oligonucleotides. The Company's unique combination is designed to allow selective targeting of the underlying genetic drivers of disease that were previously undruggable. Through targeted, non-viral delivery of small interfering RNA ("siRNA") to cardiac tissues, our approach has the potential to overcome key limitations of nonspecific viral and nanoparticle-based delivery systems, including challenges related to tissue specificity, immunogenicity, and redosing.

We believe we are well positioned to become a leader in precision cardiology given our expertise, strategic partnerships and the RNA delivery platform. The RNA delivery platform, initially developed at Avidity—in addition to the scientific, clinical and regulatory expertise that powered Avidity's development—serve as the backbone for our long-term vision: to pioneer precision RNA medicines for the heart and profoundly improve the lives of people impacted by cardiac diseases. We plan to achieve our vision through a commitment to scientific rigor, patient-centric development, and operational excellence.

The net losses of the Company Business for the fiscal years ended December 31, 2024 and 2023 were $25.1 million and $6.4 million, respectively. Net losses for the nine months ended September 30, 2025 and 2024 were $20.4 million and $13.6 million, respectively.

**Our Strategy** 

We are building a cutting-edge biopharmaceutical company with a focus on precision cardiology and a three-pronged strategic approach:

1) **Pioneer precision RNA-based therapies that transform the identification, treatment and care of people with cardiomyopathies by leveraging the RNA delivery platform, our development expertise and our deep understanding of the underlying disease pathophysiology.** The RNA delivery platform was initially developed at Avidity and was used for the first-ever successful targeted delivery of siRNA to the muscle, supporting the advancement of three rare neuromuscular programs into registrational development. We are expanding the reach of the RNA delivery platform to precision cardiology and are advancing next-generation technology innovations, which we have observed to 

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improve siRNA delivery in cardiac muscle. Our management team, which includes multiple alumni from Avidity, brings deep expertise in identifying targets that are well understood and are believed to directly address the underlying biology of a disease. Our rigorous target selection process is designed to maximize the probability of technical success in clinical development and prioritizes targets based on high penetrance, clear genotype-phenotype correlations, and the ability to develop animal models that recapitulate the key features of human disease.

2) **Advance a precision cardiology pipeline that achieves proof of concept of RNA delivery to the heart and addresses the underlying causes of cardiomyopathies, redefining standard of care paradigms.** We are prioritizing advancement of our initial product candidates, ATR 1072 and ATR 1086, for the treatment of Protein Kinase AMP-activated non-catalytic subunit Gamma 2 ("PRKAG2") syndrome and phospholamban ("PLN") cardiomyopathy, respectively, into the clinic. PRKAG2 syndrome and PLN cardiomyopathy are both severe, life-threatening rare autosomal dominant progressive cardiomyopathies with no approved treatment options and high unmet need. If supported by positive Phase 1 trial results, we expect to advance ATR 1072 and ATR 1086 into potentially registrational clinical trials while continuing to develop these and other pipeline programs, expanding into broader cardiology indications with high unmet need. 

3) **Build a fully integrated company based on our understanding of the unique needs of people with rare diseases and pave a new path for cardiomyopathies from drug discovery and development through to patient care and clinical practice.** Our leadership and management team is comprised of pioneers in RNA medicines with deep scientific and rare disease expertise. Our employees are dedicated to and guided by transparency, integrity, teamwork, excellence and innovation to help us achieve our mission rapidly, responsibly, and efficiently. We plan to maintain a disciplined approach to capital allocation and to align program prioritization with the highest probability of technical and clinical success to positively impact patients worldwide. We are focused on employing a patient-first strategy through highly collaborative patient community engagements and partnerships ensuring their perspectives and insights inform our strategic approach and guide our decision-making. Ultimately, our goal is to rapidly advance our pipeline assets from research and development to commercialization, providing access to patients and clinicians around the world. 

**Our Development Programs** 

We have initially selected genetically validated cardiology targets for our development pipeline. Our precision cardiology pipeline currently consists of two primary, wholly owned precision cardiology development candidates for the treatment of PRKAG2 syndrome and PLN cardiomyopathy. Each program is designed to address a specific genetic disease or disease mechanism associated with severe life-threatening forms of heart disease.

We have strategically prioritized rare cardiomyopathies. For our initial programs, we plan to use the same proprietary mAb targeting TfR1 across our cardiac muscle programs, which we believe gives us significant leverage of development costs and timelines associated with each incremental cardiac muscle program.

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The pipeline is supported by strong human genetics evidence, robust preclinical data, and a clear path to clinical development. The chart below represents a summary of our wholly owned development programs. We also have two additional pipeline candidates in research and development targeting undisclosed rare cardiology targets which we may develop in the future.

![LOGO](g42675g17a01.jpg)

**Experienced Leadership Team** 

Our senior management team has extensive experience in successfully developing and commercializing RNA therapies for rare genetic diseases through their involvement with major pharmaceutical and biotechnology companies. Our team members have led research, development and pre-commercial activities in rare diseases, including discovering and developing the innovative Antibody Oligonucleotide Conjugates ("AOC")<sup>TM</sup> technology. They have collective experience in advancing RNA therapies including gaining alignment with regulatory agencies on both accelerated regulatory pathways as well as paving global approval paths for rare diseases that require novel endpoints. The team has worked extensively with rare disease patient communities and understands the challenges and opportunities of rare disease drug development and commercialization.

Kathleen Gallagher, our Chief Executive Officer, has exceptional executive management expertise and tenured experience in the biopharmaceutical industry. She has over 20 years of experience and has led investor relations, portfolio strategy, program management and corporate affairs for preclinical to commercial stage companies, including Avidity, Akcea, and Merrimack Pharmaceuticals. She has directed companies through multiple financings and an initial public offering.

Steven Hughes, M.D., our Chief Medical Officer, has over 25 years of experience in the biopharmaceutical industry. He has contributed to more than 50 clinical trials and multiple product filings and launches across cardiovascular, neurology and rare disease therapeutic areas at Avidity, Ionis Pharmaceuticals, Biogen, CSL Behring and Sanofi.

Stephanie Kenney, our Chief Corporate Affairs Officer, has more than 25 years of experience in the biopharmaceutical industry leading corporate affairs, investor relations, and marketing at preclinical to commercial stage companies in autoimmune, cardiovascular, and renal therapeutic areas. She has held roles of increasing responsibility at Avidity, AstraZeneca and Hansa Biopharma.

Rocio Martin Hoyos, our Chief Strategy Officer, is a seasoned strategist with over 20 years of experience in management and commercial roles in the biopharmaceutical industry. She has held leadership positions at Avidity, Audentes Therapeutics, Celgene, Kronos Bio and Ultragenyx Pharmaceutical.

Brendan Winslow, our Chief Financial Officer, has extensive experience in financial leadership roles in the biotechnology and healthcare industries. He has held senior positions involving global operations, commercialization, and strategic transformations at Avidity, Acadia Pharmaceuticals and Baxter International.

Husam Younis, Ph.D., Pharm.D., our Chief Scientific Officer, has over 20 years of experience in drug discovery and development, including in rare disease. He has held senior leadership roles in development science at Avidity, NGM Biopharmaceuticals, Ionis Pharmaceuticals and Pfizer.

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Past achievements of our management team may not be indicative of future success. Please see "—Risk Factors" and "—Corporate Governance and Management—Executive Officers" for further information.

**Summary of Risk Factors** 

The principal risks and uncertainties affecting our business include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have a limited operating history and have not operated as a standalone public company, which may make it
difficult for you to evaluate the success of our business to date and to assess our future viability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have incurred losses since inception. We expect to incur significant losses for the foreseeable future. We may
never generate product revenue or become profitable or, if we achieve profitability, we may not be able to sustain it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary
capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our development programs, commercialization efforts or other operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All of our development programs are in the discovery or preclinical stage. If we are unable to successfully
develop, obtain regulatory approval for and ultimately commercialize product candidates, or experience significant delays in doing so, our business will be materially harmed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our approach to the discovery and development of product candidates based on the RNA delivery platform is
unproven as applied to cardiac targets, and we do not know whether we will be able to develop any products of commercial value, or if competing technological approaches will limit the commercial value of our product candidates or render the RNA
delivery platform obsolete.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any difficulties or delays in the commencement or completion, or the termination or suspension, of our ongoing or
planned preclinical studies and planned clinical trials could result in increased costs to us, or delay or limit our ability to generate revenue and adversely affect our commercial prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may find it difficult to enroll participants in some of our clinical trials. If we encounter difficulties
enrolling participants in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Use of our product candidates could be associated with side effects, adverse events or other properties or safety
risks, which could delay or preclude approval, cause us to suspend or discontinue clinical trials, abandon a product candidate, limit the commercial profile of approved labeling or result in other significant negative consequences that could
severely harm our business, prospects, operating results and financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As an organization, we have never submitted an Investigational New Drug Application ("IND"),
completed any pivotal clinical trials or submitted a Biologic License Application ("BLA") for regulatory approval and may be unable to do so for any of our product candidates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our product candidates are subject to extensive regulation and compliance, which is costly and time consuming,
and such regulation may cause unanticipated delays or prevent the receipt of the approvals required to commercialize our product candidates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Preclinical and clinical development involves a lengthy and expensive process with an uncertain outcome, and the
results of preclinical studies and early clinical trials are not necessarily predictive of future results. Our product candidates may not have favorable results in clinical trials or receive regulatory approval on a timely basis, if at all.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We rely on third parties to conduct our preclinical studies and will rely on third parties to conduct our planned
clinical trials. If these third parties do not successfully carry out their contractual duties,

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comply with applicable regulatory requirements or meet expected deadlines, our development programs and our ability to seek or obtain regulatory approval for or commercialize our product candidates may be delayed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We rely on third parties for the manufacture of our product candidates for preclinical development and expect to
rely on third parties for the manufacture of our product candidates for planned clinical development. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such
quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We rely on the RemainCo License Agreement to enable our use of certain important intellectual property and data.
If, after the consummation of the Spin-Off, RemainCo ceases to effectively maintain such intellectual property or data, then our business could be materially and adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Under certain circumstances, Eli Lilly and Company ("Lilly") or Bristol-Myers Squibb Company
("BMS") may each unilaterally terminate its respective agreement with us for convenience, which could materially and adversely affect our cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The commercial success of our product candidates will depend upon the degree of market acceptance of such product
candidates by physicians, patients, healthcare payors and others in the medical community.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We face significant competition, and if our competitors develop technologies or product candidates more rapidly
than we do or their technologies are more effective, our business and our ability to develop and successfully commercialize products may be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may face direct competition from Novartis (through its control of RemainCo) in the cardiac space, including
with respect to products that are the subject of the RemainCo License Agreement, including the RNA delivery platform technology, or other products that RemainCo or Novartis may develop independently.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may encounter difficulties in managing our growth and expanding our operations successfully.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and
cost for us to commercialize our product candidates and may affect the prices we may set.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain provisions of the RemainCo License Agreement provide RemainCo rights with respect to development
candidates discovered thereunder, which could limit our ability to engage in certain strategic transactions that stockholders may consider favorable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we are unable to obtain and maintain patent protection for our therapeutic programs and other proprietary
technologies we develop, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize
our therapeutic programs and other proprietary technologies we may develop may be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• To the extent a ROFN Sale occurs prior to or following the Spin-Off, the
assets held by the Company will be diminished, which could materially adversely affect the price of the Company Common Stock.

For more information, see the section entitled "*Risk Factors*."

**Company Information** 

The Company was incorporated on September 30, 2025 under the laws of the State of Delaware as a direct, wholly owned subsidiary of Avidity Biosciences, Inc. We changed our name from Bryce Therapeutics, Inc. to

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Atrium Therapeutics, Inc. on December 8, 2025. Our corporate headquarters are located at 10578 Science Center Drive, Suite 125, San Diego, CA 92121, and our telephone number is (619) 876-0700. Our investor relations website is located at . We will make available free of charge on our investor relations website under "SEC Filings" our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, our directors' and officers' Section 16 reports and any amendments to those reports as soon as reasonably practicable after filing such materials with, or furnishing them to, the SEC. They are also available for free on the SEC's website at www.sec.gov.

The information in or accessible through the SEC and our website are not incorporated into, and are not considered part of, this information statement.

**Implications of Being an Emerging Growth Company** 

We qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act (the "JOBS Act") enacted in 2012. As an emerging growth company, we expect to take advantage of reduced reporting requirements otherwise applicable to public companies. These provisions include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, as amended (the "Sarbanes-Oxley Act");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and
registration statements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved.

We may rely on the relief provided by these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"). However, if certain events occur prior to the end of such five-year period, including if we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

We have elected to take advantage of certain of the reduced disclosure obligations in the Registration Statement of which this information statement is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than that which you might receive from other public reporting companies in which you hold equity interests.

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. We have elected to avail ourselves of this exemption.

**Implications of Being a Smaller Reporting Company** 

Additionally, we are a "smaller reporting company," meaning that the market value of our common stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this transaction is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year. As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to, reduced disclosure obligations regarding executive compensation, and the ability to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K. We may continue to be a smaller reporting company as

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long as either (i) the market value of our common stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million.

**Summary of the Separation and Distribution** 

Please see "*The Separation and Distribution*" for a more detailed description of the matters described below.

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|:---|:---|
| Distribution Ratio | Each holder of Avidity Common Stock will receive a pro rata distribution of one share of our common stock for every ten shares of Avidity Common Stock held on the Record Date. |
| Securities to be Distributed | Based on 154,478,871 shares of Avidity Common Stock outstanding on January 21, 2026, 15,447,887 shares of Company Common Stock would be distributed. Company Common Stock to be distributed by Avidity in the Distribution and the shares of Company Common Stock issuable upon vesting of the Make Whole Awards to holders of Avidity Equity Awards pursuant to the Merger Agreement and the Separation Agreement will constitute all of our outstanding common stock immediately after the Distribution. Avidity stockholders will not be required to pay for our common stock to be received by them in the Distribution, or to surrender or exchange Avidity Common Stock in order to receive our common stock, or to take any other actions in connection with the Distribution. <br>In addition, in the event of the Distribution, holders of Avidity Equity Awards (subject to certain exceptions for New Hire RSUs and any unvested portion of the 2026 LTI Awards (each as defined below)) as of the Record Date (including outstanding Avidity Stock Options and Avidity RSUs held by RemainCo's directors and executive officers) will receive a non-transferable Make Whole Award that will be settled in shares of Company Common Stock at a ratio of one share of Company Common Stock for every ten shares of Avidity Common Stock underlying each such Avidity Equity Award, as required by the terms of the Separation Agreement and as permitted by the SEC's Staff Legal Bulletin No. 4. |
| Fractional Shares | No fractional shares will be distributed. Fractional shares will be aggregated into whole shares of Company Common Stock and sold in the public market by the distribution agent. The aggregate net cash proceeds of this sale will be distributed ratably to Avidity's stockholders who would otherwise have received fractional interests. These cash proceeds generally will be taxable to those stockholders to the extent the cash received exceeds the fair market value of the fractional interests of Company Common Stock on the Distribution Date. |
| Distribution Agent, Transfer Agent and Registrar for the Shares | Computershare Trust Company, N.A. will be the distribution agent, transfer agent and registrar for our common stock. |
| Record Date | The close of business Eastern Time, on , 2026. |

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| Distribution Date | We anticipate that the Distribution Date will occur in the first half of 2026, subject to the satisfaction or waiver of the conditions described herein. |
| Material U.S. Federal Income Tax Consequences of the Distribution | Under U.S. federal income tax laws, a U.S. holder (as defined in "*The Separation and Distribution—Material U.S. Federal Income Tax Consequences*") must include in its income as a taxable dividend the fair market value of the Company Common Stock distributable by Avidity to the extent of its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Avidity has not calculated earnings and profits in accordance with U.S. federal income tax principles. Accordingly, U.S. holders should expect to treat the Distribution as a dividend. Avidity or other applicable withholding agents may be required or permitted to withhold at the applicable rate on all or a portion of the Distribution payable to Non-U.S. holders (as defined in "*The Separation and Distribution—Material U.S. Federal Income Tax Consequences*") of the shares of Company Common Stock, and any such withholding would be satisfied by Avidity or such agent by withholding and selling a portion of the shares of Company Common Stock that otherwise would be distributable to the Non-U.S. holders or by withholding from other property held in the Non-U.S. holder's account with the withholding agent. See "*The Separation and Distribution—Material U.S. Federal Income Tax Consequences*" for further information. |
| Stock Exchange Listing | There is not currently a public market for our common stock. We have applied for the shares of our common stock to be listed on Nasdaq under the symbol "RNA." Assuming that such listing application is approved, it is anticipated that trading will commence on a when-issued basis prior to the Distribution. On the first trading day following the Distribution Date, when-issued trading in respect of our common stock will end and regular-way trading will begin. |
| Relationship between RemainCo and Us after the Distribution | Following the Distribution, we will be a public company and RemainCo will have no continuing ownership interest in us. Prior to the Distribution, we and Avidity entered into the Separation Agreement for the purpose of accomplishing, among other things, the Separation of the Company Business and the Distribution of Company Common Stock to stockholders of Avidity and the RemainCo License Agreement to enable continued access to certain intellectual property and data. |
| Permitted Third Party Sale and ROFN Sale | The transfer of assets to the Company in connection with the Separation includes the ROFN Assets that triggered the ROFN. Avidity is permitted to negotiate the sale of the Avidity assets subject to the ROFN with the ROFN Holder and, if an agreement is reached, consummate the sale of all or a portion of such assets to the ROFN Holder. |
|  | Following the Separation and in place of effecting the Distribution, Avidity may consummate a Permitted Third Party Sale, subject to the terms and conditions specified in the Merger Agreement and the Separation Agreement (including a sale to the ROFN Holder). |

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|  | If Avidity consummates a Permitted Third Party Sale or ROFN Sale, the Permitted Sale Proceeds from such sale will be distributed to holders of Avidity Common Stock and Avidity Equity Awards, on a pro rata basis and subject to applicable tax withholding. |
| Conditions to the Separation and Distribution | The Distribution is subject to the satisfaction or waiver by Avidity and the Company on or prior to the Distribution Date, as applicable, of certain conditions, including, among other things, satisfaction or, to the extent permitted therein, waiver of the conditions precedent in the Merger Agreement (with certain exceptions) to the Merger; the absence of any judgment of law prohibiting or making illegal the consummation of the Separation, the Distribution or the Merger; execution of documentation effecting transfer of the Third Party Agreements from Avidity to the Company, in a form reasonably satisfactory to Novartis; continued effectiveness of the RemainCo License Agreement; execution and delivery of the Transition Services Agreement; and the Separation having been effected in all material respects. See "*The Separation and Distribution—The Separation Agreement*" for more information on the conditions to the Separation and Distribution. |
|  | The Separation Agreement provides that Avidity may waive any of the conditions to the Distribution and proceed with the Distribution even if all such conditions have not been met. Notwithstanding Avidity's contractual ability to waive the conditions in the Separation Agreement, Avidity cannot proceed with the Distribution if there is a stop order, injunction or law preventing the consummation of the Separation or the Distribution, if the Registration Statement is not declared effective by the SEC or if such registration statement does not remain effective. However, Avidity could still proceed with the Distribution if there is an injunction or law preventing the consummation of the Merger. See "*The Separation and Distribution—The Separation Agreement—Conditions to the Spin-Off*" for more information. |
| Post-Distribution Dividend Policy | We do not expect to pay any cash dividends on our common stock in the foreseeable future. All decisions regarding the payment of dividends will be made by the Board of Directors from time to time in accordance with applicable law. |
| Risk Factors | Stockholders should carefully consider the matters discussed under "*Risk Factors*." |

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**RISK FACTORS** 

*You should carefully consider the following risk factors, together with the other information contained in this information statement, including our combined financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations." We cannot assure you that any of the events discussed in the risk factors below will not occur. These risks could have a material and adverse impact on our business, results of operations, financial condition and growth prospects. If that were to happen, the trading price of our common stock could decline substantially. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations or financial condition.* 

**Risks Related to Our Limited Operating History, Financial Position and Capital Requirements** 

***We have a limited operating history and have not operated as a standalone public company, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.***

We are a preclinical-stage biopharmaceutical company with a limited operating history upon which you can evaluate our business and prospects. We were formed in September 2025 as a subsidiary of Avidity in anticipation of the Separation. All of our development programs are in preclinical development or in the drug discovery stage. Our operations to date have been limited to activities required to effect the Separation and Distribution. We are focused primarily on organizing our company, business planning, identifying product candidates, conducting research and preclinical studies and ensuring appropriate transition arrangements are in place prior to the Separation. Our approach to the discovery and development of product candidates based on the RNA delivery platform is unproven as applied to cardiac targets, and we do not know whether we will be able to develop any product candidates that succeed in clinical development or products of commercial value. As a company, we have not yet initiated or completed any clinical trials, obtained regulatory approvals, manufactured a clinical- or commercial-scale product or arranged for a third party to do so on our behalf, or conducted sales and marketing activities necessary for successful product commercialization. In addition, we have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical industry. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing biopharmaceutical products.

***We have incurred losses since inception. We expect to incur significant losses for the foreseeable future. We may never generate product revenue or become profitable, or, if we achieve profitability, we may not be able to sustain it.***

We do not have any products approved for sale and have not generated any product revenue since our inception. If our product candidates are not successfully developed and approved, we may never generate any significant revenue. The Company Business' net losses were $25.1 million and $6.4 million for the years ended December 31, 2024 and 2023, respectively. As of September 30, 2025, the Company Business had an accumulated deficit of $57.6 million. Substantially all of the Company Business' losses have resulted from expenses incurred in connection with its research and development programs and from general and administrative costs associated with its operations. All of our product candidates will require additional development time and resources, which would be substantial, before we would be able to apply for or receive regulatory approvals and begin generating revenue from product sales. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue our development of, seek regulatory approval for and potentially commercialize any of our product candidates.

To become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials of our product candidates, discovering additional product candidates beyond our current lead product candidates, obtaining regulatory approval for these product

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candidates and manufacturing, marketing and selling any products for which we may obtain regulatory approval. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability. Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable may have an adverse effect on the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product candidates or even continue our operations.

***We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our development programs, commercialization efforts or other operations.***

The development of biopharmaceutical product candidates is capital-intensive. We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct our preclinical studies for our development programs, prepare for and conduct our planned clinical trials and seek regulatory approval for our current product candidates and any future product candidates we may develop. If we obtain regulatory approval for any of our product candidates, we also expect to incur significant commercialization expenses related to product manufacturing, marketing, compliance, sales and distribution. Because the outcome of any preclinical study or clinical trial is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates. Furthermore, following the Distribution, we expect to incur additional costs associated with operating as a standalone public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. We do not have any committed external source of funds or other support for our development efforts. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any commercialization efforts.

Immediately prior to the effective time of the Distribution, Avidity will pay and contribute to the Company an amount in cash equal to $270 million, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any bank or brokerage accounts owned by the Company as of the close of business on the day prior to the Distribution Date. Following the Spin-Off, the Company anticipates the Company Funding, as well as cash generated from our collaboration agreements, will be sufficient to meet our working capital requirements, capital expenditures and other general corporate purposes for at least twelve months following the Spin-Off and through Phase 1 clinical proof-of-concept for our product candidate, ATR 1072, for the treatment of PRKAG2 syndrome. Whether these resources are adequate to meet our liquidity needs beyond that period will depend on our growth and operating results. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we currently expect. Our operating plans and other demands on our cash resources may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, including through public or private equity or debt financings or other capital resources, such as potentially additional collaborations, licenses and other similar arrangements. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop our product candidates.

Our future capital requirements will depend on many factors, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the scope, progress, results and costs of researching and developing our current product candidates, as well as
other product candidates we may develop;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing of, and the costs involved in, obtaining marketing approvals for our current product candidates for
our current and future indications, as well as other product candidates we may develop and pursue;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the number of future indications and product candidates that we pursue and their development requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if approved, the cost of commercialization activities for our current product candidates or any other product
candidate that receive regulatory approval to the extent such costs are not the responsibility of our collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• subject to the receipt of regulatory approval, revenue, if any, received from commercial sales of our current
product candidates or revenues received from any future product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our headcount growth and associated costs as we expand our organization to achieve our objectives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the costs of preparing, filing and prosecuting patent applications, and maintaining and protecting our
intellectual property rights, including enforcing and defending intellectual property related claims; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the costs of operating as a public company.

A change in the outcome of any of these or other variables with respect to the development of any product candidate could significantly change the costs and timing associated with the development of that product candidate. Additionally, our operating plans may change or we may experience increased costs and be required to raise additional capital much sooner than anticipated.

Our ability to raise additional funds will depend on financial, economic and market conditions, the progress and timing of our research and development programs, the cost and outcome of clinical trials, the level of investment required to establish and operate as an independent public company and other factors, over which we may have no or limited control. Market volatility resulting from geopolitical and economic instability could also adversely impact our ability to access capital as and when needed.

***Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to the RNA delivery platform or our product candidates.***

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential additional collaborations, licenses and other similar arrangements. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Any future debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making capital expenditures, declaring dividends or encumbering our assets to secure future indebtedness. Such restrictions could adversely impact our ability to conduct our operations and execute our business plan.

If we raise additional funds through future collaborations, licenses and other similar arrangements, we may have to relinquish valuable rights to our future revenue streams (including future revenue streams from the BMS Collaboration Agreement and the Lilly Agreement (each as defined below)), research programs, product candidates, or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, we would be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to other parties to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

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**Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates** 

***All of our development programs are in the discovery or preclinical stage. If we are unable to successfully develop, obtain regulatory approval for and ultimately commercialize product candidates, or experience significant delays in doing so, our business will be materially harmed.***

All of our development programs are in the preclinical or drug discovery stage. We will need to progress our preclinical-stage candidates through IND-enabling studies and receive allowance from the Food and Drug Administration ("FDA"), or the equivalent regulatory authority in other countries, to proceed under an IND, or its equivalent, prior to initiating their clinical development. Our ability to generate product revenues, which we do not expect will occur in the near term, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates. The success of our product candidates will depend on several factors, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• successful completion of preclinical studies with favorable results, including those compliant with Good
Laboratory Practices ("GLPs"), toxicology, pharmacokinetic and pharmacodynamic studies in animals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• allowance to proceed with clinical trials under INDs by the FDA, or under similar regulatory submissions by
comparable foreign regulatory authorities, for the conduct of clinical trials of our product candidates and our proposed design of future clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• successful enrollment of study subjects in clinical trials and completion of clinical trials, in accordance with
applicable regulatory and scientific standards including Good Clinical Practices ("GCPs") with favorable results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• demonstrating safety, purity, potency and efficacy of our product candidates to the satisfaction of applicable
regulatory authorities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• successful pre-approval inspections by relevant regulatory authorities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• receipt of marketing approvals from applicable regulatory authorities, including BLAs from the FDA, and
maintaining such approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• making arrangements with our third-party manufacturers for, or establishing, clinical and commercial
manufacturing capabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if
and when approved, whether alone or in collaboration with others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establishing and maintaining patent and trade secret protection or regulatory exclusivity for our product
candidates, and defending these items, as required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintaining an acceptable safety profile of our products following approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• meeting post-approval requirements from regulatory authorities in any jurisdictions in which we commercialize a
product; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintaining and growing an organization of people who can develop and commercialize our products and technology.

If we are unable to develop, obtain regulatory approval for, or, if approved, successfully commercialize our product candidates, we may not be able to generate sufficient revenue to continue our business.

***Interim, topline and preliminary data from our preclinical studies and future clinical trials that we announce or publish from time to time may change as more participant data become available and are subject to audit and verification procedures that could result in material changes in the final data.***

From time to time, we may disclose interim data from our preclinical studies and future clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes

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may materially change as participant enrollment continues and more participant data become available or as participants from our clinical trials continue other treatments for their disease. Adverse differences between preliminary, topline or interim data and final data could significantly harm our business prospects.

From time to time, we may publicly disclose preliminary or topline data from our clinical trials and preclinical studies, which is based on a preliminary analysis of then-available data as of certain data cutoff dates, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the preliminary or topline results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the data we previously published. As a result, topline and preliminary data should be viewed with caution until the final data are available.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of a particular product candidate or product and the value of our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically a subset of more extensive and detailed information from the study or trial, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product, product candidate or our business. If the topline data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects and financial condition.

***Our approach to the discovery and development of product candidates based on the RNA delivery platform is unproven as applied to cardiac targets, and we do not know whether we will be able to develop any products of commercial value, or if competing technological approaches will limit the commercial value of our product candidates or render the RNA delivery platform obsolete.***

The success of our business depends primarily upon our ability to identify, develop and commercialize products based on the proprietary RNA delivery platform, which leverages a novel and unproven approach as applied to cardiac targets. While the RNA delivery platform has produced favorable preclinical and early clinical study results in certain neuromuscular indications studied by Avidity, we have not yet succeeded and may not succeed in producing final data demonstrating safety, purity or potency for any product candidates in clinical trials or in obtaining marketing approval thereafter. Our research methodology and approach to oligonucleotide-based therapy may be unsuccessful in identifying additional product candidates, and any product candidates based on the technology platform may not be effective, may be shown to have harmful side effects or may have other characteristics that may necessitate additional clinical testing, or make the product candidates unmarketable or unlikely to receive marketing approval. We may also be unsuccessful in developing and demonstrating the potential of our product candidates in our cardiac disease programs, as well as under the BMS Collaboration Agreement and the Lilly Agreement. Further, because all of our product candidates and development programs are based on the RNA delivery platform, adverse developments with respect to one of our programs, or with respect to RemainCo's product candidates developed using the RNA delivery platform, may have a significant adverse impact on the actual or perceived likelihood of success and value of our other programs.

In addition, the biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies. Our future success will depend in part on our ability to maintain a competitive position with the AOC approach. If we fail to stay at the forefront of technological change in utilizing the RNA delivery platform

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to create and develop product candidates, we may be unable to compete effectively. Our competitors may render the AOC approach obsolete, limit the commercial value of our product candidates by advances in existing technological approaches or the development of new or different approaches (including, for example, using different mAbs or transporter protein combinations with oligonucleotides than us), potentially eliminating the advantages in our drug discovery process that we believe we derive from our research approach and proprietary technologies. By contrast, adverse developments with respect to other companies that attempt to use a similar approach to our approach may adversely impact the actual or perceived value of the RNA delivery platform and potential of our product candidates.

If any of these events occur, we may be forced to abandon our development efforts for a program or programs, which would have a material adverse effect on our business and could potentially cause us to cease operations.

***Preclinical and clinical development involves a lengthy and expensive process with an uncertain outcome, and the results of preclinical studies and early clinical trials are not necessarily predictive of future results. Our product candidates may not have favorable results in clinical trials or receive regulatory approval on a timely basis, if at all.***

Preclinical and clinical development is expensive and can take many years to complete, and its outcome is inherently uncertain. We cannot guarantee that any preclinical studies or clinical trials will be conducted as planned or completed on schedule, if at all, and failure can occur at any time during the preclinical study or clinical trial process. For example, we may not be able to meet expected timeframes for IND submissions. The historical failure rate for product candidates in our industry is high.

The results from preclinical studies or clinical trials of a product candidate may not predict the results of later clinical trials of the product candidate, and interim, topline, or preliminary results of a clinical trial are not necessarily indicative of final results. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy characteristics despite having progressed through preclinical studies and early clinical trials. In particular, while we have conducted preclinical trials in potential product candidates, we do not know whether these product candidates will perform in ongoing or future studies as they have performed in these prior studies. It is not uncommon to observe results in clinical trials that are unexpected based on preclinical studies and early clinical trials, and many product candidates fail in clinical trials despite very promising early results. If unexpected observations or toxicities are observed in any of our studies, this will delay clinical trials for such development programs. Moreover, preclinical and clinical data may be susceptible to varying interpretations and analyses. A number of companies in the biopharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies. For the foregoing reasons, we cannot be certain that our ongoing and planned preclinical studies and planned clinical trials will be successful. Any safety concerns observed in any of our preclinical studies or clinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates in those and other indications, which could have a material adverse effect on our business, financial condition and results of operations.

***Any difficulties or delays in the commencement or completion, or the termination or suspension, of our ongoing or planned preclinical studies and our planned clinical trials could result in increased costs to us, or delay or limit our ability to generate revenue and adversely affect our commercial prospects.***

In order to obtain FDA approval to market a new drug we must demonstrate the safety, purity and potency (or efficacy) of our product candidates in humans to the satisfaction of the FDA. To meet these requirements, we will have to conduct adequate and well-controlled clinical trials. Clinical testing is expensive, time-consuming and subject to uncertainty.

Before we can initiate clinical trials for a product candidate, we must submit the results of preclinical studies to the FDA or comparable foreign regulatory authorities along with other information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an

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IND or similar regulatory filing required for authorization to proceed with clinical development. The FDA or comparable foreign regulatory authorities may require us to conduct additional preclinical studies for any product candidate before it allows us to initiate clinical trials under any IND or similar regulatory filing, which may lead to delays and increase the costs of our preclinical development programs.

In addition, the FDA's and other regulatory authorities' policies with respect to clinical trials may change and additional government regulations may be enacted. For instance, the regulatory landscape related to clinical trials in the European Union (the "EU") has recently evolved. The EU Clinical Trials Regulation ("CTR"), which was adopted in April 2014 and repealed the EU Clinical Trials Directive, became applicable on January 31, 2022. While the EU Clinical Trials Directive required a separate clinical trial application ("CTA") to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials. The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state. The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules. Each member state's decision is communicated to the sponsor via the centralized EU portal. Once the CTA is approved, clinical study development may proceed. The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR. Compliance with the CTR requirements by us and our third-party service providers, such as contract research organizations ("CROs") may impact our developments plans.

Moreover, even if clinical trials begin, issues may arise that could cause regulatory authorities to suspend or terminate such clinical trials. Any delays in the commencement or completion of our ongoing and planned clinical trials for our current and any future product candidates could significantly affect our product development timelines and product development costs.

We do not know whether our planned clinical trials will begin on time or if our ongoing or future clinical trials will be completed on schedule, if at all. The commencement, associated data readouts and completion of clinical trials can be delayed for a number of reasons, including delays related to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• obtaining regulatory authorizations to commence a trial or reaching a consensus with regulatory authorities on
trial design;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our
clinical studies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be
subject to extensive negotiation and may vary significantly among different CROs and trial sites;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• obtaining approval from one or more institutional review boards ("IRBs") or ethics committees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• IRBs or ethics committees refusing to approve, suspending or terminating the trial at an investigational site,
precluding enrollment of additional participants, or withdrawing their approval of the trial;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes to clinical trial protocol;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our clinical trials are put on clinical hold by a regulatory authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• clinical sites deviating from trial protocol or dropping out of a trial;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• manufacturing sufficient quantities of product candidate for use in clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• participants failing to enroll or remain in our trials at the rate we expect, or failing to return for
post-treatment follow-up;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• patients choosing an alternative treatment for the indications for which we are developing our product
candidates, or participating in competing clinical trials;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• lack of adequate funding to continue the clinical trial;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• patients experiencing severe or unexpected drug-related adverse effects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• occurrence of serious adverse events in trials of the same class of agents conducted by other companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the
resulting data;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a facility manufacturing our product candidates or any of their components being ordered by the FDA or comparable
foreign regulatory authorities to temporarily or permanently shut down due to violations of current Good Manufacturing Practices ("cGMP"), regulations or other applicable requirements, or infections or cross-contaminations of product
candidates in the manufacturing process;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any changes to our manufacturing process that may be necessary or desired;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not
performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCPs or other regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• third-party contractors not performing data collection or analysis in a timely or accurate manner; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or
regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by a data safety monitoring board for such trial or by the FDA or comparable foreign regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial.

Further, conducting clinical trials in foreign countries, as we plan to do in the future, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled participants in foreign countries to adhere to the clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks, including war, relevant to such foreign countries.

If we experience delays in the completion of, or the termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed or eliminated. Moreover, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues.

In addition, many of the factors that cause, or lead to, the termination or suspension of, or a delay in the commencement or completion of, clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate. For example, we may make formulation or manufacturing changes to our product candidates, in which case we may need to conduct additional preclinical or clinical studies to bridge our modified product

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candidates to earlier versions. Any delays that occur as a result could shorten any period during which we may have the exclusive right to commercialize our product candidates and our competitors may be able to bring products to market before we do, and the commercial viability of our product candidates could be significantly reduced. Any of these occurrences may harm our business, financial condition and prospects significantly.

***We may find it difficult to enroll participants in our clinical trials. If we encounter difficulties enrolling participants in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.***

We may not be able to initiate or continue clinical trials for our product candidates if we are unable to identify and enroll a sufficient number of eligible participants for these trials as may be required by the FDA or similar regulatory authorities outside the United States. Participant enrollment, a significant factor in the timing of clinical trials, is affected by many factors including the size and nature of the patient population, the proximity of participants to clinical sites, the eligibility and exclusion criteria for the trial, the design of the clinical trial, the risk that enrolled participants will not complete a clinical trial, our ability to recruit clinical trial investigators with the appropriate competencies and experience, competing clinical trials and clinicians' and patients' perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating as well as any product candidates under development. We will be required to identify and enroll a sufficient number of participants for each of our clinical trials. In addition, the FDA and other regulatory authorities may require that we have a certain proportion of participants in our trials from the United States or other jurisdictions in order to establish that the clinical trial results are applicable to the relevant patient populations. Potential participants for any planned clinical trials may not be adequately diagnosed or identified with the diseases which we are targeting or may not meet the entry criteria for such trials. We are initially developing product candidates targeting rare cardiac conditions with small patient populations from which to draw for clinical trials. Genetically defined diseases generally, including those for which our current product candidates are targeted, have low incidence and prevalence. We also may encounter difficulties in identifying and enrolling participants with a stage of disease appropriate for our planned clinical trials and monitoring such participants adequately during and after treatment. In addition, the process of identifying participants may prove costly.

The timing of our clinical trials depends, in part, on the speed at which we can recruit participants to participate in our trials, as well as completion of required follow-up periods. The eligibility criteria of our clinical trials, once established, will further limit the group of available trial participants. If patients are unwilling to participate in our trials for any reason, including the existence of concurrent clinical trials for similar patient populations or the availability of approved therapies, or we otherwise have difficulty enrolling a sufficient number of participants, the timeline for recruiting participants, conducting studies and obtaining regulatory approval of our product candidates may be delayed. Our inability to enroll a sufficient number of participants for any of our ongoing or future clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. In addition, we expect to rely on CROs and clinical trial sites to ensure proper and timely conduct of our current and future clinical trials and, while we have entered and will enter into agreements governing their services, we have limited influence over their actual performance.

We cannot assure you that our assumptions used in determining expected clinical trial timelines are correct or that we will not experience delays in enrollment, which would result in the delay of completion of such trials beyond our expected timelines.

***Use of our product candidates could be associated with side effects, adverse events or other properties or safety risks, which could delay or preclude approval, cause us to suspend or discontinue clinical trials, abandon a product candidate, limit the commercial profile of approved labeling or result in other significant negative consequences that could severely harm our business, prospects, operating results and financial condition.***

As is the case with biopharmaceuticals generally, it is likely that there may be side effects and adverse events associated with the use of our product candidates. Results of our clinical trials could reveal a high and

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unacceptable severity and prevalence of side effects or unexpected characteristics. Although other oligonucleotide therapeutics have received regulatory approval, our AOCs, which combine oligonucleotides with a mAb, are a novel approach to oligonucleotide therapies, which may present enhanced risk and uncertainty for our product candidates compared to more well-established classes of therapies, or oligonucleotide or mAb-based therapies on their own. Moreover, there have been only a limited number of clinical trials involving the use of oligonucleotide therapeutics or the proprietary technology used in the RNA delivery platform. It is impossible to predict when or if any product candidates we may develop will prove safe in humans. Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in more restrictive labeling or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. The drug-related side effects could affect participant recruitment or the ability of enrolled participants to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

Moreover, if our product candidates are associated with undesirable side effects in clinical trials or have characteristics that are unexpected, we may elect to abandon their development or limit their development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit the commercial prospects for the product candidate if approved. We may also be required to modify our study plans based on findings after we commence our clinical trials. Many compounds that initially showed promise in early-stage testing have later been found to cause side effects that prevented further development of the compound. In addition, regulatory authorities may draw different conclusions or require additional testing to confirm these determinations.

As we test our product candidates in larger, longer and more extensive clinical trials, or as the use of these product candidates becomes more widespread if they receive regulatory approval, it is possible that illnesses, injuries, discomforts and other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, may be reported by participants. If such side effects become known later in development or upon approval, if any, such findings may harm our business, financial condition and prospects significantly.

Participants treated with our product candidates may experience previously unreported adverse reactions, and it is possible that the FDA or other regulatory authorities may ask for additional safety data as a condition of, or in connection with, our efforts to obtain or maintain approval of our product candidates. If safety problems occur or are identified after our products, if any, reach the market, we may make the decision or be required by regulatory authorities to amend the labeling of our products, recall our products or even withdraw approval for our products.

In addition, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulatory authorities may withdraw, suspend or limit approvals of such product, or seek an injunction against
its manufacture or distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may be required to recall a product or change the way such product is administered to patients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulatory authorities may require additional warnings in labeling, such as a "black box" warning or
a contraindication;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may be required to implement a risk evaluation and mitigation strategy ("REMS"), including with
limitations on where and how product is distributed, or create a medication guide outlining the risks of such side effects for distribution to patients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may be required to conduct additional clinical trials or surveillance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we could be sued and held liable for harm caused to patients;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sales of the product may decrease significantly, or the product could become less competitive; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of a particular product candidate, if approved, and could significantly harm our business, results of operations and prospects.

***As an organization, we have never submitted an IND, completed any pivotal clinical trials or submitted a BLA for regulatory approval and may be unable to do so for any of our product candidates.***

We are continuing to develop our product candidates, and we will need to successfully complete IND-enabling studies for our preclinical product candidates. Following such trials, we will need to successfully complete our planned early-stage clinical trials, and later-stage and pivotal clinical trials in order to obtain FDA or comparable foreign regulatory approval to market any of our product candidates. Carrying out clinical trials and the submission of a successful BLA is a complicated process. As an organization, we have not submitted any INDs or comparable foreign filings, have not completed any clinical trials, have limited experience as a company in preparing, submitting and prosecuting regulatory filings and have not previously submitted a BLA or other comparable foreign regulatory submission for any product candidate. As interactions with the FDA or other regulatory authorities may not be comprehensive, we cannot be certain how many clinical trials of any of our product candidates will be required or how such trials should be designed. Consequently, we may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to regulatory submission and approval of any of our product candidates. We may require more time and incur greater costs than our competitors and may not succeed in obtaining regulatory approvals of product candidates that we develop. Failure to commence or complete, or delays in, our planned clinical trials, could prevent us from, or delay us in, submitting BLAs or comparable foreign submissions for and commercializing our product candidates.

***Our product candidates are subject to extensive regulation and compliance, which is costly and time consuming, and such regulation may cause unanticipated delays or prevent the receipt of the approvals required to commercialize our product candidates.***

The preclinical and clinical development, manufacturing, labeling, packaging, storage, record-keeping, advertising, promotion, import, export, marketing, distribution and adverse event reporting, including the submission of safety and other information, of our product candidates are subject to extensive regulation by the FDA in the United States and by comparable foreign regulatory authorities in foreign markets. In the United States, we are not permitted to market our product candidates until we receive regulatory approval from the FDA. The process of obtaining regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially based upon the type, complexity and novelty of the product candidates involved, as well as the target indications and patient population. Approval policies or regulations may change, and the FDA and other foreign regulatory authorities have substantial discretion in the drug approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons. Despite the time and expense invested in clinical development of product candidates, regulatory approval is never guaranteed. Neither we nor any current or future collaborator is permitted to market any of our product candidates in the United States until we receive approval from the FDA.

Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we or our collaborators must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe, pure, potent and effective for their intended uses. Results from preclinical studies and clinical trials can be interpreted in different ways. Even if we believe the preclinical or clinical data for our product candidates are promising, such data may not be sufficient to support approval by the FDA and comparable foreign regulatory authorities. The FDA or comparable foreign regulatory authorities, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for our product candidates either prior to or post-approval, or may object to elements of our clinical development program.

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The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• such authorities may disagree with the design or implementation of our or our collaborators' clinical
trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• negative or ambiguous results from our clinical trials or results may not meet the level of statistical
significance required by or otherwise acceptable to the FDA or comparable foreign regulatory agencies for approval, and such authorities may impose requirements for additional preclinical studies or clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by
individuals using drugs similar to our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• such authorities may not accept clinical data from trials which are conducted at clinical facilities or in
countries where the standard of care is potentially different from that of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we or any of our current or future collaborators may be unable to demonstrate that a product candidate is safe
and effective, and that product candidate's clinical and other benefits outweigh its safety risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• such authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• such authorities may not agree that the data collected from clinical trials of our product candidates are
acceptable or sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• such authorities may disagree regarding the formulation, labeling and/or the specifications of our product
candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approval may be granted only for indications that are significantly more limited than what we apply for and/or
with other significant restrictions on distribution and use;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• such authorities may find deficiencies in the manufacturing processes, quality policies or facilities of our
third-party manufacturers with which we or any of our current or future collaborators contract for clinical and commercial supplies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulations of such authorities may significantly change in a manner rendering our or any of our potential future
collaborators' clinical data insufficient for approval; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• such authorities may not accept a submission due to, among other reasons, the content or formatting of the
submission.

With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing, administrative review periods and agreements with pricing authorities. In addition, events raising questions about the safety of certain marketed biopharmaceuticals may result in increased cautiousness by the FDA and comparable foreign regulatory authorities in reviewing new drugs and biologics based on safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals. Any delay in obtaining, or inability to obtain, applicable regulatory approvals could prevent us or any of our potential future collaborators from commercializing our product candidates.

***We may attempt to secure approval from the FDA through the use of the accelerated approval pathway for certain of our product candidates. If we are unable to obtain such approval, we may be required to conduct additional preclinical studies or clinical trials beyond those that we contemplate, which could increase the expense of obtaining, and delay the receipt of, necessary regulatory approvals. Even if we receive accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw any accelerated approval we have obtained.***

We may in the future pursue accelerated approval for one or more of our product candidates. Under the accelerated approval program, the FDA may grant accelerated approval to a product candidate designed to treat a

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serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. A surrogate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit.

The accelerated approval pathway may be used in cases in which the advantage of a new biologic over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is contingent on the sponsor's agreement to conduct, in a diligent manner, additional confirmatory studies to verify and describe the biologic's predicted clinical benefit. The FDA may require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted. If such confirmatory studies fail to confirm the biologic's clinical benefit or are not completed in a timely manner, the FDA may withdraw its approval of the drug on an expedited basis.

Prior to seeking accelerated approval for any of our product candidates, we intend to seek feedback from the FDA and will otherwise evaluate our ability to seek and receive accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit a BLA for accelerated approval or any other form of expedited development, review or approval. Furthermore, if we decide to submit an application for accelerated approval for our product candidates, there can be no assurance that such application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all. The FDA could also require us to conduct further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval or any other form of expedited development, review or approval for our product candidate would result in a longer time period to commercialization of such product candidate, if any, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.

***We may expend our limited resources to pursue a particular product candidate and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.***

Because we have limited financial and managerial resources, we have focused our attention on a limited number of product candidates. As a result, we may forgo or delay pursuit of opportunities with product candidates that could have had greater potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable product candidates. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaborations, licenses and other similar arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

***We may not be able to obtain or maintain orphan drug designations for any of our product candidates, and we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.***

Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs or biologics for relatively small patient populations as orphan drugs. In the United States, the FDA may designate a drug or biologic as an orphan product if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States, or a patient population of

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greater than 200,000 individuals in the United States, but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the EU, orphan designation is granted by the European Commission based on a scientific opinion of the EMA Committee for Orphan Medicinal Products. A medicinal product may be designated as orphan if its sponsor can establish that (i) the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (ii) either (a) such condition affects no more than 5 in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the EU to justify investment; and (iii) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the medicinal product will be of significant benefit to those affected by the condition. There can be no assurance that the FDA or European Commission will grant orphan designation for any indication for which we apply.

In the United States, orphan designation entitles a party to financial incentives such as opportunities for grant funding toward clinical trial costs, tax advantages and user-fee waivers. In addition, if a product candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including a BLA, to market the same product for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity. The applicable exclusivity period is ten years in the EU, but such exclusivity period can be reduced to six years if, at the end of the fifth year, a product no longer meets the criteria for orphan designation or if the product is sufficiently profitable that market exclusivity is no longer justified.

Even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs can be approved for the same disease or condition. Even after an orphan drug is approved, the FDA or comparable foreign regulatory authority can subsequently approve another drug for the same disease or condition if such regulatory authority concludes that the later drug is clinically superior because it is shown to be safer, more effective or makes a major contribution to patient care. Orphan drug exclusivity in the United States may also be lost if the FDA later determines that the initial request for designation was materially defective. In addition, orphan drug exclusivity does not prevent the FDA from approving competing drugs containing different active ingredients for the same or similar indication. In addition, if a subsequent drug is approved for marketing for the same or a similar disease or condition as any of our product candidates that receive marketing approval, we may face increased competition and lose market share regardless of orphan drug exclusivity. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

***Receipt of Breakthrough Therapy designation or Fast Track designation by the FDA for one or more of our product candidates may not lead to a faster development or regulatory review or approval process and it does not increase the likelihood that our product candidates will receive marketing approval.***

We may seek Breakthrough Therapy or Fast Track designation for some of our product candidates.

If a product candidate is intended for the treatment of a serious or life-threatening condition and clinical or preclinical data demonstrate the potential to address unmet medical needs for this condition, the sponsor may apply for Fast Track designation. The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once a BLA is submitted, the application may be eligible for priority review if the relevant criteria are met. A Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.

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Breakthrough Therapy designation may be granted to a drug or biologic that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug or biologic may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drugs or biologics that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. The designation also includes the same benefits as Fast Track designation, including eligibility for rolling review of a BLA.

Whether to grant Breakthrough Therapy or Fast Track designation is within the discretion of the FDA. Accordingly, even if we believe one of our product candidates meets the criteria for these designations, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of either of these designations for a product candidate may not result in a faster development process, review or approval compared to product candidates considered for approval under conventional FDA review procedures and does not assure ultimate approval by the FDA. In addition, the FDA may later decide that the product candidate no longer meets the conditions for qualification and rescind granted designations.

***We may conduct certain of our clinical trials for our product candidates outside of the United States. However, the FDA and other foreign equivalents may not accept data from such trials, in which case our development plans will be delayed, which could materially harm our business.***

We may conduct clinical trials for our product candidates outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. Where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will not approve the application on the basis of foreign data alone unless those data are determined to be applicable to the U.S. population and U.S. medical practice; the studies were performed by clinical investigators of recognized competence; and the data are considered valid without the need for an on- site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. For clinical trials that are conducted only at sites outside of the United States and not otherwise subject to an IND, the FDA requires the clinical trial to have been conducted in accordance with GCPs, and the FDA must be able to validate the data from the clinical trial through an on-site inspection if it deems such inspection necessary. For such clinical trials not subject to an IND, the FDA generally does not provide advance comment on the clinical protocols for the studies, and therefore there is an additional potential risk that the FDA could determine that the clinical trial design or protocol for a non-U.S. clinical trial was inadequate, which could require us to conduct additional clinical trials. There can be no assurance the FDA will accept data from clinical trials conducted outside of the United States. If the FDA does not accept data from our clinical trials of our product candidates, it would likely result in the need for additional clinical trials, which would be costly and time consuming and delay or permanently halt our development of our product candidates.

Conducting clinical trials outside the United States also exposes us to additional risks, including risks associated with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• additional foreign regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• foreign exchange fluctuations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compliance with foreign manufacturing, customs, shipment and storage requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cultural differences in medical practice and clinical research; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diminished protection of intellectual property in some countries.

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***Disruptions at the FDA, the USPTO and other government agencies caused by funding shortages, staffing cuts or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.***

The ability of the FDA and foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, the FDA's and foreign regulatory authorities' abilities to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA's and foreign regulatory authorities' abilities to perform routine functions. Average review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies may also slow the time necessary for new drugs and biologics or modifications to approved drugs and biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. Furthermore, if the USPTO experiences significant decreases in funding or personnel, it could significantly impact the ability of the USPTO to timely review and process our regulatory submissions, which could have a material adverse effect on our business. For example, in recent years the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. In addition, the current Trump administration has issued certain policies and executive orders directed toward reducing the employee headcount and costs associated with U.S. administrative agencies, including the FDA and the USPTO, and it remains unclear the degree to which these efforts may limit or otherwise adversely affect the ability of these agencies to conduct routine activities.

Separately, if a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

**Risks Related to Our Reliance on Third Parties** 

***We rely on third parties to conduct our preclinical studies and will rely on third parties to conduct our planned clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, our development programs and our ability to seek or obtain regulatory approval for or commercialize our product candidates may be delayed.***

We are dependent on third parties to conduct our preclinical studies and will rely on third parties to conduct our clinical trials. Specifically, we intend to use and rely on medical institutions, clinical investigators, CROs and consultants to conduct our preclinical studies and clinical trials in accordance with our clinical protocols and regulatory requirements. These CROs, investigators and other third parties play a significant role in the conduct and timing of these trials and subsequent collection and analysis of data. While we have and will have agreements governing the activities of our third-party contractors, we have limited influence over their actual performance. Nevertheless, we are responsible for ensuring that each of our preclinical and clinical trials is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on our CROs and other third parties does not relieve us of our regulatory responsibilities. We and our CROs are required to comply with Good Laboratory Practices ("GLP") and GCP requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for all of our product candidates in preclinical and clinical development. Regulatory authorities enforce these requirements through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of our CROs or trial sites fail to comply with applicable GLPs and GCPs, the clinical data generated in our preclinical and clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional preclinical or clinical trials before approving our applications to conduct clinical trials or our marketing applications. In addition, our clinical trials must be conducted with products produced under cGMP and similar foreign regulations. If we fail to comply with these regulations, we may be required to repeat clinical trials, which would delay the regulatory approval process.

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If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms or at all. Switching or adding additional CROs, investigators and other third parties involves additional cost and requires our management's time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays may occur, which could materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our CROs, investigators and other third parties, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.

***We rely on third parties for the manufacture of our product candidates for preclinical and clinical development. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.***

We do not own or operate manufacturing facilities and have no plans to develop our own clinical or commercial-scale manufacturing capabilities. We expect to rely on third parties for the manufacture of our product candidates and related raw materials for preclinical and clinical development, as well as for commercial manufacture if any of our product candidates receive marketing approval. The facilities used by third-party manufacturers to manufacture our product candidates must be approved by the FDA and any comparable foreign regulatory authority for the manufacture of our product candidates pursuant to inspections that will be conducted after we submit a BLA to the FDA or any comparable application to a foreign regulatory authority. We do not control the manufacturing process of, and are completely dependent on, third-party manufacturers for compliance with cGMP and similar foreign requirements for manufacture of products. If these third-party manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or any comparable foreign regulatory authority, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. Our AOCs consist of a proprietary mAb conjugated with an oligonucleotide. All of our mAbs are manufactured by starting with cells which are stored in a cell bank. We have multiple working cell banks and one master cell bank for our mAbs manufactured in accordance with cGMP, and we believe we would have adequate backup should any cell bank be lost in a catastrophic event. However, it is possible that we could lose multiple cell banks and have our manufacturing impacted by the need to replace the cell banks. As an independent company, we may need to develop a new cell line to support future clinical and any commercial manufacturing. We may not be successful in timely developing a cell line which is comparable to those currently used to produce our mAb supply, which could delay our clinical development or commercial efforts. In addition, we have no control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or any comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would

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significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, denials of approvals, delays, suspension or withdrawal of approvals, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.

Our or a third party's failure to execute our manufacturing requirements on commercially reasonable terms and in compliance with cGMP and similar foreign requirements could adversely affect our business in a number of ways, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an inability to initiate clinical trials of our product candidates under development;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delay in submitting regulatory applications, or receiving marketing approvals, for our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by
regulatory authorities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requirements to cease development or to recall batches of our product candidates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the event of approval to market and commercialize our product candidates, an inability to meet commercial
demands for our product candidates or any other future product candidates.

In addition, we may be unable to establish any agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure of third-party manufacturers to comply with regulatory requirements and maintain quality assurance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• breach of the manufacturing agreement by the third party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to manufacture our product according to our specifications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to manufacture our product according to our schedule or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• misappropriation of our proprietary information, including our trade secrets and know-how; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.

Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations that might be capable of manufacturing for us.

Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval, and any related remedial measures may be costly or time consuming to implement. We do not currently have arrangements in place for redundant supply or a second source for all required raw materials used in the manufacture of our product candidates. If our existing or future third-party manufacturers cannot perform as agreed, we may be required to replace such manufacturers and we may be unable to replace them on a timely basis or at all.

Our current and anticipated future dependence upon others for the manufacture of our product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.

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***We rely on the RemainCo License Agreement to enable our use of certain important intellectual property and data. If, after the consummation of the Spin-Off, RemainCo ceases to effectively maintain such intellectual property or data, then our business could be materially and adversely affected.***

Pursuant to the Spin-Off, RemainCo will retain all intellectual property and data that was not exclusively related to cardiology, other than certain platform-related intellectual property that will initially be owned by us (subject to a right of RemainCo to obtain assignment of such intellectual property, subject to a grant-back license to us, as further described below). The RNA delivery platform was leveraged to develop RNA therapies across multiple disease types. Accordingly, much of the intellectual property and data that is material to our cardiology programs is owned by Avidity, and will be owned by RemainCo after the consummation of the Spin-Off and subject to certain existing third-party obligations. Therefore, in connection with the Spin-Off, we entered into the RemainCo License Agreement to enable our continued access to such intellectual property and data. Even though the Separation Agreement granted us term-limited ownership of certain intellectual property covering the RNA delivery platform, the RemainCo License Agreement provides that we must assign to RemainCo ownership of such intellectual property and intellectual property related to modification or enhancements to the RNA delivery platform that we may develop after the Spin-Off, without additional compensation, at RemainCo's request, following the completion of target selection under (or any earlier termination of) the BMS Collaboration Agreement, or prior to a change of control of the Company. In the event of such assignment, we would receive (i) an exclusive (including as to RemainCo and its affiliates), worldwide, royalty-free license to exploit products subject to the Lilly Agreement or BMS Agreements (as defined below), and (ii) a non-exclusive, worldwide, royalty-free right to exploit cardiovascular products in the cardiovascular field. In connection with the RemainCo License Agreement, Avidity is, and RemainCo will be, primarily responsible for the prosecution, maintenance and enforcement of the patents and patent applications (with regards to the RNA delivery platform, following transfer to RemainCo) directed to all such intellectual property. Avidity's or RemainCo's failure to file relevant patents that cover intellectual property that is important to our programs, or to prosecute, maintain or enforce intellectual property that is important to our programs, would impair our competitive position and have a material adverse effect on our business. Further, our business relies on continued access to know-how, trade secrets and data that are owned and controlled by Avidity. This reliance pervades various aspects of our business, including the conduct of research, the performance of clinical trials, the making of scientific publications, and the submitting of regulatory and patent filings. If Avidity or RemainCo fails to provide or maintain the foregoing, then such failure could have a significant impact on our ability to conduct our programs and have a material adverse effect on our business.

***Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.***

Because we currently rely on third parties to manufacture our product candidates and to perform quality testing, we must, at times, share our proprietary technology and confidential information, including trade secrets, with them. We seek to protect our proprietary technology, in part, by entering into confidentiality agreements, and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are intentionally or inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets and despite our efforts to protect our trade secrets, a competitor's discovery of our proprietary technology and confidential information or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business, financial condition, results of operations and prospects.

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***Under certain circumstances, Lilly or BMS may each unilaterally terminate its respective agreement with us for convenience, which could materially and adversely affect our cash flows.***

In April 2019, Avidity entered into a Research Collaboration and License Agreement (the "Lilly Agreement") with Lilly for the discovery, development and commercialization of AOCs directed against certain targets in immunology or the Lilly AOCs. Upon the closing of the Spin-Off, the Lilly Agreement will be assigned to and assumed by the Company. Lilly granted Avidity a non-exclusive license under certain Lilly technology solely to conduct research under the Lilly Agreement. Under the Lilly Agreement, Lilly will be solely responsible for funding the cost of clinical development, regulatory approval and commercialization for the Lilly AOCs. Lilly primarily controls the development and commercialization activities, pursuant to the terms of the Lilly Agreement, and our lack of control over such activities could result in delays or other difficulties in the development and commercialization of the Lilly AOCs. Any dispute with Lilly may result in the delay or termination of the development or commercialization of the Lilly AOCs, and may result in costly litigation that diverts our management's attention and resources away from our day-to-day activities and which may adversely affect our business, financial condition, results of operation and prospects.

In November 2023, Avidity entered into an agreement with BMS (the "BMS Collaboration Agreement") for the development of compounds directed to up to five targets using our RNA delivery platform (such compounds, the "BMS AOCs"). The BMS Collaboration Agreement will be assigned to and assumed by the Company upon closing of the Spin-Off. Under the BMS Collaboration Agreement, the Company will be responsible for conducting research activities for a designated period of time at its cost, subject to the parties renegotiating the research activities in case the Company's research spending is anticipated to exceed $50.0 million. BMS will be solely responsible for funding all future clinical development, regulatory and commercialization activities for the BMS AOCs. Any dispute with BMS may result in the delay or termination of the research, development or commercialization of the BMS AOCs, either on an individual target basis or collectively, and may result in costly litigation that diverts our management's attention and resources away from our day-to-day activities and which may adversely affect our anticipated cash flows, business, financial condition, results of operation and prospects.

In addition, Lilly or BMS may unilaterally terminate the Lilly Agreement or the BMS Collaboration Agreement, respectively (including for convenience), and in either such event, we would be prevented from receiving any research and development funding, milestone payments, royalty payments and other benefits under the respective agreement.

In addition, any decision by Lilly or BMS to terminate the Lilly Agreement or the BMS Collaboration Agreement, respectively, may negatively impact public perception of our AOC product candidates, which could adversely affect the market price of our common stock. We cannot provide any assurance with respect to the success of the collaborations with Lilly or BMS. Any of the foregoing events could have a material adverse effect on our business, financial condition, results of operations and prospects.

***We have entered, and may seek to enter into additional collaborations, licenses and other similar arrangements which are important to our business. If we are not successful in doing so, or if we are and we relinquish valuable rights or fail to realize the benefits of such relationships, our business could be materially and adversely affected.***

We have entered into the RemainCo License Agreement, the Lilly Agreement and the BMS Collaboration Agreement. We may seek to enter into additional collaborations, joint ventures, licenses and other similar arrangements for the development or commercialization of our product candidates, or those of potential strategic partners, due to capital costs required to develop or commercialize the product candidate or manufacturing constraints. We may not be successful in our efforts to establish or maintain such collaborations for certain product candidates because our research and development pipeline may be insufficient, the product candidates may be deemed to be at too early of a stage of development for collaborative effort or third parties may not view the product candidates as having the requisite potential to demonstrate safety and efficacy or significant

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commercial opportunity. In addition, we face significant competition in seeking appropriate strategic partners, and the negotiation process can be time-consuming and complex. We may have to relinquish valuable rights to our future revenue streams, research programs, product candidates, or grant licenses on terms that may not be favorable to us, as part of any such arrangement, and such arrangements may restrict us from entering into additional agreements with other potential collaborators. We cannot be certain that, following a collaboration, license or strategic transaction, we will achieve an economic benefit that justifies such transaction.

For example, the RemainCo License Agreement granted us rights to certain of RemainCo's intellectual property that are important to our business, and which imposes certain obligations and restrictions that could impact our anticipated cash flows. The RemainCo License Agreement contains provisions that restrict our ability to develop or commercialize products that are competitive with those licensed to RemainCo and that require us to share certain intellectual property rights. Pursuant to the terms of the RemainCo License Agreement, for a period of five years following the RemainCo License Agreement's effective date, we may not engage in any RNA therapeutics business, other than with respect to cardiovascular products in the cardiovascular field (each as defined in the RemainCo License Agreement) or products subject to the Lilly Agreement or BMS Collaboration Agreement regardless of whether such activities use any of RemainCo's intellectual property. Additionally, we may only exploit the RNA delivery platform for the development of cardiovascular products in the cardiovascular field or products subject to the Lilly Agreement or BMS Collaboration Agreement; therefore, even following expiration of this five-year period, we will not have the right to use the RNA delivery platform for programs in other therapeutic areas, and would need to independently develop or acquire the technology to be used in such programs. The terms of the BMS Collaboration Agreement similarly restrict us from developing or commercializing products that are competitive with those licensed to BMS and the Lilly Agreement restricts our ability to research, develop, manufacture or commercialize or otherwise exploit any compound or product directed against targets subject to the Lilly Agreement. For a period of ten years following the RemainCo License Agreement's effective date, the RemainCo License Agreement also grants RemainCo a right of first negotiation over our development candidates and prospective transactions, in each case, other than with respect to cardiovascular products or products subject to the Lilly Agreement or BMS Collaboration Agreement. If we do not consummate a transaction with RemainCo with respect to any such transaction and the negotiation period expires, we must notify RemainCo of any proposed third-party transaction we desire to enter into in the twelve months following the expiration of the applicable negotiating period (the "MFN") with respect to such transaction, that is on terms less favorable to us than RemainCo's last offer. Following the receipt of such notice, RemainCo may accept the Company's offer to enter into the transaction on the terms of the last written offer proposed by RemainCo, make a new offer, which we must consider in good faith, or inform us that RemainCo is no longer interested in pursuing a transaction. As a result of the foregoing and other restrictions we may be subject to, we may be unable to pursue the development of promising product candidates and may be required to redirect our business focus. Any restriction on our ability to develop or commercialize products pursuant to the RemainCo License Agreement, including as a result of RemainCo's exercise of its right of first negotiation or the MFN, could negatively impact our ability to enter into new strategic partnerships for our product candidates, and could have a material adverse impact on our financial condition, results of operations or cash flows.

Furthermore, following the closing of the Merger, RemainCo will be owned by Novartis, a large, well-capitalized pharmaceutical company with significant resources and experience in the development and commercialization of cardiology products. The RemainCo License Agreement provides RemainCo a non-exclusive, worldwide, irrevocable, royalty-free license under the RNA delivery platform technology to exploit any cardiovascular products other than products subject to the Lilly Agreement or BMS Collaboration Agreement. As a result, we may face direct competition from RemainCo in the cardiac space, including with respect to products that are the subject of the RemainCo License Agreement or other products that RemainCo or Novartis may develop independently. RemainCo and Novartis may have greater financial, technical, and marketing resources than we do, and may be able to devote substantially more resources to the development, commercialization, and marketing of competing products. This competition could limit our ability to successfully commercialize our product candidates, reduce our market share, and adversely impact our revenues and profitability. Even if we are successful in our efforts to establish such collaborations, the terms that we agree upon may not be favorable to

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us, and we may not be able to maintain our current or any future collaborations if, for example, the development or approval of a product candidate is delayed, the safety of a product candidate is questioned or the sales of an approved product candidate are unsatisfactory.

In addition, future collaborations may be terminable by our strategic partners, and we may not be able to adequately protect our rights under these agreements. Furthermore, strategic partners may negotiate for certain rights to control decisions regarding the development and commercialization of our product candidates, if approved, and may not conduct those activities in the same manner as we do. Any termination of collaborations we enter into in the future, or any delay in entering into collaborations related to our product candidates, could delay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition and results of operations.

**Risks Related to Commercialization of Our Product Candidates** 

***Even if we receive regulatory approval for any product candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense. Additionally, our product candidates, if approved, could be subject to labeling and other restrictions on marketing or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, when and if any of them are approved.***

Following potential approval of any our product candidates, the FDA and foreign regulatory authorities may impose significant restrictions on a product's indicated uses or marketing or impose ongoing requirements for potentially costly and time-consuming post-approval studies, post-market surveillance or clinical trials to monitor the safety and efficacy of the product. The FDA may also require a REMS as a condition of approval of our product candidates, or to maintain any approval after received, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority approves our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for our products will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs, GCP and similar foreign requirements for any clinical trials that we conduct post-approval. Later discovery of previously unknown problems with our products, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on the marketing or manufacturing of our products, withdrawal of approval of the product or
voluntary or mandatory product recalls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on product distribution or use, or requirements to conduct post-marketing studies or clinical
trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical
trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• refusal by the FDA or foreign regulatory authorities to approve pending applications or supplements to approved
applications filed by us or suspension or revocation of approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• product seizure or detention, or refusal to permit the import or export of our products; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• injunctions or the imposition of civil or criminal penalties.

The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.

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***Our product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated.***

The Affordable Care Act (the "ACA") includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (the "BPCIA") which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. Under the BPCIA, an application for a "biosimilar" product may not be submitted to the FDA until four years following the date that the reference product was first approved by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing such company's own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity, and potency of their product.

We believe that any of our product candidates approved as a biological product under a BLA should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our product candidates to be reference products for competing products, potentially creating the opportunity for competition sooner than anticipated. Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not clear, and will depend on a number of marketplace and regulatory factors that are still developing.

***The commercial success of our product candidates will depend upon the degree of market acceptance of such product candidates by physicians, patients, healthcare payors and others in the medical community.***

Our product candidates may not be commercially successful. Even if any of our product candidates receive regulatory approval, they may not gain market acceptance among physicians, patients, healthcare payors or the medical community. The commercial success of any of our current or future product candidates will depend significantly on the broad adoption and use of the resulting product by physicians and patients for approved indications. The degree of market acceptance of our products will depend on a number of factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• demonstration of clinical efficacy and safety compared to other more-established products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the indications for which our product candidates are approved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acceptance of a new drug for the relevant indication by healthcare providers and their patients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the pricing and cost-effectiveness of our products, as well as the cost of treatment with our products in
relation to alternative treatments and therapies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement from government
healthcare programs, including Medicare and Medicaid, private health insurers and other third-party payors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage and adequate reimbursement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any restrictions on the use of our products, and the prevalence and severity of any adverse effects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential product liability claims;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing of market introduction of our products as well as competitive drugs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effectiveness of our or any of our current or potential future collaborators' sales and marketing
strategies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unfavorable publicity relating to the product.

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If any product candidate is approved but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors or patients, we may not generate sufficient revenue from that product and may not become or remain profitable. Our efforts to educate the medical community and third-party payors regarding the benefits of our products may require significant resources and may never be successful.

***The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. If we are found or alleged to have improperly promoted off-label uses, we may become subject to significant liability.***

In addition, if any of our product candidates are approved, our product labeling, advertising and promotion will be subject to regulatory requirements and continuing regulatory review. The FDA strictly regulates the promotional claims that may be made about drug products. In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product's approved labeling, and promotion must include appropriate disclosure of information on the safety risks of our products. If we receive marketing approval for a product candidate, physicians may nevertheless, in their independent medical judgment, prescribe it to their patients in a manner that is inconsistent with the approved label. The FDA does not regulate the behavior of physicians in their choice of treatments, but the FDA does restrict manufacturer's communications on the subject of off-label use of their products. If we are found to have promoted such off-label uses, or if we are found not to have complied with other requirements for advertising and promotion of our products, we may become subject to onerous government investigations and significant liability.

***The successful commercialization of our product candidates, if approved, will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels and favorable pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our products could limit our ability to market those products and decrease our ability to generate revenue.***

The availability of coverage and the adequacy of reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers and other third-party payors are essential for most patients to be able to afford prescription medications such as our product candidates, if approved. Our ability to achieve coverage and acceptable levels of reimbursement for our products by third-party payors will have an effect on our ability to successfully commercialize those products. Moreover, we are initially developing product candidates targeting rare and genetically defined cardiac diseases with small patient populations and expect to expand into broader patient populations thereafter. In order for products that are designed to treat smaller patient populations to be commercially viable, the pricing and reimbursement for such products must be higher, on a relative basis, to account for the lack of volume. Accordingly, we will need to implement a coverage and reimbursement strategy for any approved product candidate with a smaller patient population that accounts for the smaller potential market size. Even if we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization.

There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products. In the United States, third-party payors, including private and governmental payors, such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs will be covered. Some third-party payors may require pre-approval of coverage for new or innovative devices or drug therapies before they will reimburse healthcare providers who use such therapies. It is difficult to predict at this time what third- party payors will decide with respect to the coverage and reimbursement for our products.

We cannot be sure that coverage and reimbursement in the United States, the EU or elsewhere will be available for any product that we may develop, and that any coverage will be adequate. Further, any reimbursement that may become available may be decreased or eliminated in the future.

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Obtaining and maintaining reimbursement status is time consuming, costly and uncertain. The Medicare and Medicaid programs increasingly are used as models for how private payors and other governmental payors develop their coverage and reimbursement policies for drugs. However, no uniform policy for coverage and reimbursement for products exists among third-party payors in the United States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. Furthermore, rules and regulations regarding reimbursement change frequently, in some cases at short notice, and we believe that changes in these rules and regulations are likely.

Third-party payors increasingly are challenging prices charged for biopharmaceutical products and services, and many third- party payors may refuse to provide coverage and reimbursement for particular drugs when an equivalent generic drug or a less expensive therapy is available. It is possible that a third-party payor may consider our products as substitutable and only offer to reimburse patients for the less expensive product. Even if we are successful in demonstrating improved efficacy or improved convenience of administration with our products, pricing of existing drugs may limit the amount we will be able to charge for our products. These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product development. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our products and may not be able to obtain a satisfactory financial return on products that we may develop.

Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost containment initiatives in Europe and other countries has and will continue to put pressure on the pricing and usage of our products. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medical products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our products. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.

Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products. We expect to experience pricing pressures in connection with the sale of any of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

***We face significant competition, and if our competitors develop technologies or product candidates more rapidly than we do or their technologies are more effective, our business and our ability to develop and successfully commercialize products may be adversely affected.***

The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary and novel products and product candidates. Our competitors have developed, are developing or may develop products, product candidates and processes competitive with our product candidates. Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future. We believe that a significant number of products are currently under development, and may become commercially available in the future, for

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the treatment of conditions for which we may attempt to develop product candidates. In particular, there is intense competition amongst RNA targeted therapies. Our competitors include larger and better funded pharmaceutical, biopharmaceutical, biotechnological, therapeutics companies and specialized cardiovascular treatment companies. Moreover, we may also compete with universities and other research institutions who may be active in the indications we are targeting and could be in direct competition with us. We also compete with these organizations to recruit management, scientists and clinical development personnel, which could negatively affect our level of expertise and our ability to execute our business plan.

In particular, we will face competition from Novartis, a large, multinational pharmaceutical company with substantial resources and a well-established presence in the development and commercialization of cardiology products, which following the Closing, will own RemainCo. The RemainCo License Agreement provides RemainCo a non-exclusive, worldwide, irrevocable, royalty-free license under the RNA delivery platform technology to exploit any cardiovascular products other than products subject to the Lilly Agreement or BMS Collaboration Agreement. As a result, we may face direct competition from RemainCo in the cardiac space, including with respect to products that are the subject of the RemainCo License Agreement or other products that RemainCo or Novartis may develop independently. The greater financial, technical, and marketing resources available to RemainCo and Novartis may enable them to advance competing cardiac products more rapidly or effectively than we can, potentially limiting our ability to gain or maintain market share in this therapeutic area.

We will also face competition in establishing clinical trial sites, enrolling participants for clinical trials and in identifying and in-licensing new product candidates. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Our clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition could reduce the number and types of participants available to us, because some participants who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number of qualified clinical investigators is limited, we may conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which could reduce the number of participants who are available for our clinical trials in such clinical trial site.

We expect to face competition from existing products and products in development for each of our product candidates.

We will also compete more generally with other companies developing alternative scientific and technological approaches, including other companies working to develop conjugates with oligonucleotides for extra-hepatic delivery, including Alnylam Pharmaceuticals, Inc., Aro Biotherapeutics Company, Dyne Therapeutics, Ionis Pharmaceuticals, Inc., Sarepta Therapeutics, PepGen, PeptiDream Inc. and AstraZeneca plc, as well as gene therapy and CRISPR approaches.

Many of our competitors, either alone or with strategic partners, have substantially greater financial, technical and human resources than we do. Accordingly, our competitors may be more successful than us in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining approval for treatments and achieving widespread market acceptance, which could render our product candidates, if approved, obsolete or non-competitive. Merger and acquisition activity in the biotechnology and biopharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. These companies also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and participant registration for clinical trials and acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Our commercial opportunity could be substantially limited if our competitors develop and commercialize products that are more effective, safer, less toxic, more convenient or less expensive than our comparable products. In geographies that are critical to our commercial success, competitors may also obtain regulatory approvals before us, resulting in our competitors building a strong market position in advance of the entry of our products, if approved. In

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addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of other drugs. The key competitive factors affecting the success of our programs are likely to be their efficacy, safety profile, convenience, level of promotional activity, intellectual property protection and availability of reimbursement.

***If the market opportunities for our products are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer.***

The precise incidence and prevalence for all the conditions we aim to address with our product candidates targeting cardiomyopathies are unknown. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including the scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect. Further, new trials may change the estimated incidence or prevalence of these diseases. The total addressable market across all of our product candidates will ultimately depend upon, among other things, the diagnosis criteria included in the final label for each of our product candidates approved for sale for these indications, the availability of alternative treatments and the safety, convenience, cost and efficacy of our product candidates relative to such alternative treatments, acceptance by the medical community and patient access, drug pricing and reimbursement. The number of patients in the United States and other major markets and elsewhere may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business. Further, even if we obtain significant market share for our product candidates, because some of our potential target populations are very small, we may never achieve profitability despite obtaining such significant market share.

***We currently have no marketing and sales organization and have no experience as a company in commercializing products, and we may have to invest significant resources to develop these capabilities. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenue.***

We have no internal sales, marketing or distribution capabilities, nor have we commercialized a product. If any of our product candidates ultimately receives regulatory approval, we must build a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize each such product in major markets, which will be expensive and time consuming, or collaborate with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. We have no prior experience as a company in the marketing, sale and distribution of biopharmaceutical products and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products. We may not be able to enter into collaborations or hire consultants or external service providers to assist us in sales, marketing and distribution functions on acceptable financial terms, or at all. In addition, our product revenues and our profitability, if any, may be lower if we rely on third parties for these functions than if we were to market, sell and distribute any products that we develop ourselves. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively. If we are not successful in commercializing our products, either on our own or through arrangements with one or more third parties, we may not be able to generate any future product revenue and we would incur significant additional losses.

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***Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.***

Our future growth may depend, in part, on our ability to develop and commercialize our product candidates in foreign markets. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from applicable regulatory authorities in foreign markets, and we may never receive such regulatory approvals for any of our product candidates. To obtain separate regulatory approval in many other countries we must comply with numerous and varying regulatory requirements regarding safety and efficacy and governing, among other things, clinical trials, commercial sales, pricing and distribution of our product candidates. If we obtain regulatory approval of our product candidates and ultimately commercialize our products in foreign markets, we would be subject to additional risks and uncertainties, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• different regulatory requirements for approval of drugs in foreign countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced protection for intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the existence of additional third-party patent rights of potential relevance to our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unexpected changes in tariffs, trade barriers and regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• economic weakness, including inflation, or political instability in particular foreign economies and markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other
obligations incident to doing business in another country;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• foreign reimbursement, pricing and insurance regimes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• workforce uncertainty in countries where labor unrest is common;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• production shortages resulting from any events affecting raw material supply or manufacturing capabilities
abroad; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters
including earthquakes, typhoons, floods and fires.

**Risks Related to Our Business Operations and Industry** 

***Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.***

Our quarterly and annual operating results may fluctuate significantly, which makes it difficult for us to predict our future operating results. These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing and cost of, and level of investment in, research, development, regulatory approval and
commercialization activities relating to our product candidates, which may change from time to time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• coverage and reimbursement policies with respect to our product candidates, if approved, and potential future
drugs that compete with our products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the cost of manufacturing our product candidates, which may vary depending on the quantity of production and the
terms of our agreements with third-party manufacturers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing and amount of the milestone or other payments we may receive under our current or future research and
collaboration agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expenditures that we may incur to acquire, develop or commercialize additional product candidates and
technologies;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the level of demand for any approved products, which may vary significantly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future accounting pronouncements or changes in our accounting policies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing and success or failure of preclinical studies or clinical trials for our product candidates or
competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners.

The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past results as an indication of our future performance.

This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated revenue, earnings or other guidance.

***We are dependent on the services of our management and other clinical and scientific personnel, and if we are not able to retain these individuals or recruit additional management or clinical and scientific personnel, our business will suffer.***

Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel. We are highly dependent upon our senior management, as well as our senior scientists and other members of our management team. The loss of services of any of these individuals could delay or prevent the successful development of our product pipeline, initiation or completion of our preclinical studies and clinical trials or the commercialization of our product candidates. Although we expect to execute employment agreements or offer letters with each member of our senior management team, these agreements will be terminable at will with or without notice and, therefore, we may not be able to retain their services as expected.

We will need to expand and effectively manage our managerial, operational, financial and other resources in order to successfully pursue our clinical development and commercialization efforts. We may not be successful in maintaining our unique company culture and continuing to attract or retain qualified management and other key personnel in the future due to the intense competition for qualified personnel among biopharmaceutical, biotechnology and other businesses, particularly in the San Diego area. Our industry has experienced a high rate of turnover of management personnel in recent years. If we are not able to attract, integrate, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement and execute our business strategy.

***We may encounter difficulties in managing our growth and expanding our operations successfully.***

Following the Distribution, we expect to have total employees, of which will be full-time employees upon the closing of the Spin-Off. As we continue development and pursue the potential commercialization of our product candidates, as well as function as a public company, we will need to expand our financial, development, regulatory, manufacturing, marketing and sales capabilities or contract with third parties to provide these capabilities for us. As our operations expand, we expect that we will need to manage additional relationships with various strategic partners, suppliers and other third parties.

Our future financial performance and our ability to develop and commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.

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***We are subject to various federal, state and foreign healthcare laws and regulations, which could increase compliance costs, and our failure to comply with these laws and regulations could harm our results of operations and financial condition.***

Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors and customers expose us to broadly applicable foreign, federal and state fraud and abuse and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute any products for which we obtain marketing approval. Such laws include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the federal Anti-Kickback Statute prohibits, among other things, individuals or entities from knowingly and
willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order
of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary
penalties laws prohibit, among other things, any individual or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, knowingly making, using or causing to be made or used a false record or
statement material to a false or fraudulent claim to the federal government, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. In addition, the government may assert that a
claim including items or services resulting from a violation of the federal Anti-Kickback Statute, or from improper advertising or promotion of an item or service, constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the federal civil monetary penalties laws, impose civil fines for, among other things, the offering or transfer
of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary's selection of a particular provider, practitioner, or supplier of services reimbursable by
Medicare or a state healthcare program, unless an exception applies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), created additional
federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up
a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the U.S. federal Anti-Kickback Statute, a person or entity does
not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and
medical supplies for which payment is available under Medicare, Medicaid or the Children's Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services ("CMS")
information related to payments or other transfers of value made during the previous year to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other health care providers including, among others,
physician assistants and nurse practitioners, and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held during the previous year by physicians
as defined under statute and their immediate family members;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to
sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• some state laws require biotechnology companies to comply with the biotechnology industry's voluntary
compliance guidelines and the relevant compliance guidance promulgated by the federal

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government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• some state laws that require biotechnology companies to report information on the pricing of certain drug
products; and some state and local laws require the registration or pharmaceutical sales representatives.

Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare laws and regulations will involve ongoing substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations. Defending against any such actions can be costly, time-consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare program.

***Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for us to commercialize our product candidates and may affect the prices we may set.***

In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes to the healthcare system, including cost-containment measures that may reduce or limit coverage and reimbursement for newly approved drugs and affect our ability to profitably sell any product candidates for which we obtain marketing approval. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare.

For example, in March 2010, the ACA was enacted in the United States, which substantially changed the way healthcare is financed by both governmental and private insurers, and significantly affected the pharmaceutical industry. ACA provisions of importance to our product candidates established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; extended manufacturers' Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; expanded the entities eligible for enrollment in the 340B program; increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending.

Since its enactment, there have been executive, judicial and Congressional challenges to certain aspects of the ACA, and on June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in force in its current form.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes included aggregate reductions to Medicare payments to providers, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2032. On

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January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, as of January 1, 2024. The rebate was previously capped at 100% of a drug's average manufacturer price.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products.

Most significantly, in August 2022, President Biden signed the Inflation Reduction Act of 2022 (the "IRA") into law. This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025). CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject to negotiation. The IRA permits the Secretary of the Department of Health and Human Services ("HHS") to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented, although the Medicare drug price negotiation program is currently subject to legal challenges. While the impact of the IRA on the pharmaceutical industry cannot yet be fully determined, it is likely to be significant.

Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Some states have also enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine which drugs and suppliers will be included in their healthcare programs. Furthermore, there has been increased interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices.

We expect that these new laws and other healthcare reform measures that may be adopted in the future may result in additional reductions in Medicare reimbursement and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our product candidates, if approved.

***We intend to participate in the Medicaid Drug Rebate Program and other governmental pricing programs. If we fail to comply with our reporting and payment obligations under any programs we participate in, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.***

Medicaid is a joint federal and state program administered by the states for low income and disabled beneficiaries. Manufacturers that participate in the Medicaid Drug Rebate Program ("MDRP"), have certain price reporting obligations as a condition of having their covered outpatient drugs payable under Medicaid and, if

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applicable, under Medicare Part B. The MDRP requires the manufacturer to pay a rebate to state Medicaid programs every quarter for each unit of its covered outpatient drugs dispensed to Medicaid beneficiaries and paid for by a state Medicaid program. The rebate is based on pricing data that the manufacturer must report on a monthly and quarterly basis to CMS, the federal agency that administers the MDRP and other governmental healthcare programs. These data include the average manufacturer price (the "AMP") for each drug and, in the case of innovator products, the best price, which in general represents the lowest price available from the manufacturer to certain entities in the U.S. in any pricing structure, calculated to include all sales and associated rebates, discounts and other price concessions. The Medicaid rebate consists of two components, the basic rebate and the additional rebate, which is triggered if the AMP for a drug increases faster than inflation. If the manufacturer becomes aware that its MDRP government price reporting submission for a prior quarter was incorrect or has changed as a result of recalculation of the pricing data, it must resubmit the corrected data for up to three years after those data originally were due. If the manufacturer fails to provide information timely or is found to have knowingly submitted false information to the government, it may be subject to civil monetary penalties and other sanctions, including termination from the MDRP. In the event that CMS terminates the manufacturer's rebate agreement pursuant to which the manufacturer participates in the MDRP, no federal payments would be available under Medicaid or Medicare Part B for its covered outpatient drugs. If we participate in the MDRP, our failure to comply with MDRP price reporting and rebate payment obligations could negatively impact our financial results.

In connection with Medicare Part B, a pharmaceutical manufacturer must provide CMS with average sales price (ASP) information for its drugs or biologicals payable under Part B on a quarterly basis. ASP is calculated based on a statutorily defined formula, as well as regulations and interpretations of the statute by CMS. CMS uses this information to compute Medicare Part B payment rates, which consist of ASP plus a specified percentage. The Part B payment rate is the amount that CMS reimburses the provider for drugs and biologicals administered to Medicare beneficiaries.

The IRA imposes rebates under Medicare Part B and Medicare Part D that are triggered by price increases that outpace inflation (first due in 2023), as described under the risk factor "—*Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for us to commercialize our product candidates and may affect the prices we may set*," above. The Medicare Part D rebate, if applicable, will be calculated on the basis of the AMP figures we will be required to report pursuant to the MDRP if we enroll in the MDRP. The Medicare Part B rebate, if applicable, will be calculated on the basis of the Part B payment rate, which in turn is based on the reported ASP figures.

Federal law requires that any company that participates in the MDRP also participate in the Public Health Service's 340B drug pricing program in order for federal funds to be available for the manufacturer's drugs under Medicaid and, if applicable, Medicare Part B. We intend to participate in the 340B program, which is administered by the Health Resources and Services Administration ("HRSA"), and will require us to charge statutorily defined covered entities no more than the 340B "ceiling price" for our covered outpatient drugs that receive approval. These 340B covered entities include a variety of community health clinics and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low income patients. The ACA expanded the list of covered entities to include certain free standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, but exempts "orphan drugs" from the ceiling price requirements for these covered entities. The 340B ceiling price is calculated using a statutory formula based on the AMP and rebate amount for the covered outpatient drug as calculated under the MDRP, and in general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price calculation and discount requirement. If we enroll in the 340B program, we must report 340B ceiling prices to HRSA on a quarterly basis, and HRSA publishes those prices to 340B covered entities. In addition, HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B eligible drugs. HRSA has also finalized a revised regulation implementing an administrative dispute resolution process through which 340B covered entities may pursue claims against participating

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manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs. If we enroll in the 340B program, our failure to comply 340B program requirements could negatively impact our financial results. Any additional future changes to the definition of average manufacturer price and the Medicaid rebate amount under legislation or regulation could affect our 340B ceiling price calculations and also negatively impact our financial results if we enroll in the 340B program.

In order for any product candidates, if approved, to be paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by certain federal agencies and grantees, we also intend to participate in the U.S. Department of Veterans Affairs (the "VA") Federal Supply Schedule (the "FSS") pricing program. As part of this program, we will be required to make our products, if approved, available for procurement on an FSS contract under which we must comply with standard government terms and conditions and charge a price that is no higher than the statutory Federal Ceiling Price ("FCP") to four federal agencies (VA, U.S. Department of Defense ("DOD"), Public Health Service, and U.S. Coast Guard). The FCP is based on the Non-Federal Average Manufacturer Price ("Non-FAMP") which we will be required to calculate and report to the VA on a quarterly and annual basis. Pursuant to applicable law, knowing provision of false information in connection with a Non-FAMP filing can subject a manufacturer to significant civil monetary penalties for each item of false information. The FSS pricing and contracting obligations also contain extensive disclosure and certification requirements.

We also intend to participate in the Tricare Retail Pharmacy program, under which we will be required to pay quarterly rebates on utilization of innovator products that are dispensed through the Tricare Retail Pharmacy network to Tricare beneficiaries. The rebates are calculated as the difference between the annual Non-FAMP and FCP. We will be required to list our innovator products on a Tricare Agreement in order for them to be eligible for DOD formulary inclusion. If we participate in the program and overcharge the government in connection with our FSS contract or Tricare Agreement, whether due to a misstated FCP or otherwise, we will be required to refund the difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges could result in allegations against us under the False Claims Act and other laws and regulations. Unexpected refunds to the government, and responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects if we enroll in the program.

Individual states continue to consider and have enacted legislation to limit the growth of healthcare costs, including the cost of prescription drugs and combination products. A number of states have either implemented or are considering implementation of drug price transparency legislation. Requirements of pharmaceutical manufacturers under such laws include advance notice of planned price increases, reporting price increase amounts and factors considered in taking such increases, wholesale acquisition cost information disclosure to prescribers, purchasers, and state agencies, and new product notice and reporting. Such legislation could limit the price or payment for certain drugs, and a number of states are authorized to impose civil monetary penalties or pursue other enforcement mechanisms against manufacturers who fail to comply with drug price transparency requirements, including the untimely, inaccurate, or incomplete reporting of drug pricing information.

Pricing and rebate calculations vary among products and programs. The calculations are complex and are often subject to interpretation by us, governmental or regulatory agencies, and the courts. CMS, the Department of Health & Human Services Office of Inspector General, and other governmental agencies have pursued manufacturers that were alleged to have failed to report these data to the government in a timely or accurate manner. Governmental agencies may also make changes in program interpretations, requirements or conditions of participation, some of which may have implications for amounts previously estimated or paid. If we enroll in the government pricing programs, we cannot assure you that any submissions we are required to make under the MDRP, the 340B program, the VA/FSS program, the Tricare Retail Pharmacy Program, and other governmental drug pricing programs will not be found to be incomplete or incorrect.

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***If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our products.***

We are exposed to potential product liability and professional indemnity risks as a result of the clinical trials of our product candidates and will face an even broader risk if we commercialize our product candidates. Although the clinical trial process is designed to identify and assess potential side effects, it is always possible that a drug, even after regulatory approval, may exhibit unforeseen side effects. If any of our product candidates were to cause adverse side effects during clinical trials or after approval of the product candidate, we may be exposed to substantial liabilities. Physicians and patients may not comply with any warnings that identify known potential adverse effects or identify patients who should not use our product candidates.

For example, we may be sued if our product candidates allegedly cause injury or are found to be otherwise unsuitable during product testing, clinical study, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product candidate, negligence, strict liability and a breach of warranties. Claims may be brought against us by clinical trial participants, patients, healthcare providers, pharmaceutical companies or others using, administering or selling products that may be approved in the future. Claims could also be asserted under state consumer protection acts.

In addition, we have agreed to indemnify the licensors of the intellectual property related to our product candidates against certain intellectual property infringement claims. Any claims against us, or with respect to which we are obligated to provide indemnification, regardless of their merit, could be difficult and costly to defend or settle, and could compromise the market acceptance of our product candidates or any prospects for commercialization of our product candidates, if approved.

If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit or cease the commercialization of our products. Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• decreased demand for our products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• injury to our reputation and significant negative media attention;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• withdrawal of clinical trial participants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• costs to defend the related litigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a diversion of our management's time and our resources;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• substantial monetary awards to trial participants or patients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• product recalls, withdrawals or labeling, marketing or promotional restrictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• significant negative financial impact;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the inability to commercialize our product candidates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a decline in our stock price.

***Our insurance policies may be expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities.***

We expect to have product liability insurance coverage once we enter into clinical development. In addition, we may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of our product candidates. As the expense of insurance coverage is increasing, we may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may

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arise. Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of our product candidates. Although we plan to maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies will also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover such claims and our business operations could be impaired.

We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include property, general liability, employment benefits liability, business automobile, workers' compensation, malicious invasion of our electronic systems, directors' and officers', employment practices, fiduciary liability, and product liability insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our financial position and results of operations.

***Our business, including preclinical studies and planned clinical trials, and financial condition, are subject to risks arising from pandemic and epidemic diseases.***

The COVID-19 worldwide pandemic presented substantial public health and economic challenges and affected patients, physicians and other healthcare providers, communities and business operations, as well as the U.S. and global economies and financial markets. Any future pandemic or epidemic diseases may cause disruptions that could severely impact our business, preclinical studies, clinical trials and financial condition, including impairing our ability to raise capital when needed.

The extent to which any other outbreak of a pandemic or epidemic disease impacts our results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the incident and the actions to contain its impact. Further, to the extent any pandemic or epidemic disease adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this section.

***Our business could be affected by litigation, government investigations and enforcement actions.***

We expect to operate in a number of jurisdictions in a highly regulated industry and we could be subject to litigation, government investigation and enforcement actions on a variety of matters in the United States or foreign jurisdictions, including, without limitation, intellectual property, regulatory, product liability, environmental, whistleblower, false claims, privacy, anti-kickback, anti-bribery, securities, commercial, employment and other claims and legal proceedings which may arise from conducting our business. Any determination that our operations or activities are not in compliance with existing laws or regulations could result in the imposition of fines, civil and criminal penalties, equitable remedies, including disgorgement, injunctive relief and/or other sanctions against us, and remediation of any such findings could have an adverse effect on our business operations.

Legal proceedings, government investigations and enforcement actions can be expensive and time consuming. An adverse outcome resulting from any such proceeding, investigations or enforcement actions could result in significant damages awards, fines, penalties, exclusion from the federal healthcare programs, healthcare debarment, injunctive relief, product recalls, reputational damage and modifications of our business practices, which could have a material adverse effect on our business and results of operations.

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***Our employees and independent contractors, including principal investigators, CROs, consultants and vendors, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.***

We are exposed to the risk that our employees and independent contractors, including principal investigators, CROs, consultants and vendors may engage in misconduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violate: (i) the laws and regulations of the FDA and other similar regulatory requirements, including those laws that require the reporting of true, complete and accurate information to such authorities, (ii) manufacturing standards, including cGMP requirements, (iii) federal and state data privacy, security (including cybersecurity), fraud and abuse and other healthcare laws and regulations in the United States and abroad or (iv) laws that require the true, complete and accurate reporting of financial information or data. Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, the creation of fraudulent data in our preclinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to maintain compliance with such laws or regulations. In addition, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and financial results, including, without limitation, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

***We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management.***

From time to time, we may consider strategic transactions, such as asset purchases or sales and licensing of intellectual property, products or technologies. For example, we have collaborations with Lilly and BMS pursuant to which we have granted them licenses to our intellectual property in connection with certain targets. Additional potential transactions that we may consider in the future include a variety of business arrangements, including spin-offs, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments. Any future transactions could increase our near- and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations. Future acquisitions may also require us to obtain additional financing, which may not be available on favorable terms or at all.

These transactions may never be successful and may require significant time and attention of our management. In addition, the integration of any business that we may acquire in the future may disrupt our existing business and may be a complex, risky and costly endeavor for which we may never realize the full benefits of the acquisition. Accordingly, although there can be no assurance that we will undertake or successfully complete any additional transactions of the nature described above, any additional transactions that we do complete could have a material adverse effect on our business, results of operations, financial condition and prospects.

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***Certain provisions of the RemainCo License Agreement provide RemainCo rights with respect to development candidates discovered thereunder which could limit our ability to engage in certain strategic transactions that stockholders may consider favorable.***

The RemainCo License Agreement provides RemainCo a right of first negotiation over our development candidates and prospective transactions that would give a third party the right to acquire, develop, commercialize or promote any pharmaceutical, biological or other drug product, in each case, other than with respect to cardiovascular products or products subject to the Lilly Agreement or BMS Agreements. If we do not consummate a transaction with RemainCo with respect to any such transaction and the negotiation period expires, we must notify RemainCo of any proposed third-party transaction we desire to enter into in the twelve months following the expiration of the applicable negotiating period with respect to such transaction, that is on terms less favorable to us than RemainCo's last offer. Following the receipt of such notice, RemainCo may accept the Company's offer to enter into the transaction on the terms of the last written offer proposed by RemainCo, make a new offer, which we must consider in good faith, or inform us that RemainCo is no longer interested in pursuing a transaction.

As a result of the foregoing or under any other strategic partnerships that we enter into in the future, third parties may be unwilling or unable to consummate any strategic transactions with us on terms acceptable to us or at all. The inability to consummate any such transaction and the perception that we may not be able to do so may materially and adversely impact the price of shares of Company Common Stock.

***Inflation could adversely affect our business and results of operations.***

From 2021 to 2024, the U.S. economy experienced a material level of inflation. The impact of geopolitical developments, such as the conflicts in Ukraine and the Middle East may continue to increase uncertainty in the outlook of near-term and long-term economic activity, including any impacts on inflation. Increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertainties surrounding geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. Historically, the stock prices of companies in our industry have been highly sensitive to actual or anticipated changes in the interest rate environment. A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.

***We, our collaborators and our service providers may be subject to a variety of data privacy and security laws and contractual obligations, which could increase compliance costs and our actual or alleged failure to comply with them could subject us to potentially significant fines or penalties, regulatory investigations, negative publicity, liability or otherwise harm our business, results of operations and financial condition.***

We currently maintain, and will continue to maintain in the future, a substantial amount of sensitive information, including confidential business data related to our preclinical studies and, in the future, patient health information. As a result, we are subject to laws and regulations governing the privacy and security of such information. The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention and security of personal information, including as our operations continue to expand or if we operate in foreign jurisdictions. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards or perception of their requirements may have on our business. This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. The cost of compliance with these laws, regulations and standards is high and is likely to increase in

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the future. Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our business, results of operation, and financial condition.

In the United States, there are numerous federal and state data privacy and security laws and regulations governing the collection, use, disclosure and protection of personal information, including federal and state health information privacy laws, security breach notification laws and consumer protection laws. Each of these laws is subject to varying interpretations and constantly evolving. By way of example, the regulations promulgated under HIPAA and the Health Information Technology for Economic and Clinical Health Act impose, among other things, certain standards relating to the privacy, security, transmission and breach reporting of individually identifiable health information. While we do not believe that we are currently acting as a covered entity or business associate under HIPAA and thus are not directly regulated under HIPAA, any person may be prosecuted under HIPAA's criminal provisions either directly or under aiding-and-abetting or conspiracy principles. Consequently, depending on the facts and circumstances, we could face substantial criminal penalties if we knowingly receive individually identifiable health information from a HIPAA-covered healthcare provider or research institution that has not satisfied HIPAA's requirements for disclosure of individually identifiable health information.

The U.S. Federal Trade Commission (the "FTC") also has authority to initiate enforcement actions against entities that mislead customers about HIPAA compliance, make deceptive statements about privacy and data sharing in privacy policies, fail to limit third- party use of personal health information, fail to implement policies to protect personal health information or engage in other unfair practices that harm customers or that may violate Section 5 of the Federal Trade Commission Act (the "FTC Act"). Even when HIPAA does not apply, according to the FTC failing to take appropriate steps to keep consumers' personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTC Act. The FTC expects a company's data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards.

In addition, certain state laws govern the privacy and security of health-related and other personal information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. For example, California Consumer Privacy Act, as amended by the California Privacy Rights Act (the "CCPA") requires covered businesses that process the personal information of California residents to, among other things: (i) provide certain disclosures to California residents regarding the business' collection, use, and disclosure of their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business' behalf. Additional compliance investment and potential business process changes may be required. Similar laws have been passed in other states, and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. In the event that we are subject to or affected by HIPAA, the CCPA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

Our operations abroad may also be subject to increased scrutiny or attention from data protection authorities. For example, in Europe, the General Data Protection Regulation (the "GDPR") took effect in May 2018. The GDPR governs the collection, use, disclosure, transfer or other processing of personal data of individuals within the

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European Economic Area (the "EEA") or in the context of our activities within the EEA. In addition, some of the personal data we process in respect of clinical trial participants is special category or sensitive personal data under the GDPR, and subject to additional compliance obligations and to local law derogations. Among other things, the GDPR imposes requirements regarding the security of personal data and notification of data processing obligations to the competent national data processing authorities, changes the lawful bases on which personal data can be processed, expands the definition of personal data and requires changes to informed consent practices, as well as detailed notices for clinical trial participants and investigators. In addition, the GDPR regulates the transfer of personal data subject to the GDPR to the United States and other jurisdictions that the European Commission does not recognize as having "adequate" data protection laws, and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain. On July 10, 2023, the European Commission adopted its Adequacy Decision in relation to the new EU-US Data Privacy Framework (the "DPF") rendering the DPF effective as a GDPR transfer mechanism to United States entities self-certified under the DPF.

The GDPR imposes substantial fines for breaches and violations (up to the greater of €20 million or 4% of our consolidated annual worldwide gross revenue). In addition to fines, a breach of the GDPR may result in regulatory investigations, reputational damage, orders to cease or change our data processing activities, enforcement notices, assessment notices (for a compulsory audit) and/or civil claims, including class actions. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR. Further, from January 1, 2021, companies must also comply with the United Kingdom GDPR and the amended UK Data Protection Act 2018 (together, the "UK GDPR"). The UK GDPR retains the GDPR in UK national law. The UK GDPR mirrors the fines under the GDPR, for instance, fines up to the greater of €20 million (£17.5 million) or 4% of global turnover. On October 12, 2023, the UK Extension to the DPF came into effect (as approved by the UK Government), as a UK GDPR data transfer mechanism to United States entities self-certified under the UK Extension to the DPF. As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.

We expect the existing legal complexity and uncertainty regarding international personal data transfers to continue. In particular, we expect the DPF Adequacy Decision to be challenged and international transfers to the United States and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results. Compliance with these and any other applicable data privacy and security laws and regulations is a rigorous and time- intensive process, and we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules within required time frames. If we fail to comply with any such laws or regulations, we may face significant fines and penalties that could adversely affect our business, financial condition and results of operations.

***Artificial intelligence ("AI") and emerging technologies may create risks to our business.***

We leverage data science, machine learning, AI, and other emerging technologies across various aspects of our business and operations, including specifically with respect to the RNA delivery platform. While these technologies present significant opportunities to enhance productivity, efficiency, and decision-making, their introduction and incorporation may also result in unintended consequences, new or expanded risks, and potential liabilities.

As we continue to integrate AI and related technologies into our operations, we face ongoing challenges in ensuring these systems function as intended and do not introduce unforeseen risks. There can be no assurance

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that our efforts to manage and mitigate these risks will be successful, and any failure to do so could have a material adverse effect on our business.

***Failure to effectively use and manage AI technologies could materially harm our business.***

The effective utilization of AI and related technologies is becoming increasingly important for establishing a competitive position and achieving strong financial performance. If we are unable to successfully implement or manage AI technologies, or if our competitors are more effective in developing or deploying AI capabilities, we may be placed at a competitive disadvantage. This could result in less efficient operations, reduced market share, or a diminished ability to capitalize on emerging business opportunities.

As the pace of AI innovation accelerates, competitors may adopt or develop more advanced or effective AI solutions, increasing the risk that we may fall behind in operational efficiency or market relevance. Any of these factors could have a material adverse effect on our business, financial condition, or results of operations.

***AI systems in research may produce flawed or biased results, leading to increased costs, or failure to achieve our desired outcomes.***

Our use of AI systems involves the possibility that AI-generated analyses or outputs may be deficient, flawed, or biased, potentially resulting in operational disruptions, data loss, erroneous decision-making, or other adverse outcomes. The effective development, management, and use of AI technologies in the biopharmaceutical industry is novel and complex, presenting unique technical challenges. Achieving desired levels of accuracy, efficiency, and reliability in AI-driven research and development processes can be particularly challenging. The algorithms and models used in AI systems may have inherent limitations, including biases, errors, or an inability to process certain types of biomedical data or address complex biological scenarios. These challenges could impact the effectiveness of our research and development efforts, potentially leading to delays, increased costs, or failure to achieve intended scientific or commercial outcomes.

***AI technologies are subject to evolving regulations that may increase compliance costs or expose us to penalties for non-compliance.***

The rapid development and deployment of AI and related technologies may amplify existing risks, including those associated with regulation, litigation, compliance, ethical considerations, confidentiality, and data privacy or security. Multiple governmental authorities have already proposed or enacted laws and issued guidance specifically addressing the use of AI, such as the EU Artificial Intelligence Act and various state laws in the United States. In the United States, there are ongoing debates regarding passing federal legislation addressing AI, including currently a debate that may result in Congress acting to preempt state AI laws. These evolving regulatory frameworks may impose new or more stringent obligations on our business, potentially making it more difficult to implement or expand our use of AI technologies.

As the regulatory landscape continues to develop, we may incur significant costs to comply with new laws and regulations, and there is a risk that such requirements could ultimately restrict or limit our ability to utilize AI in our operations. Failure to comply with applicable AI-related regulations could result in regulatory fines, penalties, or other liabilities, any of which could adversely affect our business, financial condition, or results of operations.

***The use of AI systems increases the risk of cybersecurity threats, such as data breaches and unauthorized access to sensitive information, which could lead to financial losses, legal liabilities, and reputational harm for the Company.***

The deployment of AI systems could expose the Company to heightened cybersecurity threats. These threats may include data breaches and unauthorized access to sensitive information, which could result in financial losses, legal liabilities, and reputational damage. As AI technologies become more integrated into our operations, the

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complexity and potential attack surface of our systems may increase, making it more challenging to safeguard against evolving cyber threats. Any failure to adequately protect our systems and data could adversely affect our business, financial condition, or results of operations.

Moreover, the use of AI systems may expose us to heightened cybersecurity risks, including data breaches and unauthorized access to sensitive information. Such incidents could result in financial losses, legal liabilities, and reputational damage. In addition, inadequate management or oversight of AI technologies by our employees could compromise our confidential information, intellectual property, or overall reputation.

**Risks Related to Our Intellectual Property** 

***If we are unable to obtain and maintain patent protection for our therapeutic programs and other proprietary technologies we develop, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our therapeutic programs and other proprietary technologies we may develop may be adversely affected.***

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our therapeutic programs and other proprietary technologies we may develop. We seek to protect our proprietary position, in part, by filing patent applications in the United States and abroad relating to our therapeutic programs and other proprietary technologies we may develop. If we are unable to obtain or maintain patent protection with respect to our therapeutic programs and other proprietary technologies we may develop, our business, financial condition, results of operations and prospects could be materially harmed.

Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our inventions, obtain, maintain and enforce our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our protection. We cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection against competitors or other third parties.

The patent prosecution process is expensive, time-consuming, and complex, and we may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output in time to obtain patent protection. Although we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection. In addition, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our inventions and the prior art allow our inventions to be patentable over the prior art.

Furthermore, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in any of our owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions. The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has been the subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our patent applications may not result in patents being issued which protect our therapeutic programs and other proprietary technologies we may develop, or which effectively prevent others from commercializing competitive technologies and products.

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Moreover, the claim coverage in a patent application can be significantly reduced before the patent is granted. Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage. Any patents issuing from our patent applications may be challenged, narrowed, circumvented or invalidated by third parties. Consequently, we do not know whether our therapeutic programs and other proprietary technology will be protectable or remain protected by valid and enforceable patents. Even if a patent is granted, our competitors or other third parties may be able to circumvent the patent by developing similar or alternative technologies or products in a non-infringing manner which could materially adversely affect our business, financial condition, results of operations and prospects. In addition, given the amount of time required for the development, testing and regulatory review of our therapeutic programs and eventual product candidates, patents protecting the product candidates might expire before or shortly after such product candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

The issuance of a patent is not conclusive as to its inventorship, scope, validity, or enforceability and our patents may be challenged in the courts or patent offices in the United States and abroad. We may be subject to a third-party pre-issuance submission of prior art to the United States Patent and Trademark Office (the "USPTO"), or become involved in opposition, derivation, revocation, reexamination, post-grant and inter partes review, or other similar proceedings challenging our patent rights. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our patent rights, allow third parties to commercialize our therapeutic programs and other proprietary technologies we may develop and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. Such proceedings also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us.

***We may not be able to protect our intellectual property and proprietary rights throughout the world.***

Filing, prosecuting and defending patents on our therapeutic programs and other proprietary technologies we may develop in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but enforcement is not as strong as that in the United States. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our intellectual property and proprietary rights generally. In addition, some jurisdictions, such as Europe, Japan and China, may have a higher standard for patentability than in the United States, including, for example, the requirement of claims having literal support in the original patent filing and the limitation on using supporting data that is not in the original patent filing. Under those heightened patentability requirements, we may not be able to obtain sufficient patent protection in certain jurisdictions even though the same or similar patent protection can be secured in U.S. and other jurisdictions.

Proceedings to enforce our intellectual property and proprietary rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, could put our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the

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damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop.

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.

In Europe, beginning June 1, 2023, European applications and patents may be subject to the jurisdiction of the Unified Patent Court (the "UPC") unless they explicitly opt out. Also, European applications will have the option, upon grant of a patent, of becoming a Unitary Patent, which will be subject to the jurisdiction of the UPC. This will present a significant change in European patent practice. As the UPC is a new entity, there is no applicable precedent on which we may rely, increasing the uncertainty of any outcome from the UPC. As a single entity can now invalidate a European patent, we may opt out of the UPC in certain cases, in which case each of our European patents would need to be challenged on a country-by-country basis.

***Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.***

Periodic maintenance fees, renewal fees, annuity fees, and various other government fees on patents and applications will be due to be paid to the USPTO and various government patent agencies outside of the United States over the lifetime of our owned or licensed patents and applications. In certain circumstances, we rely on our licensing partners to pay these fees due to U.S. and non-U.S. patent agencies. The USPTO and various non-U.S. government agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. We are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. In some cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in a partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market with similar or identical products or technology, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

***Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.***

Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.

Under the Leahy-Smith America Invents Act (the "America Invents Act"), the first inventor to file a patent application is entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. A third party that files a patent application in the USPTO before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party. This will require us to be cognizant going forward of the time from invention to filing of a patent application. Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we were the first to either (i) file any patent

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application related to our therapeutic programs and other proprietary technologies we may develop or (ii) invent any of the inventions claimed in our patent applications.

The America Invents Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post- grant review, inter partes review and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of patents issuing from those patent applications, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition, the patent positions of companies in the development and commercialization of biologics and pharmaceuticals are particularly uncertain. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. It is unpredictable how decisions by the U.S. federal courts, Congress or the USPTO may impact the value of our patent rights. For example, the U.S. Supreme Court held in Amgen v. Sanofi (2023) that a functionally claimed genus was invalid for failing to comply with the enablement requirement of the Patent Act. In addition, the U.S. Court of Appeals for the Federal Circuit recently issued a decision involving the interaction of a patent term adjustment, terminal disclaimers, and obvious-type double patenting. This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. Depending on future actions by Congress, the U.S. federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce our intellectual property in the future.

***Issued patents covering our therapeutic programs and other proprietary technologies we may develop could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.***

If we initiate legal proceedings against a third party to enforce a patent covering our therapeutic programs and other proprietary technologies we may develop, the defendant could counterclaim that such patent is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. Third parties may raise claims challenging the validity or enforceability of a patent before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post-grant review, inter partes review, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in the revocation of, cancellation of or amendment to our patents in such a way that they no longer cover our therapeutic programs and other proprietary technologies we may develop. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we or our licensing partners and the patent examiner were unaware during prosecution. If a third party were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our therapeutic programs and other proprietary technologies we may develop. Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations and prospects.

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***If we do not obtain patent term extension for our product candidate, our business may be materially harmed.***

Depending upon the timing, duration and specifics of any FDA marketing approval of any product candidate we may develop, one or more of patents issuing from our U.S. patent applications may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Action of 1984 (the "Hatch-Waxman Amendments"). The Hatch-Waxman Amendments permit a patent term extension ("PTE") of up to five years as compensation for patent term lost during the FDA review process. A PTE cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended. Similar patent term restoration provisions to compensate for commercialization delay caused by regulatory review are also available in certain foreign jurisdictions, such as in Europe under Supplemental Protection Certificate ("SPC"). The USPTO has recently rejected several PTE applications based on patent coverage that it has deemed not sufficiently specific to the approved drug, similar to SPC requirements in Europe and other jurisdictions. If we are unable to obtain adequately specific patent claims to obtain patent term extensions or equivalents, our products may not receive such additional protection.

***We may be subject to claims challenging the inventorship of our patents and other intellectual property.***

We may be subject to claims that former employees, collaborators or other third parties have an interest in our patent rights, trade secrets, or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our therapeutic programs and other proprietary technologies we may develop. Litigation may be necessary to defend against these and other claims challenging inventorship or our patent rights, trade secrets or other intellectual property. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our therapeutic programs and other proprietary technologies we may develop. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to our management and other employees. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

***If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.***

In addition to seeking patent protection for our therapeutic programs and other proprietary technologies we may develop, we also rely on trade secrets and confidentiality agreements to protect our unpatented know-how, technology and other proprietary information and to maintain our competitive position. Trade secrets and know-how can be difficult to protect. In particular, the trade secrets and know-how relevant to our programs and other proprietary technology might be disseminated within the industry through independent development, the publication of journal articles describing the methodology and the movement of personnel with scientific positions in academic and industry.

We seek to protect these trade secrets and other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants. We cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a

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competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor or other third party, our competitive position would be materially and adversely harmed.

We may be subject to claims that third parties have an ownership interest in our trade secrets. For example, we may have disputes arise from conflicting obligations of our employees, consultants or others who are involved in developing our product candidate. Litigation may be necessary to defend against these and other claims challenging ownership of our trade secrets. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable trade secret rights, such as exclusive ownership of, or right to use, trade secrets that are important to our therapeutic programs and other proprietary technologies we may develop. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to our management and other employees.

***We may be subject to claims that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.***

Some of our current employees, consultants and advisors or those we will hire in future may be employed or were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual's current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to our management.

In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Such claims could have a material adverse effect on our business, financial condition, results of operations and prospects.

***Third-party claims of intellectual property infringement, misappropriation or other violations against us or our collaborators may prevent or delay the development and commercialization of our therapeutic programs and other proprietary technologies we may develop.***

Our commercial success depends in part on our ability to avoid infringing, misappropriating and otherwise violating the patents and other intellectual property rights of third parties. There is a substantial amount of complex litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, derivation and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions. As discussed above, recently, due to changes in U.S. law referred to as patent reform, new procedures including inter partes review and post-grant review have also been implemented. As stated above, this reform adds uncertainty to the possibility of challenge to our patents in the future.

Numerous U.S. and foreign issued patents and pending patent applications owned by third parties exist in the fields in which we plan to commercialize or develop our therapeutic programs and in which we are developing other proprietary technologies. As the biotechnology and pharmaceutical industries expand and more patents are

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issued, the risk increases that our therapeutic programs and commercializing activities may give rise to claims of infringement of the patent rights of others. We cannot assure you that our therapeutic programs and other proprietary technologies we may develop will not infringe existing or future patents owned by third parties. We may not be aware of patents that have already been issued and that a third party, for example, a competitor in the fields in which we are developing our therapeutic programs, might assert as infringed by us. It is also possible that patents owned by third parties of which we are aware, but which we do not believe we infringe or that we believe we have valid defenses to any claims of patent infringement, could be found to be infringed by us. It is not unusual that corresponding patents issued in different countries have different scopes of coverage, such that in one country a third-party patent does not pose a material risk, but in another country, the corresponding third-party patent may pose a material risk to our planned products. As such, we monitor third-party patents in the relevant pharmaceutical markets. In addition, because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that we may infringe. Generative AI resources that are publicly available also present a risk that a company may inadvertently obtain, incorporate or use a third party's intellectual property.

In the event that any third party claims that we infringe their patents or that we are otherwise employing their proprietary technology without authorization and initiates litigation against us, even if we believe such claims are without merit, a court of competent jurisdiction could hold that such patents are valid, enforceable and infringed by us. In addition, we may have to pay substantial damages, including treble damages and attorneys' fees for willful infringement, pay royalties and/or redesign our infringing products or technologies, which may be impossible or require substantial time and monetary expenditure. In this case, the holders of such patents may be able to block our ability to commercialize the infringing products or technologies unless we obtain a license under the applicable patents, or until such patents expire or are finally determined to be held invalid or unenforceable. Such a license may not be available on commercially reasonable terms or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize the infringing products or technologies or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business.

Defense of infringement claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of management and other employee resources from our business, and may impact our reputation. Some of our competitors may be able to sustain the costs of litigation or administrative proceedings more effectively than we can because of greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our ability to compete in the marketplace. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition or results of operations.

***We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming and unsuccessful.***

Third parties, such as a competitor, may infringe our patent rights. Accordingly, we may in the future pursue invalidity or infringement proceedings with respect to third-party patents. The outcome following legal assertions of invalidity is unpredictable, and in an infringement proceeding, a court may decide that a patent owned by us is invalid or unenforceable or may refuse to stop the other party from using the invention at issue on the grounds that the patent does not cover the technology in question.

In addition, our patent rights may become involved in inventorship, priority or validity disputes. To counter or defend against such claims can be expensive and time consuming. An adverse result in any litigation proceeding could put our patent rights at risk of being invalidated or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

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Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect to our business. Such proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such proceedings adequately. Some of these third parties may be able to sustain the costs of such proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. If we do not prevail in the patent proceedings the third parties may assert a claim of patent infringement directed at our product candidates. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

***If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.***

Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. During trademark registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign jurisdictions. Although we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, which may not survive such proceedings. Moreover, any name we have proposed to use with our product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. Similar requirements exist in Europe. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA or an equivalent administrative body in a foreign jurisdiction objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA. Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.

We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, domain name or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and prospects.

***Intellectual property rights do not necessarily address all potential threats.***

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage.

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For example, intellectual property discovered through government funded programs may be subject to federal regulations such as "march-in" rights, certain reporting requirements and a preference for United States-based companies. Compliance with such regulations may limit our exclusive rights and limit our ability to contract with non-United States manufacturers.

Although we do not currently own issued patents or pending patent applications that have been generated through the use of United States government funding, our future owned or licensed intellectual property may be generated through the use of United States government funding or grants. Pursuant to the Bayh-Dole Act of 1980, the United States government has certain rights in inventions developed with government funding. On December 8, 2023, the National Institute of Standards and Technology (NIST) released the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights (the "Guidance") to the public for comment. The Guidance represents the first federal framework specifying that price can be a factor in considering whether the government may exercise its march-in authority pursuant to 35 U.S.C. 200 et seq. ("Bayh-Dole"). These United States government march-in rights include a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose. In addition, the United States government has the right, under certain limited circumstances, to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that: (1) adequate steps have not been taken to commercialize the invention; (2) government action is necessary to meet public health or safety needs; or (3) government action is necessary to meet requirements for public use under federal regulations, also referred to as march-in rights. If the United States government exercised its march-in rights in our future intellectual property rights that are generated through the use of United States government funding or grants, we could be forced to license or sublicense intellectual property developed by us or that we license on terms unfavorable to us, and there can be no assurance that we would receive compensation from the United States government for the exercise of such rights. The United States government also has the right to take title to these inventions if the grant recipient fails to disclose the invention to the government or fails to file an application to register the intellectual property within specified time limits. Intellectual property generated under a government funded program is also subject to certain reporting requirements, compliance with which may require us to expend substantial resources. In addition, the United States government requires that any products embodying any of these inventions or produced through the use of any of these inventions be manufactured substantially in the United States. This preference for United States industry may be waived by the federal agency that provided the funding if the owner or assignee of the intellectual property can show that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible. This preference for United States industry may limit our ability to contract with non-United States product manufacturers for products covered by such intellectual property.

We may partially depend on intellectual property licensed from third parties, and our licensors may not always act in our best interest. If we fail to comply with our obligations under our intellectual property licenses, if the licenses are terminated or if disputes regarding these licenses arise, we could lose significant rights that are important to our business.

We may be dependent, in part, on patents, know-how and proprietary technology licensed from others. Our licenses to such patents, know-how and proprietary technology may not provide exclusive rights in all relevant fields of use and in all territories in which we may wish to develop or commercialize our products in the future. The agreements under which we license patents, know-how and proprietary technology from others are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.

If we fail to comply with obligations under any license agreements, our licensors may have the right to terminate our license, in which case we would not be able to develop or market technology or product candidates covered by the intellectual property licensed under these agreements. In addition, we may need to obtain additional licenses from our existing licensors and others to advance our research or allow commercialization of product candidates we may develop. It is possible that we may be unable to obtain any additional licenses at a reasonable

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cost or on reasonable terms, if at all. In either event, we may be required to expend significant time and resources to redesign our technology, product candidates, or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected technology or product candidates.

If we or our licensors fail to adequately protect our licensed intellectual property, our ability to develop or commercialize product candidates could suffer. We may not have complete control over the maintenance, prosecution and litigation of our in-licensed patents and patent applications and may have limited control over future intellectual property that may be in-licensed. For example, we cannot be certain that activities such as the maintenance and prosecution by our licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights. It is possible that our licensors' infringement proceedings or defense activities may be less vigorous than had we conducted them ourselves or may not be conducted in accordance with our best interests.

In addition, the resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant patents, know-how and proprietary technology, or increase what we believe to be our financial or other obligations under the relevant agreement. Disputes that may arise between us and our licensors regarding intellectual property subject to a license agreement could include disputes regarding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the scope of rights granted under the RemainCo License Agreement and other interpretation-related issues;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• whether and the extent to which our technology and processes infringe on intellectual property of the licensor
that is not subject to the licensing agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our right to sublicense patent and other rights to third parties under collaborative development relationships;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our diligence obligations with respect to the use of the licensed technology in relation to our development and
commercialization of our product candidates and what activities satisfy those diligence obligations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ownership of inventions and know-how resulting from the joint
creation or use of intellectual property by our licensors and us.

***We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.***

The growth of our business may depend in part on our ability to acquire, in-license or use third-party proprietary rights. For example, our product candidates may require specific formulations to work effectively and efficiently, we may develop product candidates containing our compounds and pre-existing pharmaceutical compounds, or we may be required by the FDA or comparable foreign regulatory authorities to provide a companion diagnostic test or tests with our product candidates, any of which could require us to obtain rights to use intellectual property held by third parties. In addition, with respect to any patents we may co-own with third parties, we may require licenses to such co-owners' interest to such patents. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary or important to our business operations. In addition, we may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. Were that to happen, we may need to cease use of the compositions or methods covered by those third-party intellectual property rights, and may need to seek to develop alternative approaches that do not infringe on those intellectual property rights, which may entail additional costs and development delays, even if we were able to develop such alternatives, which may not be feasible. Even if we are able to obtain a license, it may be non-exclusive, which means that our competitors may also receive access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to develop or license replacement technology.

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Additionally, we sometimes collaborate with academic institutions to accelerate our preclinical research or development under written agreements with these institutions. In certain cases, these institutions provide us with an option to negotiate a license to any of the institution's rights in technology resulting from the collaboration. Even if we hold such an option, we may be unable to negotiate a license from the institution within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to others, potentially blocking our ability to pursue our program.

The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies that may be more established or have greater resources than we do may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our product candidates. More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. There can be no assurance that we will be able to successfully complete these types of negotiations and ultimately acquire the rights to the intellectual property surrounding the additional product candidates that we may seek to develop or market. If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of certain programs and our business financial condition, results of operations and prospects could suffer.

***Our use of open source software could impose limitations on our ability to commercialize our product candidates.***

Our use of open source software could impose limitations on our ability to commercialize our product candidates. As a result, as we seek to use the RNA delivery platform in connection with commercially available products, we may be required to license that software under different license terms, which may not be possible on commercially reasonable terms, if at all. If we are unable to license software components on terms that permit its use for commercial purposes, we may be required to replace those software components, which could result in delays, additional cost and additional regulatory approvals.

Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the software code. Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use. If we combine our proprietary software with open source software in a certain manner, we could, under certain of the open source licenses, be required to release the source code of our proprietary software to the public. This could allow our competitors to create similar products with lower development effort and time, and ultimately could result in a loss of product sales for us. Although we monitor our use of open source software, the terms of many open source licenses have not been interpreted by U.S. courts, and there is a risk that those licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our product candidates. We could be required to seek licenses from third parties in order to continue offering our product candidates, to re-engineer our product candidates or to discontinue the sale of our product candidates in the event re-engineering cannot be accomplished on a timely basis, any of which could materially and adversely affect our business, financial condition, results of operations and prospects.

Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations, and prospects.

**Risks Related to Our Common Stock** 

***To the extent a ROFN Sale occurs prior to or following the Spin-Off, the assets held by the Company will be diminished, which could materially adversely affect the price of Company Common Stock.***

The transfer of assets to the Company in connection with the Separation includes the ROFN Assets that trigger a right of first negotiation with an existing collaboration partner of Avidity that was notified concurrently with

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Avidity's announcement of the Merger Agreement. Avidity is permitted to negotiate the sale of the Avidity assets subject to the ROFN with the holder of the ROFN and, if an agreement is reached, consummate the sale of all or a portion of such assets. If such a ROFN Sale is consummated, the Company may receive less than all of the Company Assets. The ROFN Assets may be sold to the ROFN Holder prior to or following the Spin-Off. Until a ROFN Sale is consummated, if ever, or it becomes clear that no assets subject to the ROFN will be sold to the holder of the ROFN, it is uncertain which assets the Company will hold.

***We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common stock.***

We have never declared or paid any cash dividend on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, the terms of any future debt agreements may preclude us from paying dividends. Any return to stockholders will therefore be limited to the appreciation of their stock. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at the time of the Distribution or such later time at which stockholders have purchased their shares.

***Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.***

Our Certificate of Incorporation and Bylaws (each as defined below) contain provisions that could significantly reduce the value of our shares to a potential acquiror or delay or prevent changes in control or changes in our management without the consent of our Board of Directors. The provisions in our charter documents include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a classified Board of Directors with three-year staggered terms, which may delay the ability of stockholders to
change the membership of a majority of our Board of Directors ;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect
director candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the exclusive right of our Board of Directors, unless the Board of Directors grants such right to the

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the required approval of at least two-thirds of the shares entitled to
vote to remove a director for cause and to amend the prohibition on removal of directors without cause;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our Board of Directors to authorize the issuance of shares of preferred stock and to determine the
price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our Board of Directors to alter our Bylaws without obtaining stockholder approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the required approval of at least two-thirds of the shares entitled to vote to adopt, amend or repeal the Bylaws
or repeal the provisions of the Certificate of Incorporation regarding the election and removal of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual
or special meeting of our stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive
forum for certain actions and proceedings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement that a special meeting of stockholders may be called only by the Board of Directors, the chair of
our Board of Directors, our chief executive officer or our president (in the absence of a

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chief executive officer), which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• advance notice and other procedural requirements that stockholders must comply with in order to nominate
candidates to our Board of Directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror's own slate of
directors or otherwise attempting to obtain control of us.

We are also subject to the anti-takeover provisions contained in Section 203 of the DGCL. Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the transaction.

***Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.***

***An active trading market for our common stock may not develop or be sustained, or be liquid enough for investors to resell our common stock quickly or at the market price.***

There is currently no public market for our common stock, and we cannot assure you that an active trading market will develop or be sustained or that any trading market will be liquid. If an active market for our common stock does not develop or is not sustained, it may be difficult for our stockholders to sell shares of our common stock without depressing the market price for the common stock or to sell their shares at all. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares of our common stock and may impair our ability to acquire other companies or technologies by using our common stock as consideration.

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***The trading price of our common stock may be volatile and may fluctuate due to factors beyond our control, and purchasers of our common stock could incur substantial losses.***

Our stock price may be volatile. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, our stockholders and investors may not be able to sell their common stock at or above the price they paid for the common stock. The market price for our common stock may be influenced by many factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• positive or negative results, including preliminary or topline results, of preclinical studies and clinical
trials reported by us, strategic partners or competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any progress or delay in the commencement, enrollment and the ultimate completion of clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• technological innovations or commercial product introductions by us or competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to successfully develop and commercialize any of our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developments, announcements or changes in government regulations relating to drug products, including related to
drug pricing, reimbursement and healthcare coverage;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delays in in-licensing or acquiring additional complementary product
candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developments concerning proprietary rights, including patents and litigation matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• public concern relating to the commercial value or safety of any of our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• financing or other corporate transactions, or inability to obtain additional funding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announcements relating to our arrangements with RemainCo, BMS and Lilly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to meet or exceed expectations of the investment community;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated variations in our operating results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in financial estimates by us or by any securities analysts who might cover our common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announcements by therapeutic drug product providers related to pricing of therapeutics;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announcements of significant licenses, acquisitions, strategic partnerships or joint ventures by us or our
competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• publication of research reports or comments by securities or industry analysts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to attract or retain key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sales of our common stock, including sales by our directors and officers or specific stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general market or regulatory conditions in the pharmaceutical industry or in the economy as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other events and factors, many of which are beyond our control; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other factors described in this "Risk Factors" section and elsewhere in this information statement.

These and other market and industry factors may cause the market price and demand for our securities to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their common stock at or above the price paid for the common stock and may otherwise negatively affect the liquidity of our common stock.

Some companies that have experienced volatility in the trading price of their stock have been the subject of securities class action litigation. Any lawsuit to which we are a party, with or without merit, may result in an unfavorable judgment. We also may decide to settle lawsuits on unfavorable terms. Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation or adverse changes to our

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offerings or business practices. Defending against litigation is costly and time-consuming, and could divert our management's attention and resources. Furthermore, during the course of litigation, there could be negative public announcements of the results of hearings, motions or other interim proceedings or developments, which could have a negative effect on the market price of our common stock.

Volatility in our stock price may also affect our ability to attract and retain our key employees. Employees may be more likely to leave the company if the shares they own or the shares underlying their vested equity have not significantly appreciated in value relative to the original purchase price of the shares or the exercise price of the options, or conversely, if the exercise price of the options that they hold are significantly above the market price of our Common Stock. If we are unable to retain our employees, or if we need to increase our compensation expenses to retain our employees, our business, operating results, and financial condition could be adversely affected.

***Substantially all of our total outstanding shares of common stock may be sold freely into the market. This could cause the market price of our common stock to drop significantly, even if our business is doing well.***

Sales of substantially all of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Immediately following the Distribution, substantially all of our common stock will be freely tradable, without restrictions or further registration under the Securities Act, subject to certain restrictions applicable to shares of common stock held by our affiliates as defined in Rule 144 under the Securities Act.

***We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to "emerging growth companies" will make our common stock less attractive to investors.***

We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an "emerging growth company," we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As an "emerging growth company," we are required to report only two years of financial results in certain Securities Act registration statements. We may take advantage of these exemptions until we are no longer an "emerging growth company." We will remain an "emerging growth company" until the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will lose that status sooner if our revenues exceed $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of the shares of our common stock that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and the price of our common stock may be more volatile than that of an otherwise comparable company that does not avail itself of the same or similar exemptions.

***We are a smaller reporting company, and the reduced reporting requirements applicable to smaller reporting companies may make our common stock less attractive to investors.***

We are a "smaller reporting company" as defined in Rule 12b-2 under the Exchange Act. For as long as we continue to be a smaller reporting company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including reduced financial statement and other financial information disclosure, and reduced disclosure obligations regarding executive compensation in our annual and periodic reports and proxy statements. We will remain a

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smaller reporting company as long as either (i) the market value of our common stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million. Our public float is measured as of the last business day of our most recently completed second fiscal quarter, and annual revenues are as of the most recently completed fiscal year for which audited financial statements are available. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile than that of an otherwise comparable company that does not avail itself of the same or similar exemptions.

***As a result of the Separation, we will qualify for, and may elect to rely on, certain exemptions from Nasdaq corporate governance requirements during the applicable phase-in periods. We may choose to utilize one or more of these exemptions over the next twelve months.***

Nasdaq rules permit companies listing in connection with a spin-off transaction to phase in compliance with certain corporate governance requirements, including the requirement that a majority of the board of directors be independent. Specifically, we may rely on phase-in schedules for our board committees. For the Audit Committee, we are required to have at least one independent member by our listing date, a majority of independent members within 90 days of the effective date of the Registration Statement, and all independent members within one year of the effective date of the Registration Statement. For the Human Capital Management Committee, we must have at least one independent member by the closing of the Spin-Off, a majority of independent members within 90 days of our listing date, and all independent members within one year of our listing date.

During these phase-in periods, our stockholders may not have the same level of protection as those of companies with a majority-independent board. If we are unable to recruit additional independent directors or otherwise meet Nasdaq's requirements within the applicable timeframes, we may be subject to enforcement actions by Nasdaq. In addition, changes in the composition of our board and its committees could result in changes in our corporate strategy and operating philosophy, which could cause our growth strategy to differ from the one currently in place.

**Risks Related to the Distribution** 

***Because there has not been any public market for our common stock, the market price and trading volume of our common stock may be volatile and you may not be able to resell your shares of the Company's common stock at or above the initial market price of our common stock following the Distribution.***

Prior to the Distribution, there will have been no regular-way trading market for our common stock. We cannot predict the extent to which investors' interest will lead to a liquid trading market or whether the market price of our common stock will be volatile. The market price of our common stock could fluctuate significantly for many reasons, including in response to the risk factors listed in this information statement or for reasons unrelated to our specific performance, such as reports by industry analysts, investor perceptions, or negative developments for our customers, competitors or suppliers, as well as general economic and industry conditions.

***The Distribution will be taxable, and the resulting tax liability to holders of Avidity Common Stock will have to be funded from other sources.***

Avidity has not calculated earnings and profits in accordance with U.S. federal income tax principles. Accordingly, the Distribution will be treated as a taxable distribution with respect to Avidity Common Stock for U.S. federal income tax purposes in an amount equal to the fair market value of any of the Company's common stock (including fractional shares for which cash is received in lieu thereof) received pursuant to the Distribution. No cash will be received in the Distribution. Accordingly, the resulting tax liability to U.S. holders will have to

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be funded from other sources. Avidity or other applicable withholding agents may be required or permitted to withhold at the applicable rate on all or a portion of the amount payable to non-U.S. holders, and any such withholding will be satisfied by Avidity or such agent by withholding and selling a portion of the shares of Company Common Stock that otherwise would be distributable to the non-U.S. holders or by withholding from other property held in the non-U.S. holder's account with the withholding agent. For more information, see the discussion below under "*The Separation and Distribution — Material U.S. Federal Income Tax Consequences*."

***Our historical financial results as a part of Avidity and our unaudited pro forma combined financial statements may not be representative of our results as a separate, standalone company.***

The historical financial information we have included in this information statement has been derived from the consolidated financial statements and accounting records of Avidity and does not necessarily reflect what our financial position, results of operations or cash flows would have been had we been a separate, standalone company during the periods presented. The historical costs and expenses reflected in our combined financial statements include an allocation for certain corporate functions historically provided by Avidity, including general corporate expenses and employee benefits and incentives. These allocations were based on what we and Avidity considered to be reasonable reflections of the historical utilization levels of these services required in support of our business. The historical information does not necessarily indicate what our results of operations, financial position, cash flows or costs and expenses will be in the future. Our pro forma financial information set forth under "*Unaudited Pro Forma Combined Financial Information*" reflects changes to our operations as a result of the Separation. However, there can be no assurances that this unaudited pro forma combined financial information will appropriately reflect our costs as a publicly traded company.

***We will incur material costs and expenses as a result of our separation from Avidity.***

We will incur costs and expenses greater than those we currently incur as a result of our separation from Avidity. These increased costs and expenses will arise from various factors, including financial reporting and costs associated with complying with federal securities laws (including compliance with the Sarbanes-Oxley Act). In addition, we will have increased corporate and administrative costs and expenses to those we incurred while part of Avidity, even though the Company will be a smaller, standalone company following the Distribution. These costs may be material to our business.

***We incur significant costs as a result of operating as a standalone public company, and our management is required to devote substantial time to new compliance initiatives.***

As a new public company, we incur significant legal, accounting and other expenses that we would not incur as a private company. We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

The rules and regulations applicable to public companies have increased and may continue to increase our legal and financial compliance costs and have made some activities more time consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business. For example, in recent periods obtaining director and officer liability insurance has become more

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expensive, and we may be required to incur substantial costs to obtain coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees or as executive officers.

As a newly public company, most members of our senior management team have not previously held senior management positions of the same level at a public company, which may impact our ability to efficiently manage the transition to public company status and meet new regulatory and investor expectations, potentially harming our business, results of operations and financial condition.

***If, following the Distribution, we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned and our stock price may suffer.***

Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S. securities laws to do a comprehensive evaluation of its and its consolidated subsidiaries' internal control over financial reporting. To comply with this statute, we may eventually be required to document and test our internal control procedures and our management will be required to assess and issue a report concerning our internal control over financial reporting. Furthermore, if we lose our status as an emerging growth company, our independent auditors will be required to issue an opinion on the Company's internal controls over financial reporting pursuant to Section 404(b). The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act. If our management cannot favorably assess the effectiveness of our internal control over financial reporting or our auditors identify material weaknesses in our internal controls, investor confidence in our financial results may weaken, and our stock price may suffer.

***If securities or industry analysts do not publish research or reports or publish unfavorable research or reports about our business, our stock price and trading volume could decline.***

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us, our business, our market or our competitors. If these analysts cease coverage of our company, the trading price for our stock would be negatively impacted. If one or more of the analysts who covers us downgrades our stock, our stock price would likely decline. If one or more of these analysts ceases to cover us or fails to regularly publish reports on us, interest in our stock could decrease, which could cause our stock price or trading volume to decline.

***We could be subject to securities class action litigation.***

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us, because biotechnology and biopharmaceutical companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of our management's attention and resources, which could harm our business.

**General Risk Factors** 

***Our information technology systems, or those of any of our CROs, manufacturers, other contractors or consultants or current or potential future collaborators, may fail or suffer security breaches, which could result in a material disruption of our product development programs.***

The United States federal and various state and foreign governments have adopted or proposed laws, regulations and requirements regarding the collection, distribution, use, security, and storage of personally identifiable

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information and other data relating to individuals, and federal and state consumer protection laws are being applied to enforce regulations related to the collection, use, and dissemination of such data. In the ordinary course of business, we collect, store, transmit and otherwise process large amounts of data including, without limitation, proprietary business information, preclinical and clinical trial data and the personal information of our employees and contractors. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information. Despite the implementation of security measures, our internal technology systems (including infrastructure) and those of our current and any future CROs and other contractors, consultants and collaborators are vulnerable to attack, damage and interruption from computer viruses and malware (e.g. ransomware), misconfigurations, "bugs" or other vulnerabilities, malicious code, cybersecurity threats (such as denial or degradation-of-service attacks, cyber-attacks or cyber-intrusions over the Internet, hacking, phishing and other social engineering attacks), unauthorized access or use, natural disasters, terrorism, war and telecommunication and electrical failures, employee theft or misuse, human error, fraud, and sophisticated nation-state and nation-state-supported actors. Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. As a result of the post-pandemic continued hybrid working environment, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who continue to work remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. There can also be no assurance that our and our third-party service providers', strategic partners', contractors', consultants', CROs' and collaborators' cybersecurity risk management program and processes, including policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems, networks and confidential information.

We and certain of our service providers are from time to time subject to cyberattacks and security incidents. While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations or result in the unauthorized disclosure of or access to proprietary or sensitive personally identifiable information, it could result in a material disruption of our development programs and our business operations, whether due to a loss, corruption or unauthorized disclosure of our trade secrets or other similar disruptions. Some of the federal, state and foreign laws, regulations and requirements include obligations of companies to notify individuals of security breaches involving particular personally identifiable information, which could result from breaches experienced by us or by our vendors, contractors, or organizations with which we have formed strategic relationships.

Any security breach or other incident, whether real or perceived, could impact our reputation, cause us to incur significant costs, including legal expenses, harm customer confidence, hurt our expansion into new markets, cause us to incur remediation costs, or cause us to lose existing customers. For example, the loss of clinical trial data from clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. We also rely on third parties to manufacture our product candidates, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any real or perceived disruption or security breach affects our systems (or those of our third-party collaborators, service providers, contractors or consultants) or were to result in a loss of or accidental, unlawful or unauthorized access to, use of, release of, or other processing of personally identifiable information, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, the further development and commercialization of our product candidates could be delayed, and we could be subject to significant fines, penalties or liabilities for any noncompliance to certain privacy and security laws. Any adverse impact to the availability, integrity or confidentiality of our or third-party systems or confidential information can result in legal claims or proceedings (such as class actions), regulatory

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investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs. Further, our insurance coverage may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems. For further discussion on the potential liability related to the violation of these laws, see "*Risk Factors—Risks Related to Our Intellectual Property —We, our collaborators and our service providers may be subject to a variety of data privacy and security laws and contractual obligations, which could increase compliance costs and our actual or alleged failure to comply with them could subject us to potentially significant fines or penalties, regulatory investigation, negative publicity, liability or otherwise harm our business, results of operations and financial condition.*"

***Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.***

Our operations, including research activities, manufacturing and clinical trials, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or manmade disasters or business interruptions, for which we are predominantly self-insured.

We rely on third-party manufacturers to produce our product candidates. Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers were affected by a man-made or natural disaster or other business interruption. In addition, our corporate headquarters is located in San Diego, California near major earthquake faults and fire zones, and the ultimate impact on us of being located near major earthquake faults and fire zones and being consolidated in a certain geographical area is unknown. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.

***We are subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We could face criminal liability and other serious consequences for violations, which could harm our business.***

We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department's Office of Foreign Assets Controls and anti-corruption and anti-money laundering laws and regulations, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, CROs, contractors and other collaborators and partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. We may engage third parties for clinical trials outside of the United States, to sell our products abroad once we enter a commercialization phase, and/or to obtain necessary permits, licenses, patent registrations and other regulatory approvals. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities and other organizations. We can be held liable for the corrupt or other illegal activities of our employees, agents, CROs, contractors and other collaborators and partners, even if we do not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.

Furthermore, U.S. export control laws and economic sanctions prohibit the provision of certain products and services to countries, governments, and persons targeted by U.S. export controls or sanctions. Sanctions and

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export control restrictions change from time to time with little warning and may require the Company to unwind or terminate business relationships, potentially on commercially unfavorable terms and/or at a significant cost. U.S. sanctions that have been or may be imposed as a result of military conflicts in other countries may impact our ability to continue activities at future clinical trial sites within regions covered by such sanctions. Additionally, the U.S. government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries. The U.S. government has announced, and threatened, the imposition of tariffs on global imports to address trade imbalances and various other goods considered critical to national security. Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect the Company's supply chains and the financial performance of the Company. If we fail to comply with export and import regulations and such economic sanctions, penalties could be imposed, including fines and/or denial of certain export privileges. These export and import controls, and economic sanctions could also adversely affect our supply chain.

***Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial condition and stock price.***

The global credit and financial markets have from time to time experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of inflation, tariffs, military conflict, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including on Russia and its allies, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. Future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget.

***Changes in tax laws may impact our future financial position and results of operations.***

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, or interpreted, changed, modified or applied adversely to us, any of which could adversely affect our business operations and financial performance. For example, the United States government may enact significant changes to the taxation of business entities including, among others, a permanent increase in the corporate income tax rate, an increase in the tax rate applicable to certain foreign related income and elimination of certain exemptions, and the imposition of surtaxes on certain types of income. The likelihood of these changes being enacted or implemented is unclear. We are currently unable to predict whether such changes will occur and, if so, the ultimate impact on our business. To the extent that such changes have a negative impact on us, our customers or our suppliers, including as a result of related uncertainty, these changes may materially and adversely impact our business, financial condition, results of operations and cash flows.

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**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS** 

This information statement contains forward-looking statements about us that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this information statement, including statements regarding our plans, objectives, goals, strategies, future events, financing needs, plans or intentions relating to product candidates and markets and business trends, are forward-looking statements. In some cases, you can identify forward-looking statements by words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "possible," "potential," "predict," "project," "design," "seek," "should," "target," "will," "would," or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the initiation, timing, progress, potential registrational quality, and results of our research and development
programs, preclinical studies, any clinical trials, IND, and other regulatory submissions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the beneficial characteristics, including potential safety, efficacy and therapeutic effects of our product
candidates and the potential advantages of our product candidates compared to alternative therapies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the success and capabilities of the RNA delivery platform;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the prevalence of certain diseases and conditions we intend to treat and our estimates of the potential market
opportunity for our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the number of patients that we will enroll in our clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing of and costs involved in obtaining and maintaining regulatory approval of our current product
candidates and any future product candidates that we may identify or develop;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to meet future regulatory standards with respect to our product candidates, if approved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our plans relating to the further development and manufacturing of our product candidates, including for
additional indications that we may pursue;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the rate and degree of market acceptance and therapeutic benefits of our product candidates, if approved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to develop or partner and progress our current and future product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the implementation of our strategic plans for our business, product candidates, research programs and
technologies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the scope of protection we are able to establish and maintain for intellectual property rights covering our
product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• anticipated developments related to our competitors and our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our competitive position and the success of competing therapies that are or may become available;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain our current license agreements and collaborations and identify and enter into future
license agreements and collaborations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the expected potential benefits of strategic collaborations with third parties and our ability to attract
collaborators with development, regulatory, manufacturing or commercialization expertise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reliance on third parties to conduct preclinical studies and clinical trials of our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to efficiently and cost-effectively conduct our current and future clinical trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reliance on third parties for the manufacture of our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our plans relating to sales strategy, manufacturing and commercializing our product candidates, if approved;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• anticipated regulatory developments in the United States and foreign countries in which we may seek regulatory
approval for our product candidates in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing and likelihood of the achievement of milestones pursuant to our existing collaboration agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract and retain key scientific and management personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the costs of operating as a public company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the likelihood of consummating a ROFN Sale or a Permitted Third Party Sale, and the assets to be owned by the
Company following a ROFN Sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the planned completion and timing of the transactions contemplated by the Merger Agreement and the Separation
Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the accuracy of our estimates regarding future expenses, future revenue, capital requirements and the need for
additional financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future
operating expenses and capital expenditure requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to obtain funding for our operations necessary to complete further development and commercialization
of our current and future product candidates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our anticipated use of our existing resources, estimates of our expenses, capital requirements and needs for
additional financing.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled "Risk Factors" elsewhere in this information statement and reflect our management's beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this information statement. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this information statement may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this information statement, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this information statement to conform these statements to new information, actual results or to changes in our expectations, except as required by law.

You should read this information statement and the documents that we file with the SEC with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

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**THE SEPARATION AND DISTRIBUTION** 

**General** 

At or prior to the time of the Distribution, Avidity will separate the businesses described in this information statement and transfer them to the Company through the Separation, which will generally result in (a) the Company owning, assuming or retaining all assets and liabilities of Avidity and its subsidiaries exclusively related to Avidity's early stage precision cardiology programs, including ATR 1086 and ATR 1072, which target rare genetic cardiomyopathies, including phospholamban and Protein Kinase AMP-activated non-catalytic subunit Gamma 2 Syndrome, respectively, and certain collaboration agreements, including the BMS Collaboration Agreement and the Lilly Agreement, and (b) RemainCo owning, assuming or retaining all other assets and liabilities of Avidity and its subsidiaries. Following the Separation and except in the event a Permitted Third Party Sale is consummated, Avidity will distribute all of our issued and outstanding common stock pro rata to the holders of Avidity Common Stock in the Distribution. In the Distribution, each holder of Avidity Common Stock will receive a distribution of one share of our common stock for every ten shares of Avidity Common Stock held by them as of the Record Date. In the case of either the Distribution or a Permitted Third Party Sale, Avidity may also sell assets of Avidity subject to the ROFN to the ROFN Holder and thereafter distribute the Permitted Sale Proceeds of such sale to Avidity's stockholders and holders of Avidity Equity Awards, as of the chosen record date for distributing such proceeds, on a pro rata basis and subject to applicable tax withholding.

**Manner of Effecting the Distribution** 

The general terms and conditions relating to the Distribution are set forth in the Separation Agreement. Under the Separation Agreement, the Distribution will be effective following the satisfaction or waiver of the conditions described in "*The Separation and Distribution—The Separation Agreement—Conditions to the Spin-Off*." For all Avidity stockholders who own shares of Avidity Common Stock in registered form on the Record Date, our transfer agent will credit their share of Company Common Stock to book entry accounts established in their names to hold their shares of Company Common Stock. Our distribution agent will send these stockholders a statement reflecting their ownership of our common stock shortly after the Distribution Date. Book entry refers to a method of recording share ownership in our records in which no physical certificates are used. For stockholders who own shares of Avidity Common Stock through a broker or other nominee, their shares of Company Common Stock will be delivered to the broker or other nominee and credited to their accounts by such broker or other nominee. As further discussed below, fractional shares will not be distributed and Avidity's stockholders will receive cash in lieu thereof. Following the Distribution, stockholders whose shares are held in book entry form and are not affiliates of the Company may request that their Company Common Stock be transferred to a brokerage or other account at any time, as well as delivery of any physical share certificates for their shares, in each case without charge.

AVIDITY STOCKHOLDERS WILL NOT BE REQUIRED TO PAY FOR OUR COMMON STOCK RECEIVED IN THE DISTRIBUTION, OR TO SURRENDER OR EXCHANGE AVIDITY COMMON STOCK IN ORDER TO RECEIVE OUR COMMON STOCK, OR TO TAKE ANY OTHER ACTION IN CONNECTION WITH THE DISTRIBUTION. AVIDITY STOCKHOLDERS HAVE NO APPRAISAL RIGHTS IN CONNECTION WITH THE DISTRIBUTION.

No fractional share of Company Common Stock will be delivered to Avidity stockholders as part of the Distribution or credited to book entry accounts. In lieu of receiving fractional shares, each holder of Avidity Common Stock who would otherwise be entitled to receive a fractional share of Company Common Stock will receive cash for the fractional interest, which generally will be taxable to such holder to the extent the cash received exceeds the fair market value of the fractional interest of Company Common Stock on the Distribution Date. An explanation of the material U.S. federal income tax consequences of the Distribution can be found below in the subsection captioned "—*Material U.S. Federal Income Tax Consequences*." The distribution agent will, as soon as practicable after the Distribution Date, aggregate all fractional Company Common Stock into whole Company Common Stock and sell them in the open market at then-prevailing market prices and distribute

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the aggregate proceeds, net of brokerage fees and after deducting any taxes required to be withheld therefrom, ratably to Avidity stockholders otherwise entitled to fractional interests in our common stock. The amount of such payments will depend on the prices at which the aggregated fractional shares are sold by the distribution agent in the open market shortly after the Distribution Date.

See "*Executive Compensation—Treatment of Outstanding Awards*," for a discussion of how outstanding RemainCo equity awards will be affected by the Distribution.

Beginning on , and continuing until the occurrence of the Distribution and the Distribution Date, Avidity Common Stock will trade with an entitlement to the Distribution under the symbol " ."

**Reasons for the Distribution** 

Avidity's board of directors has determined that the separation of our businesses from Avidity's other business is in the best interests of Avidity and its stockholders. The potential benefits considered by Avidity's board of directors in making the determination to consummate the Distribution included the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that stockholders of Avidity would have the opportunity to receive securities of the Company under the
terms and conditions of the Merger Agreement, in addition to the consideration being paid in the Merger, allowing stockholders of Avidity to continue to recognize value from Avidity's assets and liabilities related to its early stage precision
cardiology programs and the Third Party Agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Avidity's board of directors' recognition of the potential value in the assets to be transferred to
the Company in the Separation and that the Distribution provides an attractive option for these assets, including with respect to the potential development and commercialization and future profitability of the early stage precision cardiology
programs and the potential achievement of specified milestones and royalties under the Third Party Agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the overall value of the Merger and the Spin-Off in the context of
Avidity's current and historical financial condition and results of operations, competitive position, assets, business and prospects and the risks and uncertainties inherent to the research, development, manufacture and commercialization of
Avidity's three late-stage clinical programs, del-desiran, del-brax and del-zota, as well as the further research,
development, manufacture and commercialization of its other product candidates and RNA delivery platform, and that the potential for value and near-term liquidity to Avidity's stockholders was compelling;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that the Merger Agreement that was negotiated between Avidity and Novartis contemplated completion of
the Separation and the Spin-Off or the consummation of a Permitted Third Party Sale as a condition to the Merger; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that the Separation, in combination with the Merger, provides Avidity's stockholders with more after-tax value as compared to a direct sale of the del-desiran, del-brax and del-zota assets
by Avidity because the Separation, in combination with the Merger, avoids subjecting the proceeds paid by Novartis for del-desiran, del-brax and del-zota to the corporate-level income tax that would otherwise apply if Avidity, as opposed to its stockholders, had received such proceeds on a direct sale of the del-desiran, del-brax and del-zota assets.

Avidity's board of directors also considered other terms of the Separation Agreement, which are more fully described below under "—*The Separation Agreement*":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the allocation of certain assets and liabilities related to Avidity's early stage precision cardiology
programs and Third Party Agreements to the Company (subject to exceptions);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the tax treatment of the Separation, including that the Separation will be a taxable distribution to Avidity
stockholders and that the Company generally will provide a tax indemnity to RemainCo for the Company's share of transfer taxes and any income taxes, calculated on a pro forma basis, attributable to the assets and liabilities associated with
the Company Business or imposed on the Company (in each

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case, other than taxes related to the Separation, Distribution or any sale of the Company to a third party) for any taxable period prior to the Distribution ("Company Indemnified Taxes") and RemainCo generally will provide a tax indemnity to the Company for any taxes arising in respect of the Separation, the Distribution, any sale of the Company to a third party, RemainCo's share of transfer taxes, and taxes of RemainCo or the consolidated group of which RemainCo was the common parent that are not the Company Indemnified Taxes ("RemainCo Indemnified Taxes"); <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that the parties have agreed to make an election under Section 336(e) of the Code with respect to the
Company, which is expected to result in the Company receiving a fair market value tax basis in its assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that, immediately prior to the effective time of the Distribution, Avidity will pay and contribute to
the Company an amount in cash equal to the Company Funding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the guaranty by Novartis of the performance by RemainCo of its obligations under the Separation Agreement, the
RemainCo License Agreement, the Transition Services Agreement and the Occupancy License Agreement following the effective time of the Merger.

Avidity's board of directors also considered certain aspects of the Distribution that may be adverse to the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that the price of a share of Company Common Stock may fall as certain Avidity stockholders sell their
shares of Company Common Stock because they are not interested in holding an investment in the Company Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that certain factors such as the size and expected market value of the Company may impede
investors' ability to appropriately value the Company Common Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that, because the Company will no longer be part of Avidity, the Distribution also will limit the
ability of the Company to pursue cross-company business initiatives with the RemainCo Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that, after the Distribution, the Company will not own any rights to the RemainCo Business, including
the three late-stage clinical programs del-desiran, del-brax and del-zota;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that the Separation includes certain assets of Avidity that triggered the ROFN, which may result in the
Company owning less than all of the ROFN Assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that, under the RemainCo License Agreement, the Company will not be permitted to engage in the business
of developing or selling RNA therapeutics outside of the cardiovascular field for five years following the Distribution, is prohibited from using the RNA delivery platform outside the cardiovascular field (with limited exceptions), and will be
subject to certain rights of first negotiation in favor of RemainCo with respect to products and product candidates outside of the cardiovascular field for 10 years following the Distribution, as more fully described below under
" *Business—Intellectual Property—RemainCo License Agreement* "; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the fact that, as a result of the Distribution, the Company will bear significant incremental costs associated
with being a publicly held company.

**Results of the Distribution** 

After the Distribution, we will be a public company and own the Company Business. Immediately after the Distribution, we expect to have approximately holders of record of our common stock and approximately shares of our common stock outstanding, based on the number of stockholders of record and outstanding Avidity Common Stock on and after giving effect to the delivery to stockholders of cash in lieu of fractional shares of our common stock. The actual number of shares to be distributed will be determined on the Record Date. You can find information regarding equity awards that will be outstanding after the Distribution in the section captioned, "*Executive Compensation—Treatment of Outstanding Awards—Make Whole Awards*."

The Distribution and the issuance of Make Whole Awards will not affect the number of shares of Avidity Common Stock outstanding or underlying the Avidity Equity Awards, as applicable (assuming the Avidity Stock

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Options are exercised for cash). For more information on the treatment of Avidity Common Stock and Avidity Equity Awards in the Merger, see the Proxy Statement.

**The Separation Agreement** 

Below is a summary of the material terms of the Separation Agreement. The description of the Separation Agreement in this section and elsewhere in this information statement is qualified in its entirety by reference to the complete text of the Separation Agreement, a copy of which is incorporated by reference as Exhibit 2.1 to the Registration Statement of which this information statement forms a part. This summary does not purport to be complete and may not contain all of the information about the Separation Agreement that is important to you. We encourage you to read the Separation Agreement carefully and in its entirety. Capitalized terms used in this section but not defined in this information statement have the meanings ascribed to them in the Separation Agreement.

The Separation Agreement and this summary of its terms are included to provide you with information regarding its terms. Factual disclosures about Avidity contained in this information statement or in Avidity's public reports filed with the SEC may supplement, update or modify the factual disclosures about Avidity contained in the Separation Agreement.

*Transfer of Assets and Assumption of Liabilities* 

The Separation Agreement identifies the assets to be transferred to (including the contracts to be assigned) or retained by, and the liabilities to be assumed or retained by, each of RemainCo and the Company, and it provides for when and how these transfers, assumptions and assignments will occur. For the purpose of the Separation Agreement, and subject to terms of and any exceptions set forth in the Separation Agreement, the assets consist of all right, title and ownership interests in and to all assets, properties, claims, information generated for the business, intellectual property, contracts and rights (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere on behalf of the applicable person or entity), of every kind, character and description, whether real, personal or mixed, tangible or intangible, whether accrued or contingent, in each case, whether or not received, recorded or reflected or required to be recorded or reflected on the books and records or financial statements of such person or entity, including rights and benefits pursuant to any contract, license, permit, indenture, note, bond, mortgage, agreement, concession, franchise, instrument, undertaking, commitment, understanding or other arrangement. Liabilities consist of any and all debts, guarantees, assurances, commitments, losses, remediation, deficiencies, penalties, settlements, sanctions, costs, expenses, interest and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any law, proceeding, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any governmental authority and those arising under any contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, covenant, commitment or undertaking or any fines, damages or equitable relief which may be imposed and including all costs and expenses related thereto.

Generally, following the Distribution, the Company will own, assume or retain all assets and liabilities of Avidity and its subsidiaries exclusively related to the Company Business, and RemainCo will own, assume or retain all other assets and liabilities.

In particular, the Separation Agreement provides that subject to the terms and conditions contained therein, the following assets will generally be retained by or transferred to the Company, subject to certain exceptions (collectively, the "Company Assets"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• certain specified intellectual property related to the RNA delivery platform and intellectual property
exclusively used in or exclusively related to the Company Programs or the Company Business (the "Company Intellectual Property");

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all information technology assets (i) located at Avidity's offices at Science Center Drive in San
Diego, California (the "Company Real Property") that are exclusively related to, as between the Avidity Business and the Company Business, the Company Business, (ii) used exclusively by certain employees to be transferred to the
Company (the "Transferred Employees") or (iii) otherwise specified in the Separation Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all licenses, permits, registrations, approvals and authorizations which have been issued by any governmental
authority that are held by a member of the Company Group (as defined below) that are exclusively related to, as between the RemainCo Business and the Company Business, the Company Business, or to the extent transferable, exclusively related to, as
between the RemainCo Business and the Company Business, the Company Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all deposits, letters of credit, prepaid expenses, trade accounts and other accounts that are exclusively related
to, as between the RemainCo Business and the Company Business, the Company Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all inventories of clinical products, goods, materials, parts, raw materials and clinical supplies that are
exclusively related to, as between the RemainCo Business and the Company Business, the Company Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all real property leases for the Company Real Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Third Party Agreements and any other contracts that are exclusively related to, as between the RemainCo
Business and the Company Business, the Company Business and all rights and obligations arising under any such contracts, and the portions of any contract (other than any Third Party Agreement) that relate to both the Company Business and the
RemainCo Business (which we refer to as a "Commingled Contract") that are exclusively related to, as between the RemainCo Business and the Company Business, the Company Business, and all rights and obligations arising under any such
portions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• specified lab equipment and other tangible assets to the extent such assets are not necessary for the conduct of
the RemainCo Business as conducted in the twelve months prior to the date of the Separation Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all rights under insurance policies and all rights in the nature of insurance, indemnification or contribution
that are exclusively related to, or to claims arising out of, the Company Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any goodwill that is as of the effective time of the Distribution exclusively related to the Company Business;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all other assets (other than intellectual property) owned or controlled by Avidity or its subsidiaries and
exclusively related to, as between the RemainCo Business and the Company Business, the Company Business.

All of the assets other than the assets allocated to the Company will generally be retained by, or transferred to, RemainCo. The Separation Agreement also identifies specific assets that will be allocated to RemainCo, including, subject to certain exceptions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• specified trademarks and domain names;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all other intellectual property (i) owned or controlled by Avidity or its subsidiaries, but excluding the
Company Intellectual Property, or (ii) otherwise specified in the Separation Agreement (the "RemainCo Intellectual Property");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• specified in-license agreements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all assets (other than intellectual property) owned or controlled by Avidity or any of its subsidiaries, other
than the assets to be retained by or transferred to the Company as described above.

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The Separation Agreement provides that liabilities arising out of or resulting from the ownership or operation of the Company Business or the assets allocated to the Company will generally be retained by or transferred to the Company, including the following, subject to certain exceptions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from any benefit plans maintained by the Company (or a
professional employer organization or employer of record engaged by the Company) and offered to the Company employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from the employee benefit plans to be retained by or
transferred to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from the employment or engagement of the Transferred
Employees, either (i) exclusively arising following the effective time of the Distribution or (ii) otherwise allocated to the Company pursuant to the Separation Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any liabilities allocated to the Company or any of its subsidiaries following the Distribution under the
Separation Agreement with respect to employee matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from the payment of the amounts under any retention bonus
program or individual retention bonus awards established by the Company or individual award agreement entered into by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from the payment of certain amounts under or with respect
to Avidity RSUs or cash awards granted to a newly-hired Avidity employee following the execution of the Merger Agreement, to the extent such newly-hired Avidity employee is a Transferred Employee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from the payment of certain amounts under Avidity's
Special Bonus Program granted to a Transferred Employee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities pursuant to any agreements or obligations of the Company, or following the closing of the Merger, any
member of the Company or any of its subsidiaries as of or after the effective time of the Distribution (the "Company Group"), under the Separation Agreement, the Merger Agreement, the RemainCo License Agreement, the Transition Services
Agreement or the Occupancy License Agreement.

All of the liabilities of Avidity, other than the liabilities allocated to the Company, will generally be retained by or transferred to RemainCo, including the following, subject to certain exceptions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from any assets allocated to RemainCo;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from the ownership or operation of the RemainCo Business,
as conducted at any time prior to, on or after the effective time of the Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from transaction expenses incurred by Avidity or any of its
subsidiaries in connection with the Merger Agreement and the Separation Agreement, whether paid on, prior to or after the effective time of the Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from the employment or engagement of all current and former
employees and service providers of RemainCo, whether arising on, prior to or following the effective time of the Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities to the extent arising out of or resulting from any Avidity employee benefit plan which is not being
transferred from RemainCo to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any liabilities allocated to RemainCo, any of its subsidiaries immediately following the effective time of the
Distribution or any entity that becomes a subsidiary of Avidity prior to the effective time of the Distribution upon which Avidity and Novartis mutually agree (the "RemainCo Group") with respect to employee matters; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liabilities pursuant to any agreements or obligations of Novartis, or following the closing of the Merger, any
member of the RemainCo Group, under the Separation Agreement, the Merger Agreement, the RemainCo License Agreement, the Transition Services Agreement or the Occupancy License Agreement.

*Data and Materials Separation* 

Under the Separation Agreement, Avidity, the Company and Novartis agreed upon a data and materials separation plan (the "Data and Materials Separation Plan"), pursuant to which Avidity, the Company and Novartis will (i) jointly review and determine which data and materials in possession of Avidity, the Company or a third party are (a) exclusively related to the RemainCo Business, (b) exclusively related to the Company Business or (c) related to both the RemainCo Business and the Company Business (such assets, the "Commingled Assets") and (ii) with respect to the Commingled Assets, determine each of Avidity's and the Company's respective possession of, and rights of access to, such Commingled Assets. Except as otherwise specified in the Data and Materials Separation Plan, Avidity will retain possession of each Commingled Asset.

Avidity, the Company and Novartis will use their respective reasonable best efforts to (i) implement the Data and Materials Separation Plan prior to the effective time of the Distribution (or, in the case of transfers of tangible embodiments of Company Assets pursuant the Separation Agreement, as promptly as practicable following the date of delivery of such assets) and (ii) from and after the effective time of the Distribution, comply with the requirements under the Data and Materials Separation Plan with respect to the maintenance of Commingled Assets that by their nature cannot be fully disentangled.

*Consents and Delayed Transfers* 

The Separation Agreement provides that Avidity and the Company will use reasonable best efforts to transfer any transferable licenses, permits, registrations, approvals and authorizations to the Company and obtain any consents with respect to, among other things, contracts required in connection with the Distribution or, at the written request of the other party, the assignment or novation of certain obligations under contracts, licenses and other liabilities of the parties. The Separation Agreement also requires RemainCo and the Company to cooperate with each other from and after the effective time of the Distribution to, among other things, execute and deliver, or use reasonable best efforts to cause to be executed and delivered, all instruments, and to make all filings, provide any notice and obtain all consents and/or approvals under any licenses, permits, waivers, orders or authorizations in order to effectuate the transfer of the applicable assets and assignment and assumption of the applicable liabilities pursuant to the Separation Agreement.

From and after the Distribution, with respect to any asset whose transfer or assignment is delayed (excluding any Third Party Agreement), the party retaining such delayed asset will hold for the use and benefit of the party or its subsidiary entitled thereto (at the expense of the entity entitled thereto) and use reasonable best efforts to cooperate with the intended recipient to agree to any reasonable and lawful arrangements designed to provide the applicable party or its relevant subsidiary with the economic claims, rights, benefits and control over such delayed asset and assume the economic burdens and obligations with respect thereto in accordance with the Separation Agreement, including by subcontracting, sublicensing or subleasing arrangements to the extent legally permissible. From and after the Distribution, with respect to any liability whose assumption is delayed, the party or its relevant subsidiary intended to assume such delayed liability will, or will cause its relevant subsidiary to, pay or reimburse the party (or its relevant subsidiary) retaining such delayed liability for all amounts paid or incurred by such party in connection with the retention of such delayed liability. The party retaining any delayed asset or delayed liability will, or will cause its relevant subsidiary to, treat such delayed asset or delayed liability in the ordinary course of business in accordance with past practice.

*Transition Services* 

From the date of the Separation Agreement through the effective time of the Distribution, RemainCo and the Company will, and from the effective time of the Distribution through the applicable Service Period (as defined

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in the Transition Services Agreement), the Company will use reasonable best efforts to, subject to certain exceptions and limitations: (i) establish replacement contracts with respect to the Company Business with any vendor or service provider with respect to specified transition services to be provided under the Transition Services Agreement; or (ii) establish other reasonable and lawful arrangements designed to provide the Company Group with the rights and obligations contemplated under the Transition Services.

The Separation Agreement requires the parties to take certain actions in connection with, and as a condition to RemainCo's obligations to provide certain services under, the Transition Services Agreement, including (i) using reasonable best efforts to establish separate information technology systems in order to receive information technology services; (ii) agreeing upon and using reasonable best efforts to implement a lab recommissioning plan for the Company Real Property; (iii) establishing arrangements to prevent cross-contamination and entering into the Occupancy License Agreement for purposes of shared lab services in the event that the lab at the Company Real Property is not recommissioned by the closing of the Merger; and (iv) establishing a quality management system for the Company in order to receive manufacturing services.

In the event of a Change of Control Transaction (as defined below), RemainCo will not be obligated to provide any of the Transition Services.

*Commingled Contracts* 

The Separation Agreement provides that any contract to which the Company or any of its subsidiaries following the Distribution is a party that relates to both the Company Business and the RemainCo Business will be treated as a Commingled Contract. From the date of the Separation Agreement until the date that is twelve months after the Distribution, to the extent (i) the rights and obligations under any Commingled Contract have not or are not contemplated to be transferred to either the Company or RemainCo or provided pursuant to the Transition Services Agreement, (ii) replacement contracts, contract rights, bids, purchase orders, or other agreements with respect to the Company Business or the RemainCo Business have not been obtained or are not contemplated to be obtained pursuant to the Separation Agreement, and (iii) requested by either the Company or RemainCo in writing, each party will use reasonable best efforts to assist the other party (a) to establish replacement contracts, contract rights, bids, purchase orders or other agreements with respect to either the Company Business or the RemainCo Business, or (b) to establish reasonable and lawful arrangements designed to provide either the Company and its subsidiaries or RemainCo and its subsidiaries following the Distribution with the rights and obligations under such Commingled Contract to the extent related to either the RemainCo Business or the Company Business.

After the Distribution, if RemainCo holds any asset of the Company or the Company holds any asset of RemainCo, RemainCo or the Company, as applicable, must inform the other party and use reasonable best efforts to transfer such asset to the other party without extra cost.

*Financing of the Company* 

In the event of the Distribution, and not in the event of a Permitted Third Party Sale, immediately prior to the effective time of the Distribution, Avidity will pay and contribute to the Company an amount in cash equal to the Company Funding. However, if the aggregate amount of marketable securities and cash and cash equivalents contained in any bank and brokerage accounts owned by Avidity and its subsidiary as of the close of business on the day prior to the effective time of the Distribution is less than the Company Funding, then Novartis will cause RemainCo to pay, or pay on behalf of RemainCo, the Company Funding Shortfall to the Company concurrently with the closing of the Merger.

In the event that the Company holds in its bank or brokerage accounts marketable securities, cash or cash equivalents having an aggregate value exceeding the Company Funding, the Company will, not later than immediately prior to the effective time of the Distribution, distribute to Avidity marketable securities, cash or cash equivalents that are sufficient to reduce the value of the Company's remaining marketable securities, cash and cash equivalents to $270 million.

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*The Spin-Off* 

Immediately prior to the effective time of the Distribution (and assuming a Permitted Third Party Sale has not occurred), Avidity will distribute, on a pro rata basis, to holders of Avidity's Common Stock as of the Record Date, all of the shares of Company Common Stock, as of the time of the Distribution. Avidity's board of directors (or a committee thereof), in accordance with applicable law, will establish the Record Date.

Each Avidity stockholder on the Record Date will be entitled to receive one share of Company Common Stock for every ten shares of Avidity Common Stock held by such stockholder as of the Record Date.

In addition, in the event of the Distribution, holders of any Avidity Equity Awards as of the Record Date are entitled to receive Make Whole Awards that will be settled in shares of Company Common Stock at a ratio of one share of Company Common Stock per ten shares of Avidity Common Stock underlying such Avidity Equity Award, subject to certain exceptions for Avidity RSUs granted to address promised equity awards in offer letters with recently-hired Avidity employees, which had not yet been granted as of the date of the Merger Agreement (the "New Hire RSUs") and any portion of the Avidity RSUs granted in connection with its annual performance award cycle in the ordinary course consistent with past practice if the Merger has not closed by March 1, 2026 (the "2026 LTI Awards") that is unvested as of the Distribution Date. See "—*Employee Matters*" below.

On the Distribution Date, immediately prior to the effective time of the Distribution, Avidity will instruct its stock transfer agent to effect the Distribution by distributing the shares of Company Common Stock to Avidity's stockholders as of the Record Date, and to credit the appropriate number of shares of Company Common Stock to book entry accounts for each such holder of shares of Avidity Common Stock. Avidity will instruct the stock transfer agent to deliver the shares of Company Common Stock to a depositary and to mail each such Avidity stockholder on the Record Date, a statement of the shares of Company Common Stock credited to such holder's account.

*Conditions to the Spin-Off* 

The Spin-Off is subject to the satisfaction or waiver by Avidity and the Company on or prior to the Distribution Date, as applicable, of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• satisfaction or, to the extent permitted therein, waiver of the conditions precedent in the Merger Agreement to
the Merger, other than (i) the completion of the Distribution, (ii) solely in the case of a Permitted Third Party Sale, effectiveness of the Registration Statement, and (iii) any conditions that by their nature are to be satisfied at
the closing of the Merger (provided that such conditions are then capable of being satisfied);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the absence of any judgment, ruling, order, writ, injunction, award, decision, assessment or decree of any
governmental authority preventing the consummation of the Separation, the Distribution or the Merger and any law enacted or deemed applicable to any such transaction by any governmental authority of competent jurisdiction that makes consummation of
the Separation, the Distribution or the Merger illegal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• execution of documentation effecting transfer of the Third Party Agreements from Avidity to the Company, in a
form reasonably satisfactory to Novartis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• continued effectiveness of the RemainCo License Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• execution and delivery of the Transition Services Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Separation having been effected in all material respects.

The Separation Agreement provides that Avidity may waive any of the conditions to the Distribution and proceed with the Distribution even if all such conditions have not been met. Notwithstanding Avidity's contractual ability to waive the conditions in the Separation Agreement, Avidity cannot proceed with the Distribution if there is a stop order, injunction or law preventing the consummation of the Separation or the Distribution, if the

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Registration Statement is not declared effective by the SEC or if the Registration Statement does not remain effective. However, Avidity, as a standalone company, could still proceed with the Distribution even if there is a stop order, injunction or law preventing the consummation of the Merger.

*Access to Information* 

The Separation Agreement provides for the following access to information, subject to certain exceptions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• after the Distribution Date, each of RemainCo and the Company, or any of their affiliates, agrees to provide to
the other party, as soon as reasonably practicable after written request therefor, specific and identified agreements, documents, books, records or files (whether written or electronic) in the possession or under the control of such respective party
or any of its subsidiaries which relate to the requesting party or its business or which are reasonably necessary or advisable for the requesting party to prepare its financial statements and any reports or filings to be made with any governmental
authority or for legal compliance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• from and after the Distribution Date, RemainCo and the Company will each use reasonable best efforts to make
available, upon reasonable written request, its and its subsidiaries' representatives as witnesses and any agreements, documents, books, records or files (whether written or electronic) within their control or which they may make available
without undue burden, as reasonably required by the requesting party in connection with the prosecution or defense of any proceeding, with the requesting party to bear all reasonable out-of-pocket costs and expenses in connection therewith; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• for a period of five years after the Distribution Date, upon reasonable prior notice, each of RemainCo and the
Company will make available to the other applicable party's officers and other authorized representatives reasonable access, during normal business hours, to its employees and properties that relate to the other party's business, and
will furnish promptly all information concerning such other party's business, and such other party's properties and personnel related thereto, as may reasonably be requested, provided that neither party will be required to
(i) permit any inspection or disclosure of any information that, in the reasonable judgment of such party, would be detrimental to such party's or its subsidiaries' business or operations, result in the disclosure of trade secrets
or know-how of third parties or violate confidentiality obligations, be reasonably likely to result in a violation of any law, fiduciary duty or binding agreement entered into prior to the date of the
Separation Agreement or involve information that is reasonably pertinent to a litigation or proceeding between the Company and its affiliates, on the one hand, and RemainCo and its affiliates, on the other hand, after the Distribution,
(ii) disclose any privileged information or (iii) submit to any invasive environmental testing or sampling.

*Releases* 

The Separation Agreement provides that, subject to certain exceptions specified in the Separation Agreement, each party, on behalf of itself and each member of its group, and to the extent permitted by law, all persons who any time prior to the Distribution were stockholders, directors, officers, agents or employees of any member of its respective group (in their respective capacities as such), effective at the time and conditioned upon the occurrence of the Distribution, will remise, release and forever discharge the other party and the other members of the other party's group and their respective successors, stockholders, directors, officers, agents or employees from any and all liabilities to the extent existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or have failed to occur, and any conditions existing or alleged to have existed, on or before the Distribution, including in connection with the Separation, the Distribution or any of the other transactions contemplated under the Separation Agreement, the RemainCo License Agreement, the Transition Services Agreement and the Occupancy License Agreement.

*Indemnification* 

In the Separation Agreement, subject to certain exceptions, RemainCo agrees to indemnify, defend and hold harmless the Company, each of its affiliates after giving effect to the Distribution and each of their respective

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directors, officers, employees and agents, from and against all losses to the extent arising out of, by reason of or otherwise in connection with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any liabilities described under the section entitled "— *Transfer of Assets and Assumption of Liabilities*" as allocated to RemainCo following the Distribution pursuant to the Separation Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the failure of RemainCo, any of its subsidiaries following the Distribution, or any other person or entity to
pay, perform or otherwise promptly discharge such liabilities, whether prior to, at or after the effective time of the Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any breach by RemainCo or any of its subsidiaries of the Separation Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• except to the extent related to liabilities described under the section entitled "— *Transfer of Assets and Assumption of Liabilities*" as allocated to the Company Group following the Distribution pursuant to the Separation Agreement, any guarantee, indemnification obligation, surety bond or other credit support agreement, arrangement,
commitment or understanding to the extent discharged or performed by Avidity or any of its affiliates following the Distribution for the benefit of the Company or any of its affiliates following the Distribution that survives the effective time of
the Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information supplied by Novartis or Merger Sub in writing expressly for inclusion in the Registration Statement in connection
with the Distribution and the related information statement (including any amendments or supplements), the proxy statement or any other filings with the SEC made in connection with the transactions contemplated by the Separation Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• certain tax liabilities that RemainCo is liable for pursuant to the Separation Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any liabilities relating to, arising out of or resulting from claims by any of RemainCo's stockholders, in
their capacity as such, in connection with the Distribution, except to the extent relating to, arising out of, or resulting from existing agreements between such stockholders and any the Company indemnitees.

Subject to certain exceptions, the Company agrees to indemnify, defend and hold harmless RemainCo, each of its affiliates after giving effect to the Distribution, and each of their respective directors, officers, employees and agents, from and against all losses to the extent arising out of, by reason of or otherwise in connection with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any liabilities described under the section entitled "— *Transfer of Assets and Assumption of Liabilities*" as allocated to the Company following the Distribution pursuant to the Separation Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the failure of the Company, any of its subsidiaries following the Distribution or any other person or entity to
pay, perform or otherwise promptly discharge such liabilities, whether prior to, at or after the effective time of the Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any breach by the Company or any of its subsidiaries of the Separation Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• except to the extent related to liabilities described under the section entitled "— *Transfer of Assets and Assumption of Liabilities*" as allocated to RemainCo following the Distribution pursuant to the Separation Agreement, any guarantee, indemnification obligation, surety bond or other credit support agreement, arrangement,
commitment or understanding to the extent discharged or performed by the Company or any of its affiliates following the Distribution for the benefit of RemainCo or any of its affiliates following the Distribution that survives the effective time of
the Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the Registration Statement in connection with the Distribution and the related information statement
(including any amendments or supplements), the proxy statement or any other filings with the SEC made in connection with the transactions

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contemplated by the Separation Agreement, excluding any such liabilities to the extent relating to information supplied by Novartis or Merger Sub in writing expressly for inclusion in such filings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any liabilities relating to, arising out of or resulting from claims by any holders of shares of Company Common
Stock, in their capacity as such, in connection with the Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• certain tax liabilities that the Company is liable for pursuant to the Separation Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any liabilities incurred in connection with RemainCo's performance of certain services to be provided under
the Transition Services Agreement.

Under the Separation Agreement, the amount of any indemnifiable loss will be reduced by (i) any insurance proceeds actually received, and any other amounts actually recovered from third parties in respect of the indemnifiable claim, less (ii) any related costs and expenses of such receipt or recovery, including the aggregate cost of pursuing any related insurance claims and any taxes. The Separation Agreement provides that an insurer who would otherwise be obligated to pay any claim will not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto solely by virtue of the indemnification provisions of the Separation Agreement. Pursuant to the Separation Agreement, the indemnified party will use reasonable best efforts to seek to collect or recover any third-party insurance proceeds or other indemnification, contribution or similar payments to which the indemnified party is entitled in connection with any liability for which the indemnified party seeks indemnification pursuant to the Separation Agreement. The amount of any claim by an indemnified party under the Separation Agreement will also be reduced to reflect any actual tax savings received by any indemnified party that result from the losses that gave rise to such indemnity and will be increased by an amount equal to any tax cost incurred by any indemnified party that results from the receipt of payments under the Separation Agreement.

The Separation Agreement also establishes procedures with respect to third-party claims subject to indemnification and related matters.

*Tax Matters* 

The Separation Agreement will govern the respective rights, responsibilities and obligations of RemainCo and the Company after the Distribution with respect to tax liabilities, tax returns, tax contests, and tax sharing regarding U.S. federal, state, local and foreign taxes. The Separation Agreement will also provide special rules for allocating certain tax liabilities resulting from the Distribution and related transactions.

Under the Separation Agreement, the Company generally will provide a tax indemnity to RemainCo for the Company Indemnified Taxes for any taxable period prior to the Distribution and RemainCo generally will provide a tax indemnity to the Company for any RemainCo Indemnified Taxes. The parties have also agreed to enter into a written, binding agreement to make a Section 336(e) Election with respect to the Company, which is expected to result in the Company receiving a fair market value tax basis in its assets.

*Non-Solicit* 

The Separation Agreement provides that, for a period of twelve months following the effective time of the Distribution, none of RemainCo, the Company or any of their respective subsidiaries will, without the prior written consent of the other party, subject to certain exceptions, directly or indirectly recruit or solicit employees of the other party or its subsidiaries, or subject to certain exceptions, induce or attempt to induce any such employee to terminate his or her employment with, or otherwise cease his or her relationship with, the other party or its subsidiaries.

*Additional Covenants* 

The Separation Agreement addresses additional obligations of the parties relating to, among other matters, further assurances, guarantees, provision and retention of corporate records, confidentiality, privilege and ownership and exchanges of information.

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*Novartis Guaranty* 

The Separation Agreement includes a guaranty by Novartis of the performance by RemainCo of its obligations under the Separation Agreement, the RemainCo License Agreement, the Transition Services Agreement and the Occupancy License Agreement following the effective time of the Merger.

*Employee Matters* 

Prior to the Distribution, Avidity or an affiliate of Avidity will transfer and assign the employment of specified current employees of Avidity and its affiliates (the "Company Employees") to a member of the Company Group (or a professional employer organization or employer of record engaged by a member of the Company Group (an "employer of record" or "EOR")) in accordance with applicable law. Any Company Employee not actively at work for RemainCo Group as of the effective time of the Distribution by reason of approved leave with RemainCo Group (an "Approved Leave Employee") will remain employed by RemainCo Group, and a member of the Company Group (or an EOR) will offer employment to the Approved Leave Employee following such leave (if the Approved Leave Employee returns within twelve months following the effective time of the Distribution), subject to certain limitations.

In addition, certain employees set forth on a schedule to the Separation Agreement will not be Company Employees for a period of time following the effective time of the Distribution (each such employee, a "Transition Employee"), and a member of the Company Group will offer employment to each Transition Employee as of the end of the applicable transition period set forth on a schedule to the Separation Agreement. Each Transition Employee who commences employment with a member of the Company Group shall be deemed to be a Transferred Employee, except such employee will not be eligible for severance benefits in connection with the termination of their employment with RemainCo or its affiliates. For a period of twelve months immediately following the effective time of the Distribution (or, if shorter, the date of employment termination of the relevant Transferred Employee), the Company will, and will cause its affiliates or EOR to, provide each Transferred Employee with, subject to certain limitations, (i) a base salary or hourly wage rate and cash incentive compensation opportunities (excluding equity-based incentive opportunities) that are each no less favorable than such offered to such Transferred Employee immediately prior to the effective time of the Distribution, (ii) employee benefits that are substantially comparable in the aggregate to the employee benefits (excluding equity and equity-based compensation or benefits, defined benefit pension benefits, nonqualified deferred compensation and post-employment welfare benefits (collectively, "Excluded Benefits")) provided to the Transferred Employees immediately prior to the effective time of the Distribution, and (iii) a primary work location at the same work location or another location within 50 miles of the work location as of immediately prior to the effective time of the Distribution. Nothing in the Separation Agreement creates any obligation on the part of any member of the RemainCo Group or any member of the Company Group or an EOR to (A) continue the employment of any individual or permit the return from a leave of absence for any period or (B) change the employment status of any individual from at-will.

The Company will assume and honor, or will cause a member of the Company Group or an EOR to assume and honor, specified employment and individual agreements, including any severance obligations in respect of Transferred Employees.

On the Distribution Date, RemainCo will, or will cause one of its affiliates (other than a member of the Company Group) to pay all Transferred Employees for their accrued, unused vacation and paid time off through the effective time of the Distribution.

In the event that a current employee at the executive level of any member of the RemainCo Group as of immediately following the effective time of the Distribution resigns from employment with RemainCo or any of its affiliates under circumstances entitling such employee to severance payments or benefits or any accelerated payment of any deferred cash, retention, transaction or similar bonus or award (collectively, the "Separation Benefits") and such employee commences employment with the Company within 24 months following the

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effective time of the Distribution, the Company will reimburse RemainCo for the aggregate amount of the Separation Benefits within 30 days of the employee's commencement of employment with the Company.

The Company will, or will cause its affiliates or an EOR to, credit each Transferred Employee the service credited to such Transferred Employee by RemainCo as of the effective time of the Distribution for purposes of eligibility, vesting, level of paid time off benefits and future paid time off accruals and for purposes of determining severance amounts, other than as would result in duplication of benefits for the same service period or with respect to any Excluded Benefits. The Company will, for the first plan year of such participating Transferred Employee, use reasonable best efforts to (i) waive or cause to be waived certain benefit plan requirements to the extent such benefit plan requirements would not have been applicable to or were otherwise satisfied by such Transferred Employee prior to the effective time of the Distribution under an analogous Avidity employee benefit plan; and (ii) credit each Transferred Employee with all amounts paid prior to the effective time of the Distribution with respect to any Avidity employee benefit plan that is a group health benefit plan for purposes of satisfying all applicable deductible, coinsurance, and out-of-pocket requirements.

As of the effective time of the Distribution, Transferred Employees will cease active participation in the Avidity Biosciences 401(k) Plan (the "401(k) Plan"). Prior to the effective time of the Distribution, Avidity will fully vest all employees of Avidity and its affiliates (including the Company) who participate in the 401(k) Plan in their account balances (to the extent not already fully vested).

As of or prior to the effective time of the Distribution, the Company may establish a severance plan to be effective with respect to qualifying terminations from the Company Group following the effective time of the Distribution.

Following the effective time of the Distribution, the Company Annual Incentive Plan (as defined in the Separation Agreement) will be established, which will have terms and opportunities that are comparable, with certain limitations, to those in effect as of immediately prior to the effective time of the Distribution under the corresponding RemainCo employee benefit plan except that performance metrics under the Company Annual Incentive Plan shall relate to the Company Business and the Company may modify the terms of the Company Annual Incentive Plan as it deems necessary and appropriate to comply with applicable Laws.

Following the Distribution, the Company will have full responsibility with respect to any liabilities arising or relating to the employment or engagement of all Transferred Employees to the extent exclusively arising following the effective time of the Distribution and under the employment and individual agreements and benefit plans transferred to the Company (inclusive of the payment or performance of any obligation arising out of or relating to any annual cash bonus or other short-term cash incentive plan or program in which the Company employees participate (including responsibility for the payment of the bonuses thereunder with respect to the entire calendar year in which the closing of the Merger occurs)), with certain exceptions.

Prior to the Distribution Date, Avidity and the Company will cooperate to establish, according to the terms of the Separation Agreement, (i) an equity compensation plan and forms of standard award and Make Whole Award agreements thereunder, which plan and standard award agreements are intended to be substantially similar to Avidity's 2020 Incentive Award Plan and the forms of award thereunder, and (ii) an employee stock purchase plan intended to comply with Section 423 of the Code, which plan is intended to be substantially similar to Avidity's 2020 Employee Stock Purchase Plan. The Company will adopt such plans, and Avidity will approve such plans as the Company's sole stockholder prior to the effective time of the Distribution; provided, that, except for the Make Whole Awards, no awards will be granted under such equity compensation plan and no offering periods will commence under such employee stock purchase plan prior to the effective time of the Distribution. After such adoption and approval, and prior to the effective time of the Distribution, the Company and Avidity will take all steps necessary to register the equity compensation plan under the Securities Act on Form S-8 or other appropriate form. After such registration, the Company will grant the Make Whole Awards to all holders of outstanding Avidity RSUs (aside from New Hire RSUs and 2026 LTI Awards) and Avidity Stock

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Options who are current service providers to Avidity and its affiliates (including the Company) as of such grant. "Make Whole Award" means an award evidencing the right of holders of Avidity Stock Options and Avidity RSUs as of the Record Date to receive one share of Company Common Stock per ten shares of Avidity Common Stock underlying such Avidity Stock Options and Avidity RSUs, as required by the terms of the Separation Agreement and as permitted by the SEC's Staff Legal Bulletin No. 4. subject to certain exceptions.

Following the effective time of the Distribution, RemainCo will not, and will cause its affiliates to not, seek to enforce the terms of any Avidity Employee Invention Assignment and Confidentiality Agreement between any member of the RemainCo Group and a Transferred Employee with respect to any such Transferred Employee's right to be employed by or provide services to the Company Group, but not with respect to (i) any obligations of confidentiality or non-use of RemainCo's confidential information that is unrelated to the Company in connection with the Company Business, (ii) relating to employee non-solicit obligations that apply to the Company under the Separation Agreement or (iii) invention assignment provisions with respect to the RemainCo Business.

*Licensed Names and Marks* 

Pursuant to the Separation Agreement, the Company and the Company Group has granted to Novartis, RemainCo and the RemainCo Group a non-exclusive license to use the trademarks in the Company Intellectual Property, including "Avidity," "Avidity Bio" and "Avidity Biosciences" (the "Company Marks") to conduct the RemainCo Business outside the Cardiovascular Field (as defined in the RemainCo License Agreement). This license generally expires six months after the effective time of the Distribution but expires four years after the effective time of the Distribution with regards to the "Avidity" trademark. RemainCo has agreed to cease using "Avidity" (or variations thereof) in corporate names for RemainCo Group entities as soon as reasonably practicable after the effective time of the Distribution.

Likewise, RemainCo and the RemainCo Group grant to the Company and the Company Group, a non-exclusive license to the trademarks in the RemainCo Intellectual Property (the "RemainCo Marks") to conduct the Company Business. This license expires three months after the effective time of the Distribution. The Company is prohibited from using "Avidity" in conjunction with the words "Bio" or "Biosciences" after the effective time of the Distribution.

Both parties and their respective group members may use the Company Marks and RemainCo Marks, as applicable, solely in the manner in which such trademarks were used by RemainCo during the 12-month period prior to the effective time of the Distribution.

*Technology Transfer* 

Subject to the requirements set forth in the RemainCo License Agreement, pursuant to the Separation Agreement, RemainCo, together with the RemainCo Group, will, as soon as reasonably practicable, but in no event later than nine months following the effective time of the Distribution, complete or cause to be completed, the transfer to the Company and the Company Group all tangible embodiments of all assets transferred to the Company, including all trade secrets, know-how and any other confidential or proprietary information included therein.

*Expenses* 

Except as otherwise set forth in the Separation Agreement, Transition Services Agreement or the Occupancy License Agreement, all costs and expenses incurred on or prior to the date of the Distribution in connection with the preparation, execution, delivery, printing and implementation of the Separation Agreement, the Transition Services Agreement, the Occupancy License Agreement, the Registration Statement and the related information statement, and the transactions contemplated thereby, including the Distribution, will be paid by RemainCo and deemed to be liabilities of RemainCo. Each party will bear its own costs and expenses incurred after the date of the Distribution.

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*Termination* 

The Separation Agreement will terminate automatically and concurrently with any termination of the Merger Agreement and may be terminated, and the Distribution may be amended, modified or abandoned, at any time prior to the Distribution by an agreement in writing signed by Avidity and Novartis, without the approval of the Company. After the Distribution, the Separation Agreement may only be terminated by an agreement in writing signed by RemainCo and the Company.

*Governing Law* 

The parties to the Separation Agreement have agreed that the Separation Agreement is governed by, and will be construed in accordance with, the laws of the State of Delaware.

*Jurisdiction* 

The parties to the Separation Agreement have agreed that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, the Separation Agreement or the transactions contemplated thereby (whether brought by any party or any of its affiliates or against any party or any of its affiliates) will be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties irrevocably consented to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding.

*No Third-Party Beneficiaries* 

Except as otherwise provided in the indemnification provisions relating to indemnified parties, the Separation Agreement is solely for the benefit of the parties to the Separation Agreement and it does not confer upon any person (other than the parties to the Separation Agreement and their respective successors and permitted assigns) any right, benefit or remedy of any nature.

*Waiver* 

The parties to the Separation Agreement agreed that, at any time prior to the effective time of the Distribution, either party may extend the time for the performance of any of the obligations or other acts of the other party, or may waive compliance with any of the agreements of the other party or any conditions to its own obligations, in each case, only to the extent such obligations, agreements and conditions are intended for its benefit, provided that such extension or waiver is set forth in a writing executed by such party.

*Specific Performance* 

The parties to the Separation Agreement have agreed that irreparable harm would occur that monetary damages could not make whole in the event of any breach of the Separation Agreement, and that the parties to the Separation Agreement are entitled to specific performance, or other non-monetary equitable relief, to prevent or restrain breaches or threatened breaches of the Separation Agreement without posting any bond or undertaking, in addition to any other remedy to which the parties may be entitled at law or in equity.

*Permitted Third Party Sale* 

In the event of a Permitted Third Party Sale, among other things: (i) the Distribution will be replaced by consummation of the Permitted Third Party Sale; and (ii) certain tax rights or obligations will no longer apply to Avidity, the Company or any of their respective affiliates.

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*Change of Control Transaction* 

The Separation Agreement provides that, in the event of a Change of Control Transaction, among other things, (i) the scope of intellectual property to be transferred to the Company will be adjusted according to the terms of the Separation Agreement; and (ii) RemainCo will not be obligated to provide any of the Transition Services.

The Separation Agreement defines a "Change of Control Transaction" as a transaction with a third party or third parties involving (i) the acquisition, merger, or consolidation, directly or indirectly, of the Company or its affiliate or, if there is a person that controls the Company or its affiliate, such "Controlling Person", and, immediately following the consummation of such transaction, the stockholders of the Company or its affiliate or Controlling Person, immediately prior thereto holding, directly or indirectly, as applicable, shares of capital stock of the surviving or continuing company representing less than 50% of the outstanding shares of such surviving or continuing company, (ii) the sale of all or substantially all of the assets or business of such party or, if there is a Controlling Person, such Controlling Person, or (iii) a person, or group of persons acting in concert, acquiring, directly or indirectly, more than 50% of the voting equity securities or management control of such party or, if there is a Controlling Person, such Controlling Person. For the avoidance of doubt, a Change of Control Transaction includes a Permitted Third Party Sale.

**Material U.S. Federal Income Tax Consequences of the Distribution** 

This section describes the material U.S. federal income tax consequences of the Spin-Off to stockholders of Avidity.

This section applies solely to persons that hold shares of Avidity Common Stock and Company Common Stock as capital assets within the meaning of section 1221 of the Code (generally property held for investment). This section does not address all aspects of U.S. federal income taxation and does not discuss all of the tax consequences that may be relevant to a holder in light of such holder's individual circumstances, including state, local, or non-U.S. tax consequences, estate and gift tax consequences, and tax consequences arising under the Medicare tax on net investment income or the alternative minimum tax. Moreover, this section does not address the Foreign Account Tax Compliance Act of 2010 (including the Treasury Regulations promulgated thereunder and intergovernmental agreements entered into pursuant thereto or in connection therewith and any laws, regulations or practices adopted in connection with any such agreement). This section does not apply to holders subject to special rules, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a dealer or broker in stocks, securities, commodities or foreign currencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a regulated investment company or real estate investment trust;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a tax-exempt organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a bank, financial institution, mutual fund or insurance company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a person that directly, indirectly or constructively owns 5% or more of the combined voting power of Avidity or
the Company, or of the total value of the shares of Avidity Common Stock or Company Common Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a person that holds shares of Avidity Common Stock or Company Common Stock as part of a straddle or a hedging,
conversion, or other risk reduction transaction for U.S. federal income tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a person that acquires or sells shares of Avidity Common Stock as a part of wash sale for U.S. federal income tax
purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a person that is, or holds Avidity Common Stock through, partnerships or other pass-through entities for U.S.
federal income tax purposes;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a person that is an expatriate and former long-term resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a person required to recognize income or gain no later than such income or gain is required to be reported on an
applicable financial statement (as defined in Section 451(b) of the Code);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a person that acquired shares of Avidity Common Stock or Company Common Stock pursuant to the exercise of
employee share options, through a tax qualified retirement plan or otherwise as compensation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a U.S. holder (as defined below) whose functional currency is not the U.S. dollar.

This section is based on the Code, its legislative history, existing and proposed regulations, published rulings and court decisions, all as of the date of this information statement. These laws are subject to change, possibly on a retroactive basis. Any such change could alter the tax consequences to the holders as described herein.

This discussion is intended to provide only a general summary of the material U.S. federal income tax consequences of the Distribution in the Spin-Off to holders of shares of Avidity Common Stock. We do not intend it to be a complete analysis or description of all potential U.S. federal income tax consequences of the Spin-Off. The U.S. federal income tax laws are complex and subject to varying interpretations. Accordingly, the Internal Revenue Service (the "*IRS*") may not agree with the tax consequences described in this proxy statement.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds shares of Avidity Common Stock, the tax treatment of a partner in such partnership generally will depend on the status of the partner and activities of the partnership. Holders that are partners of a partnership holding shares of Avidity Common Stock should consult their own tax advisors.

We have not sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.

**STOCKHOLDERS ARE URGED TO CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE SPIN-OFF AND OWNERSHIP OF THE COMPANY COMMON STOCK IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL (INCLUDING THE ALTERNATIVE MINIMUM TAX), STATE, LOCAL OR NON-U.S. AND OTHER TAX LAWS AND OF CHANGES IN THOSE LAWS.** 

For purposes of this discussion, the term "U.S. holder" means a beneficial owner of shares of Avidity Common Stock that is, for U.S. federal income tax purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an individual who is a citizen or resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a corporation created or organized in or under the laws of the United States, any state thereof or the District
of Columbia or other entity treated as a domestic corporation for U.S. federal income tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a trust if (i) its administration is subject to the primary supervision of a court within the United States
and one or more U.S. persons have the authority to control all substantial decisions of the trust; or (ii) it has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate the income of which is subject to U.S. federal income tax regardless of its source.

A "Non-U.S. holder" is a beneficial owner (other than a partnership or other pass-through entity for U.S. federal income tax purposes) of shares of Avidity Common Stock that is not a U.S. holder.

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***U.S. Holders***

*Tax Consequences of the Spin-Off* 

The distribution of Company Common Stock in the Distribution (including fractional shares for which U.S. holders receive cash in lieu thereof) in the event of the Spin-Off will be treated as a taxable distribution to U.S. holders for U.S. federal income tax purposes. As a general matter, a distribution by a corporation to a stockholder with respect to such stockholder's shares of the corporation's stock is treated as a taxable dividend to the extent of such stockholder's ratable share of any current or accumulated earnings and profits of the corporation, with the excess treated first as a non-taxable return of capital to the extent of such holder's adjusted tax basis in the shares of the corporation's stock and, thereafter, as capital gain.

However, RemainCo has not calculated earnings and profits in accordance with U.S. federal income tax principles. Accordingly, U.S. holders should expect to treat the Distribution (including fractional shares for which U.S. holders receive cash in lieu thereof) in the event of the Spin-Off as a taxable dividend for U.S. federal income tax purposes and the remainder of this discussion assumes such treatment. Dividends are generally taxed as ordinary income. Dividends paid to a non-corporate U.S. holder (including an individual) that constitute qualified dividend income are taxable to the U.S. holder at the preferential rates applicable to long-term capital gains, provided that the U.S. holder holds the shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meets other holding period requirements. RemainCo expects that any amount treated as a dividend paid by RemainCo to a non-corporate U.S. holder pursuant to the Distribution will constitute qualified dividend income to any U.S. holder that meets the applicable holding period requirements.

A U.S. holder's tax basis in the shares of Company Common Stock received in the Distribution generally will equal the fair market value of those shares on the Distribution Date, and a U.S. holder's holding period for those shares will begin the day after the Distribution Date.

A U.S. holder that receives cash in lieu of a fractional share of Company Common Stock generally will be treated as having received a fractional share and having received such cash as consideration for the sale of such share, and will recognize capital gain or loss (if any) based on the difference between the amount of cash received and the fair market value on the Distribution Date of the fractional share of Company Common Stock deemed received. Such gain or loss generally will be short-term capital gain or loss. The deductibility of capital losses is subject to limitations.

Although RemainCo will ascribe a value to the shares of Company Common Stock it distributes in the Distribution for tax purposes, this valuation is not binding on the IRS or any other tax authority. These taxing authorities could ascribe a higher valuation to those shares, particularly if the shares of Company Common Stock trade at prices significantly above the value ascribed to those shares by RemainCo in the period following the Distribution. Such a higher valuation may cause a larger reduction in the tax basis of a U.S. holder's shares of Avidity Common Stock or may cause a U.S. holder to recognize additional dividend or capital gain income.

*Distributions on Company Common Stock* 

We do not anticipate the Company declaring or paying cash dividends in the foreseeable future. However, if the Company does make distributions of cash or property on its shares, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from the Company's current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Dividends received by certain non-corporate U.S. holders (including individuals) may be taxed at preferential rates applicable to qualified dividend income, provided certain holding period requirements are met. Corporate U.S. holders that meet certain holding period and other requirements may be eligible for a dividends-received deduction for a portion of the dividend received. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a U.S. holder's adjusted tax basis in its Company Common Stock, but not below

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zero. Any excess will be treated as capital gain. Such gain generally will be taxable as long-term capital gain if the U.S. holder's holding period in the Company Common Stock exceeds one year, which is subject to preferential tax rates for non-corporate U.S. holders.

*Sale or Other Taxable Disposition of Company Common Stock* 

Upon a subsequent sale or other taxable disposition of a share of Company Common Stock, a U.S. holder will recognize taxable gain or loss equal to the difference between the amount realized on the disposition of the share and the U.S. holder's adjusted tax basis in the share. The gain or loss will be capital gain or loss. A non-corporate U.S. holder (including an individual) with a holding period in excess of one year generally will be eligible for reduced tax rates for such long-term capital gains. The deductibility of capital losses is subject to limitations.

***Non-U.S. Holders***

*Tax Consequences of the Spin-Off* 

For the reasons discussed above, Non-U.S. holders should expect to treat the Distribution (including fractional shares for which U.S. holders receive cash in lieu thereof) in the event of the Spin-Off as a taxable dividend for U.S. federal income tax purposes. Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.

Subject to the discussion below on effectively connected income, to the extent that the Distribution of Company Common Stock to a Non-U.S. holder is treated as a dividend, it will be subject to U.S. federal withholding tax at a rate of 30% of the fair market value of the Company Common Stock (including fractional shares for which U.S holders receive cash in lieu thereof) distributable to such Non-U.S. holder (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. holder furnishes a valid IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or other applicable documentation), certifying qualification for the lower treaty rate). A Non-U.S. holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

RemainCo or other applicable withholding agents may be required or permitted to withhold at the applicable rate on all or a portion of the Company Common Stock (including shares for which U.S. holders receive cash in lieu thereof) distributable to a Non-U.S. holder. Any such withholding with respect to Company Common Stock would be satisfied by RemainCo or any of its withholding agents by withholding and selling a portion of the shares of Company Common Stock that otherwise would be received by such Non-U.S. holder, or by withholding from other property held in such holder's account (including cash in lieu of fractional shares) with the withholding agent. Any such withheld and sold shares will be treated as distributed to the holder.

If the Distribution to a Non-U.S. holder is effectively connected with the Non-U.S. holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. holder maintains a permanent establishment or fixed base in the United States to which such Distribution is attributable), the Non-U.S. holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the Distribution is effectively connected with the Non-U.S. holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, that the Non-U.S. holder maintains a permanent establishment or fixed base in the United States to which the Distribution is attributable).

A non-U.S. holder for which the Distribution is effectively connected or attributable to a permanent establishment or fixed base in this manner will be subject to U.S. federal income tax with respect to the Distribution on a net income basis at the regular rates that apply to U.S. persons. A Non-U.S. holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) thereon, as adjusted for certain items.

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*Distributions on Company Common Stock* 

We do not anticipate the Company declaring or paying cash dividends in the foreseeable future. However, if the Company does make distributions of cash or property on its shares, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from the Company's current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. holder's adjusted tax basis in its Company Common Stock, but not below zero. Any excess will be treated as capital gain and will be treated as described below in the section entitled "*Material U.S. Federal Income Tax Consequences—Non-U.S. Holders— Sale or Other Taxable Disposition of Company Common Stock.*"

Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. holder of Company Common Stock will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. holder furnishes a valid IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or other applicable documentation), certifying qualification for the lower treaty rate). A Non-U.S. holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

If dividends paid to a Non-U.S. holder are effectively connected with the Non-U.S. holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. holder maintains a permanent establishment or fixed base in the United States to which such dividends are attributable), the Non-U.S. holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, that the Non-U.S. holder maintains a permanent establishment or fixed base in the United States to which such dividends are attributable).

Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular rates that apply to U.S. persons. A Non-U.S. holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items.

Non-U.S. holders should consult their tax advisors regarding their entitlement to the benefits, and the application, of any income tax treaties to them with respect to distributions on Company Common Stock.

*Sale or Other Taxable Disposition of Company Common Stock* 

A Non-U.S. holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition of Company Common Stock (including with respect to any cash received in lieu of a fractional share of Company Common Stock) unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the gain is effectively connected with the Non-U.S. holder's
conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. holder maintains a permanent establishment or fixed base in the United States to which
such gain is attributable);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Non-U.S. holder is a nonresident alien individual who is present in
the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or

Company Common Stock constitutes a U.S. real property interest, or "USRPI," by reason of the Company's status as a U.S. real property holding corporation, or "USRPHC," for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of such disposition or such Non-U.S. holder's holding period of such Company Common Stock.

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Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates that apply to U.S. persons. A Non-U.S. holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. holder timely files U.S. federal income tax returns with respect to such losses.

With respect to the third bullet point above, the Company does not anticipate becoming a USRPHC. Because the determination of whether the Company is a USRPHC depends on the fair market value of the Company's USRPIs relative to the fair market value of its non-U.S. real property interests and its other business assets, there can be no assurance the Company will not become a USRPHC in the future. Even if the Company were to become a USRPHC, gain arising from the sale or other taxable disposition by a Non-U.S. holder of Company Common Stock will not be subject to U.S. federal income tax if such stock is "regularly traded," as defined by applicable Treasury Regulations, on an established securities market, and such Non-U.S. holder owned, actually and constructively, 5% or less of such stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. holder's holding period, or if another exception from these rules under the Code applies. No assurance can be provided that Company Common Stock will be treated as "regularly traded," as defined by applicable Treasury Regulations, on an established securities market.

Non-U.S. holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.

***Information Reporting and Backup Withholding***

Information reporting generally will apply to payments to a holder pursuant to the Spin-Off, unless such stockholder is an entity that is exempt from information reporting and, when required, properly demonstrates its eligibility for exemption. Any payment to a U.S. holder that is subject to information reporting generally will also be subject to backup withholding, unless such U.S. holder provides the appropriate documentation (generally, IRS Form W-9) to the applicable withholding agent certifying that, among other things, its taxpayer identification number is correct, or otherwise establishes an exemption.

The information reporting and backup withholding rules that apply to payments to a holder pursuant to the Spin-Off generally will not apply to payments to a Non-U.S. holder if such Non-U.S. holder certifies under penalties of perjury that it is not a U.S. Person (generally by providing an IRS Form W-8BEN or W-8BEN-E or other applicable IRS Form W-8) or otherwise establishes an exemption. Non-U.S. holders should consult their own tax advisors to determine which IRS Form W-8 is appropriate. However, information returns are required to be filed with the IRS in connection with any distribution of the Company Common Stock in the Spin-Off paid to the Non-U.S. holder, regardless of whether such distributions constitute dividends or any tax was actually withheld.

Certain stockholders (including corporations) generally are not subject to backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against a holder's U.S. federal income tax liability if the required information is properly and timely furnished by such holder to the IRS.

**THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR STOCKHOLDERS. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES TO YOU OF THE SPIN-OFF AND OWNERSHIP OF THE COMPANY COMMON STOCK IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, INCLUDING THE APPLICATION AND EFFECT OF ANY FEDERAL, STATE, LOCAL, NON-U.S., OR OTHER LAWS.** 

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**Listing and Trading of Our Common Stock** 

There is not currently a public market for shares of our common stock. We have applied to list shares of our common stock on Nasdaq under the symbol "RNA." Assuming that such listing application is approved, it is anticipated that trading will commence on a when-issued basis on or shortly before the Distribution Date. On the first trading day following the Distribution Date, when-issued trading in our common stock will end and regular-way trading will begin. "When-issued trading" refers to trading which occurs before a security is actually issued. These transactions are conditional with settlement to occur if and when the security is actually issued and Nasdaq determines transactions are to be settled. "Regular-way trading" refers to normal trading transactions which are settled by delivery of the securities against payment on the second business day after the transaction.

Beginning on , and continuing until the occurrence of the Distribution on the Distribution Date, Avidity Common Stock will trade with an entitlement to the Distribution under the symbol " ." Any holders of Avidity Common Stock who sell shares on or before the Distribution Date will also be selling their right to receive Company Common Stock. Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling Avidity Common Stock on or before the Distribution Date.

We cannot assure you as to the price at which the Company Common Stock will trade before, on or after the Distribution Date. Particularly until shares of our common stock are fully distributed and an orderly market develops in our common stock, the price at which such shares trades may fluctuate significantly. In addition, the combined trading prices of our common stock and Avidity Common Stock held by stockholders after the Distribution may be less than, equal to, or greater than the trading price of the Avidity Common Stock prior to the Distribution.

Company Common Stock distributed to Avidity stockholders will be freely transferable, except for shares received by people who may be considered affiliates with us or shares subject to contractual restrictions. People who may be considered our affiliates after the Distribution generally include individuals or entities that control, are controlled by, or are under common control with us. This may include certain of our officers, directors and significant stockholders. Persons who are our affiliates will be permitted to sell their shares only pursuant to an effective registration statement under the Securities Act, or an exemption from the registration requirements of the Securities Act, or in compliance with Rule 144 under the Securities Act.

**Reasons for Furnishing This Information Statement** 

This information statement is being furnished by Avidity solely to provide information to holders of Avidity Common Stock who will receive our common stock in the Distribution. It is not, and is not to be construed as, an inducement or encouragement to buy or sell any of our securities. We and Avidity will not update the information in this information statement except in the normal course of our and Avidity's respective public disclosure obligations and practices.

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**BUSINESS** 

We are a biopharmaceutical company pioneering delivery of RNA therapeutics to the heart to transform the standard of care for people living with cardiomyopathies. Our proprietary technology leverages the targeted our RNA delivery platform initially developed at Avidity, which combines the tissue selectivity of mAbs and other targeted delivery ligands with the precision of oligonucleotides. This unique combination is designed to allow selective targeting of the underlying genetic drivers of disease that were previously undruggable. Through targeted, non-viral delivery of siRNA to cardiac tissues, our approach has the potential to overcome key limitations of nonspecific viral and nanoparticle-based delivery systems, including challenges related to tissue specificity, immunogenicity, and redosing.

The field of precision cardiology represents a significant scientific, clinical and commercial opportunity in cardiomyopathies, which impact approximately 4.42 million people worldwide. Current treatments focus on symptom management rather than addressing underlying genetic drivers of disease. We are committed to redefining standard of care paradigms by delivering disease modifying precision cardiology therapies to address genetically driven cardiomyopathies. Genetically driven conditions account for nearly 1 in 3 cardiomyopathy patients worldwide. We will do this by leveraging our proprietary technology, including next generation innovations, expertise and deep knowledge of underlying disease pathophysiology, and strong business acumen, geared initially towards rare disease patient populations.

Our development pipeline consists of programs that target genetically validated drivers of cardiomyopathy—PRKAG2 and PLN. These genetic drivers are associated with PRKAG2 syndrome and PLN cardiomyopathy—genetic heart conditions associated with severe, often life-threatening forms of heart disease. There are currently no therapies specifically approved for PRKAG2 syndrome or PLN cardiomyopathy, and current approaches rely on standard of care for heart failure symptoms (e.g., ACE inhibitors, beta-blockers). Given the heterogeneity of these diseases and underlying genetic drivers, new precision cardiology approaches are needed to more precisely address the underlying causes of the disease. Our programs are supported by robust preclinical data, in addition to positive clinical data generated in neuromuscular indications using the same RNA delivery platform technology at Avidity. We have observed potent and durable messenger RNA ("mRNA") knockdown, reversal of disease phenotypes in animal models, and favorable tolerability profiles in non-human primates ("NHP") in our preclinical studies in cardiac disease. While we are initially focused on targeting rare cardiac conditions with high unmet need, we believe our technology, coupled with the robust preclinical data across two different therapeutic areas, supports our strategy to expand the pipeline to treat a broader range of genetic and cardiac diseases.

We are well positioned to become a leader in precision cardiology given our expertise, strategic partnerships and our proprietary RNA delivery platform, for which we have retained certain rights (see "*—Intellectual Property—RemainCo License Agreement*" for more information on the RemainCo License Agreement). The RNA delivery platform, initially developed at Avidity—in addition to the scientific, clinical and regulatory expertise that powered Avidity's development—serve as the backbone for our long-term vision: to pioneer precision RNA medicines for the heart and profoundly improve the lives of people impacted by cardiac diseases. We plan to achieve our vision through a commitment to scientific rigor, patient-centric development, and operational excellence.

**Our Strategy** 

We are building a cutting-edge biopharmaceutical company with a focus on precision cardiology and have a three-pronged strategic approach:

1) **Pioneer precision RNA-based therapies that transform the identification, treatment and care of people with cardiomyopathies by leveraging the RNA delivery platform, our development expertise and our deep understanding of the underlying disease pathophysiology.** 

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The RNA delivery platform was initially developed at Avidity and was used for the first-ever successful targeted delivery of siRNA to the muscle, supporting the advancement of three rare neuromuscular programs into registrational development. We are expanding the reach of the RNA delivery platform to precision cardiology and are advancing next-generation technology innovations, which we have observed to improve siRNA delivery in cardiac muscle. Our management team, which includes multiple alumni from Avidity, brings deep expertise in identifying targets that are well understood and are believed to directly address the underlying biology of a disease. Our rigorous target selection process is designed to maximize the probability of technical success in clinical development and prioritizes targets based on high penetrance, clear genotype-phenotype correlations, and the ability to develop animal models that recapitulate the key features of human disease.

2) **Advance a precision cardiology pipeline that achieves proof of concept of RNA delivery to the heart and addresses the underlying causes of cardiomyopathies, redefining standard of care paradigms.** We are prioritizing advancement of our initial product candidates ATR 1072 and ATR 1086 for the treatment of PRKAG2 syndrome and PLN cardiomyopathy, respectively. PRKAG2 syndrome and PLN cardiomyopathy are both severe, life-threatening rare autosomal dominant progressive cardiomyopathies with no approved treatment options and high unmet need. If supported by positive Phase 1 trial results, we expect to advance ATR 1072 and ATR 1086 into potentially registrational clinical trials while continuing to develop these and other pipeline programs, expanding into broader cardiology indications with high unmet need. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Achieve clinical proof of concept for ATR 1072.** ATR 1072 is specifically designed to silence PRKAG2 mRNA,
the gene product that when mutated causes increased AMP-activated protein kinase ("AMPK") activity and drives cardiac glycogen accumulation. At the proof-of-concept stage, we expect to show PRKAG2 RNA knockdown, glycogen depletion, changes in N-terminal pro-B-type natriuretic peptide ("NT-proBNP") and at later times changes in electrocardiogram ("ECG"), chamber volumes. Changes in AMPK activity
will be difficult to measure due to the complexity of the AMPK system (multiple isoforms and subcellular locations), inherent technical limitations of detection methods, and the subtle, transient nature of the changes themselves. Subject to
successful completion of regulatory submission and clearance for ATR 1072, we plan to initiate the Phase 1 clinical proof-of-concept trial in the second half of 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Progress ATR 1086 into clinical development.** ATR 1086 is specifically designed to silence PLN mRNA, a
negative regulator of sarcoplasmic reticulum Ca<sup>2+</sup>-ATPase 2a ("SERCA2a"), a critical protein in cardiac muscle cells that regulates calcium handling and contraction. When overexpressed
or mutated, PLN disrupts calcium homeostasis and impairs cardiac function. In PLN-R14del cardiomyopathy, which is the most prevalent disease-relevant PLN mutation, ATR 1086 reduces PLN protein aggregates that
disrupt sarcoplasmic reticulum ("SR") function, prevents disease onset and early mortality in preclinical models, and shows favorable tolerability in non-GLP studies in cynomolgus monkeys, a NHP
species, with ~80% PLN mRNA knockdown over three months. Beyond rare genetic cases, ATR 1086 has broader therapeutic potential in heart failure and other cardiomyopathies characterized by impaired calcium handling and reduced SERCA2a activity,
offering a precise approach to restore normal calcium handling, improve heart muscle contraction, and slow disease progression. Subject to successful completion of IND filing and regulatory clearance for ATR 1086, we plan to initiate the Phase 1
clinical proof-of-concept trial in 2028.

3) **Build a fully integrated company based on our understanding of the unique needs of people with rare diseases and pave a new path for cardiomyopathies from drug discovery and development to patient care and clinical practice.** Our leadership and management team are comprised of pioneers in RNA medicines with deep scientific and rare disease expertise. Our employees are dedicated to and guided by transparency, integrity, teamwork, excellence and innovation to help us achieve our mission rapidly, responsibly, and efficiently. We plan to maintain a disciplined approach to capital allocation and align program prioritization with the highest probability of technical and clinical success to positively impact patients worldwide. We are focused on employing a patient-first strategy through highly collaborative patient community engagements and partnerships ensuring their perspectives and 

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insights inform our strategic approach and guide our decision-making. Ultimately, our goal is to rapidly advance our pipeline assets from research and development to commercialization ensuring access to patients and clinicians around the world.

**RNA delivery platform** 

**Overview** 

We are committed to pioneering the delivery of RNA therapies to the heart muscle and overcoming the current limitations of oligonucleotide therapies to treat a wide range of serious cardiac conditions. The RNA delivery platform is built on the foundation of the AOC technology, originally developed at Avidity, which we utilize to design, engineer and develop therapeutics that combine the specificity of mAbs with the precision of oligonucleotide therapies targeting the underlying cause of cardiac conditions previously untreatable with such therapeutics.

We have accumulated deep experience regarding oligonucleotide therapeutics, modulation of RNA processes, antibody engineering and conjugation, and drug delivery techniques. We collectively refer to the know-how and proprietary technology borne out of this experience, and its systematic application in the design and development of our product candidates, as the "RNA delivery platform."

Beyond AOCs, we are also developing a next-generation RNA delivery platform with the potential for subcutaneous and less frequent dosing which we believe will help achieve greater durability, increased potency and ultimately increased patient adherence.

**Our Approach** 

Our deep experience with oligonucleotide therapeutics, modulation of RNA processes, antibody engineering and conjugation, and drug delivery techniques provide a solid foundation for our efforts to address the current limitations of oligonucleotide therapies for cardiac conditions. The disruptive and broad RNA delivery platform also affords us the option to deploy various types of oligonucleotides to treat cardiac conditions including siRNAs.

Our RNA therapeutics are designed to do the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• combine validated tissue selectivity of targeted delivery ligands, including mAbs, with the precision of
oligonucleotides;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• deliver to cardiac tissues and cell types previously untreatable with RNA therapeutics;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• address the underlying cause of rare and genetically defined cardiac conditions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• leverage and scale the RNA delivery platform, our existing pre-clinical and clinical experience and experienced manufacturers who can utilize well-established and scalable methods for manufacturing mAbs and oligonucleotides. We also have the ability to use a single mAb across multiple programs, providing significant
leverage around development costs and timelines associated with each incremental program.

***Advantages of the RNA delivery platform***

We believe that our product candidates derived from the RNA delivery platform will have the potential to offer the following distinct advantages over existing RNA therapeutics:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Potential to directly address genetic cause of cardiomyopathy in patients*: the RNA delivery platform is
designed to enable non-viral, specific delivery of RNA therapeutics directly into cardiomyocytes—with the potential to achieve potent, homogeneous gene silencing in genetically defined cardiomyopathies
where existing small-molecule or viral approaches face limitations;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Expand scope of cardiac conditions addressable with oligonucleotides*: (i) utilizes identified cell
surface protein-antibody pairs to design oligonucleotides to precisely target the underlying cause of diseases previously untreatable with RNA therapeutics; (ii) flexibility to deploy an appropriate oligonucleotide type for cardiac conditions;
and (iii) optimize all structural components of the RNA delivery platform for effective delivery—the oligonucleotide, the mAb and the antibody conjugate design;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Potential for a favorable safety profile:* (i) utilize the same antibody and oligonucleotide
therapeutic modalities as Avidity has used in its clinical trials which have well-studied properties; and (ii) utilize targeted delivery and selective and specific target pharmacology limiting potential for off target effects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Infrequent dosing*: ability to deliver oligonucleotides to tissues and cells at concentrations that produce
pronounced and prolonged pharmacodynamic effects as observed in our preclinical models; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Readily reproducible and scalable*: (i) AOCs synthesized using well-established and scalable methods
for manufacturing mAbs and oligonucleotides; and (ii) ability to use a single mAb across multiple programs provides significant leverage around development costs and timelines associated with each incremental program.

**Experienced Leadership Team** 

Our senior management team has extensive experience in successfully developing and commercializing RNA therapies for rare genetic diseases through their involvement with major pharmaceutical and biotechnology companies. Our team members have led research, development and pre-commercial activities in rare diseases, including discovering and developing the innovative AOC technology. They have collective experience in advancing RNA therapies including gaining alignment with regulatory agencies on both accelerated regulatory pathways as well as paving global approval paths for rare diseases that require novel endpoints. The team has worked extensively with rare disease patient communities and understands the challenges and opportunities of rare disease drug development and commercialization.

Kathleen Gallagher, our Chief Executive Officer, has exceptional executive management expertise and tenured experience in the biopharmaceutical industry. She has over 20 years of experience and has led investor relations, portfolio strategy, program management and corporate affairs for preclinical to commercial stage companies, including Avidity, Akcea and Merrimack Pharmaceuticals. She has directed companies through multiple financings and an initial public offering.

Steven Hughes, M.D., our Chief Medical Officer, has over 25 years of experience in the biopharmaceutical industry. He has contributed to more than 50 clinical trials and multiple product filings and launches across cardiovascular, neurology and rare disease therapeutic areas at Avidity, Ionis Pharmaceuticals, Biogen, CSL Behring and Sanofi.

Stephanie Kenney, our Chief Corporate Affairs Officer, has more than 25 years of experience in the biopharmaceutical industry leading corporate affairs, investor relations, and marketing at preclinical to commercial stage companies in autoimmune, cardiovascular, and renal therapeutic areas. She has held roles of increasing responsibility at Avidity, AstraZeneca and Hansa Biopharma.

Rocio Martin Hoyos, our Chief Strategy Officer, is a seasoned strategist with over 20 years of experience in management and commercial roles in the biopharmaceutical industry. She has held leadership positions at Avidity, Audentes Therapeutics, Celgene, Kronos Bio and Ultragenyx Pharmaceutical.

Brendan Winslow, our Chief Financial Officer, has extensive experience in financial leadership roles in the biotechnology and healthcare industries. He has held senior positions involving global operations, commercialization, and strategic transformations at Avidity, Acadia Pharmaceuticals and Baxter International.

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Husam Younis, Ph.D., Pharm.D., our Chief Scientific Officer, has over 20 years of experience in drug discovery and development, including in rare disease. He has held senior leadership roles in development science at Avidity, NGM Biopharmaceuticals, Ionis Pharmaceuticals and Pfizer.

Past achievements of our management team may not be indicative of future success. Please see "—Risk Factors" and "—Corporate Governance and Management — Executive Officers" for further information.

**Our Development Programs** 

We are advancing the innovative RNA delivery platform to develop potential treatment options for people with cardiac conditions. Despite the availability of drugs that treat cardiomyopathy symptoms, many patients remain at significant risk due to a lack of disease-modifying effects and limitations with the currently available therapies such as poor tolerance and efficacy. This treatment gap represents a significant commercial opportunity both in rare and in broader cardiac conditions, where new therapies are needed to address the root cause of disease.

We have initially selected genetically validated cardiology targets for our development pipeline. Our precision cardiology pipeline currently consists of two primary, wholly owned precision cardiology development candidates for the treatment of PRKAG2 syndrome and PLN cardiomyopathy. Each program is designed to address a specific genetic disease or disease mechanism associated with severe life-threatening forms of heart disease. The pipeline is supported by strong human genetics evidence, robust preclinical data, and what we believe is a clear path to clinical development. The chart below represents a summary of our wholly owned development programs. We also have two additional pipeline candidates in research and development targeting undisclosed rare cardiology targets which we may develop in the future.

![LOGO](g42675g00k12.jpg)

Each of our programs is supported by a comprehensive translational research strategy, including biomarker development, patient identification and engagement with clinical centers of excellence. Our pipeline is designed for expansion into additional indications based on shared mechanisms of action, with the potential to address larger segments of the cardiomyopathy market. Our capital-efficient approach ensures resources are allocated to development programs with the highest probabilities of success, while maintaining flexibility to pursue new opportunities as the technology and science are further validated.

***Our Cardiac Disease Pipeline***

We believe that cardiac tissue is the next frontier for RNA delivery with potential broader applications in both rare and more common conditions. We have strategically prioritized rare cardiomyopathies. Based primarily on observations from human genetic studies, we believe PRKAG2 and PLN are cardiology targets with high probabilities of clinical success. Specific mutations in PRKAG2 or PLN drive cardiomyopathies by disrupting how heart muscle cells are built, powered or electrically coordinated. Over time, these disruptions change the heart structure and performance. We have generated preclinical data (see "Preclinical Data and Next Steps" below) that demonstrated reduction of these targets in the heart with the potential to alter the course of the disease. However, even if these targets have the highest probability of success as compared to other indications, we may still fail to develop an approved program for any of these indications. For our initial programs, we plan to use the same proprietary mAb targeting TfR1 across our cardiac muscle programs, which we believe gives us significant leverage of development costs and timelines associated with each incremental cardiac muscle

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program. In addition to our internal discovery efforts, our collaboration with BMS across several targets in cardiology is a testament to the broad potential of our approach.

*About PRKAG2 Syndrome* 

PRKAG2 syndrome is a rare, autosomal dominant, early-onset genetic disorder caused by mutations in the PRKAG2 gene, which encodes the<u> </u>g2 regulatory subunit of AMPK. AMPK is a critical enzyme responsible for maintaining cellular energy homeostasis. Pathogenic variants in PRKAG2 disrupt the structure and function of the g2 regulatory subunit, altering AMPK's activity leading to abnormal glycogen accumulation in heart muscle cells which can lead to thickened heart muscles, electrical conduction problems, and arrhythmias.

Both overactive AMPK signaling and excessive glycogen storage converge to impair cardiac energy homeostasis and remodeling potentially contributing to conditions such as hypertrophy, ischemic injury, diabetic cardiomyopathy, and heart failure. Cardiac manifestations include ventricular preexcitation, supraventricular arrhythmias (atrial fibrillation and flutter), high-grade atrioventricular block often requiring pacemaker implantation, myocardial hypertrophy and progressive heart failure, and risk of sudden cardiac death.

PRKAG2 syndrome represents approximately one percent of HCM (as defined below) patients, which has an overall prevalence between 1 in 200 and 1 in 500. In a third party study conducted with 25 carriers, researchers observed 100% clinical penetrance in some families, with a high incidence of the condition in genotype-positive carriers, supporting our belief that a mutation in the PRKAG2 gene may have a higher likelihood of leading to the disease. Currently the management of PRKAG-2 syndrome focuses on symptomatic treatment that includes managing arrhythmias, and monitoring and supporting structural heart changes caused by the disease. There are no therapies currently available to address the underlying genetic drivers of the disease.

<u>Mechanism of Disease</u> 

**PRKAG2 Syndrome is a Progressive Disorder Driven by Aberrant AMPK Activity Driving Multiple Cardiac Pathologies**![LOGO](g42675g03a18.jpg)

<u>Therapeutic Rationale for ATR 1072 in PRKAG2 Syndrome</u> 

A precision cardiology approach is needed to normalize AMPK activity and reduce glycogen accumulation in the heart caused by PRKAG2 syndrome.

Our lead product candidate, ATR 1072, is a potentially disease-modifying treatment for PRKAG2 syndrome. As shown in the graphic below, the siRNA works through a sequence-specific gene silencing mechanism to reduce PRKAG2 mRNA, normalize AMPK activity and reduce the pathogenic glycogen accumulation, all potentially leading to improved heart function.

Although we will pursue ATR 1072 initially in PRKAG2 syndrome, there is potential to expand to broader HCM and heart failure populations given that elevated AMPK activity has been observed in human heart failure and preclinical models of cardiac disease.

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![LOGO](g42675g03b18.jpg)

**ATR 1072 Designed to Silence PRKAG2 mRNA to Normalize AMPK Activity and Reduce Glycogen Accumulation in PRKAG2 Syndrome** 

<u>Preclinical Data and Next Steps</u> 

Based on comprehensive preclinical studies conducted by Avidity, ATR 1072 was selected out of our potential preclinical candidates as one of the most potent and selective molecules for PRKAG2 silencing in human cells. Since the siRNA component of ATR 1072 is cross-reactive to the mouse PRKAG2 gene, we were able to demonstrate robust in vivo activity utilizing a mouse surrogate AOC ("mATR 1072") that contains the siRNA component of ATR 1072 conjugated to a mouse targeting anti-TFR1 antibody. Marked reductions of PRKAG2 mRNA were observed in the heart of wildtype ("WT") mice (see Figure 1A below, n=4-5/group). We also observed substantial reductions in PRKAG2 protein in the heart.

We have also observed functional activity of mATR 1072 in a mouse model of PRKAG2 syndrome. In this model, mice exhibit impaired ventricular filling as observed by reduced diastolic function and increased p-wave amplitude relative to WT mice (Figure 1A, n=10/group; Figure 1B, n=9/group; 1C, n=16-20/group, respectively). Mice treated with ATR 1072 were observed to have improved diastolic function and restored p-wave amplitude (Figure 1B, 1C, respectively). We believe that this preclinical data establishes a link between PRKAG2 molecular target engagement and functional cardiac benefit, and the potential for ATR 1072 to be a disease modifying therapy.

Importantly, preliminary tolerability data in cynomolgus monkeys, a NHP species, has been evaluated. ATR 1072 was pharmacologically active in cynomolgus monkeys, with robust and durable PRKAG2 mRNA knockdown and reduced protein expression observed in the heart. In these subacute studies in cynomolgus monkeys (n=3), ATR 1072 was well tolerated, with no adverse findings in ECG parameters or heart morphology and with a preclinical tolerability profile comparable to that of the neuromuscular programs developed at Avidity using the RNA delivery platform.

IND-enabling preclinical toxicology studies and CMC manufacturing are ongoing for ATR 1072. An IND filing is expected in the second half of 2026. If the IND is accepted by the FDA, a Phase 1 clinical trial is planned.

*Figure 1: Preclinical pharmacologic activity of mATR 1072.*![LOGO](g42675g03a19.jpg)

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***Figure 1A:*** *Reduction of PRKAG2 mRNA in the heart at Day 28 (n=10 mice/group) following a single dose of mATR 1072 (3 mg/kg).*  ****

***Figures 1B and 1C:*** *Improvements in diastolic function (E/A ratio, n=9 mice/group) and P-wave amplitude (marker of atrial size, n=16-20 mice/group) at 24 weeks following repeated treatment of mATR 1072 (3 mg/kg, q12w) in a mouse model of PRKAG2 syndrome (PRKAG2<sup>R528G/R528G</sup> transgenic mice). Dotted lines indicate WT levels. Data are presented as mean ± SEM. Student's t-test. \* p < 0.05.*

*<u>About PLN Cardiomyopathy</u>*

PLN cardiomyopathy is an autosomal dominant, progressive cardiac disease caused by mutations in PLN, a small protein that normally inhibits SERCA2a calcium pump in cardiac muscle cells. SERCA2a helps pump calcium back into the sarcoplasmic reticulum after each heartbeat, allowing muscle relaxation.

PLN-R14del cardiomyopathy is the most common disease-relevant PLN mutation PLN cardiomyopathy is characterized by early phenotypic expression (II-III decade) usually dilated, arrhythmogenic, or hypertrophic cardiomyopathies with biventricular involvement, family history of premature sudden cardiac death, high incidence of ventricular arrhythmias, or cardiac transplantation.

It is estimated that over 10,000 patients in the U.S. and EU are affected by pathogenic PLN variants. Patients, including younger individuals, face increased risk of heart failure and sudden cardiac arrest. There are currently no treatment options for PLN cardiomyopathy to treat the underlying genetic driver of the disease.

<u>Mechanism of Disease</u> 

**PLN Cardiomyopathy is a Progressive Disorder Driven by PLN-R14del Protein Aggregation Abnormal Cell Function and Death**![LOGO](g42675g03b19.jpg)

<u>Therapeutic Rationale for ATR 1086 in PLN Cardiomyopathy</u> 

ATR 1086 is our second lead product candidate and represents a disease-modifying therapy for PLN cardiomyopathy. The program targets PLN. Excessive PLN activity, as manifested in PLN cardiomyopathy, disrupts calcium homeostasis, leading to delayed relaxation, impaired contractility, and progressive cardiac dysfunction.

While initially pursuing ATR 1086 development for PLN-R14del cardiomyopathy, we believe that ATR 1086 has the potential to address a broader population of heart failure and cardiomyopathy patients, particularly those characterized by calcium handling defects and reduced SERCA2a activity. By selectively reducing PLN expression, ATR 1086 is expected to relieve SERCA2a inhibition and restore calcium cycling dynamics, which may improve cardiac performance. This therapeutic rationale is further supported by human genetic studies, which have identified a common SNP at the PLN locus that upregulates PLN mRNA and is associated with increased heart failure risk. These findings suggest the therapeutic potential for PLN reduction for calcium-driven cardiomyopathies.

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**ATR 1086 is Designed to Silence PLN mRNA to Prevent Protein Aggregates in PLN Cardiomyopathy**![LOGO](g42675g03a20.jpg)

<u>Preclinical Data and Next Steps</u> 

Based on comprehensive preclinical studies conducted by Avidity, ATR 1086 was selected out of our potential preclinical candidates as one of the most potent and selective molecules for PLN silencing in human cells. We established a mouse model that expresses wildtype human PLN ("hPLN WT") to evaluate its pharmacologic activity in vivo. We tested a mouse surrogate AOC ("mATR 1086") that contains the siRNA component of ATR 1086 conjugated to a mouse targeted anti-TFR1 antibody. We observed robust PLN mRNA reduction in the heart of mATR 1086 (Figure 2A, n=10/group) suggesting ATR 1086 is pharmacologically active towards the human PLN mRNA.

We have also observed functional activity of mATR 1086 in a humanized mouse model of PLN cardiomyopathy ("hPLN<sup>R14/R14</sup>"). This model is homozygous for the human PLN 14del mutation resulting in rapidly progressive heart disease where animals die within 8 weeks of life (Figure 2B, n=10/group). Remarkably, 100% of the mice treated with mATR 1086 in this model survived through the duration of the study for at least 20 weeks. Importantly, mATR 1086 treated mice had substantial improvement in cardiac function marked by increased ejection fraction (Figure 2C, n=23-24/group). The observations from these preclinical studies support our hypothesis that reduction of the gain of function mutant PLN can lead to improved heart function and be disease modifying in this severe preclinical model of PLN cardiomyopathy.

Importantly, preliminary tolerability data in cynomolgus monkeys, a NHP species, has been evaluated. ATR 1086 was observed to be pharmacologically active in NHPs, achieving robust and durable PLN mRNA knockdown in the heart. Sustained PLN mRNA reduction (~80%) was observed to be well tolerated for over 3 months in non-GLP studies in cynomolgus monkeys (n=3), a NHP species, with no adverse findings in ECG parameters or heart morphology and with a preclinical tolerability profile comparable to that of the neuromuscular programs developed at Avidity using the RNA delivery platform.

CMC manufacturing is planned for ATR 1086 to support initiation of IND-enabling preclinical studies in 2026. We are targeting an IND submission in 2027.

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*Figure 2: Preclinical Pharmacologic Activity of mATR 1086.*![LOGO](g42675g03b21.jpg)

**Figure 2A:** Reduction of human PLN expression in the heart following repeated treatment with mATR 1086 (6 mg/kg). PLN mRNA levels were measured in cardiac tissue in transgenic mice expressing hPLN WT.

**Figures 2B and 2C:** Improved survival (Kaplan-Meier survival curve) and ejection fraction following repeated mATR 1086 treatment (6 mg/kg) in a humanized mouse model of hPLN<sup>R14/R14</sup>. Ejection fraction measured at 6-weeks of treatment. Dotted lines indicate WT levels. Data are presented as mean ± SEM. Student's t-test, \* p < 0.05.

**Current Treatment Landscape and Limitations** 

*Precision Cardiology Market Opportunity* 

Cardiomyopathy, a group of diseases that affect the heart muscle, represents a significant market opportunity where therapies primarily treat the symptoms and fail to address the underlying etiology of the disease. In the U.S. alone there are over 2 million people with cardiomyopathy. According to the Genetic Cardiomyopathy Awareness Consortium, close to half of all cardiomyopathy cases have some underlying genetic driver of disease. There are several types of myopathies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Dilated cardiomyopathy ("DCM"): the heart muscle becomes weakened and enlarged, especially the left
ventricle leading to reduced pumping ability and heart failure symptoms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hypertrophic cardiomyopathy ("HCM"): the heart muscle becomes abnormally thick, which can cause
obstruction of blood flow and increases the risk of arrythmias.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Arrhythmogenic cardiomyopathy ("ACM"): the heart muscle is replaced by fatty or fibrofatty tissue in
the right ventricle, which can lead to dangerous arrhythmias.

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As shown in the graphic below, there are three major types of cardiomyopathies among U.S. patients.

![LOGO](g42675g03b22.jpg)

*Source: Independent third-party consultant analysis commissioned by Avidity. Based on KOL interviews and literature search.* 

Recent advances in human genetics and the increasing adoption of genetic testing have enabled the identification of mutation-specific subpopulations that are ideally suited for RNA therapies. As such, we believe the current cardiomyopathy treatment paradigm is primed for disruption—moving away from managing symptoms towards addressing the genetic drivers of disease through RNA therapies.

Our strategy is to initially target rare, genetically defined populations and expand to broader cardiomyopathy indications based on shared mechanisms of action. This approach is designed to maximize the probability of technical and commercial success while maintaining capital efficiency. We believe precision RNA therapies will experience rapid clinical adoption and utilization due to (i) increasing adoption and reimbursement of cardiac genetic testing, (ii) improved understanding of human genetics in cardiology and (iii) the advancement of RNA delivery platforms.

Currently, only a few disease-modifying therapies—such as tafamidis and mavacamten—are approved for small subsets of cardiomyopathy patients, and these therapies do not address the underlying genetic causes of disease in most patients. We believe our focus on genetically validated targets and non-viral delivery provides a competitive edge, enabling the Company to address mutation-specific subpopulations with high unmet need. We believe the success of Avidity's neuromuscular pipeline, Lilly's clinical progress with the AOC technology and the preclinical progress in the BMS collaboration differentiates the platform and can enhance its credibility with investors, clinicians, and patients.

The competitive landscape is expected to intensify as more entrants pursue precision cardiology, driven by advances in human genetics, delivery technologies, and regulatory pathways. To establish and maintain a leadership position we plan to continue to drive scientific innovation with the targeted RNA delivery platform, expand our intellectual property portfolio and rapidly execute our strategic priorities. We actively monitor the competitive environment, adapt our strategy as needed, and invest in platform improvements to stay ahead of emerging threats.

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**Manufacturing** 

We currently rely on third-party manufacturers and suppliers for the manufacture of our product candidates and related raw materials, including for antibodies, oligonucleotides and linkers used to make our AOCs, for preclinical and anticipated clinical development, as well as for commercial manufacture if any of our product candidates receive marketing approval. We expect to continue to do so to meet our preclinical, and future clinical and commercial, activities. We do not currently have arrangements in place for redundant supply or a second source for all required raw materials used in the manufacture of our product candidates. We do not own or operate manufacturing facilities and have no plans to develop our own clinical or commercial-scale manufacturing capabilities. Our third-party manufacturers are required to manufacture our product candidates under cGMP requirements and other applicable laws and regulations.

We believe there are multiple sources for all of the materials required for the manufacture of our product candidates to supply our anticipated clinical trials and commercial requirements. Our AOCs consist of a proprietary mAb conjugated with the oligonucleotide therapy. All of our mAbs are manufactured by starting with cells which are stored in a cell bank. We currently have multiple working cell banks and one master cell bank for our mAbs manufactured in accordance with cGMP, and we believe we would have adequate backup should any cell bank be lost in a catastrophic event.

**Competition** 

The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary and novel products and product candidates. Our competitors have developed, are developing or may develop products, product candidates and processes competitive with our product candidates. Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future. We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we may attempt to develop product candidates. In particular, there is intense competition amongst RNA targeted therapies. Our competitors include larger and better funded pharmaceutical, biopharmaceutical, biotechnological, therapeutics companies and specialized cardiovascular treatment companies. Moreover, we may also compete with universities and other research institutions who may be active in the indications we are targeting and could be in direct competition with us. We also compete with these organizations to recruit management, scientists and clinical development personnel, which could negatively affect our level of expertise and our ability to execute our business plan.

The competitive landscape in precision cardiology is rapidly evolving but we believe we are positioned as a first mover with clear differentiation—the RNA delivery platform is uniquely differentiated by its ability to achieve targeted delivery of siRNA to the heart. Furthermore, we are not aware of others with preclinical or clinical programs targeting PRKAG2 syndrome while a few (Ionis Pharmaceuticals, PLaN Therapeutics, Solid Biosciences, Souffle Therapeutics and Tenaya Therapeutics) have disclosed programs targeting PLN cardiomyopathy.

Several companies are developing therapies for cardiomyopathies, however, the majority do not employ tissue-specific delivery to heart, such as small molecules, viral vectors in the case of gene therapy, or other delivery systems.

It is important to note that well-resourced companies like Alnylam Pharmaceuticals, Inc. and Ionis Pharmaceuticals, Inc. are investing in targeted tissue delivery technologies, including to the heart, aiming to expand the reach of RNA therapeutics beyond the liver. Direct competitors include companies pursuing antibody-based and/or peptide-base approaches for cardiac delivery. Although several companies may be pursuing non-tissue selective delivery technologies, we believe these possess significant challenges, including potential for toxicity, immunogenicity, and limitations on redosing.

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We will also face competition from Novartis, a large, multinational pharmaceutical company with substantial resources and a well-established presence in the development and commercialization of cardiology products, which following the Closing, will own RemainCo. The RemainCo License Agreement provides RemainCo a non-exclusive, worldwide, irrevocable, royalty-free license under the RNA delivery platform technology to exploit any cardiovascular products other than products subject to the Lilly Agreement or BMS Collaboration Agreement. As a result, we may face direct competition from RemainCo in the cardiac space, including with respect to products that are the subject of the RemainCo License Agreement or other products that RemainCo or Novartis may develop independently. The greater financial, technical, and marketing resources available to RemainCo and Novartis may enable them to advance competing cardiac products more rapidly or effectively than we can, potentially limiting our ability to gain or maintain market share in this therapeutic area.

We will also compete more generally with other companies developing alternative scientific and technological approaches, including other companies working to develop conjugates with oligonucleotides for extra-hepatic delivery, including Alnylam Pharmaceuticals, Inc., Aro Biotherapeutics Company, Dyne Therapeutics, Ionis Pharmaceuticals, Inc., Sarepta Therapeutics, PepGen, PeptiDream Inc. and AstraZeneca plc, as well as gene therapy and CRISPR approaches.

Many of our competitors, either alone or with strategic partners, have substantially greater financial, technical and human resources than we do. Accordingly, our competitors may be more successful than us in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining approval for treatments and achieving widespread market acceptance, which could render our product candidates, if approved, obsolete or non-competitive. Merger and acquisition activity in the biotechnology and biopharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. These companies also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials and acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies like us may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Our commercial opportunity could be substantially limited if our competitors develop and commercialize products that are more effective, safer, less toxic, more convenient or less expensive than our comparable products. In geographies that are critical to our commercial success, competitors may also obtain regulatory approvals before us, resulting in our competitors building a strong market position in advance of the entry of our products, if approved. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of other drugs. The key competitive factors affecting the success of our programs are likely to be their efficacy, safety profile, convenience, level of promotional activity, intellectual property protection and availability of reimbursement.

**Intellectual Property** 

We strive to protect our product candidates and our RNA delivery platform through a variety of methods, including seeking and maintaining patents in partnership with Avidity intended to cover our RNA delivery platform, our products and compositions, their methods of use and processes for their manufacture, and any other inventions that are commercially important to the development of our business. We rely on know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position. We also rely on trade secrets and know-how that may be important to the development of our business. We seek to obtain domestic and international patent protection and endeavor to promptly file patent applications for new commercially valuable inventions to expand our intellectual property portfolio.

We believe that we have a significant global intellectual property position and substantial know-how relating to our product candidates and our technology. In addition to filing and prosecuting patent applications in the United States, we often file counterpart patent applications in additional countries and jurisdictions where we believe such foreign filing is likely to be beneficial, including Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, Japan, Mexico, Singapore, New Zealand, Taiwan, and South Korea. We also file patent applications

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pursuant to the Patent Cooperation Treaty, or PCT. Our PCT patent applications are in the first phase of the PCT process, which is the international phase, in which patent protection is pending under a single patent application filed with the United States Patent and Trademark Office, or USPTO, as a contracting state of the PCT. These PCT patent applications have not yet entered the second phase of the PCT process, which is the national and regional phase, in which rights are continued by filing necessary documents with the patent offices of separate contracting states of the PCT. The national phase of the PCT patent application process occurs 30 months after the earliest priority date of the PCT patent application.

We continually assess and refine our intellectual property strategy as we develop new product candidates and technologies. To that end, we are prepared to file additional patent applications in any appropriate fields if our intellectual property strategy requires such filings, or where we seek to adapt to competition or seize business opportunities. Further, we are prepared to file patent applications, as we consider appropriate under the circumstances, relating to the new technologies that we develop.

We cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications we may own or license in the future, nor can we be sure that any of our existing patents or any patents we may own or license in the future will be useful in protecting our technology. Please see "*Risk Factors—Risks Related to Our Intellectual Property*" for additional information on the risks associated with our intellectual property strategy and portfolio.

***Intellectual Property Relating to ATR 1072 and Other PRKAG2 AOC Product Candidates***

With regard to ATR 1072 and other PRKAG2 AOC product candidates, as of January 22, 2026, we owned one granted U.S. Patent, two pending U.S. patent applications, one pending patent applications filed pursuant to the PCT, ten pending patent applications filed in Taiwan, Europe, Brazil, Canada, Mexico, Japan, South Korea, Israel, Australia, New Zealand and Singapore. These patent rights relate to the ATR 1072 and other PRKAG2 AOC composition of matter, formulations containing ATR 1072 and other the PRKAG2 AOC, methods of manufacturing, and methods of treating diseases, using our PRKAG2 AOC. Any patents issued from these applications are expected to expire in 2044-2045; however, a patent term extension may be available.

***Intellectual Property Relating to ATR 1086 and Other PLN AOC Product Candidates***

With regard to ATR 1086 and other PLN AOC product candidates, as of January 22, 2026, we owned one granted U.S. patent, one pending U.S. patent application, and nine pending foreign patent applications filed in Europe, Australia, Brazil, Canada, Mexico, Japan, Israel, New Zealand and Singapore. These patent rights relate to the ATR 1086 and other PLN AOC composition of matter, formulations containing ATR 1086 and other PLN AOC, methods of manufacturing, and methods of treating diseases, using our PLN AOC. Any patents issued from these applications are expected to expire in 2044; however, a patent term extension may be available.

***Intellectual Property Relating to the RNA Delivery Platform***

As of January 22, 2026, we have patent rights to 19 families of U.S. and foreign patents and patent applications generally covering the RNA delivery platform. These families include 15 issued U.S. patents, 22 granted foreign patents, 20 pending U.S. patent applications, 3 pending PCT patent applications and 59 pending foreign patent applications in Europe, Australia, Canada, China, Israel, Hong Kong, Japan, South Korea, Mexico, Singapore, New Zealand, Brazil and Taiwan, relating to key aspects and components of the RNA delivery platform systems. Our patent applications contain claims covering (i) proprietary antibodies or other binding moiety structures; (ii) proprietary oligonucleotide chemical structures; (iii) proprietary formulation compositions; (iv) proprietary AOC structures; and (v) methods for manufacturing and using our AOC technologies.

The term of individual patents depends upon the laws of the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing of a non-provisional patent

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application. However, the term of United States patents may be extended for delays incurred due to compliance with FDA requirements or by delays encountered during prosecution that are caused by the USPTO. For example, for drugs that are regulated by the FDA under the Hatch-Waxman Act, it is permitted to extend the term of a patent that covers such drug for up to five years beyond the normal expiration date of the patent. In the future, if and when our biopharmaceutical product candidates receive FDA approval, we expect to apply for patent term extensions on patents covering those product candidates. We intend to seek patent term extensions to any of our issued patents in any jurisdiction where these are available; however, there is no guarantee that the applicable authorities, including the USPTO and FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions. If patents are issued on our pending patent applications, the resulting patents are projected to expire on dates ranging from 2037 to 2046, unless we receive patent term extensions or patent term adjustments, or both.

However, the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country, and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent. As discussed in more detail in "*—Intellectual Property—RemainCo License Agreement*," the intellectual property relating to the RNA delivery platform is subject to the terms of the RemainCo License Agreement.

***Research Collaboration and License Agreement and Securities Purchase Agreement with BMS***

In November 2023, Avidity entered into (i) the BMS Collaboration Agreement to expand on its research with MyoKardia Inc. ("MyoKardia") and (ii) a Securities Purchase Agreement with BMS for the sale of 5,075,304 shares of Avidity's common stock in a private placement transaction (the "BMS Purchase Agreement" and, together with the BMS Collaboration Agreement, the "BMS Agreements"). Under the terms of the BMS Collaboration Agreement, as assigned by Avidity to the Company in connection with the Separation, BMS will have the right to select up to five targets (each a "Target") for collaborative research programs under which the Company will utilize its RNA delivery platform to conduct research and development activities in order to identify, generate, and optimize AOC compounds directed to such Targets with the goal of generating an applicable development candidate. On a Target-by-Target basis, after the Company completes specified research activities in accordance with a research plan, BMS will have the right to develop, manufacture and commercialize such compounds generated during the research term, and products containing such compounds, worldwide. The research and activities conducted under the BMS Collaboration Agreement is governed by a joint steering committee comprised of representatives from Avidity (and following the Separation, the Company) and BMS.

Under the BMS Collaboration Agreement, Avidity granted BMS and its affiliates an exclusive (including with regard to Avidity and its affiliates), worldwide, royalty-bearing license, with the right to grant and authorize sublicenses under the Avidity patents, know-how and Avidity's interest in any such intellectual property generated pursuant to the BMS Collaboration Agreement to develop, manufacture, commercialize and otherwise exploit the licensed compounds and licensed products worldwide for all uses. Avidity received approximately $100.0 million upfront, including a $60.0 million nonrefundable cash payment and approximately $40.0 million from the sale of Avidity's common stock at $7.8813 per share. The Company will also be eligible to receive up to approximately $1.35 billion in research and development milestone payments, up to approximately $825.0 million in commercial milestone payments, and tiered royalty payments representing a percentage of net sales from high single digits to low teens. The Company will be responsible for its own research costs incurred under the BMS Collaboration Agreement, subject to the parties renegotiating the research activities in case the Company's research spending is anticipated to exceed $40.0 million. BMS will fund all future clinical development, regulatory and commercialization activities coming from this collaboration.

BMS can terminate the BMS Collaboration Agreement (or a target, country or program) at will and with or without cause, with appropriate notice to the Company. In such event, material licenses granted to BMS expire,

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and (other than termination for safety concerns) BMS will negotiate and conduct a product reversion to the Company. BMS can also terminate in response to the Company's bankruptcy or uncured material breach.

***Research Collaboration and License Agreement with Lilly***

In April 2019, Avidity entered into the Lilly Agreement with Lilly for the discovery, development and commercialization of AOC products directed against certain targets in immunology on a worldwide basis. Under the Lilly Agreement, Avidity granted Lilly an exclusive, worldwide, royalty-bearing license, with the right to sublicense (subject to certain conditions), under Avidity's technology to research, develop, manufacture and sell products containing AOCs that are directed to up to six mRNA targets. The Company agreed that it will not, itself or with a third party (including by enabling a third party), research, develop, manufacture or commercialize or otherwise exploit any compound or product directed against targets subject to the Lilly Agreement.

In consideration of the rights granted to Lilly under the Lilly Agreement, Avidity received a one-time upfront fee of $20.0 million, and the right to receive up to $60.0 million in development milestone payments, inclusive of the $10 million milestone payment received in August 2025 as the result of the achievement of a clinical development milestone for a collaboration target, up to $140.0 million in regulatory milestone payments and up to $205.0 million in commercialization milestone payments per target. Lilly will be obligated to pay the Company tiered royalties ranging from the mid-single to low teens, expressed as a percentage of worldwide annual net sales of licensed products, subject to specified and capped reductions for the market entry of biosimilar products, loss of patent coverage of licensed products, and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory. Lilly's royalty obligations and the Lilly Agreement will expire on a licensed product-by-licensed product and country-by-country basis on the later of ten years from the date of the first commercial sale of such licensed product or when there is no longer a valid patent claim covering such licensed product in such country.

Lilly can terminate the Lilly Agreement (or a target) at will and with or without cause, with appropriate notice to the Company. In such event, material licenses granted to Lilly expire, and the Company and Lilly negotiate in good faith a product reversion to Avidity. Lilly can also terminate the Lilly Agreement in response to the Company's uncured material breach.

***RemainCo License Agreement***

On October 25, 2025, we entered into the RemainCo License Agreement in connection with the Spin-Off. Under the RemainCo License Agreement, we granted to Avidity (i) an exclusive (including as to us and our affiliates), worldwide, irrevocable, royalty-free license to intellectual property we own or control for all purposes and uses other than for exploitation of cardiovascular products and products subject to the Lilly Agreement or BMS Collaboration Agreement and (ii) a non-exclusive, worldwide, irrevocable, royalty-free license under the RNA delivery platform to exploit any cardiovascular products (other than products subject to the Lilly Agreement or BMS Collaboration Agreement). Except for products subject to the Lilly Agreement or BMS Collaboration Agreement, we agree not to assert patent rights we own or control against Avidity and related third parties (e.g., sublicensees, suppliers, distributors and customers) for exploitation of Avidity products incorporating the RNA delivery platform technology. Further, we agree to keep Avidity reasonably informed regarding the prosecution and maintenance of our patents.

Avidity grants us a non-exclusive, worldwide, royalty-free license to intellectual property owned by RemainCo as of the effective date of the Distribution to exploit cardiovascular products. The RemainCo License Agreement provides that ownership of the RNA delivery platform can transfer to RemainCo at RemainCo's request, following the completion of target selection under the BMS Collaboration Agreement, or prior to a change of control of the Company. In the event of such transfer, we would retain our (i) exclusive (including as to RemainCo and its affiliates), worldwide, royalty-free license to exploit products subject to the Lilly Agreement

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or BMS Agreements, and (ii) non-exclusive, worldwide, royalty-free right to exploit cardiovascular products in the cardiovascular field.

For a period of 10 years following the effective date of the RemainCo License Agreement, the RemainCo License Agreement grants RemainCo a right of first negotiation over our development candidates or prospective transactions, in each case, other than with respect to cardiovascular products or products subject to the Lilly Agreement or BMS Agreements. Furthermore, the RemainCo License Agreement provides that, if we do not consummate a transaction with RemainCo with respect to any such transaction and the negotiation period expires, we must notify RemainCo of any proposed third-party transaction we desire to enter into in the 12 months following the expiration of the applicable negotiating period with respect to such transaction, that is on terms less favorable to us than RemainCo's last offer. Following the receipt of such notice, RemainCo may accept the Company's offer to enter into the transaction on the terms of the last written offer proposed by RemainCo, make a new offer, which we must consider in good faith, or inform us that RemainCo is no longer interested in pursuing a transaction.

For a period of 5 years following the RemainCo License Agreement's effective date, we will not engage in a competitive RNA therapeutics business, other than with respect to cardiovascular products in the cardiovascular field or products subject to the Lilly Agreement or BMS Collaboration Agreement regardless of whether such activities use any of RemainCo's Intellectual Property. Additionally, we may only exploit the RNA delivery platform for the development of cardiovascular products in the cardiovascular field. or products subject to the Lilly Agreement or BMS Collaboration Agreement; therefore, even following expiration of this five-year period, we will not have the right to use the RNA delivery platform for programs in other therapeutic areas, and would need to independently develop or acquire the technology to be used in such programs.

**Government Regulation** 

Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, marketing and export and import of products such as those we are developing. We, along with third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates.

***U.S. Biologics Regulation***

In the United States, biological products are subject to regulation under the federal Food, Drug and Cosmetic Act, the Public Health Service Act, and other federal, state, and local statutes and regulations. The process required by the FDA before a biological product may be marketed in the United States generally involves the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• completion of preclinical laboratory tests, animal studies and formulation studies in accordance with GLP
regulations and other applicable regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• submission to the FDA of an IND, which must become effective before human clinical trials may begin;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approval by an independent institutional review board ("IRB") or ethics committee at each clinical
site before each trial may be initiated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• performance of adequate and well-controlled human clinical trials in accordance with GCP requirements to
establish the safety, purity and potency of the proposed biologic for its intended use;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• submission to the FDA of a BLA after completion of all pivotal trials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• satisfactory completion of an FDA advisory committee review, if applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the biological
product is produced to assess compliance with cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the product's identity, strength, quality and purity, and potential inspection of selected clinical
investigation sites and/or the trial sponsor to assess compliance with GCP; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for
use in the United States.

Once a pharmaceutical candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies, in an effort to support subsequent clinical testing. The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for certain studies. Prior to beginning the first clinical trial with a product candidate in the United States, the trial sponsor must submit an IND to the FDA. An IND is a request for allowance from the FDA to introduce an investigational drug into interstate commerce and administer the product to humans. The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies. The IND also includes results of animal and in vitro studies assessing the toxicology, PK, pharmacology, and PD characteristics of the product candidate, chemistry, manufacturing, and controls information, and any available human data or literature to support the use of the product candidate. An IND must become effective before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns about ongoing or proposed clinical trials or non-compliance with specific FDA requirements, and the trials may not begin or continue until the FDA notifies the sponsor that the hold has been lifted or modified to allow such continuation. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

Clinical trials involve the administration of the investigational product to human participants under the supervision of one or more qualified investigators, generally physicians not employed by or under the trial sponsor's control, in accordance with GCP regulations, which, among other things, include the requirement that all research participants provide their informed consent in writing for their participation in any clinical trial. Clinical trials must be conducted under protocols detailing, among other things, the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND as well as any subsequent protocol amendments. While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or *in vitro* testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.

Furthermore, an independent IRB at each institution participating in the clinical trial must review and approve each protocol before a clinical trial commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to each trial subject or his or her legal representative, monitor the study until completed and otherwise comply with IRB regulations. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the participants are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board or data monitoring committee, which

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provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for participants or other grounds, such as no demonstration of efficacy.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Phase 1*: The product candidate is initially introduced into healthy human volunteers or patients with the
target disease or condition. These studies are designed to test for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain an early indication of its effectiveness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Phase 2*: The product candidate is administered to a limited patient population with a specified disease or
condition to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and appropriate dosage. Multiple Phase 2 trials may be conducted
to obtain information prior to beginning larger and more expensive Phase 3 trials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Phase 3*: The product candidate is administered to an expanded patient population to further evaluate
dosage, to provide statistically significant evidence of clinical efficacy, and to further test for safety in an expanded patient population, generally at geographically dispersed clinical study sites. These clinical trials are intended to establish
the overall risk-benefit ratio of the product candidate and provide, if appropriate, an adequate basis for product approval and labeling.

Post-approval trials, sometimes referred to as Phase 4 studies, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of a BLA.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and biological characteristics of the product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug. In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

There are also requirements governing the reporting of ongoing clinical trials and completed trial results to public registries. Sponsors of certain clinical trials of FDA-regulated products are required to register and disclose specified clinical trial information, which is publicly available at www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, trial sites and investigators and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed until the new product or new indication being studied has been approved.

***BLA Review and Approval Process***

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, including from preclinical and other non-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications. The submission of a BLA is subject to the payment of substantial user fees, unless a waiver or exemption applies.

Within 60 days following submission of the application, the FDA reviews a BLA submitted to determine if it is substantially complete before the FDA accepts it for filing. The FDA may refuse to file any BLA that it deems

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incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the BLA must be resubmitted with the additional information. Once a BLA has been accepted for filing, the FDA's current goal is to review standard applications within ten months after the filing date, or, if the application qualifies for priority review, six months after the FDA accepts the application for filing. In both standard and priority reviews, the review process may also be extended for a three-month period by the FDA in response to new data or other information designated as a major amendment to the application. The FDA reviews a BLA to determine, among other things, whether a product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held meets standards designed to assure the product's continued safety, purity and potency.

The FDA may also convene an advisory committee to provide clinical insight on application review questions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving a BLA, the FDA will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA may inspect one or more clinical trial sites as well as the trial sponsor to assure compliance with GCP requirements.

After the FDA evaluates a BLA, it will issue an approval letter or a Complete Response Letter ("CRL"). An approval letter authorizes commercial marketing of the biologic with prescribing information for specific indications and other conditions of use. A CRL indicates that the review cycle of the application is complete and the application will not be approved in its present form. A CRL usually describes the specific deficiencies in the BLA identified by the FDA and may require additional clinical data, including additional clinical trials, or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. If a CRL is issued, the sponsor must resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may require a sponsor to conduct so-called Phase 4 clinical testing to further assess a biological product's safety and effectiveness after BLA approval, and may require additional testing and surveillance programs to monitor the safety of approved products which have been commercialized. The FDA may also place other conditions on approval including the requirement for a risk evaluation and mitigation strategy, or REMS, to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS. The FDA will not approve the BLA without an approved REMS, if required, which could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products.

In addition, the Pediatric Research Equity Act, ("PREA"), requires a sponsor to conduct pediatric clinical trials for most drugs, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, original BLAs and supplements must contain a pediatric assessment unless the sponsor has received a deferral or waiver. The required assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The sponsor or FDA may request a deferral of pediatric clinical trials for some or all of the pediatric subpopulations. A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the

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pediatric clinical trials begin. The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation.

***Expedited Development and Review Programs***

A sponsor may seek approval of its product candidate under programs designed to expedite FDA's review and approval of biological products that meet certain criteria. The FDA has a Fast Track designation program that is intended to expedite or facilitate the process for reviewing product candidates that meet certain criteria. For example, product candidates are eligible for Fast Track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once a BLA is submitted, the application may be eligible for priority review. A Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.

A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for Breakthrough Therapy designation to expedite its development and review. A product candidate can receive Breakthrough Therapy designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation includes all of the Fast Track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of FDA senior managers.

Any product submitted to the FDA for approval, including a product candidate with a Fast Track designation or Breakthrough Therapy designation, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review. A product is eligible for priority review if it is designed to treat a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA will attempt to direct additional resources to the evaluation of an application for the product candidate designated for priority review in an effort to facilitate the review. For original BLAs, priority review designation means the FDA's goal is to take action on the marketing application within six months of the 60-day filing date (as compared to ten months under standard review).

Additionally, depending on the design of the applicable clinical trials, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA will require the sponsor of a drug receiving accelerated approval to perform adequate and well-controlled confirmatory clinical trials to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit, and may require that such studies be underway before granting any accelerated approval. In addition, the FDA currently requires as a condition for accelerated submission of promotional materials prior to their use, which could adversely impact the timing of the commercial launch of the product. FDA may withdraw approval of a drug or indication approved under accelerated approval on an expedited basis if, for example, the sponsor fails to conduct the required confirmatory trial in a timely manner or if such confirmatory trial fails to verify the predicted clinical benefit of the product.

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Fast Track designation, priority review and Breakthrough Therapy designation do not change the standards for approval but may expedite the development or approval process. Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

***Post-Approval Requirements***

Any products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to FDA review and approval, including prior approval for more significant changes. There also are continuing, annual program fees for any marketed products. Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies or clinical studies to assess new safety risks, or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on the marketing or manufacturing of the product, withdrawal of approval of the product and complete
withdrawal of the product from the market or product recalls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fines, warning letters, or untitled letters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• clinical holds on clinical studies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or
revocation of product license approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• product seizure or detention, or refusal to permit the import or export of products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• mandated modification of promotional materials and labeling and the issuance of corrective information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications
containing warnings or other safety information about the product; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• injunctions or the imposition of civil or criminal penalties.

In addition, the FDA closely regulates the marketing, labeling, advertising and promotion of drug products. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses and requiring the inclusion of safety

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information about the product in all advertising and promotion. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising, onerous and costly government investigations and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product's labeling and that differ from those tested by the manufacturer and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer's communications on the subject of off-label use of their products.

***Orphan Drug Designation and Exclusivity***

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States or, if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a drug product available in the United States for this type of disease or condition will be recovered from sales of the product. orphan designation must be requested before submitting a BLA. After the FDA grants orphan designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biologic for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA application user fee.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the disease or condition for which it received orphan designation. In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if a second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

***Biosimilars and reference product exclusivity***

The ACA, signed into law in 2010, includes BPCIA which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.

Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical study or studies. Interchangeability requires that a product is biosimilar to the reference product and a determination that the product can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a

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biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant's own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products.

A biological product can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods. This six-month exclusivity, which runs from the end of existing exclusivity protection, may be granted based on the voluntary completion of a pediatric study or studies in accordance with an FDA-issued "Written Request" for such a study and the satisfaction of other requirements for the conduct and submission of the study or studies.

***U.S. Healthcare Fraud and Abuse Laws and Compliance Requirements***

In addition to FDA regulation of pharmaceutical products, U.S. federal and state healthcare laws and regulations restrict business practices in the pharmaceutical industry. These laws may impact, among other things, our current and future business operations, including our clinical research activities, and constrain the business or financial arrangements and relationships with healthcare providers and other parties. These laws include anti-kickback and false claims laws, civil monetary penalties laws, and physician and other healthcare provider payment transparency laws. In addition to the federal laws summarized below, we may also be subject to similar state and local laws and regulations that may apply to business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or by patients themselves.

The federal Anti-Kickback Statute prohibits, among other things, individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.The federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws prohibit, among other things, any individual or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute or from improper advertising or promotion of an item or service constitutes a false or fraudulent claim for purposes of the civil False Claims Act.

The federal civil monetary penalties laws impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary's selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies.

HIPAA created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children's Health Insurance

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Program, with specific exceptions, to report annually to CMS information related to payments or other transfers of value made during the previous year to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other health care providers including, among others, physician assistants and nurse practitioners, and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held during the previous year by physicians as defined under statute and their immediate family members.

Similar state and local laws and regulations may also restrict business practices in the pharmaceutical industry, such as state anti-kickback and false claims laws, which may apply to business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or by patients themselves; state laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information or which require tracking gifts and other remuneration and items of value provided to physicians, other healthcare providers and entities; and state and local laws that require the registration of pharmaceutical sales representatives.

Violation of any of such laws or any other applicable governmental regulations may result in significant criminal, civil and administrative penalties including damages, fines, imprisonment, disgorgement, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, disgorgement, exclusion from participation in government healthcare programs and the curtailment or restructuring of our operations.

***U.S. Coverage and Reimbursement***

Significant uncertainty exists as to the coverage and reimbursement status of any product candidate for which we may seek regulatory approval. Sales in the United States will depend, in part, on the availability of sufficient coverage and adequate reimbursement from third-party payors, which include government health programs such as Medicare, Medicaid, TRICARE and the Veterans Health Administration, as well as managed care organizations and private health insurers. Prices at which we or our customers seek reimbursement for our product candidates can be subject to challenge, reduction or denial by third-party payors. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs.

The process for determining whether a third-party payor will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will pay for the product. In the United States, there is no uniform policy among payors for coverage or reimbursement. Decisions regarding whether to cover a product, the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and approval processes. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that can require manufacturers to provide scientific and clinical support for the use of a product to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product that receives approval. Third-party payors may not

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consider our product candidates to be medically necessary or cost-effective compared to other available therapies, or the rebates required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development. Additionally, decreases in third-party reimbursement for any product or a decision by a third-party payor not to cover a product could reduce physician usage and patient demand for the product.

***U.S. Healthcare Reform***

In the United States, there has been, and continues to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the profitable sale of product candidates.

Among policy makers and payors in the United States, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. For example, in March 2010, the ACA was passed, which substantially changed the way healthcare is financed by both governmental and private insurers, and significantly affected the pharmaceutical industry. ACA provisions of importance to our product candidates established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; extended manufacturers' Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; expanded the entities eligible for enrollment in the 340B program; increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in force in its current form.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes included aggregate reductions to Medicare payments to providers, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2032. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. In addition, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, as of January 1, 2024. The rebate was previously capped at 100% of a drug's average manufacturer price.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products.

Most significantly, in August 2022, President Biden signed the IRA into law. This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and

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Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025). CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject to negotiation. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented, although the Medicare drug price negotiation program is currently subject to legal challenges. While the impact of the IRA on the pharmaceutical industry cannot yet be fully determined, it is likely to be significant.

Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Some states have also enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine which drugs and suppliers will be included in their healthcare programs Furthermore, there has been increased interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices.

***Foreign Regulation***

In order to market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, MA, commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable foreign regulatory authorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions. Although many of the issues discussed above with respect to the United States apply similarly in the context of the EU, the approval process varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

*Non-clinical Studies and Clinical Trials* 

Similarly to the United States, the various phases of non-clinical and clinical research in EU are subject to significant regulatory controls.

Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of GLP as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes). In particular, non-clinical studies, both in vitro and in vivo, must be planned, performed, monitored, recorded, reported and archived in accordance with the GLP principles, which define a set of rules and criteria for a quality system for the organizational process and the conditions for non-clinical studies. These GLP standards reflect the Organisation for Economic Co-operation and Development requirements.

Clinical trials of medicinal products in the EU must be conducted in accordance with EU and national regulations and the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use, or ICH, guidelines on GCP as well as the applicable regulatory requirements and the ethical principles that have

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their origin in the Declaration of Helsinki. If the sponsor of the clinical trial is not established within the EU, it must appoint an EU entity to act as its legal representative. The sponsor must take out a clinical trial insurance policy, and in most EU member states, the sponsor is liable to provide 'no fault' compensation to any study subject injured in the clinical trial.

The regulatory landscape related to clinical trials in the EU has been subject to recent changes. The CTR, which was adopted in April 2014 and repealed the EU Clinical Trials Directive, became applicable on January 31, 2022. Unlike directives, the CTR is directly applicable in all EU member states without the need for member states to further implement it into national law. The CTR notably harmonizes the assessment and supervision processes for clinical trials throughout the EU via a Clinical Trials Information System, which contains a centralized EU portal and database.

While the EU Clinical Trials Directive required a separate CTA to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials. The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state. The CTA must include, among other things, a copy of the trial protocol and an investigational medicinal product dossier containing information about the manufacture and quality of the medicinal product under investigation. The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules. Each member state's decision is communicated to the sponsor via the centralized EU portal. Once the CTA is approved, clinical study development may proceed.

The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR.

Medicines used in clinical trials must be manufactured in accordance with GMP. Other national and EU-wide regulatory requirements may also apply.

*Marketing Authorization* 

To market a medicinal product in the EU, we must obtain separate regulatory approvals. More concretely, in the EU, medicinal product candidates can only be commercialized after obtaining a MA. To obtain regulatory approval of a product candidate under EU regulatory systems, we must submit a MA application ("MAA"). The process for doing this depends, among other things, on the nature of the medicinal product. There are two types of MAs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Centralized MAs" are issued by the European Commission through the centralized procedure based on
the opinion of the Committee for Medicinal Products for Human Use ("CHMP"), of the EMA and are valid throughout the entire territory of the EU. The centralized procedure is mandatory for certain types of products, such as
(i) biotechnology medicinal products, (ii) designated orphan medicinal products, (iii) advanced therapy medicinal products, and (iv) medicinal products containing a new active substance indicated for the treatment certain
diseases, such as AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases. The centralized procedure is optional for products containing a new active substance not yet authorized in the EU, or for products that constitute
a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "National MAs" are issued by the competent authorities of the EU member states, only cover their
respective territory, and are available for product candidates not falling within the mandatory scope of the centralized procedure. Where a product has already been authorized for marketing in an EU

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member state, this national MA can be recognized in another member state through the mutual recognition procedure. If the product has not received a national MA in any member state at the time of application, it can be approved simultaneously in various member states through the decentralized procedure. Under the decentralized procedure, an identical dossier is submitted to the competent authorities of each of the member states in which the MA is sought, one of which is selected by the applicant as the reference member state. <br>

Under the centralized procedure, the maximum timeframe for the evaluation of an MAA by the EMA is 210 days, excluding clock stops.

Under the above-described procedures, before granting the MA, the EMA or the competent authorities of the EU member states make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

*Data and Marketing Exclusivity* 

In the EU, new products authorized for marketing, or reference products, generally receive eight years of data exclusivity and an additional two years of market exclusivity upon MA. If granted, the data exclusivity period prevents generic or biosimilar applicants from relying on the pre-clinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar MA in the EU during a period of eight years from the date on which the reference product was first authorized in the EU. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial authorization of the reference product in the EU. The 10-year market exclusivity period can be extended to a maximum of 11 years if, during the first eight years of those 10 years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. However, there is no guarantee that a product will be considered by the EU's regulatory authorities to be a new chemical or biological entity, and products may not qualify for data exclusivity.

There is a special regime for biosimilars, or biological medicinal products that are similar to a reference medicinal product but that do not meet the definition of a generic medicinal product, for example, because of differences in raw materials or manufacturing processes. For such products, the results of appropriate preclinical or clinical trials must be provided, and guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product. There are no such guidelines for complex biological products, such as gene or cell therapy medicinal products, and so it is unlikely that biosimilars of those products will currently be approved in the EU. However, guidance from the EMA states that they will be considered in the future in light of the scientific knowledge and regulatory experience gained at the time.

*Orphan Medicinal Products* 

The criteria for designating an "orphan medicinal product" in the EU are similar in principle to those in the United States. A medicinal product can be designated as an orphan if its sponsor can establish that: (1) the product is intended for the diagnosis, prevention or treatment of a life threatening or chronically debilitating condition (2) either (a) such condition affects not more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from the orphan status, would not generate sufficient return in the EU to justify the necessary investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized for marketing in the EU or, if such method exists, the product will be of significant benefit to those affected by that condition.

Orphan designation must be requested before submitting an MAA. An EU orphan designation entitles a party to incentives such as reduction of fees or fee waivers, protocol assistance, and access to the centralized procedure. Upon grant of a MA, orphan medicinal products are entitled to ten years of market exclusivity for the approved indication, which means that the competent authorities cannot accept another MAA, or grant a MA, or accept an

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application to extend a MA for a similar medicinal product for the same indication for a period of ten years. The period of market exclusivity is extended by two years for orphan medicinal products that have also complied with an agreed pediatric investigation plan ("PIP"). No extension to any supplementary protection certificate can be granted on the basis of pediatric studies for orphan indications. Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

The orphan exclusivity period may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for which it received orphan designation, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold. Additionally, MA may be granted to a similar product for the same indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; (ii) the applicant consents to a second orphan medicinal product application; or (iii) the applicant cannot supply enough orphan medicinal product.

*Pediatric Development* 

In the EU, MAAs for new medicinal products have to include sponsor plans for the results of studies conducted in the pediatric population, in compliance with a PIP agreed with the EMA's Pediatric Committee ("PDCO"). The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which MA is being sought. The PDCO can grant a deferral of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults. Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients. Once the MA is obtained in all EU member states and study results are included in the product information, even when negative, the product is eligible for six months' supplementary protection certificate extension (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity is granted.

The aforementioned EU rules are generally applicable in the EEA, which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.

Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties. These penalties could include delays or refusal to authorize the conduct of clinical trials, or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.

***Data Privacy and Security Laws***

We are subject to laws and regulations governing data privacy and security, including the protection of health-related and other personal information. In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, including HIPAA, and federal and state consumer protection laws and regulations (e.g., Section 5 of the FTC Act), that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners. In addition, certain state and non-U.S. laws, such as the CCPA and the GDPR govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other

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in significant ways and may not have the same effect, thus complicating compliance efforts. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. Data privacy and security laws, regulations, and related obligations are constantly evolving, may conflict with each other, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing, any of which could cause a significant disruption to our business.

**Human Capital** 

Following the Distribution, we expect to have employees, of which are full-time employees. of our employees have a Ph.D. or M.D. degree. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.

**Corporate Information** 

The Company was incorporated on September 30, 2025 under the laws of the State of Delaware as a direct, wholly owned subsidiary of Avidity Biosciences, Inc. We changed our name from Bryce Therapeutics, Inc. to Atrium Therapeutics, Inc. on December 8, 2025. Our corporate headquarters are located at 10578 Science Center Drive, Suite 125, San Diego, CA 92121, and our telephone number is (619) 876-0700. Our investor relations website is located at . We will make available free of charge on our investor relations website under "SEC Filings" our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, our directors' and officers' Section 16 reports and any amendments to those reports as soon as reasonably practicable after filing such materials with, or furnishing them to, the SEC. They are also available for free on the SEC's website at www.sec.gov.

We use our company website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Investors should monitor such website, in addition to following our press releases, SEC filings and public conference calls and webcasts. Information relating to our corporate governance is also included on our website. The information in or accessible through the SEC and our website are not incorporated into, and are not considered part of, this information statement.

**Properties** 

Following the Spin-Off, we will have operating lease obligations related to our office and laboratory facility in San Diego, California. In December 2020, and as amended in March 2022 and June 2023, Avidity entered a non-cancelable operating lease for approximately 54,597 square feet of office and laboratory space. The term of the lease expires on November 30, 2026 with an option to extend for an additional five years. In connection with the Separation, the lease and all related rights and obligations were transferred and assigned to us, and, following the Spin-Off, we will operate as the tenant under the lease.

**Legal Proceedings** 

From time to time, in the ordinary course of business, the Company is subject to litigation and regulatory examinations as well as information gathering requests, inquiries and investigations. As of January 22, 2026, there were no such matters which we believe would have a material adverse impact on our business, operating results or financial condition.

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**Emerging Growth Company Status** 

We qualify as an emerging growth company as defined in the JOBS Act. As an emerging growth company, we expect to take advantage of reduced reporting requirements otherwise applicable to public companies. These provisions include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and
registration statements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved.

We may rely on the relief provided by these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act. However, if certain events occur prior to the end of such five-year period, including if we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

We have elected to take advantage of certain of the reduced disclosure obligations in the Registration Statement of which this information statement is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than that which you might receive from other public reporting companies in which you hold equity interests.

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. We have elected to avail ourselves of this exemption.

**Smaller Reporting Company Status** 

Additionally, we are a "smaller reporting company," meaning that the market value of our common stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this transaction is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year. As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to, reduced disclosure obligations regarding executive compensation. We may continue to be a smaller reporting company as long as either (i) the market value of our common stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million.

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**DIVIDEND POLICY** 

We do not expect to pay any cash dividends on our common stock in the foreseeable future. All decisions regarding the payment of dividends will be made by the Board of Directors from time to time in accordance with applicable law.

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**CAPITALIZATION** 

The following table sets forth the Company Business' cash and capitalization as of September 30, 2025 on a historical and pro forma basis to give effect to the pro forma adjustments included in our unaudited pro forma combined financial information. The information below is not necessarily indicative of what our capitalization would have been had the Separation and Distribution been completed as of September 30, 2025. In addition, it is not indicative of our future capitalization. This table should be read in conjunction with "*Unaudited Pro Forma Combined Financial Information*" and "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations*" and the audited combined financial statements and corresponding notes included elsewhere in this information statement.

---

| | | |
|:---|:---|:---|
|  | **As of September 30, 2025** | **As of September 30, 2025** |
|  | **Historical** | **Pro Forma** |
|  | **(in thousands)** | **(in thousands)** |
|  Cash | $— | $270000<sup>(2)</sup> |
|  **Equity (Deficit):** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Parent Investment | (57147) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock, $0.001 par value<sup>(1)</sup> |  | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital |  | 212836 |
|  **Total capitalization** | $(57147) | $212853 |

---

(1) Calculated based upon the number of outstanding shares of Avidity Common Stock and shares of Avidity Common
Stock underlying Avidity's warrants (the "Avidity Warrants") to purchase shares of Avidity Common Stock, each as of September 30, 2025. Subsequent to September 30, 2025, all Avidity Warrants were exercised and converted into
shares of Avidity Common Stock.

(2) Reflects the transfer from Avidity to the Company of cash equal to $270 million, minus the sum of the
amount of marketable securities and cash and cash equivalents contained in any bank and brokerage accounts owned by the Company as of the close of business on the day prior to the Distribution Date, subject to certain adjustments agreed to by
Avidity and Novartis.

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**UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION** 

The unaudited pro forma combined financial information of the Company Business gives effect to the Separation and related transactions, as described below, in accordance with Article 11 of the SEC's Regulation S-X.

The unaudited pro forma combined financial information presented below has been derived from the historical combined financial statements of the Company Business included in this information statement. While the historical combined financial statements reflect the historical financial results of the Company Business, these pro forma statements give effect to the Separation of the Company Business into an independent, publicly traded company.

The unaudited pro forma combined financial information consists of the unaudited pro forma combined balance sheet as of September 30, 2025, and the unaudited pro forma combined statements of operations for the nine months ended September 30, 2025 and the year ended December 31, 2024. The unaudited pro forma combined balance sheet gives effect to the Separation and related transactions described below as if they had occurred on September 30, 2025. The unaudited pro forma combined statements of operations give effect to the Separation and related transactions described below as of January 1, 2024, the beginning of the most recently completed fiscal year.

The unaudited pro forma combined balance sheet as of September 30, 2025, together with the unaudited pro forma combined statement of operations for the nine months ended September 30, 2025 and the year ended December 31, 2024, have been prepared to reflect adjustments to the Company Business' historical combined financial information for the following transaction accounting and autonomous entity adjustments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the distribution of 17,124,000 shares of the Company Common Stock in connection with the Spin-Off (which number includes (i) approximately 15,359,000 shares of Company Common Stock distributed in the Distribution and (ii) approximately 1,765,000 shares of Company Common Stock underlying
the Avidity Equity Awards issued in accordance with the terms of the Merger Agreement);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effect of our anticipated post-Separation capital structure, which includes a cash transfer to the Company
from Avidity equal to $270 million of cash minus the sum of the amount of marketable securities and cash and cash equivalents held by the Company as of the closing of business on the day prior to the Distribution, subject to certain adjustments
agreed to by Avidity and Novartis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of the Separation Agreement, and Transition Services Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of non-recurring transaction costs associated with the
Separation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of the aforementioned adjustments on the income tax expense of the Company Business.

The pro forma adjustments are based on available information and assumptions that management believes are reasonable given the information that is currently available. However, such adjustments are subject to change based on the finalization of the arrangements under the Transition Services Agreement between the Company and Avidity. The unaudited pro forma combined financial statements are for informational purposes only and do not purport to represent what the financial position and results of operations of the Company Business would have been had the Separation actually occurred as of the dates indicated, nor do they project the Company's financial performance for any future period. The historical audited combined annual and unaudited combined interim financial statements of the Company Business have been derived from Avidity's historical accounting records and reflect certain allocations of expenses. All of the allocations and estimates in such historical financial statements are based on assumptions that Avidity's management believes are reasonable. The historical combined financial statements do not necessarily represent the financial position or results of operations of the Company Business had it been operated as a standalone company during the periods or at the dates presented. As a result, autonomous entity adjustments have been reflected in the unaudited pro forma combined financial information.

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The unaudited pro forma combined financial information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the audited combined annual and unaudited condensed combined interim financial statements and corresponding notes thereto included elsewhere in this information statement.

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**UNAUDITED PRO FORMA COMBINED BALANCE SHEET** 

**As of September 30, 2025** 

**(in thousands)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Historical** | **Transaction<br>Accounting<br>Adjustments** | **Total Pro<br>Forma** |
|  **ASSETS** |  |  |  |
|  Current assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $— | $270000 **(a)** | $270000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid assets | 1262 |  | 1262 |
|  Total Current assets | 1262 | 270000 | 271262 |
|  Property and equipment, net | 2770 |  | 2770 |
|  Right-of-use asset | 3512 |  | 3512 |
|  Total Assets | $**7544** | $**270000** | $**277544** |
|  **LIABILITIES AND EQUITY (DEFICIT)** |  |  |  |
|  Current liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $451 | $— | $451 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities | 5605 |  | 5605 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued compensation | 2593 |  | 2593 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease Liability, current portion | 3967 |  | 3967 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue, current portion | 19123 |  | 19123 |
|  Total Current liabilities | 31739 |  | 31739 |
|  Lease Liability, net of current portion | 312 |  | 312 |
|  Deferred revenue, net of current portion | 32066 |  | 32066 |
|  Other long-term liabilities | 574 |  | 574 |
|  Total Liabilities | **64691** | **—** | **64691** |
|  Commitments and contingencies |  |  |  |
|  EQUITY (DEFICIT) |  |  |  |
|  Common stock, $0.001 par value |  | 17 **(b)** | 17 |
|  Additional paid-in capital |  | 212836 **(b)** | 212836 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Parent Investment | (57147) | 57147 **(a)(b)** |  |
|  Total Equity (Deficit) | **(57147)** | **270000** | **212853** |
|  Total Liabilities and Equity (Deficit) | $**7544** | $**270000** | $**277544** |

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See accompanying notes

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**UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS** 

**For the Nine Months ended September 30, 2025** 

**(in thousands, except per share amounts)** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Historical** | **Transaction<br>Accounting<br>Adjustments** | **Autonomous<br>Entity<br>Adjustments** | **Pro<br>Forma** |
|  Collaboration revenue | $17759 | $— | $— | $17759 |
|  **Operating expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Research and development | 29979 | 2041 **(c)(d)** | 3239 **(g)(h)** | 35259 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 8309 | 600 **(c)(d)** | 2370 **(g)(h)** | 11279 |
|  **Total Operating expenses:** | 38288 | 2641 | 5609 | 46538 |
|  **Loss from operations** | **(20529)** | **(2641)** | **(5609)** | **(28779)** |
|  Other expense | (12) |  |  | (12) |
|  **Net loss before taxes** | **(20541)** | **(2641)** | **(5609)** | **(28791)** |
|  Income tax benefit | 176 |  |  | 176 |
|  **Net loss** | $**(20365)** | $**(2641)** | $**(5609)** | $**(28615)** |
|  **Net loss per share, basic and diluted** |  |  | **(j)(k)** | $**(1.67)** |
|  **Weighted average common stock outstanding, basic and diluted** |  |  | **(j)(k)** | **17124** |

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See accompanying notes.

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**UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS** 

**For the Year ended December 31, 2024** 

**(in thousands, except per share amounts)** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Historical** | **Transaction<br>Accounting<br>Adjustments** | **Autonomous<br>Entity<br>Adjustments** | **Pro<br>Forma** |
|  Collaboration revenue | $10897 | $— | $— | $10897 |
|  **Operating expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Research and development | 19199 | 2948 **(c)(d)** | 10978 **(g)(h)** | 33125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 4916 | 14361 **(c)(d)(e)** | 9711 **(g)(h)** | 28988 |
|  **Total Operating expenses:** | 24115 | 17309 | 20689 | 62113 |
|  **Loss from operations** | **(13218)** | **(17309)** | **(20689)** | **(51216)** |
|  Other income | 2 |  |  | 2 |
|  **Net loss before taxes** | **(13216)** | **(17309)** | **(20689)** | **(51214)** |
|  Income tax (expense) benefit | (11906) | 94 **(f)** | 3221 **(i)** | (8591) |
|  **Net loss** | $**(25122)** | $**(17215)** | $**(17468)** | $**(59805)** |
|  **Net loss per share, basic and diluted** |  |  | **(j)(k)** | $**(3.49)** |
|  **Weighted average common stock outstanding, basic and diluted** |  |  | **(j)(k)** | **17124** |

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See accompanying notes.

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**NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION** 

(a) Reflects the cash transfer from Avidity to the Company for the Company Funding, subject to certain adjustments
agreed to by Avidity and Novartis. Immediately prior to the effective time of the Distribution, Avidity will advance to the Company an amount in cash equal to $270 million, minus the sum of the amount of marketable securities and cash and cash
equivalents contained in any bank and brokerage accounts owned by the Company as of the close of business on the day prior to the Distribution Date.

(b) Represents the reclassification of Avidity's net investment in the Company into Company Common Stock,
$0.001 par value, and additional paid-in capital, to reflect the number of shares of the Company Common Stock expected to be outstanding following the consummation of the Spin-Off. The assumed number of outstanding shares of the Company Common Stock
is based on (i) the number of shares of Avidity Common Stock and the number of shares of Avidity Common Stock underlying Avidity Warrants, each outstanding as of September 30, 2025, plus (ii) Make Whole Awards issued to all the holders of Avidity
Equity Awards, excluding certain awards, assuming a Distribution Ratio of one share of Company Common Stock per ten shares of Avidity Common Stock underlying each such Avidity Equity Award, upon the effective time of the Distribution as stated in
the Separation Agreement and assumed to be issued and outstanding by the Company following the consummation of the Spin-Off. Subsequent to September 30, 2025, all Avidity Warrants were exercised and converted into shares of Avidity Common Stock.

(c) Reflects incremental depreciation related to lab equipment that will be transferred as part of the Separation
Agreement. The following adjustment has been recorded (in thousands):

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| | | |
|:---|:---|:---|
|  | **Nine months<br>ended<br>September 30,<br>2025** | **Year ended**<br>**December 31,<br>2024** |
|  Research and development | $106 | $221 |
|  General and administrative | 22 | 46 |
|  **Total** | $**128** | $**267** |

---

(d) Reflects the incremental lease expense related to assignment of lease between Avidity and the Company that will
be entered as part of Separation Agreement. The following adjustment has been recorded (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Nine months<br>ended<br>September 30,<br>2025** | **Year ended**<br>**December 31,<br>2024** |
|  Research and development | $1935 | $2727 |
|  General and administrative | 578 | 815 |
|  **Total** | $**2513** | $**3542** |

---

(e) Reflects estimated non-recurring transaction costs of
$13.5 million expected to be incurred subsequent to September 30, 2025. The transaction costs were incurred to effect the Separation and Distribution, including third party legal, audit and advisory fee. The impact of this adjustment on
the unaudited pro forma combined Statement of Operations is recorded entirely for the year ended December 31, 2024, as the non-recurring transaction costs are expected to be incurred in conjunction with
the Separation and Distribution.

(f) Reflects the adjustment to provision for income taxes of $0.1 million for the year ended December 31,
2024. The adjustment was determined by applying the respective statutory tax rates to pre-tax pro forma transaction adjustments and reflecting the impact of the valuation allowance recorded against deferred
taxes, on a jurisdictional level. The Company post-Separation income taxes will be impacted by many factors, including the profitability in local jurisdictions and the legal entity structure subsequent to the Separation, and may be materially
different from the pro forma results *.* 

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(g) Reflects the incremental costs the Company expects to incur on a standalone basis in relation to the Separation
and related transactions. These charges primarily relate to employee costs, IT licenses, insurance, and other expenses. The Company expects that the relevant contracts will be executed, and the associated employees will be transferred upon the
closing of the Spin-Off. Accordingly, the pro forma combined financial statements have been adjusted to depict the Company Business as an autonomous entity. The additional costs have been based on estimates
the Company believes are reasonable. However, actual incremental costs that will be incurred could differ materially from these estimates. The following adjustments have been recorded (in thousands):

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| | | |
|:---|:---|:---|
|  | **Nine months<br>ended<br>September 30,<br>2025** | **Year ended**<br>**December 31,<br>2024** |
|  Research and development | $3239 | $10195 |
|  General and administrative | 2370 | 7011 |
|  **Total** | $**5609** | $**17206** |

---

(h) Reflects the costs associated with a Transition Services Agreement that the Company and Avidity will enter into
in connection with the Separation. Pricing under this agreement will reflect Avidity's costs plus a profit. Given that the duration of the services within the Transition Services Agreement are expected to be less than one year, all related
costs have only been recognized in the unaudited pro forma combined Statement of Operations for the year ended December 31, 2024. The following adjustments have been recorded (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Nine months<br>ended<br>September 30,<br>2025** | **Year ended**<br>**December 31,<br>2024** |
|  Research and development | $— | $783 |
|  General and administrative |  | 2700 |
|  **Total** | $**—** | $**3483** |

---

(i) Reflects the adjustment to provision for income taxes of $3.2 million for the year ended December 31,
2024. The adjustment was determined by applying the respective statutory tax rates to pre-tax pro forma autonomous adjustments and reflecting the impact of the valuation allowance recorded against deferred
taxes, on a jurisdictional level. The Company's post-Separation income taxes will be impacted by many factors, including the profitability in local jurisdictions and the legal entity structure subsequent to the Separation, and may be
materially different from the pro forma results *.* 

(j) The number of shares of Company Common Stock used to compute basic loss per share for the nine months ended
September 30, 2025 and year ended December 31, 2024 is based on the assumed number of the shares of Company Common Stock outstanding at those dates, applying the 1-for-10 distribution ratio.

(k) The number of shares of Company Common Stock used to compute diluted loss per share is the same as the basic
Company Common Stock as described in Note (j) above, due to a net loss reported in the unaudited pro forma combined statements of operations for the nine months ended September 30, 2025 and year ended December 31, 2024. The Company
has not considered the effect of outstanding options and restricted stock units expected to be issued by the Company as awards subsequent to the Separation, if any, since their inclusion would be anti-dilutive. The weighted-average shares used to
compute basic and diluted loss per share reflect the 1-for-10 distribution ratio and any shares issued for awards vesting at the Distribution Date.

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**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** 

*The following discussion and analysis of the financial condition and results of operations of Atrium Therapeutics, a business of Avidity Biosciences, Inc. (the "Company Business") should be read together with our audited combined financial statements as of and for the years ended December 31, 2024 and December 31, 2023, together with the related notes thereto, and the unaudited condensed combined interim financial statements as of and for the nine months ended September 30, 2025 and September 30, 2024, included elsewhere in this information statement. The discussion and analysis should also be read together with the section(s) entitled "Business," and "Risk Factors" and our unaudited pro forma combined balance sheet as of September 30, 2025, and the unaudited pro forma combined statements of operations for the nine months ended September 30, 2025 and the year ended December 31, 2024. See "Unaudited Pro Forma Combined Financial Information." The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside of the Company's control. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in the sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" included elsewhere in this information statement. Furthermore, we describe our business activities in this information statement as if no Permitted Third Party Sale or ROFN Sale has occurred or will occur. References in this section and throughout this information statement to "Avidity" refer to Avidity prior to the effective time of the Distribution and references to "RemainCo" refer to Avidity at and after the effective time of the Distribution.* 

***Separation from Avidity***

On October 25, 2025, Avidity, Novartis and the Company entered into the Separation Agreement. Pursuant to the Separation Agreement, on the terms and subject to the conditions set forth therein, prior to the effective time of the Merger, Avidity will effect a pre-closing reorganization, which will generally result in the Company owning, assuming or retaining all assets and liabilities of Avidity and its subsidiaries exclusively related to their early stage precision cardiology programs and Third Party Agreements, and Avidity owning, assuming or retaining all other assets and liabilities. Thereafter, Avidity will either (a) distribute to its stockholders on the Record Date, on a pro rata basis, all the issued and outstanding shares of Company Common Stock at a ratio of one share of Company Common Stock for every ten shares of Avidity Common Stock, with the Company continuing its existence as a separate and independent company, or (b) consummate a sale of the Company to a third party, subject to the terms and conditions of the Merger Agreement and the Separation Agreement. Following the completion of the Separation, Avidity will have no continuing ownership interest in the Company. The Separation includes certain assets of Avidity that trigger a right of first negotiation with an existing collaboration partner of Avidity that was notified concurrently with Avidity's announcements of its entry into the Merger Agreement.

The historical combined financial statements of the Company Business have been prepared on a stand-alone basis and are derived from Avidity's consolidated financial statements and accounting records and are presented in conformity with United States generally accepted accounting principles ("GAAP").

The financial position, results of operations and cash flows of the Company Business historically operated as part of the Avidity's financial position, results of operations and cash flows prior to and until the distribution of Company Common Stock to Avidity stockholders. These historical combined financial statements of the Company Business may not be indicative of the future performance of the Company and do not necessarily reflect what its combined results of operations, financial condition and cash flows would have been had it operated as a separate, publicly traded company during the periods presented.

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***Transition from Avidity and Costs to Operate as an Independent Company***

The combined financial statements reflect the operating results and financial position of the Company Business as it was operated by Avidity prior to the Separation, rather than as an independent company. The Company Business has incurred and the Company will continue to incur ongoing operating expenses to operate as an independent company. These costs include the cost of various corporate headquarters functions, information technology-related costs, and costs to operate stand-alone accounting, legal, and other administrative functions. As an independent public company, our information technology operating costs may be higher than the costs allocated in the historical combined financial statements. It is not practicable to estimate the costs that would have been incurred in each of the periods presented in the historical combined financial statements for the functions described above. Actual costs that would have been incurred if the Company Business operated as a stand-alone public company during these periods would have depended on various factors, including organizational design, outsourcing and other strategic decisions related to corporate functions, information technology and back office infrastructure. On the Distribution Date, the Company will enter into the Transition Services Agreement with RemainCo, pursuant to which the Company will provide certain nominal transition services to RemainCo, and RemainCo will provide certain transition services to us. During the transition from Avidity pursuant to the Separation and Distribution, the Company may incur non-recurring expenses to expand our infrastructure.

**Overview** 

We are a biopharmaceutical company pioneering the delivery of RNA therapeutics to the heart to transform the standard of care for people living with cardiomyopathies. Our proprietary technology leverages a targeted RNA delivery platform that combines the tissue selectivity of mAbs and other targeted delivery ligands with the precision of oligonucleotides. This unique combination allows selective targeting of the underlying genetic drivers of disease that were previously undruggable.

We have initially selected genetically validated cardiology targets for our development pipeline. Our precision cardiology pipeline currently consists of two primary, wholly owned precision cardiology development candidates for the treatment of PRKAG2 syndrome and PLN cardiomyopathy. The chart below represents a summary of our wholly owned development programs. We also have two additional pipeline candidates in research and development targeting undisclosed rare cardiology targets which we may develop in the future.

![LOGO](g42675g00k15.jpg)

**ATR 1072** 

Our lead product candidate, ATR 1072, is a siRNA-based therapy targeting PRKAG2 for the treatment of PRKAG2 syndrome. Preclinical studies to date have demonstrated ATR 1072's potency and selectivity for PRKAG2 silencing. A mouse surrogate AOC (mATR 1072) containing the siRNA component of ATR 1072 conjugated to a mouse targeting anti-TFR1 antibody demonstrated robust in vivo activity. Marked reductions of PRKAG2 mRNA in the heart of wildtype mice were observed in mice treated with mATR 1072. We also observed substantial reductions in PRKAG2 protein in the heart. We have also observed functional activity of mATR 1072 in a mouse model of PRKAG2 syndrome. In this model, mice exhibit reduced diastolic function and conduction abnormalities relative to wildtype mice. Treatment with ATR 1072 improved diastolic function and restored electrical conduction parameters, which we believe establishes a link between PRKAG2 molecular target engagement and functional cardiac benefit. In addition, preliminary tolerability data in cynomolgus

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monkeys, a NHP species, has been evaluated. ATR 1072 was pharmacologically active in NHP achieving robust and durable PRKAG2 mRNA knockdown and reduced protein expression in the heart. In these subacute studies in NHP, ATR 1072 was well tolerated, with no adverse findings in electrocardiogram (ECG) parameters or heart morphology with a preclinical tolerability profile comparable to others in the RNA delivery platform. IND-enabling preclinical toxicology studies and CMC manufacturing are ongoing for ATR 1072. We expect to file an IND in the second half of 2026 and the Company plans to initiate a Phase 1 clinical trial upon IND acceptance by the FDA.

**ATR 1086** 

Our second lead product candidate, ATR 1086, is a siRNA-based therapy targeting PLN for the treatment of PLN cardiomyopathy. Preclinical studies to date have demonstrated ATR 1086's potency and selectivity for PLN silencing. In a mouse surrogate AOC (mATR 1086) containing the siRNA component of ATR 1086 conjugated to a mouse targeted anti-TFR1 antibody, mATR 1086 demonstrated robust PLN mRNA reduction in the heart. Preclinical studies have also demonstrated the functional activity of mATR 1086 in a humanized mouse model of PLN cardiomyopathy (hPLN<sup>R14/R14</sup>). This model is homozygous for the human PLN 14del mutation resulting in rapidly progressive heart disease where animals die within 8 weeks of life. mATR 1086 treatment in this model resulted in 100% survival through the duration of the study for at least 20 weeks. In addition, mATR 1086 treated mice had substantial improvement in cardiac function marked by increased ejection fraction. These data demonstrate that reduction of the gain of function mutant PLN led to improved heart function. Preliminary tolerability data in cynomolgus monkeys, a NHP species, has been evaluated. ATR 1086 was pharmacologically active in NHP achieving robust and durable PLN mRNA knockdown in the heart. Sustained PLN mRNA reduction (~80%) was well tolerated for over three months in non-GLP studies in cynomolgus monkeys (n=3), a NHP species, with no adverse findings in ECG parameters or heart morphology with a preclinical tolerability profile comparable to others in the RNA delivery platform. CMC manufacturing is planned for ATR 1086 to support initiation of IND-enabling preclinical studies in 2026. We expect to file an IND for ATR 1086 in 2027.

**Other Programs** 

While we initially focused on targeting rare cardiac conditions with high unmet need, we believe our technology coupled with the robust preclinical data across two different therapeutic areas supports our strategy to expand the pipeline to treat a broader range of genetic and cardiac diseases.

**Components of Results of Operations** 

***Revenue***

*Collaboration revenue* 

Following the Separation from Avidity, we will continue to generate revenue from research and development and clinical trial activities. This revenue comes from license and research collaboration agreements, including reimbursements for services, upfront payments, and milestone payments under current and future agreements.

We do not expect to generate revenue from product sales until our candidates successfully advance through clinical development and receive regulatory approval, if ever. Consequently, our revenue may fluctuate quarterly, influenced by the timing and amounts of payments related to our services and milestones. Any setbacks in preclinical or clinical development, or failure to secure regulatory approval, could adversely affect our ability to generate future revenues and our overall financial position.

***Operating Expenses***

Following the Separation from Avidity, our operating expenses will reflect the costs required to establish and operate as an independent, publicly traded company on an ongoing basis.

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*Research and development* 

Research and development expenses represent costs incurred in connection with our discovery research and ongoing efforts to progress preclinical programs into clinical development as well as to execute clinical trials. These expenses include both external and internal costs, as follows:

• External costs, including fees paid to CROs, contract development and manufacturing organizations
("CDMOs"), consultants, scientific advisors, and other third parties involved in preclinical and clinical development, and regulatory activities; and

• Internal costs, including employee-related expenses (including salaries, benefits, and stock-based compensation)
for personnel engaged in research and development; costs of laboratory supplies and preclinical materials; and allocated facility, information technology, and depreciation expenses of leasehold improvements and equipment.

Research and development expenses are recognized as incurred. Nonrefundable advance payments for goods and services to be used in future research and development activities are capitalized until the goods or services are received.

We manage our research and development spend in the aggregate and evaluate programs based on factors such as development progress, probability of technical and regulatory success, commercial potential, and availability of capital or partnership resources. Because our personnel and infrastructure support multiple programs, the Company Business does not allocate internal costs on a program-specific basis.

The Company expects our research and development expenses to increase as the Company continues to conduct ongoing research and development activities, advance preclinical research programs toward clinical development, including IND-enabling studies, and conduct clinical trials following the Distribution. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming and can vary significantly for each product candidate and development program.

Our research and development costs may vary significantly depending on factors such as:

• the number and scope of ongoing preclinical studies and clinical trials;

• patient enrollment and trial site costs;

• regulatory requirements and safety monitoring;

• manufacturing scale-up and process validation activities; and

• the stage of development and success of our product candidates.

*General and administrative* 

General and administrative expenses primarily consist of employee-related expenses (including salaries, benefits, and stock-based compensation) for our executive, finance, legal, human resources, and other administrative functions. Other general and administrative expenses include professional fees for legal, accounting, audit, tax, and consulting services; costs associated with insurance, investor relations, and public company compliance; and allocated facility and IT-related costs, including depreciation, not otherwise included in research and development expenses.

The Company expects general and administrative expenses to increase over time as the Company operates as a stand-alone public company and continues to build the infrastructure necessary to support our increased research and development activities, commercial readiness initiatives, compliance costs, and other corporate activities following the Distribution.

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*Other income (expense)* 

Other income (expense) primarily includes fluctuations in foreign exchange rates and other non-operating items.

**Results of Operations** 

***Comparison of the Nine Months Ended September 30, 2025 and 2024***

The following table summarizes our results of operations for the periods presented (in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **Change** |
|  Collaboration revenue | $17759 | $7924 | $9835 |
|  Research and development expenses | 29979 | 11680 | 18299 |
|  General and administrative expenses | 8309 | 3211 | 5098 |
|  Total operating expenses | 38288 | 14891 | 23397 |
|  Other expense | (12) | (2) | (10) |
|  Income tax benefit (expense) | 176 | (6641) | 6817 |
|  Net loss and comprehensive loss | $(20365) | $(13610) | $(6755) |

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*Revenue* 

Revenue increased by $9.8 million for the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to the recognition of a $10.0 million milestone under the Lilly Agreement.

*Research and Development Expenses* 

The following table illustrates the components of our research and development expenses for the periods presented (in thousands):

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|:---|:---|:---|:---|
|  | **Nine Months Ended September,** | **Nine Months Ended September,** | **Nine Months Ended September,** |
|  | **2025** | **2024** | **Change** |
|  External Costs: |  |  |  |
|  ATR 1072 | $9176 | $1340 | $7836 |
|  ATR 1086 | 2485 | 91 | 2394 |
|  Other programs | 1544 | 132 | 1412 |
|  Unallocated | 3604 | 2109 | 1495 |
|  Total external costs | 16809 | 3672 | 13137 |
|  Internal Costs |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employee-related expenses | 7933 | 3557 | 4376 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Facilities, lab supplies and other | 5237 | 4451 | 786 |
|  Total internal costs | 13170 | 8008 | 5162 |
|  Total research and development expenses | $29979 | $11680 | $18299 |

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Research and development expenses increased by $18.3 million for the nine months ended September 30, 2025, as compared to the same period in 2024. External costs increased $13.1 million primarily due to a $5.5 million increase in contract manufacturing costs, and $4.1 million increase in process and analytical development costs. Internal costs increased $5.2 million primarily due to higher personnel costs including salaries, wages and stock-based compensation.

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*General and Administrative Expenses* 

General and administrative expenses increased by $5.1 million for the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to $2.9 million in higher personnel costs including salaries, wages and stock-based compensation, and $1.3 million in higher professional fees to support our expanded operations.

*Provision for Income Taxes* 

The income tax amounts in the Company Business' interim condensed combined financial statements have been calculated on a separate return method and are presented as if the Company Business' operations were a separate taxpayer. Therefore, tax expense, cash tax payments, and items of current and deferred taxes may not be reflective of actual tax balances prior to or subsequent to the Spin-Off.

As of September 30, 2025, the Company Business continued to maintain a full valuation allowance against net deferred tax assets, which are comprised primarily of deferred revenue and stock-based compensation. The valuation allowance reflects management's assessment that it is more likely than not that these deferred tax assets will not be realized. As a result of a book to tax difference related to deferred revenue recognized for tax purposes, while maintaining a valuation allowance against its deferred tax assets, the Company Business generated taxable income and corresponding tax expense in 2024. The Company Business recognized income tax benefit of $0.2 million and income tax expense of $6.6 million for the nine months ended September 30, 2025 and 2024, respectively, which primarily represents U.S. Federal tax and state taxes.

***Comparison of the Years Ended December 31, 2024 and 2023***

The following table summarizes the Company Business' results of operations for the years presented (in thousands):

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|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** |
|  | **2024** | **2023** | **Change** |
|  Collaboration revenue | $10897 | $9764 | $1133 |
|  Research and development expenses | 19199 | 12653 | 6546 |
|  General and administrative expenses | 4916 | 3497 | 1419 |
|  Total operating expenses | 24115 | 16150 | 7965 |
|  Other income | 2 | 1 | 1 |
|  Income tax expense | (11906) |  | (11906) |
|  Net loss and comprehensive loss | $(25122) | $(6385) | $(18737) |

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*Revenue* 

Revenue increased by $1.1 million for the year ended December 31, 2024 as compared to the same period in 2023, primarily due to the increase of $9.6 million in revenue under the BMS Collaboration Agreement, partially offset by a decrease of $8.4 million in revenues under the Lilly Agreement in the current year.

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*Research and Development Expenses* 

The following tables illustrate the components of our research and development expenses for the years presented (in thousands):

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|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** |
|  | **2024** | **2023** | **Change** |
|  External Costs: |  |  |  |
|  ATR 1072 | $3251 | $692 | $2559 |
|  ATR 1068 | 128 | 586 | (458) |
|  Other programs | 482 | 485 | (3) |
|  Unallocated | 3333 | 1776 | 1557 |
|  Total external costs | 7194 | 3539 | 3655 |
|  Internal Costs |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employee-related expenses | 5985 | 4469 | 1516 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Facilities, lab supplies and other | 6020 | 4645 | 1375 |
|  Total internal costs | 12005 | 9114 | 2891 |
|  Total research and development expenses | $19199 | $12653 | $6546 |

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Research and development expenses increased by $6.5 million for the year ended December 31, 2024 as compared to the same period in 2023. External costs increased $3.7 million primarily due to $1.4 million in higher process and analytical development costs, and $1.1 million in higher contract manufacturing costs. Internal costs increased $2.9 million primarily due to $1.5 million in higher personnel costs.

*General and Administrative Expenses* 

General and administrative expenses increased by $1.4 million for the year ended December 31, 2024 as compared to the same period in 2023, primarily due to increased stock-based compensation expenses and bonus expenses.

*Provision for Income Taxes* 

The income tax amounts in the Company Business' Combined Financial Statements have been calculated on a separate return method and are presented as if the Company Business' operations were a separate taxpayer. Therefore, tax expense, cash tax payments, and items of current and deferred taxes may not be reflective of actual tax balances prior to or subsequent to the Spin-Off.

As of December 31, 2024, the Company Business continued to maintain a full valuation allowance against net deferred tax assets, which are comprised primarily of deferred revenue and stock-based compensation. The valuation allowance reflects management's assessment that it is more likely than not that these deferred tax assets will not be realized. As a result of a book to tax difference related to deferred revenue recognized for tax purposes, while maintaining a valuation allowance against its deferred tax assets, the Company Business generated taxable income and corresponding tax expense in 2024. The Company Business recorded an income tax provision of $11.9 million and $0.0 million for the periods ended December 31, 2024 and December 31, 2023, respectively, which primarily represents U.S. Federal tax and state taxes.

**Liquidity and Capital Resources** 

***Sources of Liquidity***

The Company Business has incurred net losses and negative cash flow from operations since inception and we anticipate the Company will continue to incur net losses for the foreseeable future. To date, the Company

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Business has depended on Avidity to fund its operations as Avidity uses a centralized approach to cash management. The Company Business does not have any bank accounts and, as such, had no cash and cash equivalents as of September 30, 2025 and December 31, 2024.

The Company anticipates that Avidity's funding support of the Company Business through its centralized cash management system, as well as the cash generated from the Third Party Agreements, will be sufficient to meet working capital requirements for the next twelve months if the Separation and Distribution do not occur. Following the Separation and Distribution, the Company will no longer participate in Avidity's centralized treasury system and will independently manage its liquidity. Immediately prior to the effective time of the Distribution, Avidity will pay and contribute to the Company an amount in cash equal to $270 million, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any bank and brokerage accounts held by the Company as of the close of business on the day prior to the Distribution Date. Following the Spin-Off, the Company anticipates the Company Funding, as well as cash generated from its collaboration agreements, will be sufficient to meet its working capital requirements, capital expenditures and other general corporate purposes for at least twelve months following the Spin-Off and through Phase 1 clinical proof-of-concept for our product candidate, ATR 1072, for the treatment of PRKAG2 syndrome. Whether these resources are adequate to meet the Company's liquidity needs beyond that period will depend on the Company's growth and operating results.

Following the Spin-Off, until required for use in our business, we expect to invest our cash, in accordance with our investment policy, in money market funds and fixed income securities including U.S. treasury bills and government securities. We will attempt to minimize credit risk related to our cash and cash equivalents by maintaining a well-diversified portfolio that limits the amount of exposure as to maturity and investment type.

***Future Capital Requirements***

As of September 30, 2025, the Company Business had no cash, cash equivalents, or marketable securities on hand because we did not have any bank accounts. The primary uses of cash by the Company Business are to fund its operations, which consist primarily of research and development expenditures related to its programs and, to a lesser extent, general and administrative expenditures. We anticipate that the Company will continue to incur significant and increasing expenses for the foreseeable future following the Separation and Distribution as we continue to advance our product candidates and further our research and development initiatives, expand our corporate infrastructure, including the costs of being a public company, and incur costs associated with potential commercialization. We are subject to all of the risks typically related to the development of new drug candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We anticipate that we will need substantial additional funding in connection with our continuing operations.

We do not have any products approved for sale and have not generated any revenue from product sales since our inception. We do not expect to generate revenue from any product candidates that we develop until we obtain regulatory approval for one or more of such product candidates and commercialize our products pursuant to our existing collaboration agreements or enter into new collaboration agreements with third parties. Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we may never achieve or sustain profitability and, unless and until we are able to develop and commercialize our product candidates, we will need to raise additional capital. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations with the Company Funding, revenue generated from the Third Party Agreements, if any, and through public or private equity or debt financings, or potentially other capital sources, such as collaboration or licensing arrangements with third parties or other strategic transactions. There are no assurances that we will be successful in obtaining an adequate level of financing to support our business plans when needed on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our

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common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise capital as and when needed, or on attractive terms, we may have to significantly delay, reduce, or discontinue the development and commercialization of our product candidates or scale back or terminate our operations.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could significantly increase as a result of many factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The scope, progress, results and costs of researching and developing our current product candidates, as well as
other product candidates we may develop;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The timing of, and the costs involved in, obtaining marketing approvals for our current product candidates for
current and future indications, as well as other product candidates we may develop and pursue;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The number of future indications and product candidates that we pursue and their development requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If approved, the cost of commercialization activities for our current product candidates or any other product
candidate that receives regulatory approval to the extent such costs are not the responsibility of our collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Subject to the receipt of regulatory approval, revenue, if any, received from commercial sales of our current
product candidates or revenues received from any future product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our headcount growth and associated costs as we expand our organization to achieve our objectives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The costs of preparing, filing and prosecuting patent applications, and maintaining and protecting our
intellectual property rights, including enforcing and defending intellectual property related claims; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The costs of operating as a public company.

A change in the outcome of any of these or other variables with respect to the development of any product candidate could significantly change the costs and timing associated with the development of that product candidate. Additionally, we may experience increased costs and be required to raise additional capital much sooner than anticipated. Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.

***Cash Flows***

Historically, the cash flows from operating and financing activities of the Company Business reflect the impact of funding provided by Avidity under a centralized cash management structure. As a result, the financial statements of the Company Business include intercompany transfers within operating and financing activities. Following the Separation, the Company will no longer participate in Avidity's centralized treasury system and will independently manage our liquidity.

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The following table summarizes our cash flows and cash and cash equivalents, for the periods indicated (in thousands):

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|:---|:---|:---|:---|:---|
|  | **Nine Months ended<br>September 30,** | **Nine Months ended<br>September 30,** | **Year-Ended<br>December 31,** | **Year-Ended<br>December 31,** |
|  | **2025** | **2024** | **2024** | **2023** |
|  Net cash (used in) provided by operating activities | $(21877) | $(14290) | $(22553) | $56390 |
|  Net cash used in investing activities | (566) | (48) | (266) | (320) |
|  Net cash provided by (used in) financing activities | 22443 | 14338 | 22819 | (56070) |
|  Net increase (decrease) in cash and cash<br>equivalents | $— | $— | $— | $— |

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*Cash Flows from Operating Activities* 

Net cash used in operating activities was $21.9 million for the nine months ended September 30, 2025, compared to $14.3 million in the nine months ended September 30, 2024. The change primarily reflects higher research and development spending as well as general and administrative expenses as described under "Results of Operations" above. Operating cash flows of the Company Business historically represent funding requirements for Company Business activities, which were financed by Avidity through intercompany transfers.

Net cash used in operating activities was $22.6 million for the year ended December 31, 2024, compared to $56.4 million provided by operating activities for the year ended December 31, 2023. The change primarily reflects higher research and development spending as well as general and administrative expenses as described under "Results of Operations" above, and cash payment received from the BMS Collaboration Agreement for the year ended December 31, 2023. Operating cash flows of the Company Business historically represent funding requirements for Company Business activities, which were financed by Avidity through intercompany transfers.

*Cash Flows from Investing Activities* 

Net cash used in investing activities was $0.6 million for the nine months ended September 30, 2025, compared to $0.1 million in the nine months ended September 30, 2024. The change primarily reflects the acquisition of lab equipment to further the research and development of product candidates.

Net cash used in investing activities was $0.3 million for the year ended December 31, 2024, compared to $0.3 million for the year ended December 31, 2023. The change primarily reflects the acquisition of lab equipment to further the research and development of product candidates.

*Cash Flows from Financing Activities* 

Net cash provided by financing activities was $22.4 million for the nine months ended September 30, 2025, compared to $14.3 million in the nine months ended September 30, 2024. These amounts primarily reflect net transfers from and to Avidity to fund operations and settle intercompany balances.

Net cash provided by financing activities was $22.8 million for the year ended December 31, 2024, compared to $56.1 million used in financing activities for the year ended December 31, 2023. These amounts reflect net transfers from and to Avidity to fund general operating, investing and financing activities and settle intercompany balances.

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***Contractual Obligations and Commitments***

Following the Spin-Off, the Company will have operating lease obligations related to our office and laboratory facility. In June 2020, and as amended in December 2020, Avidity entered a non-cancelable operating lease for approximately 47,737 square feet of office and laboratory space. Avidity entered into an expansion lease in June 2023 with both leases terminating concurrently on November 30, 2026. In connection with the Separation, the lease and all related rights and obligations will be transferred and assigned to us, and, following the Spin-Off, we will operate as the tenant under the lease.

Additionally, prior to the Separation, certain facility and service arrangements were comingled within contracts held by Avidity. Under the terms of the Separation, Avidity will retain those comingled contracts and continue to be the obligor. We will not assume any of Avidity's obligations under those agreements.

We enter into contracts during the ordinary course of our business for purposes such as contract research services, contract manufacturing services, professional services, and a variety of other operational needs. Our agreements often include clauses requiring payment in the event of early termination, with the amount depending on both the timing and specific terms of each contract. As a result, the Company classifies these contracts as cancellable.

***Critical Accounting Estimates***

The combined financial statements of the Company Business have been prepared in accordance with U.S. GAAP. Preparation of the financial statements requires certain judgments, estimates and assumptions that impact the reported amount of revenues and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. An accounting judgment, estimate or assumption is considered to be critical when the estimate or assumption is complex in nature or requires a high degree of judgment and the use of different judgments, estimates and assumptions could have a material impact on the combined financial statements. Management periodically reviews these estimates and makes adjustments when facts and circumstances dictate. To the extent that there are material differences between these estimates and actual results, its financial condition or results of operations will be affected.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the combined financial statements. Management believes that the critical accounting policies reflect the more significant estimates and assumptions used in the preparation of the combined financial statements. The critical accounting policies, judgments and estimates should be read in conjunction with the Company Business combined financial statements and the notes thereto and other disclosures included elsewhere in this information statement.

Significant accounting policies of the Company Business are described in Note 2 to the combined financial statements included elsewhere in this information statement. The following accounting policies with financial estimates are the most critical to understanding and evaluating our historical and future performance.

*Collaboration and Research Agreements* 

Revenue is recognized under collaboration and research agreements based on the transaction price allocated to performance obligations within each arrangement. The transaction price typically includes fixed consideration, such as non-refundable upfront license fees and research funding, and excludes variable consideration—such as development, regulatory, and commercial milestone payments—until it is probable that a significant reversal will not occur. Royalties on net sales of licensed products are recognized when the underlying sales occur.

In applying ASC 606 (Revenue from Contracts with Customers) and ASC 808 (Collaborative Arrangements), significant judgment is exercised in determining the amount and timing of revenue recognition. This process

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involves identifying promised goods or services in the contract and determining whether they are distinct performance obligations, measuring the transaction price including applying constraints on variable consideration, allocating the transaction price to performance obligations based on observable standalone selling prices when available, and recognizing revenue when or as performance obligations are satisfied. Key judgments include evaluating whether contractual obligations represent distinct performance obligations, assessing whether options provide material rights, determining whether licenses are functional or symbolic, assessing the timing of satisfaction of obligations, and estimating the probability and timing of milestone achievement and related variable consideration.

These estimates require consideration of contractual terms, collaborator billing schedules, progress toward milestones, and whether arrangements involve joint operating activities or customer relationships. Because these judgments involve inherent uncertainty, actual revenue recognized may differ from initial estimates. Estimates are regularly updated as new information becomes available, and any adjustments are recorded in the period identified, which may materially affect reported revenue.

*Accrued Research and Development Costs* 

Research and development expenses are recorded as incurred. These costs include salaries, benefits and stock-based compensation associated with research and development personnel, third-party research and development expenses, license fees, laboratory supplies, facilities, overhead costs, and consultants. At each reporting date, services performed are estimated but not yet invoiced based on discussions with vendors and review of the project progress.

These accruals of research and development expenses requires estimates of expenses incurred, including estimates of the time period over which services will be performed and the completion of contract components. If the actual timing of the performance of services varies from estimates, the accrual or prepaid expense are adjusted accordingly.

Although material differences between estimates and actual amounts incurred are not expected, variations in the status or timing of services could result in reporting amounts that are either overstated or understated in a given period. To date, there have been no material differences between estimates of such expenses and the amounts actually incurred.

*Allocation of General Corporate Expenses and Avidity Costs* 

Prior to the Separation, the combined financial statements of the Company Business included certain costs of Avidity that were allocated to the Company Business for corporate functions such as finance, legal, human resources, information technology, and other shared services. These allocations were made on a specific identification basis when possible or were allocated on the basis of a proportional cost allocation method primarily based on a percentage of the operating expenses. These cost allocations are a reasonable reflection of the utilization of services provided to, or benefit derived by, the Company Business during the periods presented, though the allocations may not be indicative of the actual costs that would have been incurred had the Company Business operated as a standalone company during the periods presented. Management believes the allocation methodologies are reasonable; however, the amounts reflected in the combined financial statements may not be indicative of the actual costs we would have incurred as a standalone entity. After the Separation, the Company will incur these expenses directly as part of our standalone operations.

**Recent Accounting Pronouncements** 

Recently issued and adopted accounting pronouncements are described in Note 2 to the combined financial statements of the Company Business included elsewhere in this information statement.

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**CORPORATE GOVERNANCE AND MANAGEMENT** 

**Directors and Executive Officers** 

The following table sets forth information concerning our executive officers and directors of the Company as of , 2026:

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
|  *Executive Officers:* |  |  |
|  Kathleen Gallagher | 45 | Chief Executive Officer and Member of the Board of Directors |
|  Husam Younis | 51 | Chief Scientific Officer |
|  Steven Hughes | 59 | Chief Medical Officer |
|  Brendan Winslow | 38 | Chief Financial Officer |
|  Stephanie Kenney | 48 | Chief Corporate Affairs Officer |
|  Rocio Martin Hoyos | 43 | Chief Strategy Officer |
|  *Non-Management Directors:* |  |  |
|  Sarah Boyce | 54 | Member of the Board of Directors |
| W. Michael Flanagan | 63 | Member of the Board of Directors |
|  Carsten Boess | 59 | Member of the Board of Directors |
|  Simona Skerjanec | 61 | Member of the Board of Directors |
|  Troy Wilson | 57 | Member of the Board of Directors |

---

***Executive Officers***

***Kathleen Gallagher*** has served as the Company's CEO since December 2025. Ms. Gallagher is also a member of the Company's Board of Directors. Ms. Gallagher joined Avidity in April 2021 and has served as Chief Program Officer since September 2024. Ms. Gallagher previously held the roles of Senior Vice President and Global Program Head, Myotonic Dystrophy Type 1 (DM1) at Avidity from July 2023 to September 2024 and Senior Vice President of Corporate Communications and Investor Relations at Avidity from April 2021 to July 2023. Ms. Gallagher brings more than 20 years of experience in the biopharmaceutical industry leading investor relations, portfolio strategy, program management and corporate affairs in preclinical to commercial stage companies. Prior to joining Avidity, Ms. Gallagher was Vice President, Investor Relations and Corporate Communications at Akcea Therapeutics, Inc. (acquired by Ionis Pharmaceuticals) from September 2017 to April 2020, where her communications strategy and relationship building expertise were essential through the development and commercial launches of rare disease therapies Tegsedi<sup>®</sup> and Waylivra<sup>®</sup>. Previously, Ms. Gallagher held roles of increasing responsibility during her tenure at Merrimack Pharmaceuticals from 2003 to 2016, where she provided leadership and direction through multiple financing rounds including an IPO and through the launch of the pancreatic cancer therapy ONIVYDE<sup>®</sup>. Ms. Gallagher earned her B.S. in English from Boston University. We believe Ms. Gallagher is qualified to serve on the Company's Board of Directors because of her leadership and communications strategy expertise gained from her experience in the biopharmaceutical industry and her deep knowledge of our preclinical programs.

***Dr. Husam Younis*** has been appointed as the Company's Chief Scientific Officer in connection with the Distribution. Dr. Younis has served as a Senior Vice President of Development Sciences at Avidity since January 2023, after serving as a Vice President at Avidity between December 2020 and December 2022. Before joining Avidity, Dr. Younis held senior leadership positions at NGM Biopharmaceuticals, Ionis Pharmaceuticals (Nasdaq: IONS), and Pfizer Inc (NYSE: PFE). He began his career as a post-doctoral scientist at Isis Pharmaceuticals and as a staff pharmacist at WalMart Inc (Nasdaq: WMT). Dr. Younis holds a Doctor of Philosophy in Pharmacology and Toxicology and a Doctor of Pharmacy, both from the University of Arizona.

***Dr. Steven Hughes*** has been appointed as the Company's Chief Medical Officer in connection with the Distribution. He has served as Avidity's Chief Medical Officer since February 2022. Prior to joining Avidity, Dr. Hughes's served as Chief Medical Officer at Arcturus Therapeutics Holdings Inc. (Nasdaq: ARCT) and

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Organovo Holdings, Inc. (now VivoSim Labs, Inc.) (Nasdaq: VIVS) from January 2021 and February 2022. Dr. Hughes has over 20 years of experience building and leading clinical development and medical affairs teams at various biopharma companies. He has contributed to over 50 clinical trials for more than 25 drugs across all stages of drug development and in multiple therapeutic areas including cardiovascular, neurology and several rare diseases with successful license approvals for several rare disease drugs. Dr. Hughes's previous positions include the Chief Medical Officer at Arcturus and Organovo, Chief Clinical Development Officer at Ionis Pharmaceuticals and clinical leadership positions at Biogen, CSL Behring and Sanofi. Dr. Hughes is board certified in pharmaceutical medicine and received his medical degree from Imperial College, London. He also has an MBA from Imperial College Business School.

***Brendan Winslow*** has been appointed as the Company's Chief Financial Officer in connection with the Distribution. Mr. Winslow has served as Senior Vice President of Finance at Avidity since 2024. Before joining Avidity, Mr. Winslow served as Vice President, Strategic Finance at Acadia Pharmaceuticals Inc. (Nasdaq: ACAD) between 2020 and 2024. Mr. Winslow also held leadership roles at Acadia Pharmaceuticals, Synchrony Financial, PepsiCo, and Baxter International, supporting global operations and strategic finance initiatives. Mr. Winslow holds an MBA from the Kellogg School of Management at Northwestern University and a Bachelor of Science in Finance from Miami University, and is a Certified Management Accountant.

***Stephanie Kenney*** has been appointed as the Company's Chief Corporate Affairs Officer in connection with the Distribution. She has served as Senior Vice President, Corporate Affairs at Avidity since August 2025. Before joining Avidity, Ms. Kenney served as Vice President, Global Corporate Affairs & Investor Relations at Hansa BioPharma (Nasdaq: HNSA) from December 2022 to August 2025. Her earlier experience includes senior leadership positions at AstraZeneca (LSA: AZN), where she served as Global Head of Corporate Affairs for the Cardiovascular, Renal & Metabolic business between September 2020 and November 2022. Ms. Kenney holds a Bachelor of Science in Communications from Mansfield University.

***Rocio Martin Hoyos*** has been appointed as the Company's Chief Strategy Officer in connection with the Distribution. Previously, she served as Senior Vice President, Global Program Head, FSHD at Avidity since April 2024. Prior to joining Avidity, Ms. Martin held several senior leadership roles at Kronos Bio, Inc. (Nasdaq: KRON) from January 2021 and April 2024. Her most recent role was Senior Vice President, Corporate Strategy and Portfolio Management, from January 2024 to April 2024, and she previously served in various vice president roles dating back to January 2021. Earlier in her career, Ms. Martin served in leadership roles at Audentes Therapeutics, Inc. (Nasdaq: BOLD), including as Vice President, Global Marketing, and at Ultragenyx Pharmaceutical Inc. (Nasdaq: RARE), Neuroly and Metabolic. Ms. Martin began her career in the biopharmaceutical industry at Celgene Corporation (Nasdaq: CELG). Ms. Martin holds a Master of Science in Biochemistry from Universidad Autónoma de Madrid and an MBA from IESE Business School.

***Non-Management Directors***

***Sarah Boyce*** has been a member of the Company's Board of Directors since December 2025. She has served as President and Chief Executive Officer and a director of Avidity since October 2019. Prior to joining Avidity, she served as President and a member of the board of directors of Akcea Therapeutics, Inc. from April 2018 through September 2019, where she led the commercialization of the company's rare disease products. Ms. Boyce served as Chief Business Officer of Ionis Pharmaceuticals, Inc. from January 2015 to April 2018, and Vice President, Head of International Business Strategy and Operations at Forest Laboratories, Inc. from 2012 to 2014. She previously held various positions with Alexion Pharmaceuticals Inc., Novartis AG, Bayer AG and F. Hoffmann-La Roche AG. Since November 2022, Ms. Boyce has served on the board of directors of OmniAb, Inc. (Nasdaq: OABI). Ms. Boyce also served on the board of directors of Berkeley Lights Inc. from July 2019 until May 2022 and the board of directors of Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) from October 2019 to November 2022. Ms. Boyce holds a B.S. in Microbiology from the University of Manchester, England. We believe Ms. Boyce is qualified to serve on the Board of Directors based on her senior leadership experience and business and operational expertise in the biopharmaceutical industry.

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***Carsten Boess*** has been a member of the Company's Board of Directors in connection with the Distribution. Mr. Boess has served as a director of Avidity since April 2020. Mr. Boess has also served on the board of director of Rocket Pharmaceuticals, Inc. (Nasdaq: RCKT) since 2018. Previously, Mr. Boess served as Executive Vice President of Corporate Affairs at Kiniksa Pharmaceuticals, Ltd. (Nasdaq: KNSA) from August 2015 until February 2020. Before Kiniksa, Mr. Boess was the Chief Financial Officer at Alexion Pharmaceuticals (Nasdaq: LXRX) from 2004 to 2005 and the Senior Vice President and Chief Financial Officer at Synageva BioPharma Corp. from 2011 until the company's acquisition by Alexion Pharmaceuticals in 2015. Previously, Mr. Boess served in multiple roles with increasing responsibility at Insulet Corporation (Nasdaq: PODD), including Chief Financial Officer from 2006 to 2009 and Vice President of International Operations from 2009 to 2011. Prior to that, Mr. Boess served as Executive Vice President of Finance at Serono Inc. from 2005 to 2006. Mr. Boess also held several financial executive roles at Novozymes of North America and Novo Nordisk (NYSE: NVO) in France, Switzerland and China. During his tenure at Novo Nordisk, he served on Novo Nordisk's Global Finance Board. From August 2020 until January 2023, Mr. Boess served on the board of directors of Health Sciences Acquisitions Corporation. Mr. Boess received a Bachelor's degree and Master's degree in Economics and Finance, specializing in Accounting and Finance from the University of Odense, Denmark. We believe Dr. Boess is qualified to serve on the Board of Directors based on his extensive business, financial and operational experience in the biopharmaceutical industry.

***Simona Skerjanec*** has been a member of the Company's Board of Directors in connection with the Distribution. She has nearly three decades of broad international experience in the pharmaceutical industry and has led multiple research and development efforts that have resulted in regulatory approvals and launches of commercial therapies in therapeutic areas including neurology and cardiology in the United States and other countries. Ms. Skerjanec was the Senior Vice President and Global Neuroscience Head at F. Hoffmann-La Roche AG ("Roche") (SIX: RO) in Switzerland between October 2020 and January 2024 and led the business and global strategy for Roche's portfolio of neurological and rare diseases, including Ocrevus<sup>®</sup> for the treatment of multiple sclerosis and a novel monoclonal antibody for the treatment of Alzheimer's disease. During her nine-year tenure at Roche, she also served as a General Manager of Roche in Portugal. Before joining Roche, Ms. Skerjanec held positions of increasing responsibility in development and commercialization. Prior to joining Roche, Ms. Skerjanec was Senior Vice President and Cardiovascular franchise head at The Medicines Company where she held various roles of increasing responsibilities in development and commercialization. She also held positions at Eli Lilly (NYSA: LLY), Pfizer (NYSA: PFE) and Johnson & Johnson (NYSA: JNJ). Ms. Skerjanec has served on the board of directors of Immunic Therapeutics (Nasdaq: IMUX) since April 2024 and the board of directors of PerceivAI, a private, AI-driven precision medicine company, since October 2024. Ms. Skerjanec holds a Master's degree in Pharmacy from University of Ljubljana and an MBA from Fairleigh Dickinson University. We believe Ms. Skerjanec is qualified to serve on the Board of Directors given her business and operational expertise in the biopharmaceutical industry, both in companies based in the United States and internationally.

***Troy Wilson, Ph.D., J.D.***, has been a member of the Company's Board of Directors in connection with the Distribution. He is the co-founder of Avidity and has served on Avidity's board of directors since November 2012, where he served as Chair since January 2021. Dr. Wilson served as Avidity's President and Chief Executive Officer from November 2012 to February 2019. He has been President and Chief Executive Officer and chairman of the board of directors of Kura Oncology (Nasdaq: KURA), Inc. since August 2014 and has served as a member of the board of directors of Puma Biotechnology (Nasdaq: PBYI), Inc. since October 2013. He has served as Executive Chairman of the board of directors of Abintus Bio, Inc. since October 2020. He has also served as Executive Chairman of the board of directors of Wellspring Biosciences, Inc., a privately-held biopharmaceutical company, since July 2012, and has served as the sole managing member of Wellspring Biosciences' parent company, Araxes Pharma LLC, since May 2012. Previously, Dr. Wilson served as a director of Zosano Pharma Corporation from June 2014 to October 2019. He also served as President and Chief Executive Officer of Wellspring Biosciences and Araxes Pharma from July 2012 to March 2019, and as President and Chief Executive Officer and a member of the board of directors of Intellikine, Inc. Dr. Wilson holds a J.D. from New York University and a Ph.D. in Bioorganic Chemistry and a B.A. in Biophysics from the University of California, Berkeley. Dr. Wilson's knowledge of our business and his senior executive and board-level

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experience at biopharmaceutical companies contributed to our Board of Directors' conclusion that he should serve as member of our Board of Directors.

***W. Michael Flanagan, Ph.D.*** has been a member of the Company's Board of Directors in connection with the Distribution. Dr. Flanagan currently serves as Chief Scientific Officer and has led Research at Avidity since January 2025 and previously served as Chief Scientific and Technology Officer at Avidity, where he led both Research and Manufacturing from February 2023 to January 2025. He previously served as the Chief Technology Officer of Avidity from January 2021 to February 2023. Dr. Flanagan has extensive experience developing multiple therapeutic modalities, including RNA therapeutics, antibody drug conjugates, and bispecific antibodies. Prior to his time at Avidity, Dr. Flanagan served as Senior Director and Project Team Leader, Oncology and Immunology for Genentech, Inc. from January 2012 to January 2021, where he advanced programs through late-stage research to end of Phase 2 development. Prior to Genentech, Dr. Flanagan served in roles of increasing responsibility in the biology groups at Sunesis Pharmaceuticals, Inc., Gilead Sciences, Inc. (Nasdaq: GILD) and Merck & Co. Inc. (NYSE: MRK), where he was Senior Director of RNA Sciences. Dr. Flanagan received a B.S. in Genetics from the University of California at Davis, a Ph.D. in Biological Sciences from the University of California at Irvine and was an American Cancer Society postdoctoral fellow at the Howard Hughes Medical Institute, Stanford School of Medicine. We believe Dr. Flanagan is qualified to serve on the Board of Directors because he is a proven biotechnology executive, recognized for his deep scientific and operational expertise, with more than 25 years of experience advancing first-in-class therapeutics, scaling innovative companies across RNA, oncology and immunology, and leading organizations through major milestones (including platform creation, clinical advancement, capital formation, partnerships and acquisitions).

**Board Composition** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Class I will consist of Simona Skerjanec and Carsten Boess, and their term will expire at our first annual
meeting of stockholders to be held after the completion of the Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Class II will consist of Troy Wilson and W. Michael Flanagan, and their term will expire at our second
annual meeting of stockholders to be held after the completion of the Distribution; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Class III will consist of Sarah Boyce and Kathleen Gallagher, and their term will expire at our third
annual meeting of stockholders to be held after the completion of the Distribution.

These board provisions could make it more difficult for third parties to gain control of our company by making it difficult to replace members of the Board of Directors.

**Director Independence** 

Our Board of Directors will undertake a review of the independence of each director. As a result of this review, the Board of Directors is expected to determine that Sarah Boyce, Carsten Boess, W. Michael Flanagan, Simon Skerjanec and Troy Wilson are independent under applicable Nasdaq listing standards.

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**Committees of the Board of Directors** 

We will establish two standing committees—Audit and Human Capital Management—each of which will operate under a charter that will be approved by the Board of Directors. Director nominees will be selected by a majority of the Board of Directors' independent directors (as defined under Nasdaq rules) in a vote in which only independent directors participate. All of the members of each of the Board of Directors' two standing committees will be independent as defined under Nasdaq rules. In addition, all members of the Audit Committee will meet the independence requirements for Audit Committee members under Rule 10A-3 under the Exchange Act.

**Audit Committee**

The Audit Committee's main function will be to oversee our accounting and financial reporting processes and the audits of our financial statements. This committee's responsibilities include, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• appointing our independent registered public accounting firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• evaluating the qualifications, independence and performance of our independent registered public accounting firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approving the audit and non-audit services to be performed by
our independent registered public accounting firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing the design, implementation, adequacy and effectiveness of our internal accounting controls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• discussing with management and the independent registered public accounting firm the results of our annual audit
and the review of our quarterly unaudited financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing, overseeing and monitoring the integrity of our financial statements and our compliance with legal and
regulatory requirements as they relate to financial statements or accounting matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing with management and our auditors any earnings announcements and other public announcements regarding
our results of operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• preparing the report that the SEC requires in our annual proxy statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and approving any related party transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• providing oversight of the Company's policies with respect to risk assessment and risk management,
including with respect to cybersecurity; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and evaluating periodically the performance of the audit committee and its members.

The members of our Audit Committee will be Carsten Boess, Simona Skerjanec and Troy Wilson. Carsten Boess will serve as the Chair of the Audit Committee. All members of our Audit Committee will meet the requirements for financial literacy under the applicable rules and regulations of the SEC and Nasdaq. The Board of Directors is expected to determine that Carsten Boess is an "audit committee financial expert" as defined by applicable SEC rules and will have the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations. The Audit Committee may delegate its authority under its charter to one or more subcommittees as it deems appropriate from time to time as further described in its charter. The Audit Committee will operate under a written charter that satisfies the applicable standards of the SEC and Nasdaq, which the Audit Committee will evaluate and review at least annually. Both our external auditor and internal financial personnel meet privately with the Audit Committee and have unrestricted access to this committee.

***Human Capital Management Committee***

The Human Capital Management Committee's main function will be to oversee human capital management and compensation of our officers and directors. The Human Capital Management Committee will review corporate goals and objectives relevant to the compensation of our chief executive officer, evaluate the performance of the Chief Executive Officer in light of those goals and objectives and approve the compensation of the Chief

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Executive Officer based on such evaluations. The Human Capital Management Committee will also review the compensation of other executive officers and in connection with such review oversee the evaluation of such executive officers. In addition, the Human Capital Management Committee will review and approve or make recommendations to the Board of Directors regarding the issuance of stock options and other awards under our equity plan. Furthermore, the Human Capital Management Committee will periodically review and recommend to the Board of Directors compensation for service on the Board of Directors and any committees of the Board of Directors. The Human Capital Management Committee may delegate its authority under its charter to one or more subcommittees as it deems appropriate from time to time as further described in its charter. The Human Capital Management Committee will periodically review and evaluate its charter, as well as periodically review and evaluate the performance of the Human Capital Management Committee and its members.

The members of our Human Capital Management Committee will be Troy Wilson, Sarah Boyce and Simona Skerjanec. Troy Wilson will serve as the Chair of the committee.

**Code of Business Conduct and Ethics for Employees, Executive Officers and Directors** 

We will adopt, upon the effective time of the Distribution, a Code of Business Conduct and Ethics that applies to our officers, directors, and employees, which will be available on our website at . The Code of Business Conduct and Ethics will contain general guidelines for conducting the business of our company consistent with the highest standards of business ethics and is intended to qualify as a "code of ethics" within the meaning of Section 406 of Sarbanes-Oxley and Item 406 of Regulation S-K. In addition, we intend to promptly disclose (1) the nature of any amendment to our Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, and (2) the nature of any waiver, including an implicit waiver, from a provision of our Code of Business Conduct and Ethics that is granted to one of these specified officers, the name of such person who is granted the waiver and the date of the waiver on our website in the future.

**Human Capital Management Committee Interlocks and Insider Participation** 

None of our directors who will serve as members of our Human Capital Management Committee are expected to be, or has been at any time during the past year, one of our officers or employees. Sarah Boyce, who will serve as a member of the Board of Directors, previously served as the President and Chief Executive Officer of Avidity prior to the Separation and Distribution. None of our executive officers will serve, or in the past year will have served, as a member of the board of directors or compensation or human capital management committee of any other entity that has one or more executive officers serving on our Board of Directors or Human Capital Management Committee.

**Non-Employee Director Compensation** 

We expect that our Board of Directors will adopt a director compensation policy for our non-employee directors in connection with or following the Distribution.

As the Company was not formed as of December 31, 2024, we did not have any directors or pay any compensation to non-employee directors with respect to service on our Board of Directors, during the year ended December 31, 2024.

Historical information concerning the compensation paid to or earned by directors of Avidity may not be directly relevant to or indicative of the compensation that any such directors will receive (as applicable) as directors of the Company following the Distribution, but is available in Avidity's previous annual proxy statements filed with the SEC. Disclosure of the compensation that Avidity directors received during the year ended December 31, 2024 is included in the proxy statement that Avidity filed on April 29, 2025.

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**EXECUTIVE COMPENSATION** 

As a newly formed entity, the Company did not have any executive officers or pay any compensation during the year ended December 31, 2025. Historical information concerning the compensation paid to or earned by named executive officers of Avidity may not be directly relevant or indicative of the compensation that any such officers will receive (as applicable) as named executive officers of the Company following the Distribution, but is available in Avidity's previous annual proxy statements filed with the SEC. Disclosure of the compensation that Avidity named executive officers received during the year ended December 31, 2024 is included in the proxy statement that Avidity filed on April 29, 2025. Detailed information on the compensation arrangements of the Company's named executive officers will be provided in the Company's first proxy statement following the Distribution.

See "*Corporate Governance and Management—Executive Officers*" of this information statement for the list of individuals who are expected to serve in executive officer positions of the Company following the Distribution.

**Executive Compensation Following the Distribution** 

***Equity Incentive Plans***

We expect that equity-based compensation will be an important component of the executive compensation program of the Company because we believe it is important to maintain a strong link between executive incentives and the creation of stockholder value. Accordingly, prior to the Distribution Date, Avidity and the Company will cooperate to establish, according to the terms of the Separation Agreement, (i) the 2026 Incentive Award Plan (the "2026 Plan") and forms of standard award and Make Whole Award agreements thereunder, which plan and standard award agreements are intended to be substantially similar to Avidity's 2020 Incentive Award Plan and the forms of award thereunder, and (ii) the 2026 Employee Stock Purchase Plan (the "ESPP"), intended to comply with Section 423 of the Code, which plan is intended to be substantially similar to Avidity's 2020 Employee Stock Purchase Plan. The Company will adopt such plans, and Avidity will approve such plans as the Company's sole stockholder prior to the effective time of the Distribution; provided, that, except for the Make Whole Awards, no awards will be granted under the 2026 Plan and no offering periods will commence under the ESPP prior to the effective time of the Distribution.

The material terms of the plans are set forth below.

*2026 Incentive Award Plan*

*Eligibility and Administration* 

Our employees, consultants and directors, and employees and consultants of our subsidiaries, will be eligible to receive awards under the 2026 Plan. Prior to the Distribution, employees, consultants and directors of Avidity, and employees and consultants of Avidity's subsidiaries will also be eligible for awards, in order to facilitate one-time grants of Make Whole Awards under the 2026 Plan, as further discussed below. The 2026 Plan will generally be administered by our Board of Directors with respect to awards to non-employee directors and by our Human Capital Management Committee with respect to other participants, each of which may delegate its duties and responsibilities to committees of our directors and/or officers (referred to collectively as the plan administrator below), subject to certain limitations that may be imposed under the 2026 Plan, Section 16 of the Exchange Act and/or stock exchange rules, as applicable. The plan administrator will have the authority to make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2026 Plan, subject to its express terms and conditions. The plan administrator will also set the terms and conditions of all awards under the 2026 Plan, including any vesting and vesting acceleration conditions.

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*Limitation on Awards and Shares Available* 

The number of shares initially available for issuance under awards granted pursuant to the 2026 Plan will be shares of our common stock. The number of shares initially available for issuance will be increased by an annual increase on January 1 of each calendar year beginning in 2027 and ending in 2036, equal to the lesser of (a) 5% of the aggregate number of Outstanding Shares and (b) such smaller number of shares as determined by our Board of Directors. For purposes of the foregoing, "Outstanding Shares" means the sum of (x) the number of shares of our common stock outstanding and (y) the number of shares of our common stock that are issuable pursuant to the exercise of any outstanding, pre-funded warrants to acquire shares of our common stock for a nominal exercise price (if any), each as of the final day of the immediately preceding calendar year. No more than shares of common stock may be issued upon the exercise of incentive stock options under the 2026 Plan. Shares issued under the 2026 Plan may be authorized but unissued shares, shares purchased in the open market or treasury shares.

If an award under the 2026 Plan expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, any shares subject to such award will, as applicable, become or again be available for new grants under the 2026 Plan. Awards granted under the 2026 Plan upon the assumption of, or in substitution for, awards authorized or outstanding under a qualifying equity plan maintained by an entity with which we enter into a merger or similar corporate transaction will not reduce the shares available for grant under the 2026 Plan.

*Awards* 

The 2026 Plan provides for the grant of stock options, including incentive stock options ("ISOs"), and nonqualified stock options ("NSOs"), restricted stock, dividend equivalents, restricted stock units ("RSUs"), stock appreciation rights ("SARs"), and other stock or cash-based awards. In addition, prior to the effective time of the Distribution, the Company will make a one-time grant of certain Make Whole Awards under the 2026 Plan, as discussed further below. Certain awards under the 2026 Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards. All awards under the 2026 Plan will be set forth in award agreements, which will detail the terms and conditions of the awards, including any applicable vesting and payment terms and post termination exercise limitations. A brief description of each award type follows.

*Stock options*. Stock options provide for the purchase of shares of our common stock in the future at an exercise price set on the grant date. ISOs, by contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. The exercise price of a stock option will not be less than 100% of the fair market value of the underlying share on the date of grant (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute options granted in connection with a corporate transaction. The term of a stock option may not be longer than ten years (or five years in the case of ISOs granted to certain significant stockholders). Vesting conditions determined by the plan administrator may apply to stock options and may include continued service, performance and/or other conditions. ISOs generally may be granted only to our employees and employees of our parent or subsidiary corporations, if any.

*SARs*. SARs entitle their holder, upon exercise, to receive from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a SAR will not be less than 100% of the fair market value of the underlying share on the date of grant (except with respect to certain substitute SARs granted in connection with a corporate transaction), and the term of a SAR may not be longer than ten years. Vesting conditions determined by the plan administrator may apply to SARs and may include continued service, performance and/or other conditions.

*Restricted stock and RSUs*. Restricted stock is an award of nontransferable shares of our common stock that remain forfeitable unless and until specified conditions are met, and which may be subject to a purchase price.

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RSUs are contractual promises to deliver shares of our common stock in the future, which may also remain forfeitable unless and until specified conditions are met and may be accompanied by the right to receive the equivalent value of dividends paid on shares of our common stock prior to the delivery of the underlying shares. Delivery of the shares underlying RSUs may be deferred under the terms of the award or at the election of the participant, if the plan administrator permits such a deferral. Conditions applicable to restricted stock and RSUs may be based on continuing service, the attainment of performance goals and/or such other conditions as the plan administrator may determine.

*Other stock or cash-based awards*. Other stock or cash-based awards are awards of cash, fully vested shares of our common stock and other awards valued wholly or partially by referring to, or otherwise based on, shares of our common stock. Other stock or cash-based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of base salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards. The plan administrator will determine the terms and conditions of other stock or cash-based awards, which may include vesting conditions based on continued service, performance and/or other conditions.

*Performance Awards* 

Performance awards include any of the foregoing awards that are granted subject to vesting and/or payment based on the attainment of specified performance goals or other criteria the plan administrator may determine, which may or may not be objectively determinable. Performance criteria upon which performance goals are established by the plan administrator may include (but are not limited to): net earnings or losses (either before or after one or more of interest, taxes, depreciation, amortization and non-cash equity-based compensation expense); gross or net sales or revenue or sales or revenue growth; net income (either before or after taxes) or adjusted net income; profits (including, but not limited to, gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); cash flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested capital; cost of capital; return on stockholders' equity; total stockholder return; return on sales; costs, reductions in costs and cost control measures; expenses; working capital; earnings or loss per share; adjusted earnings or loss per share; price per share or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development, regulatory, commercial or strategic milestones or developments; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth; customer service; employee satisfaction; recruitment and maintenance of personnel; human resources management; supervision of litigation and other legal matters; strategic partnerships and transactions; financial ratios (including those measuring liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions; cash on hand; acquisition activity; investment sourcing activity; and marketing initiatives, any of which may be measured in absolute terms or as compared to any incremental increase or decrease. Such performance goals also may be based solely by reference to our performance or the performance of a subsidiary, division, business segment or business unit, or based upon performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance of other companies.

*Non-Employee Director Compensation Limits* 

Under the 2026 Plan, the sum of any cash compensation or other compensation and the grant date fair value (as determined in accordance with ASC 718, or any successor thereto) of any equity awards granted as compensation for services as a non-employee director during any fiscal year may not exceed $750,000, increased to $1,000,000, in the fiscal year of a non-employee director's initial service as a non-employee director. The plan administrator may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the

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plan administrator may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee directors.

*Certain Transactions* 

In connection with certain transactions and events affecting our common stock, including a change of control, or change in any applicable laws or accounting principles, the plan administrator has broad discretion to take action under the 2026 Plan to prevent the dilution or enlargement of intended benefits, facilitate such transaction or event, or give effect to such change in applicable laws or accounting principles. This includes canceling awards in exchange for either an amount in cash or other property with a value equal to the amount that would have been obtained upon exercise or settlement of the vested portion of such award or realization of the participant's rights under the vested portion of such award, accelerating the vesting of awards, providing for the assumption or substitution of awards by a successor entity, adjusting the number and type of shares available, replacing awards with other rights or property or terminating awards under the 2026 Plan. In the event of a change of control where the acquirer does not assume awards granted under the 2026 Plan, awards issued under the 2026 Plan may be subject to accelerated vesting such that 100% of the awards will become vested and exercisable or payable, as applicable. In addition, in the event of certain non-reciprocal transactions with our stockholders, or an "equity restructuring," the plan administrator will make equitable adjustments to the 2026 Plan and outstanding awards as it deems appropriate to reflect the equity restructuring.

*Foreign Participants, Claw-back Provisions, Transferability and Participant Payments*

With respect to foreign participants, the plan administrator may modify award terms, establish subplans and/or adjust other terms and conditions of awards, subject to the share limits described above. All awards will be subject to the provisions of any claw-back policy implemented by our company to the extent set forth in such claw-back policy or in the applicable award agreement. With limited exceptions for estate planning, domestic relations orders, certain beneficiary designations and the laws of descent and distribution, awards under the 2026 Plan are generally non-transferable prior to vesting and are exercisable only by the participant. With regard to tax withholding obligations arising in connection with awards under the 2026 Plan and exercise price obligations arising in connection with the exercise of stock options under the 2026 Plan, the plan administrator may, in its discretion, accept cash, wire transfer, or check, shares of our common stock that meet specified conditions, a "market sell order" or such other consideration as it deems suitable or any combination of the foregoing.

*Plan Amendment and Termination* 

Our Board of Directors may amend or terminate the 2026 Plan at any time; however, except in connection with certain changes in our capital structure, stockholder approval will be required for any amendment that increases the number of shares available under the 2026 Plan. The plan administrator will have the authority, without the approval of our stockholders, to amend any outstanding stock option or SAR to reduce its price per share. No award may be granted pursuant to the 2026 Plan after the tenth anniversary of the date on which our Board of Directors adopts the 2026 Plan.

*Securities Laws* 

The 2026 Plan is intended to conform to all provisions of the Securities Act, and the Exchange Act and any and all regulations and rules promulgated by the SEC thereunder. The 2026 Plan will be administered, and awards will be granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations.

*Federal Income Tax Consequences* 

The material federal income tax consequences of the 2026 Plan under current federal income tax law are summarized in the following discussion, which deals with the general tax principles applicable to the 2026 Plan.

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The following discussion is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change. Foreign, state and local tax laws, and employment, estate and gift tax considerations are not discussed due to the fact that they may vary depending on individual circumstances and from locality to locality.

*Stock options and SARs*. A 2026 Plan participant generally will not recognize taxable income and we generally will not be entitled to a tax deduction upon the grant of a stock option or SAR. The tax consequences of exercising a stock option and the subsequent disposition of the shares received upon exercise will depend upon whether the option qualifies as an ISO or an NSO. Upon exercising an NSO when the fair market value of our stock is higher than the exercise price of the option, a 2026 Plan participant generally will recognize taxable income at ordinary income tax rates equal to the excess of the fair market value of the stock on the date of exercise over the purchase price, and we (or our subsidiaries, if any) generally will be entitled to a corresponding tax deduction for compensation expense, in the amount equal to the amount by which the fair market value of the shares purchased exceeds the purchase price for the shares. Upon a subsequent sale or other disposition of the option shares, the participant will recognize a short-term or long-term capital gain or loss in the amount of the difference between the sales price of the shares and the participant's tax basis in the shares.

Upon exercising an ISO, a 2026 Plan participant generally will not recognize taxable income, and we will not be entitled to a tax deduction for compensation expense. However, upon exercise, the amount by which the fair market value of the shares purchased exceeds the purchase price will be an item of adjustment for alternative minimum tax purposes. The participant will recognize taxable income upon a sale or other taxable disposition of the option shares. For federal income tax purposes, dispositions are divided into two categories: qualifying and disqualifying. A qualifying disposition generally occurs if the sale or other disposition is made more than two years after the date the option was granted and more than one year after the date the shares are transferred upon exercise. If the sale or disposition occurs before these two periods are satisfied, then a disqualifying disposition generally will result.

Upon a qualifying disposition of ISO shares, the participant will recognize long-term capital gain in an amount equal to the excess of the amount realized upon the sale or other disposition of the shares over their purchase price. If there is a disqualifying disposition of the shares, then the excess of the fair market value of the shares on the exercise date (or, if less, the price at which the shares are sold) over their purchase price will be taxable as ordinary income to the participant. If there is a disqualifying disposition in the same year of exercise, it eliminates the item of adjustment for alternative minimum tax purposes. Any additional gain or loss recognized upon the disposition will be recognized as a capital gain or loss by the participant.

We will not be entitled to any tax deduction if the participant makes a qualifying disposition of ISO shares. If the participant makes a disqualifying disposition of the shares, we should be entitled to a tax deduction for compensation expense in the amount of the ordinary income recognized by the participant.

Upon exercising or settling an SAR, a 2026 Plan participant will recognize taxable income at ordinary income tax rates, and we should be entitled to a corresponding tax deduction for compensation expense, in the amount paid or value of the shares issued upon exercise or settlement. Payments in shares will be valued at the fair market value of the shares at the time of the payment, and upon the subsequent disposition of the shares the participant will recognize a short-term or long-term capital gain or loss in the amount of the difference between the sales price of the shares and the participant's tax basis in the shares.

*Restricted stock and RSUs*. A 2026 Plan participant generally will not recognize taxable income at ordinary income tax rates and we generally will not be entitled to a tax deduction upon the grant of restricted stock or RSUs. Upon the termination of restrictions on restricted stock or the payment of RSUs, the participant will recognize taxable income at ordinary income tax rates, and we should be entitled to a corresponding tax deduction for compensation expense, in the amount paid to the participant or the amount by which the then fair market value of the shares received by the participant exceeds the amount, if any, paid for them. Upon the subsequent disposition of any shares, the participant will recognize a short-term or long-term capital gain or loss

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in the amount of the difference between the sales price of the shares and the participant's tax basis in the shares. However, a 2026 Plan participant granted restricted stock that is subject to forfeiture or repurchase through a vesting schedule such that it is subject to a "risk of forfeiture" (as defined in Section 83 of the Code) may make an election under Section 83(b) of the Code to recognize taxable income at ordinary income tax rates, at the time of the grant, in an amount equal to the fair market value of the shares of common stock on the date of grant, less the amount paid, if any, for such shares. We will be entitled to a corresponding tax deduction for compensation, in the amount recognized as taxable income by the participant. If a timely Section 83(b) election is made, the participant will not recognize any additional ordinary income on the termination of restrictions on restricted stock, and we will not be entitled to any additional tax deduction.

*Other stock or cash-based awards*. A 2026 Plan participant will not recognize taxable income and we will not be entitled to a tax deduction upon the grant of other stock or cash-based awards until cash or shares are paid or distributed to the participant. At that time, any cash payments or the fair market value of shares that the participant receives will be taxable to the participant at ordinary income tax rates and we should be entitled to a corresponding tax deduction for compensation expense. Payments in shares will be valued at the fair market value of the shares at the time of the payment, and upon the subsequent disposition of the shares, the participant will recognize a short-term or long-term capital gain or loss in the amount of the difference between the sales price of the shares and the participant's tax basis in the shares.

*2026 Employee Stock Purchase Plan* 

*Shares available; administration*. A total of shares of our common stock are initially reserved for issuance under our ESPP. In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2027 and ending in 2036, by an amount equal to the lesser of: (i) 1% of Outstanding Shares and (ii) such smaller number of shares as is determined by our Board of Directors. For purposes of the foregoing, "Outstanding Shares" means the sum of (a) the number of shares of our common stock outstanding and (b) the number of shares of our common stock that are issuable pursuant to the exercise of any outstanding, pre-funded warrants to acquire shares of our common stock for a nominal exercise price, each as of the final day of the immediately preceding calendar year. In no event will more than shares of our common stock be available for issuance under the ESPP.

Our Board of Directors or its committee will have authority to interpret the terms of the ESPP and determine eligibility of participants. We expect that the Human Capital Management Committee will be the initial administrator of the ESPP.

*Eligibility.* Our employees are eligible to participate in the ESPP if they meet the eligibility requirements under the ESPP established from time to time by the plan administrator. However, an employee may not be granted rights to purchase stock under our ESPP if such employee, immediately after the grant, would own (directly or through attribution) stock possessing 5% or more of the total combined voting power or value of all classes of our common or other class of stock.

*Grant of rights.* The ESPP is intended to qualify under Section 423 of the Code and stock will be offered under the ESPP during offering periods. The length of the offering periods under the ESPP will be determined by the plan administrator and may be up to 27 months long. Employee payroll deductions will be used to purchase shares on each purchase date during an offering period. The number of purchase periods within, and purchase dates during each offering period will be established by the plan administrator prior to the commencement of each offering period. Offering periods under the ESPP will commence when determined by the plan administrator. The plan administrator may, in its discretion, modify the terms of future offering periods.

The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation, which includes a participant's gross base compensation for services to us, including overtime payments and excluding sales commissions, incentive compensation, bonuses, expense reimbursements,

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fringe benefits and other special payments. The plan administrator will establish a maximum number of shares that may be purchased by a participant during any offering period, which, in the absence of a contrary designation, will be 50,000 shares. In addition, no employee will be permitted to accrue the right to purchase stock under the ESPP at a rate in excess of $25,000 worth of shares during any calendar year during which such a purchase right is outstanding (based on the fair market value per share of our common stock as of the first day of the offering period).

On the first trading day of each offering period, each participant will automatically be granted an option to purchase shares of our common stock. The option will be exercised on the applicable purchase date(s) during the offering period, to the extent of the payroll deductions accumulated during the applicable purchase period. The purchase price of the shares, in the absence of a contrary determination by the plan administrator, will be 85% of the lower of the fair market value of our common stock on the first trading day of the offering period or on the applicable purchase date, which will be the final trading day of the applicable purchase period. Participants may voluntarily end their participation in the ESPP at any time at least one week prior to the end of the applicable offering period (or such shorter or longer period specified by the plan administrator), and will be paid their accrued payroll deductions that have not yet been used to purchase shares of common stock. Participation ends automatically upon a participant's termination of employment.

A participant may not transfer rights granted under the ESPP other than by will, the laws of descent and distribution or as otherwise provided under the ESPP.

*Certain Transactions.* In the event of certain transactions or events affecting our common stock, such as any stock dividend or other distribution, change of control, reorganization, merger, consolidation or other corporate transaction, the plan administrator will make equitable adjustments to the ESPP and outstanding rights. In addition, in the event of the foregoing transactions or events or certain significant transactions, including a change of control, the plan administrator may provide for (i) either the replacement of outstanding rights with other rights or property or termination of outstanding rights in exchange for cash, (ii) the assumption or substitution of outstanding rights by the successor or survivor corporation or parent or subsidiary thereof, if any, (iii) the adjustment in the number and type of shares of stock subject to outstanding rights, (iv) the use of participants' accumulated payroll deductions to purchase stock on a new purchase date prior to the next scheduled purchase date and termination of any rights under ongoing offering periods or (v) the termination of all outstanding rights. Under the ESPP, a change of control has the same definition as given to such term in the 2026 Plan.

*Plan amendment; Termination.* The plan administrator may amend, suspend or terminate the ESPP at any time. However, stockholder approval of any amendment to the ESPP will be obtained for any amendment which increases the aggregate number or changes the type of shares that may be sold pursuant to rights under the ESPP, changes the corporations or classes of corporations whose employees are eligible to participate in the ESPP or changes the ESPP in any manner that would cause the ESPP to no longer be an employee stock purchase plan within the meaning of Section 423(b) of the Code. The ESPP will terminate on the tenth anniversary of the date it is initially approved by our Board of Directors.

*Securities Laws.* The ESPP has been designed to comply with various securities laws in the same manner as described above in the description of the 2026 Plan.

*Federal Income Taxes.* The material federal income tax consequences of the ESPP under current federal income tax law are summarized in the following discussion, which deals with the general tax principles applicable to the ESPP. The following discussion is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change. Foreign, state and local tax laws, and employment, estate and gift tax considerations are not discussed due to the fact that they may vary depending on individual circumstances and from locality to locality.

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The ESPP, and the right of participants to make purchases thereunder, is intended to qualify under the provisions of Section 423 of the Code. Under the applicable Code provisions, no income will be taxable to a participant until the sale or other disposition of the shares purchased under the ESPP. This means that an eligible employee will not recognize taxable income on the date the employee is granted an option under the ESPP (i.e., the first day of the offering period). In addition, the employee will not recognize taxable income upon the purchase of shares. Upon such sale or disposition, the participant will generally be subject to tax in an amount that depends upon the length of time such shares are held by the participant prior to disposing of them. If the shares are sold or disposed of more than two years from the first day of the offering period during which the shares were purchased and more than one year from the date of purchase, or if the participant dies while holding the shares, the participant (or his or her estate) will recognize ordinary income measured as the lesser of: (i) the excess of the fair market value of the shares at the time of such sale or disposition over the purchase price; or (ii) an amount equal to 15% of the fair market value of the shares as of the first day of the offering period. Any additional gain will be treated as long-term capital gain. If the shares are held for the holding periods described above but are sold for a price that is less than the purchase price, there is no ordinary income and the participating employee has a long-term capital loss for the difference between the sale price and the purchase price.

If the shares are sold or otherwise disposed of before the expiration of the holding periods described above, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price and we will be entitled to a tax deduction for compensation expense in the amount of ordinary income recognized by the employee. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on how long the shares were held following the date they were purchased by the participant prior to disposing of them. If the shares are sold or otherwise disposed of before the expiration of the holding periods described above but are sold for a price that is less than the purchase price, the participant will recognize ordinary income equal to the excess of the fair market value of the shares on the date of purchase over the purchase price (and we will be entitled to a corresponding deduction), but the participant generally will be able to report a capital loss equal to the difference between the sales price of the shares and the fair market value of the shares on the date of purchase.

***Make Whole Awards***

If the Distribution is completed, holders of Avidity Equity Awards (subject to certain exceptions for New Hire RSUs and any portion of the 2026 LTI Awards that is unvested as of the Record Date) as of the Record Date (including those Avidity Stock Options and Avidity RSUs held by RemainCo's directors and executive officers that remain outstanding as of the Record Date) will receive a non-transferable Make Whole Award pursuant to the 2026 Plan that will be settled in shares of Company Common Stock at a ratio of one share of Company Common Stock per ten shares of Avidity Common Stock underlying each such Avidity Equity Award, and required by the terms of the Separation Agreement. After the adoption and approval of the 2026 Plan, and prior to the effective time of the Distribution, the Company will grant the Make Whole Awards to all holders of outstanding Avidity RSUs (aside from New Hire RSUs and 2026 LTI Awards) and Avidity Stock Options who are current service providers to Avidity and its affiliates (including the Company) as of such grant. To the extent such Avidity Stock Options or Avidity RSUs are exercised or settled, as applicable, prior to the Record Date then such holders will receive shares of Company Common Stock in respect of the Avidity Common Stock in connection with the Distribution.

***Employment Agreements***

Each of the Company's executive officers is expected to enter into new employment agreements with the Company, in connection with the Distribution, which are expected to provide for contractual severance protections in both change in control and non-change in control scenarios.

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**Limitation of Liability and Indemnification of Officers and Directors** 

We expect to adopt the Certificate of Incorporation and Bylaws (each as defined below) prior to the Distribution, and which will contain provisions that limit the liability of our directors and officers for monetary damages to the fullest extent permitted by Delaware law.

Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to that amendment or repeal.

The Certificate of Incorporation and Bylaws are expected to provide that we will indemnify, to the fullest extent permitted by law, any person who is or was a party or is threatened to be made a party to any action, suit or proceeding by reason of the fact that he is or was one of our directors or officers or is or was serving at our request as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise. The Certificate of Incorporation and Bylaws are also expected to provide that we may indemnify to the fullest extent permitted by law any person who is or was a party or is threatened to be made a party to any action, suit, or proceeding by reason of the fact that he is or was one of our employees or agents or is or was serving at our request as an employee or agent of another corporation, partnership, joint venture, trust, or other enterprise. Our Certificate of Incorporation and Bylaws will also provide that we must advance expenses incurred by or on behalf of a director or officer in advance of the final disposition of any action or proceeding, subject to very limited exceptions. Our Certificate of Incorporation will also provide that, to the fullest extent permitted by the DGCL as the same exists or may hereafter be amended, a director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director or officer, as applicable.

Further, prior to the Distribution, we expect to enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained under Delaware law. These indemnification agreements will require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements will also require us to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit, or proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.

The limitation of liability and indemnification provisions that are expected to be included in our Certificate of Incorporation and Bylaws and in indemnification agreements that we enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder's investment may be harmed to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

We expect to obtain insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.

Certain of our non-employee directors may, through their relationships with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our Board of Directors.

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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

***Rule 10b5-1 Sales Plans***

Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from them. The director or officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information subject to compliance with the terms of our insider trading policy.

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**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS** 

**Related Person Transaction Policy** 

Upon the effective time of the Distribution, we will adopt a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related person transactions. The policy will become effective immediately upon the completion of the Distribution. For purposes of our policy only, a related person transaction is a material transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person has or will have a direct or indirect material interest. A transaction involving an amount exceeding the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years is presumed to be a "material transaction." A related person is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons.

Under the policy, if a transaction has been identified as a related person transaction, our management must present information regarding the related person transaction to our audit committee for review, consideration and approval or ratification. The presentation must include a description of, among other things, all relevant facts and circumstances relating thereto. In addition, under our Code of Business Conduct and Ethics, which will become effective as of the Distribution Date, our employees and directors will have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest.

**Certain Related Party Transactions** 

There have been no transactions since January 1, 2022 in which we have been a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any of our directors, executive officers or holders of more than 5% of our share capital post-Distribution, or any members of their immediate family, had or will have a direct or indirect material interest, other than the Separation Agreement and the Transition Services Agreement, as described under "*The Separation and Distribution*," and the compensation arrangements described under "*Executive Compensation*."

**Indemnification Agreements** 

Our Certificate of Incorporation and Bylaws will contain provisions limiting the liability of directors and providing that we will indemnify each of our directors to the fullest extent permitted under the DGCL.

In addition, we intend to enter into indemnification agreements with each of our directors and executive officers. For more information regarding these agreements, see "*Indemnification of Directors and Officers*."

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**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT** 

The following table sets forth information regarding the expected beneficial ownership of our common stock as of January 21, 2026, on a pro forma basis, giving effect to the Separation and Distribution by the individuals who are expected to be executive officers and directors of the Company named herein, as well as all of such expected directors and executive officers as a group, and of beneficial owners of more than 5% of our common stock.

The expected beneficial ownership of our common stock as of January 21, 2026 assumes that the Distribution occurred as of January 21, 2026. The information below assumes further that the holders of Avidity Stock Options and Avidity RSUs as of the Record Date received Make Whole Awards entitling the holder to receive as soon as practicable following the Distribution, shares of Company Common Stock at a ratio of one share of Company Common Stock for every ten shares of Avidity Common Stock subject to the applicable Avidity Stock Option and Avidity RSU, rounded down to the nearest whole number of shares. Such amounts are indicative, as such persons' interests in shares of our common stock as of the Distribution Date may differ from the interests set out in the following table.

Except as otherwise noted below, the address for persons listed in the table is c/o Atrium Therapeutics, Inc., 10578 Science Center Drive, Suite 125, San Diego, CA 92121.

Beneficial ownership representing less than one percent of our outstanding common stock is denoted with a "\*."

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| | | |
|:---|:---|:---|
|  | **Beneficial Ownership** | **Beneficial Ownership** |
| **Name of Beneficial Owner** | **Number** | **Percentage** |
|  **5% or Greater Stockholders** |  |  |
|  The Vanguard Group<sup>1</sup> | 1321976 | 8.6% |
|  Avoro Capital Advisors LLC<sup>2</sup> | 993579 | 6.4% |
| T. Rowe Price Associates, Inc.<sup>3</sup> | 978791 | 6.3% |
|  RA Capital Management, L.P.<sup>4</sup> | 864103 | 5.6% |
|  BlackRock, Inc. | 863177 | 5.6% |
|  Janus Henderson Group PLC<sup>6</sup> | 822493 | 5.3% |
|  **Executive Officers and Directors** |  |  |
|  Kathleen Gallagher% |  |  |
|  Husam Younis% |  |  |
|  Steven Hughes% |  |  |
|  Brendan Winslow% |  |  |
|  Stephanie Kenney% |  |  |
|  Rocio Martin Hoyos% |  |  |
|  Sarah Boyce% |  |  |
| W. Michael Flanagan% |  |  |
|  Carsten Boess% |  |  |
|  Simona Skerjanec% |  |  |
|  Troy Wilson% |  |  |
|  All directors and executive officers as a group (11 persons)% |  |  |

---

(1) According to Amendment No. 3 to the Schedule 13G filed with the SEC on October 30, 2025, The Vanguard
Group ("Vanguard"), an investment adviser, was deemed the beneficial owner of 13,219,759 shares of Avidity Common Stock. Vanguard has shared voting power over 878,441 shares of Avidity Common Stock, sole dispositive power over 12,196,279
shares of Avidity Common Stock, and shared dispositive power over 1,023,480 shares of Avidity Common Stock. The address of Vanguard is 100 Vanguard Blvd, Malvern, PA 19355.

(2) Represents (i) 6,875,000 shares of Avidity Common Stock held directly by Avoro Capital Advisors LLC
("Avoro Capital") and Dr. Behzad Aghazadeh and (ii) 3,060,792 shares of Avidity Common Stock that were issued in connection with the exercise of 3,060,792 pre-funded warrants of Avidity Common
Stock held by Avoro Capital, in each case, as reported on the Schedule 13G filed with the SEC by Avoro Capital on

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November 14, 2024. The Schedule 13G filed by Avoro Capital reported that Avoro Capital held 3,060,792 shares of Avidity Common Stock issuable upon exercise of pre-funded warrants, which warrants have been exercised. The address of Avoro Capital is 110 Greene Street, Suite 800, New York, New York 10012.

(3) Based on Amendment No. 7 to the Schedule 13G filed with the SEC on November 14, 2025, T. Rowe Price
Associates, Inc. ("T. Rowe"), an investment advisor, was deemed to be the beneficial owner of 9,787,912 shares of Avidity Common Stock. T. Rowe has sole voting power over 9,583,549 shares of Avidity Common Stock and sole dispositive
power over 9,787,417 shares of Avidity Common Stock. The address of T. Rowe is 1307 Point Street, Baltimore, Maryland 21231.

(4) According to Amendment No. 2 to the Schedule 13G filed with the SEC on November 14, 2025, entities
and individuals affiliated with RA Capital Management, L.P., including Peter Kolchinsky, Rajeev Shah and RA Capital Healthcare Fund, L.P., have shared voting and dispositive power over an aggregate of 8,641,031 shares of Avidity Common Stock. The
address of RA Capital Management, L.P. is 200 Berkeley Street, 18th Floor, Boston, MA 02116.

(5) According to Amendment No. 5 to Schedule 13G filed with the SEC on October 17, 2025, BlackRock, Inc.
has the sole power to vote or direct the vote of an aggregate of 8,455,367 shares of Avidity Common Stock, and has the sole power to dispose or direct the disposition of an aggregate of 8,631,771 shares of Avidity Common Stock. The address of
BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001.

(6) According to Amendment No. 4 to Schedule 13G filed with the SEC on December 5, 2025, Janus Henderson
Group PLC has the shared power to vote or direct the vote of an aggregate of 8,224,930 shares of Avidity Common Stock, and has the shared power to dispose or direct the disposition of an aggregate of 8,224,930 shares of Avidity Common Stock. The
address of Janus Henderson Group PLC is 201 Bishopsgate EC2M 3AE, United Kingdom.

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**SHARES ELIGIBLE FOR FUTURE SALE** 

Sales or the availability for sale of substantial amounts of Company Common Stock in the public market could adversely affect the prevailing market price for such shares. Upon completion of the Distribution, we will have outstanding an aggregate of approximately 15,447,887 shares of Company Common Stock, based upon 154,478,871 shares of Avidity Common Stock outstanding as of January 21, 2026. All of the common stock will be freely tradable without restriction or further registration under the Securities Act unless the shares are owned by our "affiliates" as that term is defined in the rules under the Securities Act. Shares held by "affiliates" may be sold in the public market only if registered or if they qualify for an exemption from registration or in compliance with Rule 144 under the Securities Act ("Rule 144") which is summarized below.

**Rule 144** 

In general, under Rule 144 as currently in effect, a person who is deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale would be entitled to sell within any three-month period a number of our common stock that does not exceed the greater of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• one percent of the number of shares of our common stock then outstanding; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the average weekly trading volume of our common stock on Nasdaq during the four calendar weeks preceding the
filing of a notice of Form 144 with respect to such sale.

Sales under Rule 144 are also subject to certain holding period requirements, manner of sale provisions and notice requirements and to the availability of current public information about us.

**Shares Issued Under Our Equity Incentive Plans** 

We intend to file a registration statement on Form S-8 under the Securities Act to register the shares of our common stock issuable under the 2026 Plan and ESPP. The registration statement on Form S-8 is expected to be filed following the effective date of the Registration Statement of which this information statement forms a part and will be effective upon filing. Accordingly, shares registered under such registration statement will be available for sale in the open market following the effective date of the S-8, unless such shares are subject to vesting restrictions with us, or Rule 144 restrictions applicable to our affiliates.

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**DESCRIPTION OF SECURITIES** 

*The following description summarizes some of the terms of the Company Common Stock and reflects your rights as a holder of Company Common Stock upon the effective time of the Distribution. Because it is only a summary, it does not contain all the information that may be important to you and is subject to and qualified in its entirety by reference to our amended and restated certificate of incorporation (the "Certificate of Incorporation") and amended and restated bylaws (the "Bylaws") that will be adopted prior to the effective time of the Distribution. For further information, please refer to the full version of our Certificate of Incorporation and Bylaws which is included as an exhibit to the registration statement of which this information statement is part.* 

**General** 

As of January 21, 2026, our authorized capital stock consisted of 1,000 shares of common stock, $0.001 par value per share. Under the Certificate of Incorporation to be in effect prior to the Distribution, we will be authorized to issue 400,000,000 shares of common stock, par value $0.001 per share, and 40,000,000 shares of preferred stock, par value $0.001 per share.

**Preferred Stock** 

Pursuant to the Certificate of Incorporation and Bylaws, as applicable, our Board of Directors will be authorized, without action by the stockholders, to designate and issue shares of preferred stock in one or more series. Our Board of Directors will be able to designate the rights, preferences and privileges of the shares of each series and any of its qualifications, limitations or restrictions. Our Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible future financings and acquisitions and other corporate purposes could, under certain circumstances, have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock or delaying, deferring or preventing a change in control of us, which might harm the market price of our common stock.

Our Board of Directors will make any determination to issue such shares based on its judgment as to our best interests and the best interests of our stockholders. Upon the completion of the Distribution, we will have no shares of preferred stock outstanding, and we have no current plans to issue any shares of preferred stock following completion of the Distribution.

**Voting Rights** 

Except with respect to a vote to approve the amendment of the Certificate of Incorporation that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled to vote thereon, holders of shares of our common stock will be entitled to one vote for each share held on all matters submitted to a vote of stockholders, including the election of directors, and do not have cumulative voting rights. Accordingly, the holders of a majority of the outstanding shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they so choose. Subject to the supermajority votes for some matters, other matters will be decided by the affirmative vote of our stockholders having a majority in voting power of the votes cast by the stockholders present or represented and voting on such matter. Our Bylaws will also provide that, subject to the rights of holders of any series of preferred stock, our directors may be removed only for cause and only by the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock entitled to vote thereon. In addition, the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock entitled to vote thereon will be required to amend or repeal the Bylaws, or to amend or repeal, or to adopt any provision inconsistent with, several of the provisions of our Certificate of Incorporation, including the provision relating to the appointment of directors, classes and removal of directors, the provision prohibiting stockholders from acting by written consent and the provision providing for Delaware as the exclusive jurisdiction for disputes.

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**Dividend Rights** 

Holders of our common stock will be entitled to receive ratably those dividends, if any, as may be declared by the Board of Directors out of legally available funds.

**Liquidation Rights** 

In the event of our liquidation, dissolution or winding up, the holders of our common stock will be entitled to share ratably in the assets legally available for distribution to stockholders after the payment of or provision for all of our debts and other liabilities.

**Rights and Preferences** 

Holders of our common stock will have no preemptive or conversion rights or other subscription rights and there are no redemption or sinking funds provisions applicable to the common stock.

**Fully Paid and Nonassessable** 

The outstanding shares of our common stock will be duly authorized, validly issued, fully paid and nonassessable.

**Transfer Agent and Registrar** 

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.

**Listing** 

We have applied to list the shares of our common stock on Nasdaq under the ticker symbol "RNA."

**Anti-Takeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws** 

Some provisions of the DGCL, our Certificate of Incorporation and our Bylaws contain provisions that could make the following transactions more difficult, including an acquisition of us by means of a tender offer, an acquisition of us by means of a proxy contest or otherwise or the removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions which provide for payment of a premium over the market price for our shares.

These provisions, summarized below, are intended to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our Board of Directors. We believe that the benefits of the increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.

***Special Meetings of Stockholders***

The Certificate of Incorporation will provide that a special meeting of stockholders may be called only by the Board of Directors, the chair of our Board of Directors, our chief executive officer or our president (in the absence of a chief executive officer).

***Requirements for Advance Notification of Stockholder Nominations and Proposals***

Our Bylaws will establish advance notice procedures with respect to stockholder proposals to be brought before a stockholder meeting and the nomination of candidates for election as directors, other than nominations made by or at the direction of the Board of Directors or a committee of the Board of Directors.

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***Elimination of Stockholder Action by Written Consent***

The Certificate of Incorporation will eliminate the right of stockholders to act by written consent without a meeting.

***Staggered Board of Directors***

Our Board of Directors will be divided into three classes. The directors in each class will serve for a three-year term, with one class being elected each year by our stockholders. This system of electing directors may tend to discourage a third party from attempting to obtain control of us, because it generally makes it more difficult for stockholders to replace a majority of the directors.

***Removal of Directors***

Our Bylaws will provide that, subject to the rights of holders of any series of preferred stock, no member of our Board of Directors may be removed from office except for cause and, in addition to any other vote required by law, upon the approval of not less than two thirds of the total voting power of all of our outstanding voting stock then entitled to vote in the election of directors.

***Stockholders Not Entitled to Cumulative Voting***

Our Certificate of Incorporation will not permit stockholders to cumulate their votes in the election of directors. Accordingly, the holders of a majority of the outstanding shares of our common stock entitled to vote in any election of directors will be able to elect all of the directors standing for election, if they choose.

***Choice of Forum***

***Amendment of Certificate of Incorporation***

The amendment of any of the above provision will require approval by holders of at least two thirds of the total voting power of all of our outstanding voting stock.

The provisions of the DGCL, our Certificate of Incorporation and our Bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary

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fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in the composition of our Board of Directors and management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

*Delaware Takeover Statute* 

We will be subject to the provisions of Section 203 of the DGCL. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• before the stockholder became interested, our Board of Directors approved either the business combination or the
transaction which resulted in the stockholder becoming an interested stockholder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and
also officers and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at or after the time the stockholder became interested, the business combination was approved by our Board of
Directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the o *utstanding voting stock which is not owned by the interested stockholder.* 

Section 203 defines a business combination to include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any merger or consolidation involving the corporation and the interested stockholder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any sale, transfer, lease, pledge, exchange, mortgage or other disposition involving the interested stockholder
of 10% or more of the assets of the corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock
of the corporation to the interested stockholder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• subject to exceptions, any transaction involving the corporation that has the effect of increasing the
proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other
financial benefits provided by or through the corporation.

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

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**INDEMNIFICATION OF DIRECTORS AND OFFICERS** 

We will enter into, upon the effective time of the Distribution, indemnification agreements with each of our directors and executive officers. These agreements, among other things, will require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys' fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person's services as a director or executive officer.

Our Certificate of Incorporation and Bylaws will provide that we will indemnify each of our directors and officers to the fullest extent permitted by the DGCL. Further, we intend to purchase a policy of directors' and officers' liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.

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**WHERE YOU CAN FIND MORE INFORMATION** 

We have filed with the SEC a registration statement, of which this information statement forms a part, under the Exchange Act and the rules and regulations promulgated under the Exchange Act with respect to our common stock being distributed to Avidity's stockholders in the Distribution. This information statement does not contain all of the information set forth in the registration statement and its exhibits and schedules, to which reference is made hereby. Statements in this information statement as to the contents of any contract, agreement or other document are qualified in all respects by reference to such contract, agreement or document filed as an exhibit to the registration statement and you should read the full text of such contract, agreement or document for a more complete understanding of the document or matter involved. For further information with respect to us and our common stock, we refer you to the registration statement, of which this information statement forms a part, including the exhibits and the schedules filed as a part of it.

We intend to furnish the holders of our common stock with annual reports and proxy statements containing financial statements audited by an independent public accounting firm and to file with the SEC quarterly reports for the first three quarters of each fiscal year containing interim unaudited financial information. We also intend to furnish other reports as we may determine or as required by law.

The registration statement, of which this information statement forms a part, and its exhibits and schedules, and other documents which we file with the SEC are available to the public at the SEC's website at http://www.sec.gov.

Information that we file with the SEC after the date of this information statement may supersede the information in this information statement. You may read these reports, proxy statements and other information and obtain copies of such documents and information as described above.

No person has been authorized to give any information or to make any representations other than those contained in this information statement. We take no responsibility for, and can provide no assurances as to the reliability of, any other information that others may give you. Neither the delivery of this information statement nor any distribution of securities made hereunder shall imply that there has been no change in the information set forth or in our affairs since the date hereof.

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**CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** 

On October 23, 2025, the Audit Committee of the Avidity Biosciences Board (the "Avidity Audit Committee") engaged BDO USA, P.C. ("BDO") as the independent registered public accounting firm of the Company Business for the fiscal years ended December 31, 2024 and 2023. On November 5, 2025, the Avidity Audit Committee engaged Deloitte & Touche LLP ("Deloitte") as the independent registered public accounting firm of the Company Business for the fiscal year ending December 31, 2025.

The Avidity Audit Committee dismissed BDO as the independent registered public accounting firm of the Company Business effective at the time of the initial submission of the registration statement on Form 10 of which this information statement forms a part, on December 10, 2025. BDO's report on the combined financial statements of the Company Business for the years ended December 31, 2024 and 2023, did not contain any adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles.

During the fiscal years ended December 31, 2024 and 2023, and in the subsequent interim period through December 10, 2025, (i) there were no disagreements with BDO (within the meaning of Item 304(a)(1)(iv) of Regulation S-K) on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure that if not resolved to BDO's satisfaction, would have caused BDO to make reference thereto in its reports; and (ii) there were no "reportable events" (as defined by Item 304(a)(1)(v) of Regulation S-K).

We provided BDO with a copy of the foregoing disclosures and requested that BDO provide a letter addressed to the SEC stating whether it agrees with such disclosures. A copy of BDO's letter is filed as Exhibit 16.1 to the registration statement on Form 10 of which this information statement forms a part.

During the fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through December 10, 2025, neither we nor anyone on our behalf consulted Deloitte regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company Business financial statements, and neither a written report nor oral advice was provided to us that Deloitte concluded was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.

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**ATRIUM THERAPEUTICS** 

**(A BUSINESS OF AVIDITY BIOSCIENCES, INC.)** 

**INDEX TO COMBINED FINANCIAL STATEMENTS** 

---

| | |
|:---|:---|
| **Audited Annual Combined Financial Statements** | **Page** |
|  [Report of Independent Registered Public Accounting Firm](#fintoc42675_1) | F-2 |
|  [Combined Balance Sheets as of December 31, 2024 and 2023](#fintoc42675_2) | F-3 |
|  [Combined Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023](#fintoc42675_3) | F-4 |
|  [Combined Statements of Changes in Deficit for the years ended December 31, 2024 and 2023](#fintoc42675_4) | F-5 |
|  [Combined Statements of Cash Flows for the years ended December 31, 2024 and 2023](#fintoc42675_5) | F-6 |
|  [Notes to combined financial statements](#fintoc42675_6) | F-7 |
| **Unaudited Condensed Combined Financial Statements** | **Page** |
|  [Condensed Combined Balance Sheets as of September 30, 2025 and December 31, 2024](#fintoc42675_7) | F-22 |
|  [Condensed Combined Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2025 and 2024](#fintoc42675_8) | F-23 |
|  [Condensed Combined Statements of Changes in Deficit for the nine months ended September 30, 2025 and 2024](#fintoc42675_9) | F-24 |
|  [Condensed Combined Statements of Cash Flows for the nine months ended September 30, 2025 and 2024](#fintoc42675_10) | F-25 |
|  [Notes to Condensed combined financial statements](#fintoc42675_11) | F-26 |

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**Report of Independent Registered Public Accounting Firm** 

Shareholders and Board of Directors

Avidity Biosciences, Inc.

San Diego, California

**Opinion on the Combined Financial Statements** 

We have audited the accompanying combined balance sheets of Atrium Therapeutics (a Business of Avidity Biosciences, Inc.) (the "Company") as of December 31, 2024 and 2023, the related combined statements of operations and comprehensive loss, changes in deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the "combined financial statements"). In our opinion, the combined financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion** 

These combined financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's combined financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the combined financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, P.C.

We served as the Company's auditor in 2025.

San Diego, California

December 10, 2025

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**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Combined Balance Sheets** 

**(in thousands)** 

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
|  **Assets** |  |  |
|  Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | $— | $751 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid assets | 483 | 105 |
|  Total current assets | 483 | 856 |
|  Property and equipment, net | 1083 | 1166 |
|  Right-of-use assets | 5620 | 8271 |
|  Total assets | $7186 | $10293 |
|  **Liabilities and Deficit** |  |  |
|  Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $532 | $498 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities (Note 4) | 1193 | 655 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued compensation | 246 | 848 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities, current portion | 3844 | 3639 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue, current portion | 20987 | 28161 |
|  Total current liabilities | 26802 | 33801 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities, net of current portion | 2957 | 6213 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue, net of current portion | 37961 | 40898 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term liabilities  | 574 |  |
|  Total liabilities | 68294 | 80912 |
|  Commitments and contingencies (Note 6) |  |  |
|  Deficit: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Parent Investment | (61108) | (70619) |
|  Total deficit | (61108) | (70619) |
|  Total liabilities and deficit | $7186 | $10293 |

---

See accompanying notes.

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**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Combined Statements of Operations and Comprehensive Loss** 

**(in thousands)** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2024** | **2023** |
|  Collaboration revenue | $10897 | $9764 |
|  **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Research and development | 19199 | 12653 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 4916 | 3497 |
|  **Total operating expenses** | 24115 | 16150 |
|  **Loss from operations** | (13218) | (6386) |
|  Other income | 2 | 1 |
|  **Net loss before taxes** | (13216) | (6385) |
|  Income tax expense | (11906) |  |
|  **Net loss and comprehensive loss** | $(25122) | $(6385) |

---

See accompanying notes.

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**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Combined Statements of Changes in Deficit** 

**(in thousands)** 

---

| | |
|:---|:---|
|  | **Net Parent<br>Investment** |
|  **Balance at January 1, 2023** | $(7720) |
|  Net loss | (6385) |
|  Net transfers to Parent | (56514) |
|  **Balance at December 31, 2023** | $(70619) |
|  Net loss | (25122) |
|  Net transfers from Parent | 34633 |
|  **Balance at December 31, 2024** | $(61108) |

---

See accompanying notes.

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**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Combined Statements of Cash Flows** 

**(in thousands)** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended**<br>**December 31** | **Year Ended**<br>**December 31** |
|  | **2024** | **2023** |
|  **Cash flows from operating activities** |  |  |
|  Net loss | $(25122) | $(6385) |
|  Adjustments to reconcile net loss to net cash used in operating activities |  |  |
|  Depreciation | 172 | 138 |
|  Stock-based compensation expense | 3177 | 2507 |
|  Non-cash operating lease costs | 204 | 195 |
|  Non-cash income tax expense | 11906 |  |
|  Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | 751 | 1386 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid assets | (378) | (69) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | 34 | (46) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities | 538 | (930) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued compensation | (602) | 140 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating right-of-use assets and lease liabilities, net | (3696) | (3328) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenues | (10111) | 62782 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term liabilities | 574 |  |
|  Net cash (used) in provided by operating activities | (22553) | 56390 |
|  **Cash flows from investing activities** |  |  |
|  Purchases of property and equipment | (266) | (320) |
|  Net cash used in investing activities | (266) | (320) |
|  **Cash flows from financing activities** |  |  |
|  Transfers from (to) Parent | 22819 | (56070) |
|  Net cash provided by (used in) financing activities | $22819 | $(56070) |
|  Net increase (decrease) in cash and cash equivalents  |  |  |
|  Cash and cash equivalents at beginning of period |  |  |
|  Cash and cash equivalents at end of period | $**—** | $**—** |
|  **Supplemental schedule of noncash investing and financing activities:** |  |  |
|  Right-of-use assets obtained in exchange for operating lease liabilities | $— | $1741 |
|  Costs incurred, but not paid, in connection with purchases of property and equipment included in accounts payable and accrued liabilities | $— | $212 |

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See accompanying notes.

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**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Notes to Combined Financial Statements** 

**1. Nature of Business and Basis of Presentation** 

**Description of Business** 

On October 25, 2025, Avidity Biosciences, Inc. ("Avidity") entered into an Agreement and Plan of Merger with Novartis AG ("Novartis") and Ajax Acquisition Sub, Inc., a wholly owned subsidiary of Novartis ("Merger Sub"), pursuant to which Merger Sub will merge with and into Avidity (the "Merger"), with Avidity surviving as an indirect wholly owned subsidiary of Novartis.

In connection with the Merger, Avidity entered into a Separation and Distribution Agreement (the "Separation Agreement") with Atrium Therapeutics, Inc. (the "Company"), a newly formed Delaware corporation and wholly owned subsidiary of Avidity, and Novartis (with respect to certain sections specified therein). Pursuant to the Separation Agreement, Avidity will undertake a pre-closing reorganization (the "Separation") to transfer to the Company all assets and liabilities related to its early-stage precision cardiology programs and certain collaboration agreements. Avidity will retain all other assets and liabilities.

Following the Separation, Avidity will distribute all the outstanding shares of the Company's common stock to Avidity's stockholders on a pro rata basis (the "Spin-Off"). Upon completion of the Spin-Off, the Company will operate as an independent, publicly traded company. The Company will be capitalized with $270 million in cash, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any accounts owned by the Company as of the close of business on the day prior to the date of the Spin-off. The Company will be led by a dedicated management team and board of directors. Avidity will have no continuing ownership interest in the Company following the Spin-Off.

The Merger Agreement and the Separation Agreement also provide for (i) a potential sale of the Company to a third party (a "Permitted Third Party Sale") as an alternative to the Spin-Off, and (ii) a potential sale of certain Avidity assets that are subject to a right of first negotiation to an existing collaboration partner (a "ROFN Sale"). The combined financial statements have been prepared under the assumption that the Spin-Off will be consummated, and that neither a Permitted Third Party Sale or ROFN Sale will occur. The Company is expected to focus on advancing its pipeline of precision cardiology and executing collaboration agreements, leveraging the RNA delivery platform to develop novel therapeutics targeting diseases with high unmet medical need. The Company's operations are subject to risks and uncertainties common to early-stage biotechnology companies, including, but not limited to, the development of new technological innovations by competitors, reliance on key personnel, protection of proprietary technology, compliance with regulatory requirements, and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts may require substantial capital, personnel, and infrastructure. Even if development efforts are successful, there is no assurance that the Company will generate significant revenue from product sales.

**Basis of Presentation** 

***Principles of Combination***

The combined financial statements presented herein represents the combined balance sheets as of December 31, 2024 and 2023 and the related combined statements of operations and comprehensive loss, combined statements of changes in deficit, and combined statements of cash flows for each of the years ended December 31, 2024 and 2023 of Atrium Therapeutics, a business of Avidity (the "Company Business").

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The accompanying combined financial statements present, on a historical basis, the combined assets, liabilities, expenses and cash flows directly attributable to the Company Business which have been prepared from Avidity's consolidated financial statements and accounting records and are presented on a standalone basis as if the operations have been conducted independently from Avidity. Historically, separate financial statements have not been prepared for the Company Business and it has not operated as a standalone business from Avidity. As a direct ownership relationship did not exist among all of the various programs comprising of the Company Business, Avidity's net investment in the Company Business (Net Parent Investment) is shown in lieu of shareholders' equity in the combined financial statements.

The combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC").

The combined statements of operations and comprehensive loss include all costs directly related to the Company Business, including costs for facilities, functions and services utilized by the Company Business. The combined statements of operations and comprehensive loss also include allocations for various expenses related to Avidity's corporate functions, including, but not limited to, research and development, legal and regulatory compliance, information technology, human resources and facility management. These expenses were allocated on the basis of a proportional cost allocation method primarily based on a percentage of the operating expenses. These cost allocations are a reasonable reflection of the utilization of services provided to, or benefit derived by, the Company Business during the periods presented, though the allocations may not be indicative of the actual costs that would have been incurred had the Company Business operated as a standalone company during the periods presented. It is not practicable to estimate actual costs that would have been incurred had the Company Business been a standalone company and operated as an unaffiliated entity during the periods presented. Actual costs that might have been incurred had the Company Business been a standalone company would depend on a number of factors, including the organizational structure, what corporate functions the Company Business might have performed directly or outsourced, and strategic decisions the Company Business might have made in areas such as executive management, legal and other professional services, and certain corporate overhead functions.

The income tax amounts in the combined financial statements have been calculated on a separate return method and are presented as if the Company Business operated as a separate taxpayer. Therefore, tax expense, cash tax payments, and items of current and deferred taxes may not be reflective of the Company Business' actual tax balances prior to or subsequent to the distribution.

All material agreements are either Avidity agreements, or those Avidity expects to assign to the Company upon separation. Accordingly, all considerations paid by Avidity in association with these agreements are recorded in the combined financial statements of the Company Business.

In connection with the separation from Avidity, Avidity and the Company expect to enter into a transition services agreement whereby Avidity will provide certain transition services to the Company and the Company will provide certain nominal transition services to Avidity. The Company expects to incur certain costs to establish itself as a standalone public company, as well as ongoing additional costs associated with operating as an independent, publicly traded company.

Deficit balances in these combined financial statements represent the excess of total liabilities over total assets. Net Parent Investment is primarily impacted by contributions from Avidity which are the result of net funding provided by or distributed to Avidity.

***Liquidity***

The Company Business has devoted substantially all its efforts to therapeutic drug discovery and development. The Company Business has historically been dependent upon Avidity for all its working capital and financing

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requirements as Avidity uses a centralized approach to cash management and financing of its operations. The Company Business does not have legal ownership of any bank accounts and as such, had no cash and cash equivalents as of December 31, 2024 and 2023. Financial transactions relating to the Company Business are accounted for through the Net Parent Investment account. Avidity is expected to continue to fund its cash needs though the date of Separation and Spin-Off. Immediately prior to the Distribution, the Company will receive cash balances of $270.0 million, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any accounts held by the Company as of the close of business on the day prior to the date of the Distribution, subject to certain adjustments agreed to by Avidity and Novartis.

The Company anticipates that Avidity's funding support of the Company Business through its centralized cash management system, as well as the cash generated from its collaboration agreements, will be sufficient to meet working capital requirements for the next twelve months if the Separation and Distribution does not occur. Following the Separation and Distribution, the Company will no longer participate in Avidity's centralized treasury system and will independently manage liquidity. Immediately prior to the effective time of the Distribution, Avidity will pay and contribute to the Company an amount in cash equal to $270 million, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any accounts held by the Company as of the close of business on the day prior to the Distribution Date. Following the Spin-Off, the Company anticipates the Company Funding, as well as cash generated from its collaboration agreements, will be sufficient to meet our working capital requirements, capital expenditures and other general corporate purposes for at least twelve months following the Spin-Off. Whether these resources are adequate to meet the Company's liquidity needs beyond that period will depend on the Company's growth and operating results.

**2. Summary of Significant Accounting Policies** 

***Use of Estimates***

The preparation of combined financial statements in accordance with GAAP requires estimates and assumptions that impact the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities of the Company Business at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in these combined financial statements include, but are not limited to, determining the allocations of costs and expenses from Avidity. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

***Concentrations of Credit Risk***

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of accounts receivable.

Concentrations of credit risk with respect to receivables from collaborators (see Note 3) are significant. As of December 31, 2023, a single collaborator accounted for 100% of the Company Business' accounts receivable balance. The Company Business has contractual payment terms with each of its collaborators, and the Company Business monitors their financial performance and credit worthiness so that it can properly assess and respond to any changes in their credit profile. As of and for the years ended December 31, 2024 and 2023, there were no write-offs or allowances of accounts receivable related to credit risk for the Company Business' collaborators.

***Deficit***

The Company Business' equity on the combined balance sheets represents the historical investment by Avidity in the Company Business and is presented in Net Parent Investment in lieu of stockholders' equity. The combined statements of changes in deficit includes net cash transfers and other assets and liabilities between Avidity and the Company Business as well as the net losses after tax.

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***Other Comprehensive Loss***

The Company Business has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss in all periods presented.

***Segment Information***

The operations of the Company Business constitute a single operating and reportable segment, headquartered in the United States. Operating segments are defined as components of an enterprise for which discrete financial information is available and is evaluated regularly by the chief operating decision maker ("CODM"), in deciding how to allocate resources and assess performance. The CODM of the Company Business is Avidity's Chief Executive Officer ("CEO"), who reviews combined financial information for the purposes of allocating resources and assessing performance. Factors considered in determining operating and reportable segments include the organization of our business, the nature of technology and the information reviewed by the CODM.

All revenues and assets were derived and held within the United States.

***Revenue Recognition***

To date, all the Company Business' revenue has been derived from collaboration and research agreements. The terms of these arrangements include the following types of payments to the Company Business: non-refundable, upfront license fees; development, regulatory and commercial milestone payments; payments for research and development services provided by the Company or for manufacturing supply services the Company Business provides through its contract manufacturers; and royalties on net sales of licensed products.

At the inception of a collaboration arrangement, whether the contractual arrangement is within the scope of Accounting Standards Codification ("ASC") Topic 808, Collaborative Arrangements ("ASC 808") is assessed to determine whether the arrangement involves a joint operating activity and involves two (or more) parties that are both active participants in the activity and exposed to significant risks and rewards dependent on the commercial success of such activity. Then whether the collaboration arrangement in its entirety represents a contract with a customer as defined by ASC Topic 606 ("ASC 606") is determined. If only a portion of the collaboration arrangement is potentially with a customer, the distinct good or service unit-of-account guidance in ASC 606 is applied to determine whether there is a unit of account that should be accounted for under ASC 606.

The following steps are performed in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of these agreements: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as, the Company satisfies each performance obligation. Significant judgment is applied when making estimates and assumptions under these agreements, including (i) evaluating whether contractual obligations represent distinct performance obligations, (ii) the assessment of whether options represent material rights, (iii) determining whether there are observable standalone prices and allocating transaction price to performance obligations within a contract, (iv) assessing whether any licenses are functional or symbolic, (v) determining when performance obligations have been met, and (vi) assessing the recognition of variable consideration. Each performance obligation is evaluated to determine if it can be satisfied and recognized as revenue at a point in time or over time.

The Company Business receives payments from its collaborators based on billing schedules established in each contract. Upfront and other payments may require deferral of revenue recognition to a future period until the Company performs its obligations under its research and collaboration arrangements. Amounts are recorded as accounts receivable when the Company Business' right to consideration is unconditional.

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License fees, non-refundable upfront fees, and funding of research activities are considered fixed, while milestone payments are identified as variable consideration and excluded from the transaction price. Revenue will be recognized for sales-based royalty if and when a subsequent sale occurs.

See Note 3 (Collaboration, License and Research Agreements) for additional details.

***Research and Development Costs and Accruals***

Research and development costs are expensed as incurred and include salaries, benefits and stock-based compensation associated with research and development personnel, third-party research and development expenses, license fees, laboratory supplies, facilities, overhead costs, and consultants. Nonrefundable advance payments for goods and services that will be used in future research and development activities are capitalized and recorded as expense in the period that the Company Business receives the goods or when services are performed. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of or after performance are reflected in the accompanying combined balance sheets as prepaid assets or accrued liabilities. Actual results could differ from the Company Business' estimates.

***Income Taxes***

The income tax provision of the Company Business was prepared using the separate return method. The separate return method applies the concepts of ASC Topic 740, *Income Taxes*, to the standalone financial statements of each member of the combined group as if the group members were separate taxpayers. The calculation of the Company Business' income taxes using the separate return method requires judgment and use of both estimates and allocations.

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company Business also follows the provisions of accounting for uncertainty in income taxes which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition.

Operating results of the Company Business have historically been included in the federal and state tax returns of Avidity and the resulting tax attributes will be retained by Avidity and will not be available to the Company for future use. As a result, any hypothetical net operating loss attributes and related valuation allowances are deemed to have been distributed to Avidity through the Net Parent Investment. As part of the separation, Avidity will retain all rights associated with the unused federal and state net operating losses, and research tax credit carryforwards to offset future taxable income. As a result, the Company Business does not have any associated deferred tax assets and liabilities for the years ended December 31, 2024 and December 31, 2023. Future income tax provisions may be impacted by future changes in the realizability of the hypothetical net operating loss deferred tax assets.

***Property and Equipment***

Property and equipment, including leasehold improvements, are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recorded using the straight-line method over the estimated useful lives of the related assets. As of December 31, 2024 and 2023, the Company Business' property and equipment consisted of lab equipment with a useful life ranging from three to five years. Leasehold improvements are

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amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the remaining lease term. Repairs and maintenance charges that do not increase the useful life of the assets are charged to operating expenses as incurred.

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company Business has not recognized any impairment losses in any of the periods presented in these combined financial statements.

***Leases***

Whether an arrangement contains a lease is determined at the inception of a contract. Lease right-of-use assets represent the Company Business' right to use an underlying asset for the lease term and lease liabilities represent the Company Business' obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of future lease payments over the lease term. The interest rate used to determine the present value of the future lease payments is our estimated incremental borrowing rate based on market sources including interest rates for companies with similar credit quality for agreements of similar duration. The operating right-of-use asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company Business will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable lease payments that do not depend on a rate or index, payments associated with non-lease components, and costs related to leases with terms of less than 12 months are expensed as incurred.

**Recently Issued Accounting Pronouncements** 

***Income Taxes (Topic 740): Improvements to Income Tax Disclosures***

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures, primarily through standardization and disaggregation of the income tax rate reconciliation and disaggregation of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2025. ASU 2023-09 can be applied either prospectively or retrospectively and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its combined financial statements and accompanying notes.

***Disaggregation of Income Statement Expenses***

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220-40), to improve the disclosures of expenses by requiring public business entities to provide further disaggregation of relevant expense captions (i.e., employee compensation, depreciation, intangible asset amortization) in a separate note to the financial statements, a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and the total amount of selling expenses and, in an annual reporting period, an entity's definition of selling expenses. The transition method is prospective with the retrospective method permitted, and the ASU will be effective for the Company for its annual period ending December 31, 2027 and interim periods for the interim period beginning January 1, 2028. The Company is currently evaluating the impact on its disclosures.

***Recently Adopted Accounting Pronouncements***

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable

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segments. The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit and loss. The amendments also require disclosure of all other segment items by reportable segment and a description of its composition. Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Lastly, the amendment requires that a public entity that has a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing segment disclosures in Topic 280. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. ASU 2023-07 is applied retrospectively, and early adoption is permitted. The Company Business adopted the ASU on a retrospective basis in its annual period ending December 31, 2024 and interim periods for the interim period beginning on January 1, 2025. See Note 9 for further details.

**3. Collaboration, License and Research Agreements** 

***Research Collaboration and License Agreement and Securities Purchase Agreement with Bristol Myers Squibb Company***

In November 2023, Avidity entered into (i) a Research Collaboration and License Agreement (the "BMS Collaboration Agreement") with Bristol Myers Squibb Company ("BMS") to expand on the research with MyoKardia Inc. ("MyoKardia") and (ii) a Securities Purchase Agreement (the "BMS Purchase Agreement") with BMS for the sale of 5,075,304 shares of Avidity's common stock in a private placement transaction. The BMS Collaboration Agreement and the BMS Purchase Agreement are referred to herein as the "BMS Agreements." Under the terms of the BMS Collaboration Agreement, BMS will have the right to select up to five targets (each a "Target") for collaborative research programs under which the Company will utilize its proprietary RNA delivery platform to conduct research and development activities in order to identify, generate, and optimize AOC compounds directed to such Targets with the goal of generating an applicable development candidate. On a Target-by-Target basis, after the Company completes specified research activities in accordance with a research plan, BMS will have the right to develop, manufacture and commercialize such compounds generated during the research term, and products containing such compounds, worldwide. The research and activities conducted under the BMS Collaboration Agreement is governed by a joint steering committee comprised of representatives from the Company and BMS

Avidity received approximately $100.0 million upfront, including a $60.0 million nonrefundable cash payment and approximately $40.0 million from the sale of Avidity's common stock at $7.8813 per share, which included an $8.7 million premium for the per share amount in excess of the fair value at the time of the transaction. Avidity is also eligible to receive up to approximately $1.35 billion in research and development milestone payments, up to approximately $825.0 million in commercial milestone payments, and tiered royalties from high single digits up to low double digits on net sales. Avidity is responsible for its own research costs incurred under the agreement, subject to a cumulative spending cap of $40.0 million. BMS will fund all future clinical development, regulatory and commercialization activities coming from this collaboration.

It was determined that the BMS Agreements should be accounted for separately from the research collaboration with MyoKardia (the "MyoKardia Agreement," also separately defined below). There are two distinct units of accounting identified under the BMS Agreements. The first distinct unit of accounting includes (i) a license to technology and patents; (ii) collaboration services, including research services and technical and regulatory support; and (iii) participation on research oversight committees. The Company Business has determined that these elements individually are either not capable of being distinct or are not distinct within the context of the contract and, therefore, will account for them as a single distinct performance obligation for purposes of revenue recognition. The second distinct unit of accounting is related to the sale of common stock, which will be accounted for as an issuance of equity at fair value in accordance with the applicable accounting standards. Consideration received related to the premium on sale of the Avidity's common stock was allocated to the transaction price for purposes of revenue recognition.

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At the time the BMS Agreements were entered into, the fixed and determinable amount related to the first unit of accounting was $68.7 million, which includes the upfront cash payment and premium on sale of Avidity's common stock. The Company Business will recognize revenue using the input method in an amount proportional to the collaboration expenses incurred and the total estimated collaboration expenses over the seven-year period in which it expects to deliver its performance obligation as this method provides the most faithful depiction of the Company Business' transfer of services under the BMS Agreements. The Company Business periodically reviews and updates the estimated collaboration expenses, when appropriate, which adjusts the percentage of revenue that is recognized for the period. The remaining $31.3 million was allocated to the second unit of accounting related to the sale of common stock.

The initial consideration related to the $60.0 million cash payment and approximate $40.0 million sale of common stock was received prior to December 31, 2023. $9.8 million in revenues were recognized related to the BMS Agreements in 2024 and $0.2 million recognized related to the BMS Agreements in 2023.

***Research Collaboration and License Agreement with Eli Lilly and Company***

In April 2019, Avidity entered into a Research Collaboration and License Agreement (the "Lilly Agreement") with Eli Lilly and Company ("Lilly") for the discovery, development and commercialization of AOC products directed against certain targets in immunology and other select indications on a worldwide basis. Under the Lilly Agreement, Avidity granted Lilly an exclusive, worldwide, royalty-bearing license, with the right to sublicense (subject to certain conditions), under Avidity's technology to research, develop manufacture and sell products containing AOCs that are directed to up to six mRNA targets Avidity agreed that it will not, itself or with a third party, research, develop, manufacture or commercialize or otherwise exploit any compound or product directed against targets subject to the Lilly Agreement.

In consideration of the rights granted to Lilly under the Lilly Agreement, Avidity received a one-time upfront fee of $20.0 million and the right to receive up to $60.0 million in development milestone payments, up to $140.0 million in regulatory milestone payments and up to $205.0 million in commercialization milestone payments per target. In August 2025, Avidity received a milestone payment of $10.0 million as the result of the achievement of a clinical development milestone for a collaboration target. Lilly is obligated to pay Avidity a tiered royalty ranging from the mid-single to low-double digits on worldwide annual net sales of licensed products, subject to specified and capped reductions for the market entry of biosimilar products, loss of patent coverage of licensed products, and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory. Lilly's royalty obligations and the Lilly Agreement will expire on a licensed product-by-licensed product and country-by-country basis on the later of ten years from the date of the first commercial sale or when there is no longer a valid patent claim covering such licensed product in such country.

There are multiple promises to deliver goods and services identified, which include at inception of the agreement: (i) a license to technology and patents, information and know-how; and (ii) collaboration, including research services and technical and regulatory support provided by the Company Business. One performance obligation for the promises under the Lilly Agreement has been identified since the elements are either not capable of being distinct or are not distinct within the context of the contract. Accordingly, the Company Business recognizes revenue for the fixed or determinable collaboration in an amount proportional to the collaboration expenses incurred and the total estimated collaboration expenses over the 5-year period in which it expects to deliver its performance obligation. Periodically estimated collaboration expenses are reviewed and updated, when appropriate, which adjusts the percentage of revenue that is recognized for the period. In connection with the Lilly Agreement, the Company Business recognized revenue of $1.1 million and $9.5 million for the years ended December 31, 2024 and 2023, respectively. There were no collaboration receivables related to the Lilly Agreement as of December 31, 2024. Collaboration receivables were $0.8 million and $2.1 million related to the Lilly Agreement as of December 31, 2023 and January 1, 2023 which are included in accounts receivable on the combined balance sheets of the Company Business.

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***Research Agreement with MyoKardia, Inc. ("MyoKardia")***

In December 2020, Avidity entered into a Research Collaboration (the "MyoKardia Agreement") with MyoKardia, a wholly-owned subsidiary of BMS, to demonstrate the potential utility of AOCs in cardiac tissue by leveraging MyoKardia's genetic cardiomyopathy platform including, among other aspects, its novel target discovery engine and proprietary cardiac disease models. Under the terms of the MyoKardia Agreement, in July 2023, BMS as the successor in interest to MyoKardia, exercised its option to negotiate and enter into a License Agreement covering AOCs that modulate the function of cardiovascular targets. The Research Collaboration with MyoKardia was terminated in November 2023 upon execution of the Research Collaboration and License Agreement with BMS.

The amounts received that have not yet been recognized as revenue are deferred on the combined balance sheets of the Company Business and will be recognized over the remaining research and development period until the performance obligation is satisfied. A reconciliation of the closing balance of deferred revenue related to all collaboration agreements for the years ended December 31, 2024 and 2023 is as follows (in thousands):

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| | |
|:---|:---|
|  Balance at January 1, 2023 | $6, 277 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unearned revenue from cash received during the period | 68736 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue recognized that was included in the balance at the beginning of the period | (5954) |
|  Balance at December 31, 2023 | 69059 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue recognized that was included in the balance at the beginning of the period | (10111) |
|  Balance at December 31, 2024 | $58948 |

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**4. Composition of Certain Combined Financial Statement Items** 

***Property and equipment, net (in thousands)***

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| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
|  Laboratory equipment | $2029 | $1763 |
|  Leasehold improvements | 288 | 288 |
|  Property and equipment, gross | 2317 | 2051 |
|  Less accumulated depreciation | (1234) | (885) |
|  Total property and equipment, net | $1083 | $1166 |

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During the years ended December 31, 2024 and 2023, the Company Business recognized depreciation expense of $0.2 million and $0.1 million, respectively, after allocations to Avidity.

***Accrued Liabilities (in thousands)***

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| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
|  Accrued research | $684 | $— |
|  Accrued manufacturing and technical development | 496 |  |
|  Other accrued liabilities | 13 | 655 |
|  Total accrued liabilities | $1193 | $655 |

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**5. Leases** 

***Operating Leases***

In June 2020, Avidity entered into a five-year lease agreement, as amended in December 2020, at a location in San Diego, California. Avidity entered into an expansion lease in June 2023, with both leases being assigned to the Company in connection with the Separation and terminating concurrently on November 30, 2026. The leases contain base rent of approximately $0.3 million per month with 3% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property.

Supplemental balance sheet information related to operating leases as of December 31, 2024 and 2023 is as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2024** | **2023** |
|  Operating right-of-use asset | $5620 | $8271 |
|  Operating lease liability: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | 3844 | 3639 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-current | 2957 | 6213 |
|  Total operating lease liability | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6801 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9852 |

---

The following table presents the weighted-average remaining lease term and discount rates:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2024** | **2023** |
|  Weighted-average remaining lease term (years) | 1.92 | 2.92 |
|  Weighted-average discount rate | 5.9% | 5.9% |

---

During the years ended December 31, 2024 and 2023, the Company Business recognized operating lease expense of $0.2 million and $0.2 million, respectively, after allocations to Avidity.

The future minimum lease payments by lease classification as of December 31, 2024 are as follows (in thousands):

---

| | |
|:---|:---|
|  | **Operating** |
| 2025 | $3854 |
| 2026 | 3639 |
|  Total future lease payments | 7493 |
|  Less: imputed interest | (692) |
|  Lease liability | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6801 |

---

**6. Commitments and Contingencies** 

***Litigation***

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that liability has been incurred and the amount can be reasonably estimated. There are no such matters currently outstanding for which any liabilities have been accrued.

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***Contractual Obligations***

The Company Business enters into contracts in the normal course of business for contract research services, professional services, and other services and products for operating purposes. These contracts may include certain provisions that could require payments for early termination. The amount of any such termination payments will vary depending on the timing of the termination and the specific terms of the contract.

**7. Stock-Based Compensation** 

The Company Business currently has no stock-based compensation plan. Avidity has stock-based compensation plans under which it may issue common shares or restricted common shares or grant incentive stock options or non-qualified stock options for the purchase of common shares, to employees, members of the board of directors and consultants of Avidity. Avidity also has an Employee Stock Purchase Plan (the "ESPP") which allows eligible employee who are participating in the plan to purchase shares of Avidity at a discount. Stock-based compensation has been allocated to the Company Business by using a proportional cost allocation method primarily based on a percentage of the operating expense. The amounts presented are not necessarily indicative of future awards and do not necessarily reflect the costs that the Company Business would have incurred as an independent company for the periods presented.

Stock-based compensation expense is incurred related to stock option and restricted stock grants, and to shares sold under the ESPP.

Stock-based compensation expense for stock option grants is determined using the Black-Scholes-Merton ("BSM") option pricing model and is recorded at the estimated fair value of the award as of the grant date and recognized as expense on a straight-line basis over the requisite service period (usually the vesting period) of the stock-based award. Stock-based compensation expense for Restricted Stock Units ("RSUs") is recorded at the market price of a share of Avidity's stock on the date of grant and is recognized as expense on a straight-line basis over the service period. Stock-based compensation expense for Performance Stock Units ("PSUs") is recorded at the market price of a share of Avidity's stock on the date of grant and recognized on a straight-line basis over the requisite service periods beginning when the achievement of the performance condition is determined to be probable. Stock-based compensation expense for employee stock purchases under Avidity's ESPP is determined using the BSM option pricing model and is recorded at the estimated fair value of the purchase as of the plan enrollment date and is recognized as expense on a straight-line basis over the applicable six-month ESPP offering period. The estimation of fair value for stock-based compensation requires management to make estimates and judgments about, among other things, the estimated life of options and volatility of Avidity's common stock. These judgments directly affect the amount of compensation expense that will be recognized. Forfeitures are accounted for as incurred. Stock-based compensation expense attributed to the Company by classification included within the combined statements of operations and comprehensive loss was as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2024** | **2023** |
|  Research and development expense | $1616 | $1443 |
|  General and administrative expense | 1561 | 1064 |
|  Total stock-based compensation expense | $3177 | $2507 |

---

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**8. Income Taxes** 

A reconciliation of the income tax expense computed at the U.S. federal statutory income tax rate to the Company Business' income tax expense is as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2024** | **2023** |
|  Income taxes benefit at statutory rates | $(2775) | $(1341) |
|  State income tax benefit, net of federal benefit | (389) | (174) |
|  Permanent items | 4 | 3 |
|  Stock based compensation | (843) | 41 |
|  Sec. 162(m) Limitation | 806 |  |
|  Uncertain tax positions | 378 | 197 |
|  Research and development credits | (1561) | (794) |
|  Rate adjustment | 14 | 421 |
|  Valuation allowance | 16272 | 1647 |
|  Income tax expense | $11906 | $— |

---

The Company Business' net deferred tax assets (liabilities) are as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2024** | **2023** |
|  Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | $13877 | $77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses | 45 | 156 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities | 1601 | 2342 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation | 1247 | 1181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deferred tax assets | 16770 | 3756 |
|  Less valuation allowance | (15224) | (1533) |
|  Net deferred tax assets | 1546 | 2223 |
|  Deferred tax liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Right-of-use assets | (1323) | (1966) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation | (223) | (257) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deferred tax liabilities | (1546) | (2223) |
|  **Net deferred tax assets** | $— | $— |

---

The Company Business has established a valuation allowance against its net deferred tax assets due to the uncertainty that such assets will be realized. The recoverability of the deferred tax assets are periodically evaluated. At such time as it is determined that it is more likely than not that the deferred tax assets will be realizable, the valuation allowance will be released. The change in the valuation allowance was an increase of $13.7 million and decrease of $1.5 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the Company Business has utilized federal and state net operating loss (NOL) carryforwards to offset its taxable income. The federal NOL carryforwards have been fully utilized with consideration of the 80% limitation of taxable income. The remaining California NOLs begin to expire in 2043 unless previously utilized.

As of December 31, 2024, the Company Business has utilized its federal and state research and development tax credits to offset its taxable income. The Company Business has not recorded any DTA for net operating losses or R&D credits as the NOLs and credits generated will stay with Avidity subsequent to the Separation.

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A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2024** | **2023** |
|  Gross unrecognized tax benefits at the beginning of the year | $— | $— |
|  Increase related to current year positions | 377 |  |
|  Increase related to prior year positions | 212 |  |
|  Gross unrecognized tax benefits at the end of the year | $589 | $— |

---

As of December 31, 2024, included in other long-term liabilities is a balance of $0.6 million which represents gross unrecognized tax benefits less federal benefit of state tax. There were no such balances as of December 31, 2023.

The unrecognized tax benefit amounts are reflected in the determination of the Company Business' deferred tax assets. If recognized, these amounts would affect the Company Business' effective tax rate. The Company Business does not foresee material changes to its liability for uncertain tax benefits within the next twelve months.

The Company Business' policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company Business has no accrual for interest or penalties as of December 31, 2024 or 2023.

**9. Related Party Transactions** 

***Net Parent Investment***

The Company Business has not historically operated as a standalone business and the combined financial statements are derived from the consolidated financial statements and accounting records of Avidity. The following disclosure summarizes activity between the Company Business and Avidity, including the affiliates of Avidity that are not part of the planned Spin-Off.

Net transfers from Avidity represent the net effect of transactions between Avidity and the Company Business prior to the Separation. The components of net transfers from Avidity are as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
|  Net transfers from (to) Parent as reflected in the combined statement of cash flows | $22819 | $(56070) |
|  Non-cash income tax expense | 11906 |  |
|  Stock-based compensation | 3177 | 2507 |
|  Lease expense for Avidity | (3092) | (2782) |
|  Depreciation for Avidity | (177) | (169) |
|  Net transfers from (to) Parent as reflected in the combined statement of changes in deficit | $34633 | $(56514) |

---

***Cost Allocations***

The combined financial statements reflect allocations of certain expenses from the consolidated financial statements of Avidity, including research and development expenses and general and administrative expenses. These allocations include, but are not limited to, executive management, employee compensation and benefits, facilities and operations, information technology, business development, financial services (such as accounting, audit, and tax), legal, insurance, and stock-based compensation.

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These allocations to the Company Business are reflected in the combined statements of operations and comprehensive loss as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2024** | **2023** |
|  **Cost allocations** |  |  |
|  Research and development expense | $7151 | $5759 |
|  General and administrative expense | 5270 | 3497 |
|  **Total cost allocations** | $12421 | $9256 |

---

Management believes these cost allocations are a reasonable reflection of services provided to, of the benefit derived by, the Company Business during the periods presented. The allocations may not, however, be indicative of the actual expenses that would have been incurred had the Company Business operated as a standalone public company. Actual costs that may have been incurred if the Company Business had been a standalone public company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by the Company Business employees, and strategic decisions made in areas such as research and development, information technology and infrastructure.

***Stock-Based Compensation***

The Company Business participates in Avidity's share-based compensation plans, the costs of which have been allocated to the Company Business and recorded in research and development and general and administrative expenses in the combined statements of operations and comprehensive loss. Refer to Note 7 for additional information.

**10. Segment Information** 

Our operations constitute a single operating and reportable segment and reflects how Avidity's CEO, who is the CODM, manages the Company Business, including allocating resources and measuring performance. The Company Business derives its revenues from its research collaboration and license agreements with BMS and Lilly, which are further described in "Note 3 – Collaboration, License and Research Agreements." Segment performance is measured based on net loss, which the CODM uses to evaluate the results of the segment and to make operational decisions when managing the Company Business, such as how to allocate the resources of the business to advance our preclinical and research programs and to monitor budgeted to actual expenditures. The measure of segment assets is reported on the combined balance sheets as total combined assets. The following table presents financial information, including significant segment expenses, which are regularly provided to the CODM and included within combined net loss. Research and development expenses and general and administrative expenses are adjusted to exclude depreciation and stock-based compensation for segment presentation. Other segment items include depreciation, stock-based compensation, other income, and income tax expense (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2024** | **2023** |
|  Collaboration revenue | $10897 | $9764 |
|  Research and development | 17441 | 11101 |
|  General and administrative | 3325 | 2404 |
|  Total other segment items  | 15253 | 2644 |
|  Net loss and comprehensive loss  | $(25122) | $(6385) |

---

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##### [**Table of Contents**](#toc)
**11. Subsequent Events** 

The Subsequent events were evaluated to assess the need for potential recognition and disclosure in this report through December 10, 2025, the date on which these combined financial statements were available to be issued. Based upon this evaluation, it was determined that no additional subsequent events required recognition or disclosure in these combined financial statements, other than those described in Note 1.

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**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Condensed Combined Balance Sheets** 

**(in thousands)** 

**(unaudited)** 

---

| | | |
|:---|:---|:---|
|  | **September 30,<br>2025** | **December 31,<br>2024** |
|  **Assets** |  |  |
|  Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid assets | $1262 | $483 |
|  Total current assets | 1262 | 483 |
|  Property and equipment, net | 2770 | 1083 |
|  Right-of-use assets | 3512 | 5620 |
|  Total assets | $7544 | $7186 |
|  **Liabilities and Deficit** |  |  |
|  Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $451 | $532 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities (Note 4) | 5605 | 1193 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued compensation | 2593 | 246 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities, current portion | 3967 | 3844 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue, current portion | 19123 | 20987 |
|  Total current liabilities | 31739 | 26802 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities, net of current portion | 312 | 2957 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue, net of current portion | 32066 | 37961 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term liabilities | 574 | 574 |
|  Total liabilities | 64691 | 68294 |
|  Commitments and contingencies (Note 6) |  |  |
|  Deficit: |  |  |
|  Net Parent Investment | (57147) | (61108) |
|  Total deficit | (57147) | (61008) |
|  Total liabilities and deficit | $7544 | $7186 |

---

See accompanying notes.

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##### [**Table of Contents**](#toc)
**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Condensed Combined Statements of Operations and Comprehensive Loss** 

**(in thousands)** 

**(unaudited)** 

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended<br>September 30,** | **Nine Months Ended<br>September 30,** |
|  | **2025** | **2024** |
|  Collaboration revenue | $17759 | $7924 |
|  **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Research and development | 29979 | 11680 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 8309 | 3211 |
|  **Total operating expenses** | 38288 | 14891 |
|  **Loss from operations** | (20529) | (6967) |
|  Other expense | (12) | (2) |
|  **Net loss before taxes** | (20541) | (6969) |
|  **Income tax benefit (expense)** | 176 | (6641) |
|  **Net loss and comprehensive loss** | $(20365) | $(13610) |

---

See accompanying notes.

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##### [**Table of Contents**](#toc)
**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Condensed Combined Statements of Changes in Deficit** 

**(in thousands)** 

**(unaudited)** 

---

| | |
|:---|:---|
|  | **Net Parent Investment** |
|  **Balance at January 1, 2024** | $(70619) |
|  Net loss | (13610) |
|  Net transfer from Parent | 20562 |
|  **Balance at September 30, 2024** | $(63667) |

---

---

| | |
|:---|:---|
|  | **Net Parent Investment** |
|  **Balance at January 1, 2025** | $(61108) |
|  Net loss | (20365) |
|  Net transfer from Parent | 24326 |
|  **Balance at September 30, 2025** | $(57147) |

---

See accompanying notes.

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##### [**Table of Contents**](#toc)
**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Condensed Combined Statements of Cash Flows** 

**(in thousands)** 

**(unaudited)** 

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended**<br>**September 30,** | **Nine Months Ended**<br>**September 30,** |
|  | **2025** | **2024** |
|  **Cash flows from operating activities** |  |  |
|  Net loss | $(20365) | $(13610) |
|  Adjustments to reconcile net loss to net cash used in operating activities |  |  |
|  Depreciation | 201 | 114 |
|  Stock-based compensation expense | 4127 | 2087 |
|  Non-cash operating lease costs | 296 | 139 |
|  Non-cash income tax (benefit) expense | (176) | 6641 |
|  Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable |  | 751 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid assets | (779) | (446) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current assets |  | (88) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | (81) | (178) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities | 2834 | (244) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued compensation | 2347 | 112 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating right-of-use assets and lease liabilities, net | (2522) | (2752) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenues | (7759) | (7138) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term liabilities |  | 322 |
|  Net cash used in operating activities | (21877) | (14290) |
|  **Cash flows from investing activities** |  |  |
|  Purchases of property and equipment | (566) | (48) |
|  Net cash used in investing activities | (566) | (48) |
|  **Cash flows from financing activities** |  |  |
|  Transfers from Parent | 22443 | 14338 |
|  Net cash provided by financing activities | 22443 | 14338 |
|  Net increase (decrease) in cash and cash equivalents |  |  |
|  Cash, and cash equivalents at beginning of period |  |  |
|  Cash, and cash equivalents at end of period | $— | $— |
|  **Supplemental schedule of noncash investing and financing activities:** |  |  |
|  Costs incurred, but not paid, in connection with purchases of property and equipment included in accounts payable and accrued liabilities | $1578 | $— |

---

See accompanying notes.

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##### [**Table of Contents**](#toc)
**Atrium Therapeutics** 

**(a Business of Avidity Biosciences, Inc.)** 

**Notes to Condensed Combined Financial Statements** 

**(unaudited)** 

**1. Nature of Business and Basis of Presentation** 

**Description of Business** 

On October 25, 2025, Avidity Biosciences, Inc. ("Avidity") entered into an Agreement and Plan of Merger with Novartis AG ("Novartis") and Ajax Acquisition Sub, Inc., a wholly owned subsidiary of Novartis ("Merger Sub"), pursuant to which Merger Sub will merge with and into Avidity (the "Merger"), with Avidity surviving as an indirect wholly owned subsidiary of Novartis.

In connection with the Merger, Avidity entered into a Separation and Distribution Agreement (the "Separation Agreement") with Atrium Therapeutics, Inc. (the "Company"), a newly formed Delaware corporation and wholly owned subsidiary of Avidity, and Novartis (with respect to certain sections specified therein). Pursuant to the Separation Agreement, Avidity will undertake a pre-closing reorganization (the "Separation") to transfer to the Company all assets and liabilities related to its early-stage precision cardiology programs and certain collaboration agreements. Avidity will retain all other assets and liabilities.

Following the Separation, Avidity will distribute all the outstanding shares of the Company's common stock to Avidity's stockholders on a pro rata basis (the "Spin-Off"). Upon completion of the Spin-Off, the Company will operate as an independent, publicly traded company. The Company will be capitalized with $270 million in cash, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any accounts held by the Company as of the close of business on the day prior to the date of the Spin-off. The Company will be led by a dedicated management team and board of directors. Avidity will have no continuing ownership interest in the Company following the Spin-Off.

The Merger Agreement and the Separation Agreement also provide for (i) a potential sale of the Company to a third party (a "Permitted Third Party Sale") as an alternative to the Spin-Off, and (ii) a potential sale of certain the Avidity assets that are subject to a right of first negotiation to an existing collaboration partner (a "ROFN Sale"). The condensed combined financial statements have been prepared under the assumption that the Spin-Off will be consummated, and that neither a Permitted Third Party Sale or ROFN Sale will occur.

The Company is expected to focus on advancing its pipeline of precision cardiology and executing collaboration agreements, leveraging the RNA delivery platform to develop novel therapeutics targeting diseases with high unmet medical need. The Company's operations are subject to risks and uncertainties common to early-stage biotechnology companies, including, but not limited to, the development of new technological innovations by competitors, reliance on key personnel, protection of proprietary technology, compliance with regulatory requirements, and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts may require substantial capital, personnel, and infrastructure. Even if development efforts are successful, there is no assurance that the Company will generate significant revenue from product sales.

**Basis of Presentation** 

***Principles of Combination***

The unaudited condensed combined financial statements presented herein represents the unaudited condensed combined balance sheets as of September 30, 2025 and December 31, 2024 and the related unaudited condensed combined statements of operations and comprehensive loss, unaudited condensed combined statements of

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##### [**Table of Contents**](#toc)
changes in deficit, and unaudited condensed combined statements of cash flows for each of the nine months ended September 30, 2025 and 2024 of Atrium Therapeutics, a business of Avidity (the "Company Business").

The accompanying unaudited condensed combined financial statements should be read in conjunction with the audited annual combined financial statements and related notes included within this information statement. Certain financial information that is normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), but is not required for interim reporting purposes, has been condensed or omitted. Management must make estimates and assumptions that affect the condensed combined financial statements and the related footnote disclosures. While management uses its best judgment, actual results could differ from those estimates.

The unaudited condensed combined financial statements present, on a historical basis, the combined assets, liabilities, expenses and cash flows directly attributable to the Company Business which have been prepared from Avidity's consolidated financial statements and accounting records and are presented on a standalone basis as if the operations have been conducted independently from Avidity. Historically, separate financial statements have not been prepared for the Company Business and it has not operated as a standalone business from Avidity. As a direct ownership relationship did not exist among all of the various programs comprising the Company Business, Avidity's net investment in the Company Business ("Net Parent Investment") is shown in lieu of shareholders' equity in the unaudited condensed combined financial statements.

The unaudited condensed combined statements of operations and comprehensive loss include all costs directly related to the Company Business, including costs for facilities, functions and services utilized by the Company Business. The unaudited condensed combined statements of operations and comprehensive loss also include allocations for various expenses related to Avidity's corporate functions, including, but not limited to, research and development, legal and regulatory compliance, information technology, human resources and facility management. These expenses were allocated on the basis of a proportional cost allocation method primarily based on a percentage of the operating expense. These cost allocations are a reasonable reflection of the utilization of services provided to, or benefit derived by, the Company Business during the periods presented, though the allocations may not be indicative of the actual costs that would have been incurred had the Company Business operated as a standalone company during the periods presented. It is not practicable to estimate actual costs that would have been incurred had the Company Business been a standalone company and operated as an unaffiliated entity during the periods presented. Actual costs that might have been incurred had the Company Business been a standalone company would depend on a number of factors, including the organizational structure, what corporate functions the Company Business might have performed directly or outsourced and strategic decisions the Company might have made in areas such as executive management, legal and other professional services, and certain corporate overhead functions.

The income tax amounts in the condensed combined financial statements have been calculated on a separate return method and are presented as if the Company Business' operations were separate taxpayers in the respective jurisdiction. Therefore, tax expense, cash tax payments, and items of current and deferred taxes may not be reflective of the Company Business' actual tax balances prior to or subsequent to the distribution.

All material agreements are either Avidity agreements, or those Avidity expects to assign to the Company upon separation. Accordingly, all considerations paid by Avidity in association with these agreements are recorded in the condensed combined financial statements of the Company Business.

In connection with the Separation, Avidity and the Company expect to enter into a transition services agreement whereby Avidity will provide certain transition services to the Company and the Company will provide certain nominal transition services to Avidity. The Company expects to incur certain costs to establish itself as a standalone public company, as well as ongoing additional costs associated with operating as an independent, publicly traded company.

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The condensed combined balance sheets include assets and liabilities that have been determined to be specifically identifiable or otherwise attributable to the Company Business, including certain assets that were historically held at the corporate level in Avidity. All intracompany transactions within the Company Business have been eliminated. All intercompany transactions between the Company Business and Avidity are considered to be effectively settled in the condensed combined financial statements at the time the transactions are recorded. The total net effect of these intercompany transactions considered to be settled is reflected in the combined statement of cash flows within financing activities and in the condensed combined balance sheets as "Net Parent Investment."

Deficit balance in these condensed combined financial statements represents the excess of liabilities over total assets. Net Parent Investment is primarily impacted by contributions from Avidity which are the result of net funding provided by or distributed to Avidity.

As noted above, the notes to these condensed combined financial statements are unaudited.

***Liquidity***

The Company Business has devoted substantially all its efforts to therapeutic drug discovery and development. The Company Business has historically been dependent upon Avidity for all its working capital and financing requirements as Avidity uses a centralized approach to cash management and financing of its operations. The Company Business does not have legal ownership of any bank accounts and as such, had no cash and cash equivalents as of September 30, 2025 and December 31, 2024. Financial transactions relating to the Company Business are accounted for through the Net Parent Investment account. The Company Business expects Avidity to continue to fund its cash needs though the date of separation and spin-off. As part of the Separation and Spin-Off from Avidity, the Company Business will receive cash balances of $270.0 million, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any accounts held by the Company as of the close of business on the day prior to the date of the Distribution subject to certain adjustments agreed to by Avidity and Novartis.

The Company anticipates that Avidity's funding support of the Company Business through its centralized cash management system, as well as the cash generated from its collaboration agreements, will be sufficient to meet working capital requirements for the next twelve months if the Separation and Distribution does not occur. Following the Separation and Distribution, the Company will no longer participate in Avidity's centralized treasury system and will independently manage liquidity. Immediately prior to the effective time of the Distribution, Avidity will pay and contribute to the Company an amount in cash equal to $270 million, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any accounts held by the Company as of the close of business on the day prior to the Distribution Date. Following the Spin-Off, the Company anticipates the Company Funding, as well as cash generated from its collaboration agreements, will be sufficient to meet our working capital requirements, capital expenditures and other general corporate purposes for at least twelve months following the Spin-Off. Whether these resources are adequate to meet the Company's liquidity needs beyond that period will depend on the Company's growth and operating results.

**2. Summary of Significant Accounting Policies** 

***Unaudited Condensed Combined Financial Information***

The accompanying unaudited condensed combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. The accompanying unaudited condensed combined financial statements do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete condensed combined financial statements. The accompanying year-end condensed combined balance sheets was derived from audited combined financial statements but does not include all disclosures required by GAAP. The

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unaudited condensed combined financial statements have been prepared on the same basis as the audited combined financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company Business' financial position as of September 30, 2025 and the results of its operations for the nine months ended September 30, 2025 and 2024 and its cash flows for the nine months ended September 30, 2025 and 2024. The results for the nine months ended September 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods or any future year or period.

***Use of Estimates***

The preparation of condensed combined financial statements of the Company Business in accordance with GAAP requires estimates and assumptions that impact the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the condensed combined financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

**Recently Issued Accounting Pronouncements** 

***Income Taxes (Topic 740): Improvements to Income Tax Disclosures***

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures, primarily through standardization and disaggregation of the income tax rate reconciliation and disaggregation of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2025. ASU 2023-09 can be applied either prospectively or retrospectively and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its combined financial statements and accompanying notes.

***Disaggregation of Income Statement Expenses***

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220-40), to improve the disclosures of expenses by requiring public business entities to provide further disaggregation of relevant expense captions (i.e., employee compensation, depreciation, intangible asset amortization) in a separate note to the financial statements, a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and the total amount of selling expenses and, in an annual reporting period, an entity's definition of selling expenses. The transition method is prospective with the retrospective method permitted, and the ASU will be effective for the Company for its annual period ending December 31, 2027 and interim periods for the interim period beginning January 1, 2028. The Company is currently evaluating the impact on its disclosures.

**3. Collaboration, License and Research Agreements** 

***Research Collaboration and License Agreement and Securities Purchase Agreement with Bristol Myers Squibb Company***

In November 2023, Avidity entered into a Research Collaboration and License Agreement (the "BMS Collaboration Agreement") with Bristol Myers Squibb Company ("BMS") to expand on its research with MyoKardia Inc. ("MyoKardia"). In connection with the BMS Collaboration Agreement, Avidity recognized revenue of $7.8 million and $6.8 million for the nine months ended September 30, 2025 and 2024, respectively. There were no collaboration receivables related to the BMS Collaboration Agreement in any of the periods presented.

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***Research Collaboration and License Agreement with Eli Lilly and Company***

In April 2019, Avidity entered into a Research Collaboration and License Agreement (the "Lilly Agreement") with Eli Lilly and Company ("Lilly") for the discovery, development and commercialization of AOC products directed against certain targets in immunology and other select indications on a worldwide basis. The Company Business recognized revenue of $10.0 million and $1.1 million for the nine months ended September 30, 2025 and 2024, respectively. In August 2025, Lilly paid the Company $10.0 million as the result of the achievement of a clinical development milestone under the Lilly Agreement for a collaboration target. There were no collaboration receivables related to the Lilly Agreement as of September 30, 2025 and December 31, 2024. There was no deferred revenue related to the Lilly Agreement at September 30, 2025.

The amounts received that have not yet been recognized as revenue are deferred on the Company Business' condensed combined balance sheets and will be recognized over the remaining research and development period until the performance obligation is satisfied. A reconciliation of the closing balance of deferred revenue related to all collaboration agreements for the nine months ended September 30, 2025 and 2024 is as follows (in thousands):

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| | |
|:---|:---|
|  Balance at January 1, 2024 | $69059 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue recognized that was included in the balance at the beginning of the period | (7138) |
|  Balance at September 30, 2024 | $61921 |
|  Balance at January 1, 2025 | $58948 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue recognized that was included in the balance at the beginning of the period | (7759) |
|  Balance at September 30, 2025 | $51189 |

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**4. Composition of Certain Combined Financial Statement Items** 

***Property and equipment, net (in thousands)***

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| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,<br>2024** |
|  Laboratory equipment | $4173 | $2030 |
|  Leasehold improvements |  | 288 |
|  Property and equipment, gross | 4173 | 2318 |
|  Less accumulated depreciation | (1403) | (1235) |
|  Total property and equipment, net | $2770 | $1083 |

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During the nine months ended September 30, 2025 and 2024, the Company Business recognized depreciation expense of $0.2 million and $0.1 million, respectively, after allocations to Avidity.

***Accrued liabilities (in thousands)***

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| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
|  Accrued manufacturing and technical development | $3847 | $496 |
|  Accrued research | 159 | 684 |
|  Other accrued liabilities | 1599 | 13 |
|  Total accrued liabilities | $5605 | $1193 |

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**5. Leases** 

***Operating Leases***

In June 2020, Avidity entered into a five-year lease agreement, as amended in December 2020, at a location in San Diego, California. Avidity entered into an expansion lease in June 2023, with both leases being assigned to the Company in connection with the Separation and terminating concurrently on November 30, 2026. The leases contain base rent of approximately $0.3 million per month with 3% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property.

Supplemental balance sheet information related to operating leases as of September 30, 2025 and December 31, 2024 is as follows (in thousands):

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| | | |
|:---|:---|:---|
|  | **As of<br>September 30,<br>2025** | **As of<br>December 31,<br>2024** |
|  Operating right-of-use asset | $3512 | $5620 |
|  Operating lease liability: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | 3967 | 3844 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-current | 312 | 2957 |
|  Total operating lease liability | $4279 | $6801 |

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The following table presents the weighted-average remaining lease term and discount rates:

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| | | |
|:---|:---|:---|
|  | **As of<br>September 30,<br>2025** | **As of<br>December 31,<br>2024** |
|  Weighted-average remaining lease term (years) | 1.17 | 1.92 |
|  Weighted-average discount rate | 5.9% | 5.9% |

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During the nine months ended September 30, 2025 and 2024, the Company Business recognized operating lease expense of $0.3 million and $0.1 million, respectively, after allocations to Avidity.

The Company Business' future minimum lease payments by lease classification as of September 30, 2025 are as follows (in thousands):

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| | |
|:---|:---|
|  | **Operating** |
|  2025 (remaining three months) | $972 |
| 2026 | 3639 |
|  Total future lease payments | 4611 |
|  Less: imputed interest | (332) |
|  Lease liability | $4279 |

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**6. Commitments and Contingencies** 

***Litigation***

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that liability has been incurred and the amount can be reasonably estimated. There are no such matters currently outstanding for which any liabilities have been accrued.

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***Contractual Obligations***

The Company Business enters into contracts in the normal course of business for contract research services, professional services, and other services and products for operating purposes. These contracts may include certain provisions that could require payments for early termination. The amount of any such termination payments will vary depending on the timing of the termination and the specific terms of the contract.

**7. Stock-Based Compensation** 

The Company Business currently has no stock-based compensation plan. Avidity has stock-based compensation plans under which it may issue common shares or restricted common shares or grant incentive stock options or non-qualified stock options for the purchase of common shares, to employees, members of the board of directors and consultants of Avidity. Avidity also has an Employee Stock Purchase Plan (the "ESPP") which allows eligible employee who are participating in the plan to purchase shares of Avidity at a discount.

Stock-based compensation has been allocated to the Company Business by using proportional cost allocation method primarily based on a percentage of the operating expense. The amounts presented are not necessarily indicative of future awards and do not necessarily reflect the costs that the Company Business would have incurred as an independent company for the periods presented.

Stock-based compensation expense is incurred related to stock option and restricted stock grants, and to shares sold under the ESPP.

The allocation of stock-based compensation expense across the Company Business' equity incentive plans described in the condensed combined financial statements was as follows (in thousands):

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| | | |
|:---|:---|:---|
|  | **Nine Months Ended<br>September 30,** | **Nine Months Ended<br>September 30,** |
|  | **2025** | **2024** |
|  Research and development expense | $2145 | $1063 |
|  General and administrative expense | 1982 | 1024 |
|  Total stock-based compensation expense | $4127 | $2087 |

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**8. Income Taxes** 

The Company Business recognized income tax benefit of $0.2 million and income tax expense of $6.6 million for the nine months ended September 30, 2025 and 2024, respectively, resulting in effective tax rates of 1% for September 30, 2025, and (95.3%) for September 30, 2024. The effective tax rate for the nine months ended September 30, 2025 varies from the U.S. federal statutory tax rate of 21% primarily due to the full valuation allowance against all its deferred tax assets. The effective tax rate for the nine months ended September 30, 2024, varies from the U.S. federal statutory tax rate of 21% primarily due to the current income tax expense arising from the recognition of deferred revenue for tax purposes, and the increase in the valuation allowance corresponding to the deferred revenue. As of September 30, 2025 and December 31, 2024, included in other long-term liabilities is a balance of $0.6 million and $0.6 million, respectively, which represents gross unrecognized tax benefits less federal benefit of state tax.

**9. Related Party Transactions** 

***Net Parent Investment***

The Company Business has not historically operated as a standalone business and the condensed combined financial statements are derived from the consolidated financial statements and accounting records of Avidity. The following disclosure summarizes activity between the Company Business and Avidity, including the affiliates of Avidity that are not part of the planned spin-off.

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Net transfers from Avidity represent the net effect of transactions between Avidity and the Company Business prior to the Separation. The components of net transfers from Avidity are as follows (in thousands):

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| | | |
|:---|:---|:---|
|  | **September 30,** | **September 30,** |
|  | **2025** | **2024** |
|  Net transfers from Parent as reflected in the Combined Statement of Cash Flows | $22443 | $14338 |
|  Non-cash income tax (benefit) expense | (176) | 6641 |
|  Stock-based compensation | 4127 | 2087 |
|  Lease expense for Avidity | (1812) | (2334) |
|  Depreciation for Avidity | (256) | (170) |
|  Net transfers from Parent as reflected in the Combined Statement of Changes in Deficit | $24326 | $20562 |

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***Cost Allocations***

The condensed combined financial statements reflect allocations of certain expenses from the financial statements of Avidity, including research and development expenses and general and administrative expenses. These allocations include, but are not limited to, executive management, employee compensation and benefits, facilities and operations, information technology, business development, financial services (such as accounting, audit, and tax), legal, insurance, and stock-based compensation.

These allocations to the Company are reflected in the condensed combined statements of operations and comprehensive loss as follows (in thousands):

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| | | |
|:---|:---|:---|
|  | **Nine Months Ended<br>September 30,** | **Nine Months Ended<br>September 30,** |
|  | **2025** | **2024** |
|  **Cost allocations:** |  |  |
|  Research and development expense | $9688 | $4502 |
|  General and administrative expense | 8079 | 3211 |
|  **Total cost allocations** | $17767 | $7713 |

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Management believes these cost allocations are a reasonable reflection of services provided to, of the benefit derived by, the Company Business during the periods presented. The allocations may not, however, be indicative of the actual expenses that would have been incurred had the Company Business operated as a standalone public company. Actual costs that may have been incurred if the Company had been a standalone public company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by the Company Business employees, and strategic decisions made in areas such as research and development, information technology and infrastructure.

***Stock-Based Compensation***

The Company Business' employees participate in Avidity's stock-based compensation plans, the costs of which have been allocated to the Company Business and recorded in research and development and general and administrative expenses in the condensed combined statements of operations and comprehensive loss. Refer to Note 7 for additional information.

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**10. Segment Information** 

Our operations constitute a single operating and reportable segment and reflects how Avidity's CEO, who is the Chief Operating Decision Maker ("CODM"), manages the Company Business, including allocating resources and measuring performance. The Company Business derives its revenues from its research collaboration and license agreements with BMS and Lilly, which are further described in "Note 3 – Collaboration, License and Research Agreements." Segment performance is measured based on net loss, which the CODM uses to evaluate the results of the segment and to make operational decisions when managing the Company Business, such as how to allocate the resources of the business to advance our preclinical and research programs and to monitor budgeted to actual expenditures. The measure of segment assets is reported on the combined balance sheets as total combined assets. The following table presents financial information, including significant segment expenses, which are regularly provided to the CODM and included within combined net loss. Research and development expenses and general and administrative expenses are adjusted to exclude depreciation and stock-based compensation for segment presentation. Other segment items include depreciation, stock-based compensation, other income, and income tax expense (in thousands):

The following table presents financial information, including significant segment expenses, which are regularly provided to the CODM and included within combined net loss (in thousands):

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| | | |
|:---|:---|:---|
|  | **Nine Months Ended<br>September 30** | **Nine Months Ended<br>September 30** |
|  | **2025** | **2024** |
|  Collaboration revenue | $17759 | $7924 |
|  Research and development | 27680 | 10523 |
|  General and administrative | 6280 | 2167 |
|  Total other segment items | 4164 | 8844 |
|  **Net loss and comprehensive loss** | $(20365) | $(13610) |

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**11. Subsequent Events** 

The Company Business evaluated subsequent events to assess the need for potential recognition and disclosure in this report through December 10, 2025, the date on which these condensed combined financial statements were available to be issued. Based upon this evaluation, it was determined that no additional subsequent events required recognition or disclosure in these condensed combined financial statements, other than those described in Note 1.