EFFECTIVE UNDER SECTION 12.2.3 AND
THE [***] LICENSE GRANTED UNDER CLAUSE (II) ABOVE SHALL AUTOMATICALLY CONVERT TO
AN EXCLUSIVE LICENSE, WITH THE RIGHT TO GRANT SUBLICENSES AS SET FORTH IN
SECTION 5.2.2, AND (B) UPON THE CONCLUSION OF THE ARBITRATION PROCESS IN
REGULUS' FAVOR, OR REGULUS' COMPLIANCE WITH THE ARBITRATOR'S FINAL AWARD WITHIN
THE CURE PERIOD SET FORTH IN CLAUSE (A) ABOVE IF THE CONCLUSION IS IN GSK'S
FAVOR, THE [***] LICENSE GRANTED UNDER CLAUSE (II) ABOVE SHALL TERMINATE AND
REVERT TO REGULUS.
DURING THE ENTIRE TIME PENDING THE FINAL RESOLUTION OF ANY
SUCH DISPUTE, REGULUS SHALL NOT GRANT ANY LICENSE TO ANY THIRD PARTY UNDER THE
REGULUS TECHNOLOGY OR COLLABORATION TECHNOLOGY WITH RESPECT TO THE SAME SUBJECT
MATTER, WHICH WOULD MATERIALLY CONFLICT OR OTHERWISE MATERIALLY INTERFERE WITH
THE POTENTIAL EXCLUSIVE LICENSE TO GSK UNDER THIS SECTION 12.7.3(D).
(E)
THE PARTIES UNDERSTAND AND AGREE THAT, DUE TO THE NATURE OF
THE COLLABORATION UNDER THIS AGREEMENT, DAMAGES TO GSK RESULTING FROM [***]
EVENT UNDER THIS AGREEMENT WOULD BE DIFFICULT TO CALCULATE ACCURATELY, AND THUS
THE REMEDY SET FORTH IN SECTIONS [***] REPRESENTS A RATIONAL RELATIONSHIP
BETWEEN THE DAMAGES FROM [***] ON THE ONE HAND, AND THE CUMULATIVE LOSS TO GSK
OF ITS EXPECTATION INTEREST AND ITS LOST INVESTMENT AND LOST POTENTIAL RETURN ON
INVESTMENT.
12.7.4
UPON TERMINATION BY REGULUS FOR CAUSE (OTHER THAN [***] UNDER
SECTION 12.2; TERMINATION BY REGULUS FOR GSK INSOLVENCY UNDER SECTION 12.6.
(A)
IN THE EVENT OF A TERMINATION OF THIS AGREEMENT BY REGULUS
PURSUANT TO SECTION 12.2.1 OR 12.2.2, AS APPLICABLE, WITH RESPECT TO ANY
COLLABORATION TARGET(S),
110
OR IN ITS ENTIRETY, UPON THE UNCURED MATERIAL BREACH OF GSK [***], IN WHICH
EVENT SECTION 12.7.2 SHALL APPLY) WHERE SUCH MATERIAL BREACH PERTAINS TO [***]
OR MORE COLLABORATION TARGETS, OR TO THE AGREEMENT AS A WHOLE, OR IN THE EVENT
OF A TERMINATION OF THIS AGREEMENT IN ITS ENTIRETY BY REGULUS PURSUANT TO
SECTION 12.6 UPON THE INSOLVENCY OF GSK:
(I)
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, ALL
LICENSES GRANTED TO GSK WITH RESPECT TO COLLABORATION COMPOUNDS AND LICENSED
PRODUCTS DIRECTED TO SUCH TERMINATED COLLABORATION TARGET(S) SHALL TERMINATE AND
ALL SUCH COLLABORATION COMPOUNDS AND LICENSED PRODUCTS SHALL BE DEEMED REFUSED
CANDIDATES, REFUSED CANDIDATE PRODUCTS OR (IF GSK HAS PREVIOUSLY EXERCISED ITS
PROGRAM OPTION AS OF THE EFFECTIVE DATE OF SUCH TERMINATION) RETURNED LICENSED
PRODUCTS, AND THE EXCLUSIVE LICENSES GRANTED TO REGULUS UNDER SECTION 5.1.2 AND
SECTION 5.1.3 SHALL APPLY WITH RESPECT TO SUCH REFUSED CANDIDATES AND REFUSED
CANDIDATE PRODUCTS, AND RETURNED LICENSED PRODUCTS, RESPECTIVELY;
(II)
REGULUS SHALL BE OBLIGATED TO PAY GSK ANY APPLICABLE REVERSE
ROYALTIES UNDER SECTION [***] WITH RESPECT TO ANY SUCH REFUSED CANDIDATE
PRODUCTS, AND UNDER SECTION [***] WITH RESPECT TO ANY SUCH RETURNED LICENSED
PRODUCTS;
(III)
REGULUS SHALL HAVE NO FURTHER OBLIGATION TO GSK TO PERFORM ANY
DEVELOPMENT OR MANUFACTURING ACTIVITIES HEREUNDER WITH RESPECT TO THE TERMINATED
COLLABORATION TARGET(S);
(IV)
GSK SHALL HAVE NO FURTHER OBLIGATION TO REGULUS TO PERFORM ANY
DEVELOPMENT, MANUFACTURING OR COMMERCIALIZATION ACTIVITIES HEREUNDER WITH
RESPECT TO THE