<PAGE>
                                                                   Exhibit 10.23

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

================================================================================

                  RESEARCH COLLABORATION AND LICENSE AGREEMENT

                                 BY AND BETWEEN

                NOVARTIS INSTITUTES FOR BIOMEDICAL RESEARCH, INC.

                                       AND

                          ALNYLAM PHARMACEUTICALS, INC.

================================================================================
<PAGE>
                  RESEARCH COLLABORATION AND LICENSE AGREEMENT

          This RESEARCH COLLABORATION AND LICENSE AGREEMENT (this "Agreement"),
effective as of October 12, 2005 (the "Effective Date"), by and between Novartis
Institutes for BioMedical Research, Inc., a corporation organized and existing
under the laws of Delaware, with its principal place of business at 250
Massachusetts Avenue, Cambridge, Massachusetts 02139 ("Novartis"), and Alnylam
Pharmaceuticals, Inc., a corporation organized and existing under the laws of
Delaware, with its principal place of business at 300 Third Street, 3rd Floor,
Cambridge, Massachusetts 02142 ("Alnylam").

                                    RECITALS:

          WHEREAS, Novartis is engaged in the business of Discovering,
Developing, Commercializing and Manufacturing products in the Field (each as
defined below);

          WHEREAS, Alnylam has developed, acquired and licensed technology
useful for the Discovery, Development, Manufacture, characterization and use of
therapeutic products that function through the mechanism of RNA interference
("RNAi"); and

          WHEREAS, Novartis and Alnylam desire to enter into a research
collaboration, upon the terms and conditions set forth in this Agreement, to
identify and optimize RNAi Compounds directed against Selected Targets (each as
defined below).

          NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Alnylam and Novartis agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          For the purpose of this Agreement, the following terms, whether used
in singular or plural form, shall have the respective meanings set forth below:

          "A List" shall have the meaning set forth in Section 2.1(a).

          "Abandoned Program" shall have the meaning set forth in Section
2.3(b).

          "Accounting Standards" shall mean, with respect to Alnylam, United
States Generally Accepted Accounting Principles, and with respect to Novartis,
International Financial Reporting Standards.

          "Active Program" shall have the meaning set forth in Section 2.3(a).
<PAGE>
          "Adoption Consideration" shall have the meaning set forth in Section
4.2(a).

          "Adoption Date" shall have the meaning set forth in Section 3.1(c).

          "Adoption Fee" shall have the meaning set forth in Section 4.2(a).

          "Adoption License" shall have the meaning set forth in Section 3.1(c).

          "Adopted Product" shall mean any product that contains one or more
RNAi Compound(s) that are Discovered, Developed, Commercialized or Manufactured
pursuant to the Adoption License.

          "Adopted Product Obligations" shall have the meaning set forth in
Section 4.2(a).

          "Advisory Group" shall have the meaning set forth in Section 2.5.

          "Affiliate" shall mean any Person who directly or indirectly controls
or is controlled by or is under common control with a Party to this Agreement.
For purposes of this definition, "control" or "controlled" shall mean ownership
directly or through one or more Affiliates, of fifty percent (50%) or more of
the shares of stock entitled to vote for the election of directors, in the case
of a corporation, or fifty percent (50%) or more of the equity interest in the
case of any other type of legal entity, status as a general partner in any
partnership, or any other arrangement whereby a Party controls or has the right
to control the Board of Directors or equivalent governing body of a corporation
or other entity, or the ability to cause the direction of the management or
policies of a corporation or other entity. The Parties acknowledge that in the
case of certain entities organized under the laws of certain countries outside
of the US, the maximum percentage ownership permitted by law for a foreign
investor may be less than fifty percent (50%), and that in such case such lower
percentage shall be substituted in the preceding sentence, provided that such
foreign investor has the power to direct the management and policies of such
entity. Without expanding the definition of "control", in the case of Novartis,
"Affiliate" shall also include for purposes hereof Novartis Institute for
Functional Genomics, Inc., the Friedrich Miescher Institute for BioMedical
Research, and Novartis Institute for Tropical Diseases Pte. Ltd.

          "Agreement" shall have the meaning set forth in the Preamble, and
shall include, for the avoidance of doubt, all Exhibits and Schedules attached
hereto.

          "Alnylam" shall have the meaning set forth in the Preamble.

          "Alnylam Intellectual Property" shall mean Alnylam Know-How and
Alnylam Patent Rights.

          "Alnylam Know-How" shall mean Know-How now or in the future Controlled
by Alnylam, including Broad RNAi Know-How.


                                        2
<PAGE>
          "Alnylam Opportunity Notice" shall have the meaning set forth in
Section 2.6(b).

          "Alnylam Opportunity Response" shall have the meaning set forth in
Section 2.6(c)(i).

          "Alnylam Opportunity Response Period" shall have the meaning set forth
in Section 2.6(c)(i).

          "Alnylam Patent Rights" shall mean Patent Rights now or in the future
Controlled by Alnylam, including the Broad RNAi Patent Rights.

          "Alnylam Program" shall have the meaning set forth in Section 2.6(b).

          "Alnylam Program Agreement" shall have the meaning set forth in
Section 2.6(c)(i)(B).

          "Alnylam Property" shall have the meaning set forth in Section 7.2(a).

          "Alnylam Sole Inventions" shall have the meaning set forth in Section
6.1(a).

          "Annual Net Sales" shall mean, with respect to a Licensed Product, the
Net Sales of such Licensed Product during a Contract Year.

          "Audit Rights Holder" shall have the meaning set forth in Section
4.9(a).

          "Audit Team" shall have the meaning set forth in Section 4.9(b).

          "Auditee" shall have the meaning set forth in Section 4.9(a).

          "B List" shall have the meaning set forth in Section 2.1(a).

          "Bankrupt Party" shall have the meaning set forth in Section 8.3.

          "Bankruptcy Code" shall have the meaning set forth in Section 8.3.

          "Base Royalty Amount" shall have the meaning set forth in Section
4.4(e)(ii)(B).

          "Blocked Target" shall mean any Target that either (a) is the subject
of a Dedicated Alnylam Program as of the date that Alnylam receives the Target
List or Supplemental Target List naming such Target, or (b) is subject to a
contractual obligation under the terms as of the Effective Date of a
Pre-Existing Alliance Agreement that would be breached by the inclusion of such
Target as a Selected Target or Supplemental Target under this Agreement.

          "Blocked Target List" shall have the meaning set forth in Section
2.1(a).


                                        3
<PAGE>
          "Blocking RNAi Intellectual Property" shall have the meaning set forth
in Section 4.5.

          "Broad RNAi Intellectual Property" shall mean Broad RNAi Know-How and
Broad RNAi Patent Rights.

          "Broad RNAi Know-How" shall mean all Know-How now or in the future
Controlled by Alnylam, that relates to RNAi technology, products or processes,
including, (a) the general structure, architecture, or design of nucleic acid
based molecules which engage RNAi mechanisms in a cell; (b) chemical
modifications of nucleic acids (including any modification to the base, sugar or
internucleoside linkage, nucleotide mimetics, and any end modifications) which
do not abolish the RNAi activity of the nucleic acid molecules in (a); (c)
manufacturing techniques for the nucleic acid based molecules or chemical
modifications of (a) and (b); and (d) all uses or applications of nucleic acid
based molecules or chemical modifications in (a) or (b); but excluding Know-How
which relates solely to (i) a specific Target or small group of Targets; or (ii)
delivery technologies which may be broadly employed for delivery of nucleic acid
based molecules.

          "Broad RNAi Patent Rights" shall mean the Patent Rights listed on
Schedule 1(b), the Patents licensed to Alnylam under the Listed Alnylam Third
Party Agreements, and all other Patents now or in the future Controlled by
Alnylam that Cover RNAi technology, products or processes, including, Patents
that Cover (a) the general structure, architecture, or design of nucleic acid
based molecules which engage RNAi mechanisms in a cell; (b) chemical
modifications of nucleic acids (including any modification to the base, sugar or
internucleoside linkage, nucleotide mimetics, and any end modifications) which
do not abolish the RNAi activity of the nucleic acid molecules in (a); (c)
manufacturing techniques for the nucleic acid based molecules or chemical
modifications of (a) and (b); and (d) all uses or applications of nucleic acid
based molecules or chemical modifications in (a) or (b); but excluding Patents
which relates solely to (i) a specific Target or small group of Targets; or (ii)
delivery technologies which may be broadly employed for delivery of nucleic acid
based molecules.

          "Business Day" shall mean a day on which banking institutions in
Boston, Massachusetts are open for business.

          "Change of Control" shall have the meaning set forth in Section
2.4(b).

          "Co-Fund" or "Co-Funding" shall have the meaning set forth in Section
4.6(b).

          "Co-Fund Negotiation Period" shall have the meaning set forth in
Section 4.6(c).

          "Collaboration Product" shall mean any product that contains one or
more Discovered RNAi Compound(s) as active ingredient(s).


                                        4
<PAGE>
          "Collaboration Success Milestone" shall mean a decision by Novartis,
at its sole discretion, during the Research Term that the overall progress of
the Research Collaboration is such that Novartis wishes to significantly expand
the scope of its activities in the Field beyond those directed to Selected
Targets.

          "Commercialization" or "Commercialize" shall mean any and all
activities directed to marketing, promoting, detailing, distributing, importing,
having imported, exporting, having exported, selling or offering to sell a
product, whether before or after Regulatory Approval for such product has been
obtained.

          "Commercially Reasonable Efforts" shall mean, with respect to the
efforts to be expended by a Party with respect to any objective, reasonable,
diligent, good faith efforts to accomplish such objective as such Party would
normally use to accomplish a similar objective under similar circumstances, it
being understood and agreed that with respect to the Discovery, Development or
Commercialization of any Collaboration Product, such efforts shall be
substantially equivalent to those efforts and resources commonly used by such
Party for a product owned by it or to which it has rights, which product is at a
similar stage in its development or product life and is of similar market
potential taking into account efficacy, safety, approved labeling, the
competitiveness of alternative products in the marketplace, the patent and other
proprietary position of the product, the likelihood of regulatory approval given
the regulatory structure involved, the profitability of the product, alternative
products and other relevant factors. Commercially Reasonable Efforts shall be
determined on a market-by-market and product-by-product basis, and it is
anticipated that the level of effort will change over time, reflecting changes
in the status of the Collaboration Product and the market(s) involved.

          "Confidential Information" shall mean the terms of this Agreement
(including the list of Selected Targets and the Targets included on any Target
List) and all Know-How or other information, including proprietary information
and materials (whether or not patentable) regarding a Party's technology,
products, business information or objectives, that is treated as confidential by
the disclosing Party in the regular course of business or is otherwise
designated as confidential by the disclosing Party.

          "Contract Quarter" shall mean a calendar quarter ending on March 31st,
June 30th, September 30th and December 31st.

          "Contract Year" shall mean each calendar year ending on December 31.

          "Control" or "Controlled" shall mean, with respect to any intellectual
property right or other intangible property, the possession by a Party (whether
by ownership, license or "control" (as defined in the definition of "Affiliate"
above) over an Affiliate having possession by ownership or license) of the
ability to grant access to, or a license or sublicense of, such rights or
property.

          "Controlled Contractor" shall mean either (a) a Third Party contractor
such as a contract research organization, contract employee, consultant and the
like who


                                        5
<PAGE>
merely conducts activities on behalf of a Party, is subject to Party's
supervision and control, and will not have any rights (other than non-exclusive
research rights) in any intellectual property created in connection with such
activities, or (b) a Third Party contract manufacturer.

          "Cover", "Covered" or "Covering" shall mean, with respect to a Patent
Right, that, in the absence of a license granted to a Person under a Valid Claim
included in such Patent Right, the practice by such Person of an invention
claimed in such Patent Right would infringe such Valid Claim (or, in the case of
a Patent Right that is a Patent Application, would infringe a Valid Claim in
such Patent Application if it were to issue as a Patent).

          "CRT Sublicense Agreement" shall have the meaning set forth in Section
3.1(f)(ii).

          "Dedicated Alnylam Program" shall mean a bona fide Alnylam Discovery,
Development or Commercialization program directed towards a Target (a) that is
conducted pursuant to a written research, Development or Commercialization plan,
and (b) to which Alnylam has dedicated at least [**] immediately preceding
Alnylam's receipt of the Target List or Supplemental Target List naming such
Target.

          "Dedicated Novartis Program" shall mean a bona fide Novartis
Discovery, Development or Commercialization program directed towards a Target
(a) that is conducted pursuant to a written research, Development or
Commercialization plan, and (b) to which Novartis has dedicated at least [**]
immediately preceding Novartis's receipt of the Target Inquiry naming such
Target.

          "Develop" or "Development" shall mean any and all preclinical and
clinical drug development activities, including test method development and
stability testing, toxicology, animal efficacy studies, formulation, quality
assurance/quality control development, statistical analysis, clinical studies,
clinical trials and testing, regulatory affairs, product approval and
registration, chemical development and development Manufacturing, packaging
development and Manufacturing and development documentation efforts in support
of development activities anywhere in the world.

          "Discover" or "Discovery" shall mean any and all research or discovery
activities.

          "Discovered RNAi Compound" shall mean an RNAi Compound directed to a
Selected Target that is Discovered during the course of an Active Program
(excluding Abandoned Programs that do not become Active Programs pursuant to
Sections 2.3(b) or 2.6(c)) together with all derivatives of such RNAi Compound.
For purposes of this definition, "derivative" shall mean a compound that may
contain modified nucleotides or may have been modified by chemical or molecular
genetic means but which still, at least in vitro, functions through an RNAi
mechanism against the same Target.

          "Effective Date" shall have the meaning set forth in the Preamble.


                                        6
<PAGE>
          "Encumbered Field" shall mean:

          (a) Until [**], the treatment, prophylaxis and diagnosis of ocular
microvascular disease in humans with RNAi Products, where "ocular microvascular
disease" means age-related macular degeneration and [**], including [**],
including [**]; but specifically excluding [**], such as (by way of example
only) [**].

          (b) Until [**], or potentially sooner under certain circumstances:

               (i) The treatment of any neurodegenerative disease, but excluding
     [**], where "neurodegenerative disease" means a disease of the brain and/or
     spinal cord in humans that is characterized by the chronic and progressive
     death of neurons which leads to the loss of normal neural function,
     including Parkinson's disease, Huntington's disease, Alzheimer's disease,
     and amyotrophic lateral sclerosis, but excluding [**], using

               (ii) [**], where "direct delivery to the human nervous system"
     does not encompass [**].

          (c) After any joint decision by Alnylam and a Pre-Existing Alliance
Party to develop a human therapeutic product that includes siRNA(s) as active
pharmaceutical ingredient(s) to be delivered or approved for delivery via an
implanted infusion device directly to the human nervous system:

               (i) Until [**] years after the date of such decision, or
     potentially sooner under certain circumstances, [**]; and

               (ii) For so long as such therapeutic product is under development
     and until its commercial launch, [**]; and

               (iii) Following [**] until [**] such product delivered or
     approved for delivery via an implanted infusion device to the human nervous
     system.

          "Event of Bankruptcy" shall have the meaning set forth in Section 8.3.

          "Excess Amount" shall have the meaning set forth in Section
4.4(e)(ii)(B).

          "Exclusivity Term" shall mean the term commencing on the Effective
Date and terminating upon the Exclusivity Termination Date. The "Exclusivity
Termination Date" shall mean (a) the date of termination of the Research Term,
if this Agreement is terminated pursuant to Section 8.1(a)(ii); (b) the second
(2nd) anniversary following the expiration or termination of the Research Term,
if the Selection Term is less than five (5) years in length (except for the case
where this Agreement is terminated pursuant to Section 8.1(a)(ii)); and (c) the
third (3rd) anniversary following the expiration or termination of the Research
Term, if the Selection Term is at least five (5) years in length.


                                        7
<PAGE>
          "Executive Officers" shall mean Novartis's Chief Executive Officer (or
the officer or employee of Novartis then serving in a substantially equivalent
capacity) or his/her designee of substantially equivalent rank, and Alnylam's
Chief Executive Officer (or the officer or employee of Alnylam then serving in a
substantially equivalent capacity).

          "FDA" shall mean the United States Food and Drug Administration or any
successor agency thereto.

          "Field" shall mean all human, veterinary or agricultural applications,
including processes and products directed to the treatment, palliation,
diagnosis or prophylaxis of any or all Indications.

          "First Animal Study" shall have the meaning set forth in Section
4.4(a).

          "First Commercial Sale" shall mean the first sale of a Licensed
Product by Novartis or an Affiliate or sublicensee of Novartis to a Third Party
in a country following Regulatory Approval of such Licensed Product in that
country or, if no such Regulatory Approval or similar marketing approval is
required, the date upon which such Licensed Product is first commercially
launched in such country.

          "FTE" shall mean, in case of an Abandoned Program, Active Program,
Dedicated Alnylam Program, Dedicated Novartis Program or Target
identification/validation services, respectively, the equivalent of the work of
one (1) scientist, full time for one (1) year, for or on behalf of a Party,
which equates to a total of [**] per year of scientific work directly related to
such Abandoned Program, Active Program, Dedicated Alnylam Program, Dedicated
Novartis Program or Target identification/validation services, respectively, and
the direct scientific management thereof.

          "Gatekeeper" shall have the meaning set forth in Section 3.1(e)(iv).

          "IND" shall mean an application submitted to a Regulatory Authority to
initiate human clinical trials, including (a) an Investigational New Drug
application or any successor application or procedure filed with the FDA, or any
foreign equivalent thereof, and (b) all supplements and amendments that may be
filed with respect to the foregoing.

          "Indemnified Party" shall have the meaning set forth in Section
9.1(c)(i).

          "Indemnifying Party" shall have the meaning set forth in Section
9.1(c)(i).

          "Indication" shall mean any disease or condition, sign or symptom of a
disease or condition, or symptom associated with a disease or syndrome.

          "Infrastructure Fee" shall have the meaning set forth in Section
4.3(c).

          "Intellectual Property" shall have the meaning set forth in Section
7.2(a).


                                        8
<PAGE>
          "Invalidity Claim" shall have the meaning set forth in Section 6.4(c).

          "IP Contracts" shall have the meaning set forth in Section 7.2(b).

          "Joint Intellectual Property" shall have the meaning set forth in
Section 6.1(b).

          "Joint Steering Committee" shall have the meaning set forth in Section
2.2(a).

          "Know-How" shall mean any information, inventions, trade secrets or
technology, whether or not proprietary or patentable and whether stored or
transmitted in oral, documentary, electronic or other form, Controlled by a
Party that is necessary or useful to (a) the activities contemplated by the
Research Collaboration, (b) the Discovery, Development, Commercialization or
Manufacture of RNAi Compounds or RNAi Products, or (c) the practice of the RNAi
mechanism or technology. Know-How shall include ideas, concepts, formulas,
methods, procedures, designs, compositions, plans, documents, data, discoveries,
developments, techniques, protocols, specifications, works of authorship,
biological materials, and any information relating to research and development
plans, experiments, results, compounds, therapeutic leads, candidates and
products, clinical and preclinical data, clinical trial results, and
Manufacturing information and plans (but excluding any scientific, regulatory,
pre-clinical or clinical information or data regarding specific Indications and
any marketing, financial, commercial, personnel and other business information
and plans); in each case, to the extent necessary or useful to the activities
contemplated by the Research Collaboration or to the Discovery, Development,
Commercialization or Manufacture of the RNAi Compounds or RNAi Products.

          "Law" shall mean any law, statute, rule, regulation, ordinance or
other pronouncement having the effect of law of any federal, national,
multinational, state, provincial, county, city or other political subdivision,
domestic or foreign.

          "Licensed Products" shall mean: (a) the Collaboration Products, and
(b) the Adopted Products.

          "Licensed Property" shall have the meaning set forth in Section
7.2(a).

          "Listed Alnylam Third Party Agreement" shall mean an agreement listed
on Schedule 1(l).

          "Listed Alnylam Third Party Payments" shall have the meaning set forth
in Section 4.4(e)(ii)(A).

          "Listed Counterparties" shall mean the Third Party counterparties to
Listed Alnylam Third Party Agreements and their respective successors in
interest.

          "Major Market Country" shall mean, individually and collectively, the
United Kingdom, France, Germany, Italy, Spain and Japan.


                                        9
<PAGE>
          "Manufacture" or "Manufacturing" shall mean any and all activities and
operations involved in or relating to the manufacturing, quality control testing
(including in-process, release and stability testing), releasing or packaging,
for pre-clinical, clinical or commercial purposes.

          "Minimum Quarterly Payment" shall have the meaning set forth in
Section 4.4(e)(iii).

          "NDA" shall mean an application submitted to a Regulatory Authority
for marketing approval of a product, including (a) a New Drug Application,
Product License Application or Biologics License Application filed with FDA or
any successor applications or procedures, or any foreign equivalent thereof, and
(b) all supplements and amendments that may be filed with respect to the
foregoing.

          "Net Sales" shall mean, with respect to a Licensed Product, the gross
amount invoiced by or on behalf of Novartis or any Novartis Affiliate, licensee
or sublicensee for that Licensed Product sold to Third Parties (other than
licensees or sublicensees) in bona fide, arm's-length transactions, less
customary deductions, determined in accordance with Novartis's standard
accounting methods and in accordance with International Financial Reporting
Standards (IFRS) as generally and consistently applied by Novartis, to the
extent included in the gross invoiced sales price of any Licensed Product or
otherwise directly paid or incurred by Novartis, its Affiliates or distributors
with respect to the sale of such Licensed Product, including: (a) free goods;
(b) cash discounts; (c) direct to customer discounts; (d) charge-backs; (e)
Medicaid rebates; (f) deductions due for discount card programs; (g) amounts
repaid or credited by reasons of defects, rejection recalls, returns; (h)
tariffs, duties, excise, sales, value-added and other taxes (other than taxes
based on income); (i) delayed ship order credits; (j) all insurance expense
included in the invoice price; (k) amounts credited for uncollectible amounts on
previously sold products; (l) deduction of [**] for distribution and warehousing
expenses; and (m) any other reduction or specifically identifiable amounts
included in the Licensed Product's gross invoice that are creditable for reasons
substantially equivalent to those listed above. Sales between or among Novartis,
its Affiliates or their respective licensees and sublicensees shall be
disregarded for purposes of calculating Net Sales. Any of the items set forth
above that would otherwise be deducted from the invoice price in the calculation
of Net Sales but which are separately charged to Third Parties shall not be
deducted from the invoice price in the calculation of Net Sales.

          i) In the case of any sale or other disposal of a Licensed Product
between or among Novartis and its Affiliates, licensees and sublicensees, for
resale, Net Sales shall be calculated as above only on the value charged or
invoiced on the first arm's-length sale thereafter to a Third Party;

          ii) In the case of any sale which is not invoiced or is delivered
before invoice, Net Sales shall be calculated at the time of shipment or when
the Licensed Product is paid for, if paid for before shipment or invoice;


                                       10
<PAGE>
          iii) In the case of any sale or other disposal for value, such as
barter or counter-trade, of any Licensed Product, or part thereof, other than in
an arm's-length transaction exclusively for money, Net Sales shall be calculated
as above on the value of the non-cash consideration received or the fair market
price (if higher) of the Licensed Product in the country of sale or disposal;

          iv) In the event the Licensed Product is sold in a finished dosage
form in combination with one or more other active ingredients (a "Combination
Product"), the Net Sales of the Licensed Product, for the purposes of
determining royalty payments, shall be determined by multiplying the Net Sales
(as defined above) of the Combination Product by the fraction, 'A/(A+B)' where
'A' is the weighted (by sales volume) average sale price in the relevant country
of the Licensed Product when sold separately in finished form and 'B' is the
weighted average sale price in that country of the other product(s) sold
separately in finished form. In the event that such average sale price cannot be
determined for both the Licensed Product and the other product(s) in the
Combination Product, Net Sales for purposes of determining royalty payments
shall be agreed by the Parties based on the relative value contributed by each
component, such agreement shall not be unreasonably withheld.

          "Non-Bankrupt Party" shall have the meaning set forth in Section 8.3.

          "Novartis" shall have the meaning set forth in the Preamble.

          "Novartis Intellectual Property" shall mean all Patent Rights and
Know-How now or in the future Controlled by Novartis that are necessary or
useful for the conduct of the activities contemplated by the Research
Collaboration and all Patent Rights that Cover the foregoing Know-How.

          "Novartis Overpayment" shall have the meaning set forth in Section
4.4(e)(ii)(B).

          "Novartis Sole Inventions" shall have the meaning set forth in Section
6.1(a).

          "Owned Know-How" shall have the meaning set forth in Section 7.2(a).

          "Owned Patents" shall have the meaning set forth in Section 7.2(a).

          "Owned Property" shall have the meaning set forth in Section 7.2(a).

          "Party" shall mean Alnylam or Novartis; "Parties" shall mean Alnylam
and Novartis.

          "Patent Offices" shall have the meaning set forth in Section 7.2(f).

          "Patent Rights" shall mean utility and design patents and all
substitutions, divisions, continuations, continuations-in-part, reissues,
reexaminations and extensions thereof and supplemental protection certificates
relating thereto, and all counterparts


                                       11
<PAGE>
thereof or substantial equivalents in any country, including utility models and
industrial designs (collectively, "Patents") and any applications or provisional
applications for any of the foregoing ("Patent Applications").

          "Person" shall mean any corporation, limited or general partnership,
limited liability company, joint venture, trust, unincorporated association,
governmental body, authority, bureau or agency, any other entity or body, or an
individual.

          "Phase I Study" shall mean a study of a product in human volunteers or
patients the purpose of which is preliminary determination of safety and
tolerability of a dosing regime and for which there are no primary endpoints (as
recognized by FDA) in the protocol relating to efficacy.

          "Phase II Study" shall mean (a) a dose exploration, dose response,
duration of effect, kinetics, dynamic relationship or preliminary efficacy and
safety study of a product in the target patient population, or (b) a controlled
dose ranging clinical trial to evaluate further the efficacy and safety of a
product in the target patient population and to define the optimal dosing
regimen.

          "Phase III Study" shall mean a controlled pivotal clinical study of a
product that is prospectively designed to demonstrate statistically whether such
product is effective and safe for use in a particular Indication in a manner
sufficient to obtain Regulatory Approval to market such product.

          "Post-IND Alnylam Program" shall have the meaning set forth in Section
2.6(c)(i)(B).

          "Pre-Existing Alliance Agreements" shall mean the agreements set forth
on Schedule 1(p).

          "Pre-Existing Alliance Parties" shall have the meaning set forth in
Section 3.1(e)(i).

          "Pre-IND Alnylam Program" shall have the meaning set forth in Section
2.6(c)(i)(A).

          "Pre-Paid Adopted Product Fees" shall have the meaning set forth in
Section 4.2(a).

          "Product Liability Claim" shall have the meaning set forth in Section
9.1(a).

          "Program Data" shall have the meaning set forth in Section 6.1(d).

          "Redacted Research Collaboration and License Agreement" shall have the
meaning set forth in Section 5.1.


                                       12
<PAGE>
          "Registration Filing" shall mean an application submitted to a
Regulatory Authority to initiate human clinical trials or for marketing approval
of a product, including an IND, NDA, a Biologics License Application, any
equivalent of the foregoing in any jurisdiction, and all supplements and
amendments that may be filed with respect to the foregoing.

          "Regulatory Approval" shall mean, with respect to a product in a
country, the approval of the applicable Regulatory Authority necessary for the
marketing and sale of such product in such country.

          "Regulatory Authority" shall mean any federal, national,
multinational, state, provincial or local regulatory agency, department, bureau
or other governmental entity with authority over the marketing, pricing or sale
of a pharmaceutical product in a country, including the FDA.

          "Research Collaboration" shall mean the activities of the Parties
under Research Plans to identify and optimize RNAi Compounds directed against
Selected Targets and develop improved RNAi technology to enable and enhance the
utility of such RNAi Compounds, upon and subject to the terms and conditions set
forth in this Agreement.

          "Research Institution" shall mean an academic, non-profit research
institution or hospital that conducts Discovery or Development activities on
behalf of or in collaboration with Alnylam and to which Alnylam does not grant
any Commercialization rights under Alnylam Intellectual Property with respect to
any RNAi Compounds or RNAi Products provided by Alnylam or Discovered or
Developed in the course of such Discovery or Development activities.

          "Research Plan" shall have the meaning set forth in Section 2.3(a).

          "Research Term" shall have the meaning set forth in Section
8.1(a)(iii).

          "RNAi" shall have the meaning set forth in the Recitals.

          "RNAi Compound" shall mean any compound that in vitro or otherwise
functions through the mechanism of RNAi and consists of or encodes
double-stranded RNA, and which double-stranded RNA is optionally chemically
modified to contain modified nucleotide bases or non-RNA nucleotides, and
optionally may be administered in conjunction with a delivery vehicle or vector.

          "RNAi Product" shall mean any product that contains one or more RNAi
Compounds as an active ingredient.

          "RNAi Therapeutic Rights" shall mean the right to Discover, Develop,
Commercialize or Manufacture RNAi Compounds and RNAi Products for therapeutic
uses.


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<PAGE>
          "Royalty Term" shall mean, separately with respect to each Licensed
Product in each country, the period commencing on the First Commercial Sale of
such Licensed Product in such country and concluding on the later of (a) the
expiration of the last to expire Alnylam Patents containing a Valid Claim
Covering the Development, Commercialization or Manufacture of such Licensed
Product in that country, or (b) [**] after the date of First Commercial Sale of
such Licensed Product in that country.

          "Selected Target" shall have the meaning set forth in Section 2.1(a).

          "Selected Target Threshold" shall have the meaning set forth in
Section 2.1(a).

          "Selection Term" shall have the meaning set forth in Section
8.1(a)(i).

          "Severed Clause" shall have the meaning set forth in Section 9.4.

          "Significant Pharmaceutical Company" shall have the meaning set forth
in Section 2.4(b).

          "Sole Inventions" shall have the meaning set forth in Section 6.1(a).

          "sPOC" shall mean the selection by Novartis, in its sole discretion,
of a Discovered RNAi Compound for the clinical phase of Development by Novartis.
The specific criteria used to determine sPOC on a Discovered RNAi
Compound-by-Discovered RNAi Compound basis shall be set forth in the applicable
Research Plan.

          "Stacking Reduction" shall have the meaning set forth in Section
4.4(e)(iii).

          "Stock Purchase Agreement" shall mean that certain Stock Purchase
Agreement, dated as of September 6, 2005, between Alnylam and Novartis Pharma
AG, together with that certain Investor Rights Agreement, between Alnylam and
Novartis Pharma AG, dated as of September 6, 2005.

          "Successful Completion" shall mean the execution of a study approved
by the Joint Steering Committee in material compliance with all criteria set
forth by the Joint Steering Committee (but without regard to results).

          "Supplemental Target" shall have the meaning set forth in Section
2.1(b)(ii).

          "Supplemental Target List" shall have the meaning set forth in Section
2.1(b)(ii).

          "Supplemental Target Response Notice" shall have the meaning set forth
in Section 2.1(b)(ii).


                                       14
<PAGE>
          "Supplemental Target Threshold" shall have the meaning set forth in
Section 2.1(b)(ii).

          "Target" shall mean: (a) a polypeptide or entity comprising a
combination of at least one polypeptide and other macromolecules, that is a site
or potential site of therapeutic intervention by a therapeutic agent; or a
nucleic acid which is required for expression of such polypeptide; (b) variants
of a polypeptide, cellular entity or nucleic acid described in clause (a); (c) a
defined non-peptide entity, including a microorganism, virus, bacterium or
single cell parasite; provided that the entire genome of a virus shall be
regarded as a single Target; or (d) a naturally occurring interfering RNA or
microRNA or precursor thereof.

          "Target Inquiry" shall have the meaning set forth on Section
3.1(e)(ii).

          "Target List" shall have the meaning set forth in Section 2.1(a).

          "Target Response Notice" shall have the meaning set forth in Section
2.1(a).

          "Third Party" shall mean any Person other than Alnylam or Novartis and
their respective Affiliates.

          "Third Party Adoption" shall have the meaning set forth in Section
4.2(b).

          "Third Party Adoption Consideration" shall have the meaning set forth
in Section 4.2(b).

          "Third Party Infringement Claim" shall have the meaning set forth in
Section 6.4(a).

          "Unblocking Amount" shall have the meaning set forth in Section
4.4(e)(iii).

          "Valid Claim" shall mean a claim (a) of any issued, unexpired Patent
that has not been revoked or held unenforceable or invalid by a decision of a
court or governmental agency of competent jurisdiction from which no appeal can
be taken, or with respect to which an appeal is not taken within the time
allowed for appeal, and that has not been disclaimed or admitted to be invalid
or unenforceable through reissue, disclaimer or otherwise, or (b) of any Patent
Application that has not been cancelled, withdrawn or abandoned, or been pending
for more than [**].


                                       15
<PAGE>
                                   ARTICLE II

                             RESEARCH COLLABORATION

          2.1 SELECTION OF TARGETS FOR INCLUSION INTO THE RESEARCH
COLLABORATION.

          (a) Initial Thirty(30) Targets. Within thirty (30) days following the
Effective Date, and from time to time thereafter, Alnylam shall provide to the
Gatekeeper a list of Targets that are Blocked Targets (a "Blocked Target List").
During the Selection Term, Novartis may from time to time deliver to the
Gatekeeper one or more lists of Targets (each such list, a "Target List") that
Novartis desires to include in the Research Collaboration. Within two (2) days
following the Gatekeeper's receipt of the Target List, the Gatekeeper shall
notify Novartis in writing (a "Target Response Notice") which, if any, of the
Targets identified on such Target List are on the Blocked Target List most
recently delivered by Alnylam to the Gatekeeper. All of the Targets on the
Target List that are not on such Blocked Target List shall be deemed "Selected
Targets" for the purposes of this Agreement, and the Gatekeeper shall notify
both Parties of the identity of such Selected Targets within the same two (2)
day time period. Selected Targets that are or have been the subject of an Active
Program shall be deemed to be on the "A List," and Selected Targets that are not
nor have not been the subject of an Active Program shall be deemed to be on the
"B List." Subject to Section 2.1(b), Novartis shall be entitled to submit
Targets for designation as Selected Targets until an aggregate of Thirty(30)
Selected Targets (the "Selected Target Threshold") have been identified pursuant
to the foregoing procedure. Novartis shall submit the first Target List, which
shall contain at least [**] Targets, within [**] after the Effective Date.
Without limiting the provisions of Sections 2.6(b) and (c), the Parties agree
that none of the genes of respiratory syncytial virus (RSV) shall be available
as a "Selected Target" under the provisions of this Section 2.1.

          (b) Additional Targets. In the event that the Selected Target
Threshold has been reached, Novartis may from time to time during the Selection
Term either:

          (i) upon written notice to Alnylam, withdraw (for any reason) a B List
Target from treatment as a Selected Target. Thereafter Novartis shall be free to
designate substitute Targets pursuant to Section 2.1(a) at any time, up to the
Selected Target Threshold (for the avoidance of doubt, such substitute Targets
shall not be considered "Supplemental Targets"); or

          (ii) deliver to the Gatekeeper one or more lists of additional
Target(s) (each such list, a "Supplemental Target List"). Within two (2) days
following the Gatekeeper's receipt of a Supplemental Target List, the Gatekeeper
shall notify Novartis in writing (a "Supplemental Target Response Notice")
which, if any, of the Targets identified on such Supplemental Target List are on
the Blocked Target List most recently delivered by Alnylam to the Gatekeeper.
All of the Targets on the Supplemental Target List that are not are on such
Blocked Target List (each such Target, a "Supplemental Target"), shall be deemed
"Selected Target(s)" for the purposes of this Agreement, and


                                       16
<PAGE>
the Gatekeeper shall notify both Parties of the identity of such Supplemental
Targets within the same two (2) day time period. Novartis shall pay, or cause to
be paid, the payment set forth in Section 4.3(a). Novartis may designate no more
than ten(10) Supplemental Targets in the aggregate (the "Supplemental Target
Threshold").

          (c) In the event that a Blocked Target ceases to be a Blocked Target,
Alnylam shall promptly advise the Gatekeeper thereof and it shall be removed
from the Blocked Target List. In the event that (i) Novartis was unable to
select a Target as a Selected Target under Section 2.1(a) or a Supplemental
Target under Section 2.1(b) because such Target was on the Blocked Target List
as of the date such Target List or Supplemental Target List, as the case may be,
was received by the Gatekeeper, and (ii) such Target subsequently ceases to be a
Blocked Target, the Gatekeeper shall promptly notify Novartis thereof, and
Novartis shall thereafter be permitted to select such Target subject, in the
applicable case, to the Selected Target Threshold or the Supplemental Target
Threshold.

          2.2 JOINT STEERING COMMITTEE.

          (a) Constitution; Representatives. The Parties will establish a Joint
Steering Committee ("Joint Steering Committee"), comprised of three (3)
representatives designated by Alnylam and three (3) representatives designated
by Novartis, each of which representatives shall be of the seniority and
experience appropriate for participation on the Joint Steering Committee in
light of the functions, responsibilities and authority of such committee. Each
Party shall make its designation of its representatives not later than thirty
(30) days after the Effective Date. Each Party may change any one or more of its
Joint Steering Committee representatives at any time upon written notice to the
other Party. If a Party's representative is unable to attend a meeting, such
Party may designate an alternate to attend such meeting in place of the absent
representative. In addition, each Party may, subject to the other Party's
consent (not to be unreasonably withheld or delayed), invite non-voting
employees, and, with the consent of the other Party, consultants or scientific
advisors (provided they are engaged as such under obligations of confidentiality
no less protective of the Parties' Confidential Information than as set forth in
Article V) to attend the meetings of the Joint Steering Committee. The Joint
Steering Committee shall be dissolved and its activities and authority
terminated upon the expiration or termination of the Research Term.

          (b) Authority. The Joint Steering Committee shall be responsible for
overseeing, managing and auditing the Research Collaboration. Such
responsibilities shall include:

               (i) Providing general oversight of the Active Programs, including
     allocating the appropriate number of FTEs;

               (ii) Periodically reviewing the overall goals, strategy and
     progress of the Research Collaboration;

               (iii) Initiating Active Programs;


                                       17
<PAGE>
               (iv) Reviewing proposed Research Plans and considering additions,
     updates or amendments to extant Research Plans;

               (v) Prioritizing the allocation of resources dedicated to the
     Research Collaboration;

               (vi) Determining whether and which Third Party contractors should
     be engaged in connection with any aspect of the Research Collaboration;

               (vii) Monitoring the pre-clinical Development of Discovered RNAi
     Compounds;

               (viii) Resolving any disagreement between the Parties relating to
     the matters set forth in clauses (i) through (vi) in accordance with the
     decision-making procedure set forth in Section 2.2(e); and

               (ix) Discussing any other issues submitted to it by the Parties.

          (c) Meetings. The Joint Steering Committee shall meet to discuss the
business of the Research Collaboration within thirty (30) days after the
Effective Date and, thereafter, at least quarterly until the end of the Research
Term. In addition, a Party may call a meeting of the Joint Steering Committee
upon reasonable notice to the other Party, such notice requirement being deemed
waived by a Party's attendance and participation. The location of Joint Steering
Committee meetings, when in person, shall alternate between Novartis's and
Alnylam's offices unless otherwise agreed by the Joint Steering Committee. The
Joint Steering Committee may also meet by means of a telephone or video
conference call, and may take action by vote at a meeting or telephone or video
conference call, or pursuant to a written vote.

          (d) Project Teams. The Joint Steering Committee shall have the
authority to create project teams for the Research Collaboration, each of which
will meet (via telephone or video conference or in person) no less frequently
than monthly, and which will report to the Joint Steering Committee on the
progress of the activities performed on the Research Collaboration no less
frequently than quarterly. The Joint Steering Committee shall also have the
authority to create additional subcommittees as needed. Notwithstanding the
foregoing, the Joint Steering Committee shall not have the authority to amend or
modify the terms of this Agreement.

          (e) Decision-Making. All decisions of the Joint Steering Committee
shall be made by unanimous vote of the Joint Steering Committee representatives,
with each Party's Joint Steering Committee representatives collectively having
one (1) vote, and the goal of all decision making shall be to achieve consensus.
Upon thirty (30) days prior written notice, either Party may convene a special
meeting of the Joint Steering Committee for the purpose of resolving any failure
to reach agreement on a matter within the scope of the authority and
responsibility of the Joint Steering Committee. If the matter is not resolved by
the Joint Steering Committee within thirty (30) days after referral to the Joint
Steering Committee, then: (i) if such failure to reach agreement relates to a
matter identified in Section 2.2(b)(iv), then Novartis shall have the right to


                                       18
<PAGE>
decide the matter, and (ii) if such failure to reach agreement relates to a
matter identified in Sections 2.2(b)(i), (ii), (iii), (v), (vi) or (vii), then
such matter shall be referred to the Executive Officers for resolution. If such
matter is not resolved by the Executive Officers within fifteen (15) days after
referral to the Executive Officers, then Novartis shall have the right to decide
the matter. In exercising its decision-making authority under this Section
2.2(e), Novartis shall be consistent with the provisions of Section 2.4.

          (f) Dispute Resolution. Any dispute between the Parties with respect
to a matter not within the scope of Sections 2.2(b)(i) through (vii) (including
whether specific milestone events have occurred) shall be referred to the
Executive Officers for resolution. If such matter is not resolved by the
Executive Officers within fifteen (15) days after referral thereto, then either
Party may seek any and all remedies available under law or equity with respect
to such dispute.

          2.3 ACTIVE PROGRAMS; RESEARCH PLANS.

          (a) Initiation and Modification of an Active Program. From time to
time during the Selection Term, the Joint Steering Committee shall initiate,
subject to Section 2.4, one or more research programs (each such program, an
"Active Program") (i) to identify or optimize RNAi Compounds directed to a
Selected Target, or (ii) to develop RNAi technology to enable or enhance the
utility of Discovered RNAi Compounds in the Field. Under the supervision of the
Joint Steering Committee, Discovery activities to be undertaken with respect of
each such Active Program shall be set forth in a research plan (each such plan,
a "Research Plan") that will set forth the Parties' respective obligations with
respect to such Active Program, including, workflow, deliverables, timelines,
and budgets, it being understood that Novartis representatives on the Joint
Steering Committee shall be subject to Novartis's standard budget procedures.
Any representative of the Joint Steering Committee may, at any time or from time
to time, submit, on behalf of the Party it represents, a proposed Research Plan,
or proposed additions, updates or amendments to an extant Research Plan for its
review. Any such proposed Research Plans or proposed additions, updates or
amendments shall not become effective until approved, subject to Section 2.2(e),
in writing by the Joint Steering Committee. The Joint Steering Committee shall
review and consider any such Research Plans or additions, updates or amendments
of an extant Research Plan on an expeditious basis, and all such additions,
updates and amendments approved as set forth above shall, subject to Section
2.2(e), constitute and be deemed part of this Agreement for all purposes and
incorporated herein.

          (b) Discontinuation of an Active Program.

          From time to time during the Research Term, the Joint Steering
Committee may elect to discontinue one or more Active Programs (each such
discontinued Active Program, an "Abandoned Program") and any such
discontinuation shall constitute a termination of the applicable Research Plan
governing such Abandoned Program. Alnylam shall be free to continue any
Abandoned Program on its own in accordance with the following: (x) until such
time as Alnylam adds substantive value to such Abandoned Program, Alnylam shall
be permitted to enter into an agreement with a


                                       19
<PAGE>
Third Party, not subject to Section 2.6(b) and (c), for the Development or
Commercialization of RNAi Compounds Discovered during the course of such
Abandoned Program, and (y) at or following such times as Alnylam adds
substantive value to such Abandoned Program, Alnylam may enter into an agreement
with a Third Party, subject to compliance with the provisions of this Section
2.6(b) and Section 2.6(c), for the Development or Commercialization of RNAi
Compounds Discovered during the course of such Abandoned Program. From time to
time during the Selection Term, the Joint Steering Committee may reinstate any
such Abandoned Program and Research Plan, whereby such Abandoned Program shall
thereafter again be an "Active Program," unless Alnylam has initiated a bona
fide research program (pursuant to a written research plan) with respect to such
Abandoned Program and has dedicated [**] the Joint Steering Committee's decision
to reinstate such Abandoned Program. For the avoidance of doubt, following the
Joint Steering Committee's election to deem an Active Program as an Abandoned
Program, Novartis's rights under the "Discovered RNAi Compound(s),"
"Collaboration Product(s)," and "Selected Target(s)" that are the subject of
such Abandoned Program shall terminate unless and until such Abandoned Program
subsequently becomes an Active Program pursuant to Sections 2.3(b) or 2.6(c).

          2.4 STAFFING; INFRASTRUCTURE.

          (a) During the Research Term, the Joint Steering Committee shall
allocate approximately [**] FTEs (the exact number of FTEs to be determined by
the Joint Steering Committee) to staff each Active Program. Novartis agrees that
(i) within [**] following the Effective Date, it shall cause the Joint Steering
Committee to initiate at least [**] Active Programs and allocate at least [**]
Alnylam-provided FTEs to Active Programs, and (ii) for each year thereafter
during the Research Term, it shall cause the Joint Steering Committee to
administer at least [**] Active Programs and allocate at least [**]
Alnylam-provided FTEs to Active Programs. Novartis or its Affiliates will fund
the FTEs provided by Alnylam at the rate set forth in Section 4.3(b). Starting
in [**], the Joint Steering Committee will, by [**] of each Contract Year, give
notice to Alnylam as to how many Alnylam-provided FTEs the Joint Steering
Committee will allocate to Active Programs for the following Contract Year, and
Novartis agrees to fund such forecasted FTEs in the aggregate (or such higher
number as is agreed upon by the Joint Steering Committee). Novartis or its
Affiliates will also pay Alnylam a quarterly Infrastructure Fee in support of
each Active Program in accordance with Section 4.3(c).

          (b) In the event of a public announcement that Alnylam has entered
into a definitive agreement to undergo a Change of Control, Novartis shall have
the right to suspend all of Alnylam's activities (together with Novartis's
obligations to fund such activities) under each Active Program until such time
as either (i) Alnylam undergoes such Change of Control, or (ii) there is a
public announcement that such Change of Control will not occur. The duration of
the Selection Term shall be tolled for the duration of such suspension. In the
event that Alnylam undergoes a Change of Control, Novartis shall have the right,
upon written notice to Alnylam within thirty (30) days after a Change of
Control, to immediately terminate Novartis's obligations under Section 2.4(a)
and Alnylam's rights under Section 3.2 (which shall not constitute a termination
of this Agreement for purposes of Article VIII). In the event that Novartis


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<PAGE>
exercises such termination rights, Alnylam shall immediately cease working on
all Active Programs and shall promptly return all of Novartis's Know-How,
Program Data and Confidential Information. For purposes of this Section 2.4(b),
a "Change of Control" of Alnylam shall be deemed to occur if Alnylam is involved
in a merger, reorganization or consolidation in which its shareholders
immediately prior to such transaction would hold less than fifty percent (50%)
of the securities or other ownership or voting interests representing the equity
of the surviving entity immediately after such merger, reorganization or
consolidation, or if there is a bona fide sale of all or substantially all of
Alnylam's assets or business relating to this Agreement to a Third Party, or if
a "Significant Pharmaceutical Company" (as defined below) effectively acquires
control of the management and policies of Alnylam. A "Significant Pharmaceutical
Company" is a pharmaceutical company, biotechnology company, or group of such
companies acting in concert, with aggregate annual sales of pharmaceutical
products greater than [**] U.S. dollars ($[**]).

          2.5 SCIENTIFIC STRATEGY AND ADVISORY GROUP.

          Promptly following the Effective Date, the Parties will establish a
scientific strategy and advisory group ("Advisory Group") to consider overall
strategy for the relevant science and clinical applications of the Research
Collaboration and the field of RNAi. The Advisory Group will include the
scientific founders and scientific leadership of Alnylam, including Dr. Philip
Sharp or his successor as the chair of Alnylam's Scientific Advisory Board,
together with at least three of the senior scientists of Novartis, including Dr.
Mark Fishman or his successor in title. The Advisory Group shall meet with such
frequency as may be established by the Advisory Group (but in no event less
often than three (3) times per year), and at such times and locations (or by
telephone or video conference call) as may be established by the Advisory Group.
The Advisory Group will annually designate an Advisory Group Chair, and the
Parties shall alternate responsibility for chairing the meetings of the Advisory
Group, beginning with Novartis. The Advisory Group shall not have any authority
over the Research Collaboration, including any Research Plan or Active Program.
No Advisory Group member may delegate his/her participation in the Advisory
Group.

          2.6 RESTRICTIONS ON ALNYLAM.

          (a) Exclusivity. Without limitation to the exclusive rights granted to
Novartis under Section 3.1, Alnylam shall not, and shall ensure that its
Affiliates do not (either alone or, directly or indirectly, in conjunction with
a Third Party) conduct any activities directed towards: (i) the Discovery
(except in connection with an Active Program) of any RNAi Compound or RNAi
Products directed to a Selected Target (other than Selected Targets that are the
subject of Abandoned Programs that do not become Active Programs pursuant to
Sections 2.3(b) or 2.6(c)) during the Selection Term, or (ii) the Discovery
(except in connection with an Active Program), Development, Commercialization or
Manufacture of (A) Discovered RNAi Compounds or Collaboration Products, or (B)
RNAi Compounds or RNAi Products directed to Selected Targets that are or were
the subject of an Active Program (other than Abandoned Programs that do not
become Active Programs pursuant to Sections 2.3(b) or 2.6(c)). For


                                       21
<PAGE>
the avoidance of doubt, Alnylam shall not, and shall ensure that its Affiliates
do not, grant to any Third Party any rights under Alnylam Intellectual Property
to engage in any of the foregoing activities.

          (b) Permitted Activities Subject to Right of First Offer. So long as
such activities do not violate the terms of Section 2.6(a) or Novartis's
exclusive rights under Section 3.1, Alnylam shall retain the right to Discover,
Develop, Commercialize or Manufacture RNAi Compounds and RNAi Products directed
at one or more Targets (each, an "Alnylam Program"); provided, however, that (x)
during the Exclusivity Term, Alnylam or its Affiliates may enter into agreements
with Research Institutions to Discover or Develop one or more RNAi Compounds or
RNAi Products or engage Controlled Contractors; and (y) if, during the
Exclusivity Term, Alnylam or any of its Affiliates seek, directly or indirectly
in conjunction with a Third Party (other than with a Controlled Contractor or a
Research Institution or as expressly contemplated pursuant to the terms as of
the Effective Date of a Pre-Existing Alliance Agreement), to Discover, Develop,
Commercialize or Manufacture, or to license any Third Party (other than with a
Controlled Contractor or a Research Institution or as expressly contemplated
pursuant to the terms as of the Effective Date of a Pre-Existing Alliance
Agreement) the right to Discover, Develop, Commercialize or Manufacture any RNAi
Compounds or RNAi Products pursuant to an Alnylam Program, Alnylam shall first
provide written notice thereof, together with a reasonably detailed description
of such Alnylam Program (including the relevant Target(s), Indications and data
showing the performance of the RNAi Compounds involved (to the extent available,
but not the identity of the RNAi Compounds involved), to Novartis (an "Alnylam
Opportunity Notice"), and the provisions of Section 2.6(c) will apply.

          (c) Right of First Offer.

     (i) If Novartis notifies Alnylam in writing within [**] after receipt of
the Alnylam Opportunity Notice (the "Alnylam Opportunity Response Period"; such
notice, the "Alnylam Opportunity Response") that it wishes to Discover, Develop
or Commercialize the RNAi Compounds or RNAi Products under such Alnylam Program,
then:

          (A) if such Alnylam Program is directed to a product with respect to
     which the applicable Regulatory Authority in the United States or one of
     the Major Market Countries has not accepted a bona fide IND filing (a
     "Pre-IND Alnylam Program"), then such Alnylam Program and related RNAi
     Compound, product and Targets shall thereafter be included under this
     Agreement with each being treated as an "Active Program," "Discovered RNAi
     Compound," "Collaboration Product," and "Selected Targets" (provided that
     such Targets shall not be treated as Selected Targets or Supplemental
     Targets for the purposes of calculating the Selected Target Threshold or
     Supplemental Target Threshold respectively) respectively; provided,
     however, that without prejudice to the binding nature of the foregoing, the
     Parties [**] to agree upon [**], provided that in no event shall such [**]
     be less than the [**], which [**] shall include all [**] (determined in
     accordance with the [**] under this Agreement) for the [**] involved in
     such Alnylam Program, all [**] with respect to such Alnylam


                                       22
<PAGE>
     Program, the Infrastructure Fees which would have been payable by Novartis
     pursuant to Section 4.3(c) if the Alnylam Program had been an Active
     Program, and all milestones which would have been payable by Novartis
     pursuant to Section 4.4(c) if the Alnylam Program had been an Active
     Program; or

          (B) if such Alnylam Program is directed to a product with respect to
     which the applicable Regulatory Authority in the United States or one of
     the Major Market Countries has accepted a bona fide IND filed by Alnylam (a
     "Post-IND Alnylam Program"), the Parties shall use commercially reasonable
     efforts to negotiate and execute a definitive agreement to reflect the
     rights and obligations of each Party with respect to such RNAi Compound (an
     "Alnylam Program Agreement") within [**] after the date Novartis received
     the Alnylam Opportunity Notice. The Alnylam Program Agreement shall include
     (i) non-financial terms which are substantially similar to the terms set
     forth herein applicable to "Active Programs," "Discovered RNAi Compounds"
     and "Collaboration Products," (provided that any Targets covered by such
     Alnylam Program shall not be treated as Selected Targets or Supplemental
     Targets for the purposes of calculating the Selected Target Threshold or
     Supplemental Target Threshold, respectively) and (ii) appropriate financial
     consideration after giving effect to the maturity of Alnylam's Discovery,
     Development and Commercialization activities up through and including the
     Alnylam Opportunity Notice. During the period in which the Parties are
     using commercially reasonable efforts to negotiate and execute an Alnylam
     Program Agreement, Alnylam shall give reasonable consideration to any
     Novartis input on any agreements that Alnylam desires to enter into with
     any Research Institution with respect to such Alnylam Program.

During the Alnylam Opportunity Response Period, Alnylam shall provide, at
Novartis's reasonable request, information (but not the identity of the RNAi
Compounds involved) that would be relevant in making a decision about whether or
not to participate in such Alnylam Program.

     (ii) If: (A) Novartis indicates during the Alnylam Opportunity Response
Period that it has no interest in a Pre-IND Alnylam Program; or (B) with respect
to Post-IND Alnylam Programs, Novartis and Alnylam are unable, after using
commercially reasonable efforts, to enter into an Alnylam Program Agreement
within [**] after the date Novartis received the Alnylam Opportunity Notice,
then Alnylam and its Affiliates shall for a period of [**] thereafter be free,
without any further obligation to Novartis, to enter into an agreement with a
Third Party seeking to Discover, Develop or Commercialize, or to license any
Third Party to Discover, Develop and Commercialize, any RNAi Compounds and RNAi
Products pursuant to such Alnylam Program on terms no more favorable, overall,
to such Third Party than those offered to Novartis under Section 2.6(c)(i).

     (iii) If: (A) Novartis indicates during the Alnylam Opportunity Response
Period that it has no interest in a Post-IND Alnylam Program; or (B) Novartis
fails to provide Alnylam an Alnylam Opportunity Response prior to the expiration
of the


                                       23
<PAGE>
Alnylam Opportunity Response Period with respect to either a Pre-IND Alnylam
Program or a Post-IND Alnylam Program, then Alnylam and its Affiliates shall be
free, without any further obligation to Novartis, to enter into an agreement
with a Third Party seeking to Discover, Develop or Commercialize, or to license
any Third Party to Discover, Develop and Commercialize, any RNAi Compounds and
RNAi Products pursuant to such Alnylam Program.

          (d) Alnylam's Acquisition of Third Party Intellectual Property.
Alnylam may enter into agreements with Third Parties to acquire or license
rights from such Third Parties so long as Alnylam complies with the provisions
of Sections 2.6(b) and (c), as applicable, in connection therewith.

          2.7 TECHNOLOGY TRANSFER.

          (a) Information. On a periodic basis as agreed by the Parties, and
promptly following Novartis's reasonable request from time to time, Alnylam
shall deliver to Novartis or its designated Affiliate, for no additional
consideration, (i) all Alnylam Intellectual Property specifically relating to
the Discovered RNAi Compounds, (ii) all Alnylam Intellectual Property relating
to the Research Collaboration (including each of the Active Programs), and (iii)
all Alnylam Intellectual Property necessary or useful to the Discovery,
Development, Commercialization or Manufacture of Discovered RNAi Compounds or
Collaboration Products. Following the Adoption Date, on a periodic basis as
agreed by the Parties, and promptly following Novartis's reasonable request from
time to time, Alnylam shall deliver to Novartis, for no additional
consideration, all Broad RNAi Intellectual Property that is necessary or useful
to the exercise of Novartis's rights under the Adoption License. The information
to be delivered pursuant to the foregoing provisions of this Section 2.7 shall
include copies of all Patent Rights, Know-How documentation, copyright
registrations, and applications thereof, Program Data, and all other
documentation relating to the intellectual property embodied in the Discovered
RNAi Compounds, whether in human or machine readable form (such form to be
acceptable to Novartis), and un-redacted copies of agreements that directly or
indirectly grant or restrict rights in Alnylam Intellectual Property subject to
compliance with applicable documented confidentiality obligations and provided
that Alnylam may redact terms that do not relate to Novartis's rights or
obligations under this Agreement; provided, that, until the earlier of (x) the
expiration of the Selection Term or (y) such time as Novartis acquires the
Adoption License, Alnylam will use commercially reasonable efforts to ensure
that Novartis is granted access to un-redacted copies of agreements thereafter
entered into directly or indirectly granting or restricting rights in Alnylam
Intellectual Property (provided that Alnylam may redact terms that do not relate
to Novartis's rights or obligations under this Agreement). Additionally, with
respect to each Licensed Product that is not directed to the same Indication as
an Alnylam product that is the subject of a Dedicated Alnylam Program, Alnylam
shall deliver to Novartis or its designated Affiliate, for no additional
consideration, all scientific, regulatory, pre-clinical or clinical information
or data regarding specific Indications and all marketing, financial, commercial,
personnel and other business information and plans that are necessary or useful
to the Discovery, Development, Commercialization or Manufacture of such Licensed
Product and its related RNAi Compound(s).


                                       24
<PAGE>
          (b) Technology. On a periodic basis as agreed by the Parties, and
promptly following Novartis's reasonable request from time to time, Alnylam
shall deliver to Novartis or its designated Affiliate, for no additional
consideration, physical embodiments of (i) the Discovered RNAi Compounds, (ii)
all Know-How now or in the future Controlled by Alnylam that is used in the
course of the Research Collaboration (including each of the Active Programs),
and (iii) all Know-How now or in the future Controlled by Alnylam that is
necessary or useful to the Discovery, Development, Commercialization or
Manufacture of Discovered RNAi Compounds or Collaboration Products. Following
the Adoption Date, on a periodic basis as agreed by the Parties, and promptly
following Novartis's request from time to time, Alnylam shall deliver to
Novartis, for no additional consideration, all Know-How Controlled by Alnylam
that is necessary or useful to the exercise of Novartis's rights under the
Adoption License.

          (c) Without limiting the generality of any other provision of this
Agreement, Alnylam shall, until the fifth (5th) anniversary of the termination
or expiration of the Research Term, make its relevant scientific and technical
personnel available to Novartis to answer any questions or provide instruction
as reasonably requested by Novartis concerning the items delivered pursuant to
Section 2.7, in connection with Novartis's Development, Commercialization and
Manufacture of the Discovered RNAi Compounds and the Licensed Products.

                                   ARTICLE III

                                 GRANT OF RIGHTS

          3.1 ALNYLAM GRANTS.

          (a) Research Term. Subject to the terms and conditions of this
Agreement (including Sections 3.1(e) and (f)), Alnylam hereby grants to Novartis
and its Affiliates a worldwide, royalty-free, non-sublicensable right and
license under Alnylam Intellectual Property to, during the Research Term, (i)
perform Novartis's obligations under the Research Collaboration, (ii) engage in
the Discovery of RNAi Compounds in the Field, and (iii) Discover RNAi Compounds
directed at the Selected Targets (other than Selected Targets that are the
subject of Abandoned Programs that do not become Active Programs pursuant to
Sections 2.3(b) or 2.6(c)). The rights granted under clauses (i) and (ii) shall
be non-exclusive, and the rights granted under clause (iii) shall be exclusive,
subject to Alnylam's right (itself or through its Affiliates) to perform its
obligations under the Research Collaboration or to pursue Abandoned Programs
that do not become Active Programs pursuant to Sections 2.3(b) or 2.6(c).


                                       25
<PAGE>
          (b) Collaboration Products. Subject to the terms and conditions of
this Agreement (including Sections 3.1(e) and (f)), Alnylam hereby grants to
Novartis and its Affiliates an exclusive (subject to Alnylam's right (itself or
through its Affiliates) to perform its obligations under the Research
Collaboration), worldwide, royalty-bearing, sublicensable (subject to Section
3.1(d)) right and license under Alnylam Intellectual Property to (i) Discover,
Develop, Commercialize or Manufacture Collaboration Products for all
applications in the Field, and (ii) to Develop, Commercialize or Manufacture
Discovered RNAi Compounds.

          (c) Adoption. Upon Novartis's written election during the Research
Term (following such time as the Collaboration Success Milestone has been
achieved) and Novartis's or its Affiliate's tender to Alnylam of the Adoption
Consideration (the date of such tender, the "Adoption Date"), Alnylam hereby
grants, in addition to the licenses granted in Sections 3.1(a) and (b), to
Novartis and its Affiliates a non-exclusive, worldwide, perpetual, irrevocable,
royalty-bearing right and license, subject to the terms and conditions of this
Agreement (including Sections 3.1(e) and (f)), under Broad RNAi Intellectual
Property to engage in any and all activities in the Field, including all
Discovery, Development, Commercialization and Manufacturing activities directed
to the Field (the "Adoption License"). Novartis's rights under the Adoption
License are non-sublicensable; provided, however, that Novartis may engage Third
Party contractors, including contract research organizations, contract
employees, consultants, contract manufacturers and the like.

          (d) Novartis Sublicense Rights. The sublicensing of Novartis's rights
under Section 3.1(b) will be subject to the following provisions: (i) Novartis's
sublicensees shall have no right to grant further sublicenses without Alnylam's
written consent, which consent shall not be unreasonably withheld or delayed;
and (ii) Novartis shall be primarily liable for any failure by its sublicensees
to comply with, and Novartis guarantees to Alnylam the compliance by each of its
sublicensees with, all relevant restrictions, limitations and obligations in
this Agreement.

          (e) Reservation of Rights.

          (i) Novartis acknowledges and agrees that the grants by Alnylam under
Alnylam Intellectual Property set forth in Sections 3.1(a) through (c) are
subject to, and are limited to the extent of, the rights that Alnylam has
previously granted and is required to grant under Alnylam Intellectual Property
to Third Parties (the "Pre-Existing Alliance Parties") under the terms as of the
Effective Date of the Pre-Existing Alliance Agreements. As and to the extent
that such rights previously or subsequently granted to Pre-Existing Alliance
Parties under Alnylam Intellectual Property lapse, terminate or otherwise revert
to Alnylam, they shall be automatically included in the rights under Alnylam
Intellectual Property granted to Novartis under Sections 3.1(a) through (c).
Without limiting the foregoing, (x) Alnylam covenants not to amend or extend any
Pre-Existing Alliance Agreements in a manner that would further narrow or limit
the scope of Novartis's rights under Section 3.1(a) through (c), and (y) Alnylam
covenants not to grant any exclusive rights or licenses under any Broad RNAi
Intellectual Property except in connection with Alnylam Programs that are not
acquired by Novartis pursuant to


                                       26
<PAGE>
Section 2.6(c) or as expressly contemplated pursuant to the terms as of the
Effective Date of Pre-Existing Alliance Agreements, provided, that the
provisions of this clause (y) shall terminate upon the expiration of the
Research Term if Novartis has not elected to obtain the Adoption License. Until
such time as Novartis is no longer precluded as a result of rights granted under
the terms as of the Effective Date of one or more Pre-Existing Alliance
Agreements from engaging in Target identification or Target validation, Alnylam
shall, at its cost and expense, allocate up to [**] in furtherance of the
Research Collaboration.

          (ii) Novartis further acknowledges that a Pre-Existing Alliance Party
may from time to time request rights under Alnylam Intellectual Property with
respect to a particular Target that Alnylam is required, pursuant to the terms
as of the Effective Date of a Pre-Existing Alliance Agreement, to grant such
rights to such Pre-Existing Alliance Party with respect to such Target unless,
among other conditions, such Target is already the subject of an active program
of Discovery, Development or Commercialization of RNAi Compounds directed to
such Target by Novartis. In order for Alnylam to fulfill its obligations under
the Pre-Existing Alliance Agreements, following the Adoption Date, Novartis
shall, within twenty (20) days following Novartis's receipt of a written inquiry
from Alnylam (through the Gatekeeper mechanism described in Section 3.1(e)(iv))
with respect to a specified Target (a "Target Inquiry"), notify Alnylam (through
the Gatekeeper mechanism described in Section 3.1(e)(iv)) in writing whether or
not such Target is the subject of a Dedicated Novartis Program. If Novartis so
notifies Alnylam that such Target is the subject of a Dedicated Novartis
Program, Alnylam shall not grant to such Pre-Existing Alliance Party the
requested rights under the Broad RNAi Intellectual Property with respect to such
Target. If Novartis so notifies Alnylam that such Target is not the subject of a
Dedicated Novartis Program, then Alnylam may grant to such Pre-Existing Alliance
Party the relevant rights under Broad RNAi Intellectual Property with respect to
such Target, and Novartis's rights under Sections 3.1(a) or (c) shall be subject
to such Pre-Existing Alliance Party's rights with respect to such Target.
Notwithstanding the foregoing, in no event will Alnylam directly or indirectly
notify or communicate to any Third Party the contents or the existence of
Novartis's response hereunder without Novartis's prior written consent, which
may be withheld at Novartis's sole discretion.

          (iii) From time to time during the Research Term, and after the
Adoption Date, following an affirmative decision by Novartis to initiate a
program directed to the Discovery, Development or Commercialization of RNAi
Compounds directed to a particular Target, Novartis may inquire of the
Gatekeeper in writing whether or not such Target is on the Blocked Target List
by virtue of being subject to a then-current exclusive or co-exclusive grant
under a Pre-Existing Alliance Agreement or subject of an option, right of first
refusal or similar right under a Pre-Existing License Agreement in the
Encumbered Field. The Gatekeeper shall, within two (2) days following the
Gatekeeper's receipt of such written request from Novartis, notify Novartis in
writing whether or not such Target is or may be excluded; provided, however,
that in no event will the Gatekeeper directly or indirectly notify or
communicate to Alnylam the contents or the existence of Novartis's inquiry
hereunder without Novartis's prior written consent, which may be withheld at
Novartis's sole discretion. In the event that such


                                       27
<PAGE>
Target is not on such Blocked Target List, Novartis shall be free to Discover,
Develop, Commercialize or Manufacture RNAi Compounds and Licensed Products
directed to such Targets. Notwithstanding the foregoing, a Pre-Existing Alliance
Party may subsequently request exclusive or co-exclusive rights from Alnylam
with respect to a particular Target as described in Section 3.1(e)(ii) and the
provisions of Section 3.1(e)(ii) shall control.

          (iv) Gatekeeper. The inquiries and responses made by one Party to the
other in connection with Sections 2.1 and 3.1(e)(ii) through (iii) shall be made
in writing to the attention of an independent attorney registered to practice
before the United States Patent and Trademark Office mutually agreeable to both
Parties (the "Gatekeeper") who will be bound by confidentiality obligations to
both Parties. The Gatekeeper's responsibility shall be to ensure that each Party
complies on an ongoing basis with the terms and conditions of Sections 2.1 and
3.1(e)(ii) through (iii). Each Party agrees to provide the Gatekeeper with full
and complete copies of all records and information (including un-redacted copies
of the relevant Third Party agreements) that are necessary for the Gatekeeper to
render its determination. In the event that the Gatekeeper determines that, in
connection with an inquiry or response made by either Party in connection with
Sections 2.1 or 3.1(e)(ii) through (iii), such Party may not have complied with
the provisions of one or more of those Sections, the Gatekeeper shall issue a
written report to both Parties stating with specificity such actual or suspected
non-compliance, and each Party hereby consents to the disclosure to the other
Party of any confidential information included in such report (provided that
such information shall be treated by the Parties' as Confidential Information
pursuant to Article V). The Parties shall share equally the fees, costs and
expenses of the Gatekeeper's appointment.

          (f) Contractual Obligations under Listed Alnylam Third Party
Agreements.

          (i) For the avoidance of doubt, the grants by Alnylam under Alnylam
Intellectual Property set forth in Sections 3.1(a) through (c) include, subject
to Section 3.1(f)(ii), the sublicense of all Alnylam Intellectual Property that
is not owned by Alnylam, and the license and sublicense of Alnylam Intellectual
Property acquired or licensed after the Effective Date. Novartis's rights and
licenses under such Alnylam Intellectual Property are limited to the rights
granted to Alnylam under Third Party agreements granting Alnylam rights
thereunder and Novartis shall comply, and cause its Affiliates and sublicensees
to comply, with those restrictions and other terms applicable to sublicensees
under such agreements. In the event that Alnylam or its Affiliates acquires or
licenses any rights under additional Alnylam Intellectual Property such
additional Alnylam Intellectual Property shall be automatically included in the
scope of the rights under Alnylam Intellectual Property granted to Novartis
pursuant to Sections 3.1(a) through (c); provided, however, that in the event
that such rights thereunder subject Alnylam's or its Affiliates' sublicensees to
restrictions and other terms, Alnylam shall deliver a copy of such agreement
(provided that Alnylam may redact terms that do not relate to Novartis's rights
or obligations under this Agreement). Novartis shall comply, and cause its
Affiliates and sublicensees to comply, with those restrictions and other terms
applicable to sublicensees under such agreements. In the course of acquiring or


                                       28
<PAGE>
licensing additional Broad RNAi Intellectual Property or any other Alnylam
Intellectual Property Covering a Collaboration Product, Alnylam shall use its
best efforts to ensure that such rights include the right to sublicense to
Novartis such Broad RNAi Intellectual Property or any other Alnylam Intellectual
Property Covering a Collaboration Product. Notwithstanding the foregoing, it
shall not be deemed a breach of this Section 3.1(f)(i) for Novartis to fail to
comply with a provision of any such Third Party agreement that Novartis has not
received from Alnylam.

          (ii) Notwithstanding Sections 3.1(a) through (c), the grants by
Alnylam under Alnylam Intellectual Property set forth in Sections 3.1(a) through
(c), shall not include licenses to Patent Rights licensed to Alnylam or its
Affiliates under the License Agreement between Cancer Research Technologies
Limited and Alnylam U.S., Inc. (formerly Alnylam Pharmaceuticals, Inc.) dated
July 18, 2003. The Parties shall simultaneously with the execution of this
Agreement enter into the agreement substantially in the form set forth in
Schedule 3.1(f)(ii) (the "CRT Sublicense Agreement").

          (g) Alnylam shall not assign, license or otherwise grant any rights or
dispose of (collectively, a "disposition") with respect to any Broad RNAi
Intellectual Property or other Alnylam Intellectual Property Covering a
Collaboration Product without making such disposition expressly subject to
Novartis's rights under this Agreement.

          3.2 NOVARTIS GRANT.

          Novartis hereby grants to Alnylam and its Affiliates a worldwide,
royalty-free, non-exclusive, non-sublicensable right and license under Novartis
Intellectual Property to perform Alnylam's obligations under an Active Program
during the Research Term.

          3.3 AFFILIATES.

          For the avoidance of doubt, in granting the rights under Sections 3.1
and 3.2, Alnylam and Novartis are granting, on behalf of their current and
future Affiliates (other than a Third Party that becomes an Affiliate of Alnylam
as a result of a Change of Control), such Affiliates' respective rights under
the Alnylam Intellectual Property and Novartis Intellectual Property, as the
case may be, that are owned or licensed by such Affiliates. For the purposes of
this Section 3.3, Novartis's "Affiliates" shall not include Novartis Institute
for Functional Genomics, Inc., the Friedrich Miescher Institute for BioMedical
Research or Novartis Institute for Tropical Diseases Pte. Ltd.

          3.4 NOVARTIS FREEDOM TO OPERATE; COMMITMENTS.

          Alnylam acknowledges that Novartis is in the business of Discovering,
Developing, Commercializing and Manufacturing processes and products in the
Field and nothing in this Agreement or any duties which may be imposed under
applicable Law shall be construed as restricting such business or imposing on
Novartis a duty to Discover, Develop, Commercialize or Manufacture the
Discovered RNAi Compounds or


                                       29
<PAGE>
any Licensed Products to the exclusion of, or in preference to, any other
process or product, or in any way other than in accordance with its normal
commercial practices, or to disclose information to Alnylam not specifically
required hereunder; provided, however, that Novartis shall, itself or through
its Affiliates, use Commercially Reasonable Efforts to Develop and Commercialize
Collaboration Products.

                                   ARTICLE IV

                              FINANCIAL PROVISIONS

          4.1 EQUITY INVESTMENT; UP-FRONT CONSIDERATION.

          (a) Equity Investment. In addition to the monetary payments described
in this Article IV, the Parties have entered into the Stock Purchase Agreement
and, in connection with the Closing (as defined in the Stock Purchase
Agreement), Alnylam shall simultaneously with the execution of this Agreement
issue shares of Alnylam capital stock to Novartis Pharma AG or its designee upon
payment therefor.

          (b) Up-Front Consideration. In consideration of the rights granted to
Novartis under this Agreement as of the Effective Date, Novartis shall pay, or
cause to be paid, to Alnylam ten million dollars ($10,000,000) within ten (10)
Business Days following the Effective Date, of which [**] dollars ($[**]) shall
represent retrospective reimbursement of Alnylam's expenses to date incurred in
the development of in vivo RNAi technology, and [**] dollars ($[**]) shall
represent an upfront license fee. The foregoing payments shall be deemed to
include the following amounts: (i) $[**] for a sublicense of the rights licensed
by Alnylam under the Agreement between the [**] and Alnylam Pharmaceuticals,
Inc. dated September 17, 2003; and (ii) the payments made in respect of Section
3.1 of the [**] Sublicense Agreement.

          4.2 ADOPTION.

          (a) In the event that Novartis elects, pursuant to the terms of
Section 3.1(c), to exercise its right to acquire the Adoption License, Novartis
shall, or shall cause one of its Affiliates to, (i) pay to Alnylam a one-time
technology adoption fee of [**] dollars ($[**]) (the "Adoption Fee"), and (ii)
advance to Alnylam, in one disbursement, the amount of [**] dollars ($[**])
(such amount, the "Pre-Paid Adopted Product Fees," and together with the
Adoption Fee, the "Adoption Consideration"). The Pre-Paid Adopted Product Fees
shall be credited against the unpaid balance of any and all of Novartis's future
payment obligations with respect to Adopted Products under Section 4.4 (such
future payment obligations, "Adopted Product Obligations") by applying the
then-current uncredited balance to [**] percent ([**]%) of the Adopted Product
Obligation owed with respect to each Contract Quarter following the Adoption
Date, and then reducing the uncredited balance of the Pre-Paid Adopted Product
Fees by the amount so applied, until the entire amount of the uncredited balance
has been so credited. The foregoing payments shall be deemed to include the
following amounts: (i) $[**] for a sublicense of the rights licensed by Alnylam
under the Agreement between the [**] and


                                       30
<PAGE>
Alnylam Pharmaceuticals, Inc. dated September 17, 2003; and (ii) the payments
made in respect of Section 3.2 of the [**] Sublicense Agreement.

          (b) Notwithstanding the provisions of Section 4.2(a), in the event
that, during the period of time beginning on the Effective Date and continuing
until [**] after the Adoption Date, (x) Alnylam or one of its Affiliates
directly or indirectly grants (by license, option, covenant not to sue, waiver,
settlement or otherwise) to a Third Party rights that are substantially similar
to those which may be or have been granted to Novartis under Section 3.1(c) (a
"Third Party Adoption"), and (y) the aggregate consideration payable by such
Third Party or obtained by Alnylam or its Affiliates in respect of such rights
(whether by payment, loan, exercise price, forgiveness of debt, success
milestones due before such rights may be granted, or otherwise, or any
combination of the foregoing, or the fair market value thereof, the "Third Party
Adoption Consideration") is less than the Adoption Consideration plus the
Collaboration Success Milestone or more favorable to such Third Party than the
Adoption Consideration plus the Collaboration Success Milestone, then (A)
Alnylam shall notify Novartis in writing of such Third Party Adoption
Consideration, and (B) the Adoption Consideration plus the Collaboration Success
Milestone shall, from time to time, be reduced to the lowest Third Party
Adoption Consideration then in effect. In the event that the Third Party
Adoption occurs following Novartis's acquisition of the Adoption License,
Novartis shall be entitled to deduct the amount of any excess of the Adoption
Consideration plus the Collaboration Success Milestone over the Third Party
Adoption Consideration against payment(s) due under Section 4.4. Compliance with
the terms of this Section 4.2(b) shall be verified by Alnylam's principal
external auditors (or, if such auditors cannot perform such verification, a
mutually agreed upon independent Third Party valuation services firm) who shall,
on an annual basis within ninety (90) days following the end of each Contract
Year, provide Novartis with written confirmation that shall either confirm that
the above requirements have been observed in full or, in the case of
non-compliance, provide full details of the lowest Third Party Adoption
Consideration.

          4.3 RESEARCH COLLABORATION PAYMENTS.

          (a) Supplemental Selected Target Fee. Upon Novartis's election
pursuant to the terms of Section 2.1(b)(ii) to treat a Supplemental Target as a
Selected Target, Novartis shall pay, or cause to be paid, a one-time payment of
[**] dollars ($[**])-per-Supplemental Target within [**] following the receipt
by Novartis of an invoice therefor in accordance with Section 4.7.

          (b) FTE Funding. During the first [**] of the Selection Term, Novartis
or its Affiliates will fund the FTEs provided by Alnylam pursuant to Section 2.4
at an annual rate per FTE of [**] dollars ($[**]), pro-rated to the duration
that such FTEs perform work in an Active Program. After the [**] of the
Selection Term, the Parties shall enter into good faith negotiations to adjust
the annual FTE rate applicable to FTEs provided by Alnylam, it being understood
that the Research Collaboration shall continue during such negotiations.
Novartis shall pay, or cause to be paid, such reimbursement quarterly, in
arrears, in accordance with Section 4.7.


                                       31
<PAGE>
          (c) Infrastructure Fee. During the Research Term, Novartis shall pay,
or cause to be paid, to Alnylam an infrastructure fee (the "Infrastructure Fee")
of [**] dollars ($[**]) per Contract Quarter for each Active Program meeting
both of the following criteria: (i) such Active Program was active for at least
[**] during such Contract Quarter, and (ii) Alnylam provided at least [**]
within such Contract Quarter for such Active Program. Novartis shall pay, or
cause to be paid, the Infrastructure Fee quarterly, in arrears, in accordance
with Section 4.7.

          4.4 MILESTONE AND ROYALTY PAYMENTS.

          (a) Research Milestone Payments. In connection with the research and
preclinical Development of Discovered RNAi Compounds directed against Selected
Targets, Novartis shall pay, or cause to be paid, to Alnylam the following
one-time payments with respect to each Selected Target upon the achievement of
the milestone events set forth below:

<TABLE>
<CAPTION>
Milestone Event:                                                 Payment Amount:
----------------                                                 ---------------
<S>                                                              <C>
Successful Completion of a first study of a Discovered RNAi           $[**]
Compound in animals to evaluate pharmacokinetics/
biodistribution or mechanism of action (e.g., evidence of
knock-down) ("First Animal Study"):

Determination by Novartis to nominate a Discovered RNAi               $[**]
Compound for sPOC:
</TABLE>

Each of the milestone payments under this Section 4.4(a) shall be payable only
once in relation to each Selected Target. By way of example, in the event that
Novartis elects not to proceed with the Development or Commercialization of an
RNAi Compound directed to a Selected Target for which one or both of the
foregoing milestone payments have been paid, Novartis shall not be required to
make any milestone payments previously paid under this Section 4.4(a) with
respect to any back-up RNAi Compound(s) directed at such Selected Target.

          (b) Program Milestone Payments. In connection with the research and
preclinical Development of Discovered RNAi Compounds, Novartis shall pay, or
cause to be paid, to Alnylam the following one-time payments upon the
achievement of the milestone events set forth below:

<TABLE>
<CAPTION>
Milestone Event:                                                 Payment Amount:
----------------                                                 ---------------
<S>                                                              <C>
Successful Completion of First Animal Studies for Discovered          $[**]
RNAi Compounds directed at a cumulative total of [**] Selected
Targets:

Successful Completion of First Animal Studies for                     $[**]
</TABLE>


                                       32
<PAGE>
<TABLE>
<S>                                                                   <C>
Discovered RNAi Compounds directed at a cumulative total of
[**] Selected Targets:

Successful Completion of First Animal Studies for Discovered          $[**]
RNAi Compounds directed at a cumulative total of [**] Selected
Targets:
</TABLE>

          (c) Collaboration Success Milestone. In connection with the
achievement of the Collaboration Success Milestone, Novartis shall pay, or cause
to be paid, to Alnylam the amount of [**] dollars ($[**]).

          (d) Clinical Milestone Payments. In connection with the clinical
Development of each Licensed Product against a Target, Novartis shall pay, or
cause to be paid, to Alnylam the following payments upon the achievement of the
milestone events set forth below:

<TABLE>
<CAPTION>
                                            Payment for    Payment for
                                           Collaboration     Adopted
Milestone Event:                             Products:      Products:
----------------                           -------------   -----------
<S>                                        <C>             <C>
The earlier of: (i) initiation of Phase        $[**]        See below
I Studies (first human, first visit) in
the United States, or (ii) initiation of
Phase I Studies in the first Major
Market Country:

The earlier of: (i) initiation of Phase        $[**]        See below
II Studies (first patient, first visit)
in the United States, or (ii) initiation
of Phase II Studies in the first Major
Market Country:

The earlier of: (i) initiation of Phase        $[**]        See below
III Studies (first patient, first visit)
in the United States, or (ii) initiation
of Phase III Studies in the first Major
Market Country:

The earlier of: (i) acceptance of the          $[**]        See below
dossier for the first submission of a
bona fide NDA by the FDA, or (ii)
acceptance of the dossier for the first
submission of a bona fide NDA by the
applicable Regulatory Authorities in at
least [**] of the Major Market
Countries:

The earlier of: (i) Regulatory Approval        $[**]        See below
in the United States, or (ii) Regulatory
Approval in at least [**] of the Major
Market Countries:
</TABLE>


                                       33
<PAGE>
The payments required to be made under this Section 4.4(d) for Adopted Products
shall be as follows:

     (1) in the event that the Selection Term continues for [**], or in the
     event that this Agreement is terminated by Novartis pursuant to Sections
     8.2 or 8.3, or in the event that Alnylam undergoes a Change of Control
     during the Selection Term, then the amounts payable in respect of Adopted
     Products under this Section 4.4(d) shall be [**] percent ([**]%) of the
     amounts payable in respect of Collaboration Products;

     (2) in the event that the Selection Term continues for [**], then the
     amounts payable in respect of Adopted Products under this Section 4.4(d)
     shall be [**] percent ([**]%) of the amounts payable in respect of
     Collaboration Products; and

     (3) in the event that the Selection Term continues for [**], then the
     amounts payable in respect of Adopted Products under this Section 4.4(d)
     shall be [**] percent ([**]%) of the amounts payable in respect of
     Collaboration Products.

Each of the milestone payments under this Section 4.4(d) shall be payable only
once in relation to each Target for the first Indication only. By way of
example, in the event that Novartis elects not to proceed with the Development
or Commercialization of a Licensed Product directed to a Target for which one or
more of the foregoing milestone payments have been paid, Novartis shall not be
required to make any milestone payments previously paid under this Section
4.4(d) with respect to any back-up Licensed Product(s) directed at such Target.
In addition, in the event that, with respect to the clinical Development of a
Licensed Product, Novartis satisfies a clinical milestone under this Section
4.4(d), Novartis shall pay to Alnylam all earlier milestone payments under this
Section 4.4(d) that have not otherwise been paid with respect to such Target
(regardless of whether such earlier milestones have been satisfied).

          (e) Product Royalties.

          (i) Base Rate. During each relevant Royalty Term, Novartis shall pay,
or cause to be paid, to Alnylam the following royalties on Annual Net Sales of
each Licensed Product:


                                       34
<PAGE>
<TABLE>
<CAPTION>
Incremental Annual Net Sales of a Licensed       Royalty Rate    Royalty Rate
Product (on a Licensed Product-by-Licensed      Applicable to   Applicable to
Product basis) during the applicable Contract   Collaboration      Adopted
Year:                                             Products:       Products:
---------------------------------------------   -------------   -------------
<S>                                             <C>             <C>
Less than or equal to $[**]:                        [**]%         See below

Greater than $[**], but less than or equal to       [**]%         See below
$[**]:

Greater than $[**]:                                 [**]%         See below
</TABLE>

The royalty rate applicable to Adopted Products under the chart set forth above
shall be as follows:

     (1) in the event that the Selection Term continues for [**], or in the
     event that this Agreement is terminated by Novartis pursuant to Sections
     8.2 or 8.3, or in the event that Alnylam undergoes a Change of Control
     during the Selection Term, then the royalty rate in respect of Adopted
     Products under this Section 4.4(e)(i) shall be [**] percent ([**]%) of the
     royalty rate applicable to Collaboration Products;

     (2) in the event that the Selection Term continues for [**], then the
     royalty rate in respect of Adopted Products under this Section 4.4(e)(i)
     shall be [**] percent ([**]%) of the royalty rate applicable to
     Collaboration Products; and

     (3) in the event that the Selection Term continues for [**], then the
     royalty rate in respect of Adopted Products under this Section 4.4(e)(i)
     shall be [**] percent ([**]%) of the royalty rate applicable to
     Collaboration Products.

Notwithstanding the foregoing:

     (A) if a compulsory license is granted to a Third Party with respect to a
     Licensed Product in any country, Novartis shall pay to Alnylam the
     foregoing percentages on amounts it receives from compulsory licensees in
     such country;

     (B) (x) upon the abandonment or withdrawal of a claim of a published Patent
     Application of Alnylam Patent Rights in a country, or

          (y) if the validity of a Valid Claim of an issued Alnylam Patent Right
     in a country is the subject of administrative or legal action and is later
     revoked or held unenforceable or invalid by a decision of a court or
     governmental agency of competent jurisdiction or is disclaimed or admitted
     to be invalid or unenforceable through reissue, disclaimer or otherwise,

     that, in the case of clauses (x) or (y), was the sole basis for the payment
     of royalties by Novartis pursuant to this Section 4.4(e)(i), Novartis shall
     be entitled


                                       35
<PAGE>
     to credit such paid amounts against any future royalties or payments to be
     made to Alnylam pursuant to this Section 4.4(e)(i) with respect to such
     country. If such claim is the last claim of any Alnylam Patent Rights in
     such country upon which a payment under this Section 4.4(e)(i) would be
     owed, Novartis shall be entitled to a refund of any payments made in
     respect thereof (for the avoidance of doubt, this clause (B) shall not
     apply with respect to sales of a Licensed Product in a country made during
     the first [**] after the date of First Commercial Sale of such Licensed
     Product in such country); and

     (C) with respect to each Contract Quarter during any part of the Royalty
     Term remaining after the expiration of the last to expire Alnylam Patent
     Rights containing a Valid Claim Covering the Development, Commercialization
     or Manufacture of the relevant Licensed Product in the United States or
     Japan, the foregoing royalties shall, solely with respect to such
     country's(ies') proportionate share of the worldwide Annual Net Sales of
     such Licensed Product in each tier, be reduced to [**] percent ([**]%) of
     the rate otherwise applicable pursuant to the foregoing.

     For the avoidance of doubt, Novartis's obligation to pay royalties under
     this Section 4.4(e)(i) is imposed only once with respect to the same unit
     of Licensed Product, including by reason of such Licensed Product being
     Covered by more than one Valid Claim of Alnylam Patent Rights. The amounts
     payable under this Section 4.4(e)(i) shall also be adjusted in accordance
     with Sections 4.4(e)(ii) and (iii).

          (ii) (A) Payments in Respect of Alnylam In-Licenses. In addition to
any royalty set forth in Section 4.4(e)(i), during the Royalty Term, Novartis
shall, subject to Section 4.4(e)(ii)(B), reimburse Alnylam for the clinical
milestones and royalty payments payable (each such payment, a "Listed Alnylam
Third Party Payment," collectively, the "Listed Alnylam Third Party Payments")
to Third Parties pursuant to Listed Alnylam Third Party Agreements in respect of
Licensed Products. Without limiting the provisions of Section 6.5, the Parties
shall cooperate to coordinate such reimbursements by Novartis in a manner that
ensures all amounts payable pursuant to Listed Alnylam Third Party Agreements
are paid in a timely manner and otherwise in compliance with such Listed Alnylam
Third Party Agreements. For the avoidance of doubt, Novartis shall reimburse
Alnylam for clinical milestones and royalty payments payable to Garching
Innovation GmbH under either (x) Co-Exclusive License Agreement between Garching
Innovation GmbH and Alnylam, dated December 20, 2002, or (y) Co-Exclusive
License Agreement between Garching Innovation GmbH and Ribopharma AG, dated July
30, 2003, but not both of such agreements.

          (B) Net Sales Adjustment. In the event that, in a Contract Quarter,
the sum (on a Licensed Product-by-Licensed Product basis) of (x) the Listed
Alnylam Third Party Payments paid or payable by Novartis in such Contract
Quarter, plus (y) the amount that, absent this Section 4.4(e)(ii)(B), would be
payable to Alnylam under Section 4.4(e)(i) (the "Base Royalty Amount") exceeds
(such excess amount, the "Excess Amount"):


                                       36
<PAGE>
<TABLE>
<CAPTION>
Collaboration         Adopted
Products:             Products:   Annual Net Sales of such Licensed Product:
-------------         ---------   ------------------------------------------
<S>                   <C>         <C>
[**]% of Annual Net   See below   On Annual Net Sales less than or equal to
Sales                             $[**]

[**]% of Annual Net   See below   On Annual Net Sales greater than $[**], but
Sales                             less than or equal to $[**]

[**]% of Annual Net   See below   On Annual Net Sales greater than $[**]
Sales
</TABLE>

Novartis shall be permitted to deduct the Excess Amount from the Base Royalty
Amount. In the event that the Excess Amount for a Contract Quarter exceeds the
Base Royalty Amount (such excess amount, the "Novartis Overpayment"), then
Novartis shall be entitled to deduct such Novartis Overpayment from any
subsequent payment(s) due under this Section 4.4(e). The Net Sales adjustment
thresholds applicable to Adopted Products under the chart set forth above shall
be as follows:

     (1) in the event that the Selection Term continues for [**], or in the
     event that this Agreement is terminated by Novartis pursuant to Sections
     8.2 or 8.3, or in the event that Alnylam undergoes a Change of Control
     during the Selection Term, then the Net Sales adjustment thresholds in
     respect of Adopted Products under this Section 4.4(e)(ii)(B) shall be [**]
     percent ([**]%) of the Net Sales adjustment threshold applicable to
     Collaboration Products;

     (2) in the event that the Selection Term continues for [**], then the Net
     Sales adjustment threshold in respect of Adopted Products under this
     Section 4.4(e)(ii)(B)shall be [**] percent ([**]%) of the Net Sales
     adjustment threshold applicable to Collaboration Products; and

     (3) in the event that the Selection Term continues for [**], then the Net
     Sales adjustment threshold in respect of Adopted Products under this
     Section 4.4(e)(ii)(B) shall be [**] percent ([**]%) of the Net Sales
     adjustment threshold applicable to Collaboration Products.

          (iii) Royalty Stacking. All amounts payable by Novartis to Alnylam
under Section 4.4(e)(i), as adjusted by Section 4.4(e)(ii)(B), will be reduced
(such reduction, a "Stacking Reduction") by [**] percent ([**]%) of all amounts
payable (such amounts, "Unblocking Amounts") by Novartis or its Affiliates under
Third Party agreements (other than the Listed Alnylam Third Party Agreements or
payments made in respect of Blocking RNAi Intellectual Property) that grant
intellectual property rights that


                                       37
<PAGE>
Novartis or an Affiliate determine, in their sole, reasonable discretion, are
necessary or advisable for Discovery, Development, Commercialization or
Manufacture of one or more Licensed Product(s); provided, however, to the extent
that the Stacking Reductions for a Contract Quarter would cause the amount
payable to Alnylam in such Contract Quarter to be less than [**] percent ([**]%)
of the amount otherwise payable pursuant to Section 4.4(e)(i), as adjusted by
Section 4.4(e)(ii)(B) (the "Minimum Quarterly Payment") then: Novartis shall be
entitled to (A) deduct the Stacking Reductions until the Minimum Quarterly
Payment is reached, and (B) thereafter deduct the remaining balance of Stacking
Reductions against any subsequent payment(s) due under this Section 4.4(e). If
any Unblocking Amount is applicable to more than one Licensed Product, the
Unblocking Amount will be allocated to each such Licensed Product by reasonably
pro-rating the Unblocking Amount among the Licensed Products to which it is
applicable. In entering into the agreements with Third Parties described above,
Novartis shall use commercially reasonable efforts to (a) minimize the
Unblocking Amount, and (b) have the foregoing Third Parties agree to customary
royalty stacking provisions pursuant to which payments hereunder can be offset
against payments to such Third Parties.

          (iv) Notwithstanding the adjustments under Sections 4.4(e)(i) through
(iii) and Section 4.5 on royalties payable to Alnylam, with respect to each
Licensed Product in each Contract Quarter, (A) Alnylam's royalties payable
pursuant to Section 4.4(e)(i) [**] of such Licensed Product's Net Sales in such
Contract Quarter, and (B) Novartis shall reimburse Alnylam for the Listed
Alnylam Third Party Payments payable in respect of such Licensed Product in such
Contract Quarter. Any amounts that, absent this Section 4.4(e)(iv), would
otherwise be deductible under Sections 4.4(e)(i) through (iii) or Section 4.5
against Alnylam royalties will be credited against subsequent payments due under
this Section 4.4(e), subject to the foregoing.

          (v) Duration of Royalty Payments. The royalties payable under this
Section 4.4 shall be paid on a country-by-country basis on each Licensed Product
until the expiration of the applicable Royalty Term.

          (f) Sales Milestones.

          With respect to each Collaboration Product, Novartis shall pay, or
cause to be paid, to Alnylam the following one-time payments upon the
achievement of the milestone events set forth below:

<TABLE>
<CAPTION>
Milestone Event:                                         Payment Amounts:
----------------                                         ----------------
<S>                                                      <C>
Aggregate worldwide Annual Net Sales of the applicable         $[**]
Collaboration Product reach $[**]:

Aggregate worldwide Annual Net Sales of the applicable         $[**]
Collaboration Product reach $[**]:

Aggregate worldwide Annual Net Sales of the applicable         $[**]
Collaboration Product reach $[**]:
</TABLE>


                                       38
<PAGE>
Each of the milestone payments under this Section 4.4(f) shall be payable only
once in relation to each Collaboration Product.

          4.5  PAYMENTS IN RESPECT OF BLOCKING RNAI INTELLECTUAL PROPERTY.

          Except for Listed Alnylam Third Party Payments paid or payable
pursuant to Listed Alnylam Third Party Agreements, Alnylam shall [**] by
Novartis or its Affiliates, for Novartis and its Affiliates to acquire or
license rights under Third Party intellectual property or proprietary rights
("Blocking RNAi Intellectual Property") that would be infringed by the exercise
of Novartis' rights under Broad RNAi Intellectual Property granted pursuant to
Sections 3.1(a) through (c) to the extent that such intellectual property or
proprietary rights relate to RNAi Compounds and RNAi Products generally, as
distinct from intellectual property or proprietary rights solely covering a
particular RNAi Compound or RNAi Product.

          4.6  CO-FUNDING.

          (a) With respect to each Licensed Product, Novartis shall, during the
Exclusivity Term, provide timely notice to Alnylam before the initiation of the
first Phase I Study with respect to such Licensed Product.

          (b) Alnylam will thereafter have a period of no more than [**] to
provide written notice to Novartis of Alnylam's interest in co-funding, and
sharing in the net profits and losses of, Novartis's Development and
Commercialization of such Licensed Product ("Co-Fund" or "Co-Funding"). Such
Co-Funding shall be in lieu of receiving the payments described in Section 4.4
with respect to such Licensed Product, and shall include a premium for
Novartis's risks to date.

          (c) If Novartis has an interest in having Alnylam Co-Fund such
Licensed Product, the Parties shall enter into good faith negotiations for a
period of [**] after receipt of Alnylam's notice of interest (the "Co-Fund
Negotiation Period") to determine whether or not, and if so, the terms and
conditions (including financial terms and observer rights) pursuant to which,
Alnylam may Co-Fund such Licensed Product. If the Parties are for any reason
unable to enter into a written Co-Funding agreement during the Co-Fund
Negotiation Period with respect to such Licensed Product, Novartis shall be free
to continue Developing and Commercializing such Licensed Product without any
further obligation under this Section 4.6 to Alnylam; provided, however, the
Parties shall during the course of this Agreement agree to enter into [**]
Co-Funding agreements with respect to [**] Collaboration Products.

          (d) Alnylam's Co-Funding of a Collaboration Product, if agreed to by
the Parties pursuant to Section 4.6(c), shall provide that Alnylam: (i) shall be
required to


                                       39
<PAGE>
fund at least [**] percent ([**]%) of Novartis's past and future development and
commercialization costs and expenses of such Collaboration Product, and (ii)
shall share in at least [**] percent ([**]%) of the net profits and losses of
the development and commercialization of such Collaboration Product.

          (e) For avoidance of doubt, Alnylam's Co-Funding of a Licensed Product
shall not give Alnylam any additional decision-making rights and Novartis will
be solely responsible for all decisions regarding the Development and
Commercialization of such Co-Funded Licensed Product.

          4.7  REPORTING; INVOICING AND PAYMENT.

          (a) FTEs and Infrastructure Fee. Alnylam shall, within [**] following
the end of each Contract Quarter, deliver to Novartis a report stating the FTEs
that worked on each Active Program and the Active Programs that it actively
worked on with respect to such Contract Quarter.

          (b) Milestones. Novartis shall notify Alnylam of the occurrence of one
of the milestone events identified in Sections 4.4(a), (b), (c) or (d) within
[**] following such occurrence. Thereafter, Alnylam may submit an invoice in
respect of the applicable milestone payment.

          (c) Royalty Reports; Payments. Following the First Commercial Sale of
a Licensed Product, Novartis shall, within [**] following the end of each
Contract Quarter, deliver to Alnylam a report stating the Net Sales in units and
in value of the Licensed Product made by Novartis, its Affiliates and their
respective licensees and sublicensees, on a country-by-country basis (consistent
with Novartis's internal geographical organization thereof), together with the
calculation of the royalties due to Alnylam. In the event that Alnylam agrees
with Novartis's royalty calculation, Alnylam may submit an invoice to Novartis
for such amounts. In the event that Alnylam does not agree with Novartis's
royalty calculation, Alnylam may submit an invoice to Novartis for any
undisputed amounts, which upon notice to Novartis of a dispute with respect to
such royalty calculation, shall be without prejudice to Alnylam's rights and
remedies with respect to any disputed amounts.

          (d) Invoices. All amounts payable by Novartis under this Agreement
shall be made only upon receipt by Novartis of an invoice substantially in the
form set forth in Schedule 4.7 (as may be updated by Novartis from time to time)
covering such payment. Except in the event of a bona fide dispute with respect
to such invoiced amounts, all payments made by Novartis pursuant to this
Agreement will be made within [**] following receipt by Novartis of the
applicable invoice.

          4.8  FINANCIAL RECORDS.

          Each Party and its Affiliates shall keep for three (3) years all
financial records relating to the transactions and activities contemplated by
this Agreement in sufficient detail to verify compliance with the terms of this
Agreement. The Parties shall


                                       40
<PAGE>
maintain all records in accordance with their respective Accounting Standards.
Each Party shall promptly notify the other in the event that it changes the
accounting principles pursuant to which its records shall be maintained, it
being understood that only internationally recognized accounting principles may
be used.

          4.9  AUDIT RIGHT.

          (a) For the purposes of the audits rights described herein, a Party
subject to an audit in any given Contract Year will be referred to as the
"Auditee" and the other Party who has certain and respective rights to audit the
books and records of the Auditee will be referred to as the "Audit Rights
Holder."

          (b) Each Party may, upon request and at its expense (except as
provided for herein), cause an internationally-recognized independent accounting
firm selected by it (except one to whom the Auditee has a reasonable objection)
(the "Audit Team"), to audit during ordinary business hours the books and
records of the other Party's compliance with its obligations under this
Agreement, including the correctness of any payment made or required to be made
to or by such Party, as applicable, and any report underlying such payment (or
lack thereof), pursuant to the terms of this Agreement. Prior to commencing such
audit, the Audit Team shall enter into an appropriate confidentiality agreement
with the Auditee.

          (c) In respect of each audit of the Auditee's books and records: (i)
the Auditee may be audited only once per Contract Year; (ii) no records for any
given Contract Year for an Auditee may be audited more than once; and (iii) the
Audit Rights Holder shall only be entitled to audit books and records of an
Auditee from the three (3) Contract Years prior to the Contract Year in which
the audit request is made; provided, however, that the Audit Rights Holder shall
be entitled to audit all contracts to which such books and records relate
regardless of the date such contracts were entered into.

          (d) In order to initiate an audit for a particular Contract Year, the
Audit Rights Holder must provide written notice to the Auditee. The Audit Rights
Holder exercising its audit rights shall provide the Auditee with written notice
of one or more proposed dates of the audit which are at least forty-five (45)
days after the date of the Auditee's receipt of such written notice. The Auditee
will reasonably accommodate the scheduling of such audit. The Auditee shall
provide such Audit Team with full and complete access to the applicable books
and records and otherwise reasonably cooperate with such audit.

          (e) The audit report and basis for any determination by an Audit Team
shall be made available for review and comment by the Auditee, and the Auditee
shall have the right, at its expense, to request a further determination by such
Audit Team as to matters which the Auditee disputes (to be completed no more
than thirty (30) days after the first determination is provided to such Auditee
and to be limited to the disputed matters). If the Parties disagree as to such
further determination and such disagreement relates to financial matters, the
Audit Rights Holder and the Auditee shall mutually select an
internationally-recognized independent accounting firm that shall make a final


                                       41
<PAGE>
determination as to the remaining matters in dispute that shall be binding upon
the Parties. With respect to disagreements that relate to non-financial matters,
the Parties reserve all rights and remedies available at law and equity. Such
accountants shall not disclose to the Audit Rights Holder any information
relating to the business of the Auditee except that which should properly have
been contained in any report required hereunder or otherwise required to be
disclosed to such Party to the extent necessary to verify the payments required
to be made or other obligations pursuant to the terms of this Agreement.

          (f) If the audit shows any under-reporting or underpayment, or
overcharging by any Party, that under-reporting, underpayment or overcharging
shall be reported to the Joint Steering Committee (or both Parties if the Joint
Steering Committee is no longer operating) and the underpaying or overcharging
Party shall remit such underpayment or reimburse such overcompensation (together
with interest at the interest rate of three percent (3%) with respect to any
underpayment or overcharge) to the underpaid or overcharged Party within fifteen
(15) days of receiving the audit report. Further, if the audit for an annual
period shows an under-reporting or underpayment or an overcharge by any Party
for that period in excess of ten percent (10%) of the amounts properly
determined, the underpaying or overcharging Party, as the case may be, shall
reimburse the applicable underpaid or overcharged Audit Rights Holder conducting
the audit, for its respective audit fees and reasonable out-of-pocket expenses
in connection with said audit, which reimbursement shall be made within thirty
(30) days of receiving appropriate invoices and other support for such
audit-related costs.

          4.10 CURRENCY EXCHANGE.

          All amounts in this Agreement are expressed in U.S. Dollars. With
respect to sales of Licensed Products invoiced in U.S. Dollars, the sales and
royalties payable shall be expressed in U.S. Dollars. With respect to sales of
Licensed Products invoiced in a currency other than U.S. Dollars, the sales and
royalties payable shall be expressed in their U.S. Dollar equivalent calculated
using Novartis's then-current standard exchange rate methodology applied in its
external reporting in accordance with International Financial Reporting
Standards as generally and consistently applied by Novartis (which is ultimately
based on official rates such as Reuters and the European Central Bank) for the
conversion of foreign currency sales into United States Dollars. All payments
shall be made in U.S. Dollars.

          4.11 TAX MATTERS.

          The Parties shall use all reasonable and legal efforts to reduce or
optimize tax withholding, to the extent permitted by applicable law, on payments
made pursuant to this Agreement. Each Party agrees to cooperate in good faith to
provide the other Party with such documents and certifications as are reasonably
necessary to enable such other Party to minimize any withholding tax obligations
or liabilities. Notwithstanding such efforts, if Novartis concludes that tax
withholdings under the Laws of any country are required with respect to payments
to Alnylam, Novartis shall withhold the required amount and pay it to the
appropriate governmental authority. The Parties will reasonably


                                       42
<PAGE>
cooperate in providing one another with documentation of the payment of any
withholding taxes paid pursuant to this Section 4.11 and in completing and
filing documents required under the provisions of any applicable tax Laws or
under any other applicable Law in connection with the making of any required tax
payment or withholding payment, or in connection with any claim to a refund of
or credit for any such payment.

          4.12 LATE PAYMENTS.

          Unless otherwise mutually agreed by the Parties, all undisputed
amounts due under this Agreement that are overdue by at least ten (10) Business
Days shall earn interest from such date due until paid at a rate equal to the
three (3) month LIBOR rate for United States Dollars, as reported by The Wall
Street Journal, plus one percent (1%) per annum.

                                    ARTICLE V

                            CONFIDENTIAL INFORMATION

          5.1  CONFIDENTIAL INFORMATION.

          All Confidential Information disclosed by a Party to the other Party
in connection with the activities contemplated by this Agreement shall not be
used by the receiving Party except in connection with the activities and
licenses contemplated by this Agreement, shall be maintained in confidence by
the receiving Party (except to the extent reasonably necessary for Regulatory
Approval of a product or for the filing, prosecution and maintenance of Patent
Rights), and shall not otherwise be disclosed by the receiving Party to any
other person, firm, or agency, governmental or private, without the prior
written consent of the disclosing Party, except to the extent that the
Confidential Information (as determined by competent documentation):

               (a) was known or used by the receiving Party prior to its date of
     disclosure to the receiving Party; or

               (b) either before or after the date of the disclosure to the
     receiving Party, is lawfully disclosed to the receiving Party by sources
     other than the disclosing Party rightfully in possession of the
     Confidential Information; or

               (c) either before or after the date of the disclosure to the
     receiving Party, becomes published or generally known to the public
     (including information known to the public through the sale of products in
     the ordinary course of business), without the receiving Party or its
     sublicensees violating this Article V; or

               (d) is independently developed by or for the receiving Party
     without reference to or reliance upon the Confidential Information.


                                       43
<PAGE>
Notwithstanding anything set forth herein to the contrary, this Article V shall
not prohibit the receiving Party from disclosing Confidential Information of the
disclosing Party to defend or prosecute litigation; provided that, to the extent
practicable, the receiving Party provides prior written notice of such
disclosure to the disclosing Party and assists the disclosing Party in its
reasonable and lawful efforts to avoid or minimize the degree of such
disclosure. Notwithstanding the foregoing provisions of this Section 5.1, either
Party may only disclose the terms of this Agreement if such Party reasonably
determines, based on advice from its counsel, that it is required to make such
disclosure by applicable law, regulation or legal process (whether in connection
with its ongoing disclosure obligations, in connection with a corporate activity
or otherwise), including without limitation by the rules or regulations of the
United States Securities and Exchange Commission or similar regulatory agency in
a country other than the United States or of any stock exchange or NASDAQ, in
which event such Party shall provide prior notice of such intended disclosure to
the other Party sufficiently in advance to enable the other Party to seek
confidential treatment or other protection for such information unless the
disclosing Party is prevented by law or regulation from providing such advance
notice and shall disclose only such terms of this Agreement as such disclosing
Party reasonably determines, based on advice from its counsel, are required by
applicable law, regulation or legal process to be disclosed (whether in
connection with its ongoing disclosure obligations, in connection with a
corporate activity or otherwise). In the event that either Party determines that
it must publicly file this Agreement with the United States Securities and
Exchange Commission such Party shall (i) initially file a redacted copy of this
Agreement (the "Redacted Research Collaboration and License Agreement") in the
form of Exhibit D to the Stock Purchase Agreement, (ii) request, and use
commercially reasonable efforts to obtain, confidential treatment of all terms
redacted from such Redacted Research Collaboration and License Agreement;
provided that the redaction of such terms is permitted by the applicable rules
and regulations of the United States Securities and Exchange Commission, (iii)
permit the other Party to review and approve such initial request for
confidential treatment and any subsequent correspondence with respect thereto at
least two (2) Business Days prior to its submission to the United States
Securities and Exchange Commission, and (iv) promptly deliver to the other Party
any written correspondence received by it or its representatives from the United
States Securities and Exchange Commission with respect to such confidential
treatment request and promptly advise the other Party of any other material
communications between it or its representatives with the United States
Securities and Exchange Commission with respect to such confidential treatment
request. Alnylam shall be permitted to disclose in confidence (pursuant to a
written agreement with confidentiality obligations no less restrictive than set
forth herein) the terms of this Agreement to the extent Alnylam is contractually
obligated to do so to the Listed Counterparties; provided, that Alnylam shall
redact such portions as Novartis reasonably requests.

          5.2  EMPLOYEE AND ADVISOR OBLIGATIONS.

          Each Party agrees that it shall provide Confidential Information
received from the other Party only to its and its Affiliates' employees,
consultants, advisors, contractors and permitted sublicensees who have a need to
know such information in order for the receiving Party to exercise its rights or
perform its obligations under this


                                       44
<PAGE>
Agreement and have an obligation to treat such information and materials as
confidential under terms no less restrictive than those set forth herein.

          5.3  PUBLICATIONS.

          The Parties acknowledge that scientific lead time is a key element of
the value of the Research Collaboration and further agree that scientific
publications must be strictly monitored to prevent any adverse effect of the
premature publication of results of the Research Collaboration. The Parties
shall establish a procedure for publication review and approval with respect to
publications regarding the Research Collaboration and each Party shall first
submit to the other Party an early draft of all such publications, whether they
are to be presented orally or in written form, at least [**] prior to submission
for publication. Each Party shall review each such proposed publication in order
to avoid the unauthorized disclosure of a Party's Confidential Information and
to preserve the patentability of inventions arising from the collaboration. If,
as soon as reasonably possible but no longer than [**] following receipt of an
advance copy of a Party's proposed publication, the other Party informs such
Party that its proposed publication contains Confidential Information of the
other Party, then such Party shall delete such Confidential Information from its
proposed publication. If, as soon as reasonably possible but no longer than [**]
following receipt of an advance copy of a Party's proposed publication, the
other Party informs such Party that its proposed publication could be expected
to have a material adverse effect on any Patent Rights or Know-How of such other
Party, then such Party shall delay such proposed publication for a period of
reasonable length to permit the timely preparation and first filing of Patent
Application(s) on the information involved. For the avoidance of doubt, the
provisions of this Section 5.3 are not intended to govern or limit submissions
reasonably necessary for Regulatory Approvals, press releases, submissions in
connection with the filing, prosecution and maintenance of Patent Rights, and
the like.

          5.4  PUBLICITY.

          Neither Party shall issue any press release or public announcement
relating to this Agreement, the Research Collaboration or any Licensed Products
without the prior written approval of the other Party, which approval shall not
be unreasonably withheld, except that a Party may issue such a press release or
public announcement if required by Law, including by the rules or regulations of
the United States Securities and Exchange Commission or similar regulatory
agency in a country other than the United States or of any stock exchange or
NASDAQ; provided that the other Party has received prior notice of such intended
press release or public announcement if practicable under the circumstances and
the Party subject to the requirement includes in such press release or public
announcement only such information relating to the Licensed Product(s) or this
Agreement as is required by such Law. The rights of approval and notice granted
to a Party in accordance with the preceding sentence shall only apply for the
first time that specific information is to be disclosed, and shall not apply to
the subsequent disclosure of substantially similar information that has
previously been disclosed.


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<PAGE>
                                   ARTICLE VI

                   INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION

                               AND RELATED MATTERS

          6.1  OWNERSHIP OF INVENTIONS.

          (a) Sole Inventions. Each Party shall exclusively own all inventions
made solely by such Party, its employees, agents and consultants in the course
of the Research Collaboration ("Sole Inventions"). Sole Inventions made solely
by Novartis, its employees, agents and consultants are referred to herein as
"Novartis Sole Inventions". Sole Inventions made solely by Alnylam, its
employees, agents and consultants are referred to herein as "Alnylam Sole
Inventions."

          (b) Joint Intellectual Property. Alnylam hereby assigns all of its
rights under any and all inventions or Know-How made or acquired from time to
time jointly by employees, agents and consultants of Novartis, on the one hand,
and employees, agents and consultants of Alnylam, on the other hand
(collectively "Joint Intellectual Property") in connection with the Research
Collaboration, and such Joint Intellectual Property shall be Novartis Sole
Inventions. At Novartis's request from time to time, Alnylam shall, and shall
cause its Affiliates, employees, agents and consultants to, execute documents
and instruments and perform such acts as may be reasonably necessary in order to
effect the foregoing assignment. Following the Research Term, or during the
Research Term in the event that the Joint Steering Committee elects to
discontinue one or more Active Programs pursuant to Section 2.3(b), in the event
that Alnylam desires to acquire or license rights in any of the Novartis Sole
Inventions that, absent this Section 6.1(b), would have been Joint Intellectual
Property, Novartis may, on a case-by-case, product-by-product basis grant rights
under such Novartis Sole Inventions pursuant to terms and conditions agreed to
by the Parties. Novartis hereby grants to Alnylam a worldwide, non-exclusive,
royalty-free right and license (sublicenseable solely to Controlled Contractors)
under the Novartis Sole Inventions that, absent this Section 6.1(b), would have
been Joint Intellectual Property that is Broad RNAi Intellectual Property, to
engage in any and all research activities directed to the Field.

          (c) Inventorship. For purposes of determining whether an invention is
a Novartis Sole Invention, an Alnylam Sole Invention or Joint Intellectual
Property, inventorship shall be resolved in accordance with United States patent
laws.

          (d) Data Ownership; Right of Reference; Regulatory Matters. All
preclinical and clinical data generated with respect to the Collaboration
Products in the course of the Research Collaboration shall be owned by the Party
generating such data ("Program Data"); provided, that (i) Alnylam shall provide,
and Novartis shall have access to, a reference with respect to, and the right to
use, all Program Data generated by Alnylam in the course of the Research
Collaboration, and (ii) Alnylam shall not attempt to use its Program Data in any
Registration Filing for any product that includes a Discovered RNAi Compound.
Alnylam shall provide to Novartis, to the extent Alnylam


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<PAGE>
is aware of Novartis Registration Filing(s) or other Novartis products, (A)
notice of Alnylam Patent Rights relevant to a Novartis Registration Filing,
prior to the time such Registration Filing is filed, and (B) prompt notice of
the issuance of any Alnylam Patent Right which may be relevant to a Novartis
product, giving the date of issue and Patent number for each such Patent and
Novartis will decide if such Patent is to be listed pursuant to any Novartis
Registration Filing for such product. Similarly, Alnylam shall provide Novartis
prompt notice of any Alnylam Patent Right term extensions in any country.

          6.2  PROSECUTION AND MAINTENANCE OF PATENT RIGHTS.

          (a) Prosecution and Maintenance.

          (i) Alnylam shall have the exclusive right and option, but not the
obligation, at its cost, to file and prosecute any Patent Rights covering
Alnylam Patent Rights; provided that in the event that Alnylam declines the
option to file, prosecute or maintain any such Patent Rights that pertain to a
Discovered RNAi Compound and/or a Licensed Product, it shall give Novartis
reasonable notice of at least [**] to this effect, sufficiently in advance to
permit Novartis to undertake such filing, prosecution and maintenance without a
loss of rights, and thereafter Novartis may, upon written notice to Alnylam,
file and prosecute such Patent Applications and maintain such Patents in
Alnylam's name, all at Novartis's expense (subject to the immediately following
sentence), and all such Alnylam Sole Inventions shall remain owned exclusively
by Alnylam, subject to the provisions of Section 3.1. If Novartis incurs filing,
prosecution and/or maintenance expenses with respect to Sole Inventions owned by
Alnylam and pertaining to a Discovered RNAi Compound or Licensed Product in
accordance with the immediately preceding sentence, Novartis shall be entitled
to deduct its reasonable expenses from the royalties that Novartis pays to
Alnylam with respect to products in which such Discovered RNAi Compound(s) are
active ingredient(s) or such Licensed Product, as the case may be, pursuant to
Section 4.4(e).

          (ii) Novartis shall have the exclusive right and option, but not the
obligation, at its cost, to file, prosecute or maintain any Patent Rights
covering Novartis Sole Inventions.

          (b) Cooperation. Each Party agrees to cooperate with the other with
respect to the preparation, filing, prosecution and maintenance of Patents and
Patent Applications pursuant to Section 6.2(a), including, the execution of all
such documents and instruments and the performance of such acts (and causing its
relevant employees to execute such documents and instruments and to perform such
acts) as may be reasonably necessary in order to permit the other Party to
continue any preparation, filing, prosecution or maintenance of Patent Rights,
whether or not such Party is participating in or funding the filing, prosecution
or maintenance of such Patent Rights.


                                       47
<PAGE>
          6.3 THIRD PARTY INFRINGEMENT.

          (a) Notice. Alnylam shall promptly report in writing to Novartis any
(x) known or suspected infringement of Alnylam Patent Rights or (y) known or
suspected unauthorized use or misappropriation of Alnylam Know-How, of which
Alnylam becomes aware, and shall provide Novartis with all available evidence
supporting such infringement, suspected infringement, unauthorized use or
misappropriation or suspected unauthorized use or misappropriation.

          (b) Infringement Action.

               (i) Subject to Section 6.3(b)(ii), Alnylam shall have the right
     to initiate a suit or take other appropriate action that it believes is
     reasonably required to protect the Alnylam Intellectual Property, including
     a defense to a claim of invalidity or unenforceability. Thereafter, Alnylam
     shall keep Novartis promptly informed, and shall from time to time consult
     with Novartis regarding the status of any such suit or action and shall
     provide Novartis with copies of all material documents (e.g., complaints,
     answers, counterclaims, material motions, orders of the court, memoranda of
     law and legal briefs, interrogatory responses, depositions, material
     pre-trial filings, expert reports, affidavits filed in court, transcripts
     of hearings and trial testimony, trial exhibits and notices of appeal)
     filed in, or otherwise relating to, such suit or action.

               (ii) Novartis shall have the sole and exclusive right to initiate
     a suit under Alnylam Intellectual Property or take other appropriate action
     that it believes is reasonably required to protect Novartis Sole
     Inventions, a Discovered RNAi Compound or a Licensed Product. Novartis
     shall give Alnylam advance notice of its intent to file any such suit or
     take any such action and the reasons therefor, and shall provide Alnylam
     with an opportunity to make suggestions and comments regarding such suit or
     action. Thereafter, Novartis shall keep Alnylam promptly informed, and
     shall from time to time consult with Alnylam regarding the status of any
     such suit or action and shall provide Alnylam with copies of all material
     documents (e.g., complaints, answers, counterclaims, material motions,
     orders of the court, memoranda of law and legal briefs, interrogatory
     responses, depositions, material pre-trial filings, expert reports,
     affidavits filed in court, transcripts of hearings and trial testimony,
     trial exhibits and notices of appeal) filed in, or otherwise relating to,
     such suit or action.

          (c) Conduct of Action; Costs. The Party initiating suit shall have the
sole and exclusive right to select counsel for any suit initiated by it under
this Section 6.3. If required under applicable Law in order for such Party to
initiate or maintain such suit, the other Party shall join as a party to the
suit. If requested by the Party initiating suit, the other Party shall provide
reasonable assistance to the Party initiating suit in connection therewith at no
charge to such Party except for reimbursement of reasonable out-of-pocket
expenses incurred in rendering such assistance. The Party initiating suit shall
assume and pay all of its own out-of-pocket costs incurred in connection with
any litigation or proceedings described in this Section 6.3, including the fees
and expenses of


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<PAGE>
the counsel selected by it. The other Party shall have the right to participate
and be represented in any such suit by its own counsel at its own expense.

          (d) Recoveries. Any recovery obtained as a result of any proceeding
described in this Section 6.3 or from any counterclaim or similar claim asserted
in a proceeding described in Section 6.4, by settlement or otherwise, shall be
applied in the following order of priority:

               (i) first, the Party initiating the suit or action shall be
     reimbursed for all costs in connection with such proceeding paid by such
     Party;

               (ii) second, the other Party shall be reimbursed for all costs in
     connection with such proceeding paid by the other Party; and

               (iii) third, any remainder shall be paid [**] percent ([**]%) to
     the Party initiating the suit or action, and the balance to the other
     Party.

          6.4 CLAIMED INFRINGEMENT; CLAIMED INVALIDITY.

          (a) Notice. In the event that a Third Party at any time asserts a
claim, or brings an action, suit or proceeding against a Party, or any of its
Affiliates or sublicensees, claiming infringement of such Third Party's Patent
Rights or unauthorized use or misappropriation of such Third Party's Know-How,
based upon an assertion or claim arising out of any of the activities taken in
respect of the Research Collaboration or in respect of the Discovery,
Development, Commercialization or Manufacture of Discovered RNAi Compounds or
Licensed Products (such a claim, action, suit or proceeding, a "Third Party
Infringement Claim"), such Party shall promptly notify the other Party in
writing of the claim or the commencement of such action, suit or proceeding,
enclosing a copy of the claim and all papers served.

          (b) Defense of Third Party Infringement Claims. Subject to the
Parties' respective rights and obligations under Section 9.1, the following
provisions shall apply to the conduct of the defense of Third Party Infringement
Claims:

               (i) Within thirty (30) days after delivery of the notification
     required to be delivered under Section 6.4(a), the Party against whom the
     claim is brought shall, upon written notice thereof to the other Party,
     select counsel reasonably satisfactory to the other Party and shall assume
     control of the defense of such action, suit, proceeding or claim; provided,
     however, that if a claim is brought against both Parties, Novartis shall
     assume control. The Party controlling such defense shall keep the other
     Party advised of the status of such action, suit, proceeding or claim and
     the defense thereof and shall consider recommendations made by the other
     Party with respect thereto.

               (ii) The Party not controlling such defense may participate
     therein at its own expense.


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<PAGE>
               (iii) The Party controlling the defense shall not agree to any
     settlement of such action, suit, proceeding or claim without the prior
     written consent of the other Party, which shall not be unreasonably
     withheld or delayed. Where failure to settle any action, suit, proceeding
     or claim is unreasonably interfering with the Development or
     Commercialization of Licensed Products, Parties shall refer the matter to
     the independent evaluation of a mediator. The Party controlling the defense
     shall not agree to any settlement of such action, suit, proceeding or claim
     or consent to any judgment in respect thereof that does not include a
     complete and unconditional release of the other Party from all liability
     with respect thereto, or that imposes any liability or obligation on the
     other Party, without the prior written consent of the other Party.

          (c) Patent Invalidity Claim. If a Third Party at any time asserts a
claim that any Alnylam Patent Right Covering a Discovered RNAi Compound or a
Licensed Product is invalid or otherwise unenforceable (an "Invalidity Claim"),
whether as a defense in an infringement action brought by Alnylam or Novartis
pursuant to Section 6.3, in a declaratory judgment action or in a Third Party
Infringement Claim brought against Alnylam or Novartis, the Parties shall
cooperate with each other in preparing and formulating a response to such
Invalidity Claim. Neither Party shall settle or compromise any Invalidity Claim
involving Patent Rights Controlled by the other Party without the consent of the
other Party. If Novartis or its Affiliates incurs expenses to respond to
Invalidity Claims involving Alnylam Patent Rights, Novartis shall, without
limitation to any other rights or remedies available at Law or under this
Agreement, be entitled to deduct such expenses against the amounts otherwise
payable by Novartis pursuant to Section 4.4(e) with respect to the relevant
Licensed Product.

          6.5 MAINTAIN LICENSES IN FORCE.

          Alnylam shall, and shall cause its Affiliates to, comply with all
material terms and conditions of, and shall not, and shall cause its Affiliates
not to, without Novartis's prior written consent, accelerate, terminate, cancel,
amend or modify, or waive any claims or rights under the Listed Alnylam Third
Party Agreements, or take any action, or fail to take any action, that gives a
Listed Counterparty the right to accelerate, terminate, cancel, amend or modify
any rights under the Listed Alnylam Third Party Agreements; provided, however,
that Alnylam may take any action with respect to Listed Alnylam Third Party
Agreements that does not affect any of Novartis's rights or obligations. Alnylam
shall promptly notify Novartis if any Third Party party to any Listed Alnylam
Third Party Agreement or any Third Party with which Alnylam has entered into a
license agreement after the Effective Date that is material to the Research
Collaboration, any Discovered RNAi Compound or any Licensed Product, alleges any
breach, default, or event that with the passage of time or giving of notice
could become a default, by Alnylam of any such license agreement. Novartis shall
be entitled, but not obligated, to cure any alleged breach or default by Alnylam
of a payment obligation or other obligation, if possible, under any such license
agreement and set-off the cost of such cure against amounts otherwise owed to
Alnylam hereunder. The Parties shall use commercially reasonable efforts
following the Effective Date to effect agreements or amendments to the Listed
Alnylam Third Party Agreements that will allow Novartis or its


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<PAGE>
Affiliates to directly pay any amounts due under such Listed Alnylam Third Party
Agreements in the event that Alnylam defaults under any of its payment
obligations and continue to permit Novartis to benefit from any rights granted
under such Listed Alnylam Third Party Agreements and licensed to Novartis under
this Agreement in the event of Alnylam's breach thereof.

          6.6 PATENT MARKING.

          Novartis shall comply with the patent marking statutes in each country
in which a Licensed Product is made, offered for sale, sold or imported by
Novartis, its Affiliates, licensees and/or sublicensees.

          6.7 TRADEMARKS.

          (a) Each Party and its Affiliates shall retain all right, title and
interest in and to its and their respective corporate names and logos.

          (b) Novartis shall not acquire any rights under this Agreement in any
trademark, service mark or Internet domain name including the word "alnylam" or
any other trademarks or trade dress of Alnylam or its Affiliates, and Alnylam
shall not acquire any rights under this Agreement in any trademark, service mark
or Internet domain name including the word "novartis" or any other trademarks or
trade dress of Novartis or its Affiliates.

          6.8 OPPOSITION.

          Novartis shall, and shall cause its Affiliates to, promptly after the
Effective Date withdraw its opposition proceeding against Kreutzer-Limmer
EP1144623.

          6.9 COORDINATION WITH LISTED ALNYLAM THIRD PARTY AGREEMENTS.

          To the extent that any of the provisions of a Listed Alnylam Third
Party Agreement that have been delivered to Novartis prior to the Effective Date
entitles a Listed Counterparty to participate in the prosecution, maintenance,
enforcement or defense of one or more Alnylam Patent Rights that Novartis,
pursuant to Sections 6.2, 6.3 or 6.4, is also entitled to participate in,
Novartis shall coordinate its activities with the Listed Counterparty in a
manner consistent with the restrictions set forth in such Listed Alnylam Third
Party Agreement, and Alnylam shall provide reasonable cooperation to facilitate
such coordination.

                                   ARTICLE VII

                         REPRESENTATIONS AND WARRANTIES

          7.1 MUTUAL REPRESENTATIONS AND WARRANTIES.


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<PAGE>
          (a) Representations of Authority. Each Party represents and warrants
to the other Party that it has full corporate right, power and authority to
enter into this Agreement and to perform its obligations under this Agreement.

          (b) Consents. Each Party represents and warrants to the other Party
that all necessary consents, approvals and authorizations of all government
authorities and other Persons required to be obtained by it as of the Effective
Date in connection with the execution, delivery and performance of this
Agreement have been obtained.

          (c) No Conflict. Each Party each represents and warrants to the other
Party that, notwithstanding anything to the contrary in this Agreement, the
execution and delivery of this Agreement, the performance of its obligations in
the conduct of the Research Collaboration and the licenses and sublicenses to be
granted pursuant to this Agreement (a) do not and will not conflict with or
violate any requirement of applicable Laws effective as of the Effective Date,
and (b) do not and will not conflict with, violate, breach or constitute a
default under any contractual obligations of it or any of its Affiliates
existing as of the Effective Date.

          (d) Enforceability. Each Party represents and warrants to the other
Party that this Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms.

          (e) Employee Obligations. Each Party represents and warrants that all
of its employees, officers, consultants and advisors who are or will be involved
in the Research Collaboration have executed or will have executed agreements or
have existing obligations under Law requiring assignment to such Party of all
intellectual property and proprietary rights made during the course of and as
the result of their association with such Party, and obligating such individuals
to maintain as confidential such Party's Confidential Information. Each Party
represents and warrants that, to its knowledge, none of its employees who are or
will be involved in the Research Collaboration are, as a result of the nature of
such Research Collaboration, in violation of any covenant in any contract with a
Third Party relating to non-disclosure of proprietary information,
non-competition or non-solicitation.

          7.2 REPRESENTATIONS AND WARRANTIES OF ALNYLAM.

          Alnylam represents and warrants to Novartis:

          (a) "Intellectual Property" shall mean, collectively all U.S. and
non-U.S. registered, unregistered and pending Patent Rights and Know-How. "Owned
Know-How" shall mean, collectively, all Know-How in which Alnylam or any of its
Affiliates has an ownership interest. "Owned Patents" shall mean all Patent
Rights in which Alnylam or any of its Affiliates has an ownership interest.
"Owned Property" shall mean, collectively, (x) all Owned Patents, and (y) Owned
Know-How. "Alnylam Property" shall mean, collectively, Intellectual Property
Controlled by Alnylam pursuant to an IP Contract (collectively, the "Licensed
Property") and the Owned Property.


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<PAGE>
          (b) Schedule 7.2(b) sets forth a complete and accurate list of (i) all
Owned Patents, indicating the owner thereof, and all applications, registrations
and grants with respect thereto, and (ii) all agreements pursuant to which
Alnylam licensed, granted any rights to, or made any covenant not to sue with
respect to any Alnylam Intellectual Property (collectively, the "IP Contracts"),
specifically indicating, as applicable, each amendment thereto. Alnylam has
disclosed to Novartis true and complete copies of all IP Contracts and all
amendments thereto, except for the portions thereof which are subject to
confidentiality obligations to the other party(ies) to such IP Contracts that do
not relate to Novartis's rights or obligations under this Agreement. The
restrictions set forth the copies of the IP Contracts delivered to Novartis and
the rights that Alnylam has previously granted and is required to grant to
Pre-Existing Alliance Parties under the terms as of the Effective Date of the
Pre-Existing Alliance Agreements described in Section 3.1(e)(i) are the only
restrictions to which Novartis's rights under Section 3.1(a) through (c) are
subject.

          (c) Alnylam has granted no exclusive or co-exclusive rights under
Broad RNAi Intellectual Property except as follows:

          (i) Alnylam has granted exclusive RNAi Therapeutic Rights to
     Pre-Existing Alliance Parties to an aggregate of [**] Targets without
     limitation as to therapeutic area and [**] Targets with rights initially
     limited to a defined therapeutic area, but with the licensee having a
     right of first negotiation for therapeutic rights outside such defined
     therapeutic area;

          (ii) Alnylam has granted options to Pre-Existing Alliance Parties to
     acquire exclusive RNAi Therapeutic Rights directed to an aggregate of [**]
     Targets, and options to acquire co-exclusive RNAi Therapeutic Rights for an
     aggregate of [**] Targets, provided that:

               (A) As of the Effective Date, the subject Targets have been
          selected by Pre-Existing Alliance Parties for [**] of the options
          enumerated above, and the availability of any Target to Pre-Existing
          Alliance Parties for the other options is subject either to Alnylam's
          discretion (in the case of [**] options) or to the existence of any
          active programs, contractual obligations to third parties or ongoing
          negotiations of Alnylam (in the case of [**] options);

               (B) In the case of a Pre-Existing Alliance Party holding options
          to acquire exclusive RNAi Therapeutic Rights for [**] Targets, such
          options are subject to the acceptance by Alnylam of proprietary
          Targets proposed by such Pre-Existing Alliance Party, one such
          proprietary Target having been accepted by Alnylam to date, and to the
          subsequent exercise by such Pre-Existing Alliance Party of an opt-in
          right upon [**] conducted under good laboratory practice;

               (C) In the case of a Pre-Existing Alliance Party holding options
          to acquire exclusive RNAi Therapeutic Rights for [**] Targets and
          co-exclusive RNAi Therapeutic Rights for [**] Targets:


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<PAGE>
                    (1) Alnylam may decline any request to grant any such option
               for a Target with respect to which: Alnylam has an active program
               in progress or due to start within [**]; is the subject of a
               contractual obligation to a third party that would preclude the
               grant of RNAi Therapeutic Rights for such Target to the
               Pre-Existing Alliance Party; or is the subject of a good faith
               negotiation with a third party to enter into such a contractual
               obligation within [**]; further provided that if Alnylam declines
               such a request and has not [**] with respect to the subject
               Target within [**] if Alnylam is working on such Target alone, or
               within [**] if such Target is subject to a contractual obligation
               with a third party that precludes Alnylam from granting such
               request and Alnylam is contractually able to revoke such third
               party's rights, then Alnylam will be obligated at such later time
               to grant such request. [**];

                    (2) On January 1 of each year until January 1, 2009, with
               respect to [**] for which co-exclusive RNAi Therapeutic Rights
               have been granted, such co-exclusive RNAi Therapeutic Rights
               shall [**] RNAi Therapeutic Rights;

                    (3) Such Pre-Existing Alliance Party has the right to
               purchase an option to [**] each year beginning on January 1,
               2007; and

                    (4) On each occasion that such Pre-Existing Alliance Party
               [**], it has the right to receive an [**], the RNAi Therapeutic
               Rights available [**] RNAi Therapeutic Rights. As of the
               Effective Date, such Pre-Existing Alliance Party [**].

               (D) In the case of a Pre-Existing Alliance Party holding options
          for exclusive RNAi Therapeutic Rights for [**] Targets, Alnylam [**]
          of such an option with respect to any Target.

               (E) In the case of a Pre-Existing Alliance Party holding options
          for exclusive RNAi Therapeutic Rights for[**]Targets, Alnylam will
          review in good faith any request to grant any such option for a
          Target, subject to the following: (i) any commitments to third parties
          that Alnylam may have with respect to such target(s) and (ii) ongoing
          activities or activities under consideration by Alnylam relating to
          its business or scientific interests.

          (iii) With respect to RNAi Compounds [**], Alnylam has granted a
     Pre-Existing Alliance Party options for [**] of Targets.

          (iv) With respect to the Encumbered Fields, Alnylam (A) has agreed
     with certain Pre-Existing Alliance Parties not to Discover, Develop,
     Commercialize or Manufacture RNAi Compounds and RNAi Products with third
     parties, excepting research institutions and/or contract service
     organizations, and (B) has granted such Pre-Existing Alliance Parties
     rights of first negotiation to collaborate with Alnylam in such Encumbered
     Fields, and to receive exclusive RNAi Therapeutic Rights with respect to
     such Encumbered Fields, [**] for which such RNAi Therapeutic Rights may be
     granted; provided, however, that such limitations with respect to
     Encumbered Fields will expire as set forth in the definition thereof.


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<PAGE>
          (d) Except as set forth in Schedule 7.2(b), Alnylam or a subsidiary is
the sole and exclusive owner of all of the Owned Property, and, with respect to
the Owned Patents, is listed in the records of the appropriate U.S. or non-U.S.
governmental authority as the sole and exclusive owner of record for each
registration, grant and application listed in Schedule 7.2(b). Alnylam and its
predecessors-in-interest to all Owned Property that is Broad RNAi Intellectual
Property have obtained from all individuals who participated in the development
or inventorship of such Broad RNAi Intellectual Property (as employees of
Alnylam or any predecessor, as consultants, as employees of consultants or
otherwise), effective assignments of any and all rights of such individuals in
such Broad RNAi Intellectual Property. To Alnylam's knowledge, Alnylam and its
predecessors-in-interest to all other Owned Property have obtained from all
individuals who participated in the development or inventorship of such Owned
Property (as employees of Alnylam or any predecessor, as consultants, as
employees of consultants or otherwise), effective assignments of any and all
rights of such individuals in such Owned Property. No officer or employee of
Alnylam or any Affiliate thereof is subject to any agreement with any Third
Party that requires such officer or employee to assign to a Third Party any
interest in inventions or other Intellectual Property conceived during such
officer's or employee's appointment or employment with Alnylam or its Affiliate.

          (e) No act has been done or omitted to be done by Alnylam or any
Affiliate thereof, or, to the knowledge of Alnylam, by any direct or indirect
licensee or collaborator of Alnylam or any Affiliate thereof, or any Person with
which Alnylam or any subsidiary is a co-owner of any Owned Property, which has
had or is reasonably likely to have the effect of canceling, forfeiting,
abandoning or dedicating to the public, or entitling any U.S. or non-U.S.
governmental authority or any other Person to cancel, forfeit, modify or
consider abandoned, any Owned Property, or give any Person any rights with
respect thereto (other than pursuant to an IP Contract listed in Schedule
7.2(b)). Except as set forth in Schedule 7.2(e), neither Alnylam nor any
Affiliate has any knowledge of any facts or claims which cause or would cause
any Owned Property to be invalid or unenforceable, and neither Alnylam nor any
Affiliate thereof has received any written notice that any Person may bring such
a claim. Alnylam or one of its subsidiaries owns, free and clear of any lien or
encumbrance (except for encumbrances expressly set forth in an IP Contract
listed in Schedule 7.2(b)), or otherwise has the valid right to use through an
IP Contract listed in Schedule 7.2(b), all Alnylam Property. No proceedings or
claims in which Alnylam or any Affiliate alleges that any Person is infringing
upon, or otherwise violating, any Owned Property, or, to Alnylam's knowledge,
any Licensed Property, are pending, and none have been served by, instituted or
asserted by Alnylam or any such Affiliate, nor are any proceedings threatened
alleging any such violation or infringement. Neither Alnylam nor any subsidiary
has divulged, furnished to or made accessible to any Person, any material
Know-How that is Confidential Information included in Alnylam Property without
prior thereto having obtained an enforceable agreement of confidentiality from
such Person. All key personnel employed by Alnylam and any subsidiary have
executed an enforceable agreement of confidentiality. Alnylam and its Affiliates
have taken and will continue to take reasonable measures to maintain the
confidentiality of the Alnylam Know-How that is Confidential Information in a
manner consistent with prudent


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<PAGE>
commercial practice in the biopharmaceuticals industry. Neither Alnylam nor its
Affiliates have materially breached the terms of any IP Contract, or otherwise
taken any action, or failed to take any action, that would give a Third Party
the right to accelerate, terminate, cancel, amend or modify any IP Contract
(which breach, action or inaction has not been cured or waived in writing), and
neither Alnylam nor its Affiliates have received any notice alleging such
breach, action or inaction (which breach, action or inaction has not been cured
or waived in writing). To Alnylam's knowledge, no Third Party has breached the
terms of any IP Contract, and neither Alnylam nor its Affiliates have issued any
notice alleging such breach. The exercise by Novartis of the rights and licenses
thereunder, do not require the consent of any Third Party, including the Third
Party parties to the Listed Alnylam Third Party Agreements.

          (f) With respect to each of the Owned Patents: (i) all necessary
registration, maintenance and renewal fees have been paid and all necessary
documents and certificates have been filed with the relevant Governmental
Entities for the purpose of maintaining such Patents; (ii) to Alnylam's
reasonable belief, such Patents disclose patentable subject matter under 35
U.S.C. Section 101 and its counterparts under non-U.S. law, and there are no
inventorship challenges or interferences declared or, to Alnylam's knowledge,
provoked with respect to such Patents; (iii) Alnylam and each Affiliate have
complied with the required duty of candor and good faith in dealing with the
U.S. Patent and Trademark Office and similar Governmental Entities
(collectively, "Patent Offices"), including the duty to disclose to the Patent
Offices all information required to be disclosed under all applicable laws and
regulations; and (iv) other than through an IP Contract listed in Schedule
7.2(b), no third party, including any academic organization or governmental
authority, possesses rights to such Patents.

          (g) As of the date that Alnylam delivers a Blocked Target List to the
Gatekeeper, each of the Targets included on the Blocked Target List are (i) the
subject of a material commitment made by Alnylam to an Alnylam Program directed
to such Target or (ii) subject, pursuant to a written agreement entered into by
Alnylam, to rights that Alnylam granted to a Third Party, in each of case (i)
and (ii) prior to the delivery to Alnylam of such Target List or Supplemental
Target List, as the case may be, in which such Target was identified.

          (h) Except as set forth on Schedule 7.2(h), Alnylam is not aware of
[**] broad RNAi technology that are not included in any license grants by
Alnylam to Novartis under Article III.

          (i) Schedule 7.2(i) identifies all Listed Alnylam Third Party Payment
obligations existing as of the Effective Date.

          (j) Schedule 7.2(j) identifies all agreements pursuant to which
Alnylam is precluded from including one or more Target(s) in the Research
Collaboration.


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<PAGE>
          7.3 EFFECTIVE DATE OF REPRESENTATIONS.

          The representations and warranties set forth in Sections 7.1 and 7.2
are, except as expressly provided above, being made by the Parties solely as of
the Effective Date. Without limiting the foregoing or any covenant or other
provision of this Agreement, in the event that during the Research Term, there
occurs any circumstances that would render any of the representations and
warranties made in Sections 7.2(c) through 7.2(g) untrue with respect to any
Alnylam Intellectual Property that Covers a Discovered RNAi Compound or any
Broad RNAi Intellectual Property if such representations and warranties were
given subsequent to the Effective Date, then Alnylam shall notify Novartis in a
reasonably detailed writing within thirty (30) days after becoming aware of such
circumstances. In connection with Novartis's bona fide consideration of
acquiring the Adoption License, Alnylam shall afford Novartis and its attorneys
and authorized representatives reasonable access to all relevant Patent Rights
files, contracts, correspondence, records and Patent personnel of Alnylam and
its Affiliates in order to permit Novartis to conduct due diligence with respect
to the Broad RNAi Intellectual Property.

          7.4 NO WARRANTIES.

          EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTIONS 7.1 OR 7.2, OR IN
THE STOCK PURCHASE AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS
ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY,
INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

                                  ARTICLE VIII

                              TERM AND TERMINATION

          8.1 TERM.

          (a) Term of Research Collaboration.

          (i) The Selection Term will commence on the Effective Date and shall
continue until the third (3rd) anniversary of the Effective Date (the "Selection
Term"), which Selection Term may be extended for up to two (2) additional one-
(1-) year periods, at Novartis's election upon the provision of written notice
to Alnylam not later than ninety (90) calendar days prior to the end of the then
current Selection Term. Notwithstanding the foregoing, the Selection Term may be
terminated earlier pursuant to Sections 8.2 or 8.3.

          (ii) If, at any time following the second (2nd) anniversary of the
Effective Date but prior to the Adoption Date, Novartis determines in its sole
discretion that the conduct of the Research Collaboration as a whole is failing,
and is likely to continue to fail, to produce successful results with respect to
the Selected Targets, then Novartis may terminate this Agreement upon at least
ninety (90) calendar days written


                                       57
<PAGE>
notice to Alnylam. Upon the effective date of a termination under this Section
8.1(a)(ii), this Agreement shall terminate in its entirety subject to Section
8.4(f).

          (iii) The Research Collaboration will commence on the Effective Date
and shall continue until the completion of Alnylam's scheduled participation in
the Active Programs initiated during the Selection Term in accordance with their
respective Research Plans (the "Research Term"); provided, however, that in no
event shall the Research Term extend for more than three (3) months after the
end of the Selection Term.

          (iv) Upon the expiration or termination of the Research Term (except
pursuant to Section 8.1(a)(ii)), (A) Alnylam's participation in all Active
Programs will cease, (B) the Joint Steering Committee shall dissolve, and (C)
all of Novartis's rights under this Agreement with respect to Selected Targets
on the B List (as of the date of such expiration or termination) shall
terminate; provided, however, that

               (x) Novartis shall be entitled within thirty (30) days following
     such expiration or termination to select one or more of the Selected
     Targets then on the B List, with respect to which Novartis and its
     Affiliates will have the exclusive right to (1) Discover RNAi Compounds
     directed at such Selected Targets, (2) Develop, Commercialize or
     Manufacture such RNAi Compounds, and (3) Discover, Develop, Commercialize
     or Manufacture Licensed Products containing such RNAi Compounds (provided,
     further that for all other purposes under this Agreement, such RNAi
     Compounds and such Licensed Products shall be treated as Adopted Products);
     and

               (y) Alnylam shall be entitled within thirty (30) days following
     Novartis's selection, to select an equal number of Targets with respect to
     which Alnylam and its Affiliates will have the exclusive right to (1)
     Discover RNAi Compounds directed at such Targets, (2) Develop,
     Commercialize or Manufacture such RNAi Compounds, and (3) Discover,
     Develop, Commercialize or Manufacture products containing such RNAi
     Compounds.

All other rights and obligations under this Agreement shall continue or
terminate in accordance with the terms of this Agreement.

          (b) Term of Agreement. This Agreement shall be effective as of the
Effective Date and shall continue, subject to Sections 2.4(b), 8.1(a)(ii), 8.2
and 8.3, in accordance with its terms until with respect to a Licensed Product
in a particular country, the expiration of such Licensed Product's Royalty Term
in such country. Without prejudice to any other rights or remedies available at
law or in equity, neither Party shall have the right to terminate any right or
obligation under this Agreement except pursuant to Sections 2.4(b), 8.1(a)(ii),
8.2 or 8.3.

          8.2 TERMINATION FOR CAUSE.

          (a) During or following the Research Term, Novartis may terminate this
Agreement upon ninety (90) calendar days' prior written notice to Alnylam upon
the material breach by Alnylam of any of its representations, warranties or
obligations under


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<PAGE>
this Agreement; provided that such termination shall become effective only if
Alnylam fails to remedy or cure the breach within ninety (90) calendar days of
receiving such notice.

          (b) During the Research Term, Alnylam may terminate this Agreement on
a Active Program-by-Active Program basis if Novartis fails to make three (3) or
more undisputed payments when due to Alnylam under this Agreement with respect
to such Active Program (including milestone payments in respect of a Selected
Target that are the subject of such Active Program) if, with respect to each
such payment failure, Novartis fails to remedy or cure such payment failure
within ninety (90) calendar days of receiving notice of such payment failure.

          (c) In the event that, prior to the Adoption Date, Alnylam has
terminated this Agreement pursuant to Section 8.2(b) with respect to at least
five (5) Active Programs, Alnylam shall have the right to terminate this
Agreement in its entirety.

          (d) Following the Research Term, Alnylam may terminate this Agreement
on a country-by-country, Licensed Product-by-Licensed Product basis upon ninety
(90) calendar days' prior written notice to Novartis upon the material breach by
Novartis with respect to such country and Licensed Product of any of its
representations, warranties or obligations under this Agreement; provided that
such termination shall become effective only if Novartis fails to remedy or cure
the breach within ninety (90) calendar days of receiving such notice.

          8.3 TERMINATION FOR BANKRUPTCY.

          If at any time during the term of this Agreement, an Event of
Bankruptcy (as defined below) relating to either Party (the "Bankrupt Party")
occurs, the other Party (the "Non-Bankrupt Party") shall have, in addition to
all other legal and equitable rights and remedies available hereunder, the
option to terminate this Agreement upon thirty (30) calendar days written notice
to the Bankrupt Party. It is agreed and understood that if the Non-Bankrupt
Party does not elect to terminate this Agreement upon the occurrence of an Event
of Bankruptcy, then, except as may otherwise be agreed with the trustee or
receiver appointed to manage the affairs of the Bankrupt Party, the Non-Bankrupt
Party shall continue to make all payments required of it under this Agreement as
if the Event of Bankruptcy had not occurred, the Bankrupt Party shall not have
the right to terminate any license granted herein, and in the event that Alnylam
is the Bankrupt Party, the operation of the Joint Steering Committee shall
immediately cease. The term "Event of Bankruptcy" shall mean, with respect to a
Party: (a) filing by such Party in any court or agency pursuant to any statute
or regulation of any state or country, a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the appointment of a receiver or
trustee of the Bankrupt Party or of its assets; (b) a Person proposing a written
agreement of composition or extension of a Bankrupt Party's debts; (c) such
Party being served with an involuntary petition against the Bankrupt Party,
filed in any insolvency proceeding, and such petition shall not be dismissed
within sixty (60) calendar days after the filing thereof; (d) such Party
proposing or being a party to any dissolution or liquidation of such Party; or
(e) such Party making a general assignment


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<PAGE>
for the benefit of creditors. If this Agreement is terminated by Novartis
pursuant to this Section 8.3 due to the rejection of this Agreement by or on
behalf of Alnylam or one or more of its Affiliates under Section 365 of Title
11, United States Code (the "Bankruptcy Code"), all licenses and rights to
licenses granted under or pursuant to this Agreement by Alnylam or its
Affiliates to Novartis are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101(35A) of the Bankruptcy Code. The Parties
agree that Novartis, as a licensee of such rights under this Agreement, shall
retain and may fully exercise all of its rights and elections under the
Bankruptcy Code, and that upon commencement of a bankruptcy proceeding by or
against Alnylam or one or more of its Affiliates under the Bankruptcy Code,
Novartis shall be entitled to a complete duplicate of or complete access to (as
Novartis deems appropriate) any such intellectual property and all embodiments
of such intellectual property. Such intellectual property and all embodiments
thereof shall be promptly delivered to Novartis (i) upon any such commencement
of a bankruptcy proceeding upon written request therefor by Novartis, unless
Alnylam elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of Alnylam upon written request therefor by Novartis.
The foregoing provisions of this Section 8.3 are without prejudice to any rights
Novartis may have arising under the Bankruptcy Code or other applicable Law.

          8.4 EFFECT OF EXPIRATION OR TERMINATION.

          (a) If Novartis terminates this Agreement pursuant to Section 8.2(a),
then (x) Novartis obligations under Sections 2.4 and 3.4 and Alnylam's rights
under Section 3.2 shall terminate, (y) Alnylam's obligations under Sections 2.6
and 2.7 and Article VI shall continue, and (z) Novartis's rights under Article
III shall continue subject only to the obligation to pay to Alnylam the amounts
due under Sections 4.4 as they become due; provided, however, in the event that
such termination was due to: (i) the purported grant to a Third Party of license
rights granted exclusively to Novartis under this Agreement that adversely
affects Novartis; (ii) the disclosure by Alnylam of material Confidential
Information of Novartis in violation of Article V of this Agreement; (iii)
Alnylam ceasing to perform its funded obligations during the Research Term; or
(iv) the material breach by Alnylam of any of the representations or warranties
set out in Article VII for which Novartis has not been indemnified in full,
Novartis shall only be obligated to pay to Alnylam [**] percent ([**]%) of the
amounts otherwise due under Sections 4.4 as they become due, and [**] Alnylam
with respect thereto.

          (b) If Alnylam terminates this Agreement pursuant to Section 8.2(b)
with respect to an Active Program, then (i) all of Novartis's licenses under
Sections 2.6 and 3.1(a) and (b) and Alnylam's rights under Section 3.2 with
respect to the Selected Target, Discovered RNAi Compound and Collaboration
Product that are the subject of such Active Program shall terminate, (ii) each
Party shall promptly return to the other Party all Confidential Information of
the other Party pertaining exclusively to such Active Program, (iii) Alnylam may
undertake the Discovery, Development, Manufacture and Commercialization of the
Selected Target, Discovered RNAi Compound and


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<PAGE>
Collaboration Product that are the subject of such Active Program, and (iv) all
other terms of this Agreement shall remain in effect.

          (c) If Alnylam terminates this Agreement in its entirety pursuant to
Section 8.2(c), then (i) this Agreement, subject to Section 8.4(f), including
all licenses granted under Article III, shall terminate, and (ii) each Party
shall promptly return to the other Party all Confidential Information of the
other Party.

          (d) If Alnylam terminates this Agreement pursuant to Section 8.2(d),
then all provisions of this Agreement, including the licenses granted under
Article III, with respect to the relevant terminated Licensed Product(s) in the
relevant country(ies) granted by Alnylam to Novartis hereunder shall terminate.

          (e) Upon the expiration of the Royalty Term applicable to any Licensed
Product in a country, Novartis's and its Affiliates' licenses under Sections
3.1(b) or (c) with respect to such Licensed Product in such country shall
convert to perpetual, irrevocable, non-exclusive, transferable, paid-up,
royalty-free license with the right to sublicense in such country, to Discover,
Develop, Commercialize or Manufacture such Licensed Product in such country.

          (f) Survival. The expiration or termination of any right or obligation
under this Agreement for any reason will not affect obligations, including the
payment of any royalties and milestones, that have accrued as of the date of
such expiration or termination, as the case may be, and the provisions set forth
in Sections 4.8 and 4.9 and Articles V, VII, VIII and IX shall survive such
expiration or termination.

                                   ARTICLE IX

                                  MISCELLANEOUS

          9.1 INDEMNIFICATION.

          (a) By Alnylam. Alnylam shall defend, indemnify and hold harmless
Novartis, its Affiliates and their respective directors, officers, employees and
agents, at Alnylam's cost and expense, from and against any liabilities, losses,
costs, damages, fees or expenses (including reasonable fees and expenses of
legal counsel) arising out of any Third Party claim based on (i) any breach by
Alnylam of any of its representations, warranties or obligations pursuant to
this Agreement, or any claim the allegations of which, if true, would constitute
a breach of the representations or warranties set forth in this Agreement, or
(ii) the negligence or willful misconduct of Alnylam or its Affiliates or
sublicensees, or any of their respective directors, officers, employees and
agents, in the performance of obligations or exercise of rights under this
Agreement, or (iii) any Product Liability Claim relating to a product that is
Discovered, Developed, Manufactured or Commercialized by Alnylam (excluding, for
the avoidance of doubt, Licensed Products), except to the extent that such
claims arise out of any negligence or willful misconduct of Novartis or its
Affiliates or sublicensees, or any of their respective directors, officers,
employees and agents. "Product Liability Claim" shall mean, with respect to a
product, any Third Party claim, suit, action, proceeding, liability or
obligation


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<PAGE>
involving any actual or alleged death or bodily injury arising out of or
resulting from the use of such product.

          (b) By Novartis. Novartis shall defend, indemnify and hold harmless
Alnylam, its Affiliates and their respective directors, officers, employees and
agents at Novartis's cost and expense, from and against any liabilities, losses,
costs, damages, fees or expenses (including reasonable fees and expenses of
legal counsel) arising out of any Third Party claim based on (i) any breach by
Novartis of any of its representations, warranties or obligations pursuant to
this Agreement, or any claim the allegations of which, if true, would constitute
a breach of the representations or warranties set forth in this Agreement, or
(ii) the negligence or willful misconduct of Novartis or its Affiliates or
sublicensees, or any of their respective directors, officers, employees and
agents, in the performance of obligations or exercise of rights under this
Agreement, or (iii) any Product Liability Claim relating to a Licensed Product,
except to the extent that such claims arise out of any negligence or willful
misconduct of Alnylam or its Affiliates or sublicensees, or any of their
respective directors, officers, employees and agents.

          (c) Claims for Indemnification with respect to Third Parties.

               (i) With regard to any Third Party claim for which
     indemnification may be sought under this Section 9.1 against a person
     entitled to indemnification under this Section 9.1 (an "Indemnified
     Party"), the Indemnified Party shall give prompt written notification to
     the person from whom indemnification is sought (the "Indemnifying Party")
     of the commencement of any action, suit or proceeding relating to such
     Third Party claim or, if earlier, upon the assertion of any such claim by a
     Third Party (it being understood and agreed, however, that the failure by
     an Indemnified Party to give notice of a Third-Party claim as provided in
     this Section 9.1(c) shall not relieve the Indemnifying Party of its
     indemnification obligation under this Agreement except and only to the
     extent that such Indemnifying Party is actually prejudiced as a result of
     such failure to give notice).

               (ii) Within thirty (30) days after delivery of such notification,
     the Indemnifying Party may, upon written notice thereof to the Indemnified
     Party, assume control of the defense of such action, suit, proceeding or
     claim with counsel reasonably satisfactory to the Indemnified Party. If the
     Indemnifying Party does not assume control of such defense, the Indemnified
     Party shall control such defense.

               (iii) The Party not controlling such defense may participate
     therein at its own expense; provided that if the Indemnifying Party assumes
     control of such defense and the Indemnified Party reasonably concludes,
     based on advice from counsel, that the Indemnifying Party and the
     Indemnified Party have conflicting interests with respect to such action,
     suit, proceeding or claim, the Indemnifying Party shall be responsible for
     the reasonable fees and expenses of counsel to the Indemnified Party solely
     in connection therewith; provided further, however, that in no event shall
     the Indemnifying Party be responsible for the fees


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     and expenses of more than one counsel in any one jurisdiction for all
     Indemnified Parties.

               (iv) The Party controlling such defense shall keep the other
     Party advised of the status of such action, suit, proceeding or claim and
     the defense thereof and shall consider recommendations made by the other
     Party with respect thereto.

               (v) The Indemnified Party shall not agree to any settlement of
     such action, suit, proceeding or claim without the prior written consent of
     the Indemnifying Party, which shall not be unreasonably withheld. The
     Indemnifying Party shall not, without the prior written consent of the
     Indemnified Party, agree to any settlement of such claim or consent to any
     judgment in respect thereof that does not include a complete and
     unconditional release of the Indemnified Party from all liability with
     respect thereto or that imposes any liability or obligation on the
     Indemnified Party.

          9.2 CHOICE OF LAW.

          This Agreement shall be governed by and interpreted under the laws of
in effect in the Commonwealth of Massachusetts, excluding its conflicts of laws
principles.

          9.3 NOTICES.

          Any notice or report required or permitted to be given or made under
this Agreement by one of the Parties to the other shall be in writing and shall
be deemed to have been delivered upon personal delivery or (a) in the case of
notices provided between Parties in the continental United States, four (4) days
after deposit in the mail or the next Business Day following deposit with a
reputable overnight courier and (b) in the case of notices provided by telecopy
(which notice shall be followed immediately by an additional notice pursuant to
clause (a) above if the notice is of a default hereunder), upon completion of
transmissions to the addressee's telecopier, as follows (or at such other
addresses or facsimile numbers as may have been furnished in writing by one of
the Parties to the other as provided in this Section 9.3):

          If to Alnylam:

          Alnylam Pharmaceuticals, Inc.
          300 Third Street, 3rd Floor
          Cambridge, Massachusetts 02142
          Attention: Senior Vice President of Business Development
          Fax: (617) 551-8101


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<PAGE>
          With a copy (which shall not constitute notice) to:

          Wilmer Cutler Pickering Hale and Dorr LLP
          60 State Street
          Boston, MA 02109
          Attention: Steven D. Singer, Esq.
          Fax: (617) 526-5000

          If to Novartis:

          Novartis Institutes for BioMedical Research, Inc.
          250 Massachusetts Avenue
          Cambridge, Massachusetts 02139
          Attention: General Counsel
          Fax: (617) 871-3354

          With a copy (which shall not constitute notice) to:

          Dewey Ballantine LLP
          1301 Avenue of the Americas
          New York, New York 10019
          Attention: Morton A. Pierce, Esq.
                     Stanton J. Lovenworth, Esq.
          Fax: (212) 259-6333

          9.4 SEVERABILITY.

          If, under applicable Law any provision hereof is invalid or
unenforceable, or otherwise directly or indirectly affects the validity of any
other material provision(s) of this Agreement ("Severed Clause"), then, it is
mutually agreed that this Agreement shall endure except for the Severed Clause.
The Parties shall consult and use their best efforts to agree upon a valid and
enforceable provision which shall be a reasonable substitute for such Severed
Clause in light of the intent of this Agreement.

          9.5 INTERPRETATION.

          Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation." The word "will" shall be construed to have the same meaning and
effect as the word "shall." The word "or" shall be construed to have the same
meaning and effect as "and/or." Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or therein), (b) any reference to any Laws herein shall be construed as
referring to such Laws as from time to time enacted, repealed or amended, (c)
any reference herein to any Person shall be construed to include the Person's
successors and


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<PAGE>
assigns, (d) the words "herein", "hereof' and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (e) all references herein to Articles,
Sections, Exhibits or Schedules shall be construed to refer to Articles,
Sections, Exhibits and Schedules of this Agreement. The titles and subtitles
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.

          9.6 INTEGRATION.

          This Agreement, the CRT Sublicense Agreement and the Stock Purchase
Agreement constitute the entire agreement between the Parties with respect to
the within subject matter and supersedes all previous agreements, whether
written or oral. This Agreement may be amended only in writing signed by
properly authorized representatives of each of the Parties.

          9.7 INDEPENDENT CONTRACTORS; NO AGENCY.

          Neither Party shall have any responsibility for the hiring, firing or
compensation of the other Party's employees or for any employee benefits. No
employee or representative of a Party shall have any authority to bind or
obligate the other Party to this Agreement for any sum or in any manner
whatsoever, or to create or impose any contractual or other liability on the
other Party without said Party's written approval. For all purposes, and
notwithstanding any other provision of this Agreement to the contrary, each
Party's legal relationship under this Agreement to the other Party shall be that
of independent contractor. The Parties agree and acknowledge that neither owes
any fiduciary duties to the other.

          9.8 ASSIGNMENT; SUCCESSORS.

          Neither Alnylam nor Novartis may assign this Agreement in whole or in
part without the consent of the other Party and such attempted assignment shall
be deemed null and void; provided, however, that either Party may assign this
Agreement (i) to an Affiliate on the condition that the assigning Party shall
remain primarily liable hereunder for the prompt and punctual payment and
performance of all obligations of the assignee, or (ii) to a Third Party in
connection with a sale or transfer of all or substantially all of the assigning
Party's business to which this Agreement relates. This Agreement shall be
binding upon, and shall inure to the benefit of, all permitted successors and
assigns.

          9.9 EXECUTION IN COUNTERPARTS; FACSIMILE SIGNATURES.

          This Agreement may be executed in counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one and the same
instrument even if both Parties have not executed the same counterpart.
Signatures provided by facsimile transmission shall be deemed to be original
signatures.


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          9.10 WAIVERS.

          No failure on the part of Novartis or Alnylam to exercise and no delay
in exercising any right, power, remedy or privilege under this Agreement, or
provided by statute or at law or in equity or otherwise, shall impair, prejudice
or constitute a waiver of any such right, power, remedy or privilege or be
construed as a waiver of any breach of this Agreement or as an acquiescence
therein, nor shall any single or partial exercise of any such right, power,
remedy or privilege preclude any other or further exercise thereof or the
exercise of any other right, power, remedy or privilege.

          9.11 NO CONSEQUENTIAL OR PUNITIVE DAMAGES.

          NEITHER PARTY HERETO WILL BE LIABLE FOR INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, EXEMPLARY OR MULTIPLE DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, OR FOR LOST PROFITS ARISING
FROM OR RELATING TO ANY BREACH OF, OR OTHERWISE UNDER, THIS AGREEMENT,
REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 9.11 IS
INTENDED TO LIMIT OR RESTRICT (i) THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF
EITHER PARTY WITH RESPECT TO THIRD PARTY CLAIMS UNDER SECTIONS 9.1 OR (ii)
REMEDIES AVAILABLE TO EITHER PARTY WITH RESPECT TO A BREACH OF ARTICLE V.

          9.12 ACTIONS OF AFFILIATES.

          Each Party shall be liable for any failure by its Affiliates to comply
with the restrictions, limitations and obligations set forth in this Agreement.
Each Party may perform its obligations hereunder personally or through one or
more Affiliates, although each Party shall nonetheless be solely responsible for
the performance of its Affiliates. Neither Party shall permit any of its
Affiliates to commit any act (including any act of omission) that such Party is
prohibited hereunder from committing directly. To the extent that the rights
granted to a Party hereunder may be and are exercised by an Affiliate of such
Party, such Affiliate shall be bound by the corresponding obligations of such
Party.

          9.13 EXPENSES.

          Except as otherwise expressly set forth in this Agreement, each Party
shall be solely responsible for the expenses it incurs in connection with its
performance of the activities contemplated by this Agreement.

                  [Remainder of Page Intentionally Left Blank]


                                       66
<PAGE>
          IN WITNESS WHEREOF, Alnylam and Novartis have caused this Agreement to
be duly executed by their authorized representatives, as of the date first
written above.

                                        ALNYLAM PHARMACEUTICALS, INC.


                                        By: /s/ John M. Maraganore
                                            ------------------------------------
                                        Name: John M. Maraganore
                                              ----------------------------------
                                        Title: President and CEO
                                               ---------------------------------


                                        NOVARTIS INSTITUTES FOR BIOMEDICAL
                                        RESEARCH, INC.


                                        By: /s/ Mark C. Fishman
                                            ------------------------------------
                                        Name: Mark C. Fishman
                                              ----------------------------------
                                        Title: President & CEO
                                               ---------------------------------
<PAGE>
                                  SCHEDULE 1(B)

                            BROAD RNAI PATENT RIGHTS

[**]
<PAGE>
                                  SCHEDULE 1(L)

                      LISTED ALNYLAM THIRD PARTY AGREEMENTS

Co-Exclusive License Agreement between Garching Innovation GmbH and Alnylam
Pharmaceuticals, Inc. dated December 20, 2002.

Co-Exclusive License Agreement between Garching Innovation GmbH and Ribopharma
AG dated July 30, 2003.

Licence Agreement between Cancer Research Technology Ltd. and Alnylam
Pharmaceuticals, Inc. dated July 18, 2003.

Agreement between the Board of Trustees of the Leland Stanford Junior University
and Alnylam Pharmaceuticals, Inc. dated September 17, 2003.

Strategic Collaboration & License Agreement between Isis Pharmaceuticals, Inc.,
and Alnylam Pharmaceuticals, Inc., dated March 11, 2004.

Research Collaboration and License Agreement between Merck & Co., Inc., Alnylam
Pharmaceuticals, Inc. and Alnylam Holding Co., dated September 08, 2003.

Collaboration and License Agreement between Merck & Co., Inc. and Alnylam
Pharmaceuticals, Inc., dated June 29, 2004.

Collaboration Agreement by and between Alnylam Pharmaceuticals, Inc. and
Medtronic, Inc., dated February 08, 2005.

License and Option Agreement between GeneCare Research Institute Co., Ltd. and
Alnylam Pharmaceuticals, Inc., dated January 06, 2005.

License and Option Agreement between Nastech Pharmaceutical Company, Inc., and
Alnylam Pharmaceuticals, Inc., dated July 20, 2005.

License Agreement between Benitec Australia, Ltd. and Alnylam Pharmaceuticals,
Inc., dated April 08, 2005.

License Agreement between Garching Innovation GmbH and Isis Pharmaceuticals,
Inc. and Alnylam Pharmaceuticals, Inc., dated October 18, 2004.

Award Letter from Cystic Fibrosis Foundation Therapeutics (CFFT) to Alnylam
Pharmaceuticals, Inc., dated March 15, 2005.

Sponsored Research Agreement between Mayo Foundation for Medical Education and
Research and Alnylam Pharmaceuticals, Inc., dated October 01, 2003.

Award Letter from Michael J. Fox Foundation (MJFF) to Alnylam Pharmaceuticals,
Inc., dated July 07, 2005
<PAGE>
License Agreement between South Alabama Medical Sciences Foundation (SAMSF) and
Alnylam Pharmaceuticals, Inc., dated November 18, 2004.

[**]
<PAGE>
                                  SCHEDULE 1(P)

                        PRE-EXISTING ALLIANCE AGREEMENTS

Research Collaboration and License Agreement between Merck & Co., Inc., Alnylam
Pharmaceuticals, Inc. and Alnylam Holding Co., dated September 8, 2003.

Strategic Collaboration & License Agreement between Isis Pharmaceuticals, Inc.,
and Alnylam Pharmaceuticals, Inc., dated March 11, 2004.

Collaboration and License Agreement between Merck & Co., Inc. and Alnylam
Pharmaceuticals, Inc., dated June 29, 2004.

License and Option Agreement between GeneCare Research Institute Co., Ltd. and
Alnylam Pharmaceuticals, Inc., dated January 6, 2005.

Collaboration Agreement by and between Alnylam Pharmaceuticals, Inc. and
Medtronic, Inc., dated February 08, 2005.

License Agreement between Benitec Australia, Ltd. and Alnylam Pharmaceuticals,
Inc., dated April 8, 2005.

License and Option Agreement between Nastech Pharmaceutical Company, Inc., and
Alnylam Pharmaceuticals, Inc., dated July 20, 2005.
<PAGE>
                               SCHEDULE 3.1(F)(II)

                 CANCER RESEARCH TECHNOLOGY SUBLICENSE AGREEMENT

                                LICENSE AGREEMENT

This LICENSE AGREEMENT (this "License Agreement"), effective as of October 12,
2005 (the "Effective Date"), is by and between Novartis Institutes for
BioMedical Research, Inc., a corporation organized and existing under the laws
of Delaware, with its principal place of business at 250 Massachusetts Avenue,
Cambridge, Massachusetts 02139 ("Novartis"), and Alnylam Pharmaceuticals, Inc.,
a corporation organized and existing under the laws of Delaware, with its
principal place of business at 300 Third Street, 3rd Floor, Cambridge,
Massachusetts 02142 ("Alnylam"). Novartis and Alnylam are each sometimes
referred to herein individually as a "Party" and collectively as "Parties."

                                    RECITALS

          WHEREAS, Novartis and Alnylam have entered into the RESEARCH
COLLABORATION AND LICENSE AGREEMENT (the "Collaboration Agreement") as of the
Effective Date;

          WHEREAS, Alnylam U.S., Inc. (then known as Alnylam Pharmaceuticals,
Inc.) is a party to that certain License Agreement (the "CRT Agreement"), dated
July 18, 2003, with Cancer Research Technology Limited ("CRT").

          WHEREAS, Alnylam wishes to sublicense to Novartis, and Novartis wishes
to sublicense from Alnylam, the CRT Patent Rights (as defined in the CRT
Agreement) pursuant to the terms of this License Agreement.

          NOW, THEREFORE, in consideration of the respective covenants and
agreements contained herein, and for other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, Alnylam and Novartis agree as
follows:

                                    ARTICLE 1

                                   DEFINITIONS

          All capitalized terms used herein that are not otherwise defined
herein shall have the meaning given to such terms in the Collaboration
Agreement.

          "Blocking IP" shall mean any and all Patent Rights (other than those
licensed under this Licence Agreement or Patent Rights Controlled by Alnylam)
which, if claims covering subject matter of such Patent Rights issue, would
render the use, development, manufacture, sale, or other disposal of a Licensed
Product which is a CRT
<PAGE>
Licensed Product unlawful in the absence of a license to such Patent Rights from
a Third Party, it being understood that Blocking IP shall include (i) any
intellectual property rights licensed from a Third Party other than CRT by
Novartis pursuant to Section 4.4(e)(iii) of the Collaboration Agreement, and
(ii) any Blocking RNAi Intellectual Property licensed from a Third Party other
than CRT by Novartis pursuant to Section 4.5 of the Collaboration Agreement, if,
with respect to clauses (i) and (ii), such intellectual property rights would
apply to a Licensed Product which is a CRT Licensed Product.

          "CRT Agreement" shall have the meaning given to such term in the
Recitals.

          "CRT Field" shall mean the development of RNAi Products for the
treatment of human disease (including by means of gene therapy).

          "CRT Licensed Product" shall mean a product or products which, or the
process of production of which, or the use of which falls within the scope of a
Valid Claim (as defined in the CRT Agreement) of the CRT Patent Rights.

          "CRT Patent Rights" shall have the meaning given to such term in the
CRT Agreement, which include the rights identified on Schedule A hereto.

                                    ARTICLE 2

                                  LICENSE GRANT

          2.1  RESEARCH TERM

          Subject to the terms and conditions of the Collaboration Agreement and
of Section 2.5 of this License Agreement, Alnylam hereby grants to Novartis and
its Affiliates a worldwide, royalty-free, non-sublicensable right and sublicense
under CRT Patent Rights to, during the Research Term, (i) perform Novartis's
obligations under the Research Collaboration, (ii) engage in any and all
Discovery activities directed to the CRT Field, and (iii) Discover RNAi
Compounds directed at the Selected Targets (other than Selected Targets that are
the subject of Abandoned Programs that do not become Active Programs pursuant to
Sections 2.3(b) or 2.6(c) of the Collaboration Agreement). The rights granted
under clauses (i) and (ii) shall be non-exclusive, and the rights granted under
clause (iii) shall be exclusive, subject to Alnylam's right (itself or through
its Affiliates) to perform its obligations under the Research Collaboration or
to pursue Abandoned Programs that do not become Active Programs pursuant to
Sections 2.3(b) or 2.6(c) of the Collaboration Agreement).

          2.2  COLLABORATION PRODUCTS

          Subject to the terms and conditions of the Collaboration Agreement and
of Section 2.5 of this License Agreement, Alnylam hereby grants to Novartis and
its Affiliates an exclusive (subject to Alnylam's right (itself or through its
Affiliates) to perform its obligations under the Research Collaboration),
worldwide, royalty-bearing, sublicensable (subject to Section 3.1(d) of the
Collaboration Agreement) right and


                                       73
<PAGE>

sublicense under CRT Patent Rights to (i) Discover, Develop, Commercialize or
Manufacture Collaboration Products for all applications in the CRT Field, and
(ii) to Develop, Commercialize or Manufacture Discovered RNAi Compounds.

          2.3  TECHNOLOGY ADOPTION OPTION

          Upon Novartis's written election during the Research Term (following
such time as the Collaboration Success Milestone has been achieved) and
Novartis's or its Affiliate's tender to Alnylam of the Adoption Consideration
(the date of such tender, the "Adoption Date"), Alnylam hereby grants, in
addition to the licenses granted in Sections 2.1 and 2.2, to Novartis and its
Affiliates a non-exclusive, worldwide, perpetual, irrevocable, royalty-bearing
right and license, subject to the terms and conditions of the Collaboration
Agreement and of Section 2.5 of this License Agreement, under CRT Patent Rights
to engage in any and all activities in the CRT Field, including all Discovery,
Development, Commercialization and Manufacturing activities directed to the CRT
Field (the "Adoption License"). Novartis's rights under the Adoption License are
non-sublicensable; provided, however, that Novartis may engage Third Party
contractors, including contract research organizations, contract employees,
consultants, contract manufacturers and the like.

          2.4  NOVARTIS SUBLICENSE RIGHTS

          The sublicensing of Novartis's rights under Section 2.2 will be
subject to the following provisions: (i) Novartis's sublicensees shall have no
right to grant further sublicenses without Alnylam's written consent, which
consent shall not be unreasonably withheld or delayed; and (ii) Novartis shall
be primarily liable for any failure by its sublicensees to comply with, and
Novartis guarantees to Alnylam the compliance by each of its sublicensees with,
all relevant restrictions, limitations and obligations in this License
Agreement.

          2.5  RESERVATION OF RIGHTS

          (i) For the sake of clarity, save to the extent necessary for the
Development and/or Commercialization of Licensed Products which are CRT Licensed
Products in the CRT Field, neither Novartis nor any Affiliate is granted the
right to make use of the CRT Patent Rights to research, develop, use, keep,
make, have made, sell and otherwise dispose or offer to dispose of products:

               a) for any diagnostic application;

               b) as research tools or reagents;

               c) for target validation; or

               d) small molecule drug discovery

including the provision of services in relation thereto to Affiliates or Third
Parties (as defined in the CRT Agreement).

          (ii) Novartis acknowledges and agrees that, pursuant to Clause 2.3 of
the CRT Agreement, CRT and Cancer Research UK shall have the right to use, and
CRT


                                       74
<PAGE>
shall have the right to consent to the use by academic research institutions
(including for the sake of clarity those in receipt of Cancer Research UK
funding) of, the CRT Patent Rights in the Field for internal, or in
collaboration with another academic research institution, non-commercial,
non-commercially sponsored research. For the sake of clarity, Cancer Research
UK-funded Researchers (as defined in the CRT Agreement) shall be permitted under
the CRT Patent Rights to conduct clinical trials of potential dsRNA therapeutic
agents as part of their Cancer Research UK-funded academic research.

          (iii) Novartis acknowledges and agrees that the grants by Alnylam
under CRT Patent Rights set forth in Sections 2.1 through 2.4 will be subject to
the same rights, and limited to the same extent, as rights Alnylam has
previously granted under Alnylam Patent Rights to Pre-Existing Alliance Parties,
and shall be subject to the terms and conditions of Sections 3.1(e) through (g),
6.5 and 6.9 of the Collaboration Agreement as though CRT Patent Rights were
included in Alnylam Patent Rights and the CRT Agreement was a Listed Alnylam
Third Party Agreement.

                                    ARTICLE 3

                              FINANCIAL PROVISIONS

          3.1  UPFRONT CONSIDERATION

          In consideration of the rights granted to Novartis under this License
Agreement as of the Effective Date, Novartis shall pay, or cause to be paid, to
Alnylam [**] dollars ($[**]) within ten (10) Business Days following the
Effective Date.

          3.2  TECHNOLOGY ADOPTION

          In the event that Novartis elects, pursuant to the terms of Section
2.3, to exercise its right to acquire the Adoption License, Novartis shall, or
shall cause one of its Affiliates to, pay to Alnylam a one-time technology
adoption fee of [**] dollars ($[**]) in relation to the grant of the CRT Patent
Rights under Section 2.3.

          3.3  ROYALTIES

          Novartis shall pay, or cause to be paid, to Alnylam royalties of [**]
per cent ([**]%) of Net Sales (as defined in the CRT Agreement) of Royalty
Licensed Products (as defined in the CRT Agreement) in the CRT Field.

          3.4  ROYALTY STACKING

          Provided always that the royalty payable under Section 3.3 of this
License Agreement to Alnylam shall not in any event be reduced below [**]
percent ([**]%), if at any time prior to or during the period for the payment of
royalties under this License Agreement in relation to any particular territory,
Novartis (or its Affiliate as the case may


                                       75
<PAGE>
be) or a Sub-licensee (as defined in the CRT Agreement) elects in its reasonable
opinion to take a license from a Third Party to any Blocking IP (as defined in
the CRT Agreement) to develop, make, sell or otherwise dispose of Licensed
Products, the royalties set forth in Section 3.3 applicable to such Licensed
Product (as defined in the CRT Agreement) shall be reduced by [**]% of the
amount paid to such Third Party to access said Blocking IP.

          3.5  RECONCILIATION WITH ROYALTY OBLIGATIONS UNDER AGREEMENT

          Any amounts paid by Novartis to Alnylam pursuant to Section 3.3 of
this License Agreement, as adjusted in accordance with Section 3.4, shall be
considered a Listed Alnylam Third Party Payment for the purposes of Section 4.4
of the Collaboration Agreement.

                                   ARTICLE IV

                          COMPLIANCE WITH CRT AGREEMENT

          Pursuant to the requirements of Clause 2.4 of the CRT Agreement:

          4.1  TERMINATION

          The term and termination of this License Agreement shall be governed
by Article VIII of the Collaboration Agreement as though CRT Patent Rights were
included in Alnylam Patent Rights, provided that:

          (a) This License Agreement shall terminate automatically on the expiry
or termination for whatever reason of the CRT Agreement.

          (b) In the event of termination of the CRT Agreement pursuant to
Clause 10 of the CRT Agreement, CRT has agreed that it will enter into a direct
licensing arrangement with Novartis on terms substantially similar to those
contained herein save that any license granted by CRT to Novartis shall be
consistent with the terms of this License Agreement in relation to field,
territory, exclusivity, rights to sub-license and payment provisions. However,
in the event of termination of the CRT Agreement by Alnylam pursuant to Clause
10.2 of such CRT Agreement, the provisions of the foregoing sentence shall apply
save that the granting of such license by CRT shall be subject to CRT's consent.
Novartis acknowledges and agrees that (i) CRT shall have no obligation to enter
into a direct licensing arrangement with Novartis where Novartis is in default
of its obligations under this License Agreement; (ii) CRT shall not be expected
to take any responsibility for any disputes between Alnylam (or its Affiliate as
the case may be) and Novartis relating to the terms of this License Agreement,
and (iii) notwithstanding the foregoing provisions of this Section 4.1(b), CRT
shall not be obliged to enter into a direct license with Novartis in
circumstances in which Novartis reserves any right to maintain a claim against
CRT where such claim was previously maintained against Alnylam (or its Affiliate
as the case may be).


                                       76
<PAGE>
          4.2  BOOKS AND RECORDS

          Novartis shall undertake to CRT directly to allow CRT the same access
to Novartis's books and records as CRT has to Alnylam's books and records under
the CRT Agreement; and

          4.3  ASSIGNMENT

          (a) Subject to Section 4.3(b), neither Party shall without the prior
written consent of the other Party, which shall not be unreasonably withheld,
assign the benefit and/or burden of this License Agreement nor sub-contract any
of its obligations hereunder unless otherwise permitted by the terms hereof.

          (b) Either Party shall be entitled to assign the benefit and/or burden
of this License Agreement to any Affiliate or to its successor in connection
with any merger, consolidation or sale or other disposal of all or substantially
all of its assets and/or business to which this License Agreement relates.

          4.4  SUB-LICENSES

          Any sub-license granted by Novartis under this License Agreement shall
be subject to the terms of this Article IV and Section 2.5 of this License
Agreement.

                                    ARTICLE V

                           OTHER TERMS AND CONDITIONS

          Except as explicitly set forth to the contrary in Articles I through
IV, the grant of the CRT Patent Rights under Sections 2.1 through 2.4 shall be
governed by the terms and conditions of the Collaboration Agreement as though
such CRT Patent Rights were included in Alnylam Patent Rights. Alnylam has
disclosed to Novartis a true and complete copy of the CRT Agreement Contracts
and all amendments thereto.

                  [Remainder of Page Intentionally Left Blank]


                                       77
<PAGE>
          IN WITNESS WHEREOF, Alnylam and Novartis have caused this License
Agreement to be duly executed by their authorized representatives, as of the
date first written above.

                                        ALNYLAM PHARMACEUTICALS, INC.


                                        By: /s/ John M. Maraganore
                                            ------------------------------------
                                        Name: John M. Maraganore
                                              ----------------------------------
                                        Title: President and CEO
                                               ---------------------------------


                                        NOVARTIS INSTITUTES FOR BIOMEDICAL
                                        RESEARCH, INC.


                                        By: /s/ Mark C. Fishman
                                            ------------------------------------
                                        Name: Mark C. Fishman
                                              ----------------------------------
                                        Title: President & CEO
                                               ---------------------------------


                                       78
<PAGE>
                                   SCHEDULE A

                                CRT PATENT RIGHTS

                                      [**]
<PAGE>
                                  SCHEDULE 4.7

                                 FORM OF INVOICE

                              [Alnylam Letterhead]

[Date]

Novartis Institutes for BioMedical Research, Inc.
Attn: Finance Dept. - AP 1702
250 Massachusetts Avenue
Cambridge, MA 02139
USA

Re:  Purchase Order Number [Enter PO Number]
     Collaboration Agreement: [Title of Research Project]

Amount and Currency:                  [_________________]
Amount of VAT (if applicable):        [_________________]   N/A in US
Total Amount (including VAT):         [_________________]   N/A in US

VAT number (if applicable)            [_________________]   N/A in US

This is an invoice requesting payment in connection with the above-captioned
purchase order between Nantucket, Inc. and Novartis Institutes for BioMedical
Research, Inc.

Project Contact Person in Novartis:   [_________________]

SPECIFICATION:                        [describe in reasonable detail the
                                      services and dates, or the event, for
                                      which payment is due (e.g. 1.Q.2000, 2nd
                                      funding year)]

Sincerely yours,

ALNYLAM PHARMACEUTICALS, INC.
<PAGE>
                               SCHEDULE 7.2(B)(I)

                                  OWNED PATENTS

                                      [**]
<PAGE>
                               SCHEDULE 7.2(B)(II)

                                  IP CONTRACTS

The following is a list of all agreements, as of the Effective Date, pursuant to
which Alnylam licensed, granted any rights to, or made any covenant not to sue
with respect to Alnylam Intellectual Property, excluding any material transfer
agreement or research collaboration agreement in which any rights granted by
Alnylam extend solely to the use of specific materials for a defined study and
no rights are granted to Alnylam's underlying intellectual property.

Non-Exclusive License Agreement between Ambion, Inc., and Alnylam
Pharmaceuticals, Inc., dated June 08, 2005.

[**]

License Agreement between Benitec Australia, Ltd. and Alnylam Pharmaceuticals,
Inc., dated April 08, 2005.

Licence Agreement between Cancer Research Technology Ltd. and Alnylam
Pharmaceuticals, Inc., dated July 18, 2003.

     -    Amendment to Schedule 2 of Licence Agreement between Cancer Research
          Technology Ltd. (CRT) and Alnylam Pharmaceuticals, Inc., dated August
          29, 2003.

License Agreement between Carnegie Institute of Washington and Ribopharma AG,
dated March 01, 2002.

     -    Amendment to License Agreement between Carnegie Institute of
          Washington and Ribopharma AG, dated November 28, 2003.

Non-Exclusive License Agreement between Cell Signaling Technology, Inc. and
Ribopharma AG, dated December 01, 2003.

Non-Exclusive License Agreement between Cenix Bioscience GmbH and Ribopharma AG,
dated January 09, 2004.

     -    Amendment to Non-Exclusive License Agreement between Cenix Bioscience
          GmbH and Ribopharma AG, dated February 02, 2004.

License Agreement between Cold Spring Harbor Laboratory and Alnylam
Pharmaceuticals, Inc., dated December 20, 2003.

Award Letter from Cystic Fibrosis Foundation Therapeutics (CFFT) to Alnylam
Pharmaceuticals, Inc., dated March 15, 2005.
<PAGE>
Non-Exclusive License Agreement between Eurogentec SA and Alnylam Europe AG,
dated June 27, 2005.

Co-Exclusive License Agreement between Garching Innovation GmbH and Alnylam
Pharmaceuticals, Inc., dated December 20, 2002.

     -    Co-Exclusive License Agreement between Garching Innovation GmbH and
          Alnylam Pharmaceuticals, Inc., Amendment, dated March 24, 2003.

     -    Co-Exclusive License Agreement between Alnylam Pharmaceuticals, Inc.
          and Garching Innovation GmbH dated December 20, 2002, Amendment with
          respect to certain deadlines, dated May 7, 2003.

     -    Amendment of the License Agreement dated December 20, 2002 between
          Garching Innovation GmbH and Alnylam Pharmaceuticals, Inc., dated July
          2, 2003.

     -    Co-Exclusive License Agreement between Garching Innovation GmbH and
          Alnylam Pharmaceuticals, Inc., dated December 20, 2002, Amendment of
          Appendix B with respect to certain patent claims, dated July 21, 2003.

     -    Amendment of the License Agreement dated December 20, 2002 between
          Garching Innovation and Alnylam Pharmaceuticals, Inc., dated January
          8, 2004.

Co-Exclusive License Agreement between Garching Innovation GmbH and Ribopharma
AG dated July 30, 2003.

     -    Agreement (the "Requirement Amendment") between Garching Innovation
          GmbH, Alnylam Pharmaceuticals, Inc., Alnylam US, Inc. and Alnylam
          Europe AG, effective June 14, 2005.

License Agreement between Garching Innovation GmbH and Isis Pharmaceuticals,
Inc. and Alnylam Pharmaceuticals, Inc., dated October 18, 2004.

License and Option Agreement between GeneCare Research Institute Co., Ltd. and
Alnylam Pharmaceuticals, Inc., dated January 06, 2005.

     -    Side-Letter Agreement between GeneCare Research Institute Co., Ltd.
          and Alnylam Pharmaceuticals, Inc., dated January 06, 2005.

License Agreement between Hybridon, Inc., and Alnylam U.S., Inc., dated August
02, 2004.

Non-Exclusive License Agreement between Invitrogen Corporation and Ribopharma
AG, dated January 07, 2004.
<PAGE>
Strategic Collaboration & License Agreement between Isis Pharmaceuticals, Inc.,
and Alnylam Pharmaceuticals, Inc., dated March 11, 2004.

     -    Letter Agreement between Isis Pharmaceuticals, Inc., and Alnylam
          Pharmaceuticals, dated March 09, 2004.

     -    Letter Agreement between Isis Pharmaceuticals, Inc., and Alnylam
          Pharmaceuticals, dated March 11, 2004.

     -    Amendment to the Strategic Collaboration & License Agreement dated
          March 11, 2004 between Isis Pharmaceuticals, Inc., and Alnylam
          Pharmaceuticals, Inc., dated June 14, 2005.

[**]

Sponsored Research Agreement between Mayo Foundation for Medical Education and
Research and Alnylam Pharmaceuticals, Inc., dated October 01, 2003.

     -    Amendment to Sponsored Research Agreement between Mayo Foundation for
          Medical Education and Research and Alnylam Pharmaceuticals, Inc. dated
          March 29, 2004.

     -    Amendment to Sponsored Research Agreement between Mayo Foundation for
          Medical Education and Research and Alnylam Pharmaceuticals, Inc.,
          dated March 01, 2005.

     -    Amendment to Sponsored Research Agreement between Mayo Foundation for
          Medical Education and Research and Alnylam Pharmaceuticals, Inc.,
          dated August 30, 2005.

Collaboration Agreement by and between Alnylam Pharmaceuticals, Inc. and
Medtronic, Inc., dated February 08, 2005.

Research Collaboration and License Agreement between Merck & Co., Inc., Alnylam
Pharmaceuticals, Inc. and Alnylam Holding Co., dated September 08, 2003.

     -    Amendment to Research Collaboration and License Agreement between
          Merck & Co., Inc., Alnylam Pharmaceuticals, Inc. and Alnylam Holding
          Co., dated September 30, 2004.

Collaboration and License Agreement between Merck & Co., Inc., and Alnylam
Pharmaceuticals, Inc., dated June 29, 2004.

     -    Amendment No. 1 to Collaboration and License Agreement between Merck &
          Co., Inc and Alnylam Pharmaceuticals, Inc., dated August 02, 2004.
<PAGE>
License Agreement between Merck KgaA and Ribopharma AG, dated January 04, 2002.

Award Letter from Michael J. Fox Foundation (MJFF) to Alnylam Pharmaceuticals,
Inc., dated July 07, 2005.

Non-Exclusive License Agreement between MWG Biotech AG and Alnylam
Pharmaceuticals, Inc., dated July 05, 2005.

License and Option Agreement between Nastech Pharmaceutical Company, Inc., and
Alnylam Pharmaceuticals, Inc., dated July 20, 2005.

[**]

Non-Exclusive License Agreement between RNAx GmbH and Ribopharma AG, dated
January 26, 2004.

[**]

Non-Exclusive License Agreement between Sigma-Aldrich Company and Alnylam
Pharmaceuticals, Inc., dated July 06, 2005.

License Agreement between South Alabama Medical Sciences Foundation (SAMSF) and
Alnylam Pharmaceuticals, Inc., dated November 18, 2004.

Agreement between the Board of Trustees of the Leland Stanford Junior University
and Alnylam Pharmaceuticals, Inc., dated September 17, 2003.

[**]
<PAGE>
                                 SCHEDULE 7.2(E)

                                      [**]
<PAGE>
                                 SCHEDULE 7.2(H)

                           [**] BROAD RNAI TECHNOLOGY

This schedule lists [**] broad RNAi technology but are not included in any
license grants by Alnylam to Novartis under Article III [**].

[**]
<PAGE>
                                 SCHEDULE 7.2(I)

                 LISTED ALNYLAM THIRD PARTY PAYMENT OBLIGATIONS

The following excerpts from the cited agreements set forth Alnylam's payment
obligations with respect to Third Parties.

1.   OBLIGATIONS UNDER CO-EXCLUSIVE LICENSE AGREEMENT BETWEEN GARCHING
     INNOVATION GMBH AND ALNYLAM PHARMACEUTICALS, INC., DATED DECEMBER 20, 2002,
     AND UNDER CO-EXCLUSIVE LICENSE AGREEMENT BETWEEN GARCHING INNOVATION GMBH
     AND RIBOPHARMA AG, DATED JULY 30, 2003

ARTICLE 5 - SHARES, ROYALTIES AND PAYMENT TERMS

5.2 Running Royalties

COMPANY shall pay to GI the following running royalties on NET SALES of
therapeutic and prophylactic LICENSED PRODUCTS by COMPANY and its SUBLICENSEES:

(a)  [**]% ([**] percent) of the first US$[**] ([**] US Dollars) of annual
     accumulated NET SALES of all LICENSED PRODUCTS;

(b)  [**]% ([**] percent) of annual accumulated NET SALES of all LICENSED
     PRODUCTS between US$[**] ([**] US Dollars) and US$[**] ([**] US Dollars);

(c)  [**]% ([**] percent) of annual accumulated NET SALES of all LICENSED
     PRODUCTS between US$[**] ([**] US Dollars) and US[**] ([**] US Dollars);

(d)  [**]% ([**] percent) of annual accumulated NET SALES of all LICENSED
     PRODUCTS between US$[**] ([**] US Dollars) and US$[**] ([**] US Dollars);

(e)  [**]% ([**] percent) of annual accumulated NET SALES of all LICENSED
     PRODUCTS between US$[**] ([**] US Dollars) and US$[**] ([**]US Dollars);
     and

(f)  [**]% ([**] percent) of annual accumulated NET SALES of all LICENSED
     PRODUCTS above US$[**] ([**] US Dollars).

In the event that COMPANY or a SUBLICENSEE develops diagnostic LICENSED
PRODUCTS, COMPANY shall initiate negotiations with GI at least [**] months prior
to the intended first commercial sale of each diagnostic LICENSED PRODUCT.
COMPANY and GI shall negotiate in good faith [**] terms for such diagnostic
LICENSED PRODUCT.

If the sale of any LICENSED PRODUCT is covered by more than one of the PATENT
RIGHTS, multiple royalties shall not be due.

Non-cash consideration shall not be accepted by COMPANY or any SUBLICENSEE for
LICENSED PRODUCTS without the prior written consent of GI.
<PAGE>
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
[**]% ([**] percent) of any additional running royalties to be paid to such
third party up to [**]% ([**] percent) 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 [**]% ([**] percent) 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 GI under this Agreement.

(b) PATENT RIGHTS Coverage

In the event that (i) COMPANY or its SUBLICENSEES sell a LICENSED PRODUCT in a
country where no PATENT RIGHTS are issued and no patent applications that are
part of the PATENT RIGHTS are pending that have not been pending for less than
[**] after filing national patent applications in the country in question, and
(ii) such LICENSED PRODUCT is manufactured in a country where PATENT RIGHTS are
issued or patent applications that are part of the PATENT RIGHTS are pending
that have not been pending for more than [**] after filing national patent
applications in the country in question, the royalties stated in Section 5.2
will be reduced by [**]% ([**]percent) for such LICENSED PRODUCT, until the
expiration or abandonment of all issued patents and filed patent applications
within the PATENT RIGHTS in the country in which the LICENSED PRODUCT is
manufactured.

2.   LICENCE AGREEMENT BETWEEN CANCER RESEARCH TECHNOLOGY LTD. AND ALNYLAM
     PHARMACEUTICALS, INC., DATED JULY 18, 2003

Payment obligations under this agreement are set forth in, and governed by, the
CRT Sublicense Agreement.
<PAGE>
3.   AGREEMENT BETWEEN THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR
     UNIVERSITY AND ALNYLAM PHARMACEUTICALS, INC., DATED SEPTEMBER 17, 2003

6    ROYALTIES

6.2  MINIMUM ROYALTY. Beginning one year from the Effective Date, and each
     anniversary thereafter, Alnylam will pay to Stanford a yearly royalty of
     $[**]. Yearly royalty payments are nonrefundable, but they are creditable
     against earned royalties to the extent provided in Section 6.4.

6.3  EARNED ROYALTY. In addition, Alnylam will pay Stanford earned royalties on
     Net Sales as follows:

     (A)  [**]% of Net Sales for a Licensed Product subject to the following;.

     (B)  Such royalty payments shall be reduced up to [**]% (from [**]% of Net
          Sales down to [**]% of Net Sales) by the amount of royalty paid to
          access additional intellectual property necessary in order to sell
          Licensed Products ("Additional Earned Royalties").

     (C)  Such royalty payments shall be reduced as follows:

          (1)  [**]% if Additional Earned Royalties are [**]% or less.

          (2)  [**]% if Additional Earned Royalties are greater than [**]% but
               less than [**]%.

          (3)  [**]% if Additional Earned Royalties are equal to or greater than
               3% but less than [**]%.

          (4)  [**]% if Additional Earned Royalties are equal to or greater than
               [**]% but less than [**]%.

          (5)  [**]% if Additional Earned Royalties are equal to or higher than
               [**]%.

     (D)  Only one royalty is due on each Licensed Product sold by Alnylam or
          its sublicensees regardless of whether its manufacture, use,
          importation or sale are or shall be covered by more than one patent or
          patent application included in Licensed Patents under this Agreement,
          and no further royalties will be due for use of such Licensed Product
          by Alnylam or its sublicensee's customers.

6.4  CREDITABLE PAYMENTS. Creditable payments under this Agreement will be an
     offset to Alnylam against each earned royalty payment which Alnylam would
     be required to pay under Section 6.3 until the entire credit is exhausted.

6.5  MILESTONE PAYMENTS.

     (A)  For the first Licensed Product, Alnylam will make the following
          payments for the filing of an IND, intitiation of Phase II trial,
          initiation of Phase III
<PAGE>
          trial, and approval of New Drug Application or equivalent in the U.S.
          ("Milestone Payments"):

          (1)  $[**] for filing of the first IND.

          (2)  $[**] for initiation of the first Phase II trial.

          (3)  $[**] for initiation of the first Phase III trial.

          (4)  $[**] for approval of the first New Drug Application or
               equivalent regulatory approval in the U.S..

     (B)  For the second Licensed Product, Alnylam will make the following
          Milestone Payments:

          (1)  $[**] for filing of the first IND.

          (2)  $[**] for initiation of the first Phase II trial.

          (3)  $[**] for initiation of the first Phase III trial.

          (4)  $[**] for approval of the first New Drug Application or
               equivalent regulatory approval in the U.S..

     (C)  For the third and every subsequent Licensed Product, Alnylam will make
          the following Milestone Payments:

     (1)  $[**] for filing of the first IND.

     (2)  $[**] for initiation of the first Phase II trial.

     (3)  $[**] for initiation of the first Phase III trial.

     (4)  $[**] for approval of the first New Drug Application or equivalent
          regulatory approval in the U.S..

     (D)  Notwithstanding the above, at the time that Stanford receives a
          Milestone Payment from Alnylam on behalf of a sublicensee under 13.6,
          the corresponding Milestone Payment under this Section 6.5 will not be
          due.

6.6  OBLIGATION TO PAY ROYALTIES. If this Agreement is not terminated in
     accordance with other provisions, Alnylam will be obligated to pay
     royalties on all Licensed Product that is either sold or produced under the
     license granted in Article 3, whether or not the Licensed Product is
     produced before the Effective Date of this Agreement or sold after the
     Licensed Patent has expired.
<PAGE>
4.   STRATEGIC COLLABORATION & LICENSE AGREEMENT BETWEEN ISIS PHARMACEUTICALS,
     INC., AND ALNYLAM PHARMACEUTICALS, INC., DATED MARCH 11, 2004

                                    ARTICLE 7

                   LICENSE FEES AND ROYALTIES PAYABLE TO ISIS

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

     7.3 Development Milestones.

          (a) Alnylam, its Affiliates or sublicensees (except Naked
Sublicensees) will pay to Isis the following milestone payments for each Alnylam
Product within [**] after the first achievement of each of the following events:

<TABLE>
<CAPTION>
MILESTONE EVENT                 MILESTONE PAYMENT
---------------                 -----------------
<S>                             <C>
Initiation of Phase I Trial          US$[**]

Initiation of Phase III Trial        US$[**]

Filing NDA                           US$[**]

Marketing Approval                   US$[**]
</TABLE>

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

          (b) 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 Gene Target within [**] after such MicroRNA
Product reaches the initiation of [**], and not for any other MicroRNA Product
that is an Alnylam Product that modulates the particular Gene Target.
<PAGE>
5.   LICENSE AGREEMENT BETWEEN BENITEC AUSTRALIA, LTD. AND ALNYLAM
     PHARMACEUTICALS, INC., DATED APRIL 8, 2005

III. FINANCIAL AND THIRD PARTY OBLIGATIONS

3.1  OPTION FEES, MILESTONE PAYMENTS AND ROYALTIES.

     Should either PARTY exercise the option granted it under sections 2.1 or
     2.3 above, the exercising PARTY ("EXERCISING PARTY") shall pay the granting
     PARTY ("GRANTING PARTY") the fees, milestone payments and royalties listed
     in Exhibit C or as may otherwise be agreed upon. Should either PARTY
     exercise the option granted it under sections 2.2 or 2.4 above, the
     exercising PARTY ("EXERCISING PARTY") shall pay the granting PARTY
     ("GRANTING PARTY") the fees, milestone payments and royalties listed in
     Exhibit D, or if BENITEC is the EXERCISING PARTY and has elected to include
     ISIS LICENSED PATENTS in its license from ALNYLAM, in Exhibit D.1, or as
     may otherwise be agreed upon in the definitive license agreement.

3.2  THIRD PARTY OBLIGATIONS.

     LICENSED PATENTS that are licensed to a PARTY by a third party and subject
     to obligations under a written agreement with such third party are noted as
     such in Exhibits A and B, respectively. Obligations under such agreements
     may include financial obligations to the third party or others. The PARTIES
     acknowledge that prior to the exercise of any option granted under this
     Agreement each PARTY will provide the other PARTY redacted copies of third
     party license agreements for the LICENSED PATENTS noted on Exhibits A and B
     under which an option is exercised under this Agreement. To the extent
     applicable, the PARTIES agree to be bound by the terms and obligations of
     the third party license agreements under which each may be granted a
     sublicense under this Agreement. This includes, but is not limited to,
     financial obligations for products covered by VALID CLAIMS and reporting
     obligations. A summary of third party financial obligations for ALNYLAM
     LICENSED PATENTS is provided in Exhibit F. There are no third party
     financial obligations for which ALNYLAM is responsible in relation to the
     BENITEC LICENSED PATENTS in Exhibit B.
<PAGE>
                                    EXHIBIT C

             FINANCIAL TERMS FOR LICENSES GRANTED UNDER THE OPTIONS
                         GIVEN IN SECTIONS 2.1 AND 2.3

<TABLE>
<S>                             <C>
Option:                         Non-Exclusive option to obtain an exclusive
                                license to research, develop and commercialize
                                therapeutic products directed against a
                                specified target as provided in Sections 2.1 and
                                2.3. Option to be exercised on or before
                                initiation of IND-enabling toxicology studies
                                for the first candidate RNAi therapeutic
                                directed to the named target.

Option exercise fee:            $[**]

Annual renewal fee:             $[**] per year after option is exercised and in
                                each year thereafter until first licensed
                                product is marketed.

Milestone payments
(per product):                  IND:                            $[**]
                                Start Phase II:                 $[**]
                                Start Phase III:                $[**]
                                First regulatory submission:    $[**]
                                First regulatory approval:      $[**]
                                Second regulatory submission:   $[**]
                                Second regulatory approval:     $[**]

Royalties (on any/all
products that are marketed)*:   [**]% of Net Sales
</TABLE>

*    Note: Licensee would be responsible on a pass-through basis for any
     payments that become due in relation to intellectual property held by a
     third party and licensed by such third party to ALNYLAM, if the license to
     which these financial terms apply is granted under Section 2.1, or to
     BENITEC, if the license to which these financial terms apply is granted
     under Section 2.3.
<PAGE>
                                    EXHIBIT D

             FINANCIAL TERMS FOR LICENSES GRANTED UNDER THE OPTIONS
         GIVEN IN SECTIONS 2.2 AND 2.4, EXCEPT IN THE CASE THAT BENITEC
            HAS ELECTED TO INCLUDE A LICENSE TO ISIS LICENSED PATENTS
                             PURSUANT TO SECTION 2.2

<TABLE>
<S>                             <C>
Option:                         Option to obtain an exclusive license to
                                research, develop and commercialize therapeutic
                                products directed against a specified target as
                                provided in Sections 2.2 and 2.4. Option to be
                                exercised on or before initiation of
                                IND-enabling toxicology studies for the first
                                candidate RNAi therapeutic directed to the named
                                target.

Option exercise fee:            $[**]

Annual renewal fee:             $[**] per year after option is exercised and in
                                each year thereafter until first licensed
                                product is marketed.

Milestone payments
(per product):                  IND:                            $[**]
                                Start Phase II:                 $[**]
                                Start Phase III:                $[**]
                                First regulatory submission:    $[**]
                                First regulatory approval:      $[**]
                                Second regulatory submission:   $[**]
                                Second regulatory approval:     $[**]

Royalties (on any/all
products that are marketed)*:   [**]% of Net Sales up to $[**]
                                [**]% of Net Sales between $[**] and $[**]
                                [**]% of Net Sales above $[**]
</TABLE>

*    Note: Licensee would be responsible on a pass-through basis for any
     payments that become due in relation to intellectual property held by a
     third party and licensed by such third party to ALNYLAM, if the license to
     which these financial terms apply is granted under Section 2.2, or to
     BENITEC, if the license to which these financial terms apply is granted
     under Section 2.4.
<PAGE>
6.   LICENSE AGREEMENT BETWEEN GARCHING INNOVATION GMBH AND ISIS
     PHARMACEUTICALS, INC. AND ALNYLAM PHARMACEUTICALS, INC., DATED OCTOBER 18,
     2004

ARTICLE 5 - FINANCIAL PROVISIONS

5.1  Initial Payment

.....

5.2 Milestone Payments

ALNYLAM and ISIS shall each pay to GI the following milestone payments for each
of their respective Licensed Products (including Licensed Products of their
Affiliates and Sublicensees) within thirty (30) days after the achievement of
the following milestone events:

<TABLE>
<CAPTION>
Milestone Event                                Milestone Payment
---------------                                -----------------
<S>                                            <C>
First Initiation of Phase I Clinical Study          US$[**]
First Initiation of Phase II Clinical Study         US$[**]
First Initiation of Phase III Clinical Study        US$[**]
Regulatory Approval in USA, Japan or Europe         US$[**]
</TABLE>

Each of the above milestone payment is due from the Party that is engaged in the
development and commercialization of such Licensed Product.

Initiation of the respective phase of the clinical study shall be deemed to be
achieved after the dosing of the first patient (or, in the event of a Phase I
Clinical Study, of the first healthy person) in such clinical study.

For each Licensed Product, milestone payments will only be due the first time
such Licensed Product achieves such milestone. A Licensed Product will be
considered the same Licensed Product as long as it has not been modified in such
a way (unless as the result of stabilizing, formulation or delivery technology)
that would require the filing of a different IND for such Licensed Product.

5.3 Running Royalties

(a) Licensed Products Covered by Valid Claims

ALNYLAM and ISIS shall each pay to GI for each of their respective Licensed
Products (including Licensed Products of their Affiliates and Sublicensees)
covered by Valid Claims the following running royalties on the incremental
portion of annual Net Sales:

<TABLE>
<S>                                             <C>     <C>
Less than or equal to $[**] US Dollars                  [**]%
Between $[**] US Dollars and $[**] US Dollars   [**]%
Between $[**] US Dollars and $[**] US Dollars   [**]%
Greater than $[**] US Dollars                           [**]%
</TABLE>

Annual Net Sales shall be calculated based on the cumulative annual Net Sales of
the
<PAGE>
respective Licensed Product in countries where one or more Valid Claims cover
such Licensed Product. For purposes of clarity, examples of royalty calculations
are attached hereto as Appendix B.

(b) Licensed Products Covered by Pending Claims

ALNYLAM and ISIS shall each pay to GI for each of their respective Licensed
Products (including Licensed Products of their Affiliates and Sublicensees)
covered by Pending Claims the following running royalties on annual Net Sales:

<TABLE>
<S>                                             <C>     <C>
Less than or equal to $[**] US Dollars                  [**]%
Between $[**] US Dollars and $[**] US Dollars   [**]%
Between $[**] US Dollars and $[**] US Dollars   [**]%
Greater than $[**] US Dollars                           [**]%
</TABLE>

Annual Net Sales shall be calculated based on the cumulative annual Net Sales of
the respective Licensed Product in countries where one or more Pending Claims
cover such Licensed Product.

5.4 Reduction of Running Royalties

(a) Third Party Licenses

In the event ALNYLAM or ISIS, or any of their Affiliates or Sublicensees,
licenses any patents or patent applications Controlled by a Third Party in order
to make, use, or sell a Licensed Product (explicitly excluding, without
limitation, any Third Party patents and patent applications covering any
formulation, stabilization, or delivery technology, or any target for a Licensed
Product) the running royalties set forth in Sec. 5.3 will be reduced, on a
country-by-country and product-by-product basis, from the date running royalties
have to be actually paid to such Third Party, by [**]% of any running royalty
owed to a Third Party for the manufacture, use or sale of a Licensed Product,
provided however that the running royalties due to GI will not be reduced to
less than [**]%. GI has a right to challenge in writing (and in accordance with
Section 10.3) whether such Third Party license is required for objective
commercial and/or legal reasons and therefore should result in a reduction in
the royalties.

(b) Minimum Royalty Floor

The running royalties stated in Section 5.3 shall in no event be reduced by the
application of this Section 5.4 to less than a minimum royalty rate of (i) [**]%
([**] percent) for Licensed Products covered by Valid Claims, and (ii) [**]%
([**] percent) for Licensed Products covered by Pending Claims.

(c) Cumulative Royalties Due to GI

In no event shall the total cumulative running royalty burden of ALNYLAM or Isis
for a Licensed Product arising out of this Agreement and any Existing GI
Licenses, calculated on a product-by-product and country-by-country basis,
exceed [**]% ([**] percent) for such a Licensed Product.
<PAGE>
7.   AWARD LETTER FROM CYSTIC FIBROSIS FOUNDATION THERAPEUTICS (CFFT) TO ALNYLAM
     PHARMACEUTICALS, INC., DATED MARCH 15, 2005

     -    The Award will be paid as follows:

          a.   $[**] within five (5) days of the Effective Date;

          b.   $[**] within thirty (30) days of the accomplishment of each of
               Milestones 1 and 2 and $[**] within thirty (30) days of the
               accomplishment of Milestone 3.

     -    The milestone events (the "Milestones") are as follows:

               Milestone 1: Establish siRNA stability in sputum samples derived
     from CF patients;

               Milestone 2: Screen siRNA molecules that target up to 20
     different genes for their ability to restore CFTR activity in vitro;

               Milestone 3: Selection of lead siRNA sequences for future
     evaluation in vivo.

     ....

     -    After the completion of the activities described in the work plan for
          the Project, CFFT and Alnylam agree to negotiate in good faith for
          CFFT to support further phases of the research. If such negotiations
          are successful, the royalty payments specified below will be revised
          and may be replaced by a market royalty related to the sales of a
          Product commensurate with the timing and amount of CFFT's investment.
          However, subject to such negotiations, nothing in this Agreement is
<PAGE>
          intended to prevent Alnylam from continuing the research and
          development of a Product after completion of the Project without
          CFFT's assistance.

Alnylam hereby agrees to the following terms and conditions:

     -    Alnylam shall make the following royalty payments to CFFT:

          a.   [**] times the amount of the Award actually paid hereunder on the
               first anniversary of the date the Product is approved for sale in
               the United States by the U.S. Food and Drug Administration;

          b.   [**] times the amount of the Award actually paid hereunder on the
               following anniversary date;

          c.   [**] times the amount of the Award actually paid hereunder on the
               third anniversary of the date; and

          d.   The amount of the Award actually paid hereunder also on the third
               anniversary of the date specified in a. above if aggregate sales
               of the Product during such three years exceed $[**].

     -    In the event the Interruption License is activated, in lieu of any
          payment to CFFT as hereinabove specified, CFFT shall pay Alnylam [**]
          percent ([**]%) of all compensation and consideration CFFT receives
          from any third party (net of any other third party royalty or payment
          obligations required to be paid in connection with licenses or other
          similar obligations incurred by either party in development
<PAGE>
          and commercialization of a Product), whether in form of signing fee,
          license fee, milestone payment, royalty or otherwise with respect to a
          Product, but not to less than [**] percent ([**]%); provided that,
          such [**] percent ([**]%) shall be reduced by [**] percent ([**]%) for
          each additional $[**] CFFT invests in the research and development of
          a Product. If CFFT invests in increments less than $[**], the [**]
          percent ([**]%) reduction shall be appropriately prorated for purposes
          of calculating the above reduction. For purposes of the above
          calculation, the amount of the Award made by CFFT hereunder shall be
          disregarded.

8.   SPONSORED RESEARCH AGREEMENT BETWEEN MAYO FOUNDATION FOR MEDICAL EDUCATION
     AND RESEARCH AND ALNYLAM PHARMACEUTICALS, INC. DATED OCTOBER 01, 2003

                                    EXHIBIT B

I. An exclusive, worldwide, sub licensable license under desired Background IP,
Joint Discoveries set forth in Section 3.4(b) above and Other Discoveries to
make, have made, use, have used, market, sell, import and offer products or
methods in all fields until the expiration of all patents covering such
Background IP, Joint Discoveries and Other Discoveries ("Licensed Patents"). In
return for such license, SPONSOR will make the following payments to MAYO:

II. For the indications stated below, the following clinical milestones will be
paid for product covered by an issued, unexpired claim of Licensed Patents
("Licensed Product").

<TABLE>
<CAPTION>
MILESTONE                    PD [**]   PD [**]   EACH ADDITIONAL [**]
---------                    -------   -------   --------------------
<S>                          <C>       <C>       <C>
Filing of first IND           $[**]      [**]            $[**]

Phase III initiation          $[**]     $[**]            $[**]
</TABLE>
<PAGE>
<TABLE>
<S>                           <C>       <C>              <C>
NDA Filing, or equivalent,    $[**]     $[**]            $[**]
in the US or EU

Market approval in the US     $[**]     $[**]            $[**]
or EU
</TABLE>

In addition, upon first issuance of a valid claim of the Licensed Patents that
covers an Alnylam Licensed Product -- $[**]

III. For a Licensed Product that is marketed by SPONSOR or its Sub licensees, a
royalty of:

     [**]% of Net Sales < or = $[**]
     [**]% of Net Sales > $[**]

     Such royalty payments shall be reduced up to [**]% by amounts paid to
     access additional intellectual property believed to be necessary in order
     to sell Licensed Products.

IV. An annual license maintenance fee of $[**] per year (creditable to
milestones and royalties).

V. SPONSOR will be responsible for and will incur the cost for future patent
filings and prosecution. SPONSOR will inform MAYO of all substantive activities.
In the event that SPONSOR exercises its Option for an exclusive license, SPONSOR
shall reimburse MAYO for the past costs of filing and prosecution for Licensed
Patents.

9.   LICENSE AGREEMENT BETWEEN SOUTH ALABAMA MEDICAL SCIENCES FOUNDATION (SAMSF)
     AND ALNYLAM PHARMACEUTICALS, INC., DATED NOVEMBER 18, 2004

                                    ARTICLE 4

                                  CONSIDERATION

     In consideration of the license rights granted by SAMSF to ALNYLAM under
this Agreement, ALNYLAM agrees to pay SAMSF the following:

     4.2. ALNYLAM will make the following payments, upon achievement of
particular milestones listed below:

<TABLE>
<S>     <C>                               <C>
  (i)   Issuance of first Claim under     $[**]
        Patent Rights

 (ii)   Issuance of first Broad Generic   $[**]
        Claim under Patent Rights

(iii)   For the first candidate drug      $[**]
        Compound covered by Patent
        Rights, approval of a New Drug
        Application ("NDA") by the U.S.
        Food and Drug Administration
</TABLE>
<PAGE>
     Any milestone described above will be deemed to be met by ALNYLAM if met by
an Affiliate or a Sublicensee of ALNYLAM. ALNYLAM shall notify SAMSF in writing
within thirty (30) Days upon the achievement of each milestone, such notice to
be accompanied by payment of the appropriate milestone payment. Mile fees shall
be non-creditable.

     4.3. On a country-by country basis, running royalties of:

          (a)  [**] percent ([**]%) of Net Sales of a Licensed Produce if such
               Licensed Product is covered by one or more issued claims under
               Patent Rights in the Country where such Licenses Products are
               sold, payable until the expiration of the last to expire Patent
               rights in such country; and

          (b)  Sales of Licensed Products by ALNYLAM to its Affiliates or to
               Sublicensees, or among them, shall not be deemed a sale subject
               to royalty. Only one (1) royalty is to be paid on any Licensed
               Product.

     4.4. Annual payments to maintain the exclusivity of the license, payable on
each anniversary date of the License Agreement, beginning with the third
anniversary date. Said payments will be fully creditable against any milestone
fees and/or earned running royalties due in the same calendar year, and will be
payable according to the following schedule:

<TABLE>
<S>                         <C>
     (a) 2007-1020          $[**]

     (b) 2011-termination   $[**]
</TABLE>

     4.5. In the case of granting a Naked Sublicense, ALNYLAM will pay SAMSF
[**]% ([**] percent) of Sublicense Consideration received. For the avoidance of
doubt, if ALNYLAM grants a sublicense hereunder in connection with a Research
and Development Collaboration, it will not pay any portion of Sublicense
Consideration to SAMSF.

10.  [**]

3.2 Milestones. Upon the occurrence of the milestones set forth below, Alnylam
shall make the milestone payments set forth below to Licensor within thirty (30)
days of the occurrence of each such event:
<PAGE>
<TABLE>
<CAPTION>
Milestone Event                                                          Payment
---------------                                                          -------
<S>                                                                      <C>
Initiation by Alnylam of an IND enabling toxicology study involving an    E[**]
siRNA specific for MLL-AF4 covered by Licensed Patent Rights

Filing of an IND for an siRNA specific for MLL-AF4 covered by Licensed    E[**]
Patent Rights

Enrollment of patients in a Phase II Clinical Trial of an siRNA           E[**]
specific for MLL-AF4 covered by Licensed Patent Rights

Enrollment of patients in a Phase III Clinical Trial of an siRNA          E[**]
specific for MLL-AF4 covered by Licensed Patent Rights

Approval in a first country for an siRNA specific for MLL-AF4 covered     E[**]
by Licensed Patent Rights
</TABLE>

Anything to the contrary notwithstanding, each of the foregoing payments shall
be payable only once and soley with respect to the first Licensed Product to
reach each such milestone.

3.3 Royalties.

     (a) Alnylam shall pay to Licensor earned royalties at the rate of [**]
percent ([**]%) on annual Net Sales by Alnylam and its Affiliates and
sublicensees of Licensed Product up to and including $[**] and [**] percent
([**]%) on annual Net Sales by Alnylam and its Affiliates and sublicenses of
Licensed Products greater than $[**].

     (b) Royalties on Licensed Products whose manufacture, use or sale is
covered by a Valid Claim under the Licensed Patent Rights shall be payable on a
country-by-country basis for any country in which the Licensed Products are
manufactured, used or sold in which there is a Valid Claim under the Licensed
Patent Rights. The obligation to pay royalties shall be imposed only once with
respect to the same unit of Licensed Product.

     (c) In the event that a Licensed Product is sold in any country in the form
of a combination product containing one or more therapeutically active
ingredients in addition to such Licensed Product, Net Sales of such combination
product will be adjusted by [**] [**]), where A is the average invoice price of
the Licensed Product in such country, if sold separately in such country, and B
is the average invoice price of any other therapeutically active ingredients in
the combination, if sold separately in such country. If, in a specific county,
the other therapeutically active ingredients in the combination product are not
sold separately in such country, Net Sales shall be calculated by [**], where A
is the average invoice price of the Licensed Product in such and C is the
invoice price of the combination product in such country. If, in a specific
country, the Licensed Product is not sold separately in such country, Net Sales
shall be calculated by [**], Where B is the average invoice price of the other
therapeutically active ingredients in the combination product in such country
and C is the invoice price of the combination product in such country. The
invoice price for the Licensed Product and for each other therapeutically,
active ingredient shall be for a quantity comparable to that used in the
combination product and of the same class, purity and potency. If, in a specific
country,
<PAGE>
both the Licensed Product and the other therapeutically active ingredients in
the combination product are not sold separately in such country, a market price
for the Licensed Product and the other therapeutically active ingredients in the
combination products shall be negotiated in good faith by the Parties.

     (d) If Alnylam or any of its Affiliates determines, in good faith, that it
must, in order to operate under or exploit any of the licensees granted under
Section 2.1 of the Agreement in any country, make payments (including, without
limitation, licensed fees, milestones or royalties) to one or more third parties
to obtain a license or similar right in the absence of which the Licensed Patent
Rights could not legally be used in connection with the manufacture, use or sale
of Licensed Products in such country, Alnylam shall be entitled to deduct from
the royalties thereafter payable to Licensor under this Agreement an amount
equal to such third party payments; provided however, that I no event shall the
royalties due Licensor under this Agreement be reduced by more than [**] percent
([**]%) of the royalties that would otherwise be due in accordance with Section
3.3 (a) of this Agreement, as applicable.

11.  RESEARCH COLLABORATION AND LICENSE AGREEMENT BETWEEN MERCK & CO., INC,
     ALNYLAM PHARMACEUTICALS, INC. AND ALNYLAM HOLDING CO., DATED SEPTEMBER 08,
     2003

     Under certain circumstances set forth in the above-named agreement, rights
with respect to certain products may become available to Alnylam that would then
become available to Novartis pursuant to Section 3.1(e). Novartis agrees and
acknowledges (i) that until such time as such rights become available to
Alnylam, Alnylam is not at liberty under the confidentiality provisions of the
above-named agreement to disclose any payments that would be due to Merck & Co.
in relation to such products, and (ii) that at such time, this Schedule 7.2(i)
will be amended to include the amounts of such payments, and such payments will
then be treated as though they had been listed on this Schedule 7.2(i) as of the
Effective Date.

12.  COLLABORATION AND LICENSE AGREEMENT BETWEEN MERCK & CO., INC AND ALNYLAM
     PHARMACEUTICALS, INC., DATED JUNE 29, 2004

     Under certain circumstances set forth in the above-named agreement, rights
with respect to certain products may become available to Alnylam that would then
become available to Novartis pursuant to Section 3.1(e). Novartis agrees and
acknowledges (i) that until such time as such rights become available to
Alnylam, Alnylam is not at liberty under the confidentiality provisions of the
above-named agreement to disclose any payments that would be due to Merck & Co.
in relation to such products, and (ii) that at such time, this Schedule 7.2(i)
will be amended to include the amounts of such payments, and such payments will
then be treated as though they had been listed on this Schedule 7.2(i) as of the
Effective Date.
<PAGE>
13.  COLLABORATION AGREEMENT BY AND BETWEEN ALNYLAM PHARMACEUTICALS, INC. AND
     MEDTRONIC, INC., DATED FEBRUARY 08, 2005

     Under certain circumstances set forth in the above-named agreement, rights
with respect to certain products may become available to Alnylam that would then
become available to Novartis pursuant to Section 3.1(e). Novartis agrees and
acknowledges (i) that until such time as such rights become available to
Alnylam, Alnylam is not at liberty under the confidentiality provisions of the
above-named agreement to disclose any payments that would be due to Merck & Co.
in relation to such products, and (ii) that at such time, this Schedule 7.2(i)
will be amended to include the amounts of such payments, and such payments will
then be treated as though they had been listed on this Schedule 7.2(i) as of the
Effective Date.
<PAGE>
                                 SCHEDULE 7.2(J)

  AGREEMENTS PURSUANT TO WHICH ALNYLAM IS PRECLUDED FROM INCLUDING ONE OR MORE
                     TARGET(S) IN THE RESEARCH COLLABORATION

Research Collaboration and License Agreement between Merck & Co., Inc, Alnylam
Pharmaceuticals, Inc. and Alnylam Holding Co., dated September 8, 2003.

Strategic Collaboration & License Agreement between Isis Pharmaceuticals, Inc.,
and Alnylam Pharmaceuticals, Inc., dated March 11, 2004.

Collaboration and License Agreement between Merck & Co., Inc and Alnylam
Pharmaceuticals, Inc., dated June 29, 2004.

License and Option Agreement between GeneCare Research Institute Co., Ltd and
Alnylam Pharmaceuticals, Inc., dated January 6, 2005.

Collaboration Agreement by and between Alnylam Pharmaceuticals, Inc. and
Medtronic, Inc., dated February 08, 2005.

License Agreement between Benitec Australia, Ltd. and Alnylam Pharmaceuticals,
Inc., dated April 8, 2005.

License and Option Agreement between Nastech Pharmaceutical Company, Inc., and
Alnylam Pharmaceuticals, Inc., dated July 20, 2005.