EXHIBIT 10.2

LICENSE AND COLLABORATION AGREEMENT

by and between

ALNYLAM PHARMACEUTICALS, INC.

and

THE MEDICINES COMPANY

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

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LICENSE AND COLLABORATION AGREEMENT

THIS LICENSE AND COLLABORATION AGREEMENT (this “Agreement”), effective as of
February 3, 2013 (the “Effective Date”), by and between Alnylam Pharmaceuticals,
Inc., a corporation organized and existing under the laws of the State of
Delaware (“Alnylam”) and, The Medicines Company, a corporation organized and
existing under the laws of Delaware (“MedCo”).

RECITALS:

WHEREAS, Alnylam owns or controls certain fundamental intellectual property
relating to RNA interference, and is developing proprietary therapeutic products
in the Field Targeting the human PCSK9 gene, including ALN-PCS02 and ALN-PCSsc
(all as defined below);

WHEREAS, MedCo desires to develop and commercialize such products in the
Territory (as defined below);

WHEREAS, Alnylam desires to collaborate with MedCo in the further development of
such products in the Territory as set forth herein; and

WHEREAS, Alnylam and MedCo believe that a license and collaboration for such
purpose on the terms and conditions of this Agreement would be desirable.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the Parties hereby agree as follows:

1. DEFINITIONS

Unless specifically set forth to the contrary herein, the following terms,
whether used in the singular or plural, shall have the respective meanings set
forth below:

1.1 [Intentionally Omitted].

1.2 “Acquired Party” has the meaning set forth in Section 6.7.

1.3 “Acquirer” has the meaning set forth in Section 6.7.

1.4 “Additional Alnylam In-Licenses” means the agreements set forth in Section C
of Schedule D.

1.5 “Affiliate” means, with respect to a Person, any other Person which
controls, is controlled by, or is under common control with the applicable
Person. For purposes of this definition, “control” shall mean: (a) in the case
of corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the stock or shares (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction)
entitled to vote for the election of directors, or otherwise having the power to
control or direct the affairs of such Person; and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest or the power to direct the management and policies
of such non-corporate entities.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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1.6 “ALN-PCS02” means the siRNA Product Controlled by Alnylam comprising the
siRNA [***] formulated in a lipid-based nanoparticle, as further described on
Schedule A.

1.7 “ALN-PCSsc” means an siRNA Product Controlled by Alnylam comprising an siRNA
conjugated with a triantennary Ga1NAc molecule, as further described on Schedule
B.

1.8 “Alnylam Collaboration IP” means (a) any improvement, discovery or Know-How,
patentable or otherwise, first conceived or reduced to practice or, with respect
to inventions and discoveries other than patentable inventions, otherwise
identified, discovered, made or developed, solely by individuals who are
employees, agents or consultants of Alnylam or its Affiliates and Controlled by
Alnylam at any time during the Term, in each case in the conduct of the
Collaboration, and (b) any Patent Rights which claim such improvements,
discoveries or Know-How. Alnylam Collaboration IP excludes Alnylam’s interest in
Joint Collaboration IP. Patent Rights constituting Alnylam Collaboration IP are
either Alnylam Core Technology Patent Rights or Alnylam Product-Specific Patent
Rights, as the case may be.

1.9 “Alnylam Core Technology Patent Rights” means Patent Rights Controlled by
Alnylam at any time during the Term that are reasonably necessary or useful to
Develop, Manufacture or Commercialize Licensed Products, in each case other than
Alnylam Product-Specific Patent Rights and Patent Rights comprising Joint
Collaboration IP. Alnylam Core Technology Patent Rights includes the Patent
Rights set forth on Schedule C-1 and may include Patent Rights that constitute
Alnylam Collaboration IP.

1.10 “Alnylam Indemnitees” has the meaning set forth in Section 10.1.

1.11 “Alnylam In-Licenses” means (a) the Existing Alnylam In-Licenses and
(b) any agreement between Alnylam (or its Affiliates) and a Third Party entered
into after the Effective Date pursuant to which Alnylam acquires Control of
Know-How or Patent Rights that are reasonably necessary or useful to Develop,
Manufacture or Commercialize Licensed Products in the Field in the Territory,
but in the case of any such agreement described in clause (b), solely to the
extent that such agreement is designated as an Alnylam In-License pursuant to
Section 6.4.2.2.

1.12 “Alnylam Know-How” means Know-How Controlled by Alnylam at any time during
the Term that is reasonably necessary or useful to Develop, Manufacture and/or
Commercialize Licensed Products in the Field in the Territory.

1.13 “Alnylam Patent Rights” means Alnylam Core Technology Patent Rights and
Alnylam Product-Specific Patent Rights.

1.14 “Alnylam Product-Specific Patent Rights” means Patent Rights Controlled by
Alnylam at any time during the Term that solely claim (a) an siRNA Targeting the
human PCSK9 gene contained in a Licensed Product, and pharmaceutical
compositions thereof; (b) an siRNA Product or

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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specific components thereof to the extent that such components are unique to
said siRNA Products; (c) methods of using the compositions described in clause
(a) or (b) above as a human therapeutic or prophylactic, or to Target the human
PCSK9 gene, or to inhibit expression of human PCSK9, and foreign equivalents of
such method claims; (d) methods and compositions directed to the synthesis or
analysis of the compositions described in clause (a) or (b); or (e) Alnylam
Collaboration IP that is applicable solely to a Licensed Product; provided,
however, that (y) any such patents that include claims that are directed to
subject matter applicable to siRNA or siRNA delivery in general will not be
considered Alnylam Product-Specific Patent Rights but will be considered Alnylam
Core Technology Patent Rights. Alnylam Product-Specific Patent Rights excludes
Joint Collaboration IP, includes the Patent Rights set forth on Schedule C-2 and
may include Patent Rights that constitute Alnylam Collaboration IP.

1.15 “Alnylam Technology” means, collectively, Alnylam Know-How, Alnylam Patent
Rights, Alnylam Collaboration IP and Alnylam’s interest in Joint Collaboration
IP.

1.16 “Bankrupt Party” has the meaning set forth in Section 6.5.

1.17 “Breaching Party” has the meaning set forth in Section 12.2.2.

1.18 “Bulk Drug Product” means formulated Bulk Drug Substance in bulk form prior
to filling and finishing.

1.19 “Bulk Drug Substance” means an siRNA (including chemical modifications and
covalent conjugates) or other active ingredient in bulk form manufactured for
use as an active pharmaceutical ingredient in a Licensed Product.

1.20 “Business Day” means a day on which banking institutions in Boston,
Massachusetts, USA and Parsippany, New Jersey, USA are open for business,
excluding any Saturday or Sunday.

1.21 “Calendar Quarter” means the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30 and December 31 of
each Calendar Year; provided, that (a) the first Calendar Quarter of the Term
shall begin on the Effective Date and end on the first to occur of
March 31, June 30, September 30 or December 31 thereafter and the last Calendar
Quarter of the Term shall end on the last day of the Term, and (b) the first
Calendar Quarter of a Royalty Term for a Licensed Product in a country shall
begin on the First Commercial Sale of such Licensed Product in such country and
end on the first to occur of March 31, June 30, September 30 or December 31
thereafter and the last Calendar Quarter of a Royalty Term shall end on the last
day of such Royalty Term.

1.22 “Calendar Year” means each successive period of twelve (12) months
commencing on January 1 and ending on December 31; provided, that (a) the first
Calendar Year of the Term shall begin on the Effective Date and end on the first
December 31 thereafter and the last Calendar Year of the Term shall end on the
last day of the Term, and (b) the first Calendar Year of a Royalty Term for a
Licensed Product in a country shall begin on the First Commercial Sale of such
Licensed Product in such country and end on the first December 31 thereafter and
the last Calendar Year of the Term shall end on the last day of such Royalty
Term.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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1.23 “Challenge” has the meaning set forth in Section 12.2.4.

1.24 “Challenging Party” has the meaning set forth in Section 12.2.4.

1.25 “Change of Control” means, with respect to a Party, any of the following:
(a) the sale or disposition of all or substantially all of the assets of such
Party or its direct or indirect controlling Affiliate to a Third Party, other
than to an entity of which more than fifty percent (50%) of the voting capital
stock are owned after such sale or disposition by shareholders of such Party or
its direct or indirect controlling Affiliate (in either case, whether directly
or indirectly through any parent entity); or (b) (i) the acquisition by a Third
Party, alone or together with any of its Affiliates, other than an employee
benefit plan (or related trust) sponsored or maintained by such Party or any of
its Affiliates, of more than fifty percent (50%) of the outstanding shares of
voting capital stock of such Party or its direct or indirect controlling
Affiliate, or (ii) the acquisition, merger or consolidation of such Party or its
direct or indirect controlling Affiliate with or into another Person, other
than, in the case of this clause (b), an acquisition or a merger or
consolidation of such Person or its controlling Affiliate in which the holders
of shares of voting capital stock of such Person or its controlling Affiliate,
as the case may be, immediately prior to such acquisition, merger or
consolidation will beneficially own, directly or indirectly, at least fifty
percent (50%) of the shares of voting capital stock of the acquiring Third Party
or the surviving corporation in such acquisition, merger or consolidation, as
the case may be, immediately after such acquisition, merger or consolidation.

1.26 “Clinical Study” means a Phase I Study, Phase II Study, Phase III Study, or
Pivotal Study, as applicable; but excluding any Post-Approval Studies.

1.27 “Collaboration” means the activities of the Parties in the Development and
Manufacture of Licensed Products under this Agreement and/or the Development
Supply Agreement.

1.28 “Combination Product” has the meaning set forth in Section 1.89.

1.29 “[***]” has the meaning set forth in Section 7.4.4.

1.30 “[***]” has the meaning set forth in Section 7.4.4.

1.31 “Commercialization” or “Commercialize” means any and all activities
directed to marketing, promoting, distributing, importing, exporting, offering
to sell and/or selling a product, including the conduct of Post-Approval
Studies, and activities directed to obtaining pricing and reimbursement
approvals, as applicable.

1.32 “Commercially Reasonable Efforts” means (a) with respect to the obligations
of a Party under this Agreement that relate to the Development, Manufacture or
Commercialization of a Licensed Product, the carrying out of such obligations in
a diligent, expeditious and sustained manner using efforts and resources,
including reasonably necessary personnel and financial resources, that

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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biopharmaceutical companies of comparable size to, and comparable resources of,
such Party typically devote to their own products of similar market potential at
a similar stage in development or product life, taking into account the
following factors to the extent reasonable and relevant: issues of safety and
efficacy, product profile, competitiveness of such Licensed Product and
alternative Third Party products (but not alternative products Controlled by the
Party to which the efforts obligation applies which are not Licensed Products)
in the marketplace, the patent or other proprietary position of such Licensed
Product, the regulatory structure involved and the potential profitability of
such Licensed Product marketed or to be marketed, but excluding from
consideration any financial considerations of MedCo to Alnylam under this
Agreement; provided, however, that to the extent the obligations of MedCo under
this Agreement relate to the Development, Manufacture or Commercialization of a
Licensed Product for China, such efforts and resources shall instead be those
that MedCo typically devotes to its own products of similar market potential at
a similar stage in development or product life, taking into account the factors
set forth above; and (b) with respect to other obligations under this Agreement,
the carrying out of such obligations in a diligent, expeditious and sustained
manner using efforts and resources, including reasonably necessary personnel and
financial resources, that biopharmaceutical companies of comparable size and
resources typically devote to similar obligations.

1.33 “Competitive Infringement” has the meaning set forth in Section 11.4.1.

1.34 “Confidential Information” means with respect to a Party but subject to
Section 8.1(a)(i)-(iv), any and all confidential or proprietary information and
data, including (with respect to Alnylam as the disclosing Party) Alnylam
Technology, (with respect to MedCo as the disclosing Party) MedCo Technology,
and all other scientific, pre-clinical, clinical, regulatory, manufacturing,
marketing, financial and commercial information or data, whether communicated in
writing or orally or by any other method, which is provided by one Party to the
other Party in connection with this Agreement. Alnylam Technology is
Confidential Information of Alnylam. MedCo Technology is Confidential
Information of MedCo. Joint Collaboration IP is the Confidential Information of
both Parties, with each Party being considered both the disclosing Party and the
receiving Party.

1.35 “Control”, “Controls” or “Controlled by” means, with respect to any
Know-How, Patent Right or other intellectual property right and a Party, the
ability of such Party or its Affiliates (whether by ownership or license, other
than pursuant to a license granted under this Agreement) to assign, transfer, or
grant access to, or a license or sublicense of, such item or right as provided
for herein without violating the terms of any agreement or other arrangement
with any Third Party; provided that, with respect to rights to any Third Party
Know-How, Patent Rights or other intellectual property right that are licensed
to, or otherwise obtained by, (i) a Party or its Affiliates pursuant to an
agreement entered into by such Party or any of its Affiliates after the
Effective Date or (ii) Alnylam or its Affiliates pursuant to any Additional
Alnylam In-License, such Third Party Know-How, Patent Rights or other
intellectual property right shall be deemed not to be under the Control of such
Party or its Affiliates, or Alnylam or its Affiliates, respectively, unless and
until the agreement pursuant to which such rights are obtained becomes an
In-License pursuant to Section 6.4.2.

1.36 “Costs” means (a) with respect to the Development, (i) the direct and
documented out-of-pocket costs and expenses incurred by a Party or its
Affiliates in conducting activities under the

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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Transaction Agreements, and (ii) FTE Costs of internal personnel that are
attributable or reasonably allocable to such activities, in each case as
determined in accordance with GAAP, and (b) with respect to the supply of
Licensed Product by Alnylam pursuant to Sections 5.1(a)(i) and (ii), the
reasonable internal and external costs of Alnylam incurred in Manufacturing or
having Manufactured such Licensed Product (i) to the extent that such Licensed
Product is Manufactured by Alnylam, the fully allocated cost of Manufacture of
such Licensed Product, consisting of direct material and direct labor costs,
plus Manufacturing overhead attributable to such Licensed Product (including
facilities start-up costs, all directly incurred Manufacturing variances and a
reasonable allocation of related Manufacturing administrative and facilities
costs for such Licensed Product, but excluding corporate administrative overhead
and/or costs associated with excess capacity), all calculated strictly in
accordance with GAAP consistently applied by Alnylam, and (ii) to the extent
that such Licensed Product is Manufactured by a Third Party manufacturer, the
actual fees paid by Alnylam to the Third Party for the Manufacture, supply and
packaging of such Licensed Product and any reasonable costs, including direct
labor costs, actually incurred by Alnylam in managing or overseeing the Third
Party relationship.

1.37 “Cover,” “Covering” or “Covers” means, as to a product and Patent Rights,
that, in the absence of a license granted under, or ownership of, such Patent
Rights, the research, development, manufacture, use, offer for sale, sale, or
importation of such product would infringe such Patent Rights or, as to a
pending claim included in such Patent Rights, the research, development,
manufacture, use, offer for sale, sale, or importation of such product would
infringe such Patent Rights if such pending claim were to issue in an issued
patent.

1.38 “Development,” “Developing” or “Develop” means the research and development
of Licensed Products, including activities related to the generation,
characterization, optimization, construction, expression, use and production of
Licensed Products, any other research and development activities related to the
testing and qualification of Licensed Products, including toxicology studies,
statistical analysis and report writing, pre-clinical testing, Clinical Studies
and regulatory affairs, product approval and registration activities, but
excluding Post-Approval Studies.

1.39 “Development Costs Cap” has the meaning set forth in Section 2.3.1.

1.40 “Development Supply Agreement” has the meaning set forth in Section 5.1.

1.41 “Dispute” has the meaning set forth in Section 13.12.

1.42 “Effective Date” has the meaning set forth in the preamble.

1.43 “EMA” means the European Medicines Agency and any successor governmental
authority having substantially the same function.

1.44 “EU” means the European Union, as its membership may be altered from time
to time, and any successor thereto.

1.45 “[***]” has the meaning set forth in Section 7.4.4.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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1.46 [Intentionally Omitted].

1.47 “Existing Alnylam In-Licenses” means (a) the Third Party agreements
identified as such in Section A of Schedule D and (b) any Additional Alnylam
In-License included within the definition of Existing Alnylam In-Licenses
pursuant to Section 6.4.2.3.

1.48 “Existing Alnylam Third Party Agreements” means the Third Party agreements
identified as such in Section B of Schedule D.

1.49 “Extra Early Development Costs” has the meaning set forth in Section 2.3.1.

1.50 “FDA” means the United States Food and Drug Administration and any
successor governmental authority having substantially the same function.

1.51 “Field” means the treatment, palliation and/or prevention of all human
diseases.

1.52 “Finished Product” means the finished product formulation of a Licensed
Product, containing Bulk Drug Product, filled into unit packages (but excluding,
in the case of supply by Alnylam or its Affiliates, any automated delivery
device such as an “autoinjector”) for final labeling and packaging.

1.53 “First Commercial Sale” means, with respect to a Licensed Product in a
country, the first sale by MedCo or its Related Parties for end use or
consumption of such Licensed Product in such country after all Regulatory
Approvals legally required for such sale have been granted by the Regulatory
Authority of such country.

1.54 “FTE” means [***] hours of work devoted to or in support of the Development
or Manufacture of a Licensed Product, that is carried out by one or more
qualified scientific or technical employees or contract personnel of a Party or
its Affiliates.

1.55 “FTE Cost” means, for any period, the FTE Rate multiplied by the number of
FTEs in such period; provided, however, that for purposes of such calculation,
no individual may account for more than one FTE in any Calendar Year.

1.56 “FTE Rate” means [***] U.S. Dollars ($[***]) per FTE, increased annually
beginning on January 1, 2014 and thereafter on January 1 of each succeeding year
by the percentage increase in the CPI as of December 31 of the then most
recently ended calendar year over the level of the CPI on December 31, 2012. As
used in this definition, “CPI” shall mean the Consumer Price Index – Urban Wage
Earners and Clerical Workers, U.S. City Average, All Items, 1982-84 = 100,
published by the United States Department of Labor, Bureau of Labor Statistics
(or its successor equivalent index) in the United States.

1.57 “GAAP” means generally accepted accounting principles as practiced in the
United States or, to the extent applicable, IFRS (International Financial
Reporting Standards).

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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1.58 “Generic Competition” has the meaning set forth in Section 7.4.3.

1.59 “Generic Product” means, with respect to a Licensed Product in a country,
another pharmaceutical product that (a) is sold by a Third Party other than a
Related Party of MedCo under license from Medco in such country, (b) is
authorized for use in such country in one or more of the indications for which
such Licensed Product has Regulatory Approval in such country, (c) contains the
same active ingredient(s) as such Licensed Product or a bioequivalent thereof,
and (d) was approved for sale in such country by reference to the same or a
subset of the same information that was used for obtaining the Regulatory
Approval for such Licensed Product in such country without such Third Party
being granted a license to such information by MedCo or its Related Parties.

1.60 “Governmental Authority” means any applicable government authority, court,
tribunal, arbitrator, agency, legislative body, commission or other
instrumentality of (a) any government of any country or territory, (b) any
state, province, county, city or other political subdivision thereof or (c) any
supranational body.

1.61 “IND” means an Investigational New Drug application, Clinical Trial
Application or similar application or submission for approval to conduct human
clinical investigations filed with or submitted to a Regulatory Authority in
conformance with the requirements of such Regulatory Authority.

1.62 “Indemnitee” has the meaning set forth in Section 10.3.

1.63 “Initial Development Budget” has the meaning set forth in Section 2.2.1.

1.64 “Initial Development Plan” has the meaning set forth in Section 2.2.1.

1.65 “In-Licenses” means, collectively, the Alnylam In-Licenses and the MedCo
In-Licenses.

1.66 “Joint Collaboration IP” means, collectively, (a) any improvement,
discovery or Know-How, patentable or otherwise, first conceived or reduced to
practice or, with respect to inventions and discoveries other than patentable
inventions, otherwise identified, discovered, made or developed, jointly by
individuals who are employee(s), agent(s) or consultant(s) of Alnylam or its
Affiliates, on the one hand, and individuals who are employee(s), agent(s) or
consultant(s) of MedCo or its Affiliates, on the other hand, in the conduct of
the Collaboration, and (b) any Patent Rights which claim such improvements,
discoveries or Know-How during the Term.

1.67 “Joint Steering Committee” or “JSC” means the joint steering committee as
more fully described in Section 4.1.

1.68 “Know-How” means any biological materials and other tangible materials or
intangible information, including inventions, practices, methods, protocols,
formulas, knowledge, know-how, trade secrets, processes, assays, skills,
experience, techniques, governmental or regulatory correspondence (including
conversation logs), and results of experimentation and testing, including
pharmacological, toxicological and pre-clinical and clinical test data and
analytical and quality control data, patentable or otherwise.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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1.69 “Laws” means all applicable laws, statutes, rules, regulations, orders,
judgments, injunctions, ordinances or other pronouncements having the binding
effect of law of any Governmental Authority.

1.70 “Lead Product” has the meaning set forth in Section 2.2.2.

1.71 “Licensed Compound” has the meaning set forth in Section 1.89.

1.72 “Licensed Product” means any siRNA Product, including ALN-PCS02 and
ALN-PCSsc.

1.73 “Licensing Party” has the meaning set forth in Section 6.4.2.2.

1.74 “Licensor Party” has the meaning set forth in Section 12.2.4.

1.75 “Losses” has the meaning set forth in Section 10.1.

1.76 “Major Market Country” means the United States, the United Kingdom, France,
Germany, Italy, Spain, Japan, or China.

1.77 “Manufacturing” or “Manufacture” means, as applicable, all activities
associated with the production, manufacture, processing, filling, finishing,
packaging, labeling, shipping, and storage of a Licensed Product (including Bulk
Drug Substance, Bulk Drug Product and Finished Product), including process and
formulation development, process validation, stability testing, manufacturing
scale-up, pre-clinical, clinical and commercial manufacture and analytical
development, product characterization, quality assurance and quality control
development, testing and release.

1.78 “MedCo Collaboration IP” means (a) any improvement, discovery or Know-How,
patentable or otherwise, first conceived or reduced to practice or, with respect
to inventions and discoveries other than patentable inventions, otherwise
identified, discovered, made or developed, solely by individuals who are
employees, agents or consultants of MedCo or its Affiliates and Controlled by
MedCo at any time during the Term, in each case in the conduct of the
Collaboration or otherwise under this Agreement, and (b) any Patent Rights which
claim such improvements, discoveries or Know-How. MedCo Collaboration IP
excludes MedCo’s interest in Joint Collaboration IP.

1.79 “MedCo Commercialization Plan” has the meaning set forth in Section 3.2.

1.80 “MedCo Development Plan” has the meaning set forth in Section 2.2.3.

1.81 “MedCo Improvements” means any improvement, discovery or Know-How,
patentable or otherwise, that (a) is first conceived or reduced to practice, or
with respect to inventions

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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and discoveries other than patentable inventions, otherwise identified,
discovered, made or developed, solely by individuals who are employees, agents
or consultants of MedCo or its Affiliates in the course of conducting
Development, Manufacturing or Commercialization activities with respect to
Licensed Products under this Agreement, (b) is Controlled by MedCo or its
Affiliates, and (c) constitutes (i) a new use or method of use of, or a new
indication for, a Licensed Product, or (ii) an improvement that would otherwise
be dominated by Alnylam Technology, including, as applicable, formulation
technology. For clarity, MedCo Improvements excludes device technology for the
administration of a pharmaceutical product to a human.

1.82 “MedCo Indemnitees” has the meaning set forth in Section 10.2.

1.83 “MedCo In-License” means any agreement between MedCo (or its Affiliates)
and a Third Party pursuant to which MedCo Controls Know-How or Patent Rights
that are reasonably necessary or useful for the Development, Manufacture and/or
Commercialization of Licensed Products in the Territory, but solely to the
extent, if any, that such agreement is designated as a MedCo In-License pursuant
to Section 2.4(b).

1.84 “MedCo Know-How” means Know-How in MedCo Collaboration IP and MedCo’s
rights in Know-How comprising Joint Collaboration IP.

1.85 “MedCo Patent Rights” means Patent Rights in MedCo Collaboration IP (other
than MedCo’s rights in Patent Rights comprising Joint Collaboration IP).

1.86 “MedCo Technology” means, collectively, MedCo Know-How, MedCo Patent
Rights, MedCo Collaboration IP and MedCo’s interest in Joint Collaboration IP.

1.87 “MicroRNA Mimic” means a double-stranded or single-stranded oligonucleotide
or analog thereof with a substantially similar base composition as a particular
microRNA and which is designed to mimic the activity of such microRNA.

1.88 “NDA” means a New Drug Application, Biologics License Application,
Marketing Authorization Application or similar application or submission filed
with a Regulatory Authority in a country or group of countries to obtain
marketing approval for a biological, pharmaceutical or other therapeutic or
prophylactic product in that country or in that group of countries.

1.89 “Net Sales” means, for any period and for any country in the Territory, the
total aggregate amount billed during such period in such country by MedCo, its
Affiliates and its Sublicensees in such country for all sales of the Licensed
Products to Third Parties (other than to a Sublicensee of MedCo or its
Affiliates) after deducting, if not previously deducted, from the amount
invoiced or received, the following deductions to the extent actually applied or
taken with respect to such sales of Licensed Products:

(a) discounts (including trade, cash and quantity discounts), cash and non-cash
coupons, charge back payments and rebates granted to managed health care
organizations or to federal, state and local governments, their agencies, and
purchasers and reimbursers or to customers;

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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(b) actually granted credits, allowances, discounts to and chargebacks for
claims, spoiled, damaged or outdated goods, rejections or returns of the
Licensed Products, including Licensed Products returned in connection with
recalls or withdrawals;

(c) taxes and duties paid, absorbed or allowed which are directly related to the
sale of the Licensed Product;

(d) actual freight and insurance costs incurred in transporting the Licensed
Product to customers;

(e) discounts or rebates or other payments required by applicable Law, including
any governmental special medical assistance programs;

(f) customs duties, surcharges and other governmental charges incurred in
connection with the exportation or importation of the Licensed Product;

(g) fee-for-service wholesaler fees, GPO administrative fees, inventory
management fees paid to wholesalers, and any similar fees reasonably allocated
to the Licensed Product, to the extent consistent with the usual course of
dealing of MedCo or the applicable Related Party for its products other than a
Licensed Product;

(h) amounts that are written off as uncollectible in accordance with the
accounting procedures of MedCo or the applicable Related Party, consistently
applied; provided, that if any such written-off amounts are subsequently
collected, such collected amounts shall be included in Net Sales in the period
in which they are subsequently collected; and

(i) any other deduction to revenue that is not described above which is required
to be recorded as an adjustment to gross revenue for financial reporting
purposes.

Such amounts shall be determined from the books and records of MedCo or its
Related Parties, maintained in accordance with GAAP, consistently applied.

If any Licensed Product is sold as a Combination Product (as defined below), the
Net Sales from the Combination Product, for the purposes of determining
milestones and royalties, shall be determined by multiplying the Net Sales of
the Combination Product during the applicable Calendar Quarter, by the fraction,
A/(A+B), where A is the average sale price of a Sole Compound Product (as
defined below) when sold separately in finished form and B is the average sale
price of the other active compounds or active ingredients included in the
Combination Product when sold separately in finished form, in each case during
the applicable Calendar Quarter or, if sales of both the Sole Compound Product
and the other active compounds or active ingredients did not occur in such
period, then in the most recent Calendar Quarter in which sales of both
occurred. If such average sale price cannot be determined for both the Sole
Compound Product and all other active compounds or active ingredients included
in the Combination Product, Net Sales for the purposes of determining milestones
and royalties shall be calculated by multiplying the Net Sales of the
Combination Product by the fraction of C/(C+D) where C is the fair market value
of the Sole Compound Product and D is the fair market value of all other

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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active compounds or active ingredients included in the Combination Product. In
such event, MedCo shall in good faith make a determination of the respective
fair market values of the Sole Compound Product and all other active compounds
or active ingredients included in the Combination Product, and shall notify
Alnylam of such determination and provide Alnylam with MedCo’s basis for such
determination. If Alnylam in good faith does not agree with such determination,
Alnylam shall give MedCo written notice of its disagreement within thirty
(30) days after receiving the relevant report pursuant to Sections 7.3 or 7.4,
and the provisions of Section 13.12 shall apply. “Licensed Compound” means an
siRNA Product subject to a license granted by Alnylam to MedCo under
Section 6.1. “Combination Product” means a product that contains one or more
Licensed Compounds and one or more therapeutically active compounds or active
ingredients that are not Licensed Compounds. “Sole Compound Product” means a
product containing no active compounds or active ingredients other than a
Licensed Compound.

In the case of any sale or other disposal for value, such as barter or
counter-trade, of Licensed Product, or part thereof, other than in an arm’s
length transaction exclusively for cash, Net Sales shall be calculated as above
on the value of the non-cash consideration received or the fair market price (if
higher) of the Licensed Product in the country of sale or disposal, as
determined in accordance with GAAP.

Sales between or among MedCo and its Related Parties shall be excluded from the
computation of Net Sales, but Net Sales shall include sales to the first Third
Party (other than a Sublicensee of MedCo or its Affiliate) thereafter by MedCo
or its Related Parties.

1.90 “Non-Acquired Party” has the meaning set forth in Section 6.7.

1.91 “Non-Bankrupt Party” has the meaning set forth in Section 6.5.

1.92 “Non-Breaching Party” has the meaning set forth in Section 12.2.2.

1.93 “Party” means MedCo and/or Alnylam.

1.94 “Patent Rights” means all patents (including all reissues, extensions,
substitutions, confirmations, re-registrations, re-examinations, supplementary
protection certificates and patents of addition) and patent applications
(including all provisional applications, requests for continuation,
continuations, continuations-in-part and divisionals) and all equivalents of the
foregoing in any country of the world.

1.95 “Payee” has the meaning set forth in Section 7.9.1.

1.96 “Paying Party” has the meaning set forth in Section 7.9.1.

1.97 “[***]” means the [***].

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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1.98 “Person” shall mean any natural person, corporation, unincorporated
organization, partnership, association, joint stock company, joint venture,
limited liability company, trust, Governmental Authority, or any other entity.

1.99 “Pharmacovigilance Agreement” has the meaning set forth in Section 2.6.3.

1.100 “Phase I Completion” means [***].

1.101 “Phase I Study” means a study in humans which provides for the
introduction into humans of a product, conducted in healthy volunteers or
patients, to obtain initial information on product safety, tolerability,
pharmacological activity or pharmacokinetics, as more fully defined in 21 C.F.R.
§ 312.21(a) (or the equivalent thereof outside the United States).

1.102 “Phase I/II Study” means a single study in humans that includes a Phase I
Study and a Phase II Study.

1.103 “Phase II Study” means a study in humans of the safety, dose ranging or
efficacy of a product, as further defined in 21 C.F.R. § 312.21(b) (or the
equivalent thereof outside the United States).

1.104 “Phase III Study” means a study in humans of the efficacy and safety of a
product, which is prospectively designed to demonstrate statistically whether
such product is effective and safe for use in a particular indication in a
manner sufficient (alone or together with one or more other such studies) to
file an application for Regulatory Approval for such product, as further defined
in 21 C.F.R. § 312.21(c) (or the equivalent thereof outside the United States).

1.105 “Pivotal Study” means a controlled pivotal clinical study of a product
that is prospectively designed to demonstrate statistically whether such product
is effective and safe for use in a particular indication in a manner sufficient
to obtain Regulatory Approval to market such product in a Major Market Country.

1.106 “Post-Approval Study” means a clinical study of a Licensed Product
initiated in a country after receipt of Regulatory Approval for such Licensed
Product in such country.

1.107 “Pre-Existing Affiliates” has the meaning set forth in Section 6.7.

1.108 “Product Trademark(s)” means the trademark(s) and service mark(s) for use
in connection with the distribution, marketing, promotion and sale of Licensed
Products, and/or accompanying logos, trade dress and/or indicia of origin.
Product Trademarks specifically excludes the corporate names and logos of the
Parties and their Related Parties.

1.109 “Regulatory Approval” means any and all approvals, licenses, registrations
or authorizations of any Regulatory Authority that are necessary for the
marketing and sale of a pharmaceutical product in a country or group of
countries, including pricing and/or reimbursement approval in any country in
which pricing and/or reimbursement approval is required by applicable Laws.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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1.110 “Regulatory Authority” means any applicable government regulatory
authority involved in granting approvals for the Development, Manufacturing
and/or Commercialization of any Licensed Product, including the FDA and the EMA.

1.111 “Regulatory Lead” has the meaning set forth in Section 2.6.1.

1.112 “Regulatory Exclusivity” means, with respect to a Licensed Product in a
country, any exclusive marketing right, data exclusivity right, orphan drug
designation, or another exclusive right which would prevent a Generic Product
version of such Licensed Product from being marketed or sold in such country,
conferred by any Governmental Authority with respect to such Licensed Product in
such country, other than a Patent Right.

1.113 “Related Party” means, with respect to a Party, such Party’s Affiliates
and permitted Sublicensees.

1.114 “Royalty Term” has the meaning set forth in Section 7.4.2.

1.115 “Sales Milestone” has the meaning set forth in Section 7.3.

1.116 “Selection Date” has the meaning set forth in Section 2.2.2.

1.117 “siRNA” means a double-stranded ribonucleic acid (RNA) composition
designed to act primarily through an RNA interference mechanism that consists of
either (a) two separate oligomers of native or chemically modified RNA that are
hybridized to one another along a substantial portion of their lengths, or (b) a
single oligomer of native or chemically modified RNA that is hybridized to
itself by self-complementary base-pairing along a substantial portion of its
length to form a hairpin.

1.118 “siRNA Product” means an siRNA composition designed to Target the human
PCSK9 gene through an RNA interference mechanism, and which is not a microRNA,
microRNA antagonist or MicroRNA Mimic.

1.119 “Sole Compound Product” has the meaning set forth in Section 1.89.

1.120 “Sublicensed Party” has the meaning set forth in Section 6.4.1.2.

1.121 “Sublicensee” means, with respect to MedCo or Alnylam, as the case may be,
a Third Party to whom such Party grants a sublicense under any Alnylam
Technology or MedCo Technology, respectively, to Develop, Manufacture or
Commercialize a Licensed Product in the Field pursuant to Section 6.1.3 or
Section 6.2.3, and, with respect to Alnylam, a Third Party to whom Alnylam
grants a sublicense pursuant to Section 6.2.3 under any MedCo Improvements
licensed to Alnylam pursuant to Section 6.2.2.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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1.122 “Sublicensor Party” has the meaning set forth in Section 6.4.1.2.

1.123 “Target” or “Targeting” means, with respect to an siRNA and a target gene,
that such siRNA antagonizes the expression of the messenger RNA of such target
gene, and with respect to a product and a target gene, that such product
contains an siRNA that antagonizes the expression of the messenger RNA of such
target gene.

1.124 “Term” has the meaning set forth in Section 12.1.

1.125 “Territory” means all countries of the world.

1.126 “Third Party” means an entity other than the Parties and their Affiliates.

1.127 “Third Party License Payment” means royalties, upfront fees, milestones or
other amounts payable under an In-License.

1.128 “Transaction Agreements” means, collectively, this Agreement, the
Development Supply Agreement, any quality agreement between the Parties with
respect to the supply of Licensed Product and the Pharmacovigilance Agreement.

1.129 “United States” means the United States of America and its territories,
possessions and commonwealths.

1.130 “Valid Claim” means a claim of: (a) an issued and unexpired Patent Right,
which claim has not been (i) revoked or held unenforceable, unpatentable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction, which is not appealable or has not been appealed within the time
allowed for appeal, or (ii) abandoned, disclaimed, denied or admitted to be
invalid or unenforceable through reissue, re-examination or disclaimer or
otherwise, or (b) a patent application that has been pending less than [***]
from the date of filing of the earliest patent application from which such
patent application claims priority, which claim has not been cancelled,
withdrawn or abandoned, or finally rejected by an administrative agency action
from which no appeal can be taken.

2. DEVELOPMENT COLLABORATION

2.1 Overview. Prior to the Effective Date, Alnylam has been engaged in the
Development of Licensed Products. Under this Agreement, the Parties will
collaborate in the further Development of Licensed Products, with Alnylam
retaining all responsibility for the Development of Licensed Products until
Phase I Completion as set forth in the Initial Development Plan, and MedCo
assuming all other responsibility for the Development of Licensed Products.
Initially the Collaboration will include the Development of both ALN-PCS02 and
ALN-PSCsc in parallel. In accordance with the process described below, the
Parties intend to select one of ALN-PCS02 or ALN-PSCsc for ongoing Development
prior to the initiation of IND-enabling studies described in the Initial
Development Plan.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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2.2 Development Plans.

2.2.1 Initial Global Development Plan. The Development activities to be
undertaken by Alnylam with respect to Licensed Products in the Territory prior
to Phase I Completion will be set forth in a written workplan and timetable (the
“Initial Development Plan”), which plan includes the Development activities to
be undertaken (and all of which will be conducted by Alnylam) with respect to
Licensed Products prior to Phase I Completion, and an estimated budget for such
Development activities (“Initial Development Budget”). A draft of the Initial
Development Plan is attached hereto as Schedule E. Alnylam shall submit an
update to the Initial Development Plan for review and approval by the JSC of any
material modifications or updates within forty-five (45) days of the Effective
Date and thereafter on at least a semi-annual basis. The JSC shall have the
right to modify the Initial Development Plan during such review and approval but
only to the extent consistent with the budget and timelines contained in the
Initial Development Plan attached hereto as Schedule E or as otherwise agreed by
the Parties.

2.2.2 Selection of Lead Product. Within thirty (30) days after the Selection
Date (as defined below), the JSC shall designate one of ALN-PCS02 and ALN-PCSsc
as the product to continue to Develop under the Collaboration (the designated
product, the “Lead Product”). “Selection Date” means [***].

2.2.3 MedCo Development Plan. The global Development activities to be undertaken
with respect to Licensed Products by MedCo, or, to the extent agreed upon by the
Parties in writing, by Alnylam following Phase I Completion, will be set forth
in a rolling [***] written workplan and timetable (the “MedCo Development Plan”)
to be prepared, subject to JSC approval, by MedCo. Within [***] days after
filing of the IND for the Lead Product in accordance with the Initial
Development Plan, MedCo shall provide the initial MedCo Development Plan to the
JSC for review and approval. The MedCo Development Plan shall subsequently be
updated by MedCo from time to time and no less frequently than twice per
Calendar Year, subject to JSC approval.

2.3 Responsibilities for Development Activities.

2.3.1 Initial Development Plan. Alnylam shall be responsible for the global
Development of Licensed Products and all Development activities with respect
thereto through Phase I Completion as set forth in the Initial Development Plan.
Alnylam shall be responsible for one hundred percent (100%) of all Costs for the
Development activities that are conducted by Alnylam for the Licensed Product in
the Territory pursuant to the Initial Development Plan up to a total of
(a) [***] dollars ($[***]), prior to the receipt by Alnylam of the Milestone
Payment in Section 7.2(a)(i), or (b) [***] ($[***]), upon receipt by Alnylam of
the Milestone Payment in Section 7.2(a)(i) (such amount in (a) or (b), the
relevant “Development Costs Cap”); provided, however, that, Alnylam shall also
bear any Costs for Development activities conducted by Alnylam pursuant to the
Initial Development Plan that exceed such amount to the extent such excess Costs
[***]. MedCo shall be responsible for all Costs with respect to Development
activities for the Licensed Product pursuant to the Initial Development Plan
that (a) are conducted by Alnylam, (b) are in excess of the then-applicable
Development Costs Cap, and (c) are approved by the JSC (the “Extra Early
Development Costs”).

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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2.3.2 MedCo Development Plan. MedCo shall be responsible for all Development
activities with respect to Licensed Products under the MedCo Development Plan
and, as and to the extent mutually agreed by the Parties in writing, Alnylam
will assist MedCo in such Development activities under the MedCo Development
Plan. MedCo shall be responsible for one hundred percent (100%) of all costs and
expenses with respect to such Development activities that are conducted by or on
behalf of MedCo and, if agreed upon in writing by the Parties, all Costs with
respect to such Development activities that are conducted by Alnylam after Phase
I Completion pursuant to the MedCo Development Plan.

2.3.3 Development and Certain Supply Costs. Within thirty (30) days following
the end of each Calendar Quarter in which Costs are incurred by Alnylam under
the Initial Development Plan or the MedCo Development Plan or pursuant to
Section 5.1(a), Alnylam shall prepare and deliver to MedCo a quarterly report
summarizing such Costs incurred during such period. Alnylam shall submit any
additional information reasonably requested by MedCo related to such Costs
included in its report within [***] Business Days after its receipt of such
request. Alnylam shall issue concurrently an invoice to MedCo for any Extra
Early Development Costs incurred by Alnylam and/or any Costs incurred by Alnylam
pursuant to the MedCo Development Plan in conducting activities to be conducted
by Alnylam as agreed upon in writing by the Parties, and MedCo shall pay all
amounts within [***] days after its receipt of the invoice. Alnylam and its
Affiliates shall keep complete and accurate records in sufficient detail to
enable the payments payable hereunder to be determined. Commencing after Alnylam
first issues such an invoice, MedCo shall have the right to audit the records of
Alnylam with respect to any such Costs included in such reports, in accordance
with Section 7.5.

2.4 Diligence.

(a) After the JSC’s selection of the Lead Product, MedCo will use Commercially
Reasonable Efforts to (i) Develop at least one Licensed Product and obtain
Regulatory Approval of at least one Licensed Product in each Major Market
Country and (ii) subject to Section 2.3.2, perform the Development activities
under the MedCo Development Plan.

(b) Alnylam will use Commercially Reasonable Efforts to perform the Development
activities under the Initial Development Plan and, subject to Section 2.3.2,
those activities under the MedCo Development Plan which Alnylam has agreed in
writing to undertake; provided, however, that except as expressly provided in
this Agreement or otherwise agreed to in writing by Alnylam, in no event will
Alnylam be required to perform any activities under the Initial Development Plan
or the MedCo Development Plan with respect to Licensed Products that would
require Alnylam to incur Costs in excess of the then-applicable Development
Costs Cap, unless paid or payable by MedCo as Extra Early Development
Costs. Alnylam will be excused from its obligation to perform its affected
Development and Manufacturing obligations with respect to Licensed Products
under the Transaction Agreements during any period of time with respect to which
Alnylam cannot perform such obligations to the extent that, (i) Alnylam becomes
aware that the performance of such obligations would infringe Patent Rights that
MedCo Controls and are reasonably necessary for such performance by Alnylam, and
(ii) Alnylam is not protected by any safe harbor provisions with respect to
claims that it would

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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infringe such Patent Rights. The Parties agree to promptly discuss in good faith
a mutually agreed resolution to such a situation. If the Parties agree in
writing that MedCo will grant Alnylam a license or sublicense under such Patent
Rights, then unless otherwise agreed by the Parties in writing, such Patent
Rights will be considered MedCo Patent Rights, and if such Patent Rights are
licensed to MedCo or its Affiliate by a Third Party, such sublicense shall be
subject to the relevant license agreement to MedCo or its Affiliate from such
Third Party and such agreement shall be designated a MedCo In-License.

2.5 Records and Reports.

2.5.1 Prior to the date that is [***] days after Phase I Completion, Alnylam
shall prepare and deliver to the JSC a quarterly written report summarizing
Alnylam’s Development activities for Licensed Products performed to date (or
updating such report for activities performed since the last such report
submitted hereunder, as applicable). Within [***] days after Phase I Completion
Alnylam shall deliver to the JSC a final report of Alnylam’s Development
activities for the Licensed Products. After Phase I Completion, MedCo shall
prepare and deliver to the JSC, by no later than each [***] (for the period
ending December 31 of the prior Calendar Year), written reports summarizing
Development activities for Licensed Products performed to date (or updating such
report for activities performed since the last such report submitted hereunder,
as applicable), with Alnylam providing to MedCo, in accordance with the MedCo
Development Plan, written reports summarizing Alnylam’s activities (if any)
under the MedCo Development Plan. Each Party will provide the members of the JSC
with written copies of all materials they intend to present at a JSC meeting.
The JSC may also request at any time specific material data or information
related to Collaboration activities or that a written report be prepared in
advance of any meeting summarizing certain material data and information arising
out of the conduct of the Collaboration activities, and the Party or appropriate
committee to whom such request is made shall promptly provide to the other Party
or JSC such report, data or information.

2.5.2 Each Party will maintain scientific records, in sufficient detail and in
good scientific manner appropriate for patent and regulatory purposes, which
will fully and properly reflect all work done and results achieved in the
performance of the Development activities with respect to Licensed Products by
such Party. Each Party will have the right, during normal business hours and
upon reasonable notice, to inspect and copy (or request the other Party to copy)
all records of the other Party maintained in connection with the work done and
results achieved in the performance of such Development activities, but solely
to the extent access to such records is necessary for such Party to exercise its
rights under this Agreement. All such records, and the information disclosed
therein, will be maintained as Confidential Information by the recipient Party
in accordance with Article 8.

2.6 Regulatory Matters.

2.6.1 Regulatory Filings and Interactions. Alnylam shall be the “Regulatory
Lead” with respect to Licensed Products through Phase I Completion and MedCo
shall be the Regulatory Lead with respect to Licensed Products thereafter.
Except as otherwise provided in the Initial Development Plan or Section 2.6.2,
(a) each Party will own the INDs, the NDAs and related regulatory documents
submitted to the applicable Regulatory Authorities by it with respect to
Licensed Products and (b) the Regulatory Lead will, as to Licensed Products,
(i) oversee, monitor and coordinate all regulatory actions, communications and
filings with, and submissions to, each Regulatory Authority, (ii) be

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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responsible for interfacing, corresponding and meeting with each Regulatory
Authority, and (iii) be responsible for maintaining all regulatory filings.
Alnylam will promptly notify the JSC in writing of all material communications
received by it from Regulatory Authorities regarding the Licensed Products and
of all filings and submissions made by it to Regulatory Authorities regarding
the Licensed Products; provided, however, that after Phase I Completion, Alnylam
shall not communicate with any Regulatory Authority regarding any Licensed
Product without MedCo’s prior written consent, except as required by Law or as
requested or required by a Regulatory Authority. MedCo shall provide Alnylam
with written notice of (x) all filings and submissions for Regulatory Approval
regarding any Licensed Product in the Territory in a timely manner; and (y) all
Regulatory Approvals obtained or denied and the filing of any IND for any
Licensed Product within fifteen (15) days after such event; provided, however,
that in all circumstances except as required by Law, MedCo shall inform Alnylam
of such event prior to public disclosure of such event by MedCo.

2.6.2 IND Transfer; Right of Reference. Upon MedCo’s written request Alnylam
will use Commercially Reasonable Efforts to promptly transfer to MedCo, at
Alnylam’s expense, Alnylam’s IND for the Lead Product after Phase I Completion,
and any other Alnylam Know-How reasonably requested by MedCo with respect to any
such IND. During the Term, each Party will have the right to reference the other
Party’s INDs, NDAs and other filings with and submissions to Regulatory
Authorities with respect to Licensed Products for the purpose of conducting its
Development activities under the Initial Development Plan and the MedCo
Development Plan, and in the case of MedCo, to otherwise obtain Regulatory
Approval of Licensed Products in the Territory.

2.6.3 Pharmacovigilance. Within [***] months after the Effective Date, the
Parties will develop and agree in writing upon a pharmacovigilance agreement
(“Pharmacovigilance Agreement”) that will include safety data exchange
procedures governing the coordination of collection, investigation, reporting,
and exchange of information concerning any adverse experiences, and any product
quality and product complaints involving adverse experiences, related to
Licensed Products, sufficient to enable each Party to comply with its legal and
regulatory obligations.

2.7 Information Exchange. Prior to Phase I Completion, Alnylam shall provide,
and shall have its Affiliates provide, to MedCo, without additional
compensation, all material Know-How Controlled by Alnylam and/or its Related
Parties (as applicable) relating to Licensed Products, including copies of
(a) pre-clinical and clinical safety and efficacy data, (b) protocols and
investigator brochures, and (c) regulatory filings, that are reasonably
necessary or useful for MedCo (or its Related Parties) to perform its
obligations or exploit its rights under this Agreement with respect to such
Licensed Products. Promptly after Phase I Completion and on an ongoing basis
throughout the Term, as requested by the JSC and to the extent not already
provided to MedCo, Alnylam shall provide, and shall have its Affiliates provide,
to MedCo, without additional compensation, all material Alnylam Know-How that
relates to the Licensed Products, including copies of (i) pre-clinical and
clinical safety and efficacy data, (ii) protocols and investigator brochures and
(iii) regulatory filings, in each case that are reasonably necessary or useful
for MedCo (or its Related Parties) to perform its obligations or exploit its
rights under this Agreement with respect to such Licensed Products. The transfer
of Alnylam Know-How reasonably necessary or useful for the Manufacture of
Licensed Products by Alnylam and its Affiliates to MedCo will also be subject to
the provisions of Section 5.2 and the Development Supply Agreement.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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2.8 Third Parties. The Parties shall be entitled to utilize the services of
Third Party contract research and contract manufacturing organizations to
perform their respective Development and Manufacturing activities under this
Agreement; provided, that (a) each Party shall ensure that such Third Parties it
utilizes operate in a manner consistent with the terms of this Agreement and
(b) each Party shall remain at all times fully liable for its responsibilities
under this Agreement. Each Party shall ensure that any agreements with such
Third Parties shall include confidentiality and non-use provisions that are no
less stringent than those set forth in Section 8.1 of this Agreement and shall
use Commercially Reasonable Efforts to obtain ownership of, and/or a fully
sublicenseable license under and to, any Know-How and Patent Rights that are
developed or used by such Third Parties in the performance of such agreement and
are reasonably necessary or useful to Develop, Manufacture and/or Commercialize
Licensed Products in the Field.

3. COMMERCIALIZATION OF THE LICENSED PRODUCTS

3.1 Responsibility and Diligence. As between the Parties, MedCo shall have the
sole right and be solely responsible, at its expense, for all Commercialization
activities relating to Licensed Products in the Field in the Territory. MedCo
shall use Commercially Reasonable Efforts, through itself or its Related
Parties, to Commercialize at least one Licensed Product in the Field in at least
each Major Market Country after receipt of Regulatory Approval of such Licensed
Product in the Field in such Major Market Country.

3.2 MedCo Commercialization Plan. No less than [***] months in advance of the
reasonably expected first Regulatory Approval in the Territory with respect to a
Licensed Product, and on an annual basis thereafter, MedCo shall prepare and
deliver to Alnylam, a written non-binding plan that summarizes the
Commercialization activities to be undertaken with respect to Licensed Products
in the Territory in the next Calendar Year and, to the extent commercially
reasonable, MedCo’s plans to obtain further Regulatory Approvals and
Commercialize Licensed Products in countries in the Territory in which MedCo is
not then Commercializing Licensed Products, and the dates by which such
activities are targeted to be accomplished (the “MedCo Commercialization Plan”).
The MedCo Commercialization Plan shall subsequently be updated and modified by
MedCo, from time to time and no less frequently than once per Calendar Year.

3.3 Advertising and Promotional Materials. MedCo will be responsible for the
creation, preparation, production, reproduction and filing with the applicable
Regulatory Authorities, of relevant written sales, promotion and advertising
materials relating to Licensed Products for use in the Territory. All such
promotional materials will be compliant with all Laws, and substantially
consistent with the MedCo Commercialization Plan. To the extent permitted by
Law, MedCo and its Related Parties shall use Commercially Reasonable Efforts to
include Alnylam’s (or its designee’s) name with reasonable prominence on
Licensed Product promotional materials related to the Licensed Product in the
Territory in acknowledgement of Alnylam’s contributions to the Licensed Product.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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3.4 Reporting Obligations. MedCo shall prepare and deliver to Alnylam, by no
later than each [***] following the first Regulatory Approval of a Licensed
Product in the Field in the Territory (for the period ending December 31 of the
prior Calendar Year), written reports summarizing MedCo’s Commercialization
activities for Licensed Products performed to date (or updating such report for
activities performed since the last such report submitted hereunder, as
applicable). In addition, MedCo shall provide Alnylam with written notice of the
First Commercial Sale of each Licensed Product in the Territory within [***]
days after such event; provided, however, that in all circumstances except as
required by Law, MedCo shall inform Alnylam of such event prior to public
disclosure of such event by MedCo. MedCo shall also provide such other
information to Alnylam as Alnylam may reasonably request with respect to MedCo’s
Commercialization activities with respect to Licensed Products.

3.5 Sales and Distribution. MedCo and its Related Parties shall have the sole
right and shall be responsible for the pricing of Licensed Products, booking
sales, warehousing and distribution of Licensed Products in the Territory.
Moreover, MedCo and its Related Parties shall have the sole right and shall be
solely responsible for handling all returns of commercialized Licensed Product,
as well as all aspects of Licensed Product order processing, invoicing and
collection, distribution, inventory and receivables, in the Territory.

3.6 Recalls, Market Withdrawals or Corrective Actions. In the event that any
Regulatory Authority issues or requests a recall or takes a similar action in
connection with the Licensed Product in the Territory, or in the event MedCo
determines that an event, incident or circumstance has occurred that may result
in the need for a recall or market withdrawal in the Territory, MedCo shall,
within [***] hours after it receives such information from such Regulatory
Authority or makes such determination, advise Alnylam thereof by telephone,
facsimile or e-mail.

3.7 Commercialization Expenses. As between the Parties, MedCo shall bear all
costs and expenses incurred in connection with the Commercialization of Licensed
Products in the Territory.

4. COLLABORATION MANAGEMENT

4.1 Joint Steering Committee. The Parties hereby establish a joint steering
committee (the “JSC”) to facilitate the Collaboration as follows:

4.1.1 Composition of the Joint Steering Committee. The Development of Licensed
Products hereunder shall be conducted under the direction of the JSC, which
shall comprise [***] representatives of MedCo and [***] representatives of
Alnylam. Each Party shall appoint its respective representatives to the JSC from
time to time, and may substitute one or more of its representatives, in its sole
discretion, effective upon notice to the other Party of such change. Each Party
shall have at least one JSC representative who is a senior employee (vice
president level or above), and all JSC representatives shall be employees of the
relevant Party and have appropriate expertise and ongoing familiarity with the
Collaboration. Additional non-voting representatives or consultants may from
time to time, by mutual consent of the Parties, be invited to attend JSC
meetings, subject to all representatives (including the designated voting
representatives) and consultants undertaking confidentiality obligations in a
written agreement (which may have been executed prior to the Effective Date)
that are substantially comparable to the requirements of Section 8.1. All
proceedings for the JSC shall take place in English. Each Party shall bear its
own expenses relating to attendance at such meetings by its representatives.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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4.1.2 JSC Chairperson. The JSC chairperson shall be an employee of Alnylam prior
to Phase I Completion and an employee of MedCo thereafter. The JSC chairperson’s
responsibilities shall include (a) scheduling meetings at least once per
Calendar Quarter, but more frequently if the JSC determines it necessary;
(b) setting agendas for meetings with solicited input from other members;
(c) coordinating the delivery of draft minutes to the JSC for review and final
approval; and (d) conducting meetings, including ensuring that objectives for
each meeting are set and achieved. The JSC chairperson shall have no greater
authority on the JSC than any other representative of the JSC.

4.1.3 JSC Responsibilities. The JSC shall have the following responsibilities
with respect to the Collaboration:

(a) reviewing reports and updates provided by Alnylam regarding the Development
of Licensed Products under the Initial Development Plan, including material
modifications and updates to the Initial Development Plan provided by Alnylam in
accordance with Section 2.2.1, providing Alnylam with feedback regarding same
and approving such updates and modifications to the Initial Development Plan in
accordance with Section 2.2.1;

(b) [***];

(c) approving Extra Early Development Costs in accordance with Section 2.3.1(c);

(d) reviewing reports and updates provided by MedCo regarding the Development of
Licensed Products in the Territory, including reviewing and approving the MedCo
Development Plan and updates thereto in accordance with Section 2.2.3;

(e) ensuring coordination between the Parties with respect to Development
activities in the Territory for Licensed Products under the MedCo Development
Plan (to the extent the Parties have agreed in writing that Alnylam should
perform any such activities), and regulatory and pharmacovigilance requirements
and matters to the extent necessary for the Parties to perform their duties or
exercise their rights hereunder and for the Parties to comply with the
Pharmacovigilance Agreement and the requirements of Law and Regulatory
Authorities, respectively;

(f) regularly assessing the progress of Alnylam in its conduct of the Initial
Development Plan and the progress of MedCo in its conduct of the MedCo
Development Plan, against the respective timelines contained therein;

(g) reviewing Alnylam Technology that would be reasonably helpful to MedCo’s
Development of Licensed Products and determine which of such Alnylam Technology
should be transferred to MedCo; and

(h) performing such other activities as the Parties agree in writing shall be
the responsibility of the JSC.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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For purposes of clarity, the JSC shall not have the authority to modify the
terms of this Agreement.

4.1.4 Meetings. The first JSC meeting shall be held within [***] months after
the Effective Date, and the JSC shall thereafter meet in accordance with a
schedule established by mutual written agreement of the Parties, but no less
frequently than [***] per Calendar Quarter, with the location for such meetings
alternating between Alnylam’s and MedCo’s US facilities (or such other locations
as are mutually agreed by the Parties). Alternatively, the JSC may meet by means
of teleconference, videoconference or other similar communications equipment,
but at least [***] meetings per Calendar Year shall be conducted in person.

4.2 Appointment of Subcommittees, Project Teams and Collaboration Managers. The
JSC shall be empowered to create such subcommittees of itself and project teams
as it may deem appropriate or necessary. Each such subcommittee and project team
shall report to the JSC, which shall have authority to approve or reject
recommendations or actions proposed thereby subject to the terms of this
Agreement. The provisions of Sections 4.1.1 and 4.1.4 shall apply to each
subcommittee, mutatis mutandis, unless otherwise determined by the JSC.

4.3 Minutes. A secretary shall be appointed for each meeting and shall prepare
minutes of the meeting, which shall provide a description in reasonable detail
of the discussions held at the meeting and a list of any actions, decisions or
determinations approved by the JSC. The JSC secretary shall have no greater
authority on the JSC than any other representative of the JSC.

4.4 Decision-Making.

4.4.1 With respect to decisions of the JSC, the representatives of each Party
shall have collectively one vote on behalf of such Party. For each meeting of
the JSC, at least one (1) representative of each Party shall constitute a quorum
and each Party shall use Commercially Reasonable Efforts to have its
representative(s) participate in each JSC meeting. Action on any matter may be
taken at a meeting, by teleconference, videoconference or by written agreement.
The JSC shall attempt to resolve any and all disputes before it for decision by
consensus.

4.4.2 If the JSC is unable to reach a consensus with respect to a dispute for a
period in excess of [***] days, then the dispute shall be submitted to the Chief
Executive Officers of Alnylam and MedCo for resolution.

4.4.3 If such escalated dispute cannot be resolved for a period in excess of
[***] days, then:

(a) [***]; and

(b) [***].

4.4.4 Notwithstanding the foregoing, MedCo may not exercise its final
decision-making authority (i) to require Alnylam to undertake obligations beyond
those for which it is responsible, or forgo any rights, under this Agreement,
(ii) to cause Alnylam to incur any Costs above the then-applicable Development
Costs Cap with respect to which MedCo has not otherwise agreed to

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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reimburse Alnylam under this Agreement, (iii) to require Alnylam to take or
decline to take any action that would result in a violation of any Law or any
agreement with any Third Party or the infringement of intellectual property
rights of Third Parties, (iv) in a manner that excuses MedCo from any of its
obligations specifically enumerated under this Agreement, or (v) to expand or
narrow the responsibilities of the JSC.

4.5 Dissolution of JSC. The JSC shall be dissolved upon the First Commercial
Sale of the last Licensed Product that is expected to be Developed in the
Territory; provided, that after the fifth (5th) anniversary of the Effective
Date Alnylam shall have the right, but not the obligation, to dissolve the JSC.
Upon the dissolution of the JSC, MedCo shall have the sole rights and authority
to take any action that had been within the JSC’s purview.

5. MANUFACTURE AND SUPPLY OF THE LICENSED PRODUCT

5.1 Responsibilities for Licensed Product Supply.

(a) Alnylam will be solely responsible for (i) obtaining supply of Finished
Product reasonably required for the conduct of Alnylam’s obligations under the
Initial Development Plan through Phase I Completion, and (ii) supplying MedCo
with the quantity of Finished Product reasonably required for the first Phase II
Study of the Lead Product conducted under the MedCo Development Plan (which, for
clarity, may be the Phase II Study portion of a Phase I/II Study of the Lead
Product initiated pursuant to the Initial Development Plan), in each case at
Alnylam’s expense for the Costs of such Licensed Product, but only to the extent
that such Costs, when added to the Development Costs incurred by Alnylam
pursuant to the Initial Development Plan, do not exceed the then-applicable
Development Costs Cap, unless paid or payable by MedCo as Extra Early
Development Costs.

(b) MedCo will have the sole right and responsibility to Manufacture and supply
Licensed Product for Development and Commercialization in the Territory under
the MedCo Development Plan (except that Alnylam shall be responsible for
supplying Licensed Product as described in clause (a)(ii) above), subject to the
successful completion of the transfer of Alnylam Know-How to MedCo or its
designated Third Party(ies) contract manufacturers pursuant to Section 5.3 and
the Development Supply Agreement.

5.2 Development Supply Agreement. Within [***] months after the Effective Date,
the Parties will negotiate in good faith and enter into a supply and technical
transfer agreement (the “Development Supply Agreement”) pursuant to which
Alnylam will (a) subject to the terms of Section 5.3, promptly provide MedCo or
Third Party contract manufacturer(s) selected by MedCo and reasonably acceptable
to Alnylam with Alnylam Know-How reasonably necessary or useful for the
Manufacture of the Bulk Drug Substance, Bulk Drug Product and Finished Product,
as the case may be, and shall make available its personnel on a reasonable basis
to consult with MedCo with respect thereto, all at MedCo’s expense for the Costs
reasonably incurred by Alnylam in connection with such technology transfer
activities; and (b) supply Finished Product to MedCo as set forth in
Section 5.1(a)(ii). The terms and conditions of the Development Supply Agreement
shall be commercially reasonable and consistent with industry standards, as well
as, if applicable, Alnylam’s agreements with its Third Party contract
manufacturers.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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5.3 Technology Transfer. Subject to the terms of the Development Supply
Agreement, as soon as reasonably practicable, but in no event later than the
fifth (5th) anniversary of the Effective Date, Alnylam shall initiate a
technology transfer to MedCo, or to its Third Party manufacturer(s) of Licensed
Product, selected by MedCo and reasonably acceptable to Alnylam, of Alnylam
Know-How that is reasonably necessary or useful for the Manufacture of the
Licensed Product, and shall make available its personnel on a reasonable basis
to consult with MedCo or such Third Party manufacturer(s) with respect thereto,
all at MedCo’s expense, including the Costs reasonably incurred by Alnylam in
connection with such technology transfer activities. MedCo shall reimburse
Alnylam such Costs incurred with respect to such Manufacturing technology
transfer within [***] days after receipt of an invoice therefor. Alnylam and its
Affiliates shall keep complete and accurate records in sufficient detail to
enable the payments payable hereunder to be determined. Alnylam shall not be
required to perform technology transfer to more than one Third Party
manufacturer for each stage of the Licensed Product supply chain (i.e., Bulk
Drug Substance, Bulk Drug Product and Finished Product). Promptly after MedCo’s
written request, Alnylam shall use Commercially Reasonable Efforts to assign to
MedCo any manufacturing agreement between Alnylam and a Third Party that is
solely related to the manufacture of Licensed Products. Such assignment shall be
subject to the terms and conditions of such agreement, including any required
consents of such Third Party and MedCo’s written agreement to assume all the
obligations of Alnylam under such agreement to be undertaken after such
assignment, but Alnylam shall remain solely responsible for its obligations
under such agreement arising prior to such assignment. Except as provided in the
immediately preceding sentence, MedCo shall be solely responsible for
contracting with such Third Party manufacturer (and any other Third Party
manufacture to whom Alnylam has initiated technology transfer as set forth in
this Section 5.3) for the supply of such Licensed Product and Alnylam shall have
no obligations under such agreement between MedCo and such Third Party
manufacturer. Alnylam shall use Commercially Reasonable Efforts to obtain any
such consent in a form reasonably acceptable to MedCo.

5.4 Additional Licensed Product Supply. MedCo agrees to consider, and the
Parties agree to discuss in good faith, the manufacture and supply of Bulk Drug
Substance, Bulk Drug Product and/or Finished Product by Alnylam (or its
designee) to MedCo for MedCo’s further Development activities and/or for
Commercial sale in the Territory; provided, however, that nothing in the
foregoing sentence shall be construed to require the Parties to agree to such an
arrangement.

6. LICENSES

6.1 License Grants to MedCo.

6.1.1 Development and Commercialization License. Subject to the terms and
conditions of this Agreement, including Section 6.1.4, Alnylam hereby grants
MedCo a non-transferable (except as provided in Section 13.1), sublicenseable
(subject to Section 6.1.3), exclusive license under Alnylam Technology to
Develop and Commercialize Licensed Products in the Field in the Territory. Such
license shall be royalty-bearing for the Royalty Term applicable to each
Licensed Product in each

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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country in the Territory, and, after the expiration of the Royalty Term
applicable to such Licensed Product in such country, shall convert to a fully
paid-up, irrevocable, perpetual, non-exclusive, sublicenseable (subject to
Section 6.1.3) license to Develop and Commercialize such Licensed Product in the
Field in such country.

6.1.2 Manufacturing License. Subject to the terms and conditions of this
Agreement, including those set forth in Article 5 and Section 6.1.4, Alnylam
hereby grants MedCo a non-transferable (except as provided in Section 13.1),
sublicenseable (subject to Section 6.1.3), worldwide, royalty-bearing, exclusive
license under Alnylam Technology to Manufacture Licensed Products for
Development of Licensed Products after Phase I Completion and for
Commercialization in the Field in the Territory. Such license shall be
royalty-bearing for the Royalty Term applicable to each Licensed Product in each
country in the Territory, and, after the expiration of the Royalty Term
applicable to such Licensed Product in such country, shall convert to a fully
paid-up, irrevocable, perpetual, non-exclusive, sublicenseable (subject to
Section 6.1.3) license to Manufacture such Licensed Product for Development of
Licensed Products after Phase I Completion and for Commercialization in the
Field in such country.

6.1.3 Sublicensing Terms.

(a) MedCo shall have the right to sublicense any of its rights under
Section 6.1.1 and 6.1.2 to any of its Affiliates or to any Third Party without
the prior written consent of Alnylam, subject to the requirements of this
Section 6.1.3, except that Alnylam’s prior written consent shall be required for
any sublicense to a Third Party of either (i) all or substantially all of
MedCo’s rights under this Agreement, or (ii) all or substantially all of MedCo’s
rights to Develop and Commercialize Licensed Products in the United States.

(b) Each sublicense granted by MedCo pursuant to this Section 6.1.3 shall be
subject to the terms and conditions of this Agreement and shall contain terms
and conditions consistent with those in this Agreement. MedCo shall promptly
provide Alnylam with a copy of the fully executed sublicense agreement covering
any Commercialization sublicense granted hereunder, and each such sublicense
agreement shall contain the following provisions: (i) a requirement that the
Sublicensee comply with confidentiality and non-use provisions that are no less
stringent than Section 8.1 with respect to Alnylam’s Confidential Information;
provided, however, that if such sublicense agreement contains a sublicense of
Licensed Product sales rights, such sublicense agreement shall also contain the
following provisions: (x) a requirement that the Sublicensee submit applicable
sales or other reports to MedCo to the extent necessary or relevant to the
reports required to be made or records required to be maintained under this
Agreement; and (y) the audit requirement set forth in Section 7.5; and
(ii) subject to Section 6.4, any other provisions applicable to a Sublicensee
required under any Alnylam In-License or necessary to allow Alnylam or its
Affiliates to comply with its obligations thereunder, to the extent that MedCo
had been made aware of such provisions prior to entering into such sublicense,
including any such provision regarding diligence, insurance, indemnification,
confidentiality, reporting, audits, publication, data sharing or regulatory
matters.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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(c) If MedCo becomes aware of a material breach of any sublicense by a
Sublicensee of the rights granted to MedCo under this Section 6.1, MedCo shall
promptly notify Alnylam of the particulars of the same and use Commercially
Reasonable Efforts to cause the Sublicensee to comply with all the terms of the
sublicense necessary for MedCo’s compliance with the terms of this Agreement. In
the event that (i) the Sublicensee has failed to cure a material breach of such
obligations within [***] days after notice of such breach and (ii) such material
breach also constitutes a breach of this Agreement, MedCo shall terminate the
sublicense at the request of Alnylam; provided, however, that, if such
Sublicensee disputes that it has materially breached such obligations, or
disputes that it has not timely cured a breach of such obligations, MedCo shall
not be obligated to terminate such sublicense until such dispute is resolved by
settlement, or in a final, non-appealable decision of a court or arbitrator,
finding that such Sublicensee had materially breached such sublicense and had
not timely cured such material breach. Notwithstanding any sublicense, MedCo
shall remain primarily liable to Alnylam for the performance of all of MedCo’s
obligations under, and MedCo’s compliance with all terms and conditions of, this
Agreement.

6.1.4 Retained Rights. Notwithstanding the license grants in Sections 6.1.1 and
6.1.2, Alnylam retains the rights under Alnylam Technology (a) to Develop and
Manufacture Licensed Products in the Field in the Territory solely for the
purpose and only to the extent necessary for the performance of its obligations
under the Transaction Agreements, and (b) for all internal basic and preclinical
research purposes, in each case including the right to collaborate with and
issue sublicenses to academic collaborators and/or Third Party contractors
involved in such research activities.

6.2 License Grants to Alnylam.

6.2.1 Development and Manufacturing License. Subject to the terms and conditions
of this Agreement, MedCo hereby grants Alnylam a non-transferable (except as
provided in Section 13.1), sublicenseable (subject to Section 6.2.3),
non-exclusive, worldwide, royalty-free license, under MedCo Technology, to
perform Alnylam’s Development and Manufacturing obligations with respect to
Licensed Products under the Transaction Agreements.

6.2.2 MedCo Improvements License. Subject to the terms and conditions of this
Agreement, MedCo hereby grants Alnylam a non-transferable (except as provided in
Section 13.1), sublicenseable (subject to Section 6.2.3), worldwide,
non-exclusive, royalty-free license under any MedCo Improvements to research,
develop, manufacture and/or commercialize products containing siRNA molecules in
the Field and in the Territory. Such license is subject to the exclusive license
grants to MedCo under Section 6.1 and the terms of Section 9.5.1.

6.2.3 Sublicensing Terms.

(a) Alnylam shall have the right to sublicense any of its rights under
Section 6.2.1 to any of its Affiliates or to any Third Party contractor without
the prior written consent of MedCo, subject to the requirements of this
Section 6.2.3. Alnylam shall have the right to sublicense any of its rights
under Section 6.2.2 or Section 12.3(b) to any of its Affiliates or to any Third
Party without the prior written consent of MedCo, subject to the requirements of
this Section 6.2.3.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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(b) Each sublicense granted by Alnylam pursuant to this Section 6.2.3 shall be
subject to the terms and conditions of this Agreement and shall contain terms
and conditions consistent with those in this Agreement. Each such sublicense
agreement shall contain the following provisions: (i) a requirement that the
Sublicensee comply with confidentiality and non-use provisions that are no less
stringent than Section 8.1 with respect to MedCo’s Confidential Information, and
(ii) subject to Section 6.4, any other provisions applicable to a Sublicensee
required under any MedCo In-License or necessary to allow MedCo or its
Affiliates to comply with its obligations thereunder, to the extent that Alnylam
had been made aware of such provisions prior to entering into such sublicense,
including any such provision regarding diligence, insurance, indemnification,
confidentiality, reporting, audits, publication, data sharing or regulatory
matters.

(c) If Alnylam becomes aware of a material breach of any sublicense by a
Sublicensee of the rights granted to Alnylam under this Section 6.2 or
Section 12.3(b), Alnylam shall promptly notify MedCo of the particulars of the
same and use Commercially Reasonable Efforts to cause the Sublicensee comply
with all the terms of the sublicense necessary for Alnylam’s compliance with the
terms of this Agreement. In the event that (i) the Sublicensee has failed to
cure a material breach of such obligations within [***] days after notice of
such breach and (ii) such material breach also constitutes a breach of this
Agreement, Alnylam shall terminate the sublicense at the request of MedCo;
provided, however, that, if such Sublicensee disputes that it has materially
breached such obligations, or disputes that it has not timely cured a breach of
such obligations, Alnylam shall not be obligated to terminate such sublicense
until such dispute is resolved by settlement, or in a final, non-appealable
decision of a court or arbitrator, finding that such Sublicensee had materially
breached such sublicense and had not timely cured such material breach.
Notwithstanding any sublicense, Alnylam shall remain primarily liable to MedCo
for the performance of all of Alnylam’s obligations under, and Alnylam’s
compliance with all terms and conditions of, this Agreement.

6.3 Joint Collaboration IP. Subject to the rights and licenses granted to, and
the obligations of, each Party under this Agreement, including MedCo’s
obligations under Section 7.4 during the Term, each Party shall have the right
to exploit its interest in Joint Collaboration IP without the consent of and
without accounting to the other Party.

6.4 In-Licenses and Existing Alnylam Third Party Agreements.

6.4.1 Compliance with In-Licenses.

6.4.1.1 All licenses and other rights granted to MedCo under this Article 6
(including any sublicense rights) are subject to the rights and obligations of
Alnylam and its Affiliates under the Alnylam In-Licenses and the Existing
Alnylam Third Party Agreements. All licenses and other rights granted to Alnylam
under this Article 6 and Section 12.3(b) (including any sublicense rights) are
subject to the rights and obligations of MedCo and its Affiliates under the
MedCo In-Licenses.

6.4.1.2 Subject to Section 6.4.1.3, (a) each Party (the “Sublicensed Party”)
granted a sublicense under any of the In-Licenses of the other Party (the
“Sublicensor Party”) shall comply with all applicable terms and conditions of
the In-Licenses of the Sublicensor Party to

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

29

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the extent (i) required by the terms of such In-Licenses with respect to a
sublicense under the terms of such In-License to the extent applicable to
(A) the Sublicensed Party’s rights or obligations relating to the Development,
Manufacture or Commercialization of Licensed Products under any of the
Transaction Agreements or (B) the filing, prosecution, maintenance, extension,
defense, enforcement, patent challenge or the further sublicensing of the
Alnylam Technology (if Alnylam is the Sublicensor Party) or the MedCo Technology
(if MedCo is the Sublicensor Party) to the extent relevant to the Sublicensed
Party’s rights or obligations relating to the Development, Manufacture or
Commercialization of Licensed Products under any of the Transaction Agreements,
and (ii) the Sublicensed Party has been given written notice or provided a copy
of such provisions on or prior to the later of (x) the Effective Date or (y) the
date on which such In-License is first required to have been provided to the
Sublicensed Party hereunder (provided that, with respect to an amendment
thereto, such amendment is consistent with the last sentence of Section 6.4.4),
and (b) each Sublicensed Party shall perform and take such actions as may be
required to allow the Sublicensor Party to comply with its obligations under the
Sublicensor Party’s In-Licenses, to the extent (i) applicable to (A) the
Sublicensed Party’s rights or obligations relating to the Development,
Manufacture or Commercialization of Licensed Products under any of the
Transaction Agreements or (B) the filing, prosecution, maintenance, extension,
defense, enforcement, patent challenge or the further sublicensing of the
Alnylam Technology (if Alnylam is the Sublicensor Party) or the MedCo Technology
(if MedCo is the Sublicensor Party) to the extent relevant to the Sublicensed
Party’s rights or obligations relating to the Development, Manufacture or
Commercialization of Licensed Products under any of the Transaction Agreements
and (ii) that the Sublicensed Party had been given written notice or provided a
copy of such provisions on or prior to the later of (x) the Effective Date or
(y) the date on which such In-License is first required to have been provided to
the Sublicensed Party hereunder (provided that, with respect to an amendment
thereto, such amendment is consistent with the last sentence of Section 6.4.4),
including any such obligations relating to sublicensing, patent matters,
confidentiality, reporting, audit rights, indemnification and diligence. Without
limiting the foregoing, each Sublicensed Party shall prepare and deliver to the
Sublicensor Party any additional reports required under the applicable
In-Licenses of the Sublicensor Party, in each case reasonably sufficiently in
advance to enable the Sublicensor Party to comply with its obligations under the
applicable In-Licenses, to the extent that the Sublicensed Party had been made
aware of such provisions with reasonably sufficient time prior to the date on
which such compliance is required in order for such Sublicensed Party, or its
Related Parties, to properly prepare such reports, using Commercially Reasonable
Efforts, including reasonably sufficient time to gather, analyze, format and
review the relevant information (to the extent not already required to be
provided to the Sublicensor Party under any Transaction Agreement other than
pursuant to an In-License Agreement of the Sublicensor Party).

6.4.1.3 The Parties acknowledge that the terms of any In-License may be subject
to interpretation. The Parties shall cooperate with each other in good faith to
support each Sublicensed Party in complying with its obligations, in accordance
with this Section 6.4, under an In-License pursuant to which such Sublicensed
Party has been granted a sublicense pursuant to this Agreement. Without
limitation to the foregoing, the Parties shall, from time to

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

30

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time, upon the reasonable request of either Party, discuss the terms of any
In-License and agree upon, to the extent reasonably possible, a consistent
interpretation of the terms of such In-License in order to, as fully as possible
without imposing an unreasonable burden on the normal business activities of any
Party, allow the Sublicensor Party and the Sublicensed Party to comply with the
terms of such In-License, without imposing an unreasonably higher burden on one
Party than the other with respect to compliance with the terms of such
In-License. Promptly after a Party reaches a conclusion or obtains information
that such interpretation is or may be incorrect, it shall share such conclusion
or information with the other Party and the Parties shall discuss such
conclusion or information.

6.4.1.4 Each Sublicensor Party shall ensure that, to the fullest extent
permitted under the relevant In-License, any Confidential Information of the
Sublicensed Party disclosed to the relevant Third Party as required by such
In-License shall be protected as confidential information of the Sublicensor
Party in accordance with such In-License.

6.4.1.5 Each Sublicensor Party agrees, upon the Sublicensed Party’s request, to
provide the Sublicensed Party with copies of any In-Licenses to which the
Sublicensed Party is a party (other than any amendments or side letters thereto
which are not materially relevant to the rights granted to, and the obligations
imposed on, the Sublicensed Party under this Agreement). Each Sublicensor Party
shall promptly provide the Sublicensed Party with a copy of any amendment,
including any side letter, to any In-License of the Sublicensor Party, to the
extent relevant in any way to the rights or obligations of the Sublicensed Party
and whether or not such amendment is consistent with the obligations of the
Sublicensor Party under the last sentence of Section 6.4.4. Confidential
Information of the Sublicensor Party or its counterparty may be redacted from
such copies, except to the extent that such information is required in order to
enable the Sublicensed Party to comply with its obligations to the Sublicensor
Party under this Agreement with respect to such In-License or in order to enable
the Sublicensor Party to ascertain compliance with the provisions of this
Agreement.

6.4.1.6 If the Sublicensor Party receives written notice from the relevant Third
Party that the Sublicensor Party is in material breach of its In-License such
that it would materially adversely affect the rights of the Sublicensed Party
under this Agreement, and if the Sublicensor Party determines that it cannot or
chooses not to cure or otherwise resolve any such alleged breach or default,
then the Sublicensor Party shall so notify the Sublicensed Party within ten
(10) Business Days of such determination.

6.4.1.7 To the extent that the Sublicensor Party receives written notice from
the relevant Third Party that the Sublicensed Party is in material breach of an
obligation imposed on the Sublicensed Party under an In-License of the
Sublicensor Party pursuant to this Section 6.4, the Sublicensor Party shall
promptly provide the Sublicensed Party with a copy of such breach notice, and
any other relevant documents, received from such Third Party, but in no event
more than five (5) Business Days after the Sublicensor Party’s receipt thereof.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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6.4.2 New In-Licenses; Additional Alnylam In-Licenses.

6.4.2.1 Alnylam Negotiation of Future Alnylam In-Licenses. Subject to
Section 6.4.2.4, in the event that Alnylam or its Affiliate determines to enter
into an agreement with a Third Party after the Effective Date pursuant to which
Alnylam or its Affiliate would acquire a license under Patent Right(s) that
Covers the development, manufacture or commercialization of pharmaceutical
products comprised of siRNA compositions (other than microRNAs, microRNA
antagonists or MicroRNA Mimics) in the Field and the Territory, and if such a
license with respect to Licensed Products in the Field is available, then
Alnylam shall use best efforts to ensure that the terms of such license
applicable to Licensed Products in the Field are not materially less favorable
than the terms applicable to other pharmaceutical products containing siRNA
compositions in the Field under such license agreement.

6.4.2.2 Acceptance of Future Alnylam In-Licenses. In the event that Alnylam (the
“Licensing Party”) or its Affiliate enters into an agreement with a Third Party
after the Effective Date that meets the criteria set forth in clause (b) of the
definition of Alnylam In-License, then Alnylam will promptly provide MedCo with
notice and a copy of the applicable Third Party agreement. Within thirty
(30) days following receipt of such notice, MedCo will decide, in its sole
discretion, whether to accept the applicable Third Party agreement as an Alnylam
In-License, and provide notice of such decision to Alnylam. In the event that
MedCo declines to accept such agreement as an Alnylam In-License, any rights
granted to MedCo thereunder will not be deemed to be “Controlled” by Alnylam or
licensed to MedCo under this Agreement, and will not be subject to the payment
provisions under this Agreement relating to In-Licenses. In the event that MedCo
accepts such Third Party agreement as an Alnylam In-License, such agreement will
thereafter be included within the definition of Alnylam In-License, and any
rights granted to Alnylam thereunder will be deemed to be “Controlled” by
Alnylam and sublicensed to MedCo pursuant to the terms of this Agreement.

6.4.2.3 Additional Alnylam In-Licenses. MedCo shall have the option, exercisable
during the Term upon written notice to Alnylam, and on an Additional Alnylam
In-License by Additional Alnylam In-License basis, to expand the definition of
Alnylam Patent Rights under this Agreement to include the Patent Rights
Controlled by Alnylam under such Additional Alnylam In-License. Upon receipt of
such written notice from MedCo, then such agreement will thereafter be included
within the definition of Existing Alnylam In-Licenses, and all rights granted to
Alnylam thereunder will be deemed to be “Controlled” by Alnylam and sublicensed
to MedCo under this Agreement effective as of the date of such written notice,
and Schedule D will be updated accordingly.

6.4.2.4 Product-Specific Rights. As between the Parties, MedCo and its
Affiliates shall have the sole right to enter into an agreement with a Third
Party after the Effective Date to acquire a license with respect to Licensed
Products in the Field under any Patent Right that (a) Covers the Development,
Manufacture or Commercialization of any Licensed Product and (b) if such license
had been acquired by Alnylam, would be an Alnylam Product-Specific Patent Right.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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6.4.3 Payments Under In-Licenses.

6.4.3.1 Alnylam shall bear [***] percent ([***]%) of any Third Party License
Payments under the Alnylam In-Licenses, other than the payments described in
Section 6.4.3.2, that become payable based on the licensing or sublicensing to
MedCo of rights thereunder, or the exercise by MedCo of rights hereunder, with
respect to Licensed Products.

6.4.3.2 Subject to Sections 6.1.3(a), and 7.4.5 (to the extent applicable),
MedCo shall bear [***] percent ([***]%) of, and shall reimburse Alnylam for:

 

  (a) [***], and, if MedCo exercises its option pursuant to Section 6.4.2.3 with
respect to [***], under the [***], that become payable based on the Manufacture
or Commercialization by MedCo or its Related Parties of Licensed Products;
provided, however, that (i) such [***], as the case may be, shall not [***] as
set forth as of the Effective Date in such [***], as applicable, and (ii) the
[***] taken together shall not exceed (x) with respect to [***], (A) on or prior
to [***], and (B) after [***] (as defined on Schedule D), [***] (as defined on
Schedule D) and, [***], which cover [***], [***]; and (y) with respect to [***],
(A) on or prior to [***], and (B) after [***], which cover [***],

 

  (b) [***], other than the [***], that become payable based on the Manufacture
or Commercialization by MedCo or its Related Parties of Licensed Products [***];
provided, however, that the [***] under each [***] shall not [***] as set forth
as of the Effective Date in such [***],

 

  (c) [***], other than the [***], that become payable based on the Development,
Manufacturing or Commercialization by MedCo or its Related Parties of Licensed
Products, not to exceed [***] provided by Alnylam to MedCo pursuant to
Section 6.4.2.2, and

 

  (d) [***] that become payable based on [***] thereunder, or [***] hereunder,
with respect to Licensed Products.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

33

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6.4.3.3 With respect to the calculation of royalties payable by MedCo pursuant
to Section 6.4.3.2(a), (b) or (c), if any such royalties are calculated based on
the total sales during any relevant period of any Licensed Product(s) and any
other products which are not Licensed Products, then the royalties shall be
allocated pro rata to such Licensed Product(s) and other products such that
MedCo, on the one hand, and Alnylam and its Affiliates and other licensees, on
the other hand, bear their pro rata portion of such royalties based on the total
sales of such Licensed Product(s) and such other products during the relevant
time period. Subject to the confidentiality and non-use obligations of Article
8, the Parties shall share any reasonably necessary information in order to
properly calculate the royalty payments due from MedCo in accordance with this
Section 6.4.3.3 and any overpayment by MedCo hereunder shall be promptly
refunded to MedCo. Schedule H provides a non-limiting example of the
calculations with respect to this Section 6.4.3.3.

6.4.3.4 With respect to any milestone payments payable by MedCo pursuant to
Section 6.4.3.2(c), if any such milestone payments are due only on the first
product to achieve the relevant milestone event under the relevant Alnylam
In-License, and a Licensed Product is the first such product, then, upon the
achievement of such milestone event by each of the next two (2) products which
are not Licensed Products to achieve such milestone event, Alnylam shall pay to
MedCo [***] of the milestone payment paid by MedCo with respect to such
milestone event. If a Licensed Product is not the first product to achieve the
relevant milestone event, but is the second or third product to achieve the
relevant milestone event, then MedCo agrees to reimburse Alnylam for [***] of
such milestone payment.

6.4.3.5 Alnylam shall invoice MedCo for amounts payable by MedCo pursuant to
Sections 6.4.3.2 and 6.4.3.4, and MedCo shall pay all such amounts to Alnylam
within thirty (30) days after its receipt of the invoice. Alnylam and its
Affiliates and sublicensees shall keep complete and accurate records in
sufficient detail to enable the calculation of royalty payments by MedCo in
accordance with Section 6.4.3.3, and the payments to or from MedCo pursuant to
Section 6.4.3.4, to be determined. MedCo shall have the right to audit such
records of Alnylam in accordance with Section 7.5.

6.4.4 Maintenance of In-Licenses. Each Sublicensor Party and its Affiliates
shall use its Commercially Reasonable Efforts to maintain its good standing
under each of its In-Licenses (including by not initiating any patent challenges
which could result in the termination of any such In-License in accordance with
its terms and promptly forwarding to the relevant Third Party all reports,
payments and other information and material provided by the Sublicensed Party to
the Sublicensor Party which, in accordance with the terms of such In-License,
are to be forwarded or paid to the relevant Third Party). Without the prior
written consent of the Sublicensed Party, neither Sublicensor Party nor its
Affiliates shall (a) breach any of its material obligations or waive any of its
rights under any of its In-Licenses, (b) amend any of its In-Licenses in any
manner that would be materially adverse to the rights granted to the Sublicensed
Party under this Agreement, or (c) terminate any of its In-Licenses, including
by failure to satisfy any of its diligence obligations thereunder.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

34

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6.5 Bankruptcy. All rights and licenses granted under or pursuant to this
Agreement by a Party to the other, including those set forth in Sections 6.1 and
6.2, are and shall otherwise be deemed to be, for purposes of Section 365(n) of
the U.S. Bankruptcy Code, licenses of right to “intellectual property” as
defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree that
the Parties and their respective Related Parties, as sublicensees of such rights
under this Agreement, shall retain and may fully exercise all of their rights
and elections under the U.S. Bankruptcy Code and any foreign counterpart
thereto. The Parties further agree that that upon commencement of a bankruptcy
proceeding by or against a Party (the “Bankrupt Party”) under the Bankruptcy
Code, the other Party (the “Non-Bankrupt Party”) will be entitled to a complete
duplicate of, or complete access to (as the Non-Bankrupt Party deems
appropriate), all such intellectual property and all embodiments of such
intellectual property. Such intellectual property and all embodiments of such
intellectual property will be promptly delivered to the Non-Bankrupt Party
(a) upon any such commencement of a bankruptcy proceeding and upon written
request by the Non-Bankrupt Party, unless the Bankrupt Party elects to continue
to perform all of its obligations under this Agreement, or (b) if not delivered
under (a) above, upon the rejection of this Agreement by or on behalf of the
Bankrupt Party and upon written request by the Non-Bankrupt Party. The Bankrupt
Party (in any capacity, including debtor-in-possession) and its successors and
assigns (including any trustee) agrees not to interfere with the exercise by
Non-Bankrupt Party or its Related Parties of its rights and licenses to such
intellectual property and such embodiments of intellectual property in
accordance with this Agreement, and agrees to assist the Non-Bankrupt Party and
its Related Parties in obtaining such intellectual property and such embodiments
of intellectual property in the possession or control of Third Parties as
reasonably necessary or desirable for the Non-Bankrupt Party to exercise such
rights and licenses in accordance with this Agreement. The foregoing provisions
are without prejudice to any rights the Non-Bankrupt Party may have arising
under the Bankruptcy Code or other Laws.

6.6 No Other Rights. Except as otherwise expressly provided in this Agreement,
under no circumstances shall a Party, as a result of this Agreement, obtain any
ownership interest or other right in any Know-How, Patent Rights or other
intellectual property rights of the other Party, including items owned,
controlled or developed by the other Party, or provided by the other Party to
the receiving Party at any time pursuant to this Agreement.

6.7 No Reach Through to Acquirer IP. Notwithstanding anything in this Agreement
to the contrary, following the closing of a Change of Control of a Party (the
“Acquired Party”), the Parties agree that the other Party (the “Non-Acquired
Party”) shall not obtain rights or access to the Patent Rights or Know-How
controlled by the Acquirer (as defined below) or any of the Affiliates of such
Acquirer (other than the Acquired Party and its Affiliates which exist
immediately prior to the closing of such Change of Control (such Affiliates, the
“Pre-Existing Affiliates”)); and the Acquirer and its Affiliates (other than the
Acquired Party and its Pre-Existing Affiliates) shall not obtain rights or
access to the Patent Rights or Know-How controlled by the Non-Acquired Party or
any of its Affiliates pursuant to this Agreement, or be bound by the
restrictions set forth in Section 9.5.1. For clarity but without limitation, the
Non-Acquired Party’s rights in all Patent Rights and Know-How Controlled by the
Acquired Party or any of its Pre-Existing Affiliates, which Patent Rights and
Know-How exist as of the date of the closing of such Change of Control and are
then licensed hereunder to the Non-Acquired Party, shall remain licensed to such
Non-Acquired Party after the date of the closing

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

35

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of such Change of Control in accordance with and subject to the terms and
conditions of this Agreement and shall not be affected in any manner by virtue
of such Change of Control. “Acquirer” means, with respect to the Acquired Party,
the Third Party that acquires such Acquired Party or its direct or indirect
controlling Affiliate, or that acquires all or substantially all of the assets
of the Acquired Party or its direct or indirect controlling Affiliate.

7. CERTAIN FINANCIAL TERMS

7.1 Upfront Fee. As partial consideration for the licenses and other rights
granted by Alnylam to MedCo under this Agreement, and to fund Alnylam’s
Development Costs under the Initial Development Plan up to the Development Costs
Cap under this Agreement, within five (5) days after the Effective Date, MedCo
shall pay Alnylam a non-refundable, non-creditable initial payment of
Twenty-Five Million U.S. Dollars ($25,000,000).

7.2 Development Milestone Fees.

(a) As partial consideration for the licenses and other rights granted in this
Agreement, and to fund Alnylam’s Development Costs under the Initial Development
Plan up to the Development Costs Cap under this Agreement, MedCo shall make the
non-refundable, non-creditable milestone payments to Alnylam set forth below no
later than [***] days after the earliest date on which MedCo becomes aware that
the corresponding milestone event has first been achieved with respect to a
Licensed Product.

 

Milestone Event

   Milestone
Payment  

(i) First dosing of a subject in a Phase I Study of a Licensed Product

   $ 10,000,000   

[***]

     [***]   

[***]

     [***]   

[***]

     [***]   

[***]

     [***]   

(b) Each milestone payment by MedCo to Alnylam hereunder shall be payable only
once, regardless of the number of times achieved with respect to a Licensed
Product or the Licensed Products and in no event shall the total milestone
payments under this Section 7.2 exceed [***] dollars ($[***]).

(d) MedCo shall provide Alnylam with written notice of the achievement by MedCo
or any of its Related Parties of any milestone event set forth in
Section 7.2(a)(ii)-(v) within [***] days after MedCo becomes aware of such
event; provided, however, that, except as required by Law, MedCo shall inform
Alnylam of such event prior to any public disclosure of such event by MedCo.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

36

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(e) Alnylam shall provide MedCo with written notice of the achievement by
Alnylam or any of its Related Parties of any milestone event set forth in
Section 7.2(a)(i) within [***] after Alnylam becomes aware of such event;
provided, however, that, except as required by Law, Alnylam shall inform MedCo
of such event prior to any public disclosure of such event by Alnylam.

7.3 Sales Milestone Fees. As partial consideration for the licenses and other
rights granted in this Agreement, MedCo shall make the non-refundable,
non-creditable milestone payments to Alnylam set forth below no later than [***]
after the end of the Calendar Year in which the corresponding milestone event (a
“Sales Milestone”) has first been achieved with respect to the Licensed
Products.

 

Aggregate Calendar Year Net Sales of the Licensed Products in the Territory
Equals or Exceeds
(in U.S. Dollars):

   Milestone
Payment

[***]

   [***]

[***]

   [***]

[***]

   [***]

With respect to the foregoing Sales Milestones, payment shall be made only once
for each milestone regardless of the number of times aggregate Calendar Year Net
Sales for Licensed Products in the Territory reach a particular dollar threshold
and in no event shall the total milestone payments under this Section 7.3 exceed
[***] dollars ($[***]). If Licensed Products achieve a higher Sales Milestone in
a Calendar Year without having first achieved a lower Sales Milestone in any
previous Calendar Year, then the milestone payment(s) for the lower Sales
Milestone(s) shall be due and payable to Alnylam concurrently with the milestone
payment for the higher Sales Milestone that has been achieved. For example, if
aggregate Net Sales of the Licensed Products in the Territory are $[***] in the
first Calendar Year, and then $[***] in the next Calendar Year, then MedCo will
owe Alnylam a milestone payment of $[***] with respect to the second Calendar
Year ($[***] for the $[***] milestone and $[***] for the $[***] milestone).

7.4 Royalties.

7.4.1 Royalties Payable on Licensed Products. Subject to the terms and
conditions of this Agreement, as partial consideration for the licenses and
other rights granted in this Agreement MedCo shall pay to Alnylam royalties on
aggregate Net Sales by MedCo and its Related Parties of all Licensed Products in
the Territory, as follows:

 

Aggregate Calendar Year

Net Sales of all Licensed Products in the Territory

   Royalty
(as a percentage of
Net Sales)

[***]

   [***]

[***]

   [***]

[***]

   [***]

[***]

   [***]

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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Royalties on aggregate Net Sales shall be paid at the rate applicable to the
portion of such aggregate Net Sales within each of the Net Sales levels above
during such Calendar Year.

7.4.2 Royalty Term. The period during which the royalties set forth in
Section 7.4.1 shall be payable, on a Licensed Product-by-Licensed Product and
country-by-country basis, shall commence with the First Commercial Sale of such
Licensed Product in such country and continue until the latest of (a) the
expiration of the last Valid Claim of any Patent Right that is (i) included in
Alnylam Technology or MedCo Improvements, and (ii) Covers the manufacture, use,
offer for sale, sale or importation of the Licensed Product in such country of
sale, (b) the expiration of Regulatory Exclusivity for such Licensed Product in
such country, and (c) the twelfth (12th) anniversary of the First Commercial
Sale of the Licensed Product in such country (each such period, a “Royalty
Term”).

7.4.3 Royalty Adjustment for Generic Competition. Subject to Section 7.4.6, the
royalties to be paid by MedCo to Alnylam pursuant to this Section 7.4 shall be
reduced by [***] percent ([***]%) with respect to Net Sales in a country of the
Territory of any Licensed Product as to which Generic Competition exists.
“Generic Competition” means, with respect to a Licensed Product in any country
in the Territory in a given Calendar Quarter, that, during such Calendar
Quarter, one or more Generic Products are commercially available in such country
and such Generic Products have a combined market share (calculated on the basis
of the number of units sold) of at least [***] percent ([***]%) of the aggregate
market share of Licensed Products and Generic Products (based on data provided
by IMS International, or if such data is not available, such other reliable data
source as reasonably agreed by the Parties).

7.4.4 [***]

7.4.5 Royalty Adjustment for Necessary Third Party IP. Subject to Section 7.4.6,
(a) if MedCo or any of its Related Parties is required to obtain a license or
similar right from any Third Party under any Patent Rights that would be
infringed by the practice of the Alnylam Patent Rights with respect to Licensed
Products in the Field, and if MedCo or any of its Related Parties is required to
pay to such Third Party a royalty, license fees or milestone payments to obtain
such license or similar right with respect to the Development, Manufacture or
Commercialization of Licensed Products in the Field,

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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then the royalties to be paid by MedCo to Alnylam on Net Sales of a Licensed
Product pursuant to this Section 7.4 in a Calendar Quarter shall be reduced by
[***] percent ([***]%) of the amount of such royalty, license fees or milestone
payments reasonably attributable to the Development, Manufacture or
Commercialization of such Licensed Product and actually paid to such Third Party
to the extent MedCo, directly or indirectly, bears the cost of such payment in
such Calendar Quarter, and (b) the royalties to be paid by MedCo to Alnylam on
Net Sales of a Licensed Product pursuant to this Section 7.4 in a Calendar
Quarter shall be reduced by [***] percent ([***]%) of the amount of any payments
made by MedCo to Alnylam pursuant to Section 6.4.3.2(c) reasonably attributable
to the Development, Manufacture or Commercialization of such Licensed Product
and actually paid to such Third Party to the extent MedCo, directly or
indirectly, bears the cost of such payment in such Calendar Quarter.

7.4.6 Royalty Floor. Notwithstanding the foregoing provisions of this
Section 7.4, in no event during the applicable Royalty Term for a Licensed
Product in a country of the Territory shall the royalties payable to Alnylam
hereunder for such Licensed Product in such country for any Calendar Quarter be
reduced pursuant to Sections 7.4.3, 7.4.4, and 7.4.5 to less than [***] percent
([***]%) of the royalties payable pursuant to Section 7.4.1 as to such Licensed
Product in such country for such Calendar Quarter.

7.4.7 Reports; Payment of Royalty. During the Term, following the First
Commercial Sale of the Licensed Product in the Territory, MedCo shall furnish to
Alnylam a written report within [***] days after the end of each Calendar
Quarter showing, on a Licensed Product-by-Licensed Product and
country-by-country basis, the gross sales of each Licensed Product in each
country of the Territory, deductions from gross sales (itemized by deduction
category) for each Licensed Product for each country of the Territory included
in the calculation of Net Sales, the Net Sales in each country of the Territory
of Licensed Product during the reporting period, a calculation of royalty
adjustments pursuant to Section 7.4 (if any) for such period and the royalties
payable under this Agreement. Quarterly reports shall be due no later than the
[***] day following the end of each Calendar Quarter. In addition, to the extent
required under Sections 6.1.3(b) or 6.4.1, MedCo shall prepare and deliver to
Alnylam any additional reports as required under the Alnylam In-Licenses and to
determine any payments due under Section 6.4. Royalties shown to have accrued by
each royalty report shall be due and payable on the date such royalty report is
due. Along with the last report for a Calendar Year provided hereunder, MedCo
will provide a final report for such entire Calendar Year that includes a
calculation of [***] (if any) for such period, and a statement on whether any
reconciling payments must be made at such time to effect the intent of
Section 7.4.4. Within [***] days after such statement is provided, the Party
that owes any amounts to the other Party to effect such reconciliation will pay
the relevant amount to the other Party. MedCo and its Related Parties shall keep
complete and accurate records in sufficient detail to enable the royalties and
other payments payable hereunder, and, to the extent required under Sections
6.1.3(b) or 6.4.1, by Alnylam to Third Parties under the Alnylam In-Licenses, to
be determined.

7.4.8 Blended Royalty Rates. The Parties acknowledge and agree that the Patent
Rights and Know-How licensed pursuant to this Agreement justify royalty rates of
differing amounts with respect to the sales of Licensed Products, which rates
could be applied separately to Licensed Products involving the exercise of such
Licensed Patents and/or the incorporation of such Know-How, and that,

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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if such royalties were calculated separately, royalties relating to
Patent-Rights and royalties relating to Know-How would last for different terms.
Notwithstanding the foregoing, the Parties have determined, for reasons of
convenience, that blended royalty rates for the Patent Rights and the Know-How
licensed hereunder, as set forth above, will apply during a single Royalty Term.

7.5 Audits.

7.5.1 Upon the written request of a Party and not more than [***], the other
Party and its Related Parties shall permit an independent certified public
accounting firm of internationally-recognized standing selected by the
requesting Party and reasonably acceptable to the other Party, at the requesting
Party’s expense except as set forth below, to have access during normal business
hours to such of the records of the other Party as may be reasonably necessary
to verify the accuracy of the royalty, Cost reimbursement and other reports
hereunder for any Calendar Year ending not more than [***] Calendar Years prior
to the date of such request for the sole purpose of verifying the basis and
accuracy of costs incurred under Section 2.3.1, to the extent Alnylam has
provided notice thereof to MedCo pursuant to Section 2.3.3, and payments made
under Sections 2.3.3, 6.4 and, if applicable, 12.3 and Articles 5, 7 and 11. The
records for any Calendar Year may be audited no more than once.

7.5.2 If such accounting firm identifies a discrepancy made during such period,
the appropriate Party shall pay the other Party the amount of the discrepancy,
together with late-payment interest in accordance with Section 7.7, within [***]
days after the date the requesting Party delivers to the other Party such
accounting firm’s written report so concluding, or as otherwise agreed by the
Parties in writing. The fees charged by such accounting firm shall be paid by
the requesting Party, unless such discrepancy results from a reporting error by
the other Party and represents an underpayment by such other Party of at least
five percent (5%) of the total amounts due from such other Party hereunder, or
represents an overpayment to such other Party of at least five percent (5%) of
the total amounts due to such other Party hereunder, in a Calendar Year, in
which case such fees, to the extent reasonable, shall be paid by the other
Party.

7.5.3 To the extent required under Sections 6.1.3(b) or 6.4.1, and subject to
Section 6.4, MedCo shall comply with all applicable audit requirements in the
Alnylam In-Licenses and shall include in each sublicense granted by it pursuant
to this Agreement a provision requiring its Sublicensees to make reports to
Alnylam, to keep and maintain records of sales made pursuant to such sublicense
and to grant access to such records by the independent accountants of the
Person(s) that are also party to such Alnylam In-Licenses to the same extent
required of MedCo under this Agreement.

7.5.4 Unless an audit for a Calendar Year has been commenced prior to the [***]
anniversary of the end of such Calendar Year, the calculation of royalties, Cost
reimbursement and other payments payable with respect to such Calendar Year
shall be binding and conclusive upon both Parties, and each Party and its
Related Parties shall be released from any further liability or accountability
with respect to such royalties or expense reimbursement for such Calendar Year,
upon such [***] anniversary. If an audit for a Calendar Year has been commenced
prior to the [***] anniversary of the end of such Calendar Year, the calculation
of royalties, Cost reimbursement and other payments payable with respect to such
Calendar Year shall be binding and conclusive upon both Parties, and

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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each Party and its Related Parties shall be released from any further liability
or accountability with respect to such royalties or expense reimbursement for
such Calendar Year, following the conclusion of such audit.

7.5.5 Each Party shall treat all financial information subject to review under
this Section 7.5 or under any sublicense agreement as the audited Party’s
Confidential Information in accordance with the confidentiality and non-use
provisions of this Agreement, and shall cause its accounting firm to enter into
an acceptable confidentiality agreement with the audited Party and/or its
Related Parties obligating it to retain all such information in confidence
pursuant to such confidentiality agreement.

7.6 Payment Exchange Rate. All payments to be made under this Agreement shall be
made in United States dollars and shall be paid by bank wire transfer in
immediately available funds to such bank account in the United States as may be
designated in writing by the receiving Party from time to time. In the case of
Net Sales made or expenses incurred by a Party and its Related Parties in
currencies other than United States dollars, the rate of exchange to be used in
computing the amount of United States dollars due shall be the rate of exchange
utilized by such Party in its worldwide accounting system and calculated in
accordance with generally accepted accounting principles in the United States
consistently applied, prevailing on the last day of each Calendar Quarter for
royalty payments.

7.7 Late Payments. Any amount owed by a Party to the other Party under this
Agreement that is not paid on or before the date such payment is due shall bear
interest at a rate per annum equal to the lesser of (a) the then current one
(1) month London Inter-Bank Offering Rate for US Dollars, as quoted on the
British Banker’s Association’s website currently located at www.bba.org.uk (or
such other source as may be mutually agreed by the Parties), plus [***]
percentage points, per annum or (b) the highest rate permitted by Law,
calculated on the number of days such payments are paid after such payments are
due and compounded monthly.

7.8 Blocked Payments. If, by reason of Laws in any jurisdiction in the
Territory, it becomes impossible or illegal for a Party to transfer milestone
payments, royalties or other payments under this Agreement to the other Party,
the payor shall promptly notify the payee. During any such period described
above, the payor shall deposit such payments in local currency in the relevant
jurisdiction to the credit of the payee in a recognized banking institution
designated by the payee or, if none is designated by the payee within a period
of [***] days, in a recognized banking institution selected by the payor and
identified in a written notice given to the payee.

7.9 Taxes.

7.9.1 The Parties acknowledge and agree that, as of the Effective Date, no
deduction for any tax withholding shall be required with respect to the payments
due under this Agreement. Each Party (the “Paying Party”) shall use reasonable
efforts to minimize tax withholding on payments made to the other Party (the
“Payee”). Notwithstanding such efforts, if the Paying Party concludes that tax
withholdings under the Laws of any country are required with respect to payments
to the Payee, the Paying Party shall promptly notify the Payee and allow the
Payee [***] Business Days to determine whether there are actions the Payee can
lawfully undertake to avoid such withholding. The Paying

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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Party shall refrain from making such payment until the earliest to occur of:
(a) such [***] Business Day period has expired; (b) the Payee instructs the
Paying Party that the Payee intends to take actions that will reduce, or obviate
the need for, such withholding, in which case the Paying Party shall make such
payment (and future payments subject to the same or similar treatment), subject
to no or such reduced withholding of tax, only after (i) it is instructed to do
so by the Payee and (ii) it has received written advice from the Payee’s
counsel, in form and substance reasonably satisfactory to the Paying Party, that
such actions have been taken, are lawful and are effective to so reduce or
eliminate such withholding; or (c) the Payee instructs the Paying Party to make
such payment and withhold the required amount of tax and pay it to the
appropriate Governmental Authority in accordance with applicable Laws, in which
case, the Paying Party shall take such actions and shall promptly thereafter
provide the Payee with copies of receipts or other evidence of such withheld
amount and such payment, including to the extent reasonably available to the
Paying Party, such evidence as is reasonably required and sufficient to allow
the Payee to document such tax withholdings adequately for purposes of claiming
foreign tax credits and similar benefits. The Parties will cooperate reasonably
in completing and filing documents required under the provisions of any
applicable tax Laws or under any other applicable Law, in connection with the
making of any required tax withholding payment, or in connection with any claim
to a refund of, or credit for, any such payment. Each Party will reasonably
cooperate with the other Party (at such other Party’s expense and request) to
minimize such taxes imposed on such other Party in accordance with applicable
Laws.

7.9.2 Notwithstanding the foregoing, if, as a result of (a) the assignment of
this Agreement by the Paying Party to an Affiliate or a Third Party outside of
the United States or (b) the exercise by the Paying Party of its rights under
this Agreement through an Affiliate or Third Party outside of the United States,
foreign withholding tax in excess of the foreign withholding tax amount that
would have been payable in the absence of such assignment or exercise of rights
becomes payable with respect to amounts due to the Payee hereunder, such amount
due to the Payee will be increased so that the amount actually paid to the Payee
(after withholding of the excess withholding tax) equals the amount that would
have been payable to the Payee in the absence of such excess withholding.

7.9.3 For clarity, the provisions of Sections 7.9.1 and 7.9.2 shall not apply to
taxes imposed on a Party’s net income.

7.10 Invoices. To the extent necessary for the Paying Party to comply with
applicable Law or GAAP, the Paying Party may require the other Party to issue an
invoice to the Paying Party for any amount due by the Paying Party hereunder
prior to the Paying Party paying such amount.

7.11 Good Faith Disputes Over Payment Obligations, With respect to any payment
due or purported to be due hereunder, the portion of any such payment which is
disputed in good faith shall not be owed until the dispute is resolved, and the
Parties shall use good faith efforts to promptly resolve such dispute; provided,
however, that any such amount finally determined to be due shall be paid with
interest pursuant to Section 7.7 from the date originally due (without regard to
this Section 7.11).

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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8. CONFIDENTIALITY AND PUBLICATION

8.1 Nondisclosure Obligation.

(a) All Confidential Information disclosed by one Party to the other Party
hereunder shall be maintained in confidence by the receiving Party and shall not
be disclosed to a Third Party or used for any purpose except as set forth herein
without the prior written consent of the disclosing Party, except that no
information or data shall be considered Confidential Information to the extent
that such information or data:

 

  (i) is known by the receiving Party at the time of its receipt, and not
through a prior disclosure by the disclosing Party, as documented by the
receiving Party’s business records;

 

  (ii) is in the public domain or publicly known by use and/or publication
before its receipt from the disclosing Party (or, with respect to Joint
Collaboration IP, before its development hereunder), or thereafter enters the
public domain or becomes publicly known through no fault of the receiving Party;

 

  (iii) 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

 

  (iv) is developed by the receiving Party independently of Confidential
Information received from the disclosing Party (including any Joint
Collaboration IP), as documented by the receiving Party’s business records.

(b) Notwithstanding the obligations of confidentiality and non-use set forth
above and in Section 8.2 below, a receiving Party may provide Confidential
Information disclosed to it, and disclose the existence and terms of this
Agreement, as may be reasonably required in order to perform its obligations and
to exploit its rights under this Agreement, to (i) Related Parties, and their
employees, directors, agents, consultants, advisors and/or other Third Parties
for the performance of its obligations hereunder (or for such entities to
determine their interest in performing such activities) in accordance with this
Agreement, in each case who are obligated to keep such Confidential Information
confidential on terms no less stringent than those in this Section 8.1;
(ii) Governmental Authorities or other Regulatory Authorities in order to obtain
patents in accordance with this Agreement, or otherwise perform its obligations
or exploit its rights under this Agreement; provided, that such Confidential
Information shall be disclosed only to the extent reasonably necessary to do so;
(iii) the extent required by Law, including by the rules or regulations of the
United States Securities and Exchange Commission or similar regulatory agency in
a country other than the United States or of any stock exchange or listing
entity; (iv) any bona fide actual or prospective underwriters, investors,
lenders, other financing sources, acquirers, permitted sublicensees,
collaborators or strategic partners and to consultants and advisors of such
Party, in each case who are obligated to keep such Confidential Information
confidential on terms no less stringent than those in this Section 8.1; and
(v) Third Parties to the extent a Party is required to do so pursuant to the
terms of an In-License.

If a Party is required by Law to disclose Confidential Information that is
subject to the non-disclosure provisions of this Section 8.1 or Section 8.2,
such Party shall, to the extent permitted by Law, promptly inform the other
Party of the disclosure that is being sought in order to provide the other Party
an opportunity to challenge or limit the disclosure obligations. Confidential
Information that is required

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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to be disclosed by Law shall remain otherwise subject to the confidentiality and
non-use provisions of this Section 8.1 and Section 8.2. If either Party
concludes that a copy of this Agreement must be filed with the United States
Securities and Exchange Commission or similar regulatory agency in a country
other than the United States, such Party will provide the other Party with a
copy of this Agreement showing any provisions hereof as to which the Party
proposes to request confidential treatment, will provide the other Party with an
opportunity to comment on any such proposed redactions and to suggest additional
redactions, and will take such Party’s reasonable and timely comments into
consideration before filing the Agreement.

8.2 Publication and Publicity.

8.2.1 Publication. MedCo and Alnylam each acknowledge the other Party’s interest
in publishing the results of the Collaboration. Each Party also recognizes the
mutual interest in obtaining valid patent protection and in protecting trade
secret information. Consequently, except for disclosures permitted pursuant to
Section 8.1, 8.2.2(b) or 8.2.2(c), either Party wishing to make a publication or
public presentation of Development results that contains the Confidential
Information of the other Party shall deliver to the other Party a copy of the
proposed written publication or presentation at least [***] days prior to
submission for publication or presentation. The reviewing Party shall have the
right (a) to propose modifications to the publication or presentation for patent
reasons, trade secret reasons or business reasons, which proposals the
publishing Party may accept or reject in its discretion, and (b) to request a
reasonable delay in publication or presentation in order to protect patentable
information in accordance with Article 11. If the reviewing Party requests a
delay pursuant to clause (b), the publishing Party shall delay submission or
presentation for a period of an additional [***] days to enable the
non-publishing Party to file patent applications protecting such Party’s rights
in such information in accordance with Article 11. With respect to any proposed
publications or disclosures by clinical investigators or academic or non-profit
collaborators, such materials shall be subject to review under this Section 8.2
to the extent that MedCo or Alnylam, as the case may be, has the right and
ability (after using Commercially Reasonable Efforts to obtain such right and
ability) to do so.

8.2.2 Publicity.

(a) Except as set forth in Section 8.1 above and clause (b) below, the terms of
this Agreement may not be disclosed by either Party, and no Party shall use the
name, trademark, trade name or logo of the other Party or its employees in any
publicity, news release or disclosure relating to this Agreement or its subject
matter, without the prior express written permission of the other Party, except
as may be required by Law or expressly permitted by the terms of the Transaction
Agreements.

(b) Following the execution of this Agreement, the Parties shall issue a joint
press release agreed to by the Parties and substantially in the form set forth
in Schedule F. After such initial press release, except as provided in Sections
8.1, 8.2.2(a), or 8.2.2(c), neither Party shall issue a press release or public
announcement relating to this Agreement without the prior written approval of
the other Party, which approval shall not be unreasonably withheld, conditioned
or delayed, except that a Party may (i) once a press release or other public
statement is approved in writing by both Parties, make subsequent public
disclosure of the information contained in such press release or other written

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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statement without the further approval of the other Party, and (ii) issue a
press release or public announcement as required, in the reasonable judgment of
such Party, by Law, including by the rules or regulations of the United States
Securities and Exchange Commission or similar regulatory agency in a country
other than the United States or of any stock exchange or listing entity.

(c) Either Party may issue a press release or make a public disclosure relating
to this Agreement or the Parties’ activities under this Agreement to the extent
that such disclosure describes the commencement and/or “top-line” results of
Clinical Trials of a Licensed Product conducted by such Party, the achievement
by such Party of any material Development events with respect to a Licensed
Product or the filing for or receipt of Regulatory Approval with respect to the
Licensed Product by such Party or its Related Parties in the Territory, or
amounts paid to either Party in respect of the achievement of any milestone
events. Prior to making any such disclosure, the Party making the disclosure
shall provide the other Party with a draft of such proposed disclosure at least
five (5) Business Days (or, to the extent faster timely disclosure of a material
event is required by Law or stock exchange or stock market rules, such shorter
period of time sufficiently in advance of the disclosure so that the other Party
will have the opportunity to comment upon the disclosure and the disclosing
Party will be able to comply with its obligations) prior to making any such
disclosure, for the other Party’s review and comment, which shall be considered
in good faith by the disclosing Party.

(d) Subject to Sections 8.2.1 and 8.2.2(c), MedCo and its Related Parties may
make public announcements or disclosures reasonably necessary or useful to
Develop or Commercialize the Licensed Products in the Field in the Territory,
including disclosures necessary to recruit subjects to clinical trials and
disclosures to advertise, promote and otherwise Commercialize the Licensed
Products.

9. REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION

9.1 Mutual Representations and Warranties. Each Party represents and warrants to
the other Party that as of the Effective Date:

9.1.1 It is duly organized and validly existing under the laws of its
jurisdiction of incorporation or formation, and has full corporate or other
power and authority to enter into this Agreement, and to carry out the
provisions hereof.

9.1.2 It is duly authorized to execute and deliver this Agreement, and to
perform its obligations hereunder, and the person or persons executing this
Agreement on its behalf has been duly authorized to do so by all requisite
corporate action.

9.1.3 This Agreement is legally binding upon it and enforceable in accordance
with its terms. The execution, delivery and performance of this Agreement by it
does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a party and by which it may be bound, or with its
charter or by-laws.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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9.1.4 It has not granted, and will not grant, during the Term, any right to any
Affiliate or Third Party that would conflict with the rights granted to the
other Party hereunder.

9.1.5 Neither it nor any of its Affiliates has been debarred or is subject to
debarment.

9.2 Representations and Warranties of Alnylam. Except as provided in Schedule G,
Alnylam represents and warrants to MedCo that as of the Effective Date:

9.2.1 (a) Alnylam is the sole and exclusive owner of, or otherwise has the right
to license to MedCo as set forth in this Agreement, pursuant to an Alnylam
In-License (or will Control pursuant to an Additional Alnylam In-License at such
time that such Additional Alnylam In-License is included as an Alnylam
In-License pursuant to Section 6.4.2.3), the Alnylam Technology. (b) All of the
Alnylam Technology licensed to MedCo hereunder in the Territory that is solely
and exclusively owned by Alnylam or its Affiliates is free and clear of liens,
charges or encumbrances, other than licenses granted to Third Parties that are
not inconsistent with the rights and licenses granted to MedCo under this
Agreement. (c) The Alnylam Technology and the Patent Rights licensed by Alnylam
pursuant to the Additional Alnylam In-Licenses constitute all the intellectual
property that Alnylam or its Affiliates own or have rights under that are or may
be reasonably necessary or useful for the Development, Manufacturing and
Commercialization of the Licensed Products.

9.2.2 Alnylam has sufficient legal and/or beneficial title and ownership of, or
sufficient license rights under, the Alnylam Patent Rights listed in Schedule C
to grant the licenses to such Alnylam Patent Rights granted to MedCo pursuant to
this Agreement.

9.2.3 (a) To Alnylam’s knowledge, Schedule C-1 sets forth a complete and
accurate list of the Alnylam Core Technology Patent Rights. (b) To Alnylam’s
knowledge, Schedule C-2 sets forth a complete and accurate list of the Alnylam
Product-Specific Patent Rights. (c) Schedules C-1 and C-2 collectively set forth
a complete and accurate list of the Alnylam Patent Rights owned, either solely
or jointly, by Alnylam or its Affiliates. (d) To Alnylam’s knowledge, Schedules
C-1 and C-2 collectively set forth a complete and accurate list of the Alnylam
Patent Rights licensed, either exclusively or nonexclusively, to Alnylam or its
Affiliates. (e) To Alnylam’s knowledge, each issued Alnylam Patent Right remains
in full force and effect. (f) Alnylam or its Affiliates have timely paid all
filing and renewal fees payable with respect to such Alnylam Patent Rights for
which Alnylam controls prosecution and maintenance. (g) Schedules C-1 and C-2
indicate whether each Alnylam Patent Right is owned exclusively by Alnylam or
its Affiliates, is owned jointly by Alnylam and one or more Affiliates or Third
Parties, or is licensed to Alnylam or its Affiliates. (h) For each Alnylam
Patent Right that is owned, but not owned exclusively, by Alnylam or its
Affiliates, or that is licensed to Alnylam or its Affiliates, Schedules C-1 and
C-2 identify the Third Party owner(s) and, if applicable, the Alnylam In-License
pursuant to which Alnylam Controls such Alnylam Patent Right. (i) For each
Alnylam Product-Specific Patent Right that is licensed, but not exclusively
licensed, to Alnylam or its Affiliates, Schedule C-2 indicates the non-exclusive
nature of the license. (j) For each Alnylam Core Technology Patent Right family
(other than Patent Rights licensed from Isis Pharmaceuticals, Inc.) that is
licensed, but not exclusively licensed, to Alnylam or its Affiliates, Schedule
C-1 indicates the non-exclusive nature of the license. (k) Alnylam or its
Affiliates is/are the sole and exclusive owner(s) of

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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all Patent Rights identified in Schedules C-1 or C-2 as being owned exclusively
by Alnylam or its Affiliates and Alnylam Controls all other Patent Rights
identified on such schedules. (l) To Alnylam’s knowledge, Schedule C-3 sets
forth a complete and accurate list of the Patent Rights licensed to Alnylam
pursuant to the Additional Alnylam In-Licenses and which, if MedCo exercises its
option pursuant to Section 6.4.2.3 with respect to the relevant Additional
Alnylam In-License on the Effective Date, would be considered “Controlled” by
Alnylam.

9.2.4(a) To Alnylam’s knowledge, the Alnylam Product-Specific Patent Rights,
are, or, upon issuance, will be, valid and enforceable patents and no Third
Party has challenged or threatened to challenge the scope, validity or
enforceability of any Alnylam Product-Specific Patent Right (including, by way
of example, through opposition or the institution or written threat of
institution of interference, nullity or similar invalidity proceedings before
the United States Patent and Trademark Office or any analogous foreign
Governmental Authority). (b) Alnylam has complied with all applicable Laws,
including any duties of candor to applicable patent offices, in connection with
its filing, prosecution and maintenance of the Alnylam Patent Rights for which
Alnylam controls filing, prosecution and maintenance.

9.2.5 (a) Section A and Section C of Schedule D sets forth a complete and
accurate list of all agreements between Alnylam or any of its Affiliates, on the
one hand, and a Third Party(ies), on the other hand, entered into on or prior to
the Effective Date and pursuant to which Alnylam or any of its Affiliates
licenses or acquires any intellectual property rights owned or controlled by
Alnylam or its Affiliates which are reasonably necessary or useful to Develop,
Manufacture or Commercialize Licensed Products in the Field. (b) Alnylam and its
Affiliates have not granted any Third Party, and are not under any obligation to
grant any Third Party, any right to Develop, Manufacture or Commercialize
Licensed Products in the Field in the Territory, except for the non-exclusive
licenses granted to the Third Parties pursuant to the Existing Alnylam Third
Party Agreements. (c) Alnylam Controls all Know-How and Patent Rights licensed
to Alnylam under the Existing Alnylam In-Licenses that are necessary or useful
for MedCo to Develop, Manufacture and/or Commercialize Licensed Products in the
Field in the Territory. (d) Without limiting the generality of the foregoing,
(i) Alnylam has obtained all necessary consents (if any) and fulfilled all
necessary conditions (if any) to sublicense to MedCo under this Agreement such
Know-How and Patent Rights licensed to Alnylam or its Affiliates under the
Existing Alnylam In-Licenses, and (ii) Alnylam has obtained all necessary
consents (if any) under the Existing Alnylam Third Party Agreements to grant the
licenses to MedCo to Alnylam Technology that are purported to be granted to
MedCo pursuant to this Agreement. (e) At such time that an Additional Alnylam
In-License is included as an Alnylam In-License pursuant to Section 6.4.2.3,
Alnylam will Control all Know-How, if any, and Patent Rights licensed to Alnylam
or its Affiliates under such Additional Alnylam In-License that is necessary or
useful for MedCo to Develop, Manufacture and/or Commercialize Licensed Products
in the Field in the Territory.

9.2.6 To Alnylam’s knowledge, neither Alnylam nor its Affiliates are in breach
or default under any Existing Alnylam In-License or Additional Alnylam
In-License, and neither Alnylam nor its Affiliates have received any written
notice of breach or default with respect to any Existing Alnylam In-License or
Additional Alnylam In-License.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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9.2.7 Alnylam has provided MedCo with true and complete copies of all Existing
Alnylam In-Licenses, Additional Alnylam In-Licenses and Existing Alnylam Third
Party Agreements; provided, however, that, (a) to the extent that the terms of
any such agreements require Alnylam to redact any provisions thereof before
providing such agreements, or relevant portion thereof, to MedCo, Alnylam has
provided MedCo with copies of such agreements, which are true and complete to
the fullest extent possible under such agreements and that any provisions or
portions which have not been provided to MedCo either (i) are not relevant to
any obligations owed by MedCo, or rights granted to MedCo, under such agreement
or any Transaction Agreement or (ii) have been summarized by Alnylam to MedCo in
writing, and such summary is true and complete in all material respects; and
(b) Alnylam is not required by this Section 9.2.7 to provide to MedCo copies of
any amendment or side letter to any Existing Alnylam In-License, Additional
Alnylam In-License or Existing Alnylam Third Party Agreement which is not
materially relevant to the rights granted to, and the obligations imposed on,
MedCo under this Agreement.

9.2.8 To Alnylam’s knowledge, the use, Development, Manufacture or
Commercialization by Alnylam or MedCo (or their respective Related Parties) of
any Licensed Product as formulated and manufactured as of the Effective Date, or
as intended to be formulated and manufactured as of the Effective Date, (a) does
not and will not infringe any issued, valid and enforceable patent of any Third
Party or (b) will not infringe the claims of any published Third Party patent
application when and if such claims were to issue in scope that was valid and
enforceable.

9.2.9 There is no (a) claim, demand, suit, proceeding, arbitration, inquiry,
investigation or other legal action of any nature, civil, criminal, regulatory
or otherwise, pending or, to Alnylam’s knowledge, threatened against Alnylam or
any of its Affiliates or (b) judgment or settlement against or owed by Alnylam
or any of its Affiliates, in each case in connection with the Alnylam Technology
or any Licensed Product.

9.2.10 To Alnylam’s knowledge, the Development of Licensed Product in the
Territory to date has been conducted by Alnylam and its Affiliates and its
subcontractors, in compliance (in all material respects) with all applicable
Laws.

9.3 [Intentionally Omitted].

9.4 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY
KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY WITH RESPECT TO ANY
TECHNOLOGY, LICENSED PRODUCT, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF
THIS AGREEMENT AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT WITH RESPECT TO ANY AND
ALL OF THE FOREGOING. EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY
THAT THE DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF THE LICENSED PRODUCTS
PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL OR THAT ANY PARTICULAR SALES LEVEL
WITH RESPECT TO THE LICENSED PRODUCTS WILL BE ACHIEVED.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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9.5 Certain Covenants.

9.5.1 Exclusivity. During the Term but subject to this Agreement including
Sections 6.1.4 and 6.7, neither Party or its Affiliates will, without the prior
written agreement of the other Party, alone or with or for an Affiliate or Third
Party, or grant any Third Party a license to, research, develop, manufacture or
commercialize in any country any product directed to the human PCSK9 gene, other
than a Licensed Product pursuant to this Agreement. For purposes of this
Section 9.5.1, “directed to” means, with respect to a compound, molecule or
siRNA and a target, that such compound, molecule or siRNA modulates the
expression or activity of such target, influences the expression or activity of
such target or otherwise antagonizes or inhibits the expression or activity of
such target, and with respect to a product and a target, that such product
contains a compound, molecule or siRNA that modulates the expression or activity
of such target, influences the expression or activity of such target or
otherwise antagonizes or inhibits the expression or activity of such target.

9.5.2 Compliance. Each Party and its Related Parties shall conduct the
Collaboration and the Development, Manufacture and Commercialization of the
Licensed Product in material accordance with all Laws and industry standards,
including current governmental regulations concerning good laboratory practices,
good clinical practices and good manufacturing practices.

9.5.3 Debarment. Neither Party nor any of its Affiliates will use in any
capacity, in connection with the Collaboration or the performance of its
obligations under this Agreement, any person or entity that has been debarred
pursuant to Section 306 of the United States Federal Food, Drug, and Cosmetic
Act, as amended, or that is the subject of a conviction described in such
section. Each Party agrees to inform the other Party in writing immediately if
it learns that (a) it or any person or entity that is performing activities in
the Collaboration or under this Agreement, is debarred or is subject to
debarment or is the subject of a conviction described in Section 306, or (b) any
action, suit, claim, investigation or legal or administrative proceeding is
pending or, to the notifying Party’s knowledge, is threatened, relating to the
debarment or conviction of the notifying Party or any person or entity used in
any capacity by such Party or any of its Affiliates in connection with the
Collaboration or the performance of its other obligations under this Agreement

10. INDEMNIFICATION; LIMITATION OF LIABILITY; INSURANCE

10.1 General Indemnification by MedCo. MedCo shall indemnify, hold harmless, and
defend Alnylam, its Related Parties, and their respective directors, officers,
employees and agents (“Alnylam Indemnitees”) from and against any and all Third
Party claims, suits, losses, liabilities, damages, costs, fees and expenses
(including reasonable attorneys’ fees) (collectively, “Losses”) to the extent
such Losses arise out of or result from, directly or indirectly, (a) any breach
of, or inaccuracy in, any representation or warranty made by MedCo in the
Transaction Agreements or any breach or violation of any covenant or agreement
of MedCo in the Transaction Agreements, (b) the negligence or willful misconduct
by or of MedCo and its Related Parties, and their respective directors,
officers, employees and agents, in the performance of MedCo’s obligations under
the Transaction Agreements,

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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or (c) the Development, Manufacture or Commercialization of Licensed Products by
MedCo or its Related Parties. MedCo shall have no obligation to indemnify the
Alnylam Indemnitees to the extent that the Losses arise out of or result from,
directly or indirectly, any breach of, or inaccuracy in, any representation or
warranty made by Alnylam in the Transaction Agreements, or any breach or
violation of any covenant or agreement of Alnylam in the Transaction Agreements,
or the negligence or willful misconduct by or of any of the Alnylam Indemnitees.

10.2 General Indemnification by Alnylam. Alnylam shall indemnify, hold harmless,
and defend MedCo, its Related Parties and their respective directors, officers,
employees and agents (“MedCo Indemnitees”) from and against any and all Losses
to the extent such Losses arise out of or result from, directly or indirectly,
(a) any breach of, or inaccuracy in, any representation or warranty made by
Alnylam in the Transaction Agreements or any breach or violation of any covenant
or agreement of Alnylam in the Transaction Agreements, (b) the negligence or
willful misconduct by or of Alnylam and its Related Parties, and their
respective directors, officers, employees and agents, in the performance of
Alnylam’s obligations under the Transaction Agreements, (c) the Development,
Manufacture or Commercialization of Licensed Products by Alnylam or its Related
Parties pursuant to the Initial Development Plan, the Development Supply
Agreement or Section 12.3, or (d) the exercise by Alnylam or its Related Parties
of its rights in Section 6.2.2. Alnylam shall have no obligation to indemnify
the MedCo Indemnitees to the extent that the Losses arise out of or result from,
directly or indirectly, any breach of, or inaccuracy in, any representation or
warranty made by MedCo in the Transaction Agreements, or any breach or violation
of any covenant or agreement of MedCo in the Transaction Agreements, or the
negligence or willful misconduct by or of any of the MedCo Indemnitees.

10.3 Indemnification Procedure. In the event of any such claim against any MedCo
Indemnitee or Alnylam Indemnitee (individually, an “Indemnitee”), the
indemnified Party shall promptly notify the other Party in writing of the claim
once the indemnified Party learns of it, and the indemnifying Party shall manage
and control, at its sole expense, the defense of the claim and its settlement.
The Indemnitee shall cooperate with the indemnifying Party, at the indemnifying
Party’s reasonable request and expense, and may, at its option and expense, be
represented in any such action or proceeding. The indemnifying Party shall not
be liable for any settlements, litigation costs or expenses incurred by any
Indemnitee without the indemnifying Party’s written authorization. The
indemnifying Party shall not settle any such claim without the Indemnitee’s
consent, unless such settlement requires only payments by the indemnifying
Party. Notwithstanding the foregoing, if the indemnifying Party believes that
any of the exceptions to its obligation of indemnification of the Indemnitees
set forth in Sections 10.1 or 10.2 may apply, the indemnifying Party shall
promptly notify the Indemnitees, which shall then have the right to be
represented in any such action or proceeding by separate counsel at their
expense; provided, that the indemnifying Party shall be responsible for payment
of such expenses if the Indemnitees are ultimately determined to be entitled to
indemnification from the indemnifying Party for the matters to which the
indemnifying Party notified the Indemnitees that such exception(s) may apply. To
the extent that an indemnification obligation hereunder results in payments to a
Third Party which are described in Section 6.4.3, the provisions of Sections
10.1 through 10.3 shall be subject to the provisions of Section 6.4.3 to the
extent Section 6.4.3 is applicable.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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10.4 Limitation of Liability. NEITHER PARTY HERETO WILL BE LIABLE FOR SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR
THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR
RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH
DAMAGES, EXCEPT AS A RESULT OF A PARTY’S WILLFUL MISCONDUCT, A MATERIAL BREACH
OF THE CONFIDENTIALITY AND NON-USE OBLIGATIONS IN ARTICLE 8, OR A BREACH OF THE
EXCLUSIVITY PROVISION IN SECTION 9.5.1. NOTHING IN THIS SECTION 10.4 IS INTENDED
TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY.

10.5 Insurance. Each Party shall maintain insurance during the Term and for a
period of at least [***] years after the last commercial sale of any Licensed
Product under this Agreement by such Party or its Related Parties, with a
reputable, solvent insurer in an amount appropriate for its business and
products of the type that are the subject of this Agreement, and for its
obligations under this Agreement. Specifically, each Party shall maintain
product liability insurance of at least [***] U.S. Dollars ($[***]) per
occurrence. Upon reasonable request, each Party shall provide the other Party
with evidence of the existence and maintenance of such insurance coverage.

10.6 Obligations with Respect to IP Representations, Warranties and Covenants.
In the event that Alnylam has materially breached any of its representations,
warranties or covenants under Sections 9.2 or 6.4.4 and such breach has a
material adverse effect on the rights of MedCo under this Agreement, then
Alnylam shall use Commercially Reasonable Efforts to remedy such breach and
obtain the right from the relevant Affiliate or Third Party in order to Control
the relevant intellectual property such that it is considered Alnylam Technology
and licensed or sublicensed to MedCo hereunder, and Alnylam shall bear any
additional incremental payments that may be owed to such Affiliate or Third
Party with respect to such remedy and such rights, license and sublicense,
including any costs and expenses that might otherwise reasonably be imposed on
MedCo or its Related Parties with respect to such consent or such rights,
license or sublicense, other than the payment of royalties in accordance with
Section 6.4.3 as set forth as of the Effective Date under any Existing Alnylam
In-License (or any Additional Alnylam In-License, as the case may be) with
respect to sales of Licensed Products by MedCo or its Related Parties. For
clarity, the foregoing shall not be deemed to be MedCo’s sole remedy with
respect to such breach.

11. INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS

11.1 Inventorship. Inventorship for patentable inventions conceived or reduced
to practice during the course of the performance of activities pursuant to this
Agreement shall be determined in accordance with United States patent laws for
determining inventorship.

11.2 Ownership. Alnylam shall own the entire right, title and interest in and to
all inventions and discoveries (and Patent Rights claiming patentable inventions
therein) first conceived or reduced to practice or, with respect to inventions
and discoveries other than patentable inventions, otherwise identified,
developed, made or discovered, solely by employees or consultants of Alnylam or

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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acquired solely by Alnylam in the course of conducting the Collaboration. MedCo
shall own the entire right, title and interest in and to all inventions and
discoveries (and Patent Rights claiming patentable inventions therein) first
conceived or reduced to practice or, with respect to inventions and discoveries
other than patentable inventions, otherwise identified, developed, made or
discovered, solely by employees or consultants of MedCo or acquired solely by
MedCo in the course of conducting the Collaboration. The Parties shall jointly
own any inventions and discoveries (and Patent Rights claiming patentable
inventions therein) first conceived or reduced to practice or, with respect to
inventions and discoveries other than patentable inventions, otherwise
identified, developed, made or discovered, jointly in the course of conducting
the Collaboration.

11.3 Prosecution and Maintenance of Patent Rights.

11.3.1 MedCo Technology and Product-Specific Technology. MedCo has the sole
right and responsibility to, at MedCo’s discretion, file, conduct prosecution,
and maintain (including the defense of any interference, opposition or any other
pre- or post-grant proceedings or challenges), all Patent Rights comprising
MedCo Technology (other than Joint Collaboration IP), in MedCo’s name.

11.3.2 Alnylam Technology.

(a) Subject to Sections 11.3.2(b) and 11.3.2(c), Alnylam has the sole right and
responsibility to, at Alnylam’s discretion, file, conduct prosecution, and
maintain (including the defense of any interference, opposition or any other
pre- or post-grant proceedings or challenges), all Patent Rights comprising
Alnylam Technology (other than Joint Collaboration IP), in Alnylam’s name.
Alnylam agrees to use Commercially Reasonable Efforts to prosecute and maintain
such Alnylam Patent Rights in the Major Market Countries, and to prosecute and
maintain Alnylam Product-Specific Patent Rights in all other countries
reasonably requested by MedCo.

(b) Alnylam shall provide MedCo, sufficiently in advance for MedCo to comment,
with copies of all patent applications and other material submissions and
correspondence intended to be filed with any patent counsel or patent
authorities pertaining to Patent Rights comprising Alnylam Product-Specific
Patent Rights, and Alnylam shall consider in good faith MedCo’s reasonable and
promptly provided comments and advice with respect to the prosecution or
maintenance strategy with respect to such Patent Rights; provided, however, that
if Alnylam determines that MedCo’s comments or advice are not reasonable,
Alnylam shall promptly notify MedCo thereof and the Parties shall promptly
discuss such determination. If the Parties cannot promptly reach agreement with
respect to such issue, the Parties shall hire an outside patent attorney,
mutually agreeable to the Parties, to determine which Party’s approach is more
likely to obtain the broadest enforceable patent coverage for the Licensed
Products in the Field, and the Parties shall implement such approach. In the
event that MedCo fails to provide any such comments or advice reasonably in
advance of a patent office deadline, Alnylam shall in good faith file a response
designed to obtain the broadest enforceable patent coverage for the Licensed
Products in the Field. Alnylam shall promptly provide MedCo with copies of all
material correspondence received from any patent counsel or patent authorities
pertaining to Patent Rights comprising Alnylam Product-Specific Patent Rights.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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(c) In the event that Alnylam elects not to seek or continue to seek or maintain
patent protection on any Alnylam Product-Specific Patent Rights, subject to the
terms and conditions of any applicable Alnylam In-License or Existing Alnylam
Third Party Agreement, Alnylam shall notify MedCo of such decision in sufficient
time so as to permit MedCo to decide whether to seek, prosecute and maintain
such Patent Right and to take any necessary actions without losing patent
protection, and MedCo shall have the right (but not the obligation), at its
expense, to seek, prosecute and maintain in any country patent protection on
such Alnylam Product-Specific Patent Rights in the name of Alnylam. Alnylam
shall use Commercially Reasonable Efforts to make available to MedCo its
documentation, and its authorized attorneys, agents or representatives, and such
of its employees, as are reasonably necessary to assist MedCo in obtaining and
maintaining the patent protection described under this Section 11.3.2(c).
Alnylam shall sign or use Commercially Reasonable Efforts to have signed all
legal documents necessary to file and prosecute such patent applications or to
obtain or maintain such patents.

11.3.3 Joint Collaboration IP.

(a) Alnylam shall have the first right to, at Alnylam’s discretion, file,
prosecute and maintain (including the defense of any interference, opposition or
any other pre- or post-grant proceedings or challenges), all Patent Rights
comprising Joint Collaboration IP, in the names of both Alnylam and MedCo.
Alnylam shall provide MedCo, sufficiently in advance for MedCo to comment, with
copies of all patent applications and other material submissions and
correspondence intended to be filed with any patent counsel or patent
authorities pertaining to Patent Rights comprising Joint Collaboration IP, and
Alnylam shall consider in good faith MedCo’s reasonable and promptly provided
comments and advice with respect to the prosecution or maintenance strategy with
respect to such Patent Rights; provided, however, that if Alnylam determines
that MedCo’s comments or advice are not reasonable, Alnylam shall promptly
notify MedCo thereof and the Parties shall promptly discuss such determination.
If the Parties cannot promptly reach agreement with respect to such issue, the
Parties shall hire an outside patent attorney, mutually agreeable to the
Parties, to determine which Party’s approach is more likely to obtain the
broadest enforceable patent coverage for the Licensed Products in the Field, and
the Parties shall implement such approach. In the event that MedCo fails to
provide any such comments or advice reasonably in advance of a patent office
deadline, Alnylam shall in good faith file a response designed to obtain the
broadest enforceable patent coverage for the Licensed Products in the Field.
Alnylam shall promptly provide MedCo with copies of all material correspondence
received from any patent counsel or patent authorities pertaining to Patent
Rights comprising Joint Collaboration IP. Each Party shall sign, or use
Commercially Reasonable Efforts to have signed, all legal documents necessary to
file and prosecute patent applications or to obtain or maintain patents in
respect of such Joint Collaboration IP, at its own cost.

(b) In the event that Alnylam elects not to file or continue to prosecute or
maintain patent protection on any Joint Collaboration IP in the Territory,
Alnylam shall notify MedCo of such decision in sufficient time so as to permit
MedCo to decide whether to seek, prosecute and maintain such Patent Right and to
take any necessary actions without losing patent protection, and MedCo shall
have the right (but not the obligation), to file, prosecute and maintain in any
country Patent Rights comprising Joint Collaboration IP in the names of both
Alnylam and MedCo. Alnylam shall use

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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Commercially Reasonable Efforts to make available to MedCo its documentation,
and its authorized attorneys, agents or representatives, and such of its
employees, as are reasonably necessary to assist MedCo in obtaining and
maintaining the patent protection described under this Section 11.3.3(b).
Alnylam shall sign or use Commercially Reasonable Efforts to have signed all
legal documents necessary to file and prosecute such patent applications or to
obtain or maintain such patents.

11.3.4 Cooperation. With respect to the rights granted to a Party under Sections
11.3.2 or 11.3.3, each Party hereby agrees: (a) to make its employees, agents
and consultants reasonably available to the other Party (or to the other Party’s
authorized attorneys, agents or representatives), to the extent reasonably
necessary to enable such Party to undertake patent prosecution; (b) to provide
the other Party with copies of all material correspondence pertaining to
prosecution with the patent offices; (c) to cooperate, if necessary and
appropriate, with the other Party in gaining patent term extensions wherever
applicable to Patent Rights licensed under this Agreement; and (d) to endeavor
in good faith to coordinate its efforts with the other Party to minimize or
avoid interference with the prosecution and maintenance of the other Party’s
patent applications.

11.3.5 Patent Expenses. Except as provided below with respect to Alnylam
Product-Specific Patent Rights and Patent Rights comprising Joint Collaboration
IP in the Territory, the patent filing, prosecution and maintenance expenses
incurred after the Effective Date with respect to Patent Rights comprised of
Alnylam Technology and MedCo Technology shall be borne by each Party having the
right to file, prosecute and maintain such Patent Rights under this
Section 11.3. MedCo shall reimburse Alnylam on a Calendar Quarter basis (and
within thirty (30) days after receipt of an invoice) with respect to the
out-of-pocket patent filing, prosecution and maintenance expenses incurred by
Alnylam after the Effective Date with respect to the Alnylam Product-Specific
Patent Rights in the Territory, up to [***] ($[***]) of such expenses per
Calendar Year. The Parties shall share equally the out-of-pocket patent filing,
prosecution and maintenance expenses incurred with respect to Patent Rights
comprising Joint Collaboration IP. Each Party shall keep complete and accurate
records with respect to such amount required to be paid by the other Party, and
such other Party shall have the right to audit such records in accordance with
Section 7.5.

11.3.6 Patent Term Extension. MedCo will determine, in its sole discretion, a
strategy of seeking available patent term extension, restorations and
supplementary protection certificates (“SPC”) and other extensions from among
Alnylam Product-Specific Patent Rights, MedCo Patent Rights and Patent Rights
comprising Joint Collaboration IP, to the extent applicable, that will be
designed to maximize patent protection and commercial value for the Licensed
Products in the Field in the Territory, and the Parties, subject to the
provisions of any In-License, will seek patent term extensions, restorations,
SPCs and other extensions in all relevant countries in the Territory for such
Patent Rights as selected by MedCo in accordance with that strategy. If MedCo
determines not to so file for any extension, restoration or SPC for any of such
Patent Rights in any relevant country of the Territory, it will give notice of
such determination to Alnylam at least [***] days prior to the date on which
such a filing must be made or the right to do so is lost, and Alnylam will have
the right to make such filing. Where required under national law, Alnylam will
make the filings for such extensions, restorations and SPCs for Alnylam
Product-Specific Patents and, as applicable, will make, or cooperate with MedCo
to make, the filing for Patent Rights comprising Joint Collaboration IP in the
Territory, in

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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each case as directed by MedCo. Each Party will execute such authorizations and
other documents and take such other actions as may be reasonably requested by
the other Party to obtain any such extensions, restorations and SPCs in the
Territory.

11.4 Third Party Infringement.

11.4.1 Notices. Each Party shall promptly report in writing to the other Party
any (a) known or suspected infringement of any Alnylam Technology, MedCo
Technology or Joint Collaboration IP or (b) unauthorized use or misappropriation
of any Confidential Information or Know-How of a Party by a Third Party of which
it becomes aware, in each case to the extent such infringing, unauthorized or
misappropriating activities involve, as to a Licensed Product, a Generic Product
or competing product in the Field (“Competitive Infringement”), and shall
provide the other Party with all available evidence of such infringement,
unauthorized use or misappropriation.

11.4.2 Rights to Enforce.

(a) MedCo Technology. Subject to the provisions of any In-License, MedCo shall
have the sole and exclusive right to initiate an infringement or other
appropriate suit anywhere in the world against any Third Party as to any
infringement, or suspected infringement of, any Patent Rights, or of any use or
suspected use without proper authorization of any Know-How, comprising MedCo
Patent Rights, MedCo Know-How (other than MedCo’s interest in Joint
Collaboration IP), or MedCo Collaboration IP. MedCo will consider in good faith
any request from Alnylam to initiate an infringement or other appropriate suit
against any Third Party with respect to a Competitive Infringement in the
Territory of MedCo Patent Rights, MedCo Know-How (other than MedCo’s interest in
Joint Collaboration IP) or MedCo Collaboration IP; provided, however, that MedCo
shall not be required to initiate any such suit or permit Alnylam to initiate
any such suit.

(b) Alnylam Technology and Joint Collaboration IP. Subject to the provisions of
any In-License or Existing Alnylam Third Party Agreement, MedCo shall have the
first right to initiate an infringement or other appropriate suit or action
anywhere in the world against any Third Party with respect to any Competitive
Infringement in the Territory of any Alnylam Product-Specific Patent Rights,
Joint Collaboration IP (with respect to which MedCo shall consider Alnylam’s
input in good faith), or, with Alnylam’s prior written consent, Alnylam Core
Technology Patent Right or Alnylam Know-How (other than Alnylam’s interest in
Joint Collaboration IP). Alnylam will consider in good faith any request from
MedCo to initiate an infringement or other appropriate suit against any Third
Party with respect to a Competitive Infringement in the Territory of any Alnylam
Core Technology Patent Right or such Alnylam Know-How (other than Alnylam’s
interest in Joint Collaboration IP); provided, however, that Alnylam shall not
be required to initiate any such suit or permit MedCo to initiate any such suit.

(c) Step-In Right. If within [***] days after MedCo’s receipt of a notice of a
Competitive Infringement with respect to any Alnylam Product-Specific Patent
Right or Joint Collaboration IP (or at least ten (10) days before the loss of
the right to take an action as described in Section 11.4.2(b) and permitted
hereunder with respect to such Competitive Infringement, except if MedCo has
notified Alnylam in writing that it intends to, and actually does, take action
as described in Section 11.4.2(b)

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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and permitted hereunder against such Competitive Infringement), MedCo does not
take any action as described in Section 11.4.2(b) and permitted hereunder
against such Competitive Infringement in the relevant country in the Territory,
Alnylam may in its sole discretion, bring and control any legal action in
connection therewith at its sole expense.

11.4.3 Procedures; Expenses and Recoveries. The Party having the right to
initiate any infringement suit under Section 11.4.2 above shall have the sole
and exclusive right to select counsel for any such suit and shall pay all
expenses of the suit, including attorneys’ fees and court costs and
reimbursement of the other Party’s reasonable out-of-pocket expense in rendering
assistance requested by the initiating Party. If required under applicable Law
in order for the initiating Party to initiate and/or maintain such suit, or if
either Party is unable to initiate or prosecute such suit solely in its own name
or it is otherwise advisable to obtain an effective legal remedy, in each case,
the other Party shall join as a party to the suit and will execute and cause its
Affiliates to execute all documents, and take all actions, reasonably necessary
for the initiating Party to initiate litigation and maintain such action. In
addition, at the initiating Party’s request, the other Party shall provide other
reasonable assistance to the initiating Party in connection with an infringement
suit at no charge to the initiating Party except for reimbursement by the
initiating Party of reasonable out-of-pocket expenses incurred in rendering such
assistance. The non-initiating Party shall have the right to participate and be
represented in any such suit under Section 11.4.2(b) or 11.4.2(c) by its own
counsel at its own expense. If the Parties obtain from a Third Party, in
connection with any such suit under Section 11.4.2(b) or 11.4.2(c), any damages,
license fees, royalties or other compensation (including any amount received in
settlement of such litigation), such amounts shall be allocated in all cases as
follows:

 

  (i) first, to reimburse each Party for all out-of-pocket expenses of the suit
incurred by the Parties, including attorneys’ fees and disbursements, court
costs and other litigation expenses and, to the extent that such recovery is
insufficient to fully reimburse each Party, each Party will be reimbursed pro
rata in accordance with each Party’s out-of-pocket expenses; and

 

  (ii) second, the balance shall be paid as follows: (A) damages designated by
the relevant court as multiple or punitive damages shall be paid [***] percent
([***]%) to the Party initiating the suit and [***] percent ([***]%) to the
other Party; and (B) any other amounts shall be paid to MedCo, but, to the
extent that MedCo would otherwise owe a royalty to Alnylam if MedCo or its
Related Parties had sold the relevant Licensed Product subject to the
Competitive Infringement in the Field in the relevant country in the Territory,
such balance shall be considered “Net Sales” for purposes of determining
royalties owed to Alnylam hereunder.

11.5 Trademarks. MedCo and its Related Parties have the sole right to use any
trademark it owns or controls for Licensed Products in the Territory at its sole
discretion, and each Party and its Related Parties shall retain all right, title
and interest in and to its and their respective corporate names and logos. MedCo
will develop one or more Product Trademark(s) for use by MedCo and its Related
Parties in the Territory to Commercialize Licensed Products which have received
Regulatory Approval in the Field in the Territory. MedCo (or its Related
Parties, as appropriate) shall own all rights to such

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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Product Trademarks and all goodwill associated therewith, throughout the
Territory, and the rights to any Internet domain names incorporating the
applicable Product Trademarks or any variation or part of such Product
Trademarks used as its URL address or any part of such address. For the
avoidance of doubt, neither Party shall have any right to use the other Party’s
or the other Party’s Related Parties’ corporate names or logos in connection
with Commercialization of Licensed Products without the prior written consent of
the other Party.

12. TERM AND TERMINATION

12.1 Term. This Agreement shall be effective as of the Effective Date and,
unless terminated earlier pursuant to Section 12.2, this Agreement shall
continue in effect on a Licensed Product-by-Licensed Product and
country-by-country basis until expiration of the last Royalty Term to expire
under this Agreement (“Term”). Upon expiration of the Term, all licenses of
MedCo granted by Alnylam under Article 6 shall become fully paid-up,
irrevocable, perpetual, non-exclusive, sublicenseable licenses.

12.2 Termination Rights.

12.2.1 Termination for Convenience. MedCo shall have the right to terminate this
Agreement at any time after the Effective Date on four (4) months prior written
notice to Alnylam.

12.2.2 Termination for Cause. This Agreement may be terminated at any time
during the Term upon written notice by either Party (the “Non-Breaching Party”)
if the other Party (the “Breaching Party”) is in material breach of its
obligations hereunder and has not cured such breach within ten (10) days in the
case of a payment breach, or within sixty (60) days in the case of all other
breaches, after notice requesting cure of the breach, or, if cure of such breach
other than non-payment cannot reasonably be effected within such sixty (60) day
period, to deliver to the Non-Breaching Party a plan reasonably calculated to
cure such breach within a timeframe that is reasonably prompt in light of the
circumstances then prevailing, but in no event more than [***]. Following
delivery of such a plan, the Breaching Party will carry out the plan and cure
the breach. If the Breaching Party fails to cure a material breach of this
Agreement as provided above, then the Non-Breaching Party may terminate this
Agreement upon written notice to the Breaching Party.

12.2.3 Termination for Failure to Designate a Lead Product. Alnylam shall have
the right to terminate this Agreement upon thirty (30) days prior written notice
to MedCo in the event that a Lead Product has not been designated by the JSC (or
by the Chief Executive Officer of MedCo pursuant to Section 4.4.3) prior to the
earlier of: (a) thirty (30) days after Alnylam reaches the Development Costs Cap
described in Section 2.3.1(a) and provides notice thereof to MedCo pursuant to
Section 2.3.3, unless MedCo has agreed to pay or has paid the relevant Extra
Early Development Costs; and (b) on or prior to June 30, 2015.

12.2.4 Challenges of Patent Rights. In the event that a Party (the “Challenging
Party”) or any of its Related Parties (a) commences or participates in any
action or proceeding (including any patent opposition, re-examination or any
other pre- or post-grant challenge or proceeding), or otherwise asserts any
claim, challenging or denying the validity or enforceability (such an action or

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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proceeding, a “Challenge”) of any of the Patent Rights licensed to such
Challenging Party by the other Party (the “Licensor Party”) under this Agreement
or any claim thereof or (b) actively assists any other person or entity in
bringing or prosecuting any action or proceeding (including any patent
opposition, re-examination or any other pre- or post-grant challenge or
proceeding) challenging or denying the validity or enforceability of any of such
Patent Rights or any claim thereof, then (i) such Challenging Party shall give
notice thereof to such Licensor Party within [***] days of taking such action or
of learning that its Related Party has taken such action, and (ii) such Licensor
Party will have the right, in its sole discretion, to give notice to such
Challenging Party that this Agreement will terminate thirty (30) days following
such notice (or such longer period as such Licensor Party may designate in such
notice), and, unless, with respect to a challenge brought by such Challenging
Party, such Challenging Party withdraws, or, with respect to a challenge brought
by its Affiliates, causes, or, with respect to a challenge brought by its
Sublicensee, uses Commercially Reasonable Efforts to cause, to be withdrawn, all
such challenge(s) within such thirty (30)-day (or longer) period, this Agreement
will so terminate. Notwithstanding the foregoing, in such event, MedCo, as the
Licensor Party under this Agreement, may only terminate the licenses it has
granted under this Agreement to Alnylam as the Challenging Party with respect to
the Patent Rights that are the subject of the Challenge. In the event that such
Licensor Party is not permitted under Law to terminate this Agreement such that
the licenses with respect to all the Patent Rights under this Agreement are
terminated, then the Parties agree to construe this provision to permit such
Licensor Party to terminate only the licenses to that portion of such Patent
Rights with respect to which such Licensor Party may terminate consistent with
Law.

12.3 Effect of Termination. Without limiting any other legal or equitable
remedies that either Party may have, if this Agreement is terminated by Alnylam,
or by MedCo in accordance with Section 12.2.1, then:

 

  (a) If this Agreement is terminated by MedCo pursuant to Section 12.2.1, then
MedCo’s obligation under Section 9.5.1 shall survive for a period of eight
(8) months after the effective date of termination, and if this Agreement is
terminated by Alnylam pursuant to Sections 12.2.2 or 12.2.4, then MedCo’s
obligations under Section 9.5.1 shall survive for a period of twelve (12) months
after the effective date of termination.

 

  (b)

Subject to the terms and conditions of this Agreement (including Sections 6.4.1
and 6.4.4 with respect to the MedCo In-Licenses (if any) applicable to the
rights granted to Alnylam pursuant to this Section 12.3(b)), MedCo shall and
hereby does grant Alnylam a non-transferable (except as provided in
Section 13.1), sublicenseable (subject to Section 6.2.3), worldwide,
non-exclusive, royalty-bearing license, under any MedCo Technology that is
produced, generated, conceived and/or reduced to practice as a result of the
Development, Manufacturing or Commercialization activities of MedCo under this
Agreement to Develop, Manufacture and Commercialize Licensed Products in the
Field in the Territory. The Parties shall negotiate in good faith the royalty to
be paid to MedCo by Alnylam in exchange for, and reflecting the then net present
value of, the foregoing license, and, in the event that the Parties cannot
mutually agree upon such amount within [***] days following the effective date
of termination, the Parties will, as

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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  soon as reasonably practicable and in no event later than [***] days following
the expiration of such [***]-day period, mutually decide upon an independent
Third Party valuation firm with substantial experience in valuing licenses of
intellectual property rights for the commercialization of pharmaceutical and
biotechnology products, which shall make a final and binding determination of
the net value of such license and both Parties shall promptly provide all
reasonable materials and information requested by such valuation firm and shall
share equally in the expenses of such valuation firm.

 

  (c) MedCo shall use Commercially Reasonable Efforts to as promptly as
practicable transfer to Alnylam or Alnylam’s designee (i) possession and
ownership of all governmental or regulatory correspondence, conversation logs,
filings and approvals (including all Regulatory Approvals and pricing and
reimbursement approvals) in MedCo’s or its Affiliates’ possession and Control
relating to the Development, Manufacture or Commercialization of the Licensed
Products and all Product Trademarks, (ii) copies of all data, reports, records
and materials, and other sales and marketing related information in MedCo’s or
its Affiliates’ possession and Control to the extent that such data, reports,
records, materials or other information relate to the Development, Manufacture
or Commercialization of Licensed Products, including all non-clinical and
clinical data relating to Licensed Products, and customer lists and customer
contact information and all adverse event data in MedCo’s possession and
Control, and (iii) all records and materials in MedCo’s possession and Control
containing Confidential Information of Alnylam. MedCo shall further appoint
Alnylam as MedCo’s and/or MedCo’s Affiliates’ agent for all Licensed
Product-related matters involving Regulatory Authorities in the Territory until
all such Regulatory Approvals and other regulatory filings have been transferred
to Alnylam or its designee,

 

  (d) if the effective date of termination is after First Commercial Sale, then
MedCo shall appoint Alnylam as its exclusive distributor of the Licensed Product
in the Territory and grant Alnylam the right to appoint sub-distributors, until
such time as all such Regulatory Approvals in the Territory have been
transferred to Alnylam or its designee,

 

  (e) if MedCo or its Affiliates are Manufacturing Licensed Product, then at
Alnylam’s option, MedCo shall supply the Licensed Product to Alnylam in the
Territory on commercially reasonable terms to be negotiated in good faith by the
Parties, until such time as all such Regulatory Approvals in the Territory have
been transferred to Alnylam or its designee, Alnylam has obtained all necessary
manufacturing approvals or Alnylam has procured or developed its own source(s)
of Licensed Product supply,

 

  (f) if Alnylam so requests, MedCo shall use Commercially Reasonable Efforts to
assign to Alnylam any Third Party agreements solely relating to the Development,
Manufacture or Commercialization of the Licensed Product to which MedCo is a
party, subject to any required consents of such Third Party, which MedCo shall
use Commercially Reasonable Efforts to obtain promptly,

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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  (g) MedCo shall promptly transfer and assign to Alnylam all of MedCo’s and its
Affiliates’ rights, title and interests in and to the Product Trademark(s) owned
by MedCo or its Affiliates and used for the Licensed Products in the Field in
the Territory,

 

  (h) MedCo shall transfer to Alnylam any inventory of Licensed Products
Controlled by MedCo or its Affiliates as of the termination date, on
commercially reasonable terms to be negotiated in good faith by the Parties,

 

  (i) MedCo shall use Commercially Reasonable Efforts to provide, at Alnylam’s
reasonable expense, any other assistance reasonably requested by Alnylam for the
purpose of allowing Alnylam or its designee to proceed expeditiously with the
Development, Manufacture and Commercialization of Licensed Products in the
Territory, and

 

  (j) MedCo shall execute all documents and take all such further actions as may
be reasonably requested by Alnylam in order to give effect to the foregoing
clauses.

12.4 Effect of Expiration or Termination; Survival. 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,
including the obligation to pay royalties for the Licensed Product sold prior to
such expiration or termination. The provisions of Articles 10 (other than
Section 10.6) and 13, Sections 6.1.4(b), 6.3, 6.5, 6.6, 6.7, 8.1, 8.2.2, 9.4,
11.1, 11.2, 11.3.3, 11.3.4 (with respect to the rights granted to each Party
under Section 11.3.3), 11.3.5 (with respect to Joint Collaboration IP), 12.3 (if
applicable) and 12.4, Section 7.4.7 (with respect to any royalty report for the
last Calendar Quarter), Sections 7.5 through 7.11 (with respect to amounts owed
prior to expiration or termination of this Agreement or amounts due thereafter
pursuant to Section 12.4), and the last sentences of Sections 6.1.1, 6.1.2 or
12.1 (with respect to the licenses which have converted as set forth therein on
or before the expiration or termination of this Agreement) shall survive any
expiration or termination of this Agreement. Except as set forth in this Article
12, upon termination or expiration of this Agreement all other rights and
obligations of the Parties under this Agreement cease.

13. MISCELLANEOUS

13.1 Assignment. Except as provided in this Section 13.1, this Agreement may not
be assigned or otherwise transferred, nor may any right or obligation hereunder
be assigned or transferred, by either Party without the written consent of the
other Party. However, either Party may, without the other Party’s written
consent, assign this Agreement and its rights and obligations hereunder in whole
or in part to an Affiliate or to a Person that acquires, by merger, sale of
assets or otherwise, all or substantially all of the business of the assigning
Party to which the subject matter of this Agreement relates. The Parties
acknowledge that MedCo is considering the potential assignment of all or a
significant portion of its obligations under this Agreement to a Third Party
joint venture in which MedCo may hold a non-controlling equity interest, and
Alnylam agrees to discuss in good faith with MedCo such an assignment together
with appropriate financial and other protections for Alnylam; provided, however,
that nothing in the foregoing sentence shall be construed to require Alnylam to

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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agree to such an assignment. The assigning Party shall remain responsible for
the performance by its assignee of this Agreement or any obligations hereunder
so assigned. Any assignment of the rights or obligations of this Agreement not
in accordance with the foregoing shall be void.

13.2 Governing Law. This Agreement shall be construed and the respective rights
of the Parties determined in accordance with the substantive laws of the State
of New York, notwithstanding any provisions of New York law governing conflicts
of laws to the contrary, and the patent laws of the relevant jurisdiction
without reference to any rules of conflict of laws.

13.3 Entire Agreement; Amendments. This Agreement and, when executed, the other
Transaction Agreements, contain the entire understanding of the Parties with
respect to the subject matter hereof, and supersedes all previous arrangements
with respect to the subject matter hereof, whether written or oral, including
the Mutual Confidential Disclosure Agreement made as of January 16, 2012 by the
Parties. This Agreement (including the Schedules hereto) may be amended, or any
term hereof modified, only by a written instrument duly-executed by authorized
representatives of both Parties.

13.4 Severability. If any provision hereof should be held invalid, illegal or
unenforceable in any respect in any jurisdiction, the Parties shall substitute,
by mutual consent, valid provisions for such invalid, illegal or unenforceable
provisions, which valid provisions in their economic effect are sufficiently
similar to the invalid, illegal or unenforceable provisions that it can be
reasonably assumed that the Parties would have entered into this Agreement with
such valid provisions. In case such valid provisions cannot be agreed upon, the
invalid, illegal or unenforceable of one or several provisions of this Agreement
shall not affect the validity of this Agreement as a whole, unless the invalid,
illegal or unenforceable provisions are of such essential importance to this
Agreement that it is to be reasonably assumed that the Parties would not have
entered into this Agreement without the invalid, illegal or unenforceable
provisions.

13.5 Headings. The captions to the Articles and Sections hereof are not a part
of this Agreement, but are merely for convenience to assist in locating and
reading the several Articles and Sections hereof.

13.6 Interpretation. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms and any noun shall
include the corresponding singular and plural forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “but not
limited to.” The word “will” shall be construed to have the same meaning and
effect as the word “shall.” “$” or “(D)(d)ollar” means U.S. Dollars. With
respect to any license grant, “exclusive” means exclusive as between the
licensor Party and the licensed Party to the fullest extent possible, in light
of any rights already granted by the licensor Party to Third Parties prior to
the date on which such license is first granted and in light of any limitations
on the rights granted to the licensor Party by its licensors. Unless the context
requires otherwise, (a) 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

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
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herein or therein), (b) any reference to any Laws herein shall be construed as
referring to such Laws as from time to time enacted, repealed or amended,
(c) any reference herein to any Person shall be construed to include the
Person’s successors and permitted assigns, (d) 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, (e) all
references herein to Articles, Sections or Schedules shall be construed to refer
to Articles, Sections and Schedules of this Agreement, (f) the word “or” shall
be construed to have the same meaning and effect as “and/or”, and (g) a term not
defined herein but reflecting a different part of speech than a term which is
defined herein shall be interpreted in a correlative manner.

13.7 Waiver of Rule of Construction. 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.

13.8 No Implied Waivers; Rights Cumulative. No failure on the part of Alnylam or
MedCo to exercise, and no delay in exercising, any right, power, remedy or
privilege under this Agreement, or provided by statute or at law or in equity or
otherwise, shall impair, prejudice or constitute a waiver of any such right,
power, remedy or privilege or be construed as a waiver of any breach of this
Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege. Except as expressly provided in this Agreement, no right or remedy
herein conferred upon or reserved to either Party is intended to be exclusive of
any other right or remedy.

13.9 Notices. All notices which are required or permitted hereunder shall be in
writing and sufficient if delivered personally, sent by facsimile (and promptly
confirmed by personal delivery, registered or certified mail or overnight
courier), sent by nationally-recognized overnight courier or sent by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:

 

If to Alnylam, to:    Alnylam Pharmaceuticals, Inc.    300 Third Street   
Cambridge, MA 02142    Attention: Legal Department    Facsimile No.: (617)
551-8101

With a copy to:

   Faber Daeufer Itrato & Cabot PC    950 Winter Street    Waltham, MA 02451   
Attention: Sumy C. Daeufer, Esq.    Facsimile No.: (781) 795-4747

 

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SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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If to MedCo, to:    The Medicines Company    8 Sylvan Way    Parsippany, NJ
07054    Attention: President    Facsimile No.: (862) 207-6119

With a copy to:

   The Medicines Company    8 Sylvan Way    Parsippany, NJ 07054    Attention:
General Counsel    Facsimile No.: (862) 207-6062

or to such other address 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: (a) when delivered if personally delivered
or sent by facsimile on a Business Day (or if delivered or sent on a
non-Business Day, then on the next Business Day); (b) on receipt if sent by
overnight courier; and/or (c) on receipt if sent by mail.

13.10 Compliance with Export Regulations. Neither Party shall export any
technology licensed to it by the other Party under this Agreement except in
compliance with U.S. export laws and regulations.

13.11 Force Majeure. 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 that 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), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, fire, floods, or other acts of
God, or acts, omissions or delays in acting by any Governmental Authority or the
other Party. The affected Party shall notify the other Party of such force
majeure circumstances as soon as reasonably practical, and shall promptly
undertake all reasonable efforts necessary to cure such force majeure
circumstances.

13.12 Dispute Resolution. In the event that the Parties do not resolve any
dispute, controversy or claim arising from, or related to, this Agreement or to
the breach hereof (collectively, “Dispute”) and neither Party has final
decision-making authority as to such Dispute pursuant to Section 4.4, and a
Party wishes to pursue the matter, such Party may file suit to have such Dispute
adjudicated in a court of competent jurisdiction.

13.13 Independent Contractors. It is expressly agreed that Alnylam and MedCo
shall be independent contractors and that the relationship between Alnylam and
MedCo shall not constitute a partnership, joint venture or agency. Alnylam shall
not have the authority to make any statements, representations or commitments of
any kind, or to take any action, which shall be binding on MedCo, without the
prior written consent of MedCo, and MedCo shall not have the authority to make
any statements, representations or commitments of any kind, or to take any
action, which shall be binding on Alnylam without the prior written consent of
Alnylam.

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
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13.14 Counterparts. The Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Facsimile signatures and signatures
transmitted via PDF shall be treated as original signatures.

13.15 Performance by Affiliates. Each Party shall have the right to have any of
its obligations hereunder performed by, any of its Affiliates and the
performance of such obligations by any such Affiliate(s) shall be deemed to be
performance by such Party; provided, however, that such Affiliate shall be bound
by the corresponding obligations of such Party and such Party shall be
responsible for ensuring the performance of its obligations under this Agreement
and that any failure of any Affiliate performing obligations of such Party
hereunder shall be deemed to be a failure by such Party to perform such
obligations.

13.16 Binding Effect; No Third Party Beneficiaries. As of the Effective Date,
this Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns. Except as expressly set forth
in this Agreement, no person or entity other than the Parties and their
respective permitted assignees hereunder shall be deemed an intended beneficiary
hereunder or have any right to enforce any obligation of this Agreement.

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

 

THE MEDICINES COMPANY     ALNYLAM PHARMACEUTICALS, INC. BY:  

/s/ Glenn Sblendorio

    BY:  

/s/ John M. Maraganore

NAME: Glenn Sblendorio     NAME: John M. Maraganore, Ph.D. TITLE: President and
CFO     TITLE: Chief Executive Officer

[Signature Page to License and Collaboration Agreement]

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

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SCHEDULE A

ALN-PCS02

ALN-PCS02 is an investigational ribonucleic acid interference (RNAi) therapeutic
agent that is comprised of active pharmaceutical ingredient [***] (see
sequence & diagram below), a synthetic small interfering RNA (siRNA) that is
Targeted to the PCS messenger RNA (mRNA) in a [***] lipid nanoparticle
formulation (see description below).

[***]

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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SCHEDULE B

ALN-PCSsc

ALN-PCSsc is an investigational ribonucleic acid interference (RNAi) therapeutic
agent that is comprised of an active pharmaceutical ingredient which is a
synthetic small interfering RNA (siRNA) that is Targeted to the PCS messenger
RNA (mRNA) and covalently linked on the 3’ end of the sense strand to a
triantennary N-acetylgalactosamine (GalNAc3) ligand (see diagram below). The
active pharmaceutical ingredient may be [***] (see sequence & diagram below).

[***]

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
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SCHEDULE C

ALNYLAM PATENT RIGHTS

SCHEDULE C-1

ALNYLAM CORE TECHNOLOGY PATENT RIGHTS

[***]

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
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SCHEDULE C-2

ALNYLAM PRODUCT-SPECIFIC PATENT RIGHTS

[***]

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
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SCHEDULE C-3

PATENT RIGHTS IN ADDITIONAL ALNYLAM IN-LICENSES

[***]

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
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SCHEDULE D

EXISTING ALNYLAM IN-LICENSES,

EXISTING ALNYLAM THIRD PARTY AGREEMENTS AND ADDITIONAL ALNYLAM IN-LICENSES

A. As of the Effective Date, Existing Alnylam In-Licenses are the following
Third Party agreements:

1. Co-Exclusive License Agreement between Max Planck Innovation GmbH (formerly
Garching Innovation GmbH) and Alnylam Pharmaceuticals, Inc., dated December 20,
2002, as amended by Amendment dated July 2, 2003, the Requirements Amendment
effective June 15, 2005, the Waiver Amendment effective August 9, 2007 and the
Amendment to the Alnylam Co-Exclusive License Agreement dated as of March 14,
2011, by and between Alnylam Pharmaceuticals, Inc., on the one hand, and
Whitehead Institute for Biomedical Research, Massachusetts Institute of
Technology and Max-Planck-Innovation GmbH, on the other hand; and Co-Exclusive
License Agreement between Max Planck Innovation GmbH (formerly Garching
Innovation GmbH) and Alnylam Europe AG (formerly Ribopharma AG), dated July 30,
2003 (collectively, the “Garching Agreements”)

2. Amended and Restated Strategic Collaboration & License Agreement between Isis
Pharmaceuticals, Inc. and Alnylam Pharmaceuticals, Inc., dated April 28, 2009,
as amended by letter agreement dated August 27, 2012 (“Isis Agreement”)

3. Sponsored Research Agreement dated as of July 27, 2009 by and among Alnylam,
The University of British Columbia (“UBC”) and AlCana Technologies, Inc.
(“AlCana”)

4. Supplemental Agreement among Tekmira Pharmaceuticals Corporation (“Tekmira”),
Protiva Biotherapeutics Inc. (“Protiva”), UBC and AlCana

5. Sublicense Agreement dated January 8, 2007 between Alnylam and Tekmira (as
successor in interest to Inex Pharmaceuticals Corporation)

6. Cross-License Agreement by and among Alnylam, Tekmira and Protiva dated
November 12, 2012 and Settlement Agreement and General Release dated
November 12, 2012 by and among Tekmira, Protiva, Alnylam and AlCana

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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B. As of the Effective Date, Existing Alnylam Third Party Agreements are the
following Third Party agreements:

1. License and Collaboration Agreement among F. Hoffmann-La Roche Ltd,
Hoffman-La Roche Inc., and Alnylam Pharmaceuticals, Inc., dated July 8, 2007, as
amended by letter amendment dated May 29, 2008 (assigned to Arrowhead Research
Corporation in October 2011)

2. License and Collaboration Agreement between Takeda Pharmaceutical Company
Limited and Alnylam Pharmaceuticals, Inc., dated May 27, 2008, as supplemented
or amended by letter agreements dated August 18, 2009 and March 16, 2011

C. As of the Effective Date, the Additional Alnylam In-Licenses are the
following Third Party agreements:

[***]

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
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SCHEDULE E

INITIAL DEVELOPMENT PLAN

[***]

 

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SCHEDULE F

JOINT PRESS RELEASE

 

LOGO [g513837ex10_2pg74a.jpg]    LOGO [g513837ex10_2pg74b.jpg]

Contacts:

The Medicines Company    Alnylam Pharmaceuticals, Inc.

Michael Mitchell

Head of Global Communications

973-290-6097

michael.mitchell@themedco.com

  

Cynthia Clayton

Vice President, Investor Relations and

Corporate Communications

617-551-8207

 

Amanda Sellers (Media)

Spectrum

202-955-6222 x2597

DRAFT – Not for Release

The Medicines Company and Alnylam Form Strategic Alliance to

Develop and Commercialize RNAi Therapeutics Targeting PCSK9 for the

Treatment of Hypercholesterolemia

– The Medicines Company Obtains Exclusive Global License to Advance ALN-PCS RNAi
Therapeutic Program –

– Alnylam to Receive $25 Million in Upfront Payment in Addition to Milestone
Payments and Royalties on Product Sales –

– Companies to Host Conference Call Today at 8:30 a.m. ET to Discuss
Collaboration –

Parsippany, N.J. and Cambridge, Mass., February 4, 2013 – The Medicines Company
(Nasdaq: MDCO) and Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY), a leading RNAi
therapeutics company, announced today that they have formed an exclusive global
alliance for the development and commercialization of Alnylam’s ALN-PCS RNAi
therapeutic program for the treatment of hypercholesterolemia.

 

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“This new alliance unites two organizations with a shared culture and commitment
to innovation. In my view and past experience, there could be no stronger
partner for our ALN-PCS program than The Medicines Company, which has
demonstrated industry-wide leadership in the advancement of cardiovascular
medicines to patients and remarkable success in its strategy of in-licensing,
developing, and commercializing breakthrough products,” said John Maraganore,
Ph.D., Chief Executive Officer of Alnylam. “For Alnylam, this new partnership
enables the advancement of ALN-PCS, an important program within our ‘Alnylam
5x15’ product development and commercialization strategy focused on RNAi
therapeutics directed toward genetically validated targets. We believe that the
ALN-PCS program holds great promise for the development of a significant
therapeutic option for patients with hypercholesterolemia, and that the unique
mechanism of action for ALN-PCS could provide a differentiated and potentially
best-in-class strategy for PCSK9 antagonism.”

“Our focus on acute and intensive care medicine has led us to a leadership
position with Angiomax and potentially with cangrelor in the management of
patients in extreme risk as a consequence of the rupture of their vulnerable
coronary artery plaque at and around the time of acute coronary syndromes.
Meantime, we have made progress with MDCO-216 (ApoA-1 Milano), a turbocharged
form of HDL-C (‘good cholesterol’) which has the potential to modify disease
through reverse cholesterol transport,” said Clive Meanwell, M.D., Ph.D.,
Chairman and Chief Executive Officer of The Medicines Company. “Now, this
exciting collaboration with Alnylam – leaders in their field of RNAi – adds a
second potentially disease modifying approach and more cutting edge technology
to our portfolio. We have seen that PCSK9 gene silencing can substantially
reduce LDL-cholesterol in patients and has epidemiological and disease
mechanisms studies suggest this can further reduce the risks of the world’s
number one killer, coronary artery disease. Clearly we see the complementarity
of approaches which increase ‘good cholesterol’ (HDL-C) and decrease ‘bad
cholesterol’ (LDL-C). We look forward to working with our colleagues at Alnylam
for whom we have the greatest respect and admiration based upon earlier
collaborations particularly around Angiomax, which was invented by John
Maraganore.”

PCSK9 (proprotein convertase subtilisin/kexin type 9) is a protein that
regulates low-density lipoprotein (LDL) receptor levels on hepatocytes;
gain-of-function human mutations in PCSK9 are associated with
hypercholesterolemia while loss-of-function mutations are associated with lower
levels of LDL cholesterol and a reduced risk of cardiovascular disease. ALN-PCS
is a PCSK9 synthesis inhibitor that reduces intracellular and extracellular
levels of PCSK9 resulting in lowered plasma levels of LDL-C. MDCO-216 is a
naturally occurring variant of a protein found in high-density lipoprotein, or
HDL. It is a reverse cholesterol transport agent designed to reduce
atherosclerotic plaque burden development and thereby reduce the risk of adverse
thrombotic events.

Under this alliance, The Medicines Company and Alnylam intend to collaborate on
the advancement of the ALN-PCS program. Alnylam’s ALN-PCS program includes
ALN-PCS02 – an intravenously administered RNAi therapeutic which has completed a
Phase I trial, and ALN-PCSsc – a subcutaneously administered RNAi therapeutic
currently in pre-clinical development. Alnylam will continue the program while
funded by The Medicines Company for an estimated one to two years to complete
certain pre-clinical and Phase I clinical studies. The Medicines Company will
then lead and

 

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REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
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fund development from Phase II forward and commercialize the ALN-PCS program if
successful. Under the terms of the agreement, The Medicines Company will make an
upfront cash payment of $25 million to Alnylam. Alnylam may also receive
potential development and commercial milestone payments of up to $180 million.
Alnylam will be eligible to receive scaled double-digit royalties on global
products sales of ALN-PCS products.

Alnylam has completed a Phase I trial of ALN-PCS02 in healthy volunteer subjects
with elevated baseline LDL-C. Results showed that administration of a single
intravenous dose of drug, in the absence of concomitant lipid-lowering agents
such as statins, resulted in statistically significant and durable reductions of
PCSK9 plasma levels of up to 84% and lowering of LDL-C of up to 50%. ALN-PCS02
was shown to be generally safe and well tolerated in this study and there were
no serious adverse events related to study drug administration. Alnylam has also
presented pre-clinical data from its ALN-PCSsc program demonstrating potent
knockdown of the PCSK9 target gene with an ED50 of less than 0.3 mg/kg after a
single subcutaneous dose.

“Cardiovascular disease remains the leading cause of mortality worldwide, with
elevated LDL-C a major modifiable risk factor. New strategies are needed to
dramatically and rapidly reduce LDL-C and prevent acute cardiovascular events
that result from the rupture of cholesterol rich plaque when patients are at
their most vulnerable,” said Daniel J. Rader, M.D., professor of Medicine and
chief, Division of Translational Medicine and Human Genetics, at the Perelman
School of Medicine at the University of Pennsylvania. “As a key regulator of the
LDL receptor, liver-expressed PCSK9 is one of the most important and best
validated new targets in molecular medicine for the treatment of
hypercholesterolemia. The ALN-PCS data generated to date are very encouraging
and I look forward to continued clinical studies that highlight the unique
mechanistic approach of PCSK9 synthesis inhibitors.”

Dr. Rader serves as a member of Alnylam’s Scientific Advisory Board and as a
consultant on Alnylam’s ALN-PCS program, and Alnylam and Dr. Rader collaborate
on research for which Alnylam provides materials.

Conference Call Information

The Medicines Company and Alnylam will host a conference call today at 8:30 a.m.
ET to discuss this new collaboration. To access the call, please dial
877-312-7507 (domestic) or 631-813-4828 (international) five minutes prior to
the start time and refer to conference ID 96998933. A replay of the call will be
available beginning at 11:30 a.m. ET. To access the replay, please dial
855-859-2056 (domestic) or 404-537-3406 (international) and refer to conference
ID 96998933. A live audio webcast of the presentation will be available on The
Medicines Company website at www.themedicinescompany.com, and on the News &
Investors section of the Alnylam’s website, www.alnylam.com

About Hypercholesterolemia

Hypercholesterolemia is a condition characterized by very high levels of
cholesterol in the blood which is known to increase the risk of coronary artery
disease, the leading cause of death in the U.S. Some

 

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SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
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forms of hypercholesterolemia can be treated through dietary restrictions,
lifestyle modifications (e.g., exercise and smoking cessation) and medicines
such as statins. However, a large proportion of patients with
hypercholesterolemia are not achieving target LDL-C goals with statin therapy,
including genetic familial hypercholesterolemia patients, acute coronary
syndrome patients, high-risk patient populations (e.g., patients with coronary
artery disease, diabetics, symptomatic carotid artery disease, etc.) and other
patients that are statin intolerant. Severe forms of hypercholesterolemia are
estimated to affect more than 500,000 patients worldwide, and as a result, there
is a significant need for novel therapeutics to treat patients with
hypercholesterolemia whose disease is inadequately managed by existing
therapies.

About ALN-PCS

ALN-PCS is a systemically delivered RNAi therapeutic targeting the gene
proprotein convertase subtilisin/kexin type 9 (PCSK9), a target validated by
human genetics that is involved in the metabolism of low-density lipoprotein
cholesterol (LDL-C, or “bad” cholesterol). ALN-PCS therapies are PCSK9 synthesis
inhibitors that lower levels of both intracellular and extracellular PCSK9,
thereby phenocopying the human genetics observed in loss of function or null
human PCSK9 mutations (N. Engl. J. Med. (2006) 354:1264-1272; Am. J. Hum. Genet.
(2006) 79: 514-523). PCSK9 synthesis inhibition through an RNAi mechanism has
the potential to lower tissue and circulating plasma PCSK9 protein levels
resulting in higher LDL receptor levels in the liver, and subsequently lower
LDL-C levels in the blood stream. Lower LDL-C is associated with a decreased
risk of cardiovascular disease, including myocardial infarction and stroke.

About RNA Interference (RNAi)

RNAi (RNA interference) is a revolution in biology, representing a breakthrough
in understanding how genes are turned on and off in cells, and a completely new
approach to drug discovery and development. Its discovery has been heralded as
“a major scientific breakthrough that happens once every decade or so,” and
represents one of the most promising and rapidly advancing frontiers in biology
and drug discovery today which was awarded the 2006 Nobel Prize for Physiology
or Medicine. RNAi is a natural process of gene silencing that occurs in
organisms ranging from plants to mammals. By harnessing the natural biological
process of RNAi occurring in our cells, the creation of a major new class of
medicines, known as RNAi therapeutics, is on the horizon. Small interfering RNA
(siRNA), the molecules that mediate RNAi and comprise Alnylam’s RNAi therapeutic
platform, target the cause of diseases by potently silencing specific mRNAs,
thereby preventing disease-causing proteins from being made. RNAi therapeutics
have the potential to treat disease and help patients in a fundamentally new
way.

About The Medicines Company

The Medicines Company (Nasdaq: MDCO) provides medical solutions to improve
health outcomes for patients in acute and intensive care hospitals worldwide.
These solutions comprise medicines and knowledge that directly impact the
survival and well being of critically ill patients.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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CONFIDENTIAL

 

The Medicines Company Forward-Looking Statement

Statements contained in this press release about The Medicines Company that are
not purely historical, and all other statements that are not purely historical,
may be deemed to be forward-looking statements for purposes of the safe harbor
provisions under The Private Securities Litigation Reform Act of 1995. Without
limiting the foregoing, the words “believes,” “anticipates” and “expects” and
similar expressions are intended to identify forward-looking statements. These
forward-looking statements involve known and unknown risks and uncertainties
that may cause the Company’s actual results, levels of activity, performance or
achievements to be materially different from those expressed or implied by these
forward-looking statements. Important factors that may cause or contribute to
such differences include whether the Company’s products will advance in the
clinical trials process on a timely basis or at all, whether the Company will
make regulatory submissions for product candidates on a timely basis, whether
its regulatory submissions will receive approvals from regulatory agencies on a
timely basis or at all, whether physicians, patients and other key decision
makers will accept clinical trial results, and such other factors as are set
forth in the risk factors detailed from time to time in the Company’s periodic
reports and registration statements filed with the Securities and Exchange
Commission including, without limitation, the risk factors detailed in the
Company’s Quarterly Report on Form 10-Q filed on November 9, 2012, which are
incorporated herein by reference. The Company specifically disclaims any
obligation to update these forward-looking statements.

About Alnylam Pharmaceuticals

Alnylam is a biopharmaceutical company developing novel therapeutics based on
RNA interference, or RNAi. The company is leading the translation of RNAi as a
new class of innovative medicines with a core focus on RNAi therapeutics for the
treatment of genetically defined diseases, including ALN-TTR for the treatment
of transthyretin-mediated amyloidosis (ATTR), ALN-AT3 for the treatment of
hemophilia and rare bleeding disorders (RBD), ALN-AS1 for the treatment of acute
intermittent porphyria (AIP), ALN-PCS for the treatment of hypercholesterolemia,
and ALN-TMP for the treatment of hemoglobinopathies. As part of its “Alnylam
5x15TM” strategy, the company expects to have five RNAi therapeutic products for
genetically defined diseases in clinical development, including programs in
advanced stages, on its own or with a partner by the end of 2015. Alnylam has
additional partnered programs in clinical or development stages, including
ALN-RSV01 for the treatment of respiratory syncytial virus (RSV) infection and
ALN-VSP for the treatment of liver cancers. The company’s leadership position on
RNAi therapeutics and intellectual property have enabled it to form major
alliances with leading companies including Merck, Medtronic, Novartis, Biogen
Idec, Roche, Takeda, Kyowa Hakko Kirin, Cubist, Ascletis, Monsanto, Genzyme, and
The Medicines Company. In addition, Alnylam holds a significant equity position
in Regulus Therapeutics Inc., a company focused on discovery, development, and
commercialization of microRNA therapeutics. Alnylam has also formed Alnylam
Biotherapeutics, a division of the company focused on the development of RNAi
technologies for applications in biologics manufacturing, including recombinant
proteins and monoclonal antibodies. Alnylam’s VaxiRNA™ platform applies RNAi
technology to improve the manufacturing processes for vaccines; GlaxoSmithKline
is a collaborator in this effort. Alnylam scientists and collaborators have
published their research on RNAi therapeutics in over 100 peer-reviewed papers,
including many in the world’s top scientific journals such as Nature, Nature
Medicine, Nature Biotechnology, and Cell. Founded in 2002, Alnylam maintains
headquarters in Cambridge, Massachusetts. For more information, please visit
www.alnylam.com.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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CONFIDENTIAL

 

About “Alnylam 5x15™”

The “Alnylam 5x15” strategy, launched in January 2011, establishes a path for
development and commercialization of novel RNAi therapeutics directed toward
genetically defined targets for diseases with high unmet medical need. Products
arising from this initiative share several key characteristics including: a
genetically defined target and disease; the potential to have a major impact in
a high unmet need population; the ability to leverage the existing Alnylam RNAi
delivery platform; the opportunity to monitor an early biomarker in Phase I
clinical trials for human proof of concept; and the existence of clinically
relevant endpoints for the filing of a new drug application (NDA) with a focused
patient database and possible accelerated paths for commercialization. By the
end of 2015, the company expects to have five such RNAi therapeutic programs in
clinical development, including programs in advanced stages, on its own or with
a partner. The “Alnylam 5x15” programs include ALN-TTR for the treatment of
transthyretin-mediated amyloidosis (ATTR), ALN-AT3 for the treatment of
hemophilia and rare bleeding disorders (RBD), ALN-AS1 for the treatment of acute
intermittent porphyria (AIP), ALN-PCS for the treatment of hypercholesterolemia,
ALN-TMP for the treatment of hemoglobinopathies, and other programs. Alnylam
intends to focus on developing and commercializing certain programs from this
product strategy itself in North and South America, Europe, and other parts of
the world; these include ALN-TTR, ALN-AT3, and ALN-AS1; the company will seek
global development and commercial alliances for other programs.

Alnylam Forward-Looking Statements

Various statements in this release concerning Alnylam’s future expectations,
plans and prospects, including without limitation, statements regarding
Alnylam’s views with respect to the potential for RNAi therapeutics, including
the potential for the ALN-PCS program, including ALN-PCS02 and ALN-PCSsc, its
expectations regarding the receipt of upfront and potential development and
commercialization milestones and royalty payments on worldwide net sales, if
any, under The Medicines Company agreement, and Alnylam’s expectations regarding
its “Alnylam 5x15” product strategy, constitute forward-looking statements for
the purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
indicated by these forward-looking statements as a result of various important
factors, including, without limitation, Alnylam’s ability to successfully
demonstrate the efficacy and safety of its drug candidates and the pre-clinical
and clinical results for these product candidates, including ALN-PCS02 and
ALN-PCSsc, which may not support further development of such product candidates,
both our and The Medicines Company’s ability to successfully advance ALN-PCS02
and/or ALN-PCSsc resulting in the potential payment of milestones and royalties
to us, actions of regulatory agencies, which may affect the initiation, timing
and progress of clinical trials for such product candidates, obtaining,
maintaining and protecting intellectual property, obtaining regulatory approval
for products, competition from others using technology similar to Alnylam’s and
others developing products for similar uses, and Alnylam’s ability to establish
and maintain strategic business alliances, including its collaboration with The
Medicines Company, and new business initiatives, as well as those risks more
fully discussed in the “Risk Factors” filed with Alnylam’s current report on
Form 8-K filed with the Securities and Exchange Commission (SEC) on January 14,
2013 and in other filings that Alnylam makes with the SEC. In addition, any
forward-looking statements represent Alnylam’s views only as of today and should
not be relied upon as representing its views as of any subsequent date. Alnylam
does not assume any obligation to update any forward-looking statements.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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SCHEDULE G

DISCLOSURE SCHEDULE

Section 9.2.1(a):

 

•  

Reference is made to certain claims alleged by the plaintiffs in the action
entitled:

[***]

Section 9.2.2:

 

•  

Reference is made to certain claims alleged by the plaintiff in the [***]
Litigation.

Section 9.2.5(c):

 

•  

Reference is made to certain claims alleged by the plaintiff in the [***]
Litigation.

Section 9.2.8:

 

•  

[***]

Section 9.2.9(a):

 

•  

Reference is made to certain claims alleged by the plaintiff in the [***]
Litigation.

Section 9.2.9(b):

 

•  

Reference is made to the [***].

 

•  

Reference is made to the [***].

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

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SCHEDULE H

EXAMPLE FOR SECTION 6.4.3.3

If, with respect to a particular Alnylam In-License, royalties are payable with
respect to aggregate net sales of all products covered by such Alnylam
In-License, and are not determined on a product-by-product basis, according to
the following tiered royalty rates:

 

Aggregate Calendar Year net sales by Alnylam, its Affiliates or any of its
sublicensees of all products

   Royalty
(as a percentage of  such net
sales)

[***]

   [***]

[***]

   [***]

[***]

   [***]

[***]

   [***]

And if sales are made during each of the four Calendar Quarters of the relevant
Calendar Year as shown in the table below, then royalties owed by MedCo pursuant
to such Alnylam In-License shall be as shown in such table:

 

Sales By

  

Calendar Quarter 1

 

Calendar Quarter 2

 

Calendar Quarter 3

 

Calendar Quarter 4

[***]

   [***]   [***]   [***]   [***]

[***]

   [***]   [***]   [***]   [***]

[***]

   [***]   [***]   [***]   [***]

[***]

   [***]   [***]   [***]   [***]

[***]

   [***]   [***]   [***]   [***]

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.

 

81