Exhibit 10.2

Execution Copy

SECOND AMENDED AND RESTATED

STRATEGIC COLLABORATION AND

LICENSE AGREEMENT

This Second Amended and Restated Strategic Collaboration and License Agreement
(the “Agreement”) is executed this January 8, 2015 (the “Second Restatement
Date”), between Isis Pharmaceuticals, Inc., a Delaware corporation having an
address at 2855 Gazelle Court, Carlsbad, CA 92010 (“Isis”) and Alnylam
Pharmaceuticals, Inc., a Delaware corporation having an address at 300 Third
Street, Cambridge, MA 02142 (“Alnylam”). Isis and Alnylam may be referred to
herein as the “Parties,” or each individually as a “Party.”

GUIDING PRINCIPLES

Isis is the leader in RNA-based drug discovery, has created technology,
intellectual property, expertise, facilities and resources to discover and
develop oligonucleotide drugs;

Alnylam is the leader in RNAi therapeutics, has developed and acquired
intellectual property, expertise and technology in RNAi therapeutics, and is
conducting research, drug discovery and development focused on Double Stranded
RNA drugs;

Isis and Alnylam desire to create a long-term strategic relationship that will
enhance the positions of both companies in RNA-based drug discovery;

Isis will continue to pursue RNA-based drug discovery technology very broadly
including all potential mechanisms of action. Isis will work with Alnylam as
Isis’ primary means of participating in the potential value of Double Stranded
RNA Products, and will not enter into any collaborations with Third Parties the
primary purpose of which is to discover Double Stranded RNA Products;

Alnylam will continue to pursue RNAi therapeutics and the use of Double Stranded
RNA. Alnylam has no present plans to pursue Single Stranded Products;

Isis and Alnylam are parties to the Amended and Restated Strategic Collaboration
and License Agreement dated April 28, 2009 (as amended to date, the “First
Restated Agreement”), which amended and restated the Strategic Collaboration and
License Agreement dated March 11, 2004 (as amended through April 28, 2009 (the
“First Restatement Date”), the “Original Agreement”) to, among other things,
provide each Party with certain exclusive licenses to research, develop and
commercialize Single Stranded RNAi Products for a limited pool of gene targets,
and co-exclusivity in the field of Single Stranded RNAi Compounds; 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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Isis and Alnylam now wish to amend and restate the First Restated Agreement to
(i) reflect the termination of the Research Program and certain rights of
Alnylam with respect to Single Stranded RNAi Compounds and Single Stranded RNAi
Products, (ii) expand the First Restated Agreement by providing each other
(x) non-exclusive licenses to certain additional Patents of the respective
Parties and (y) exclusive licenses to research, develop and commercialize
oligomeric compounds directed to certain RNA Targets in the Field.

The objectives of the strategic relationship are to:

 

•   Enhance the leadership of Alnylam in RNAi therapeutics.

 

•   Enhance the potential of Alnylam to develop Double Stranded RNA drugs.

 

•   Enhance the patent positions of each Party with respect to certain Double
Stranded RNA drugs.

 

•   Provide Isis with a means for participating in the success of RNAi
therapeutics.

 

•   Enhance the potential of Isis to develop Single Stranded Compound drugs.

 

•   Provide Alnylam with exclusive rights to research, develop and commercialize
oligomeric compounds for certain RNA Targets in the Field.

 

•   Provide Isis with exclusive rights to research, develop and commercialize
oligomeric compounds for certain RNA Targets 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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ARTICLE 1

DEFINITIONS; AMENDMENT AND RESTATEMENT

1.1 Capitalized terms used herein and not defined elsewhere herein have the
meanings set forth in Exhibit 1.1.

1.2 Effective as of the Second Restatement Date, this Agreement restates and
supersedes the First Restated Agreement as amended through the Second
Restatement Date. The terms and conditions of the First Restated Agreement shall
apply for the period from the First Restatement Date until the Second
Restatement Date unless otherwise provided by this Agreement.

ARTICLE 2

EQUITY INVESTMENT

2.1 In connection with the Original Agreement, Isis purchased from Alnylam
1,666,667 shares of Series D Preferred Stock, at $6.00 per share (i.e., at an
aggregate purchase price of $10,000,002).

ARTICLE 3

MANUFACTURING SERVICES RELATIONSHIP

3.1 [Intentionally Deleted]

ARTICLE 4

COLLABORATIVE RESEARCH EFFORTS; PROTECTED TARGETS

4.1 [Intentionally Deleted]

4.2 [Intentionally Deleted]

4.3 Isis Enabled Targets for Single Stranded RNAi.

(a) Enabled Targets. Isis will have a pool (the “Enabled Target Pool”)
containing [***] slots for which Isis can designate certain RNA Targets against
which Isis intends to research, develop and commercialize a Single-Stranded RNAi
Product (each such slot, an “Enabled Target Slot” and any RNA Target occupying
such a slot, an “Enabled Target”); provided, however, that, each time Isis
designates as a Development Candidate a Single Stranded RNAi Product Designed
for one of Isis’

 

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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Enabled Targets, then (i) such Enabled Target will be considered to have
graduated from Isis’ Enabled Target Pool (a “Graduated Enabled Target”),
(ii) Isis will be permitted to designate a new Enabled Target to fill the open
Enabled Target Slot in Isis’ Enabled Target Pool, and (iii) so long as Isis
continues to maintain an Active Program for the applicable Single Stranded RNAi
Product Designed for the Graduated Enabled Target, such Graduated Enabled Target
will remain an Enabled Target of Isis hereunder. For purposes of clarity, except
as set forth in 6.1(h)(i) and 6.1(l), as applicable, Isis may not practice the
Alnylam Patent Rights to research, develop or commercialize a Single Stranded
RNAi Product other than a Single Stranded RNAi Product Designed for one of Isis’
Enabled Targets.

(b) [Intentionally Deleted]

(c) Designating Enabled Targets. From time to time after the Second Restatement
Date Isis may designate an RNA Target as an Enabled Target upon written notice
to Alnylam; provided, that there is an open Enabled Target Slot in the Enabled
Target Pool. At no time during the period commencing with the Second Restatement
Date and ending upon the expiration of the Alnylam Exclusive Target Royalty Term
may Isis designate an Alnylam Exclusive Target as an Enabled Target.

(d) Removing Enabled Targets. From time to time after the Second Restatement
Date Isis may remove an RNA Target from the Enabled Target Pool upon written
notice to Alnylam (which removal will create an open Enabled Target Slot). In
addition, on an Enabled Target-by-Enabled Target basis, if Isis has not
designated a Development Candidate comprising a Single Stranded RNAi Product
Designed for the applicable Enabled Target before the [***] year anniversary of
the date Isis added the applicable Enabled Target to the Enabled Target Pool,
then such RNA Target will be automatically removed from the Enabled Target Pool.
Once Isis removes an RNA Target from its Enabled Target Pool (whether
voluntarily or by operation of this Section 4.3(d)), such RNA Target shall no
longer be deemed an Enabled Target hereunder and Isis will be prevented from
later adding such RNA Target to its Enabled Target Pool until [***] months have
passed from the date such RNA Target was removed.

(e) [Intentionally Deleted]

(f) Confidentiality. The fact that Isis has designated or removed a particular
RNA Target within the Enabled Target Pool is Confidential Information of Isis,
subject to the provisions of Article 12. Alnylam shall not disclose such
Confidential Information of Isis to any Third Party, including its Third Party
collaborators, or use such Confidential Information to guide its own (or its
Third Party collaborators’) decisions to pursue particular RNA Targets, but
Alnylam can use such Confidential Information to decline a Third Party’s request
for a license to such RNA Target.

 

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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ARTICLE 5

LICENSES GRANTED BY ISIS TO ALNYLAM

5.1 License Grants. Subject to the terms and conditions of this Agreement,
including, but not limited to, the restrictions set forth in Section 5.3, Isis
grants Alnylam the following licenses:

(a) Subject to the terms of Section 11.8, under Isis Current Motif and Mechanism
Patents and Isis Current Chemistry Patents, a license to research, develop,
make, have made, use, import, offer to sell and sell Double Stranded RNA and
Double Stranded RNA Products.

(b) [Intentionally Deleted].

(c) Subject to the terms of Section 11.8, under the Isis Current Motif and
Mechanism Patents and Isis Current Chemistry Patents, a license to research,
develop, make, have made, use, import, offer to sell and sell MicroRNA Products.

(d) [Intentionally Deleted].

(e) A royalty-free, fully paid, license to practice any Know-How disclosed to
Alnylam during the performance of this Agreement, subject to the non-disclosure
but not the non-use provisions contained in Article 12.

(f) A fully paid, royalty-free license under Isis Manufacturing Patents to
research, develop, make, have made, use and import Alnylam Products for Research
Use.

(g) Subject to the terms of Section 11.8, under Isis Extended Field Patents, a
license to research, develop, make, have made, use, import, offer to sell and
sell Double Stranded RNA and Double Stranded RNA Products, other than Alnylam
Exclusive Target Products in the Field.

(h) Subject to the terms of Section 11.8, under Isis Exclusive Target Patents, a
license to research, develop, make, have made, use, import, offer to sell and
sell Alnylam Exclusive Target Products in the Field.

5.2 License Exclusivity, Territory and Sublicenses.

(a) Subject to the terms and conditions of this Agreement, including the
restrictions set forth in Section 5.3, the license from Isis to Alnylam granted
in Section 5.1(a) is worldwide and co-exclusive (with Isis), with the exclusive
right to grant Naked Sublicenses; the licenses from Isis to Alnylam granted in
Sections 5.1(c),

 

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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(e), (f), and (g) are worldwide and nonexclusive; and the license from Isis to
Alnylam granted in Section 5.1(h) is worldwide and exclusive. Alnylam is not
permitted to grant sublicenses under the licenses granted in Sections 5.1(a)
through 5.1(e), except that Alnylam is permitted to grant (i) sublicenses in
connection with a Bona Fide Discovery Collaboration, (ii) sublicenses in
connection with a Development Collaboration, (iii) Naked Sublicenses and
(iv) sublicenses under the license granted in Section 5.1(e) in connection with
the discovery, development or commercialization of any product. Alnylam is not
permitted to grant sublicenses under the licenses granted in Section 5.1(f).
Alnylam is not permitted to grant sublicenses under the license granted in
Section 5.1(g) except that Alnylam is permitted to grant sublicenses in
connection with a Bona Fide Third Party Collaboration. Alnylam is permitted to
grant sublicenses under the license granted in Sections 5.1(h) except only that
any such sublicense granted with respect to a Single Stranded Compound, Single
Stranded Product, Single Stranded RNAi Compound or Single Stranded RNAi Product
is subject to Isis’ prior written consent, which consent may be withheld in
Isis’ sole discretion. Notwithstanding anything to the contrary in the
foregoing, Alnylam is permitted to grant sublicenses under its licenses in
Section 5.1 to its Affiliates.

(b) [Intentionally deleted]

(c) Alnylam cannot sublicense its right to grant Naked Sublicenses under this
Agreement except that Alnylam may permit its sublicensees to grant further
sublicenses in connection with a sublicense to further the research, development
or commercialization of an Alnylam Product.

(d) Notwithstanding the foregoing, (i) Alnylam acknowledged and permits the
license Isis granted[***], as amended through the First Restatement Date, that
granted [***] a nonexclusive license under Isis Current Motif and Mechanism
Patents and Isis Current Chemistry Patents for the manufacture and sale of
chemically modified oligonucleotides for [***] only and (ii) subject to the
exclusive license grant to Alnylam in Section 5.1(h), Isis may continue to grant
licenses to Third Parties under the Isis Patent Rights for the purpose of
manufacturing and selling oligonucleotides; provided that, to the extent such
licenses cover Double Stranded RNA Isis will restrict such licenses to [***] and
will exclude Agricultural Field Products from such licenses granted after
August 27, 2012.

5.3 Limitations on Licenses.

(a) The licenses granted under Section 5.1(a) through (g) above do not grant any
rights to Alnylam to practice the Isis Excluded Technology. The licenses granted
under Section 5.1(h) above do not grant any rights to Alnylam to practice the
Isis Exclusive Target Excluded Technology. If Alnylam wishes to license any Isis
Excluded Technology or Isis Exclusive Target Excluded Technology for which Isis
has the right to grant a license or sublicense, Isis will negotiate in good
faith an appropriate 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.

 

6

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(b) Notwithstanding the licenses granted to Alnylam under Section 5.1, Isis
retains its rights in the Isis Patent Rights, in the Joint Patents, and in the
Isis Extended Field Patents (i) exclusively for the Isis Reserved DS-Targets,
(ii) exclusively for the Isis Encumbered Targets, and (iii) exclusively for the
Isis Exclusive Targets. Once a particular contractual restriction expires on an
Isis Encumbered Target, Alnylam’s licenses under Section 5.1 will no longer be
limited under this Section 5.3(b) for such target and such target shall no
longer be an Isis Encumbered Target. Isis will update the [***] (as defined in
the letter agreement dated March 9, 2004 between Alnylam and Isis) provided to
Alnylam prior to the Effective Date and subsequent [***] provided to Alnylam
from time to time, to remove targets that are no longer Isis Encumbered Targets
promptly upon receipt of a written request from Alnylam to update such [***] ,
but will not be required to update such [***] more frequently than [***] a
Calendar Quarter.

(c) Licenses to Isis Patent Rights, Isis Extended Field Patents and Isis
Exclusive Target Patents that are joint patents with Third Parties (i.e.,
invented by one or more Isis inventors and one or more non-Isis inventors) are
licensed subject to the retained rights of any non-Isis inventors and their
assignees and licensees. Any such retained rights of non-Isis inventors and
their assignees and licensees existing as of the Second Restatement Date are set
forth in Exhibit 5.3(c) attached hereto.

(d) Licenses to Isis Patent Rights, Isis Extended Field Patents and Isis
Exclusive Target Patents that are subject to contractual obligations between
Isis and Third Parties in effect as of the Second Restatement Date are licensed
(i) subject to the restrictions and other terms described in the Isis Third
Party Agreements, and (ii) with respect to Agricultural Field Products, to the
extent Isis has the right under such Third Party Agreements to grant such a
license for Agricultural Field Products. Prior to the Second Restatement Date,
Isis has provided Alnylam with copies of the Isis Third Party Agreements,
provided, that Isis may redact copies of out-licenses Isis has granted Third
Parties so long as the redacted terms do not limit Alnylam’s rights hereunder or
create obligations for Alnylam. Alnylam hereby agrees to comply, and to cause
its sublicensees to comply, with such restrictions and other terms.

(e) Notwithstanding the exclusive nature of the license granted by Isis to
Alnylam under Section 5.1(h), Isis may grant Permitted Licenses.

(f) The license to Isis Extended Field Patents granted in Section 5.1(g) does
not include any rights with respect to Double Stranded RNA or Double Stranded
RNA Products that are designed to modulate any Isis Retained Targets. Isis will
endeavor in good faith and use commercially reasonable and diligent efforts 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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take all actions reasonably necessary, without any obligation on the part of
Isis to compensate any Person, to enable Isis to grant a license to Alnylam
pursuant to Section 5.1(g) with respect to Double Stranded RNA and Double
Stranded RNA Products that are designed to modulate each Isis Retained Target
other than the Isis Retained Special Target(s), within [***] days after the
Second Restatement Date, and will continue to do so until such ability to
license Alnylam is obtained with respect to each Isis Retained Target other than
the Isis Retained Special Target(s). Isis will promptly notify Alnylam when such
ability to license Alnylam is obtained, and effective upon delivery of such
notice to Alnylam, the applicable RNA Target will automatically no longer be an
Isis Retained Target, and the Parties will update Schedule 1-69 accordingly as
promptly as feasible.

5.4 Alnylam Covenant Regarding Sublicensing of Isis Patent Rights. Alnylam shall
use good faith efforts to include sublicenses under the licenses under the Isis
Patent Rights granted to Alnylam in Sections 5.1(a) in any Third Party
collaboration or license agreement in which Alnylam grants rights to develop and
commercialize Double Stranded RNA Products, unless the technology covered by
such licensed Isis Patent Rights would not reasonably be expected to advance the
goals of such Third Party collaboration or license relationship.

5.5 Diligence on Alnylam Exclusive Targets. For each Alnylam Exclusive Target,
Alnylam will use Commercially Reasonable Efforts (either on its own, with an
Affiliate or in a Bona Fide Third Party Collaboration) to develop and
commercialize [***].

ARTICLE 6

LICENSES GRANTED BY ALNYLAM TO ISIS; AND

EXCLUSIVITY COVENANT

6.1 License Grants. Subject to the terms and conditions of this Agreement,
including, but not limited to, the restrictions set forth in Section 6.5,
Alnylam grants Isis the following licenses:

(a) Subject to the terms of Section 11.8, a fully-paid, royalty-free,
nonexclusive license under Alnylam Current Motif and Mechanism Patents and
Alnylam Current Chemistry Patents to research, develop, make, have made, use and
import Isis Products other than Isis Single Stranded RNAi Products for Research
Use.

(b) [Intentionally Deleted].

 

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) Subject to the terms of Section 11.8, a nonexclusive license under Alnylam
Current Motif and Mechanism Patents and Alnylam Current Chemistry Patents to
research, develop, make, have made, use, import, offer to sell and sell Isis
Single Stranded Products.

(d) [Intentionally Deleted].

(e) Subject to the terms of Section 11.8, under the Alnylam Current Motif and
Mechanism Patents and Alnylam Current Chemistry Patents, a nonexclusive license
to research, develop, make, have made, use, import, offer to sell and sell
MicroRNA Products.

(f) [Intentionally Deleted].

(g) A worldwide, royalty-free, fully paid, nonexclusive license to practice any
Know-How disclosed to Isis during the performance of this Agreement, subject to
the non-disclosure but not the non-use provisions contained in Article 12.

(h) Subject to the terms of Section 11.8, a worldwide license under the Alnylam
Current Motif and Mechanism Patents and Alnylam Current Chemistry Patents to
(i) research, develop, make, have made, use and import Single Stranded RNAi
Compounds and Single Stranded RNAi Products for Research Use, and (ii) research,
develop, make, have made, use, import, offer to sell and sell Isis Single
Stranded RNAi Products. The license granted to Isis under the foregoing clause
(i) shall be non-exclusive, and the license granted to Isis under the foregoing
clause (ii) shall be exclusive.

(i) [Intentionally Deleted].

(j) Under Alnylam’s rights in Research Program Patents, a royalty-free license
for any and all purposes, except to research, develop, make, have made, use,
import, offer to sell or sell any (1) oligonucleotides (or chemically modified
oligonucleotide analogs) designed to work via the RNase H 1 or 2 mechanism
(including any oligonucleotide which has [***]), (2) Double Stranded RNA
Products, (3) MicroRNA Products, (4) Single Stranded RNAi Products, or (5) Isis
Single Stranded Product.

(k) Subject to the terms of Section 11.8, a nonexclusive license under Alnylam
Extended Field Patents to research, develop, make, have made, use, import, offer
to sell and sell Single Stranded Products, other than Isis Exclusive Target
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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(l) Subject to the terms of Section 11.8, an exclusive license under Alnylam
Exclusive Target Patents to research, develop, make, have made, use, import,
offer to sell and sell Isis Exclusive Target Products in the Field.

6.2 License Option. For each RNA Target in the Isis DS-Target Pool (as further
described below) Alnylam grants Isis an option to obtain (on a Reserved
DS-Target-by-Reserved DS-Target basis), subject to the terms and conditions of
this Agreement, including, but not limited to, the restrictions set forth in
Section 6.5, a non-exclusive license under, subject to the terms of
Section 11.8, Alnylam Current Motif and Mechanism Patents, Alnylam Current
Chemistry Patents and Alnylam’s rights in Joint Patents, to research, develop,
make, have made, use, import, offer for sale and sell Double Stranded RNA
Products that are Isis Products.

(a) This option will expire on a Reserved DS-Target-by-Reserved DS-Target basis
if Isis has not paid Alnylam the option fee set forth in Section 8.1 below
before the earlier of (i) [***] with respect to such Reserved DS-Target,
(ii) the [***] anniversary of the date such Reserved DS-Target [***] or the
[***] anniversary of the date such Reserved DS-Target [***] with a Third Party
and Isis is contractually able to revoke such Third Party’s rights or (iii) the
date Isis [***] with respect to such Reserved DS-Target.

(b) For any Reserved DS-Target for which Isis obtains a license from Alnylam
under this Section 6.2, Isis will use Commercially Reasonable Efforts (either on
its own or in an Antisense Drug Discovery Program or Development Collaboration)
to develop and commercialize Double Stranded RNA Products that modulate such
Reserved DS-Target.

6.3 Sublicenses.

(a) With respect to any license granted by Alnylam pursuant to Section 6.1(a),
or 6.2, Isis may only grant a sublicense to a Third Party solely for (i) the
purpose of enabling such Third Party to collaborate with Isis in an Antisense
Drug Discovery Program, or (ii) to develop and commercialize an Isis Product in
a Development Collaboration. With respect to any license granted by Alnylam
pursuant to Section 6.1(c), 6.1(e), 6.1(g), Isis may grant a sublicense to a
Third Party in connection with the discovery, development or commercialization
of any product. Isis may grant sublicenses under Section 6.1(j). With respect to
the licenses granted by Alnylam pursuant to Section 6.1(h), Isis may only grant
a sublicense to a Third Party to further the research, development or
commercialization of an Isis Single Stranded RNAi Product that Isis has
performed on its own (or with Alnylam under the Research Program) and [***] at
least [***]% of the work to discover and develop the Isis Single Stranded RNAi
Product through the [***] (or a date that is earlier than [***] if requested by
Isis and approved in writing by Alnylam, such approval not to be unreasonably
withheld). Isis is

 

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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not permitted to grant sublicenses under the license granted in Section 6.1(k),
except that Isis is permitted to grant sublicenses in connection with a Bona
Fide Third Party Collaboration. Isis is permitted to grant sublicenses under the
license granted in Section 6.1(l), except only that any such sublicense granted
with respect to a Double Stranded RNA or a Double Stranded RNA Product is
subject to Alnylam’s prior written consent, which consent may be withheld in
Alnylam’s sole discretion. Notwithstanding anything to the contrary in the
foregoing, Isis is permitted to grant sublicenses under its licenses in Sections
6.1 and 6.2 to its Affiliates.

(b) Notwithstanding anything in this Agreement to the contrary, Isis may not
enter into any drug discovery collaboration the primary purpose of which is to
discover Double Stranded RNA Products and/or to develop Double Stranded RNA
Products to any point up to the [***].

6.4 DS-Target Pool.

(a) Reserved DS-Target Slots. On the Effective Date, Isis will have a pool (the
“Isis DS-Target Pool”) containing up to [***] slots for which Isis can designate
certain RNA Targets other than the Alnylam Exclusive Targets solely for
Antisense Drug Discovery Programs (each such slot, a “DS-Target Slot” and any
RNA Target occupying such a slot, a “Reserved DS-Target”); provided, however,
that on January 1 of each year starting with January 1, 2007, Isis will gain the
right to purchase one additional DS-Target Slot by paying Alnylam [***] per each
additional DS-Target Slot. These rights are cumulative and, subject
to Section 17.2(c) do not expire during the License Term. Furthermore, in the
event that Isis pays the [***] license option fee for a Reserved DS-Target
pursuant to Section 8.1, such Reserved DS-Target will be considered to have
graduated from the Isis DS-Target Pool, and, subject to Section 6.4(e), Isis
will be permitted to designate a new Reserved DS-Target to fill the open
DS-Target Slot in the Isis DS-Target Pool. For purposes of clarity, except as
permitted under Sections 6.1(h)(i), Isis may not practice the Alnylam
Patent Rights to research, develop or commercialize Single Stranded RNAi
Products for a Reserved DS-Target unless such Reserved DS-Target is designated
as an Enabled Target by Isis pursuant to Section 4.3(a) above.

(b) Initial Designations. The letter delivered by Isis to Alnylam on the Second
Restatement Date sets forth the Reserved DS-Targets as of the Second Restatement
Date.

 

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) Removing/Adding DS-Targets. After the Second Restatement Date and no more
than once in any [***] month period (a “Target Reallocation Period”), Isis may
do any of the following:

(i) Remove an RNA Target from the Isis DS-Target Pool (which, following such
removal will create an open DS-Target Slot); or

(ii) Add a new RNA Target to any open DS-Target Slot (subject to the procedures
and provisions of Section 6.4(e).

Notwithstanding the foregoing provisions of this Section 6.4(c), in any Target
Reallocation Period, Isis cannot remove a number of Reserved DS-Targets that
exceeds the number calculated by dividing the then current number of DS-Target
Slots by [***] and rounding down to the nearest whole number. For the purpose of
the limitation described in the immediately preceding sentence, removing an RNA
Target from the Isis DS-Target Pool and then filling the open DS-Target Slot
created by such removal shall count as a single removal. Once Isis removes an
RNA Target from the Isis DS-Target Pool, Isis will be prevented from later
adding such RNA Target to the Isis DS-Target Pool until [***] months have passed
from the date Isis removed such RNA Target.

(d) New Target Request. When Isis wishes to add a new RNA Target to occupy a
vacant DS-Target Slot, it will provide Alnylam with written notice (the “Request
Notice”) of the RNA Target it wishes to add (the “Proposed Reserved DS-Target”).
The Request Notice will include the gene name, and the NCBI accession number or
nucleic acid sequence for the Proposed Reserved DS-Target.

(e) New Target Rejection/Approval. Within [***] days of receipt of the Request
Notice, Alnylam will give Isis written notice if any of the criteria set forth
below applied to such Proposed Reserved DS-Target at the time of Alnylam’s
receipt of the Request Notice. If, at such time, the Proposed Reserved DS-Target
is (i) subject to Alnylam’s own Active Program [***], (ii) encumbered by a
contractual obligation between Alnylam and a Third Party that would preclude
Alnylam from granting a license under Section 6.2 with respect to the Proposed
Reserved DS-Target, (iii) the subject of Alnylam’s good faith negotiations to
enter into a contractual obligation within the [***] months following receipt of
the Request Notice with a Third Party (as supported by a written request from
such Third Party) that would preclude Alnylam from granting a license under
Section 6.2 with respect to the Proposed Reserved DS-Target, or (iv) an Alnylam
Exclusive Target, then the Proposed Reserved DS-Target will be rejected and will
not become a Reserved DS-Target. If the Proposed Reserved DS-Target is not
rejected under this subsection (e), the Proposed Reserved DS-Target will become
an Isis Reserved DS-Target. Alnylam will promptly notify Isis in writing if a
rejected Proposed Reserved DS-Target later becomes available to be designated as
a Reserved DS-Target.

(f) [Intentionally Deleted]

(g) Diligence on Rejected Targets. If (i) Alnylam rejects a Proposed Reserved
DS-Target under Section 6.4(e) above and (ii) Alnylam has [***]

 

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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with respect to such rejected Proposed Reserved DS-Target by the [***]
anniversary of the date Alnylam rejected such Proposed Reserved DS-Target if
Alnylam is working on such target alone, or the [***] anniversary of the date
Alnylam rejected such Proposed Reserved DS-Target if such rejected Proposed
Reserved DS-Target is subject to a contractual obligation between Alnylam and a
Third Party that would preclude Alnylam from granting a license under
Section 6.2 with respect to the rejected Proposed Reserved DS-Target but Alnylam
[***], then [***] such rejected Proposed Reserved DS-Target [***].

(h) Diligence Obligations in Third Party Contractual Obligations. With the goal
of minimizing contractual encumbrances on Alnylam Patent Rights with respect to
RNA Targets in the absence of a reasonable intent to discover and develop
products that modulate such RNA Targets by Third Parties with which Alnylam
enters into such contractual obligations, Alnylam intends to seek reasonable
diligence obligations from Third Parties in negotiating contracts between
Alnylam and such Third Parties that would constitute contractual obligations of
Alnylam that would preclude Alnylam from granting licenses to Isis under
Section 6.2 with respect to Proposed Reserved DS-Targets; or that would prevent
Alnylam from granting Isis licenses with respect to Proposed Reserved
DS-Targets; provided that Isis hereby acknowledges that such diligence
obligations are often heavily negotiated in biotechnology license and
collaboration agreements and that this Section 6.4(h) shall not prevent Alnylam
from entering into contracts between Alnylam and Third Parties in accordance
with Alnylam’s reasonable business judgment.

(i) Confidentiality. The fact that Isis has designated or removed a particular
RNA Target within the Isis DS-Target Pool is Confidential Information of Isis,
or that Alnylam has rejected a particular RNA Target proposed for a DS-Target
Slot or disallowed the redesignation of a particular RNA Target is Confidential
Information of Alnylam, subject to the provisions of Article 12. Neither Party
shall disclose such Confidential Information of the other Party to any Third
Party, including its Third Party collaborators, or use such Confidential
Information of the other Party to guide its own (or its Third Party
collaborators’) decisions to pursue particular RNA Targets, but Alnylam can use
such Confidential Information of Isis to decline a Third Party’s request for a
license to such RNA Target.

6.5 Limitations on Licenses.

(a) The licenses granted under Sections 6.1(a) through (k) and 6.2 above do not
grant any rights to Isis to practice the Alnylam Excluded Technology. The
license granted under Section 6.1(l) above does not grant any rights to Isis to
practice the Alnylam Exclusive Target Excluded Technology. The licenses granted
under Sections 6.1 and 6.2 above do not grant any rights to Isis to practice the
Alnylam Extended Field Patents or the Alnylam Exclusive Target Patents with
respect to Agricultural Products 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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the Agricultural Field. If Isis wishes to license any Alnylam Excluded
Technology or Alnylam Exclusive Target Excluded Technology for which Alnylam has
the right to grant a sublicense, Alnylam will negotiate in good faith an
appropriate license.

(b) Licenses to Alnylam Patent Rights, Alnylam Extended Field Patents or Alnylam
Exclusive Target Patents that are joint patents with Third Parties (i.e.,
invented by one or more Alnylam inventors and one or more non-Alnylam inventors)
are licensed subject to the retained rights of any non-Alnylam inventors and
their assignees and licensees. There are no Alnylam Current Chemistry Patents or
Alnylam Current Motif and Mechanism Patents subject to such retained rights. To
Alnylam’s knowledge, as of the Second Restatement Date, there are no Alnylam
Extended Field Patents or Alnylam Exclusive Target Patents subject to such
retained rights.

(c) Licenses to Alnylam Patent Rights, Alnylam Extended Field Patents and
Alnylam Exclusive Target Patents that are subject to contractual obligations
between Alnylam and Third Parties in effect as of the Second Restatement Date
are licensed subject to the restrictions and other terms of the Alnylam Third
Party Agreements. Prior to the Second Restatement Date, Alnylam has provided
Isis with copies of the Alnylam Third Party Agreements, the Stanford Agreement
and the CRT Agreement, provided in each case Alnylam may redact copies of
out-licenses Alnylam has granted Third Parties so long as the redacted terms do
not limit Isis’ rights hereunder or create obligations for Isis. Isis hereby
agrees to comply, and to cause its sublicensees to comply, with such
restrictions and other terms.

(d) Notwithstanding anything to the contrary herein, the licenses to Alnylam
Patent Rights hereunder initially shall not include licenses to Patents:

(i) licensed by Alnylam under the Agreement effective as of September 17, 2003
between The Board of Trustees of the Leland Stanford Junior University
(“Stanford University”) and Alnylam Pharmaceuticals, Inc. (as amended, the
“Stanford Agreement”); provided that with respect to any such licensed Patents
that are or become issued Patents, Isis shall have the option of expanding its
licenses to Alnylam Patent Rights, Alnylam Extended Field Patents and/or Alnylam
Exclusive Target Patents (as applicable) hereunder to include such issued
Patents by notifying Alnylam of such election and paying to Alnylam, in addition
to all amounts otherwise payable to Alnylam hereunder (and without any right
under Section 8.2 to reduce such otherwise payable amounts as a consequence of
such additional payment amounts), all amounts that become payable by Alnylam to
Stanford University pursuant to the Stanford Agreement as a result of such
expansion of Isis’ licenses and Isis’ (and its Affiliates’ and sublicensees’)
exercise of its rights thereunder. Upon exercise of such option, the Stanford
Agreement will be an Alnylam Third Party Agreement and Exhibit 6.5(c) updated
accordingly, such Patents will be licensed to Isis subject to the restrictions
and other terms of the Stanford Agreement and Isis hereby agrees to comply, and
to cause its sublicensees to comply, with such restrictions and other terms;

 

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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(ii) licensed by Alnylam under the License Agreement effective July 18, 2003
between Cancer Research Technology Limited (“CRT”) and Alnylam Pharmaceuticals,
Inc. (as amended, the “CRT Agreement”); provided that with respect to any such
licensed Patents that are or become issued Patents, Isis shall have the option
of expanding its licenses to Alnylam Patent Rights, Alnylam Extended Field
Patents and/or Alnylam Exclusive Target Patents (as applicable) hereunder to
include such issued Patents by notifying Alnylam of such election and paying to
Alnylam, in addition to all amounts otherwise payable to Alnylam hereunder (and
without any right under Section 8.2 to reduce such otherwise payable amounts as
a consequence of such additional payment amounts), all amounts that become
payable by Alnylam to CRT pursuant to the CRT Agreement as a result of such
expansion of Isis’ licenses and Isis’ (and its Affiliates’ and sublicensees’)
exercise of its rights thereunder. Upon exercise of such option, the CRT
Agreement will be an Alnylam Third Party Agreement and Exhibit 6.5(c) updated
accordingly, such Patents will be licensed to Isis subject to the restrictions
and other terms of the CRT Agreement and Isis hereby agrees to comply, and to
cause its sublicensees to comply, with such restrictions and other terms;

(iii) that are Additional Rights (as defined in Section 11.8) Controlled by
Alnylam’s wholly-owned subsidiary Sirna Therapeutics, Inc. as of the Second
Restatement Date. If during the License Term Isis wishes to include such
Additional Rights under the licenses granted to it by Alnylam pursuant to
Article 6, Isis will notify Alnylam of its desire to do so and will assume all
financial and other obligations to the licensors and/or sellers of such
Additional Rights to Alnylam arising from the grant to Isis of such licenses.
The Parties will negotiate in good faith regarding sharing any upfront payments
or similar acquisition costs incurred by Alnylam to acquire such Additional
Rights.

(e) Notwithstanding the licenses and other rights granted to Isis under Sections
6.1 and 6.2, Alnylam retains its rights in the Alnylam Patent Rights, the Joint
Patents and the Alnylam Extended Field Patents exclusively for Alnylam Exclusive
Targets. Notwithstanding the exclusive nature of the license granted by Alnylam
to Isis under Section 6.1(l), Alnylam may grant Permitted Licenses.

(f) The license to Alnylam Extended Field Patents granted in Section 6.1(k) does
not include any rights with respect to Single Stranded Products that are
designed to modulate any Isis Retained Targets.

6.6 Alnylam Covenant to Isis Regarding Exclusivity for Single Stranded RNAi
Products. Alnylam hereby covenants to Isis, that, after the Second Restatement
Date, Alnylam will not itself, and will not grant to a Third Party a license
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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Alnylam Current Motif and Mechanism Patents, Alnylam Current Chemistry Patents,
and/or Alnylam’s rights in any Joint Patents or Research Program Patents to,
research, develop, make, have made, use, import, offer to sell and sell Single
Stranded RNAi Compounds or Single Stranded RNAi Products, except Alnylam may
(i) research, develop, make, have made, use and/or import Single Stranded RNAi
Compounds or Single Stranded RNAi Products that are not Isis Exclusive Target
Products for [***]; (ii) and may grant licenses to Third Parties to, research,
develop, make, have made, use and/or import Alnylam Exclusive Target Products;
and (iii) continue to grant licenses to Third Parties for the purpose of
manufacturing and selling oligonucleotides; provided that, to the extent such
licenses cover Single Stranded RNAi Compounds, Alnylam will restrict such
licenses to [***]. For purposes of clarity, this Section 6.6 will not preclude
Alnylam from (A) itself using [***], or (B) granting any Third Party a license
under the [***].

6.7 Diligence on Isis Exclusive Targets. For each Isis Exclusive Target, Isis
will use Commercially Reasonable Efforts (either on its own, with an Affiliate
or in a Bona Fide Third Party Collaboration) [***].

ARTICLE 7

LICENSE FEES AND ROYALTIES PAYABLE TO ISIS

7.1 License Fees.

(a) In connection with the Original Agreement, Alnylam paid Isis an initial,
irrevocable, noncreditable and non-refundable license fee of $5,000,000.

(b) In connection with the First Restated Agreement, Alnylam paid Isis an
additional, irrevocable, noncreditable and non-refundable license fee of
$11,000,000.

7.2 Royalties.

(a) Subject to the terms and conditions of, and during the term of, this
Agreement, Alnylam will pay to Isis royalties on sales of Alnylam Double
Stranded RNA Products (other than Agricultural Field Products) by Alnylam, its
Affiliates or sublicensees (except Naked Sublicensees) equal to [***]% of Net
Sales of such Products. Alnylam may reduce the royalty due under this section by
[***]% of any additional royalties that Alnylam owes to Third Parties on such
Alnylam Double Stranded RNA Product (other than an Agricultural Field Product)
that arise from Alnylam acquiring access to new technologies after the Effective
Date; provided, however that (x) the royalty due under this section can never be
less than a floor of [***]% and (y) additional royalties arising as the result
of the addition, pursuant to Section 11.8, of Isis Current Chemistry Patents,
Isis Current Motif and Mechanism Patents to the Isis Patent Rights licensed to
Alnylam cannot be used to reduce the royalty.

 

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) Subject to the terms and conditions of this Agreement, and during the
Alnylam Extended Field Royalty Term, Alnylam will pay to Isis royalties on sales
of Alnylam Extended Field Products (other than Agricultural Field Products) by
Alnylam, its Affiliates or sublicensees equal to [***]% of Net Sales of such
Products.

(c) Subject to the terms and conditions of this Agreement, and during the
Alnylam Exclusive Target Royalty Term, Alnylam will pay to Isis royalties on
sales of Alnylam Exclusive Target Products (other than Agricultural Field
Products) by Alnylam, its Affiliates or sublicensees equal to [***]% of Net
Sales of such Products. Upon expiration of the Alnylam Exclusive Target Royalty
Term, the license granted under Section 5.1(h) will terminate.

(d) Subject to the terms and conditions of, and during the term of, this
Agreement, Alnylam will pay to Isis royalties on sales of Agricultural Field
Products by Alnylam, its Affiliates or sublicensees equal to [***]% of
Agricultural Field Product Net Sales. Alnylam may not reduce the royalty due
under this subsection (d) for any additional royalties that Alnylam owes to
Third Parties on such Agricultural Field Products.

(e) The royalties payable to Isis pursuant to Section 7.2(c) are in addition to,
and not in lieu of, the royalties payable to Isis pursuant to Section 7.2(a).
Specifically, if an Alnylam Exclusive Target Product (other than an Agricultural
Field Product) is subject to the payment of royalties to Isis pursuant to
Section 7.2(c) during the applicable Alnylam Exclusive Target Royalty Term and
is also an Alnylam Double Stranded RNA Product, then the royalty calculated
pursuant to Section 7.2(a) above will also be payable to Isis with respect to
such Alnylam Exclusive Target Product for so long as such Alnylam Exclusive
Target Product is an Alnylam Double Stranded RNA Product. However, if an Alnylam
Exclusive Target Product that is subject to the payment of royalties to Isis
pursuant to Section 7.2(c) is also an Alnylam Extended Field Product, it will
not be subject to additional royalties under Section 7.2(b). Otherwise, only one
royalty shall be due under this Section 7.2 with respect to the same unit of
Product and if during any period the application of Sections 7.2(a), (b) and/or
(c) to such Product in a country would result in different royalty rates being
applied in order to calculate the royalty due with respect to Net Sales of such
Product in such country in such period, then the greatest applicable royalty
rate shall be applied.

7.3 Research and Development Milestones.

(a) [Intentionally Deleted]

 

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) [Intentionally Deleted]

(c) Double Stranded Development Milestones. Alnylam, its Affiliates or
sublicensees (except Naked Sublicensees) will pay to Isis the following
milestone payments for each Alnylam Double Stranded RNA Product within [***]
days after the first achievement of each of the following events:

 

Milestone Event

   Milestone Payment  

Initiation of Phase I Trial

   US$ 375,000   

Initiation of Phase III Trial

   US$ 750,000   

Filing NDA

   US$ [***]   

Marketing Approval

   US$ [***]   

Each milestone payment under this Section 7.3(c) will only be due on the [***]
Alnylam Double Stranded RNA Product that modulates a particular RNA Target to
trigger such milestone payment, whether such milestone is achieved by Alnylam or
an Affiliate or sublicensee of Alnylam.

Notwithstanding the foregoing, the provisions of this Section 7.3(c) shall not
apply to any Agricultural Field Product.

(d) MicroRNA Milestone. Alnylam, its Affiliates or sublicensees will pay to Isis
a milestone payment of US$[***] for the [***] MicroRNA Product that is an
Alnylam Product that modulates a particular RNA Target within [***] days after
such MicroRNA Product reaches the initiation of [***], and not for any other
MicroRNA Product that is an Alnylam Product that modulates the particular RNA
Target.

7.4 Sublicensing Revenue on Naked Sublicenses. With respect to Sublicense
Revenue from each Naked Sublicense granted by Alnylam and its Affiliates under
this Agreement, Alnylam will pay Isis within [***] days following receipt by
Alnylam of such Sublicense Revenue (a) fifty percent (50%) of all such
Sublicense Revenue that does not constitute royalty payments, and (b) [***]
percent ([***]%) of the amount that remains of the total royalties received
under such Naked Sublicense after Alnylam has paid the royalties that are due
from Alnylam to any Third Parties in connection with such Naked Sublicense.

7.5 Technology Access Fees from Certain Collaborations.

(a) Alnylam will pay Isis a percentage of Technology Access Fees received by
Alnylam and its Affiliates pursuant to Bona Fide Discovery Collaborations and
Development Collaborations entered into between Alnylam and a

 

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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Third Party. Alnylam shall make such payment to Isis within [***] days following
receipt by Alnylam of such Technology Access Fees. Such percentage will be
calculated based on the year in which Alnylam executes such Bona Fide Discovery
Collaboration or Development Collaboration agreement using the following table:

 

Year

   2004/2005     2006     2007     2008+  

Applicable Percentage

     [***] %      [***] %      [***] %      [***] % 

However, Alnylam may credit any milestone payments made by Alnylam under
Section 7.3(c) above with respect to an Alnylam Double Stranded RNA Product
against any Technology Access Fees that are later due under a Bona Fide
Discovery Collaboration or Development Collaboration that involves the same
Alnylam Double Stranded RNA Product that triggered such milestone payment.

If Alnylam grants a sublicense under the Isis Exclusive Target Patents where the
Patents sublicensed thereunder include Patents that are also Isis Patent Rights,
then such sublicense will be treated as a Bona Fide Discovery Collaboration for
purposes of this Section 7.5(a) and Alnylam will pay Isis a percentage of
Technology Access Fees received by Alnylam and its Affiliates in connection with
such sublicense. However, if Alnylam grants a sublicense under the Isis
Exclusive Target Patents and/or the Isis Extended Field Patents and the Patents
sublicensed thereunder do not include Isis Patent Rights (and do not include
Isis Exclusive Target Patents that are also Isis Patent Rights), then no
payments are due under this Section 7.5(a).

(b) Notwithstanding the foregoing, for any Bona Fide Discovery Collaboration or
Development Collaboration agreement, Alnylam will pay Isis a minimum fee,
payable upon the first Alnylam Product other than a Single Stranded RNAi Product
developed pursuant to such Bona Fide Discovery Collaboration agreement reaching
[***] (in which event Alnylam shall pay Isis such minimum fee within [***] days
following such initiation of [***]) or within [***] days after the execution of
such Development Collaboration agreement, equal to the lesser of (i) [***] or
(ii) [***]% of the Technology Access Fees from such collaboration; provided,
however that Alnylam may credit any amounts paid Isis pursuant to Section 7.5(a)
above as the result of the same Bona Fide Discovery Collaboration or Development
Collaboration agreement against this minimum fee with such amounts credited only
once, and provided further that if following such payment, additional Technology
Access Fees are owed to Isis for such Bona Fide Discovery Collaboration or
Development Collaboration, the amounts paid under this Section 7.5(b) (after
crediting of any previous Technology Access Fees paid under Section 7.5(a) in
accordance with the immediately preceding proviso) will be creditable against
such future Technology Access Fees. Notwithstanding the foregoing, the
provisions of this Section 7.5(b) shall not apply to any Bona Fide Discovery
Collaboration involving solely Agricultural Field 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.

 

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7.6 Allocation of Sublicense Income. Each time Alnylam enters into a
collaboration or license agreement pursuant to which Alnylam grants a sublicense
under the Isis Patent Rights to a Third Party that only relates to Double
Stranded RNA (an “Isis IP Sublicense”), the CEO of Isis and the CEO of Alnylam
will mutually discuss and agree in writing upon a good faith determination as to
whether such Isis IP Sublicense is a Naked Sublicense or a Bona Fide Discovery
Collaboration or Development Collaboration or Bona Fide Third Party
Collaboration. Within [***] days following the execution of each Isis IP
Sublicense, Alnylam, through its CEO, will provide Isis’ CEO a reasonably
detailed and accurate description of such Isis IP Sublicense for the purpose of
enabling the CEOs to perform the determination and allocation described in this
Section 7.6.

7.7 Revenue Sharing for Research Program Patents. Alnylam will pay Isis 50% of
any payments received by Alnylam and its Affiliates pursuant to licenses granted
by Alnylam to a Third Party under the Research Program Patents for any and all
purposes, except to research, develop, make, have made, use, import, offer to
sell or sell any (1) oligonucleotides (or chemically modified oligonucleotide
analogs) designed to work via the RNase H 1 or 2 mechanism (including any
oligonucleotide which has [***]), (2) Double Stranded RNA Products, (3) MicroRNA
Products, (4) Single Stranded RNAi Products, (5) Isis Single Stranded Product,
or (6) Alnylam Exclusive Target Products. Alnylam shall make such payment to
Isis within [***] days following receipt by Alnylam of such payments.

ARTICLE 8

LICENSE FEES, SUBLICENSE REVENUE AND

ROYALTIES PAYABLE TO ALNYLAM

8.1 Option Fee. For each Isis Reserved DS-Target for which Isis exercises its
option granted pursuant to Section 6.2, Isis will pay Alnylam an irrevocable,
noncreditable and non-refundable option fee of $[***] due upon the date of
exercise. Isis may credit any $[***] payment made under Section 6.4(a) for the
DS-Target Slot occupied by such Reserved DS-Target against this option fee. The
option fee is only payable once per RNA Target.

8.2 Royalties.

(a) Subject to the terms and conditions of, and during the term of, this
Agreement, Isis will pay to Alnylam royalties on sales of Double Stranded RNA

 

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.

 

20

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Products that are Isis Products by Isis, its Affiliates or sublicensees equal to
[***]% of Net Sales. Isis may reduce the royalty due under this section by
[***]% of any additional royalties that Isis owes to Third Parties on such
Double Stranded RNA Products that are Isis Products that arise from Isis
acquiring access to new technologies after the Effective Date; provided,
however, that (i) the royalty due under this section can never be less than a
floor of [***]%, (ii) additional royalties arising as the result of the
addition, pursuant to Section 11.8, of Alnylam Current Chemistry Patents or
Alnylam Current Motif and Mechanism Patents to the Alnylam Patent Rights
licensed to Isis, or as the result of an expansion of Isis’ licenses pursuant to
Section 6.5(d), cannot be used to reduce the royalty and (iii) Isis shall not be
entitled to reduce, pursuant to this sentence, its royalty obligation to Alnylam
below a royalty obligation equal to the lesser of (y) Alnylam’s aggregate
royalty obligations [***] existing as of the Effective Date [***] and
(z) Alnylam’s aggregate royalty obligations to [***] as such obligations may be
reduced from time to time after the Effective Date.

(b) Subject to the terms and conditions of, and during the term of, this
Agreement, Isis will pay to Alnylam royalties on Net Sales of Isis Single
Stranded RNAi Products by Isis, its Affiliates or sublicensees equal to [***]%
of Net Sales; provided, however, that if Isis is the subject of an Acquisition,
the royalty payable under this Section 8.2(b) on the Net Sales of Isis Single
Stranded RNAi Products following such Acquisition will be [***]%.

(c) Subject to the terms and conditions of this Agreement, and during the Isis
Extended Field Royalty Term, Isis will pay to Alnylam royalties on sales of Isis
Extended Field Products by Isis, its Affiliates or sublicensees equal to [***]%
of Net Sales of such Products.

(d) Subject to the terms and conditions of this Agreement, and during the Isis
Exclusive Target Royalty Term, Isis will pay to Alnylam royalties on sales of
Isis Exclusive Target Products by Isis, its Affiliates or sublicensees equal to
[***]% of Net Sales of such Products. Upon expiration of the Isis Exclusive
Target Royalty Term, the license granted under Section 6.1(l) will terminate.

(e) The royalties payable to Alnylam pursuant to Section 8.2(d) are in addition
to, and not in lieu of, the royalties payable to Alnylam pursuant to Sections
8.2(a) and (b), as applicable. Specifically, if an Isis Exclusive Target Product
is subject to the payment of royalties to Alnylam pursuant to Section 8.2(d)
during the applicable Isis Exclusive Target Royalty Term and is also a Double
Stranded RNA Product that is an Isis Product or an Isis Single Stranded RNAi
Product, as the case may be, then the royalty calculated pursuant to
Section 8.2(a) or (b), as applicable, will also be payable to Alnylam with
respect to such Isis Exclusive Target Product for so long as such Isis Exclusive
Target Product is a Double Stranded RNA Product that is an Isis Product or an
Isis Single Stranded RNAi Product, as the case may be. However, if an Isis

 

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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Exclusive Target Product that is subject to the payment of royalties to Alnylam
pursuant to Section 8.2(d) is also an Isis Extended Field Product, it will not
be subject to additional royalties under Section 8.2(c).

8.3 Development Milestones.

(a) Subject to Section 8.4, Isis, its Affiliates or sublicensees will pay to
Alnylam the following milestone payments for each Double Stranded RNA Product
that is an Isis Product within [***] days after the first achievement of each of
the following events:

 

Milestone Event

   Milestone Payment  

Initiation of Phase I Trial

   US$ [***]   

Initiation of Phase III Trial

   US$ [***]   

Filing NDA

   US$ [***]   

Marketing Approval

   US$ [***]   

Each milestone payment under this Section 8.3(a) will only be due on [***]
Double Stranded RNA Product that is an Isis Product that modulates a particular
RNA Target to trigger such milestone payment, whether such milestone is achieved
by Isis or an Affiliate or sublicensee of Isis.

(b) Isis, its Affiliates or sublicensees will pay to Alnylam a milestone payment
of US$[***] for the [***] Isis Single Stranded Product that is an Isis Product
that modulates a particular RNA Target within [***] days after such Isis Single
Stranded Product reaches the initiation of IND-Enabling Studies, and not for any
other Isis Single Stranded Product that modulates that particular RNA Target.

(c) Isis, its Affiliates or sublicensees will pay to Alnylam a milestone payment
of US$[***] for the [***] MicroRNA Product that is an Isis Product that
modulates a particular RNA Target within [***] days after such MicroRNA Product
reaches the initiation of [***], and not for any other MicroRNA Product that is
an Isis Product that modulates the particular RNA Target.

8.4 Sublicense Income on Single Stranded RNAi Sublicenses.

(a) With respect to Sublicense Revenue from each sublicense (or right to obtain
a sublicense) related to an Isis Single Stranded RNAi Product granted by Isis
and its Affiliates under this Agreement after the Second Restatement Date, Isis
will pay Alnylam, within [***] days following receipt by Isis of such Sublicense
Revenue, [***] percent ([***]%) of all such Sublicense Revenue that does not
constitute royalty payments.

 

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.

 

22

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(b) In the event that Isis enters into an Antisense Drug Discovery Program
pursuant to which Isis (i) grants a sublicense under the Alnylam Patent Rights
to further develop and/or commercialize an Isis Single Stranded RNAi Product,
(ii) commits to discover and/or develop Double Stranded RNA Products or single
stranded oligonucleotides that are not Single Stranded RNAi Compounds, or
(iii) grants a license or sublicense to intellectual property which would not
otherwise result in any amounts becoming payable to Alnylam hereunder (an “Other
Isis Sublicense”), then in determining the applicable payment due from Isis to
Alnylam in connection with such Antisense Drug Discovery Program, the CEO of
Isis and the CEO of Alnylam will mutually agree in writing upon a good faith
allocation of the consideration received by Isis under such Antisense Drug
Discovery Program between and among the consideration attributable to the
components of such Antisense Drug Discovery Program that qualify as (x) a
sublicense to further develop and/or commercialize an Isis Single Stranded RNAi
Product, (y) a collaboration to discover and/or develop Double Stranded RNA
Products or single stranded oligonucleotides that are not Single Stranded RNAi
Compounds, and (z) an Other Isis Sublicense; and Isis will pay Alnylam
Sublicense Income Fees under Section 8.4(a) in accordance with such allocation.
Within [***] days following the execution of each such transaction, Isis,
through its CEO, will provide Alnylam’s CEO a reasonably detailed and accurate
description of such transaction for the purpose of enabling Alnylam’s CEO to
perform the allocation described in this Section 8.4(b).

8.5 [Intentionally Deleted]

ARTICLE 9

OTHER PAYMENT TERMS

9.1 Payments. All payments by a Party under this Agreement will be made in
United States dollars by bank wire transfer in next day available funds to such
bank account in the United States designated in writing by Alnylam or Isis, from
time to time. Royalties payable under Sections 7.2 and 8.2 shall be payable on a
quarterly basis within 45 days after the end of each Calendar Quarter. The Party
with such royalty obligation (the “Royalty-Paying Party”) shall provide the
other Party with a report setting forth (i) gross sales of Products, as
applicable, by the Royalty-Paying Party, its Affiliates and sublicensees,
(ii) all deductions from such gross sales taken in calculating Net Sales,
(iii) Net Sales of Products, as applicable, by the Royalty-Paying Party, its
Affiliates and sublicensees, (iv) royalties payable based on such Net Sales and
(v) all other information relevant to the calculation of such royalties, on a
Product-by-Product and country-by-country basis, for each Calendar Quarter
within [***] days after the end of such Calendar Quarter.

9.2 Late Payments; Collections. In the event that any payment, including
royalty, milestone, Sublicense Revenue or Technology Access Fee payments, due

 

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.

 

23

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hereunder is not made when due, the payment will bear interest from the date due
at the lesser of (i) 1.5% per month, compounded monthly, or (ii) the highest
rate permitted by law; provided, however, that in no event will such rate exceed
the maximum legal annual interest rate. If a Party disputes in writing the
amount of an invoice presented by the other Party within [***] days of receipt
of such invoice, interest will only be due on the correct amount as later
determined or agreed. The payment of such interest will not limit a Party from
exercising any other rights it may have as a consequence of the lateness of any
payment. In addition, each Party agrees to pay all external costs of collection,
including reasonable attorneys’ fees, incurred by the other Party in enforcing
the payment obligations after a due date has passed under this Agreement.

9.3 Audit Rights.

(a) Upon the written request of Isis or Alnylam, as the case may be, and not
more than once in each calendar year, Isis or Alnylam will permit the other
Party’s independent certified public accountant to have access upon reasonable
advance notice and during normal business hours to its records as may be
reasonably necessary to verify the accuracy of the royalty reports hereunder for
the current year and the preceding 2 years prior to the date of such request.
The accounting firm will disclose to the auditing Party only whether the royalty
reports are correct or incorrect, the specific details concerning any
discrepancies, and the corrected amount of Net Sales and royalty payments. No
other information will be provided to the auditing Party. Once a Party has
audited a particular calendar year under this section, the Party will be
precluded from subsequently auditing such calendar year. In any sublicense
granted by a Party under this Agreement, such Party will endeavor to secure a
similar audit right and if reasonably requested by the other Party will enforce
such audit right.

(b) If such accounting firm concludes that additional royalties were owed during
such period, the delinquent Party will pay the additional royalties within 90
days of the date such Party receives the accounting firm’s written report. The
fees charged by such accounting firm will be paid by the auditing Party unless
the additional royalties, milestones or other payments owed by the audited Party
exceed 5% of the royalties, milestones or other payments paid for the time
period subject to the audit, in which case the audited Party will pay the
reasonable fees and expenses charged by the accounting firm.

(c) Each Party will treat all financial information subject to review under this
Section 9.3 or under any sublicense agreement in accordance with the
confidentiality provisions of Article 12, and will cause its accounting firm to
enter into an acceptable confidentiality agreement obligating such firm to
retain all such financial information in confidence pursuant to such
confidentiality 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.

 

24

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9.4 Taxes. If laws, rules or regulations require withholding of income taxes or
other taxes imposed upon payments set forth in Article 7 or 8, each Party will
make such withholding payments as required and subtract such withholding
payments from the payments set forth in Article 7 or 8. Each Party will submit
appropriate proof of payment of the withholding taxes to the other Party within
a reasonable period of time. The Parties will cooperate to obtain the
appropriate tax clearance and/or recover any such withholdings if possible.

ARTICLE 10

ALNYLAM RIGHTS OF FIRST NEGOTIATION; PREFERRED LICENSEE

10.1 Right of First Negotiation. Isis will notify Alnylam in writing once
(i) Isis, on its own with no subsequent rights to Third Parties, intends to
initiate [***] for an Isis Product that is a Double Stranded RNA Product or
(ii) if a Third Party with which Isis has a Development Collaboration or a
collaboration on an [***] an Isis Double Stranded RNA Product before or during
clinical development or commercialization with no subsequent rights to Third
Parties. Alnylam will have [***] days from the receipt of such notice to notify
Isis in writing whether or not Alnylam wishes to negotiate with Isis regarding
the development and/or commercialization of such Isis Product. If Alnylam fails
to respond to Isis’ notice within the [***] days or if Alnylam declines in
writing to exercise its right of first negotiation, then Isis will be free to
develop and commercialize (either on its own or with a Third Party) the Isis
Product. If Alnylam wishes to negotiate a license or development or
commercialization rights in such Isis Product, the Parties will negotiate in
good faith the terms of the license or collaboration agreement. If, despite good
faith negotiations, Alnylam and Isis do not reach agreement within [***] days
from Alnylam’s exercise of its right of first negotiation, then Isis will be
free to develop and commercialize (either on its own or with a Third Party) the
Isis Product; provided that during the period prior to the latest of (x) the
initiation of [***] the Isis Product, (y) the [***] anniversary of the
commencement of [***] for the Isis Product or (z) in the case of an Isis Product
[***] after the commencement of [***], the [***] anniversary of Isis’ notice to
Alnylam [***], Isis shall not enter into a license or collaboration agreement
with a Third Party for such Isis Product on terms (the “More Favorable Terms”)
that are in the aggregate materially more favorable to the Third Party than the
terms on which Isis most recently offered in writing to grant such rights to
Alnylam without first offering the More Favorable Terms to Alnylam.

10.2 Preferred Licensee. If, after the Effective Date, Alnylam grants to any
Third Party that is not a Major Pharmaceutical Company a license under the
Alnylam Patent Rights to develop and commercialize Double Stranded RNA Products,
then if (a) either (i) the [***] terms of such license are more favorable to the
Third Party than the [***] terms hereunder with respect to Isis Products are to
Isis or (ii) the [***] covered by such license exceeds the [***] potentially
licensed to Isis hereunder for development 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.

 

25

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commercialization of Double Stranded RNA Products, and (b) the roles to be
played by Alnylam and such Third Party in the development and commercialization
of Double-Stranded RNA Products under such Third Party license, the nature of
the RNA Targets covered by such Third Party license and any other relevant terms
of such Third Party license do not collectively justify the conditions described
in the preceding clauses (a)(i) and/or (a)(ii), then Alnylam shall modify the
terms of its licenses to Isis hereunder with respect to such conditions so that
they are reasonably equivalent to those granted to the Third Party. The Parties
agree that the provisions of this Section 10.2 shall not apply to licenses
involving solely Agricultural Field Products.

ARTICLE 11

INTELLECTUAL PROPERTY

11.1 Ownership of Inventions.

(a) Each Party will solely own all inventions, technology, discoveries, or other
proprietary property (collectively, “Inventions”) that are made (as determined
by U.S. rules of inventorship) solely by employees of or consultants to that
Party under this Agreement.

(b) Isis and Alnylam will jointly hold title to all Inventions, whether or not
patentable, that are made (as determined by the U.S. rules of inventorship)
jointly by employees of or consultants to Isis and Alnylam, as well as to
Patents filed thereon. Such Inventions will be “Joint Inventions,” and Patents
claiming such Joint Inventions will be “Joint Patents.” Isis and Alnylam will
promptly provide each other with notice whenever a Joint Invention is made. The
Parties agree and acknowledge that, except insofar as this Agreement provides
otherwise, the default rights conferred on joint owners under US patent law,
including the right of each Party to independently practice, license and use a
Joint Patent, will apply in relation to the Joint Patents throughout the world
as though US patent law applied worldwide.

(c) The Parties agree, upon reasonable request, to execute any documents
reasonably necessary to effect and perfect each other’s ownership of any
Invention.

11.2 Filing and Prosecution of Patent Rights.

(a) [Intentionally Deleted]

(b) Except as set forth in Sections 11.2(f) and 11.2(h) below, Isis will be
responsible for preparing, filing, prosecuting, maintaining and taking such
other actions as are reasonably necessary or appropriate with respect to the
Isis Patent Rights, the Isis Extended Field Patents and the Isis Exclusive
Target Patents.

 

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.

 

26

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(c) Except as set forth in Section 11.2(g) and 11.2(h) below, Alnylam will be
responsible for preparing, filing, prosecuting, maintaining and taking such
other actions as are reasonably necessary or appropriate with respect to the
Alnylam Patent Rights, the Alnylam Extended Field Patents and the Alnylam
Exclusive Target Patents.

(d) Each Party will endeavor in good faith to coordinate its efforts with those
of the other Party to minimize or avoid interference with the prosecution of the
Patents that are licensed under this Agreement. Neither Party will initiate or
participate in any opposition, reexamination, interference, litigation, inter
partes review, post grant review or other proceeding for the purpose of
narrowing or invalidating any claim in a Patent of the other Party; provided,
however, that either Party may assert invalidity or non-infringement as a
defense in any court proceeding bought by the other Party asserting infringement
of a granted Patent that is not a Patent then licensed under this Agreement.
Notwithstanding the above, if an interference is declared by the Patent and
Trademark Office between two or more of the Parties respective Patents, the
Parties agree to use good faith diligent efforts to resolve matters of priority
and patentability and reach agreement or understanding as to patentable claims
enjoying priority. In the event the Parties do not reach such agreement or
understanding within [***] months after declaration of the interference by the
Patent and Trademark Office (or such shorter period as necessary to comply with
the Patent and Trademark Office calendar), then the Parties agree to submit such
matter to arbitration under Section 17.6 and that the Party determined not to
have priority of invention with request and agree to adverse judgment either by
way of concession of priority or unpatentability or by disclaimer or abandonment
of the contest according to the rules of interference practice in existence at
the time. The Parties agree to file with the Patent and Trademark Office all
agreements pertaining to settlement of the interference in accordance with the
rules of interference practice in existence at the time.

(e) At the non-prosecuting Party’s request, the other Party will keep the
requesting Party reasonably informed, and provide documentation, of all material
matters relating to the preparation, filing, prosecution and maintenance of any
designated Patent licensed to the non-prosecuting Party under this Agreement.

(f) Alnylam will be responsible for preparing, filing, prosecuting, maintaining
and taking such other actions as are reasonably necessary or appropriate with
respect to the (i) Isis Exclusive Target Patents that (1) claim (x) an
oligomeric compound that hybridizes to and modulates an Alnylam Exclusive Target
or (y) a method of using such oligomeric compound in the Field and (2) cover the
manufacture, sale or use of an Alnylam Exclusive Target Product that is
comprised of a

 

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.

 

27

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Double Stranded RNA or Double Stranded RNA Product (“Isis Special Target
Patent”) and (ii) Isis Special Patents. If Alnylam elects not to file for or
continue the prosecution (including any interferences, oppositions, reissue
proceedings and re-examinations) or maintenance of an Isis Special Patent or an
Isis Special Target Patent in any country, then, Alnylam will notify Isis
promptly in writing of its intention in sufficient time to enable Isis to meet
any deadlines by which an action must be taken to establish or preserve any such
rights in such Patent in such country and Isis will have the right, but not the
obligation, to file for or continue the prosecution or maintenance of such
Patent in such country, and Alnylam will cooperate with Isis in regard thereto.
If elections with respect to obtaining patent term extension or supplemental
protection certificates or their equivalents in any country with respect to Isis
Special Target Patents are available, Alnylam shall have the right (but not the
obligation), in its sole discretion, to make any such election and make such
filing as necessary to effect such election. Alnylam shall, in its sole
discretion, seek and maintain all applicable data exclusivity periods (such as
those periods listed in the FDA’s Orange Book (including any available pediatric
extensions) or foreign equivalents) that are available for Alnylam Exclusive
Target Products. Alnylam shall have sole authority with respect to the listing
of any Isis Special Target Patents with respect to the Alnylam Exclusive Target
Products in the Orange Book.

(g) Isis will be responsible for preparing, filing, prosecuting, maintaining and
taking such other actions as are reasonably necessary or appropriate with
respect to the Patents that (1) claim (x) an oligomeric compound that hybridizes
to and modulates an Isis Exclusive Target or (y) a method of using such
oligomeric compound in the Field and (2) cover the manufacture, sale or use of
an Isis Exclusive Target Product that is comprised of a Single Stranded Compound
or Single Stranded Product (“Alnylam Special Target Patent”). If Isis elects not
to file for or continue the prosecution (including any interferences,
oppositions, reissue proceedings and re-examinations) or maintenance of an
Alnylam Special Target Patent in any country, then, Isis will notify Isis
promptly in writing of its intention in sufficient time to enable Alnylam to
meet any deadlines by which an action must be taken to establish or preserve any
such rights in such Patent in such country and Alnylam will have the right, but
not the obligation, to file for or continue the prosecution or maintenance of
such Patent in such country, and Isis will cooperate with Isis in regard
thereto. If elections with respect to obtaining patent term extension or
supplemental protection certificates or their equivalents in any country with
respect to Alnylam Special Target Patents are available, Isis shall have the
right (but not the obligation), in its sole discretion, to make any such
election and make such filing as necessary to effect such election. Isis shall,
in its sole discretion, seek and maintain all applicable data exclusivity
periods (such as those periods listed in the FDA’s Orange Book (including any
available pediatric extensions) or foreign equivalents) that are available for
Isis Exclusive Target Products. Isis shall have sole authority with respect to
the listing of any Alnylam Special Target Patents with respect to the Isis
Exclusive Target Products in the Orange Book.

 

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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(h) Solely with respect to (i) Research Program Patents, or (ii) Patents
licensed under this Agreement that claim Inventions that primarily relate to
Single Stranded RNAi Compounds, in each case that are Controlled by Alnylam but
excluding Joint Patents, Alnylam will be responsible for preparing, filing,
prosecuting, maintaining and taking such other actions as are reasonably
necessary or appropriate with respect to such Patent. If Alnylam decides to
discontinue the preparation, filing, prosecution or maintenance of such a
Patent, Alnylam will notify Isis at least [***] days prior to any deadline that,
if missed, would materially prejudice the Patent, and Isis will have the right,
at Isis’ own expense, to prepare, file, prosecute and maintain such Patent.

11.3 Filing and Prosecution of Jointly Owned Patents.

(a) The Parties will mutually agree on which of the Parties will be designated
as being the responsible Party for preparing, filing, prosecuting, maintaining
and taking such other actions as are reasonably necessary or appropriate with
respect to each Joint Patent.

(b) Each Party will keep the other Party continuously informed of all
significant matters relating to the preparation, filing, prosecution and
maintenance of Joint Patents, and shall provide the other Party with copies of
any substantial prosecution papers within thirty days of receipt.

11.4 Costs and Expenses.

(a) Except as set forth in Section 11.4(c) and (d) below, each Party will bear
its own costs and expenses in filing, prosecuting, maintaining and extending the
Alnylam Patent Rights, Alnylam Extended Field Patents, Alnylam Exclusive Target
Patents, Isis Patent Rights, Isis Extended Field Patents and Isis Exclusive
Target Patents, respectively.

(b) Except as set forth in Section 11.4(c) and (d) below, the Parties will pay
equal shares of all costs and expenses in filing, prosecuting, maintaining and
extending the Joint Patents.

(c) Alnylam will bear [***]% of its own costs and expenses in filing,
prosecuting, maintaining and extending the Isis Special Patents and the Isis
Special Target Patents. If Alnylam elects not to file for or continue the
prosecution (including any interferences, oppositions, reissue proceedings and
re-examinations) or maintenance of an Isis Special Patent or an Isis Special
Target Patent in any country, and Isis assumes the continued prosecution of such
Isis Special Patent or Isis Special Target Patent (as permitted by
Section 11.2(f)) in such country, then the Parties will [***] all of Isis’ costs
and expenses in filing, prosecuting, maintaining and extending the Isis Special
Patent or Isis Special Target Patent for which Isis assumed prosecution.

 

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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(d) Isis will bear [***]% of its own costs and expenses in filing, prosecuting,
maintaining and extending the Alnylam Special Target Patents. If Isis elects not
to file for or continue the prosecution (including any interferences,
oppositions, reissue proceedings and re-examinations) or maintenance of an
Alnylam Special Target Patent in any country, and Alnylam assumes the continued
prosecution of such Alnylam Special Target Patent (as permitted by
Section 11.2(g)) in such country, then the Parties will [***] all of Alnylam’s
costs and expenses in filing, prosecuting, maintaining and extending the Alnylam
Special Target Patent for which Alnylam assumed prosecution.

11.5 Enforcement.

(a) Each Party will promptly advise the other of any suspected or actual
infringement of the Isis Patent Rights, Alnylam Patent Rights, Joint Patents,
Alnylam Extended Field Patents, Alnylam Exclusive Target Patents, Isis Extended
Field Patents or Isis Exclusive Target Patents by any person that reasonably
affects the other Party’s business and of which it becomes aware. The notice
shall set forth the facts of such infringement or misappropriation in reasonable
detail.

(b) Subject to subsections (c)(i) and (h) below, Alnylam will have the sole and
exclusive right, in its sole discretion and at its expense, to assert and
enforce (i) any Isis Patent Rights, Alnylam Patent Rights, Joint Patents,
Alnylam Extended Field Patents, or Alnylam Exclusive Target Patents against any
party engaging in an unlicensed or unauthorized making, having made, using,
selling, offering for sale or importing of any allegedly infringing Double
Stranded RNA and (ii) any Isis Exclusive Target Patents against any party
engaging in an unlicensed or unauthorized making, having made, using, selling,
offering for sale or importing of any allegedly infringing oligomeric compound
that hybridizes to and modulates an Alnylam Exclusive Target but only if such
Isis Exclusive Target Patent is the only Patent Controlled by Alnylam that
covers such allegedly infringing oligomeric compound.

(c)

(i) For any enforcement by Alnylam under subsection (b) above that includes Isis
Patent Rights or Isis Exclusive Target Patents covering a [***] chemical
modification, Isis will actively participate in the planning and conduct of such
enforcement and will take the lead of such enforcement to the extent that the
scope or validity of any such Isis Patent Rights, Isis Extended Field Patents or
Isis Exclusive Target Patents covering a [***] chemical modification is at risk.

(ii) Subject to subsection (b) above and subsection (h) below, Isis will have
the sole and exclusive right, in its sole discretion and at its expense, to
assert and enforce Alnylam Exclusive Target Patents against any party engaging
in an unlicensed or unauthorized making, having made, using, selling, offering
for sale 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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importing of any allegedly infringing oligomeric compound that hybridizes to and
modulates an Isis Exclusive Target but only if such Alnylam Exclusive Target
Patent is the only Patent Controlled by Isis that covers such allegedly
infringing oligomeric compound.

(d) Except as set forth in Sections 11.5(b), (c) and (h),

(i) Isis will have the sole and exclusive right, in its sole discretion and at
its expense, to assert and enforce any (i) Isis Patent Rights, (ii) Isis
Extended Field Patents, and (iii) Isis Exclusive Target Patents;

(ii) Alnylam will have the sole and exclusive right, in its sole discretion and
at its expense, to assert and enforce any (i) Alnylam Patent Rights,
(ii) Alnylam Extended Field Patents, (iii) Alnylam Exclusive Target Patents, and
(iv) the Isis Special Patents; and

(iii) The Parties will agree in advance on the enforcement of any Joint Patent
and will apportion enforcement responsibilities and recoveries amongst the
Parties.

(e) The rights granted hereunder to Alnylam to enforce certain licensed in or
jointly owned Isis Patent Rights are further limited by the terms of the Isis
Third Party Agreements. The rights granted hereunder to Isis to enforce certain
licensed in or jointly owned Alnylam Patent Rights are further limited as
described in the Alnylam Third Party Agreements.

(f) The nonenforcing Party will have the right, at its own expense, to
participate in the conduct of the enforcement action and to be represented in
such action by its own counsel.

(g) The enforcing Party will not enter into any settlement that impacts the
validity, scope or interpretation of any claim of any Joint Patent or of any
Patent of the nonenforcing Party licensed to the nonenforcing Party under this
Agreement without prior written authorization of the nonenforcing Party.

(h) If the Party with enforcement rights under subsection (b), (c) or (d) above
(the “Primary Party”) fails to initiate proceedings against any actual or
suspected infringement within [***] days of receipt of written request for
enforcement from the other Party (the “Step-in Party”) and if the infringer is
directly competing with a Product (the “Affected Product”) of such Step-in
Party, then (i) if the license granted in this Agreement under which the Step-in
Party is selling the Affected Product is exclusive or co-exclusive, the Step-in
Party will have the right to assert and enforce the patents that are allegedly
being infringed, or (ii) if the license granted in this Agreement under which

 

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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the Step-in Party is selling the Affected Product is non-exclusive, the Step-in
Party will have no obligation to pay royalties during the period for which the
Primary Party fails to initiate proceedings or take other action (including
without limitation entering into a licensing arrangement) to eliminate such
infringement; provided that the provisions of the immediately preceding clause
(ii) shall not apply if the Primary Party elects to grant the Step-in Party
enforcement rights with respect to such infringement. The Primary Party will not
grant a license to any such infringing Third Party with respect to any directly
competitive infringing product on terms materially more favorable (milestones
and royalties) than the terms of the license granted hereunder to the Step-in
Party or, solely with respect to the Affected Product, will adjust the terms of
such license so that they are not materially less favorable than the terms of
the license granted to the infringing Third Party. In addition, as a condition
to the Step-in Party’s right (under clause (i) of this Section 11.5(h)) to
assert and enforce a Patent Controlled by the Primary Party that is allegedly
being infringed, the Step-in Party must also assert and enforce any relevant
Patents Controlled by such Step-in Party against the alleged infringer who is
competing with the Affected Product.

(i) Except as otherwise agreed to by the Parties as part of a cost-sharing
arrangement, any recovery realized as a result of such litigation, after
reimbursement of any reasonable litigation expenses of Isis and Alnylam, shall
be retained by the Party or Parties that brought and controlled such litigation
for purposes of this Agreement, except that any recovery realized as a result of
such litigation shall be treated as Net Sales of the applicable Products and
distributed as such Net Sales would have been distributed.

11.6 If any Person asserts in writing or in any legal proceeding that any of the
Isis Exclusive Target Patents or Alnylam Exclusive Target Patents are
unenforceable based on any term or condition of this Agreement, the Parties
shall amend this Agreement as may reasonably be required to effect the original
intent of the Parties, including to preserve the enforceability of such Patents
and the intended economic and non-economic effects of this Agreement.

11.7 [Intentionally Deleted]

11.8 Future Licenses. If after the First Restatement Date, a Party (the
“Controlling Party”) invents or acquires rights or title to an invention claimed
by a Patent that (i) would be included in the Isis Current Chemistry Patents,
Isis Current Motif and Mechanism Patents, Isis Extended Field Patents or Isis
Exclusive Target Patents if such Party is Isis or in the Alnylam Current
Chemistry Patents, Alnylam Current Motif and Mechanism Patents, Alnylam Extended
Field Patents or Alnylam Exclusive Target Patents if such Party is Alnylam (the
“Additional Rights”) and (ii) carry financial or other obligations, then the
Controlling Party must promptly notify the non-Controlling Party of such
acquisition or invention. If the non-Controlling Party

 

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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wishes to include such Additional Rights under the licenses granted pursuant to
Article 5 or 6, as applicable, the non-Controlling Party will notify the
Controlling Party of its desire to do so and will assume all financial and other
obligations to the Controlling Party’s licensors or collaborators, if any,
arising from the grant to the non-Controlling Party of such license. Any
Additional Rights that do not carry financial or other obligations shall be
automatically included under the licenses granted pursuant to Article 5 or 6, as
applicable. If a Party pays any upfront payments or similar acquisition costs to
access Additional Rights, the Parties will negotiate in good faith regarding
sharing such acquisition costs and payments. When acquiring or creating such
Additional Rights, each Party will endeavor in good faith to secure the right to
sublicense such Additional Rights to the other Party.

ARTICLE 12

CONFIDENTIALITY

12.1 Nondisclosure Obligation. All Confidential Information disclosed by one
Party to the other Party hereunder will be maintained in confidence by the
receiving Party and will not be disclosed to a Third Party or Affiliate or used
for any purpose except as set forth below.

12.2 Permitted Disclosures. Except as otherwise provided herein, a Party may
disclose Confidential Information received from the other Party:

(a) to governmental or other regulatory agencies in order to obtain Patents or
approval to conduct clinical trials, or to gain Marketing Approval; provided
that such disclosure may be made only to the extent reasonably necessary to
obtain such Patents or approvals;

(b) to any adjudicative body as required by law, provided that prior to such
disclosure, the Party subject to such disclosure obligation (the “Notifying
Party”) promptly notifies the other Party of such requirement so that such other
Party can seek a protective order, confidential treatment or other appropriate
remedy; and provided, further, that in the event that no such protective order,
confidential treatment or other remedy is obtained, or that such other Party
waives compliance with this section, the Notifying Party will furnish only that
portion of the other Party’s Confidential Information that it is advised by
counsel it is legally required to furnish;

(c) to Affiliates, sublicensees, agents, consultants, and/or other Third Parties
for the development, manufacturing and/or marketing of Products (or for such
parties to determine their interest in performing such activities) in accordance
with this Agreement on the condition that such Affiliates, sublicensees and
Third Parties agree to be bound by the confidentiality obligations contained in
this 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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(d) if such disclosure is required by law or regulation (including without
limitation by rules or regulations of any securities exchange or NASDAQ),
provided that prior to such disclosure, the Notifying Party promptly notifies
the other Party of such requirement so that such other Party can seek a
protective order, confidential treatment or other appropriate remedy; and
provided, further, that in the event that no such protective order, confidential
treatment or other remedy is obtained, or that such other Party waives
compliance with this section, the Notifying Party will furnish only that portion
of the other Party’s Confidential Information that it is advised by counsel it
is legally required to furnish; or

(e) as necessary if embodied in products to develop and commercialize such
products.

Either Party may disclose (i) a copy of this Agreement on a confidential basis
to prospective lenders and investors, (ii) a mutually agreed upon redacted copy
of this Agreement on a confidential basis to prospective collaborators and
(iii) the terms of this Agreement as required under applicable securities laws
or regulations (including without limitation under rules or regulations of any
securities exchange or NASDAQ); provided, however, that, subject to
Section 6.4(i), Alnylam shall not disclose Isis’ past or current Reserved
DS-Targets or past or current Isis Protected Targets (as defined in the First
Restated Agreement) without the express prior written consent of Isis, and,
subject to Section 4.3(f), neither Party shall disclose the other Party’s past
or current Enabled Targets without the express prior written consent of the
other Party.

12.3 Announcements; Publicity.

(a) Each Party understands that this Agreement is likely to be of significant
interest to investors, analysts and others, and that either Party therefore may
make public announcements with respect to this Agreement. The Parties agree that
any such announcement will not contain confidential business or technical
information unless disclosure of confidential business or technical information
is required by law or regulation, in which case they will make reasonable
efforts to minimize such disclosure of confidential business or technical
information to that required by law or regulation. Each Party agrees to provide
to the other Party a copy of any such public announcement as soon as reasonably
practicable under the circumstances prior to its scheduled release. Except under
extraordinary circumstances, each Party shall provide the other with an advance
copy of any press release at least two (2) Business Days prior to the scheduled
disclosure. The other Party shall have the right to expeditiously review and
recommend changes to any announcement regarding this Agreement or the subject
matter of this Agreement, provided that such right of review and recommendation
shall only apply for the first time that specific information is to be
disclosed, and shall not apply to the subsequent disclosure of information that
(i) is substantially similar to a previously reviewed disclosure and (ii) in the
context of the subsequent disclosure, does not carry a

 

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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substantially different qualitative message than that carried by the previously
reviewed disclosure. The Party whose press release has been reviewed shall in
good faith consider any changes that are timely recommended by the reviewing
Party.

(b) Each Party will (i) use reasonable, good faith efforts to provide the other
Party with at least 5 Business Days’ prior notice (which notice may be given
orally to a senior executive officer of the other Party) before such Party
publicly announces the execution of a Naked Sublicense, Bona Fide Discovery
Collaboration agreement, or Development Collaboration agreement or Bona Fide
Third Party Collaboration agreement (or any material amendments thereto) that
could reasonably be expected to be of strategic or financial importance to the
other Party’s business and (ii) cooperate with the other Party to enable the
other Party to develop appropriate mutually beneficial public announcements
regarding such transactions.

ARTICLE 13

INDEMNIFICATION

13.1 Indemnification by Alnylam. Alnylam will indemnify, defend and hold Isis
and its agents, employees, officers and directors (the “Isis Indemnitees”)
harmless from and against any and all liability, damage, loss, cost or expense
(including reasonable attorneys’ fees) arising out of Third Party claims or
suits related to (a) Alnylam’s performance of its obligations under this
Agreement; (b) breach by Alnylam of its representations and warranties set forth
in Article 15; or (c) the discovery, development, manufacture, use, importation
or commercialization (including marketing and sale) of Alnylam Products, Alnylam
Extended Field Products or Alnylam Exclusive Target Products.

13.2 Indemnification by Isis. Isis will indemnify, defend and hold Alnylam and
its Affiliates and each of their respective agents, employees, officers and
directors (the “Alnylam Indemnitees”) harmless from and against any and all
liability, damage, loss, cost or expense (including reasonable attorneys’ fees)
arising out of Third Party claims or suits related to (a) Isis’ performance of
its obligations under this Agreement; (b) breach by Isis of its representations
and warranties set forth in Article 15; or (c) the discovery, development,
manufacture, use, importation or commercialization (including marketing and
sale) of Isis Products, Isis Extended Field Products or Isis Exclusive Target
Products.

13.3 Notification of Claims; Conditions to Indemnification Obligations. A Party
entitled to indemnification under this Article 13 shall (a) promptly notify the
other Party as soon as it becomes aware of a claim or action for which
indemnification may be sought pursuant hereto, (b) cooperate with the
indemnifying Party in the defense of such claim or suit, and (c) permit the
indemnifying Party to control the defense of such claim

 

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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or suit, including without limitation the right to select defense counsel;
provided that if the Party entitled to indemnification fails to promptly notify
the indemnifying Party pursuant to the foregoing clause (a), the indemnifying
Party shall only be relieved of its indemnification obligation to the extent
prejudiced by such failure. In no event, however, may the indemnifying Party
compromise or settle any claim or suit in a manner which admits fault or
negligence on the part of the indemnified Party, or which imposes obligations on
the indemnified Party other than financial obligations that are covered by the
indemnifying Party’s indemnification obligation, without the prior written
consent of the indemnified Party. The indemnifying Party will have no liability
under this Article 13 with respect to claims or suits settled or compromised
without its prior written consent.

ARTICLE 14

TERM AND TERMINATION OF AGREEMENT

14.1 Term and Termination of Agreement. This Agreement will be effective as of
the Second Restatement Date (unless otherwise expressly stated) and unless
terminated earlier pursuant to Sections 14.2 or 14.3 below, the term of this
Agreement will continue in effect until expiration of the License Term.

14.2 Termination upon Material Breach. This Agreement may be terminated upon
written notice by either Party to the other at any time during the term of this
Agreement if the other Party is in material breach of its obligations hereunder
and has not cured such breach within 90 days after written notice requesting
cure of the breach; provided, however, that (a) in the event of a good faith
dispute with respect to the existence of such a material breach, the 90-day cure
period will be stayed until such time as the dispute is resolved pursuant to
Section 17.6 hereof, (b) so long as the breaching Party takes substantial steps
to cure the breach promptly after receiving notice of the breach from the
non-breaching Party and thereafter diligently prosecutes the cure to completion
as soon as is practicable, the non-breaching Party may not terminate this
Agreement, and (c) any license granted under this Agreement with respect to a
Product that has at least reached IND-Enabling Studies may not be terminated for
a material breach under this Section 14.2 (except for an uncured failure to make
any undisputed portion of any payment obligation under Article 7 or 8 with
respect to such Product) to the extent such license is necessary to develop,
make and have made, sell and import such Product.

14.3 Termination upon Bankruptcy; Rights in Bankruptcy.

(a) This Agreement may be terminated with written notice by either Party at any
time during the term of this Agreement upon the filing or institution of
bankruptcy, reorganization, liquidation or receivership proceedings by or
against 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.

 

36

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other Party or upon an assignment of a substantial portion of its assets for the
benefit of creditors by the other Party; provided, however, in the case of any
involuntary bankruptcy proceeding such right to terminate will only become
effective if the Party consents to the involuntary bankruptcy or such proceeding
is not dismissed within 90 days of the filing thereof.

(b) All rights and licenses granted under or pursuant to this Agreement by Isis
or Alnylam are, and will 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, as licensees of such rights under this Agreement, will
retain and may fully exercise all of their rights and elections under the U.S.
Bankruptcy Code. The Parties further agree that, in the event of the
commencement of a bankruptcy proceeding-by or against either Party under the
U.S. Bankruptcy Code, the Party hereto which is not a Party to such proceeding
will be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in their possession, will be
promptly delivered to them (i) upon any such commencement of a bankruptcy
proceeding upon their written request therefore, unless the Party subject to
such proceeding elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, following the rejection of
this Agreement by or on behalf of the Party subject to such proceeding upon
written request therefore by the non-subject Party.

14.4 [Intentionally Deleted]

14.5 Accrued Rights and Surviving Obligations.

(a) Expiration or termination of the Agreement will not relieve the Parties of
any obligation accruing prior to such expiration or termination, including, but
not limited to, financial obligations under Article 7 or 8. Sections 4.3(f),
6.4(i), and 11.1, and Articles 1, 9, 12, 13, 14 and 17 will survive expiration
or termination of the Agreement. Provisions concerning reporting requirements
will continue in effect in accordance with any applicable timetables set forth
herein. Any expiration or early termination of this Agreement will be without
prejudice to the rights of either Party against the other accrued or accruing
under this Agreement prior to termination. No expiration of this Agreement will
relieve a Party of its obligation to pay milestones, royalties, or a percentage
of Technology Access Fees or Sublicense Revenue to the extent accrued prior to
such expiration.

(b) The rights of any sublicensee under any permitted sublicense granted in
accordance with Section 5.2 or 6.3 will survive the termination of this
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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ARTICLE 15

REPRESENTATIONS AND WARRANTIES; DISCLAIMER

15.1 Representations and Warranties of the Parties. Each Party represents and
warrants to the other Party that, as of the Effective Date, the First
Restatement Date and the Second Restatement Date:

(a) Such Party is duly organized and validly existing under the laws of the
state of its incorporation and has full corporate power and authority to enter
into this Agreement and to carry out the provisions hereof;

(b) Such Party has taken all corporate action necessary to authorize the
execution and delivery of this Agreement and the performance of its obligations
under this Agreement;

(c) This Agreement is a legal and valid obligation of such Party, binding upon
such Party and enforceable against such Party in accordance with the terms of
this Agreement. The execution, delivery and performance of this Agreement by
such Party does not conflict with any agreement, instrument or understanding,
oral or written, to which such Party is a Party or by which such Party may be
bound, and does not violate any law or regulation of any court, governmental
body or administrative or other agency having authority over such Party. All
consents, approvals and authorizations from all governmental authorities or
other Third Parties required to be obtained by such Party in connection with
this Agreement have been obtained;

(d) Such Party has sufficient right, power and authority to enter into this
Agreement, to perform its obligations under this Agreement and to grant the
licenses granted hereunder.

15.2 Alnylam Representation and Warranty. Alnylam hereby represents and warrants
to Isis that as of the effective date of the Agbio License Agreement, the Agbio
License Agreement included a collaboration involving the discovery and/or
development of Double Stranded RNA Products, in which Alnylam played an integral
role in the experimentation and an important, though not necessarily dominant or
co-equal, role in the decision-making, relating to the discovery and/or
development of such Double Stranded RNA Products.

15.3 Disclaimers. THE PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS, UNLESS
OTHERWISE EXPRESSLY PROVIDED IN THIS 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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ARTICLE 16

NOTICE

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

 

if to Isis, to:

Isis Pharmaceuticals, Inc. 2855 Gazelle Court Carlsbad, CA 92010
Attention: Chief Operating Officer Fax No.: +1 (760) 603-4652

with a copy to:

Attention: General Counsel Fax No.: +1 (760) 268-4922

if to Alnylam, to:

Alnylam Pharmaceuticals, Inc. 300 Third Street Cambridge, MA 02142
Attention: SVP and General Counsel Fax No.: +1 (617) 812-0353

with a copy to:

Faber Daeufer & Itrato PC 950 Winter Street, Suite 4500 Waltham, Massachusetts
02451 Attention: Sumy C. Daeufer, Esq. Fax No.: +1 (781) 795-4747

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
will be deemed to have been given when delivered if personally delivered or sent
by facsimile on a Business Day, on the Business Day after dispatch if sent by
nationally-recognized overnight courier and on the third Business Day following
the date of mailing if sent by mail.

ARTICLE 17

MISCELLANEOUS PROVISIONS

17.1 Relationship of the Parties. It is expressly agreed that Isis and Alnylam
will be independent contractors and that the relationship between the two
Parties will not constitute a partnership, joint venture or agency. Neither Isis
nor Alnylam will have the authority to make any statements, representations or
commitments of any kind, or to take any action, which will be binding on the
other, without the prior consent of the other Party.

 

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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17.2 Successors and Assigns. Neither this Agreement nor any interest hereunder
may be assigned or otherwise transferred (whether by sale of stock, sale of
assets or merger), nor, except as expressly provided hereunder, may any right or
obligations hereunder be assigned or transferred by either Party without the
prior written consent of the other Party; provided, however, that a Party may,
without such consent, assign this Agreement and its rights and obligations
hereunder to an Affiliate or in connection with an Acquisition. Notwithstanding
the provisions of this Section 17.2:

(a) If Alnylam is the subject of an Acquisition and the entity surviving such
Acquisition does not maintain [***] that is substantially similar or greater
[***] after the time of the Acquisition, then (i) the limit on the [***] that
Isis can [***] pursuant to Section 6.4(a) will [***], and (ii) the exclusive
right to grant Naked Sublicenses under Section 5.2 will [***].

(b) [Intentionally Deleted].

(c) If Isis is the subject of an Acquisition, (i) the entity surviving such
Acquisition will no longer [***] under Section 6.4(a), (ii) the [***] such
Acquisition will be permitted to [***] pursuant to Section 6.4(a) shall be
limited to [***] per calendar year, and (iii) the royalties payable by Isis with
respect to Isis Single Stranded RNAi Products will be adjusted in accordance
with Section 8.2(b).

(d) Notwithstanding anything in this Agreement to the contrary, following the
closing of an Acquisition 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 Patents 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 Acquisition
(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 Patents 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 6.6. For clarity but without limitation, the
Non-Acquired Party’s rights in all Patents Controlled by the Acquired Party or
any of its Pre-Existing Affiliates, which Patents exist as of the date of the
closing of such Acquisition and are then licensed hereunder to the Non-Acquired
Party, shall remain licensed to such Non-Acquired Party after the date of the
closing of such Acquisition 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 Acquisition. “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, in any
case via an Acquisition.

 

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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(e) Any permitted assignee will assume all obligations of its assignor under
this Agreement. Any attempted assignment not in accordance with this
Section 17.2 will be void.

17.3 Entire Agreement; Amendments. This Agreement contains the entire
understanding of the Parties with respect to the license, development and
commercialization of Products hereunder. All express or implied agreements and
understandings, either oral or written, heretofore made by the Parties on the
same subject matter are expressly superseded by this Agreement. For clarity,
however, the letter agreement between the Parties dated January 18, 2012 is not
superseded by this Agreement and continues in full force and effect. This
Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by both Parties hereto.

17.4 Force Majeure. Neither Party will be held liable or responsible to the
other Party nor be deemed to have defaulted under or breached this Agreement for
failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected Party including, without limitation, embargoes, acts of
war (whether war be declared or not), insurrections, riots, civil commotions,
acts of terrorism, strikes, lockouts or other labor disturbances, or acts of
God. The affected Party will notify the other Party of such force majeure
circumstances as soon as reasonably practical and will make every reasonable
effort to mitigate the effects of such force majeure circumstances.

17.5 Applicable Law. The Agreement will be governed by and construed in
accordance with the laws of the State of Delaware without reference to any rules
of conflict of laws.

17.6 Dispute Resolution.

(a) The Parties recognize that disputes may from time to time arise between the
Parties during the term of this Agreement. In the event of such a dispute,
either Party, by written notice to the other Party, may have such dispute
referred to the Parties’ respective executive officers designated below or their
successors, for attempted resolution by good faith negotiations within 30 days
after such notice is received. Said designated officers are as follows:

 

For Isis:

Chief Operating Officer

For Alnylam:

President and Chief Operating Officer

 

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 the dispute is not resolved as provided above, the CEO of Isis and the CEO of
Alnylam will meet for attempted resolution by good faith negotiations within 15
days after the expiration of the preceding 30 day period.

(b) In the event the designated executive officers are not able to resolve such
dispute during such 15-day period, then any such dispute shall be resolved
through binding arbitration under the Commercial Arbitration Rules of the
American Arbitration Association by a panel of three arbitrators appointed in
accordance with such rules. The Parties shall be entitled to the same discovery
as permitted under the U.S. Federal Rules of Civil Procedure; provided that the
panel shall be entitled in its discretion to grant a request from a Party for
expanded or more limited discovery. The award of the arbitrators shall be the
sole and exclusive remedy between the Parties regarding any such dispute. An
award rendered in connection with an arbitration pursuant to this Section 17.6
shall be final and binding upon the Parties and any judgment upon such award may
be entered and enforced in any court of competent jurisdiction. Any arbitration
pursuant to this Section 17.6 shall be conducted in San Diego, California if
Alnylam initiates the arbitration or in Boston, Massachusetts if Isis initiates
the arbitration. Nothing in this Section 17.6 shall be construed as limiting in
any way the right of a Party to seek an injunction or other equitable relief
with respect to any actual or threatened breach of this Agreement or to bring an
action in aid of arbitration. Should any Party seek an injunction or other
equitable relief, or bring an action in aid of arbitration, then for purposes of
determining whether to grant such injunction or other equitable relief, or
whether to issue any order in aid of arbitration, the dispute underlying the
request for such injunction or other equitable relief, or action in aid of
arbitration, may be heard by the court in which such action or proceeding is
brought.

17.7 No Consequential Damages. IN NO EVENT WILL EITHER PARTY OR ANY OF ITS
RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT,
WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING, BUT NOT
LIMITED TO, LOSS OF PROFITS OR REVENUE, OR CLAIMS OF CUSTOMERS OF ANY OF THEM OR
OTHER THIRD PARTIES FOR SUCH OR OTHER DAMAGES.

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

17.9 Waiver. The waiver by either Party hereto of any right hereunder, or the
failure to perform, or a breach by the other Party will not be deemed a waiver
of any other right hereunder or of any other breach or failure by said other
Party whether of a similar nature or otherwise.

 

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.

 

42

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17.10 Compliance with Law. Nothing in this Agreement will be deemed to permit a
Party to export, re-export or otherwise transfer any Product sold under this
Agreement without compliance with applicable laws.

17.11 Severability. In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby, unless the absence
of the invalidated provision(s) adversely affect the substantive rights of the
Parties. The Parties will in such an instance use their best efforts to replace
the invalid, illegal or unenforceable provision(s) with valid, legal and
enforceable provision(s) which, insofar as practical, maintains the balance of
the rights and obligations of the Parties under this Agreement.

17.12 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 will be construed against the drafting Party will not apply.

17.13 Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.

17.14 Performance by Affiliates. To the extent that this Agreement imposes
obligations on Affiliates of a Party, such Party agrees to cause its Affiliates
to perform such obligations.

17.15 No Implied License. Except as expressly provided in Sections 5.1, 6.1 and
6.2 of this Agreement, no Party will be deemed by estoppel or implication to
have granted the other Party any license or other right with respect to any
intellectual property of such Party.

 

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.

 

43

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

 

ISIS PHARMACEUTICALS, INC. ALNYLAM PHARMACEUTICALS, INC. By:

/s/ B. Lynne Parshall

By:

/s/ John Maraganore

Name: B. Lynne Parshall Name: John Maraganore Title: Chief Operating Officer
Title: Chief Executive Officer

 

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.

 

44

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EXHIBIT 1.1

DEFINITIONS

 

1. “Acquisition” means any of the following events: (a) the acquisition by any
Person or group, other than a Person or group controlling such Party as of the
Second Restatement Date, of “beneficial ownership” (as defined in Rule 13d-3
under the United States Securities Exchange Act of 1934, as amended), directly
or indirectly, of fifty percent (50%) or more of the shares of such Party’s
voting stock; (b) the approval by the shareholders of such Party of a merger,
share exchange, reorganization, consolidation or similar transaction of such
Party (a “Transaction”), other than a Transaction which would result in the
voting stock of such Party outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the voting
stock of such Party or such surviving entity immediately after such Transaction;
or (c) approval by the shareholders of such Party of a complete liquidation of
such Party or a sale or disposition of all or substantially all of the assets of
such Party.

 

2. “Active Program” means with respect to an RNA Target and a Party, any ongoing
drug discovery, development, or commercialization of a compound directed to such
RNA Target being conducted by such Party (whether on its own or through a
sublicensee).

 

3. “Affiliate” with respect to a Person means any other Person controlling,
controlled by, or under common control with such Person. For purposes of this
definition, “control” refers to the possession, directly or indirectly, of the
power to direct the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, of a Person.
Notwithstanding the foregoing, Regulus Therapeutics Inc. will not be considered
an Affiliate of either Party.

 

4. “Agbio License Agreement” shall mean that certain License and Collaboration
Agreement with Monsanto Company dated as of August 27, 2012, as amended through
the Second Restatement Date, and from time to time after the Second Restatement
Date; provided Isis has approved by prior written consent any such amendment
after the Second Restatement Date that would diminish Isis’ rights under this
Agreement or increase Isis’ obligations under this Agreement; and provided
further in each case Alnylam has provided Isis a copy of such amendment before,
or promptly after executing such amendment.

 

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. “Agricultural Field” shall mean applications in agriculture, horticulture,
forestry, aquaculture and/or the residential markets relating to plants, fish,
arthropods and/or pests and pathogens thereof (e.g., home, lawn, and/or garden).
The Agricultural Field excludes, without limitation, (a) all human and animal
(other than fish and arthropods) therapeutic, prophylactic or diagnostic
applications; (b) the development, sale and use of research reagent products for
any purpose; and (c) modification of any cells, tissues or organisms for the
purpose of manufacturing heterologous proteins, peptides or viruses for any
purpose other than the modification of plants, plant cells, or plant tissues for
the purpose of manufacturing heterologous proteins, peptides or viruses for
application to plants, fish, arthropods and/or pests or pathogens thereof.

 

6. “Agricultural Field Product” means a product that contains a Double Stranded
RNA (including transgenic applications thereof) for application in the
Agricultural Field that either (a) modulates the viability and/or biological
processes (including expression of genes and/or proteins) of (i) plants,
(ii) fish, (iii) arthropods, and/or (iv) pests or pathogens thereof; or
(b) modifies plants, plant cells or plant tissues for the purpose of
manufacturing heterologous proteins, peptides or viruses for application to
(i) plants, (ii) fish, (iii) arthropods, and/or (iv) pests or pathogens thereof.

 

7.

“Agricultural Field Product Net Sales” will mean (a) the gross invoice price of
Agricultural Field Products sold by Alnylam, its Affiliates and sublicensees
(but with respect to Alnylam does not include Naked Sublicensees) to a Third
Party; provided, that such Third Party is an end-user of such Licensed Product
or a Third Party which purchases Agricultural Field Product(s) (whether in
packaged form or bulk form) from Alnylam, its Affiliate or sublicensee and
resells such Agricultural Field Product(s) to third parties in a manner
consistent with normal trade practices in the Agricultural Field; less (b) the
following items: (i) deductions actually incurred, allowed, paid, accrued or
specifically allocated in financial statements in accordance with generally
accepted accounting principles, in preparing and utilizing distribution channels
for an Agricultural Field Product (including product returns, customer rebates,
dealer incentives, volume discounts, seed service fees, cash discounts (pre-pay
discounts), (ii) local competitive response, transportation or cargo insurance,
taxes, duties or other governmental tariffs (other than income taxes),
(iii) government-mandated rebates, and (iv) a reasonable reserve for bad debts,
(and some of which items, by way of example, are currently identified as “crop
loss and replant” and “seed action pack”) in all cases allocated to such
Agricultural Field Products in accordance with generally accepted accounting
principles and methodologies established by Alnylam, its Affiliates or
sublicensee, as the case may be, and that are consistently applied by such party
across all of such party’s products in the Agricultural Field; provided,

 

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.

 

46

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  that such methodologies may be amended from time to time, upon notice to Isis
to reflect general changes to such party’s methodologies, which changes are
consistently applied by such selling party across such party’s products in the
Agricultural Field and which changes are made in the ordinary course of such
party’s business.

Isis and Alnylam agree that any reasonable definition of “net sales” customarily
used in agricultural industry technology licensing or collaboration contracts
that is agreed to under the Agbio License Agreement or subsequently agreed to by
Alnylam (or a Third Party acquirer or assignee) and a sublicensee with respect
to royalties payable to Alnylam from such sublicensee in an arms-length
transaction under a particular sublicense will replace the definition of
Agricultural Field Product Net Sales in this Agreement and will be used in
calculating the royalty payment to Isis on sales of Agricultural Field Products
(including, but not limited to, products that consist of an Agricultural Field
Product and other technologies and/or materials (i.e., combination products))
sold pursuant to such sublicense and due under this Agreement.

 

8. “Alnylam Current Chemistry Patents” means all Chemistry Patents
(i) Controlled by Alnylam as of the First Restatement Date or any time
thereafter until the Second Restatement Date and (ii) having an earliest
priority date of no later than April 30, 2014, provided, however that (a) for
any such Chemistry Patents that are acquired, licensed or invented after the
First Restatement Date that include financial or other obligations to a Third
Party, the provisions of Section 11.8 will govern whether such Patent will be
included as an Alnylam Current Chemistry Patent; and (b) Alnylam Current
Chemistry Patents do not include Patents that constitute Alnylam Excluded
Technology. Without limitation the Patents listed on Schedule 1-8 attached
hereto are Alnylam Current Chemistry Patents, except to the extent such Patents
claim Alnylam Excluded Technology.

 

9. “Alnylam Current Motif and Mechanism Patents” means all Motif and Mechanism
Patents (i) Controlled by Alnylam as of the First Restatement Date or any time
thereafter until the Second Restatement Date and (ii) having an earliest
priority date of no later than April 30, 2014, provided, however that (a) for
any such Motif and Mechanism Patents that are acquired, licensed or invented
after the First Restatement Date that include financial or other obligations to
a Third Party, the provisions of Section 11.8 will govern whether such Patent
will be included as an Alnylam Motif and Mechanism Patent; and (b) Alnylam Motif
and Mechanism Patents do not include Patents that constitute Alnylam Excluded
Technology. Without limitation the Patents listed on Schedule 1-9 attached
hereto are Alnylam Current Motif and Mechanism Patents, except to the extent
such Patents claim Alnylam Excluded Technology.

 

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.

 

47

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10. “Alnylam Double Stranded RNA Product” means a Double Stranded RNA Product
discovered or developed by Alnylam, its Affiliates or sublicensees, the
manufacture, sale or use of which is covered by a Valid Claim within the Isis
Patent Rights.

 

11. “Alnylam Excluded Technology” means (a) inhibitors to specific genes or gene
families, (b) Manufacturing Patents, (c) analytical technologies, kits and
assays, including without limitation methods, systems and compositions of matter
for amplifying, quantifying, detecting, characterizing or identifying nucleic
acids or nonoligomeric ligands thereto, (d) formulation and delivery
technologies and (e) the specific technology listed on Schedule 1-11 attached
hereto.

 

12. “Alnylam Exclusive Target” means an RNA Target or protein product of (a) the
antithrombin gene (AT, also known as AT3) or (b) the aminolevulinate synthase
gene 1 (AS1), which genes are further identified and described on Exhibit B.

 

13. “Alnylam Exclusive Target Excluded Technology” means (a) Manufacturing
Patents, (b) analytical technologies, kits and assays, including without
limitation methods, systems and compositions of matter for amplifying,
quantifying, detecting, characterizing or identifying nucleic acids or
nonoligomeric ligands thereto, (c) formulation and delivery technologies, and
(d) the specific technology listed on Schedule 1-13 attached hereto.

 

14. “Alnylam Exclusive Target Patents” means all Patents that are Controlled by
Alnylam on or prior to the [***] anniversary of the Second Restatement Date that
(a) claim (x) an oligomeric compound that hybridizes to and modulates an Isis
Exclusive Target or (y) a method of using such oligomeric compound in the Field;
or (b) are Chemistry Patents or Motif and Mechanism Patents other than those
described in clause (a) above; provided, however that (A) for any such Patents
that are acquired, licensed or invented after the First Restatement Date that
include financial or other obligations to a Third Party, the provisions of
Section 11.8 will govern whether such Patent will be included as an Alnylam
Exclusive Target Patent; and (B) Alnylam Exclusive Target Patents do not include
(I) Patents that constitute Alnylam Exclusive Target Excluded Technology, or
(II) Patents Controlled by Alnylam that specifically claim an oligomeric
compound that hybridizes to and modulates an Alnylam Exclusive Target (or method
of using such oligomeric compound in the Field). Alnylam Exclusive Target
Patents include, without limitation, the Patents listed on Schedule 1-14
attached hereto.

 

15.

“Alnylam Exclusive Target Product” means an oligomeric compound (a) that
hybridizes to and modulates an Alnylam Exclusive Target, and (b) the
manufacture, sale or use of which is covered by a Valid Claim within the Isis
Exclusive Target Patents. For purposes of determining whether a royalty is

 

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.

 

48

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  payable by Alnylam under Section 7.2(c), an oligomeric compound that
hybridizes to and modulates an Alnylam Exclusive Target will continue to be
considered an Alnylam Exclusive Target Product during the applicable Alnylam
Exclusive Target Royalty Term for such compound in a country if the manufacture,
sale or use of such compound in such country is covered by a Valid Claim within
the Isis Exclusive Target Patents at the time of First Commercial Sale of such
compound in such country.

 

16. “Alnylam Exclusive Target Royalty Term” means, on a Product-by-Product and
country-by-country basis, the period commencing with the First Commercial Sale
of an Alnylam Exclusive Target Product and ending on the later of the expiration
of (i) the last-to-expire Valid Claim of an Isis Exclusive Target Patent that
covers the manufacture, use, or sale of such Alnylam Exclusive Target Product in
such country, and (ii) any period of regulatory data protection or market
exclusivity or similar regulatory protection afforded by the Regulatory
Authorities in such country, including any such periods listed in the FDA’s
Orange Book, and all international equivalents.

 

17. “Alnylam Extended Field Patents” means all Chemistry Patents and Motif and
Mechanism Patents Controlled by Alnylam on and after the Second Restatement Date
and having any earliest priority date between May 1, 2014 and April 30, 2019,
inclusive; provided, however that (a) for any such Chemistry Patents or Motif
and Mechanism Patents that are acquired, licensed or invented that include
financial or other obligations to a Third Party, the provisions of Section 11.8
will govern whether such Patent will be included as an Alnylam Extended Field
Patent; and (b) Alnylam Extended Field Patents do not include Patents that
constitute Alnylam Excluded Technology. Alnylam Extended Field Patents include,
without limitation, the Patents listed on Schedule 1-17 attached hereto.

 

18. “Alnylam Extended Field Product” means a Double Stranded RNA Product the
manufacture, sale or use of which is covered by a Valid Claim within the Isis
Extended Field Patents.

 

19. “Alnylam Extended Field Royalty Term” means, on a Product-by-Product and
country-by-country basis, the period commencing with the First Commercial Sale
of an Alnylam Extended Field Product and ending on the expiration of the
last-to-expire Valid Claim of an Isis Extended Field Patent that covers the
manufacture, use or sale of such Alnylam Extended Field Product in such country.

 

20. “Alnylam Patent Rights” means Alnylam Current Motif and Mechanism Patents
and Alnylam Current Chemistry Patents. For purposes of determining whether a
royalty is payable by Isis under Section 8.2 in connection with the sale of an
Isis Single Stranded RNAi Product, any Joint Patent, a Valid Claim of which
covers the manufacture, use or sale of such Isis Single Stranded RNAi Product,
will be considered an Alnylam 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.

 

49

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21. “Alnylam Product” means an Alnylam Double Stranded RNA Product or MicroRNA
Product discovered or developed by Alnylam, its Affiliates or sublicensees, the
manufacture, sale or use of which is covered by a Valid Claim within the Isis
Patent Rights.

 

22. “Alnylam Special Target Patent” has the meaning set forth in
Section 11.2(g).

 

23. “Alnylam Third Party Agreements” means the in-license and other agreements
between Alnylam and a Third Party listed on Exhibit 6.5(c).

 

24. “Antisense Drug Discovery Program” means an antisense drug discovery program
that investigates multiple different mechanisms of modulating an RNA Target to
identify a drug candidate, with a predominant emphasis on potential drug
candidates that are single-stranded.

 

25. “Applicable Laws” means all laws, statutes, rules, regulations, orders,
judgments, or ordinances having the effect of law of any federal, national,
multinational, state, provincial, county, city or other political subdivision.

 

26.

“Bona Fide Discovery Collaboration” means (a) with respect to Double Stranded
RNA Products that are not Agricultural Field Products, a collaboration involving
the discovery and development of Double Stranded RNA Products, in which a Party
plays an integral role in the experimentation and an important, though not
necessarily dominant or co-equal, role in the decision-making, relating to the
discovery and development of such Double Stranded RNA Products from the point in
time at which the relevant RNA Target has been designated through the initiation
[***]; and (b) with respect to Agricultural Field Products, a collaboration
involving the discovery and/or development of Double Stranded RNA Products, in
which a Party plays an integral role in the experimentation and an important,
though not necessarily dominant or co-equal, role in the decision-making,
relating to the discovery and/or development of such Double Stranded RNA
Products. A Bona Fide Discovery Collaboration for Double Stranded RNA Products
that are not Agricultural Field Products may continue beyond the initiation of
such [***]. For Isis Products that are Double Stranded RNA Products, a Bona Fide
Discovery Collaboration must be an Antisense Drug Discovery Program. For
Alnylam, collaborations that do not include or involve Isis Patent Rights
licensed from Isis under Section 5.1(a) (and do not include Isis Exclusive
Target Patent Rights that are also Isis Patent Rights), shall not constitute
Bona Fide Discovery Collaborations. For Isis, collaborations that do not include
or involve Alnylam Patent Rights licensed from Alnylam pursuant 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.

 

50

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  Section 6.2, shall not constitute Bona Fide Discovery Collaborations. A
Party’s experimentation relating to the discovery and development of Double
Stranded RNA Products that modulate a relevant RNA Target prior to the
commencement of a collaboration shall be deemed to have been conducted in the
course of the collaboration for purposes of determining whether the
collaboration is a Bona Fide Discovery Collaboration. A series of related
collaborations and/or license agreements involving the discovery and development
of Double Stranded RNA Products with the same sublicensee or related
sublicensees that includes a Bona Fide Discovery Collaboration agreement will be
aggregated to constitute a single Bona Fide Discovery Collaboration. The Agbio
License Agreement is deemed a Bona Fide Discovery Collaboration for purposes of
this Agreement.

 

27. “Bona Fide Third Party Collaboration” means, with respect to a Party a
collaboration between such Party and a Third Party involving the discovery,
development and/or commercialization of, (a) in the case of Alnylam, an Alnylam
Extended Field Product or an Alnylam Exclusive Target Product, as the case may
be or (b) in the case of Isis, an Isis Extended Field Product or an Isis
Exclusive Target Product, as the case may be. For Alnylam, such collaborations
that do not include or involve Isis Extended Field Patents or Isis Exclusive
Target Patents licensed from Isis hereunder shall not constitute Bona Fide Third
Party Collaborations. For Isis, such collaborations that do not include or
involve Alnylam Extended Field Patents or Alnylam Exclusive Target Patents
licensed from Alnylam hereunder shall not constitute Bona Fide Third Party
Collaborations.

 

28. “Business Day” means a weekday on which banking institutions in Boston,
Massachusetts are open for business. For purposes of clarity, a Business Day
shall not include any Saturday or Sunday or federal or Commonwealth of
Massachusetts holiday.

 

29. “Calendar Quarter” means the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30 and December 31.

 

30. “Chemistry Patent” means any Patent that covers (a) an oligomeric compound
having a chemical composition that differs from a native oligonucleotide
composition or (b) any modification to the base, sugar or internucleoside
linkage of the oligomeric compound, and specifically, but without limitation,
includes covalently linked conjugates and other such moieties

 

31.

“Commercially Reasonable Efforts” means the diligent efforts, expertise and
resources normally used by a Party to develop, manufacture and commercialize a
product or compound owned by it or to which it has rights, which is of similar
market potential at a similar stage in its development or product life, taking
into

 

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.

 

51

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  account issues of safety, and efficacy, product profile, difficulty in
developing the product or compound, competitiveness of the marketplace for the
product, the proprietary position of the compound or product, the regulatory
structure involved, the potential total profitability of the applicable
product(s) marketed or to be marketed and other relevant factors affecting the
cost, risk and timing of development and the total potential reward to be
obtained if a product is commercialized, but not less than reasonably diligent
efforts. In determining whether Commercially Reasonable Efforts have been
satisfied, the fact that a Party is required to pay the other Party a royalty or
milestones shall not be a factor weighed (i.e., a Party may not apply lesser
resources or effort to a Product because it must pay a royalty or milestones to
the other Party).

 

32. “Control” or “Controlled” means, with respect to any Patent or other
intellectual property right, possession of the right by a Party or its
Affiliates (whether by ownership, license or otherwise, other than pursuant to a
license granted under this Agreement), to assign, or grant a license, sublicense
or other right to or under, such Patent or right as provided for herein without
violating the terms of any agreement or other arrangement with any Third Party.

 

33. “Confidential Information” means information which is (a) of a confidential
and proprietary nature; and (b) not readily available to that Party’s
competitors and which, if known by a competitor of that Party, might lessen any
competitive advantage of that Party or give such competitor a competitive
advantage.

Confidential Information includes, without limitation, (x) information that is
proprietary or confidential or which is treated by that Party as confidential
and which relates either directly or indirectly to the business of that Party
regardless of the form in which that information is constituted, and which is
not lawfully in the public domain; and (y) any confidential information in
relation to Patents, technology, know-how, or any improvements owned or
Controlled by a Party hereto.

Confidential Information will not include any information that the receiving
Party can establish by written records:

 

  (i) was known by it prior to the receipt of Confidential Information from the
disclosing Party;

 

  (ii) was disclosed to the receiving Party by a Third Party having the right to
do so;

 

  (iii) was, or subsequently became, in the public domain through no fault of
the receiving Party, its officers, directors, employees or agents; 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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  (iv) was concurrently or subsequently developed by personnel of the receiving
Party without having had access to the disclosing Party’s Confidential
Information.

 

34. “CRT” has the meaning set forth in Section 6.5(d)(ii).

 

35. “CRT Agreement” has the meaning set forth in Section 6.5(d)(ii).

 

36. “Designed for” means, when used in relation to a specified RNA Target, a
Single Stranded RNAi Compound that is [***] to [***] of the specified [***] via
[***].

 

37. “Development Candidate” means a Single Stranded RNAi Product for which [***]
have commenced.

 

38. “Development Collaboration” means a collaboration by either Party with a
Third Party whose purpose is the further development and/or commercialization of
a Double Stranded RNA Product or Single Stranded RNAi Product, as applicable,
and that begins at or after the initiation of IND-Enabling Studies for such
Product. For Alnylam, collaborations that do not include or involve Isis Patent
Rights licensed from Isis under Sections 5.1(a) (and do not include Isis
Exclusive Target Patent Rights that are also Isis Patent Rights), shall not
constitute Development Collaborations. For Isis, collaborations that do not
include or involve Alnylam Patent Rights licensed from Alnylam pursuant to
Sections 6.1(a), (h), (i) or Section 6.2, shall not constitute Development
Collaborations.

 

39. “Double Stranded RNA” means a composition designed to act primarily through
an RNAi mechanism that is not a MicroRNA Construct and which consists of either
(a) two separate oligomers of native or chemically modified RNA that are
hybridized to one another along a substantial portion (greater than or equal to
[***]%) 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 (greater than or equal to [***]%) of its length to
form a hairpin.

 

40. “Double Stranded RNA Product” means (a) a pharmaceutical composition that
contains a Double Stranded RNA or (b) an Agricultural Field Product.

 

41. “Effective Date” means March 11, 2004.

 

42. “Enabled Target” has the meaning set forth in Section 4.3(a).

 

43. “Enabled Target Pool” has the meaning set forth in Section 4.3(a).

 

44. “Enabled Target Slot” has the meaning set forth in Section 4.3(a).

 

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.

 

53

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45. “Field” means the treatment and/or prevention of all human or animal
diseases.

 

46. “First Commercial Sale” means, with respect to a country and a Product, the
first sale for end use or consumption of such Product in such country after all
required Marketing Approvals in such country have been obtained.

 

47. “Graduated Enabled Target” has the meaning set forth in Section 4.3(a).

 

48. “IND” means an Investigational New Drug Application or similar foreign
application or submission for approval to conduct human clinical investigations.

 

49. “IND-Enabling Studies” means the pharmacokinetic and toxicology studies
required to meet the regulations for filing an IND.

 

50. “Initiation of Phase I Trial” means the dosing of at least ten human
subjects in the first human clinical trial conducted and designed to evaluate
safety of a product.

 

51. “Initiation of Phase III Trial” means the dosing of the first patient in the
first pivotal human clinical trial the results of which could be used to
establish safety and efficacy of a Product as a basis for an application for
marketing approval or that would otherwise satisfy the requirements of 21 CFR 3
12.21I or its foreign equivalent.

 

52. “Isis Current Chemistry Patents” means all Chemistry Patents (i) Controlled
by Isis as of the First Restatement Date or any time thereafter until the Second
Restatement Date and (ii) having an earliest priority date of no later than
April 30, 2014; provided, however that (a) for any such Chemistry Patents that
are acquired, licensed or invented after the First Restatement Date that include
financial or other obligations to a Third Party, the provisions of Section 11.8
will govern whether such Patent will be included as an Isis Current Chemistry
Patent; and (b) Isis Current Chemistry Patents do not include Patents that
constitute Isis Excluded Technology. Without limitation the Patents listed on
Schedule 1-52 attached hereto are Isis Current Chemistry Patents, except to the
extent such Patents claim Isis Excluded Technology.

 

53.

“Isis Current Motif and Mechanism Patents” means all Motif and Mechanism Patents
(i) Controlled by Isis as of the First Restatement Date or any time thereafter
until the Second Restatement Date and (ii) having an earliest priority date of
no later than April 30, 2014; provided, however that (a) for any such Motif and
Mechanism Patents that are acquired, licensed or invented after the First
Restatement Date that include financial or other obligations to a Third Party,
the provisions of Section 11.8 will govern whether such Patent will be included
as an Isis Motif and Mechanism Patent; and (b) Isis Current Motif and Mechanism

 

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.

 

54

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  Patents do not include Patents that constitute Isis Excluded Technology.
Without limitation the Patents listed on Schedule 1-53 attached hereto are Isis
Current Motif and Mechanism Patents, except to the extent such Patents claim
Isis Excluded Technology.

 

54. “Isis DS-Target Pool” has the meaning set forth in Section 6.4(a).

 

55. “Isis Enabled Target Pool” has the meaning set forth in Section 4.3(a).

 

56. “Isis Encumbered Target” means an RNA Target (a) to which Isis has a
contractual obligation to a Third Party existing as of the Second Restatement
Date that precludes Isis from granting a license under Section 5 with respect to
such RNA Target and (b) that is identified and described on a [***] (as defined
in the letter agreement dated March 9, 2004 between Alnylam and Isis). When and
if such restrictions lapse an RNA Target will cease to be an Isis Encumbered
Target.

 

57. “Isis Excluded Technology” means (a) RNase H mechanisms, RNase H motifs and
RNase H oligonucleotides when utilized in an RNase H mechanism, assays and
methods thereof; (b) modulators of specific genes, gene families or proteins;
(c) Manufacturing Patents; (d) analytical technologies, kits and assays,
including without limitation methods, systems and compositions of matter for
amplifying, quantifying, detecting, characterizing or identifying nucleic acids
or nonoligomeric ligands thereto; (e) formulation and delivery technologies; and
(f) the specific technology listed on Schedule 1-57 attached hereto.

 

58. “Isis Exclusive Target” means an RNA Target or protein product of (a) the
Factor X1 gene (FX1) or (b) the Apo(a) gene (Apoa1), which genes are further
identified and described on Exhibit A.

 

59. “Isis Exclusive Target Excluded Technology” means (a) Manufacturing Patents,
(b) analytical technologies, kits and assays, including without limitation
methods, systems and compositions of matter for amplifying, quantifying,
detecting, characterizing or identifying nucleic acids or non-oligomeric ligands
thereto, (c) formulation and delivery technologies, and (d) the specific
technology listed on Schedule 1-59 attached hereto.

 

60.

“Isis Exclusive Target Patents” means all Patents Controlled by Isis on or prior
to the [***] anniversary of the Second Restatement Date that (a) claim (x) an
oligomeric compound that hybridizes to and modulates an Alnylam Exclusive Target
or (y) a method of using such oligomeric compound in the Field; or (b) are
Chemistry Patents or Motif and Mechanism Patents other than Patents described in
clause (a) above; provided, however that (A) for any such Patents that are
acquired, licensed or invented after the Restatement Date that include financial
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.

 

55

--------------------------------------------------------------------------------

  other obligations to a Third Party, the provisions of Section 11.8 will govern
whether such Patent will be included as an Isis Exclusive Target Patent; and
(B) Isis Exclusive Target Patents do not include (I) Patents that constitute
Isis Exclusive Target Excluded Technology, (II) Patents Controlled by Isis that
specifically claim an oligomeric compound that hybridizes to and modulates an
Isis Exclusive Target (or method of using such oligomeric compound in the
Field). Isis Exclusive Target Patents include, without limitation, the Patents
listed on Schedule 1-60 attached hereto, except to the extent such Patents claim
Isis Exclusive Target Excluded Technology.  

 

61. “Isis Exclusive Target Product” means an oligomeric compound that
(a) hybridizes to and modulates an Isis Exclusive Target, and (b) the
manufacture sale or use of which is covered by a Valid Claim within the Alnylam
Exclusive Target Patents. For purposes of determining whether a royalty is
payable by Isis under Section 8.2(d), an oligomeric compound that hybridizes to
and modulates an Isis Exclusive Target will continue to be considered an Isis
Exclusive Target Product during the applicable Isis Exclusive Target Royalty
Term for such compound in a country if the manufacture, sale or use of such
compound in such country is covered by a Valid Claim within the Alnylam
Exclusive Target Patents at the time of First Commercial Sale of such compound
in such country.

 

62. “Isis Exclusive Target Royalty Term” means, on a Product-by-Product and
country-by-country basis, the period commencing with the First Commercial Sale
of an Isis Exclusive Target Product and ending on the later of the expiration of
(i) the last-to-expire Valid Claim of an Alnylam Exclusive Target Patent that
covers the manufacture, use or sale of such Isis Exclusive Target Product in
such country, and (ii) any period of regulatory data protection or market
exclusivity or similar regulatory protection afforded by the Regulatory
Authorities in such country, including any such periods listed in the FDA’s
Orange Book, and all international equivalents.

 

63. “Isis Extended Field Patents” means all Chemistry Patents and Motif and
Mechanism Patents Controlled by Isis on and after the Second Restatement Date
and having any earliest priority date between May 1, 2014 and April 30, 2019,
inclusive; provided, however that (a) for any such Chemistry Patents or Motif
and Mechanism Patents that are acquired, licensed or invented that include
financial or other obligations to a Third Party, the provisions of Section 11.8
will govern whether such Patent will be included as an Isis Extended Field
Patent; and (b) Isis Extended Field Patents do not include Patents that
constitute Isis Excluded Technology. Isis Extended Field Patents include,
without limitation, the Patents listed on Schedule 1-63 attached hereto, except
to the extent such Patents claim Isis Excluded Technology.

 

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.

 

56

--------------------------------------------------------------------------------

64. “Isis Extended Field Product” means any Single Stranded Product the
manufacture sale or use of which is covered by a Valid Claim within the Alnylam
Extended Field Patents.

 

65. “Isis Extended Field Royalty Term” means, on a Product-by-Product and
country-by-country basis, the period commencing with the First Commercial Sale
of an Isis Extended Field Product and ending on the expiration of the
last-to-expire Valid Claim of an Alnylam Extended Field Patent that covers the
manufacture, use or sale of such Isis Extended Field Product in such country.

 

66. “Isis Manufacturing Patents” means the Patents specifically listed on
Schedule 1-66 attached hereto. The Parties may agree in writing from time to
time to add additional Patents to Schedule 1-66 attached hereto.

 

67. “Isis Patent Rights” means Isis Current Motif and Mechanism Patents, and
Isis Current Chemistry Patents.

 

68. “Isis Product” means any Isis Single Stranded Product, MicroRNA Product,
Double Stranded RNA Product or Isis Single Stranded RNAi Product, discovered or
developed by Isis, its Affiliates or sublicensees, the manufacture, sale or use
of which is covered by a Valid Claim within the Alnylam Patent Rights.

 

69. “Isis Retained Target” means each RNA Target that is subject to certain
Third Party obligations of Isis and described on Schedule 1-69 attached hereto,
as such schedule is updated from time to time pursuant to Section 5.3(f).

 

70. “Isis Retained Special Target” means each RNA Target designated as such on
Schedule 1-69 attached hereto.

 

71. “Isis Single Stranded Product” means any single stranded oligomeric compound
(a) that hybridizes in whole or in part to, and modulates the amount or activity
of, an RNA Target, (b) is not a Double Stranded RNA or Double Stranded RNA
Product, (c) is not a Single Stranded RNAi Compound, Single Stranded RNAi
Product or Isis Single Stranded RNAi Product, and (d) the manufacture, sale or
use of which is covered by a Valid Claim within the Alnylam Patent Rights.

 

72. “Isis Single Stranded RNAi Product” means any Single Stranded RNAi Product
Designed for an Isis Enabled Target, the manufacture, sale or use of which is
covered by a Valid Claim within the Alnylam Patent Rights.

 

73. “Isis Special Patents” means the Patents specifically listed on Schedule
1-73 attached hereto. The Parties may mutually agree in writing from time to
time to add additional Patents to Schedule 1-73 attached hereto.

 

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.

 

57

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74. “Isis Special Target Patent” has the meaning set forth in Section 11.2(f).

 

75. “Isis Third Party Agreements” means the agreements between Isis and a Third
Party listed on Exhibit 5.3(d).

 

76. “Joint Invention” has the meaning set forth in Section 11.1(b).

 

77. “Joint Patent” has the meaning set forth in Section 11.1(b).

 

78. “Know-How” means all tangible or intangible know-how, discoveries,
processes, formulas, data, clinical and preclinical results, non-Patented
Inventions, Inventions for which Patents are in preparation, trade secrets, and
any physical, chemical, or biological material or any replication of any such
material in whole or in part that are not otherwise covered by the Isis Patent
Rights or the Alnylam Patent Rights

 

79. “License Term” means the period from the Second Restatement Date until the
date of expiry of the last to expire of the Patents licensed hereunder.

 

80. “Major Pharmaceutical Company” means a Person that, together with all of its
affiliated Persons, had annual pharmaceutical product sales during the most
recently completed calendar year in excess of $[***].

 

81. “Manufacturing Patents” means Patent claims claiming (1) a method of joining
together component pieces of an oligomeric compound; (2) an improved method of
making a component piece where such component piece is disclosed prior to the
first filing of the Patent claiming such improved method; (3) in the case of
concurrently-filed Patents claiming a new component piece and disclosing
multiple methods of making the new component piece in a separate
concurrently-filed Patent, the method(s) most suitable for making the new
component piece at large scale (provided at least one method must be treated
under this Agreement as claimed under a Chemistry Patent and not under a
Manufacturing Patent); or (4) compounds used in such methods of joining together
component pieces, other than the component pieces themselves and precursors of
such component pieces. Thus, for example, Manufacturing Patents include claims
to methods such as deprotection, capping, loading onto a solid support, and
cleaving from a solid support, all of which are methods used in the process of
assembling oligomeric compounds from component pieces; and reagents, such as
solid supports themselves, useful in such methods.

 

82. “Marketing Approval” means the act of a Regulatory Authority necessary for
the marketing and sale of the Product in a country or regulatory jurisdiction,
including, without limitation, the approval of the NDA by the FDA.

 

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.

 

58

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83. “MicroRNA Construct” is a construct having the chemical and physical
description of a Double Stranded RNA that is either (a) designed to target a
precursor microRNA or a microRNA, thereby to inhibit the production or function
of the microRNA, or (b) designed to function by mimicking the translational
repressor function of a naturally occurring microRNA, and which, in relation to
its target RNA, has been demonstrated in vitro and, to the extent reasonably
feasible, in vivo, to function solely as a translational repressor and not via
cleavage of such target RNA.

 

84. “MicroRNA Product” means a pharmaceutical product that contains a MicroRNA
Construct.

 

85. “Motif and Mechanism Patents” means any Patent that covers an oligomeric
structure or composition of matter, or any method of using or incorporating such
oligomeric structure or composition of matter in vitro or in vivo, including
without limitation for therapeutic use, in which target RNA levels are modulated
by any mechanism other than RNase H.

 

86. “Naked Sublicense” means a license for Double Stranded RNA that includes
rights to the Isis Patent Rights that is not a license in connection with (a) a
Development Collaboration or (b) a Bona Fide Discovery Collaboration or (c) a
Bona Fide Third Party Collaboration. A series of Naked Sublicenses to the same
sublicensee or related sublicensees will be aggregated to constitute a single
Naked Sublicense. For the avoidance of doubt, where this Agreement grants
Alnylam exclusive rights to grant Naked Sublicenses, such exclusive rights
preclude Isis from granting licenses to the Isis Patent Rights to Third Parties
for Double Stranded RNA that are not Isis Products for which Isis has exercised
its option under Section 6.2 even though such license grants by Isis would
technically be license grants and not sublicense grants. Licenses that do not
include or involve rights to Isis Patent Rights shall not constitute Naked
Sublicenses.

 

87. “Naked Sublicensee” means a Third Party that obtains a Naked Sublicense from
Alnylam in accordance with the terms of this Agreement.

 

88. “NDA” means New Drug Application or similar application or submission for
approval to market and sell a new pharmaceutical product filed with or submitted
to a Regulatory Authority.

 

89.

“Net Sales” will mean the gross invoice price of Products sold by Alnylam or
Isis (as applicable), their respective Affiliates and sublicensees (but with
respect to Alnylam does not include Naked Sublicensees) to a Third Party less
the following items: (i) trade discounts, credits or allowances, (ii) credits or
allowances additionally granted upon returns, rejections or recalls,
(iii) freight, shipping 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.

 

59

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  insurance charges, (iv) taxes, duties or other governmental tariffs (other
than income taxes) and (v) government-mandated rebates and (vi) a reasonable
reserve for bad debts. Except in the cases of Products used to conduct clinical
trials, reasonable amounts of Products used as marketing samples and Product
provided without charge for compassionate or similar uses, a Party, its
Affiliates or sublicensees will be treated as having sold Products for an amount
equal to the fair market value of Products if: (a) Products are used by such
Party, its Affiliates or sublicensees without charge or provision of invoice, or
(b) Products are provided to a Third Party by such Party, its Affiliates or
sublicensees without charge or provision of invoice and used by such third
party.

Such amounts shall be determined from the books and records of Alnylam or Isis
(as applicable) and their respective Affiliates and sublicensees, maintained in
accordance with GAAP, consistently applied.

In the event the Product is sold as part of a Combination Product (as defined
below), the Net Sales from the Combination Product, for the purposes of
determining royalty payments, shall be determined by multiplying the Net Sales
(as determined without reference to this paragraph) of the Combination Product,
during the applicable royalty reporting period, by the fraction, A/A+B, where A
is the average sale price of the Product when sold separately in finished form
and B is the average sale price of the other product(s) included in the
Combination Product when sold separately in finished form, in each case during
the applicable royalty reporting period or, if sales of both the Product and the
other product(s) did not occur in such period, then in the most recent royalty
reporting period in which sales of both occurred. In the event that such average
sale price cannot be determined for both the Product and all other products(s)
included in the Combination Product, Net Sales for the purposes of determining
royalty payments 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 Product and D is the fair market value of all other product(s) included in
the Combination Product. As used above, the term “Combination Product” means any
pharmaceutical product which consists of a Product and other therapeutically
active pharmaceutical compound or any delivery technology that embodies
substantial intellectual property rights Controlled by the selling Party (e.g.,
a common syringe would not constitute a delivery technology that embodies
substantial intellectual property rights Controlled by the selling Party, but an
implantable delivery device such as a stent would constitute such a delivery
technology).

Notwithstanding anything in this Agreement to the contrary, where the term “Net
Sales” is used in this Agreement to apply to Agriculture Field Products, in such
context the term “Net Sales” shall be replaced with “Agricultural Field Product
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.

 

60

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Isis and Alnylam agree that any reasonable definition of “net sales” customarily
used in drug discovery, development or commercialization licensing or
collaboration contracts that is agreed to by a Party (or a Third Party acquirer
or assignee) and a sublicensee with respect to royalties payable to such Party
from such sublicensee in an arms-length transaction under a particular
sublicense will replace the definition of Net Sales in this Agreement and will
be used in calculating the royalty payment to the other Party on sales of
Products (other than Agricultural Field Products) sold pursuant to such
sublicense and due under this Agreement, for so long as the same definition of
net sales is used to calculate the royalty payable from the applicable
sublicensee to such Party.

 

90. “Other Isis Sublicense” has the meaning set forth in Section 8.4(b).

 

91. “Patent” or “Patents” means (a) patent applications (including provisional
applications and applications for certificates of invention); (b) any patents
issuing from such patent applications (including certificates of invention);
(c) all patents and patent applications based on, corresponding to, or claiming
the priority date(s) of any of the foregoing; (d) any substitutions, extensions
(including supplemental protection certificates), registrations, confirmations,
reissues, divisionals, continuations, continuations-in-part, re-examinations,
renewals and foreign counterparts thereof; and (e) all patents claiming
overlapping priority therefrom.

 

92. “Permitted Licenses” means (1) licenses granted by Isis or Alnylam (as the
case may be) before or after the Second Restatement Date to any Third Party
under the Alnylam Exclusive Target Patents (where Alnylam is the granting Party)
or the Isis Exclusive Target Patents (where Isis is the granting Party) to
(a) use oligonucleotides (or supply oligonucleotides to end users) solely to
conduct pre-clinical research, or (b) enable such Third Party to manufacture or
formulate oligonucleotides, where (i) such Third Party is primarily engaged in
providing contract manufacturing or services and is not primarily engaged in
drug discovery, development or commercialization of therapeutics; and (ii) the
granting Party does not assist such Third Party to identify, discover or make an
Alnylam Exclusive Target Product (where Isis is the granting Party) or an Isis
Exclusive Target Product (where Alnylam is the granting Party); and (2) material
transfer, collaboration, sponsored research or similar agreements with academic
collaborators or non-profit institutions solely to conduct noncommercial
Research.

 

93. “Person” means any person, organization, corporation or other business
entity.

 

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.

 

61

--------------------------------------------------------------------------------

94. “Product” means an Alnylam Product, an Isis Product, an Alnylam Extended
Field Product, an Isis Extended Field Product, an Alnylam Exclusive Target
Product, or an Isis Exclusive Target Product, as the case may be.

 

95. “Regulatory Authority” means any applicable government regulatory authority
involved in granting approvals for the marketing and/or pricing of a Product
worldwide including, without limitation, the United States Food and Drug
Administration (“FDA”) and any successor government authority having
substantially the same function, and foreign equivalents thereof.

 

96. “Research Program” means the Parties’ research collaboration focused on
Single Stranded RNAi Compounds and conducted pursuant to the First Restated
Agreement.

 

97. “Research Program Patent” means any Patents that claim Inventions that were
discovered by the employees of either Party in the performance of the Research
Program. The Research Program Patents are listed on Schedule 1-97 attached
hereto.

 

98. “Research Use” means discovering, developing and optimizing an Alnylam
Product or an Isis Product, as applicable, up to, but not including, [***],
and/or conducting pilot manufacturing studies of an Alnylam Product or an Isis
Product, as applicable. Research Use may include small pilot toxicology studies.
With respect to Isis, Research Use does not include studies [***] for potential
drug targets, but does include studies [***] for development of Double Stranded
RNA Products or Single Stranded RNAi Products, as applicable, from among
potential targets for which a reasonable scientific basis exists for believing
that such potential targets are associated with a particular disease or
condition.

 

99. “Reserved DS-Target” has the meaning set forth in Section 6.4(a).

 

100. “RNA Target” means a ribonucleic acid transcript with a defined sequence
and/or function, including all splice variants and mutant forms of such
transcript.

 

101. “Single Stranded Compound” means a single stranded oligomeric compound
(a) that hybridizes in whole or in part to, and modulates the amount or activity
of, an RNA Target, and (b) is not a Double Stranded RNA, a Double Stranded RNA
Product, a Single Stranded RNAi Compound, or a Single Stranded RNAi Product.

 

102. “Single Stranded Product” means a pharmaceutical composition that contains
a Single Stranded Compound and is not a Double Stranded RNA, a Double Stranded
RNA Product, a Single Stranded RNAi Compound, or a Single Stranded RNAi 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.

 

62

--------------------------------------------------------------------------------

103. “Single Stranded RNAi Compound” means a single stranded chemically modified
oligonucleotide and/or analog designed to cause target mRNA cleavage via the
RISC or RNAi mechanism. For purposes of clarity, an ssRNAi compound does not
include oligonucleotides (or chemically modified oligonucleotide analogs)
designed to work via other mechanisms such as (i) RNase H 1 or 2 (including any
oligonucleotide which has [***]); (ii) alteration of splicing; (iii) translation
arrest (excluding RNAi-mediated repression of translation); (iv) alteration of
processing; (v) polyadenylation; (vi) capping; (vii) modulation of pre-mRNA
processing of the target mRNA; or (viii) oligonucleotides (or chemically
modified oligonucleotide analogs) designed to mimic a known naturally occurring
microRNA.

Working via the RISC or RNAi mechanism means that the compound is capable of, in
an in vitro cell culture assay, causing cleavage of the target mRNA at the
[***], as evidenced for example by a [***] assay.

 

104. “Single Stranded RNAi Product” means a pharmaceutical composition that
contains a Single Stranded RNAi Compound.

 

105. “Stanford University” has the meaning set forth in Section 6.5(d)(i).

 

106. “Stanford Agreement” has the meaning set forth in Section 6.5(d)(i).

 

107. “Sublicense Revenue” means any payments that (1) with respect to Alnylam,
Alnylam receives from a sublicensee in consideration of a Naked Sublicense, or
(2) with respect to Isis, Isis receives from a sublicensee in consideration of a
sublicense to further the research, development or commercialization of an Isis
Single Stranded RNAi Product (other than sublicenses of rights under Sections
6.1(k) or (l)), in each case including, but not limited to, license fees,
royalties, milestone payments, and license maintenance fees, but excluding:
(i) payments made in consideration of equity or debt securities of the
applicable Party at fair market value and (ii) payments specifically committed
to reimburse the applicable Party for the fully-burdened cost of research and
development. If a Party receives any non-cash Sublicense Revenue, such Party
will pay the other Party, at the election of the Party who is entitled to
receive Sublicense Revenue payment, either (x) a cash payment equal to the fair
market value of the appropriate percentage of the Sublicense Revenue or (y) the
in-kind portion, if practicable, of the Sublicense Revenue.

 

108.

“Technology Access Fee” means any payments that Alnylam receives from granting a
Third Party access (through sublicense or otherwise) to the Isis Patent Rights
(including to Isis Exclusive Target Patent Rights that are also Isis Patent
Rights) as part of a Bona Fide Discovery Collaboration or Development

 

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.

 

63

--------------------------------------------------------------------------------

  Collaboration agreement, including, but not limited to, (1) license fees,
(2) collaboration fees, (3) option fees, (4) payments made in consideration for
the issuance of equity or debt securities above fair market value, (5) payments
made for research and development support above Alnylam’s fully-burdened cost,
but excluding the following payments: (i) payments made in consideration for
equity or debt securities of Alnylam at fair market value, (ii) payments made in
consideration for thirty-five percent (35%) or more of Alnylam’s equity
securities at fair market value plus a reasonable control premium,
(iii) payments specifically committed to reimburse Alnylam for the
fully-burdened cost of research and development, including without limitation
the fully-burdened cost of products transferred by Alnylam in connection with
such research and development, and payments received by Alnylam pursuant to the
Agbio License Agreement that are specifically committed to reimburse Alnylam for
the cost of Patent prosecution, maintenance and/or defense of Patents covering
or claiming Agricultural Field Products; provided, however, that any payments
received by Alnylam but not applied to reimburse Alnylam for such expenses will
be Technology Access Fees, (iv) [***] (v) payments that are not milestones and
that are associated with the sale of commercial products, and (vi) payments that
count as Sublicense Revenue under a Naked Sublicense subject to Alnylam’s
payment obligations to Isis under Section 7.4. If Alnylam receives any non-cash
Technology Access Fees, Alnylam will pay Isis, at Isis’ election, either (x) a
cash payment equal to the fair market value of Isis’ appropriate portion of the
Technology Access Fee or (y) the in-kind portion, if practicable, of the
Technology Access Fee.

 

109. “Third Party” means any party other than Isis or Alnylam and their
respective Affiliates.

 

110. “Valid Claim” means (i) an issued claim of an unexpired Patent that has not
been withdrawn, canceled or disclaimed, or held invalid or unenforceable by a
court of competent jurisdiction in an unappealed or unappealable decision, or
(ii) a claim of a patent application which has been pending for less than [***]
years from the earliest priority date for such application.

 

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.

 

64

--------------------------------------------------------------------------------

EXHIBIT 5.3(C) PART I

ISIS THIRD-PARTY JOINT PATENTS RIGHTS

The following schedule is provided by Isis Pharmaceuticals, Inc. to Alnylam
Pharmaceuticals, Inc., in connection with the Agreement. Capitalized terms used
but not otherwise defined herein have the meanings given to such terms in the
Agreement.

This schedule and the information and disclosures contained in this schedule are
intended only to qualify and limit the licenses granted by Isis to Alnylam in
the Agreement and do not expand in any way the scope or effect of any such
licenses. With respect to any joint patents indicated on this schedule, the
licenses granted by Isis to Alnylam in the Agreement are limited to the extent
of the joint owner’s rights in such joint patents.

Isis has cases with joint inventorship with the [***] following 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.

--------------------------------------------------------------------------------

Exhibit 5.3(c) Part II, Joint Patent Rights

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 1 page was omitted.

[***]

 

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.

--------------------------------------------------------------------------------

EXHIBIT 5.3(D)

ISIS THIRD PARTY AGREEMENTS

The following schedule of Isis Third Party Agreements is provided by Isis to
Alnylam, in connection with the Agreement. Capitalized terms used but not
otherwise defined herein have the meanings given to such terms in the Agreement.

This schedule and the information and disclosures contained in this schedule are
intended only to qualify and limit the licenses granted by Isis to Alnylam in
the Agreement and do not expand in any way the scope or effect of any such
licenses.

AGREEMENTS PROVIDING RIGHTS TO THIRD PARTIES IN CERTAIN ISIS PATENT RIGHTS

[***]

AGREEMENTS GRANTING THIRD PARTIES RIGHTS TO CONDUCT TARGET VALIDATION

[***]

RESEARCH LICENSE AGREEMENTS

[***]

AGREEMENTS CONTAINING CROSS-LICENSES TO NEW TECHNOLOGY ARISING FROM PARTNER
COLLABORATIONS

[***]

GOVERNMENT RIGHTS IN ISIS IP

 

1. Government Rights - Inventions claimed in US Patent Applications: [***] were
funded in part by a Small Business Innovation Research grant administered by the
National Institutes of Health. Accordingly, the U.S. Federal Government retains
certain rights to those 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.

--------------------------------------------------------------------------------

EXHIBIT 6.5(c)

ALNYLAM THIRD PARTY AGREEMENTS

In-License 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.

Other Third Party Agreements

 

  1. Amended and Restated License and Collaboration Agreement among Alnylam,
Isis and Regulus Therapeutics Inc., dated January 1, 2009, as amended on June 7,
2010, October 25, 2011, and August 2, 2013.

 

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

 

  3. License and Collaboration Agreement between Alnylam and F. Hoffmann-La
Roche Ltd. and Hoffmann-La Roche Inc. dated July 8, 2007, as amended by that
certain letter amendment dated May 29, 2008. This License and Collaboration
Agreement has been assigned to Arrowhead Research Corporation.

 

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.

--------------------------------------------------------------------------------

EXHIBIT 8.2(c)

DESCRIPTION OF ALNYLAM ROYALTY OBLIGATIONS TO [***] EXISTING

AS OF THE EFFECTIVE DATE

As of the Effective Date, Alnylam has the following royalty obligations to
[***]:

Alnylam is obligated to pay [***] running royalties on NET SALES (as defined in
Alnylam’s agreements with [***]) of therapeutic and prophylactic LICENSED
PRODUCTS (as defined in Alnylam’s agreements with [***]) by Alnylam and its
SUBLICENSEES (as defined in Alnylam’s agreements with [***]) that range from
[***]% ([***] percent) to [***]% ([***] percent) of NET SALES, depending on the
level of NET SALES. Royalties payable by Alnylam to [***] are subject to the
following Royalty Stacking provision:

“5.3 Royalty Stacking

(a) Third Party Licenses

In the event COMPANY or a SUBLICENSEE takes, for objective commercial and/or
legal reasons, a license from any third party under any patent applications or
patents that dominate the PATENT RIGHTS or is dominated by the PATENT RIGHTS in
order to develop, make, use, sell or import any LICENSED PRODUCT (explicitly
excluding, without limitation, any third party patents and patent applications
for formulation, stabilization and delivery), then COMPANY is allowed to deduct
[***] of any additional running royalties to be paid to such third party up to
[***] of the running royalties stated in Section 5.2, from the date COMPANY has
to pay running royalties to such third party. However, the running royalties
stated in Section 5.2 shall not be reduced to less than a minimum of [***] of
NET SALES in any case.

For avoidance of doubt, if COMPANY or a SUBLICENSEE takes a license to a third
party target, COMPANY is in no event allowed to deduct any license fees for such
target from running royalties due to [***] under this Agreement.”

Because Alnylam’s right to reduce its royalty obligations to [***] pursuant to
the foregoing royalty stacking provision is not co-extensive with Isis’ right to
reduce its royalty obligations to Alnylam pursuant to Section 8.2 of this
Agreement, Isis’ right to reduce its royalty obligations to Alnylam pursuant to
Section 8.2 of this Agreement is limited, pursuant to Section 8.2(c) of this
Agreement, to the extent necessary to ensure that Isis’ royalty obligations to
Alnylam are never less than Alnylam’s royalty obligations to [***] with respect
to sales by Isis, its Affiliates and its sublicensees of any Isis 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.

--------------------------------------------------------------------------------

Schedule 1-8

Alnylam Current Chemistry Patents

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 20 pages were omitted.

[***]

 

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.

--------------------------------------------------------------------------------

Schedule 1-9

Alnylam Current Motif and Mechanism Patents

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 68 pages were omitted.

[***]

 

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.

--------------------------------------------------------------------------------

Schedule 1.11

Alnylam Excluded Technology

 

1. All patent rights licensed to Alnylam under the license agreement between the
[***] and Alnylam dated [***].

 

2. All patent rights licensed to Alnylam under the license agreement between
[***] dated [***].

 

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.

--------------------------------------------------------------------------------

Schedule 1-13

Alnylam Exclusive Target Excluded Technology

[***]

 

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.

--------------------------------------------------------------------------------

Schedule 1-14

Alnylam Exclusive Target Patents

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 84 pages were omitted.

[***]

 

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.

--------------------------------------------------------------------------------

Schedule 1-17

Alnylam Extended Field Patents

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 1 page was omitted.

[***]

 

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.

--------------------------------------------------------------------------------

Isis Current Chemistry Patents Schedule 1-52

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 48 pages were omitted.

[***]

 

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.

--------------------------------------------------------------------------------

Isis Current Motif and Mechanism Patents Schedule 1-53

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 9 pages were omitted.

[***]

 

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.

--------------------------------------------------------------------------------

ISIS EXCLUDED TECHNOLOGY SCHEDULE 1-57

The following schedule of Excluded Technology is provided by Isis
Pharmaceuticals, Inc. to Alnylam Pharmaceuticals, Inc., in connection with the
Agreement. Capitalized terms used but not otherwise defined herein have the
meanings given to such terms in the Agreement.

This schedule and the information and disclosures contained in this schedule are
intended only to qualify and limit the licenses granted by Isis to Alnylam in
the Agreement and do not expand in any way the scope or effect of any such
licenses.

In the event of a conflict between this schedule of Excluded Technology and any
other schedule or terms of the Agreement, this schedule will govern.

 

  1. INTELLECTUAL PROPERTY COVERING:

 

  •   RNA processing, including modulation of [***];

 

  •   PNA chemistry licensed or acquired from [***];

 

  •   [***] chemistry licensed or acquired from [***];

 

  •   [***] a Gene Target.

 

  2. [***]/4’-THIO CHEMISTRY.

4’-thio chemistries including patents licensed in from [***]

In addition, the following Patents in-licensed from [***] are excluded:

 

Isis Docket Number   Country   Status  

Patent

Number

 

Granted

Date

  Title [***]   [***]   [***]   [***]   [***]   [***] [***]   [***]   [***]  
[***]   [***]   [***]

 

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.

--------------------------------------------------------------------------------

  3. MCGILL UNIVERSITY (B)

In addition to certain manufacturing technology excluded by definition, the
following Patents in-licensed from McGill University are excluded:

 

Isis Docket Number   Country   Status   Title [***]   [***]   [***]   [***]

 

  4. WALDER PATENTS (B)

The Walder Patents are excluded. “Walder Patents” means and includes[***].

 

  5. MERCK NUCLEOSIDE

Single nucleosides, nucleotides or monomers claimed in Patents filed as of the
Effective Date which are prosecuted by Merck and Co. are excluded. However if
such Patents are necessary for Alnylam to practice the licenses granted under
Section 5.1 with respect to a specific Alnylam Product, then Isis will include
such necessary Patents in the licenses granted under Section 5.1.

 

  6. CARNEGIE INSTITUTION OF WASHINGTON.

Isis is not granting Alnylam any sublicense under the License Agreement dated
January 28, 2005 between Isis and Carnegie Institution of Washington.

 

  7. GARCHING INNOVATION GMBH.

Isis is not granting Alnylam any sublicense under the Co-Exclusive License
Agreement dated October 18, 2004 among Isis, Alnylam and Garching Innovation
GmbH.

 

  8. MAX-PLANCK-INNOVATION GMBH.

Isis is not granting Alnylam any sublicense under the Co-Exclusive License
Agreement dated April 27, 2009 among Isis, Alnylam and Max-Planck-Innovation
GmbH.

 

 

(A) Isis cannot sublicense the technologies marked with this footnote.

(B) Although, Isis can sublicense the technologies marked with this footnote,
such a sublicense carries additional financial and other obligations. Isis is
willing to negotiate a separate sublicense agreement for these technologies.

 

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.

--------------------------------------------------------------------------------

ISIS EXCLUSIVE TARGET EXCLUDED TECHNOLOGY SCHEDULE 1-59

The following schedule of Isis Exclusive Target Excluded Technology is provided
by Isis Pharmaceuticals, Inc. to Alnylam Pharmaceuticals, Inc., in connection
with the Agreement. Capitalized terms used but not otherwise defined herein have
the meanings given to such terms in the Agreement.

This schedule and the information and disclosures contained in this schedule are
intended only to qualify and limit the licenses granted by Isis to Alnylam in
the Agreement and do not expand in any way the scope or effect of any such
licenses.

In the event of a conflict between this schedule of Isis Exclusive Target
Excluded Technology and any other schedule or terms of the Agreement, this
schedule will govern.

 

  1. INTELLECTUAL PROPERTY COVERING:

 

  •   RNA processing, including modulation of [***];

 

  •   PNA chemistry licensed or acquired from [***];

 

  •   [***] chemistry licensed or acquired from [***];

 

  •   [***] a Gene Target.

 

  2. [***]/4’-THIO CHEMISTRY.

4’-thio chemistries including patents licensed in from [***]

In addition, the following Patents in-licensed from [***] are excluded:

 

Isis Docket Number   Country   Status  

Patent

Number

 

Granted

Date

  Title [***]   [***]   [***]   [***]   [***]   [***] [***]   [***]   [***]  
[***]   [***]   [***]

 

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.

--------------------------------------------------------------------------------

  3. MCGILL UNIVERSITY (B)

In addition to certain manufacturing technology excluded by definition, the
following Patents in-licensed from McGill University are excluded:

 

Isis Docket Number   Country   Status   Title [***]   [***]   [***]   [***]

 

  4. WALDER PATENTS (B)

The Walder Patents are excluded. “Walder Patents” means and includes [***].

 

  5. MERCK NUCLEOSIDE

Single nucleosides, nucleotides or monomers claimed in Patents filed as of the
Effective Date which are prosecuted by Merck and Co. are excluded. However if
such Patents are necessary for Alnylam to practice the licenses granted under
Section 5.1 with respect to a specific Alnylam Product, then Isis will include
such necessary Patents in the licenses granted under Section 5.1.

 

  6. CARNEGIE INSTITUTION OF WASHINGTON.

Isis is not granting Alnylam any sublicense under the License Agreement dated
January 28, 2005 between Isis and Carnegie Institution of Washington.

 

  7. GARCHING INNOVATION GMBH.

Isis is not granting Alnylam any sublicense under the Co-Exclusive License
Agreement dated October 18, 2004 among Isis, Alnylam and Garching Innovation
GmbH.

 

  8. MAX-PLANCK-INNOVATION GMBH.

Isis is not granting Alnylam any sublicense under the Co-Exclusive License
Agreement dated April 27, 2009 among Isis, Alnylam and Max-Planck-Innovation
GmbH.

 

 

(A) Isis cannot sublicense the technologies marked with this footnote.

(B) Although, Isis can sublicense the technologies marked with this footnote,
such a sublicense carries additional financial and other obligations. Isis is
willing to negotiate a separate sublicense agreement for these technologies.

 

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.

--------------------------------------------------------------------------------

Isis Exclusive Target Patents Schedule 1-60

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 46 pages were omitted.

[***]

 

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.

--------------------------------------------------------------------------------

Isis Extended Field Patents Schedule 1-63

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 1 page was omitted.

[***]

 

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.

--------------------------------------------------------------------------------

Isis Manufacturing Patents Schedule 1-66

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 5 pages were omitted.

[***]

 

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.

--------------------------------------------------------------------------------

SCHEDULE 1-69

ISIS RETAINED TARGETS

Isis Retained Special Targets:

[***]

Other Isis Retained Targets:

[***]

 

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.

--------------------------------------------------------------------------------

Isis Special Patents Schedule 1-73

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 1 page was omitted.

[***]

 

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.

--------------------------------------------------------------------------------

Research Program Patents Schedule 1-97

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of 1 page was omitted.

[***]

 

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.

--------------------------------------------------------------------------------

Exhibit A

Isis Exclusive Targets

1. The human Factor XI gene (also known as coagulation factor XI, plasma
thromboplastin antecedent, F11, FXI) and its protein product. As of the Second
Restatement Date, the gene has NCBI Gene ID 2160, an example of an identifier
for the Factor XI gene is NCBI RefSeq code NM_000128 and an example of an
identifier for the Factor XI protein product is NCBI RefSeq code NP_000119.

2. The human Apo(a) gene (also known as apolipoprotein(a); LPA; Lipoprotein,
Lp(a); Lp(a)) and its protein product. As of the Second Restatement Date, the
gene has NCBI Gene ID 4018, an example of an identifier for the Apo(a) gene is
NCBI RefSeq code NM_005577 and an example of an identifier for the Apo(a)
protein product is NCBI RefSeq code NP_005568.

 

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.

--------------------------------------------------------------------------------

Exhibit B

Alnylam Exclusive Targets

1. The human antithrombin gene and its protein product, antithrombin (also known
as SERPINC1, antithrombin3, AT3 and ATIII). As of the Second Restatement Date,
an example of an identifier for the antithrombin gene is NCBI RefSeq code
NM_000488 and an example of an identifier for the antithrombin protein product
is NCBI RefSeq code NP_000479.

2. The human ALAS-1 gene and its protein product ALAS-1 (also known as ALAS,
ALAS3, ALASH, aminolevulinate delta-synthase, Delta-ALA synthase,
Delta-Aminolevulinate synthase 1, 5-aminolevulinic acid synthase 1, ALAS-H,
5-aminolevulinate synthase, MIG4, aminolevulinate synthase-1, AS1). As of the
Second Restatement Date, an example of an identifier for the ALAS-1 gene is NCBI
RefSeq code NM_000688 and an example of an identifier for the ALAS-1 protein
product is NCBI RefSeq code NP_000679.

 

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.