FRACTION OF A SHARE ROUNDED
DOWN TO THE NEAREST WHOLE SHARE.
NOTWITHSTANDING THE FOREGOING, IF THE
CONVERSION OF THIS NOTE PURSUANT TO THIS SECTION 2(A) WOULD OTHERWISE RESULT IN
THE HOLDER, TOGETHER WITH ITS AFFILIATES, OWNING MORE THAN [***] OF THE
OUTSTANDING CAPITAL STOCK OF THE MAKER, CALCULATED ON AN AS-CONVERTED
FULLY-DILUTED BASIS (INCLUDING AS OUTSTANDING SHARES OF CAPITAL STOCK ISSUABLE
UPON EXERCISE OR CONVERSION OF ALL OUTSTANDING STOCK OPTIONS, WARRANTS OR OTHER
CONVERTIBLE SECURITIES OF THE MAKER, INCLUDING ANY OTHER CONVERTIBLE SECURITIES
HELD BY GSK), IMMEDIATELY FOLLOWING THE CONVERSION OF THE NOTE [***], THE
OUTSTANDING AMOUNT SHALL BE CONVERTED EITHER PURSUANT TO THE FIRST SENTENCE OF
THIS SECTION 2(A) OR, [***], INTO (I) THAT NUMBER OF SHARES OF QUALIFIED
FINANCING SECURITIES THAT WOULD RESULT IN THE MAKER REACHING, BUT NOT EXCEEDING,
[***], AND (II) AN AMOUNT IN CASH EQUAL TO THE DIFFERENCE BETWEEN (A) THE
PRODUCT OF (1) THE NUMBER OF [***] SHARES ISSUED UPON CONVERSION, MULTIPLIED BY
(2) THE QUALIFIED FINANCING PRICE AND (B) THE OUTSTANDING AMOUNT.
THE MAKER
SHALL NOTIFY THE HOLDER IN WRITING OF THE ANTICIPATED OCCURRENCE OF A QUALIFIED
FINANCING AT LEAST [***] DAYS PRIOR TO THE CLOSING DATE OF THE QUALIFIED
FINANCING.
3.
REPAYMENT.
(A)
IF NO QUALIFIED FINANCING OR CHANGE OF CONTROL HAS OCCURRED PRIOR
TO THE ANNIVERSARY DATE, THE OUTSTANDING AMOUNT, IF ANY, WILL BE [***] OR, AT
THE ELECTION OF REGULUS AND WITH THE CONSENT OF ALNYLAM AND/OR ISIS, AS THE CASE
MAY BE, REGISTERED AND UNRESTRICTED SHARES OF ALNYLAM COMMON STOCK AND/OR ISIS
COMMON STOCK, WITH A VALUE EQUAL TO [***] OF THE THEN OUTSTANDING AMOUNT,
PROVIDED THAT SHARES OF ALNYLAM AND/OR ISIS COMMON STOCK, AS THE CASE MAY BE,
ARE THEN TRADED ON A NATIONAL SECURITIES EXCHANGE AND PROVIDED FURTHER THAT THE
AVERAGE DAILY TRADING VOLUME FOR SUCH SHARES, AS THE CASE MAY BE, IS GREATER
THAN [***] OF THE SHARES PROPOSED TO BE ISSUED TO THE HOLDER.
FOR PURPOSES OF
THIS SECTION 3(A), THE VALUE OF ONE SHARE OF COMMON STOCK SHALL BE EQUAL TO THE
AVERAGE CLOSING PRICE PER SHARE OF SUCH COMMON STOCK, AS REPORTED ON THE
NATIONAL SECURITIES EXCHANGE ON WHICH THE STOCK IS THEN TRADED, DURING THE [***]
TRADING DAY PERIOD ENDING ON (AND INCLUDING) THE DAY THAT IS TWO DAYS PRIOR TO
THE ANNIVERSARY DATE.
(B)
IN THE EVENT THE HOLDER TERMINATES THE LICENSE AND OPTION
AGREEMENT WITHOUT CAUSE OR THE MAKER TERMINATES THE LICENSE AND OPTION AGREEMENT
AS A RESULT OF A MATERIAL BREACH BY THE HOLDER, THIS NOTE MAY BE PREPAID IN
CASH, IN WHOLE BUT NOT IN PART AND WITHOUT ANY PRE-PAYMENT PENALTY, PRIOR TO THE
ANNIVERSARY DATE AT THE ELECTION OF THE MAKER AND WITHOUT THE PRIOR WRITTEN
CONSENT OF THE HOLDER.
4.
EVENTS OF DEFAULT.
THIS NOTE SHALL BECOME IMMEDIATELY DUE AND
PAYABLE WITHOUT NOTICE OR DEMAND (BUT SUBJECT TO THE CONVERSION RIGHTS SET FORTH
HEREIN) UPON THE OCCURRENCE AT ANY TIME OF ANY OF THE FOLLOWING EVENTS OF
DEFAULT (INDIVIDUALLY, AN "EVENT OF DEFAULT" AND COLLECTIVELY,