Exhibit 10.2
COMMON STOCK PURCHASE AGREEMENT
     COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) dated as of July 8,
2007, between ALNYLAM PHARMACEUTICALS, INC., a Delaware corporation (the
“Company”), and ROCHE FINANCE LTD, a Swiss corporation (the “Purchaser”).
     WHEREAS, the Company and the Purchaser are simultaneously entering into a
License and Collaboration Agreement (the “Collaboration Agreement”), and the
Company, Alnylam Europe AG, a German stock corporation, and an affiliate of the
Purchaser are simultaneously entering into a Stock Purchase Agreement (the “AG
Purchase Agreement”); and
     WHEREAS, in connection with the transactions contemplated by the
Collaboration Agreement and the AG Purchase Agreement, the Purchaser desires to
purchase from the Company, and the Company desires to issue and sell to the
Purchaser, shares of Common Stock, $0.01 par value per share, of the Company
(the “Common Stock”).
     NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
     1. Purchase and Sale of the Shares.
          (a) Subject to the terms and conditions of this Agreement, at the
Closing (as defined in clause (b) below), the Company will issue and sell to the
Purchaser, and the Purchaser will purchase from the Company, 1,975,000 shares of
Common Stock (the “Shares”) for an aggregate purchase price equal to the
Purchase Price (as defined below). As used herein, the “Purchase Price” means
$42,462,500, provided that in the event that the Collar Amount (as defined
below) is less than $10.98, the “Purchase Price” means the sum of (1) the
product of (A) 1,975,000 and (B) the Collar Amount (rounded to the nearest whole
cent) plus (2) $11,494,500; and the “Collar Amount” means the average of the
last reported sales prices for the Common Stock as of the end of regular trading
hours as reported on the NASDAQ Global Market for the three consecutive trading
day period ending on the trading day that is one trading day prior to the
Closing Date. The number of Shares and Collar Amount shall be adjusted to
reflect the effect of any reclassification, stock split, reverse split, stock
dividend, reorganization, recapitalization or other similar change with respect
to the Common Stock occurring after the date hereof and prior to the Closing.
          (b) The closing of the transactions contemplated hereby (the
“Closing”) shall take place at 10:00 a.m., Eastern time, on such date as the
Company and the Purchaser may agree upon (the “Closing Date”), which shall be no
later than the second business day after satisfaction or waiver of the
conditions to the Closing set forth in Section 4 of this Agreement (other than
delivery of items to be delivered at the Closing and other than satisfaction of
those conditions that by their nature are to be satisfied at the Closing, it
being understood that the occurrence of the Closing shall remain subject to the
delivery of such items and the satisfaction or waiver of such conditions at the
Closing), at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts (or remotely via the exchange of documents and
signatures),

 

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unless another date, place or time is agreed to in writing by the Purchaser and
the Company. At the Closing:
               (i) the Purchaser shall pay the Purchase Price to the Company by
wire transfer of immediately available funds to an account designated by the
Company; and
               (ii) the Company shall instruct the transfer agent for the Common
Stock to issue and promptly deliver to the Purchaser a stock certificate
representing the Shares.
     2. Representations and Warranties of the Company. The Company represents
and warrants to the Purchaser that the statements contained in this Section 2
are true and correct as of the date hereof, except as set forth herein or in the
disclosure schedule delivered by the Company to the Purchaser dated as of the
date of this Agreement (the “Disclosure Schedule”).
          (a) Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has the corporate power and authority to enter into and
perform its obligations under this Agreement, to own and operate its properties
and assets and to carry on its business as currently conducted and as presently
proposed to be conducted.
          (b) Capitalization and Voting Rights.
               (i) The authorized capital stock of the Company as of the date of
this Agreement consists of 125,000,000 shares of Common Stock and 5,000,000
shares of preferred stock, par value $0.01 per share (the “Preferred Stock”), of
which 125,000 shares have been designated Series A Junior Participating
Preferred Stock (the “Series A Preferred Stock”). As of June 29, 2007, (A)
37,635,786 shares of Common Stock were issued and outstanding and (B) no shares
of Preferred Stock were issued or outstanding;
               (ii) Except as set forth in Section 2(b)(ii) of the Disclosure
Schedule, as of the date hereof, there are: (A) no outstanding options,
warrants, rights (including conversion or preemptive rights) or agreements
pursuant to which the Company is or may become obligated to issue, sell or
repurchase any shares of its capital stock or any other securities of the
Company; (B) no restrictions on the transfer of capital stock of the Company
imposed by the Restated Certificate of Incorporation or By-laws of the Company,
any agreement to which the Company is a party, or any order of any court or any
governmental agency to which the Company is subject; and (C) no cumulative
voting rights for any of the Company’s capital stock;
               (iii) As of June 29, 2007, of the authorized Common Stock,
4,782,032 shares have been reserved for issuance upon exercise of outstanding
options or other stock-based awards under the Company’s stock incentive and
stock purchase plans. Other than as set forth in the preceding sentence or in
Section 2.3(b)(iii) of the Disclosure Schedule, there are no other shares of
Common Stock reserved for issuance. There is no capital stock of the Company
held by the Company. As of the date hereof, all of the Series A Preferred Stock
is reserved for issuance under the rights agreement between the Company and
Computershare Trust Company (f/k/a Equiserve Trust Company, N.A.), as rights
agent, dated as of July 13, 2005 (the “Shareholder Rights Plan”), and is the
only Preferred Stock reserved for issuance.

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               (iv) Except as set forth in the Reports (as defined below) or in
Section 2(b)(iv) of the Disclosure Schedule, the Company is not a party to and
is not subject to any agreement or understanding relating to, and, to the
Company’s knowledge, there is no agreement or understanding between any persons
which affects or relates to, the voting of shares of capital stock of the
Company or the giving of written consents by any stockholder or director of the
Company.
          (c) Authorization and Binding Nature. The execution and delivery by
the Company of this Agreement, the performance of all obligations of the Company
under this Agreement and the authorization, issuance and delivery of the Shares
have been duly authorized by all necessary corporate action on the part of the
Company, and this Agreement constitutes a valid and legally binding obligation
of the Company enforceable against the Company in accordance with its terms,
except (i) as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
enforcement of creditors’ rights generally and (ii) as may be limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
          (d) Non-Contravention. The execution, delivery and performance by the
Company of this Agreement and compliance with the provisions hereof by the
Company will not, with or without the giving of notice or the passage of time or
both, (i) violate or conflict with the provisions of the certificate of
incorporation or by-laws of the Company, (ii) violate or conflict with any
provision of law, statute, ordinance, rule, regulation, judgment, decree, order
or award of any court, governmental body or arbitrator applicable to the
Company, or (iii) violate or conflict with, or require any consent or other
action by any person under, any agreement to which the Company is a party or by
which it is bound, except for any such violations or conflicts and any such
consents or other actions where the failure to obtain such consents or take such
other actions, individually or in the aggregate, are not reasonably likely to
have a Material Adverse Effect (as defined below). For purposes of this
Agreement, the term “Material Adverse Effect” means a material adverse effect on
the business, properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole; provided, however, that none of
the following shall constitute, or shall be considered in determining whether
there has occurred, a Material Adverse Effect: (1) changes that are the result
of general economic or political factors affecting the national, regional or
world economy or acts of war or terrorism (except to the extent that such
changes have a disproportionate effect on the Company and its subsidiaries,
taken as a whole); (2) changes that are the result of factors generally
affecting the industries or markets in which the Company operates (except to the
extent that such changes have a disproportionate effect on the Company and its
subsidiaries, taken as a whole); (3) any adverse change, effect or circumstance,
including the termination of any collaboration or license agreements between the
Company and any entity listed in Section 2(d) of the Disclosure Schedule or the
commencement of litigation by any such entity, in any such case, arising out of
or resulting from actions contemplated by the parties in connection with this
Agreement or the pendency or announcement of the transactions contemplated by
this Agreement; (4) changes in law, rules or regulations or generally accepted
accounting principles or the interpretation thereof; (5) any action taken
pursuant to or in accordance with this Agreement or at the request of the
Purchaser; (6) of and by itself and without regard to any other fact or
circumstance, any failure by the Company to meet any published securities
analyst estimates of revenues, losses, expenses or cash balances, it being
understood that if any failure to meet any such estimates is the result of

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what would otherwise constitute a Material Adverse Effect, then the parties
acknowledge that a Material Adverse Effect shall be deemed to have occurred
notwithstanding this clause (6); and (7) of and by itself without regard to any
other fact or circumstance, a decline in the price of the Common Stock, it being
understood that if any such decline is the result of what would otherwise
constitute a Material Adverse Effect, then the parties acknowledge that a
Material Adverse Effect shall be deemed to have occurred notwithstanding this
clause (7).
          (e) Governmental Consents. Assuming the accuracy of the Purchaser’s
representations contained in Section 3 of this Agreement, no consent, approval,
order or authorization of, or registration, qualification, designation,
declaration or filing with, any Governmental Authority is required on the part
of the Company in order to enable the Company to execute, deliver and perform
its obligations under this Agreement, except for such qualifications or filings
under applicable securities laws as may be required to be made after the Closing
in connection with the transactions contemplated by this Agreement. As used
herein, “Governmental Authority” shall mean any nation or government, any
federal, state, municipal, local, provincial, regional or other political
subdivision thereof, and any person exercising executive, legislative, judicial
regulatory or administrative functions of or pertaining to government.
          (f) Authorization of Shares. When issued, sold and delivered in
accordance with the provisions of this Agreement for the consideration expressed
herein, the Shares will be duly authorized, validly issued, fully paid and
nonassessable, and will be free of restrictions on transfer other than
restrictions under this Agreement and applicable state and federal securities
laws.
          (g) SEC Reports and Financial Statements. The Company has previously
furnished or made available to the Purchaser (i) its Annual Report on Form 10-K
for the fiscal year ended December 31, 2006 as filed with the SEC), and (ii) all
other reports filed by the Company with the SEC under Section 13 or subsections
(a) and (c) of Section 14 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), from January 1, 2007 through the date of this Agreement
(such reports are collectively referred to herein as the “Reports”). The Reports
constitute all of the documents required to be filed by the Company under
Section 13 or subsections (a) and (c) of Section 14 of the Exchange Act with the
SEC from January 1, 2007 through the date of this Agreement. The Reports
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder when filed. The Reports, when considered
together, do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited financial statements for the year ended December 31,
2006 and the unaudited financial statements for the quarter ended March 31, 2007
included in the Reports (the “Financial Statements”) have been prepared in
accordance with U.S. generally accepted accounting principles applied on a
consistent basis throughout the periods indicated (except as may be indicated in
notes or as permitted by Form 10-Q) and fairly present in all material respects
the financial condition and operating results of the Company and its
subsidiaries as of the dates, and for the periods, indicated therein (subject,
in the case of the unaudited financial statements, to normal year-end audit
adjustments). Since December 31, 2006, the Company has conducted its business in
the ordinary course, and there has not been any Material Adverse Effect. Since

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March 31, 2007, the Company has incurred no liabilities (contingent or
otherwise) outside the ordinary course of business that would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Except as disclosed in the Financial Statements, the Company is not a guarantor
or indemnitor of any indebtedness of any other person, firm or corporation that
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
          (h) Subsidiaries. Except as set forth in the Reports or in Section
2(h) of the Disclosure Schedule and other than with regards to Alnylam Europe
AG:
               (i) The Company does not presently own or control, directly or
indirectly, any other corporation, association, partnership, trust, joint
venture or other business entity and does not currently own or control, directly
or indirectly, any capital stock or other ownership interest, directly or
indirectly, in any corporation, association, partnership, trust, joint venture
or other entity, other than securities in a publicly traded company or mutual
fund held for investment by the Company and consisting of less than five percent
of the outstanding capital stock of such company.
               (ii) Each corporation, partnership, joint venture, association
and other entity controlled by the Company directly or indirectly through one or
more intermediaries (each, a “Subsidiary”) is duly organized and existing under
the laws of its jurisdiction or organization, is in good standing under such
laws and is duly qualified to do business as a foreign corporation in each
jurisdiction in which a failure to so qualify would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
               (iii) All the outstanding shares of capital stock of each
Subsidiary are validly issued, fully paid and nonassessable, and are owned by
the Company free and clear of any encumbrances, other than restrictions under
securities laws.
               (iv) There are no options, warrants, convertible securities, or
other rights, agreement, arrangements or commitments of any character relating
to the capital stock of any Subsidiary.
               (v) No Subsidiary is a member of (nor is any part of its business
conducted through) any partnership, nor is it a participant in any joint venture
or similar arrangement.
               (vi) There are no voting trust, stockholder agreements, proxies
or other agreements or understandings in effect with respect to the voting or
transfer of any shares of capital stock of or any other interests in any
Subsidiary.
          (i) Litigation. Except as set forth in Section 2(i) of the Disclosure
Schedule or in the Reports, there is no action, suit, proceeding or
investigation pending or, to the Company’s knowledge, currently threatened
against the Company or any subsidiary of the Company that questions the validity
of this Agreement or the right of the Company to enter into this Agreement, or
to consummate the transactions contemplated hereby, or that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
or result in any change in the current equity ownership of the Company, nor is
the Company aware

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that there is any basis for the foregoing. To the Company’s knowledge, there are
no legal actions or investigations pending or threatened involving the
employment by or with the Company of any of the Company’s current or former
officers, their use in connection with the Company’s business of any information
or techniques allegedly proprietary to any of their former employers, or their
obligations under any agreements with prior employers or alleging a violation of
any federal, state or local statute or common law relationship with the Company.
The Company is not a party to any order, writ, injunction, judgment or decree of
any court. There is no action, suit, proceeding or investigation by the Company
currently pending or that the Company intends to initiate.
          (j) Employee and Consultant Confidentiality Agreements. Except as set
forth in Section 2(j) of the Disclosure Schedule, each employee of, or
consultant to, the Company or any of its Subsidiaries, who has or is proposed to
have access to material confidential or proprietary information of the Company
or any of its Subsidiaries, is a signatory to, and is bound by, an agreement
with the Company or one or more of its Subsidiaries relating to nondisclosure,
proprietary information and assignment of patent, copyright and other
intellectual property rights.
          (k) Proprietary Rights. (i) Except as set forth in the Company’s
Public Filings or Section 2(k) of the Disclosure Schedule: (A) to the Company’s
knowledge, the Company or one of its Subsidiaries owns, free and clear of any
lien or encumbrance, or has a valid license to, or has an enforceable right to
use, without the payment of any royalty except pursuant to the Material IP
Contracts (as hereinafter defined) listed on Section 2(k)(ii) of the Disclosure
Schedule, all U.S. and non-U.S. patents, trade secrets, know-how, trademarks,
service marks, copyrights, and other proprietary and intellectual property
rights, and all grants and applications with respect to the foregoing
(collectively, the “Proprietary Rights”) necessary for the conduct of the
Company’s business as now conducted, the absence of which would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
(such Proprietary Rights owned by or licensed to the Company or any of its
Subsidiaries collectively, the “Company Rights”); (B) to the Company’s
knowledge, the Company’s rights in the Company Rights are valid and enforceable;
(C) to the Company’s knowledge, all necessary registration, maintenance and
renewal fees in respect of the Company Rights have been paid on time; (D) except
as disclosed on the Disclosure Schedule and to the Company’s knowledge, none of
the Company or its Subsidiaries have or are infringing or otherwise violating
the applicable Proprietary Rights of any person, and have not received any
notice or are subject to any actual or threatened proceedings alleging such,
except for infringements or other violations that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;
(E) the Company and its Subsidiaries have taken reasonable measures to protect
the Company Rights, consistent with prudent commercial practices in the
biotechnology industry; (F) other than the Material IP Contracts, there are no
outstanding material options, licenses or agreements of any kind relating or
affecting to the Company Rights except for options, licenses or agreements
specifically referenced in the Collaboration Agreement; and (G) there are no
breaches or defaults of, or any disputes or threatened disputes concerning, any
of the Material IP Contracts, except for breaches, defaults and disputes in
Material IP Contracts which are not and will not be sublicensed to F.
Hoffmann-La Roche Ltd, a Swiss corporation, and Hoffmann-La Roche Inc., a New
Jersey corporation, pursuant to the Collaboration Agreement and which

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defaults and disputes would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
               (ii) Section 2(k)(ii) of the Disclosure Schedule contains a
complete and accurate list of all material agreements granting any rights
(whether to or by the Company or any of its Subsidiaries) with respect to any of
the Company Rights (collectively, the “Material IP Contracts”), specifically
indicating, as applicable, each amendment thereto.
          (l) Tax Returns, Payments and Elections. The Company has filed all
material tax returns and reports as required, and within the time prescribed, by
law. These returns and reports are true and correct in all material respects.
The Company has paid or made provision for the payment of all accrued and unpaid
taxes and other charges to which the Company is subject and which are not
currently due and payable. The federal income tax returns of the Company have
never been audited by the Internal Revenue Service, and the Company has not
agreed to an extension of the statute of limitations with respect to any of its
tax years. Neither the Internal Revenue Service nor any other taxing authority
is now asserting against the Company any deficiency or claim for additional
material taxes or interest thereon or penalties in connection therewith. The
Company has not made any elections pursuant to the U.S. Internal Revenue Code of
1986, as amended (the “Code”) (other than elections which relate solely to
methods of accounting, depreciation or amortization) which would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
          (m) Insurance. The Company has in full force and effect fire, casualty
and liability insurance policies, with coverage, in the case of property
insurance, sufficient in amount (subject to reasonable deductibles) to allow it
to replace any of its properties that might be damaged or destroyed, and in the
case of casualty and liability insurance, in amounts customary for businesses
similar to the business of the Company.
          (n) Key Employees. The Company is not aware that any person listed on
Section 2(n) of the Disclosure Schedule intends to terminate his or her
employment with the Company, nor does the Company have a present intention to
terminate the employment of any of the foregoing.
          (o) Real Property Holding Corporation. The Company is not, and has not
been during the applicable period specified in Section 897 of the Code, a United
States real property holding corporation, as defined in Section 897 of the Code.
          (p) Offering. Subject to the accuracy of the Purchaser’s
representations set forth in Section 3 of this Agreement, the offer, sale and
issuance of the Shares to be issued in conformity with the terms of this
Agreement constitute transactions which are exempt from registration
requirements under the Securities Act of 1933, as amended (the “Securities Act”)
and from all applicable state registration or qualification requirements, other
than those with which the Company has complied or will comply with prior to the
Closing.
          (q) Licenses and Other Rights; Compliance with Laws. The Company has
all franchises, permits, licenses and other rights and privileges from
Governmental Authorities necessary to permit it to own its properties and to
conduct its business as presently conducted

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and is in compliance in all material respects thereunder. The Company and its
subsidiaries are in compliance with all laws and governmental rules and
regulations applicable to its business, properties and assets, including,
without limitation, all such rules, laws and regulations relating to the
environment, fair employment practices, the rules, regulations and requirements
of the NASDAQ Global Market relating to the continued listing of the Common
Stock and occupational safety and health and public safety, except for any
non-compliance that would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
          (r) Brokers. The Company has not incurred, nor will incur, directly or
indirectly, as a result of any action taken by the Company, any liability for
brokerage or finders’ fees or agents’ commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
     3. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company that the statements contained in this
Section 3 are true and correct as of the date hereof.
          (a) Corporate Power. The Purchaser has the corporate power and
authority to enter into and perform its obligations under this Agreement. The
Purchaser has not been organized, reorganized or recapitalized for the purpose
of investing in the Company.
          (b) Authorization and Binding Nature. The execution and delivery by
the Purchaser of this Agreement and the performance of all obligations of the
Purchaser under this Agreement have been duly authorized by all requisite
corporate action on the part of the Purchaser, and this Agreement constitutes a
valid and legally binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms, except (i) as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the enforcement of creditors’ rights generally and
(ii) as may be limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies. No consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any Governmental Authority is required
on the part of the Purchaser in connection with the consummation of the
transactions contemplated by this Agreement.
          (c) Non-Contravention. The execution, delivery and performance by the
Purchaser of this Agreement and compliance with the provisions hereof by the
Purchaser will not, with or without the giving of notice or the passage of time
or both, (i) violate or conflict with the provisions of the certificate of
incorporation or bylaws or other constituent documents of the Purchaser, (ii)
violate or conflict with any provision of law, statute, ordinance, rule,
regulation, judgment, decree, order or award of any court, governmental body or
arbitrator applicable to the Purchaser, or (iii) violate or conflict with any
material agreement to which the Purchaser is a party or by which it is bound.
          (d) Accredited Investor. The Purchaser is an “accredited investor,” as
defined in Rule 501 under the Securities Act.

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          (e) Investment. The Purchaser is acquiring the Shares for its own
account for investment, not for resale to any other person and not with a view
to or in connection with any resale or distribution. The Purchaser understands
that the Shares have not been registered under the securities laws of the United
States or any other jurisdiction and cannot be transferred or resold except as
permitted pursuant to a valid registration statement or an applicable exemption
from registration. The Purchaser acknowledges that the Company has not made any
representations with respect to registration of the Shares under applicable
securities laws, that there can be no assurance that any market for the Common
Stock will continue into the foreseeable future and that, as a result, the
Purchaser must be prepared to bear the economic risk of its investment for an
indefinite period of time.
          (f) Access to Information. The Purchaser has substantial knowledge and
experience in making investment decisions of this type and is capable of
evaluating the merits and risks of its investment in the Company. The Company
has made available to the Purchaser all documents, some in redacted form, and
other information that the Purchaser has concluded is necessary, desirable and
appropriate to evaluate the merits and risks of its investment in the Company.
The Company has made available to the Purchaser the documents, some in redacted
form, requested by the Purchaser, other than those documents requested by the
Purchaser but only made available to the Purchaser in redacted form, and has
provided answers to all of its questions relating to an investment in the
Company. In evaluating the suitability of an investment in the Company, the
Purchaser has not relied upon any representations (whether oral or written)
other than as set forth herein. The Purchaser has had an opportunity to discuss
this investment with representatives of the Company and to ask questions of
them. The Purchaser understands that an investment in the Company involves
significant risks. The Purchaser understands that, in connection with the
transactions contemplated by this Agreement, the Company has offered to issue
and sell shares of Common Stock to Novartis Pharma AG under the terms of the
Investor Rights Agreement, dated as of September 6, 2005, between the Company
and Novartis Pharma AG (the “NVS Agreement”).
     4. Conditions to Closing.
          (a) Conditions to Obligation of the Purchaser. The obligation of the
Purchaser to effect the transactions contemplated hereby shall be subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, by the Purchaser:
               (i) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
as of the Closing Date as though made on and as of the Closing Date (except
(A) to the extent such representations and warranties are specifically made as
of a particular date, in which case such representations and warranties shall be
true and correct only as of such date and (B) where the failure to be true and
correct (without regard to any materiality or Material Adverse Effect
qualification contained therein), individually or in the aggregate, has not had
and would not reasonably be expected to have a Material Adverse Effect (other
than with respect to the representations and warranties of the Company set forth
in Section 2(f) which shall be true and correct in all respects)); and the
Purchaser shall have received a certificate signed on behalf of the Company by
an authorized officer of the Company to such effect.

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               (ii) Covenants. All covenants, agreements and conditions
contained in this Agreement to be performed by the Company on or prior to the
Closing Date shall have been performed or complied with in all material
respects, and the Company shall have delivered to the Purchaser a certificate
signed on behalf of the Company by an authorized officer of the Company to such
effect.
               (iii) Compliance with NVS Agreement. The Offer Period (as defined
in the NVS Agreement) relating to the Offer (as defined in the NVS Agreement)
delivered by the Company to Novartis Pharma AG on the date hereof relating to
this Agreement shall have expired or been waived or terminated.
               (iv) Secretary’s Certificate. The Secretary or Assistant
Secretary of the Company shall have delivered to the Purchaser at the Closing a
certificate stating that the resolutions of the Board of Directors of the
Company attached thereto are true and complete copies of the resolutions
approved by the Board of Directors relating to the sale of the Shares.
               (v) Good Standing Certificate. The Company shall have delivered
to the Purchaser at the Closing a certificate of the Secretary of State of the
State of Delaware as to the existence and good standing of the Company in the
State of Delaware.
               (vi) Collaboration Agreement. On or before the Closing Date, the
Company shall have duly executed and delivered to the Purchaser the
Collaboration Agreement and such agreement shall be in full force and effect on
the Closing Date (no later than the time of Closing).
               (vii) AG Purchase Agreement. The closing of the acquisition of
Alnylam Europe AG contemplated by the AG Purchase Agreement shall have occurred
(or shall occur substantially contemporaneously with the Closing hereunder).
               (viii) Market Listing. The Shares shall be approved for listing
on the NASDAQ Global Market upon issuance.
               (ix) Absence of Litigation. There shall be no injunction, action,
suit, proceeding or investigation, other than with respect to litigation as
described in clause (3) of the definition of “Material Adverse Effect”, pending
or currently threatened in writing against the Company or the Purchaser which
questions the validity of this Agreement or the right of the Company or the
Purchaser to enter into this Agreement or to consummate the transactions
contemplated hereby.
               (x) Absence of Injunction. No court, arbitrational tribunal,
administrative agency or commission of competent jurisdiction shall have issued
or entered any order, decree, judgment or injunction which is in effect and
which has the effect of prohibiting consummation of the transactions
contemplated by this Agreement.
          (b) Conditions to Obligation of the Company. The obligation of the
Company to effect the transactions contemplated hereby shall be subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, by the Company:

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               (i) Representations and Warranties. The representations and
warranties of the Purchaser set forth in this Agreement shall be true and
correct in all material respects as of the Closing Date as though made on and as
of the Closing Date; and the Company shall have received a certificate signed on
behalf of the Purchaser by an authorized officer of the Purchaser to such
effect.
               (ii) Compliance with NVS Agreement. The Offer Period (as defined
in the NVS Agreement) relating to the Offer (as defined in the NVS Agreement)
delivered by the Company to Novartis Pharma AG on the date hereof relating to
this Agreement shall have expired or been waived or terminated.
               (iii) Collaboration Agreement. On or before the Closing Date, the
Purchaser shall have duly executed and delivered to the Company the
Collaboration Agreement and such agreement shall be in full force and effect on
the Closing Date (no later than the time of Closing).
               (iv) AG Purchase Agreement. The closing of the acquisition of
Alnylam Europe AG contemplated by the AG Purchase Agreement shall have occurred
(or shall occur substantially contemporaneously with the Closing hereunder).
               (v) Ancillary Agreements. Neither the Collaboration Agreement nor
the AG Purchase Agreement shall have been terminated.
               (vi) Absence of Litigation. There shall be no injunction, action,
suit, proceeding or investigation, other than with respect to litigation as
described in clause (3) of the definition of “Material Adverse Effect”, pending
or currently threatened in writing against the Company or the Purchaser which
questions the validity of this Agreement or the right of the Company or the
Purchaser to enter into this Agreement or to consummate the transactions
contemplated hereby.
               (vii) Absence of Injunction. No court, arbitrational tribunal,
administrative agency or commission of competent jurisdiction shall have issued
or entered any order, decree, judgment or injunction which is in effect and
which has the effect of prohibiting consummation of the transactions
contemplated by this Agreement.
     5. Standstill.
          (a) The Purchaser hereby agrees that, until the third anniversary of
the Closing Date (the “Release Date”), unless the Purchaser shall have been
specifically invited in writing by the Company, neither the Purchaser nor any
Affiliates (as defined below) of the Purchaser that are controlled by Roche
Holdings Ltd (such Affiliates, excluding Genentech, Inc. and Chugai
Pharmaceutical Co., Ltd. and their respective subsidiaries and any pension plans
and their respective advisors, collectively, the “Purchaser Affiliates”) will in
any manner, directly or indirectly: (i) effect or seek, offer or propose
(whether publicly or otherwise) to effect, or cause or participate in or in any
way advise, assist or encourage any other person to effect or seek, offer or
propose (whether publicly or otherwise) to effect or participate in, (A) any
acquisition of any securities (or beneficial ownership thereof) or assets of the
Company, other than an acquisition (as a result of open market or private
purchases) that results in the Purchaser Affiliates

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beneficially owning (as defined in Rule 13d-3 of the Exchange Act), in the
aggregate, less than 5% of the total outstanding voting securities of the
Company at any time; (B) any tender or exchange offer, merger or other business
combination involving the Company; (C) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to the
Company; or (D) any “solicitation” of “proxies” (as such terms are used in the
proxy rules of the SEC) or consents to vote any voting securities of the
Company; (ii) form, join or in any way participate in a “group” (as defined
under the Exchange Act) with respect to any securities of the Company (other
than any “group” comprised solely of Affiliates of the Purchaser); (iii)
otherwise act, alone or in concert with others, to seek to control or influence
the management, Board of Directors or policies of the Company; (iv) take any
action which might force the Company to make a public announcement regarding any
of the types of matters set forth in (i) above; or (v) enter into any
discussions or arrangements with any third party with respect to any of the
foregoing. As used herein, “Affiliate” means, with respect to any person, any
other person that, directly or indirectly, by itself or through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such person. The term “control” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract or
otherwise. The Purchaser also agrees during such period not to request the
Company (or its directors, officers, employees or agents), directly or
indirectly, to amend or waive any provision of this paragraph (including this
sentence). The Purchaser represents and warrants that neither the Purchaser nor
any of the Purchaser Affiliates owns, of record or beneficially, any voting
securities of the Company, or any securities convertible into or exercisable for
any such voting securities.
          (b) The restrictions in Section 5(a) shall terminate upon the earliest
to occur of: (i) the receipt by the Company, or the public announcement, of a
bona fide unsolicited Acquisition Proposal (as defined below) by any person or
group (as defined under the Exchange Act); provided, however, that the
restrictions in Section 5(a) shall be reinstated if such bona fide unsolicited
Acquisition Proposal is withdrawn or terminated prior to the completion of the
transaction contemplated by such Acquisition Proposal; (ii) the commencement of
a “going private” transaction subject to Rule 13e-3 under the Exchange Act
involving the Company; provided, however, that the restrictions in Section 5(a)
shall be reinstated if such “going private” transaction is withdrawn or
terminated and is not completed; (iii) any person or group (as defined under the
Exchange Act) other than the Purchaser or any of the Purchaser Affiliates
becoming the beneficial owner of 20% (in number or voting power) or more of the
total outstanding voting securities of the Company; (iv) delivery by the Company
of the notice contemplated in Section 5(c), provided, however, that the
restrictions in Section 5(a) shall be reinstated if the Company notifies the
Purchaser that the Company no longer expects to enter into a definitive
agreement with respect to such transaction contemplated by such Acquisition
Proposal; (v) the individuals who on the date hereof constituted the Board of
Directors of the Company (together with any new directors whose election by such
Board of Directors or nomination for election by the stockholders of the Company
was approved by a majority of the directors of the Company then still in office
or whose election or nomination for election was previously so approved by the
directors in office on the date hereof, other than any director designated by
person or group (as defined under the Exchange Act) that has made or entered
into an agreement with respect to an Acquisition Proposal) ceasing for any
reason to constitute a majority of the Board of Directors of the Company;
(vi) the breach by the Company of Section 5(c); or (vii) the termination of this

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Agreement or the Collaboration Agreement. If the restrictions in Section 5(a)
are terminated and reinstated as set forth above, they shall again terminate in
accordance with this Section 5(b).
          (c) The Company shall notify the Purchaser no later than ten
(10) business days prior to entering into any definitive agreement with respect
to a transaction that is the subject of an Acquisition Proposal.
          (d) Notwithstanding anything to the contrary contained in this
Section 5, at any time prior to the Release Date, the Purchaser shall be
permitted to make requests to the Board of Directors or the Company to amend or
waive any of the limitations set forth in Section 5(a).
          (e) Notwithstanding the foregoing, the restrictions placed upon the
Purchaser under this Section 5 shall not apply to the purchase by the Purchaser
of any Offered Securities (as defined below) pursuant to Section 7.
          (f) As used herein, “Acquisition Proposal” means any offer, proposal,
indication of interest that relates to (i) any merger, consolidation,
recapitalization, restructuring, liquidation, dissolution or other direct or
indirect business combination involving the Company or any of its subsidiaries,
(ii) the issuance by the Company or any of its subsidiaries of capital stock
that would result in any person or group (as defined under the Exchange Act)
beneficially owning 20% (in number or voting power) or more of the total
outstanding voting securities of the Company or any of its subsidiaries in a
transaction or series of related transactions (other than pursuant to customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities or agreements with and between
persons and the Company with respect to any other bona fide issuance of
securities by the Company to such persons for resale within 40 days, including
without limitation pursuant to Section 4(2) of the Securities Act or Rule 144A
or Regulation S promulgated under the Securities Act), (iii) any tender or
exchange offer that if consummated would result in any person or group (as
defined under the Exchange Act) beneficially owning 20% (in number or voting
power) or more of the total outstanding voting securities of the Company or any
of its subsidiaries or (iv) the sale, lease, transfer, exclusive license or
other disposition, in a single transaction or series of related transactions, by
the Company or a subsidiary of the Company of assets comprising 20% or more of
the assets of the Company and its subsidiaries taken as a whole.
     6. Lockup.
          (a) Restriction on Transfer. The Purchaser agrees that, prior to the
second anniversary of the Closing Date, neither the Purchaser nor any of the
Purchaser Affiliates will (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any equity
securities of the Company or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of any equity securities of the Company, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of
securities, in cash or otherwise.

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          (b) Volume Limits. The Purchaser agrees that, during the one year
period beginning on the second anniversary of the Closing Date, neither the
Purchaser nor any of the Purchaser Affiliates will (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any equity securities
of the Company or (ii) enter into any swap or other arrangement that transfers
to another in whole or in part, any of the economic consequences of ownership of
any equity securities of the Company, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of securities, in cash or
otherwise; provided that, after the second anniversary of the Closing Date,
(x) the Purchaser shall be permitted to sell, during a single day, up to a
maximum of such number of shares of Common Stock as is equal to 25% of the
trading volume reported for the Common Stock during such day (other than the
trading volume associated with transactions by the Purchaser or any of its
Affiliates) and (y) the Purchaser may offer, pledge, sell, or contract to sell
shares of Common Stock in any “block trade”, provided that the Purchaser may
not, in any one day, sell pursuant to this clause (y) more than 0.25% of the
Common Stock then outstanding as then most recently reported by the Company in a
Report. The Purchaser shall report to the Company all sales, transfers or other
dispositions of securities of the Company within three days of any such sale,
transfer or other disposition.
          (c) No Hedging. The restrictions contained in clause (ii) of Section
6(a) and 6(b) have been expressly agreed to preclude the Purchaser and the
Purchaser Affiliates, during the periods while such provisions are applicable,
from engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a transfer of shares of Common
Stock, even if such shares would be disposed of by someone other than the
Purchaser or any Purchaser Affiliate, including without limitation, any short
sale (whether or not against the box) or any purchase, sale or grant of any
right (including, without limitation, any put or call option) with respect to
any shares of Common Stock or with respect to any security (other than a
broad-based market basket or index) that included, relates to or derives any
significant part of its value from any shares of Common Stock.
          (d) Notwithstanding the foregoing, this Section 6 shall terminate
immediately upon the earlier of (i) a Company Sale (as defined below) and
(ii) such time when the Purchaser and the Purchaser Affiliates beneficially own
(as defined in Rule 13d-3 of the Exchange Act), in the aggregate, no more than
2.5% of the total outstanding shares of Common Stock.
     7. Subscription Rights.
          (a) In the event that the Company proposes, from time to time after
the Closing, to sell or issue any New Securities (as defined below) for cash (a
“Cash Offering”) or for non-cash consideration (a “Non-Cash Offering,” and each
of the Cash Offering and Non-Cash Offering, an “Offering”), the Company shall,
subject to Section 7(k) below, grant to the Purchaser the right to purchase a
number of securities of the same type as the New Securities (except that
securities purchased by the Purchaser in connection with an Offering involving a
public offering shall be registered under the Securities Act only to the extent
permitted by applicable law) determined by multiplying the number of New
Securities that the Company proposes to offer by a fraction, the numerator of
which is the aggregate number of shares of Common Stock then owned of record by
the Purchaser as of a date within 20 days of delivery of

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the Offer (as defined below) selected by the Company on the records of the
transfer agent for the Common Stock and the denominator of which is the total
number shares of Common Stock outstanding on such date (the “Offered
Securities”); provided, however that for purposes of such calculation, the
Purchaser shall be deemed to own of record all Offered Securities or Unpurchased
Securities (as defined below) which remain available for purchase pursuant to
this Section 17 and all such securities shall be deemed to be outstanding.
          (b) “New Securities” shall mean any equity securities of the Company,
whether now authorized or not, including any equity securities issued pursuant
to rights, options, or warrants to purchase said equity securities, and
securities of any type whatsoever that are, or may become, convertible into said
equity securities; provided, that “New Securities” does not include
(i) securities issued in connection with any stock split or stock dividend by
the Company, (ii) securities issued or issuable to employees, consultants or
directors of the Company pursuant to any stock purchase plan, stock option plan,
stock incentive plan or other employee stock bonus or equity incentive
arrangement of the Company (including shares issued or issuable upon exercise of
options already granted), (iii) securities issued pursuant to the Shareholder
Rights Agreement or (iv) securities issued by the Company as consideration for
the acquisition of a majority or more of the outstanding shares of capital stock
or all or substantially all of the assets of any entity (including by merger,
reorganization or otherwise) (any such transaction, an “M & A Transaction”).
          (c) After the Closing, the Company shall not issue, sell or exchange
any New Securities in an Offering unless the Company shall deliver to the
Purchaser a written notice of any proposed or intended issuance, sale or
exchange of New Securities (the “Offer”), which Offer shall (i) identify and
describe the New Securities, (ii) describe the price and other terms upon which
they are to be issued, sold or exchanged, and the number or amount of the New
Securities to be issued, sold or exchanged, (iii) identify the persons or
entities, if known, to which or with which the New Securities are to be offered,
issued, sold or exchanged, and (iv) offer to issue and sell to the Purchaser the
Offered Securities at the Market Price (as defined below). The Purchaser shall
have the right, (i) in the case of a Cash Offering, for a period of thirty
(30) days following delivery of the Offer or (ii) in the case of a Non-Cash
Offering, for a period of thirty (30) days following the later of (x) delivery
of the Offer and (y) the date that the Market Price is determined in accordance
with Section 7(d), to elect to purchase or acquire, at the Market Price, all or
part of the Offered Securities described above (each such 30-day period, as
applicable, the “Offer Period”). The Offer by its terms shall remain open and
irrevocable for the Offer Period.
          (d) “Market Price” shall mean for purposes of this Section 7, (i) in
the case of a Cash Offering, the purchase price per share to be paid by the
purchaser of New Securities in the Cash Offering; provided, however, that in the
event of any stock dividend, stock split, combination of shares,
recapitalization or other similar change in the capital structure of the Company
which affects or relates to the Common Stock, the Market Price shall be adjusted
proportionately and (ii) in the case of a Non-Cash Offering, (A) the average of
the last reported sales prices for the Common Stock as of the end of regular
trading hours as reported on the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or any other national securities exchange or
nationally recognized trading system on which the Common Stock is then listed or
approved for quotation, for the twenty consecutive trading day

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period ending on the earlier of (x) the last trading day prior to public
announcement of the Non-Cash Offering and (y) the closing of the Non-Cash
Offering, (B) if the Common Stock is not listed or approved for quotation on the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or any other national securities exchange or nationally recognized trading
system during such twenty-day period, the average of the last reported sales
prices for the Common Stock as of the end of regular trading hours as reported
on the Over-The-Counter Bulletin Board, Bulletin Board Exchange or the Pink
Sheets’ Electronic Quotation Service (and if there are no reported sales prices
for the Common Stock, the volume-weighted arithmetic average of the last
reported bid and asked prices as of the end of regular trading hours) for such
twenty-day period, (C) if the Common Stock is not traded or quoted during such
twenty-day period, the fair market value per share as mutually determined by the
Purchaser and the Company or, if the Purchaser and the Company are unable to
mutually agree within five (5) business days of delivery of the Offer, as
determined by an Independent Appraiser (as defined below), jointly appointed by
the parties (the expenses of which will be paid by the Purchaser); provided,
however, that in the event of any stock dividend, stock split, combination of
shares, recapitalization or other similar change in the capital structure of the
Company during such twenty-day period which affects or relates to the Common
Stock, the Market Price shall be adjusted proportionately or (D) if the Offer
relates to securities other than Common Stock, the fair market value per share
as mutually determined by the Purchaser and the Company or, if the Purchaser and
the Company are unable to mutually agree within five (5) business days of
delivery of the Offer to the Purchaser, as determined by an Independent
Appraiser, jointly appointed by the parties (the expenses of which will be paid
by the Purchaser). As used herein, the term “Independent Appraiser” means a
nationally recognized investment banking firm, valuation firm or firm of
independent certified public accountants of recognized standing that is
experienced in the business of appraising biotechnology companies, and that is
not an Affiliate of the Company or the Purchaser.
          (e) To accept an Offer, in whole or in part, the Purchaser must
deliver a written notice (the “Notice of Acceptance”) to the Company prior to
the end of the Offer Period, setting forth the portion of the Offered Securities
that the Purchaser elects to purchase.
          (f) At any time after delivery of the Offer until ninety (90) days
from the expiration of the Offer Period, the Company may issue, sell or exchange
all or any part of such New Securities, but only to the offerees or purchasers
(if identified) and only upon terms and conditions (including, without
limitation, unit prices and interest rates) which are described in the Offer.
          (g) In the event the Company shall propose to sell less than all the
New Securities described in the Offer (any such sale to be in the manner and on
the terms specified in Section 7(f) above), then the number of Offered
Securities shall be reduced proportionately and thereafter the Purchaser shall
be permitted to amend, in its sole discretion, the amount specified in its
Notice of Acceptance. The Company may not issue, sell or exchange more than the
reduced number or amount of the New Securities unless and until such securities
have again been offered to the Purchaser in accordance with Section 7(c) above.
          (h) Upon the later of (i) seven (7) business days after receipt of any
required regulatory approval, (ii) seven (7) business days following delivery of
the Notice of Acceptance

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by the Purchaser to the Company and (iii) the closing of the issuance, sale or
exchange of all or less than all of the New Securities (such date in clause
(iii), the “First Closing Date”), the Purchaser shall acquire from the Company,
and the Company shall issue to the Purchaser, the number or amount of Offered
Securities specified in the Notice of Acceptance, as amended pursuant to Section
7(g) above, upon the terms and conditions specified in the Offer.
          (i) To the extent that the Purchaser does not purchase all of the
Offered Securities pursuant to an Offer (such unpurchased Offered Securities,
the “Unpurchased Securities”), the Purchaser may, at any time after the 160th
day following the First Closing Date until the later of (x) the 170th day
following the First Closing Date and (y) the date that the Second Market Price
is determined in accordance with Section 7(j) or, in each case, the next
business day thereafter if such date is not a business day, deliver to the
Company a notice of its intention (the “Second Closing Notice”) to purchase all
or part of the Unpurchased Securities (as adjusted in the event of any stock
dividend, stock split, combination of shares, recapitalization or other similar
change in the capital structure of the Company) at the Second Market Price (as
defined below) on the date that is the later of (x) seven (7) business days
after receipt of any required regulatory approval, (y) one hundred eighty
(180) days after the First Closing Date or the next business day thereafter if
such date is not a business day and (z) the date that is seven (7) business days
following delivery of the Second Closing Notice by the Purchaser to the Company
(such date, the “Second Closing Date”). On the Second Closing Date, the Company
shall issue to the Purchaser, the number or amount of Unpurchased Securities
specified in the Purchaser’s notice at the Second Market Price. Failure by the
Purchaser to provide the Second Closing Notice with respect to any Unpurchased
Securities in the time period specified above, or failure to purchase any
Unpurchased Securities on or prior to the applicable Second Closing Date, shall
terminate Purchaser’s rights to purchase such Unpurchased Securities.
          (j) The “Second Market Price” shall be the greater of (A) the Market
Price determined in accordance with Section 7(d) above plus 10% of such Market
Price and (B) the Unpurchased Securities Price (as defined below) plus 10% of
such Unpurchased Securities Price. “Unpurchased Securities Price” shall mean:
(I) in the case of Unpurchased Securities that are Common Stock, (i) the average
of the last reported sales prices for the Common Stock as of the end of regular
trading hours as reported on the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or any other national securities exchange or
nationally recognized trading system on which the Common Stock is then listed or
approved for quotation, for the twenty consecutive trading day period ending on
the last trading day prior to the date that is five (5) business days following
delivery of the Second Closing Notice by the Purchaser to the Company, (ii) if
the Common Stock is not listed or approved for quotation on the NASDAQ Global
Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or any other
national securities exchange or nationally recognized trading system during such
twenty-day period, the average of the last reported sales prices for the Common
Stock as of the end of regular trading hours as reported on the Over-The-Counter
Bulletin Board, Bulletin Board Exchange or the Pink Sheets’ Electronic Quotation
Service (and if there are no reported sales prices for the Common Stock, the
volume-weighted arithmetic average of the last reported bid and asked prices as
of the end of regular trading hours) for such twenty-day period or (iii) if the
Common Stock is not traded or quoted during such twenty-day period, the fair
market value per share as mutually determined by the Purchaser and the Company
or, if the Purchaser and the Company are unable to mutually agree within five
(5) business days of delivery of the Second

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Closing Notice to the Company, as determined by an Independent Appraiser,
jointly appointed by the parties (the expenses of which will be paid by the
Purchaser); provided, however, that in the event of any stock dividend, stock
split, combination of shares, recapitalization or other similar change in the
capital structure of the Company during such twenty-day period which affects or
relates to the Common Stock, the Second Market Price shall be adjusted
proportionately, and (II) in the case of Unpurchased Securities that are not
Common Stock, the fair market value per share as mutually determined by the
Purchaser and the Company or, if the Purchaser and the Company are unable to
mutually agree within five (5) business days of delivery of the Second Closing
Notice to the Company, as determined by an Independent Appraiser, jointly
appointed by the parties (the expenses of which will be paid by the Purchaser).
          (k) After the Closing, in the event that the Company consummates an M
& A Transaction, in lieu of the right to purchase the number of Offered
Securities determined in accordance with Section 7(a), in connection with the
next Cash Offering by the Company occurring after or contemporaneously with the
M & A Transaction, the Purchaser shall have the right, to purchase or acquire,
at a purchase price equal to the Market Price, a number of securities of the
same type as are to be issued in such Cash Offering (except that securities
purchased by the Purchaser in connection with an Offering involving a public
offering shall be registered under the Securities Act only to the extent
permitted by applicable law) determined by multiplying the sum of (i) the number
of shares of Common Stock issued by the Company in such M & A Transaction as
consideration for the acquisition of a majority or more of the outstanding
shares of capital stock or all or substantially all of the assets of the
acquired entity plus (ii) the number of securities that the Company proposes to
offer in such Cash Offering by a fraction, the numerator of which is the
aggregate number of shares of Common Stock then owned of record by the Purchaser
as of a date within 20 days of delivery of the Offer (as defined below) selected
by the Company on the records of the transfer agent for the Common Stock and the
denominator of which is the total number shares of Common Stock outstanding on
such date (the “Post-M & A Offered Securities”). With the exception of
Section 7(a), all references to Offered Securities contained in this Section 7
shall be deemed to be references to the Post-M & A Offered Securities for all
purposes relating to the offer, sale and closing of any purchase of Post-M & A
Offered Securities. Notwithstanding the foregoing, the Purchaser shall provide
the Company with non-binding written notice of its intention to exercise its
rights pursuant to this Section 7(k) within seven (7) business days of receipt
by the Purchaser of the Offer from the Company with respect to such Cash
Offering.
          (l) The obligation of the Company to offer, issue and sell to the
Purchaser any securities, and the purchase by the Purchaser of any securities
pursuant to this Section 7, is subject in all cases to the preparation,
execution and delivery by the Company and the Purchaser of a purchase agreement
containing representations and warranties with respect to the Company, the
Purchaser and the securities being purchased that are substantially similar to
those contained in the agreement between the Company and the purchaser of New
Securities in the Offering, if any, and receipt of any required regulatory
approval. The Company and the Purchaser hereby covenant and agree to execute
such a purchase agreement and to assist in the receipt of any required
regulatory approval.
          (m) This Section 7 shall terminate immediately upon the earliest of
(i) the sale by the Purchaser of any shares of the Company’s voting equity
securities other than a sale to an

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Affiliate of the Purchaser, (ii) termination or expiration of the Collaboration
Agreement or (iii) a Company Sale. As used herein, the term “Company Sale” means
a (i) merger or consolidation in which (A) the Company is a constituent party,
or (B) a subsidiary of the Company is a constituent party and the Company issues
shares of its capital stock pursuant to such merger or consolidation, except in
the case of either clause (A) or (B) any such merger or consolidation involving
the Company or a subsidiary of the Company in which the shares of capital stock
of the Company outstanding immediately prior to such merger or consolidation
continue to represent, or are converted into or exchanged for shares of capital
stock which represent, immediately following such merger or consolidation, more
than 50% by voting power of the capital stock of (1) the surviving or resulting
corporation or (2) if the surviving or resulting corporation is a wholly owned
subsidiary of another corporation immediately following such merger or
consolidation, the parent corporation of such surviving or resulting
corporation; (ii) the sale, lease, transfer, exclusive license or other
disposition, in a single transaction or series of related transactions, by the
Company or a subsidiary of the Company of all or substantially all the assets of
the Company and the subsidiaries of the Company taken as a whole (except where
such sale, lease, transfer, exclusive license or other disposition is to a
wholly owned subsidiary of the Company); or (iii) the sale or transfer, in a
single transaction or series of related transactions, by the stockholders of the
Company of more than 50% by voting power of the then-outstanding capital stock
of the Company to any person or entity or group of affiliated persons or
entities.
          (n) Notwithstanding the foregoing, the rights of the Purchaser under
this Section 7 shall not apply to any issuance if the Purchaser and the
Purchaser Affiliates would beneficially own (as defined in Rule 13d-3 of the
Exchange Act), in the aggregate, more than 4.99% of the total outstanding voting
securities of the Company after the issuance (assuming for this purpose the
purchase by the Purchaser of the securities that the Company otherwise would be
obligated to offer to the Purchaser under this Section 7). The rights of the
Purchaser under this Section 7 shall not apply to any issuance of securities
pursuant to the NVS Agreement.
     8. Termination. This Agreement may be terminated (i) at any time by mutual
written consent of the Company and the Purchaser, (ii) by the Purchaser if the
Closing has not occurred by December 31, 2007 by reason of the failure of any
condition precedent under Section 4(a) or (iii) by the Company if the Closing
has not occurred by December 31, 2007 by reason of the failure of any condition
precedent under Section 4(b). In the event that this Agreement is terminated,
the respective obligations of the Company and the Purchaser to sell and purchase
the Shares and as otherwise provided in this Agreement shall become void and be
of no further force or effect, provided that any such termination shall not
relieve any party from liability for any breach by such party, prior to the
termination of this Agreement, of any covenant or agreement (but not any
representation or warranty) contained in this Agreement.
     9. Opinions and Legends. The Purchaser agrees that the Shares shall not be
sold or transferred unless: (a) the Shares shall first have been registered
under the Securities Act, (b) the Shares are sold pursuant to Rule 144 under the
Securities Act and the Company is furnished with an opinion of counsel
reasonably satisfactory to the Company to the effect that such sale or transfer
is exempt from the registration requirements of the Securities Act or (c) the
Company shall first have been furnished with an opinion of counsel or other
information reasonably satisfactory to the Company to the effect that such sale
or transfer is exempt from the registration

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requirements of the Securities Act. The Purchaser understands that the
certificate representing the Shares shall bear a legend substantially in the
following form:
“The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of unless and until
such securities are registered under such Act or an opinion of counsel
satisfactory to the issuer is obtained to the effect that such registration is
not required.”
The foregoing legend shall be removed from the certificate evidencing the Shares
and the Company shall, or shall cause its transfer agent to, issue, no later
than five business days after receipt of a request from the Purchaser pursuant
to this Section 9, a certificate or certificates evidencing all or a portion of
the Shares, as requested by the Purchaser, without such legend if: (i) such
securities have been resold under an effective registration statement under the
Securities Act, (ii) such securities have been or will be transferred in
compliance with Rule 144 under the Securities Act, (iii) such securities are
eligible for resale pursuant to Rule 144(k) under the Securities Act or (iv) the
Purchaser shall have provided the Company with an opinion of counsel, reasonably
satisfactory to the Company, stating that such securities may lawfully be
transferred without registration under the Securities Act. The restrictions on
transfer and sale of Shares contained in this Section 9 shall terminate with
respect to any Shares for which a certificate has been issued without such
legend.
     10. Miscellaneous.
          (a) Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by
facsimile or with a reputable express courier, with charges prepaid, to the
address set forth below or to such other address of which the parties may have
given notice. Unless otherwise specified herein, such notices or other
communications shall be deemed received upon personal delivery or delivery by
facsimile, or one business day after being sent, if sent by reputable express
courier.
If to the Company:
Alnylam Pharmaceuticals, Inc.
300 Third Street
Cambridge, Massachusetts 02142
Attention: Vice President — Legal
Facsimile No.: (617) 551-8101

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with a copy (which copy shall not constitute notice to the Company) to:
WilmerHale
60 State Street
Boston, Massachusetts 02109
Attention: Steven D. Singer and Peter N. Handrinos
Facsimile No.: (617) 526-5000
If to the Purchaser:
Roche Finance Ltd
Grenzacherstrasse 124
CH-4070
Basel, Switzerland
Attn: CFD
Facsimile No.: 011 41 61 688 4169
with a copy (which copy shall not constitute notice to the Purchaser) to:
Hoffmann-La Roche Inc.
340 Kingsland Street
Nutley, New Jersey 07110-1199
Attention: General Counsel
Facsimile No.: (973) 235-3500
and with copy (which copy shall not constitute notice to the Purchaser) to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Nancy L. Sanborn
Facsimile No.: (212) 450-3800
Any party hereto may from time to time change its address for notices by giving
written notice of such changed address to the other party hereto.
          (b) Successors and Assigns. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement may be assigned or
delegated, in whole or in part, by operation of law or otherwise by either
party, without the prior written consent of the other party; provided, however,
such restriction shall not apply to the Company in the case of an assignment or
delegation in connection with a change of control, merger, consolidation,
reorganization, recapitalization or other similar transaction. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their

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respective successors and permitted assigns. Any assignment in contravention of
this provision shall be void.
          (c) Survival of Warranties. The representations and warranties of the
Company and the Purchaser contained in this Agreement shall survive the Closing
for three years.
          (d) Remedies. The rights, powers and remedies of the parties under
this Agreement are cumulative and not exclusive of any other right, power or
remedy which such parties may have under any other agreement or law. No single
or partial assertion or exercise of any right, power or remedy of a party
hereunder shall preclude any other or further assertion or exercise thereof.
          (e) Entire Agreement. This Agreement represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior oral and written and all
contemporaneous oral negotiations, commitments and understandings between such
parties. The parties may amend or modify this Agreement, in such manner as may
be agreed upon, only by a written instrument executed by the parties hereto.
          (f) Public Disclosure. In connection with the execution of the
Collaboration Agreement, the parties shall jointly issue a press release
announcing, among other things, the execution of the Collaboration Agreement and
the sale of Shares pursuant to this Agreement, in form and substance
substantially as set forth on Schedule G to the Collaboration Agreement.
Thereafter, neither party shall issue any 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 issue a press release or public announcement if
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 NASDAQ; provided that
the other party has received prior notice of such intended press release or
public announcement, or the circumstances requiring such press release or public
announcement, if practicable under the circumstances and the party subject to
the requirement includes in such press release or public announcement only such
information relating to this Agreement as is necessary to comply with applicable
law. The rights of approval and notice granted to a party in accordance with the
preceding sentence shall only apply for the first time that specific information
is to be disclosed, and shall not apply to the subsequent disclosure of
substantially similar information that has previously been made public other
than through a breach of this Agreement by the issuing party or its Affiliates.
          (g) Further Assurances. Subject to the terms and conditions of this
Agreement, the Company and the Purchaser agree to use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable laws to consummate the
transactions contemplated by this Agreement, including the execution and
delivery of such other documents, certificates, agreements and other writings
and taking such other actions as may be necessary or desirable in order to
consummate the transactions contemplated by this Agreement.

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          (h) Expenses. Each party shall pay its own expenses in connection with
this Agreement and the transactions contemplated hereby.
          (i) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without reference to
conflict of laws principles, and the parties hereby consent to the jurisdiction
of the courts of the State of Delaware.
          (j) Section Headings. The section headings are for the convenience of
the parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.
          (k) Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
          (l) Disclosure Schedule. The Disclosure Schedule shall be arranged in
subsections corresponding to the lettered subsections contained in Section 2,
and the disclosure in any section of the Disclosure Schedule shall qualify the
corresponding subsection in Section 2. The inclusion of any information in the
Disclosure Schedule shall not be deemed to be an admission or acknowledgment, in
and of itself, that such information is required by the terms hereof to be
disclosed, is material, has resulted in or would result in a Material Adverse
Effect, or is outside the ordinary course of business.
          (m) Consents. Prior to the Closing, the Company shall not take any
action or enter into any material contract, arrangement, agreement or
understanding that would require the consent, waiver, approval or authorization
of any third party to effect the transactions contemplated by this Agreement.
          (n) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of and on the date first above written.

            ALNYLAM PHARMACEUTICALS, INC.
      By:   /s/ John M. Maraganore       Name:   John M. Maraganore      
Title:   President and Chief Executive Officer       ROCHE FINANCE LTD
      By:   /s/ Knierzinger       Name:   Knierzinger       Title:              
By:           Name:           Title:        

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