exv10w1



 





Exhibit 10.1









Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.








LICENSE AND COLLABORATION AGREEMENT




     This LICENSE AND COLLABORATION AGREEMENT (this “Agreement”), is entered into as of
July 8, 2007 (the “Execution Date”), by and among F. Hoffmann-La Roche Ltd, a Swiss
corporation (“Roche Basel”), having a place of business at Grenzacherstrasse 124, CH-4070
Basel, Switzerland, and Hoffmann-La Roche Inc., a New Jersey corporation (“Roche Nutley”),
having a place of business at 340 Kingsland Street, Nutley, New Jersey 07110, U.S.A. (Roche Basel
and Roche Nutley, collectively, “Licensee”), and Alnylam Pharmaceuticals, Inc., a Delaware
corporation, having a place of business at 300 Third Street, 3rd Floor, Cambridge, Massachusetts
02142, U.S.A. (“Alnylam”), and, solely for the purposes set forth in Section 9.15 of this
Agreement, Alnylam Europe AG, a German stock corporation, with a registered office in Kulmbach,
Germany (“Alnylam Europe AG”).



INTRODUCTION




     1. Licensee is engaged in the business of Discovering, Developing, Commercializing and
Manufacturing therapeutic products (each as defined below).



     2. 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”).



     3. Alnylam desires to grant licenses to such technology to Licensee, and the Parties desire to
collaborate on certain research and development activities, in each case upon the terms and
conditions set forth in this Agreement.



     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 Licensee agree as follows:



ARTICLE I




DEFINITIONS




     1.1 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:



     “Accounting Period” shall have the meaning set forth in Section 5.8.



     “Additional Field” shall mean the treatment or prophylaxis of all Indications in any
Supplemental Therapeutic Area, where such treatment or prophylaxis comprises an RNAi Compound
complementary to, and functional in mediating the RNAi of, a Target known or believed to be
primarily implicated in such Supplemental Therapeutic Area.



     “Affiliate” shall mean any Person who directly or indirectly controls or is controlled
by or is under common control with another Person. 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
direct 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 United
States, 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. For purposes of this Agreement, [**], each shall not be
deemed an “Affiliate” of Licensee; provided, however, that if Licensee were
to assume day-to-day control of either [**], then Licensee shall have the right, at its sole
option, to designate [**], as applicable, to be an Affiliate. For purposes of Sections 6.1, 6.2,
9.8, 9.12 (the second sentence only), and 9.14, Alnylam’s Affiliates shall not include [**], any
Affiliates of [**] (other than Alnylam and Persons “controlled” by Alnylam on the Execution Date)
or any Person that becomes an Affiliate of Alnylam as a result of a [**].



     “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 Change of Control” shall be deemed to occur upon the closing of (a) a merger,
reorganization or consolidation involving Alnylam 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 (b) a sale to a Third Party of all or substantially all of
Alnylam’s assets or business relating to this Agreement.



     “Alnylam Third Party Obligations” shall mean (a) Alnylam’s obligations to, and the
rights of, Pre-Existing Alliance Parties and Listed Counterparties with respect to the Licensed
Intellectual Property under Pre-Existing Alliance Agreements and Listed Alnylam Third Party
Agreements, respectively, and (b) Alnylam Europe AG’s obligations to, and the rights of, Max Planck
with respect to certain Architecture and Chemistry Patent Rights under the Max Planck European
License Agreement; including without limitation Listed Alnylam Third Party Payment obligations.



     “Annual Net Sales” shall mean, with respect to a Licensed Product, the Net Sales of
such Licensed Product during a calendar year.



     “Architecture and Chemistry Intellectual Property” shall mean Architecture and
Chemistry Know-How and Architecture and Chemistry Patent Rights.



     “Architecture and Chemistry Know-How” shall mean Know-How Controlled by Alnylam as of
the Effective Date that relates to (a) the general structure, architecture, or design of
double-stranded oligonucleotide molecules which engage RNAi mechanisms in a cell; (b) chemical
modifications of double-stranded oligonucleotides (including any modification to the base, sugar or
internucleoside linkage, nucleotide mimetics, and any end



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modifications) which do not abolish the RNAi activity of the double-stranded oligonucleotides
in (a); (c) manufacturing techniques for the double-stranded oligonucleotide molecules or chemical
modifications of (a) and (b); or (d) all uses or applications of double-stranded oligonucleotide
molecules or chemical modifications in (a) or (b); but excluding (i) Know-How to
the extent specifically related to Blocked Targets, and (ii) Delivery Know-How.



     “Architecture and Chemistry Patent Rights” shall mean the Patent Rights listed on
Schedule C Controlled by Alnylam or, solely in the case of Patent Rights licensed under the
Max Planck European License Agreement, by Alnylam Europe AG, each as of the Effective Date,
together with any future Patent Rights that claim priority to or common priority with any of the
aforementioned Patent Rights, that Cover (a) the general structure, architecture, or design of
double-stranded oligonucleotide molecules which engage RNAi mechanisms in a cell; (b) chemical
modifications of double-stranded oligonucleotides (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 double-stranded oligonucleotides in (a); (c) manufacturing techniques for the
double-stranded oligonucleotide molecules or chemical modifications of (a) and (b); or (d) all uses
or applications of double-stranded oligonucleotide molecules or chemical modifications in (a) or
(b); but excluding (i) Patent Rights which specifically relate to Blocked Targets,
and (ii) Delivery Patent Rights. Notwithstanding anything in this Agreement to the contrary,
should it be reasonably determined after the Effective Date that (x) any omitted Patent Rights
which Alnylam Controlled as of the Effective Date disclose any Valid Claims that Cover any of
clause (a) through (d) above, but excluding any Patent Rights which specifically relate to Blocked
Targets and Patent Rights licensed under the [**] Agreement (except as set forth in Section
2.3(b)(ii)), or (y) in the course of prosecution of any Valid Claims under any of the Patent Rights
listed on Schedule C, any such Valid Claim either no longer Covers any of clause (a)
through (d) above or specifically relates to Blocked Targets, Schedule C shall be amended
to reflect the inclusion or deletion, as the case may be, of such Patent Right, to the extent that
it does not conflict with the terms of any Listed Alnylam Third Party Agreement or Pre-Existing
Alliance Agreement to do so. For the avoidance of doubt, any Patent Rights which are subsequently
included on Schedule C pursuant to clause (x) above shall be deemed “Architecture and
Chemistry Patent Rights” for all purposes hereunder.



     “Blocked Target” shall mean any Target that is subject to a contractual obligation of
a Pre-Existing Alliance Agreement that would be breached by the inclusion of such Target as a
Designated Target under this Agreement.



     “Blocked Target List” shall mean a list of Blocked Targets maintained by the
Gatekeeper, as such list may be updated from time to time.



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



     “[**] Agreement” shall have the meaning set forth in Section 2.3(b)(ii).



     “Collaboration Target” shall have the meaning set forth in Section 4.1.



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     “Combination Product” shall mean a Licensed Product combined with any other clinically
active therapeutic or prophylactic ingredient, mechanism or device.



     “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, or seeking to obtain reimbursement for, a product,
whether before or after Regulatory Approval for such product has been obtained.



     “Common Stock Purchase Agreement” shall mean the Common Stock Purchase Agreement
entered into by Licensee and Alnylam on the Execution Date.



     “Confidential Information” shall mean the terms of this Agreement 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. For the avoidance of doubt, the identity of any
Designated Targets, Submitted Targets and Blocked Targets shall be deemed the Confidential
Information of both Parties.



     “Control” or “Controlled” shall mean, with respect to any intellectual
property right or other intangible property, the possession by a Party (whether by ownership or
license) (other than a license granted pursuant to this Agreement), 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 as
contemplated under this Agreement.



     “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).



     “Delivery Intellectual Property” shall mean Delivery Know-How and Delivery Patent
Rights.



     “Delivery Know-How” shall mean Know-How Controlled by Alnylam as of the Effective Date
that relates to (a) delivery technologies which may be necessary or useful for delivery of
double-stranded oligonucleotide molecules; or (b) manufacturing techniques for the delivery
technologies of (a); but excluding Know-How to the extent specifically related to
Blocked Targets.



     “Delivery Patent Rights” shall mean Patent Rights listed on Schedule C
Controlled by Alnylam as of the Effective Date (or, solely with respect to the Patent Rights
covered by any option under Section 2.3(b)(ii) below, as of the effective date of Licensee’s
exercise of such option), together with any future Patent Rights that claim priority to or common
priority with any of the aforementioned Patent Rights, that Cover (a) delivery technologies
necessary or useful for delivery of double-stranded oligonucleotide molecules; or (b) manufacturing
techniques for the delivery technologies of (a); but excluding Patent



4









 







Rights which relate specifically to Blocked Targets. Notwithstanding anything in this
Agreement to the contrary, should it be reasonably determined after the Effective Date that (x) any
omitted Patent Rights which Alnylam Controlled as of the Effective Date disclose any Valid Claims
that Cover any of clause (a) through (b) above, but excluding any Patent Rights which specifically
relate to Blocked Targets and Patent Rights licensed under the [**] Agreement (except as set forth
in Section 2.3(b)(ii)), or (y) in the course of prosecution of any Valid Claims under any of the
Patent Rights listed on Schedule C, any such Valid Claim either no longer Covers any of
clause (a) through (b) above or specifically relates to Blocked Targets, Schedule C shall
be amended to reflect the inclusion or deletion, as the case may be, of such Patent Right, to the
extent that it does not conflict with the terms of any Listed Alnylam Third Party Agreement or
Pre-Existing Alliance Agreement to do so. For the avoidance of doubt, any Patent Rights which are
subsequently included on Schedule C pursuant to clause (x) above shall be deemed “Delivery
Patent Rights” for all purposes hereunder.



     “Designated Target” shall mean (a) at any time during the Novartis Exclusivity Term,
any Target which is (i) selected by Licensee pursuant to Section 2.4(a) of this Agreement which is
not a Blocked Target, (ii) submitted to Novartis pursuant to Licensee’s exercise of the Designated
Target Option pursuant to Section 2.6 of this Agreement, and (iii) rejected or waived by Novartis,
as evidenced by Alnylam’s written notice to Licensee pursuant to Section 2.6 of this Agreement; and
(b) at any time following the end of the Novartis Exclusivity Term, any Target selected by Licensee
pursuant to Section 2.4(a) of this Agreement which is not a Blocked Target. For the avoidance of
doubt, (x) if Licensee selects any Target prior to the end of the Novartis Exclusivity Term for
submission to Novartis, but such Target is not submitted to Novartis until after the end of the
Novartis Exclusivity Term, or (y) if Licensee selects any Target prior to the end of the Novartis
Exclusivity Term for submission to Novartis and such Target is submitted to Novartis prior to the
end of the Novartis Exclusivity Term, but the time period during which Novartis is obligated to
reply does not end until after the end of the Novartis Exclusivity Term, then such Target shall not
be deemed a “Designated Target” hereunder until such Target has been rejected or waived by Novartis
pursuant to the terms of the Novartis Agreement.



     “Designated Target Option” shall have the meaning set forth in Section 2.6.



     “[**]” shall have the meaning set forth in Section 5.5.



     “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 Manufacturing development, 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.



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     “Discovery Collaboration” shall mean collaboration between the Parties regarding the
Discovery and/or Development of potential RNAi Compounds directed to a Designated Target [**],
pursuant to the terms of Article IV.



     “Discovery Collaboration Opportunity” shall have the meaning set forth in Section 4.1.



     “Effective Date” shall mean the latest of (a) HSR Clearance Date, (b) if no filing is
to be made pursuant to the HSR Act, the Execution Date, and (c) the Closing Date as defined in the
Share Purchase Agreement (such date being referred to as the “Scheduled Date”), it being
understood that the Closing Date of the Share Purchase Agreement and the Effective Date of this
Agreement shall occur simultaneously; provided, however, that if between
the Execution Date and the Scheduled Date there occurs an event or series of events that result in
a material adverse impact upon the Licensed Patent Rights, taken as a whole, (including, for
example, the termination of any of the Listed Alnylam Third Party Agreements, or Alnylam’s receipt
of written notice of termination from a party to a Listed Alnylam Third Party Agreement (i) that
has not been cured prior to the Scheduled Date, or (ii) cannot be cured within the applicable cure
period under the Listed Alnylam Third Party Agreement), then Licensee shall have the unilateral
right to cause this Agreement not to become effective resulting in no Effective Date;
provided, further, that, notwithstanding anything in the parenthetical
above to the contrary, if between the Execution Date and the Scheduled Date, Alnylam receives a
written notice of termination from a party to a Listed Alnylam Third Party Agreement that results
in a material adverse impact upon the Licensed Patent Rights, taken as a whole, and such notice of
termination can be cured within the applicable cure period under such Listed Alnylam Third Party
Agreement, but such cure period ends after the Scheduled Date, then Licensee shall have the
unilateral right (x) to delay the effectiveness of this Agreement until Alnylam has effected the
cure, at which time the Effective Date shall be deemed to have occurred, or (y) if the applicable
cure period has lapsed without a cure having been effected, to cause this Agreement not to become
effective following the end of such cure period, resulting in no Effective Date.



     “Execution Date” shall have the meaning set forth in the preamble to this Agreement.



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



     “Field” shall mean the Primary Field and, subject to the exercise by Licensee of a
Field Option with respect to any Additional Field(s) pursuant to Section 2.5, any such Additional
Field(s).



     “Field Definition Panel” shall have the meaning set forth in Section 2.5(a)(iv).



     “Field Extension Opportunity” shall have the meaning set forth in Section 2.5(b)(i).



     “Field Option” shall have the meaning set forth in Section 2.5(b)(ii).



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     “Field Option Fee” shall have the meaning set forth in Section 5.6.



     “First Commercial Sale” shall mean the first sale of a Licensed Product by or on
behalf of Licensee or any of its Affiliates or Licensee Partners 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.



     “Future Technology Patent Rights” shall mean Patent Rights Controlled by a Party after
the Effective Date that Cover (a) delivery technologies which may be necessary or useful for
delivery of double-stranded oligonucleotide molecules; or (b) manufacturing techniques for the
delivery technologies of (a); but excluding (i) Patent Rights which specifically
relate to Blocked Targets, and (ii) Licensed Patent Rights.



     “Gatekeeper” shall have the meaning set forth in Section 2.4(b).



     “GLP Toxicology Study” shall mean a toxicology study that is conducted in compliance
with GLP and is required to meet the requirements for filing an IND.



     “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (15 U.S.C. Sec. 18a), and the rules and regulations promulgated thereunder.



     “HSR Clearance Date” shall mean the earlier of (a) the second Business Day after the
date on which the United States Federal Trade Commission shall notify Licensee and Alnylam of early
termination of the applicable waiting period under the HSR Act, or (b) the second Business Day
after the date on which the applicable waiting period under the HSR Act expires.



     “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.



     “IND-Enabling Studies” shall mean pharmacokinetic and toxicology studies required to
meet the requirements for filing an IND, including without limitation any GLP Toxicology Study.



     “Indication” shall mean any disease or condition, or sign or symptom of a disease or
condition.



     “Initial Discovery Collaboration Opportunity Period” shall have the meaning set forth
in Section 4.1.



     “Joint Future Technology Committee” shall have the meaning set forth in Section 3.2.



     “Know-How” shall mean any information, inventions, trade secrets or technology,
whether or not proprietary or patentable and whether stored or transmitted in oral,



7









 







documentary, electronic or other form. 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).



     “Kulmbach Facility” shall have the meaning set forth in Section 3.1(a).



     “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 Collaboration Product” shall mean any Licensed Product directed to a
Designated Target for which the Parties have entered into a Discovery Collaboration pursuant to
Article IV.



     “Licensed Intellectual Property” shall mean the Licensed Know-How and Licensed Patent
Rights.



     “Licensed Know-How” shall mean (a) the Architecture and Chemistry Know-How, and (b)
the Delivery Know-How.



     “Licensed Patent Rights” shall mean (a) the Architecture and Chemistry Patent Rights,
and (b) the Delivery Patent Rights.



     “Licensed Product” shall mean any RNAi Product (a) whose manufacture, use or sale
would, but for the licenses granted pursuant to this Agreement, infringe one or more Valid Claims
of the Licensed Patent Rights, or (b) which embodies Licensed Know-How. All references to Licensed
Product in this Agreement shall be deemed to include Combination Product, to the extent applicable.



     “Licensee Partner” shall mean any Third Party to which a sublicense is granted by
Licensee in accordance with Section 2.1(b), including without limitation Third Party distributor
whose obligations to Licensee or its Affiliates include responsibility for sales, marketing and/or
distribution efforts in a country on behalf of Licensee or its Affiliates, excluding wholesale
distributors who purchase Licensed Products from Licensee or its Affiliates in an arm’s length
transaction and who have no other obligation to Licensee or its Affiliates.



     “Listed Alnylam Third Party Agreement” shall mean an agreement listed on Schedule
D-1.



     “Listed Alnylam Third Party Payment” shall have the meaning set forth in Section
5.4(d).



8









 





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



     “Major Market Countries” shall have the meaning set forth in Section 2.1(b).



     “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.



     “Max Planck” shall mean Max Planck Innovation GmbH (formerly Garching Innovation
GmbH).



     “Max Planck European License Agreement” shall mean Co-Exclusive License Agreement
between Max Planck and Alnylam Europe AG (formerly Ribopharma AG), dated July 30, 2003, as amended
by the Requirement Amendment effective June 15, 2005.



     “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 the amount calculated by subtracting from the amount of
Adjusted Gross Sales (as defined below) the following:



     (a) With respect to Net Sales in the United States, a lump sum deduction of [**] percent
([**]%) of Adjusted Gross Sales in lieu of those sales-related deductions which are not accounted
for by Licensee, its Affiliates and Licensee Partners on a product-by-product basis (e.g. outward
freights, postage charges, transportation insurance, packaging materials for dispatch of goods,
custom duties, bad debt expense, discounts granted later than at the time of invoicing);



     (b) With respect to Net Sales in the Major Market Countries (other than the U.S.) and Canada,
a lump sum deduction of [**] percent ([**]%) of Adjusted Gross Sales in lieu of those sales-related
deductions which are not accounted for by Licensee, its Affiliates and Licensee Partners on a
product-by-product basis (e.g. outward freights, postage charges, transportation insurance,
packaging materials for dispatch of goods, custom duties, bad debt expense, discounts granted later
than at the time of invoicing); and



     (c) With respect to Net Sales in all territories other than those set forth in subsections (a)
and (b) above, a lump sum deduction of [**] percent ([**]%) of Adjusted Gross Sales in lieu of
those sales-related deductions which are not accounted for by Licensee, its Affiliates and Licensee
Partners on a product-by-product basis (e.g. outward freights, postage charges, transportation
insurance, packaging materials for dispatch of goods, custom duties, bad debt expense, discounts
granted later than at the time of invoicing).



9









 





     For purposes of this definition of “Net Sales”, “Adjusted Gross Sales” shall mean the
amount of gross sales of the Licensed Product invoiced by Licensee, its Affiliates and its Licensee
Partners to Third Parties less deductions of returns and return reserves (including allowances
actually given for spoiled, damaged, out-dated, rejected, returned Licensed Product sold,
withdrawals and recalls), rebates and rebate reserves (to the extent consistently applied by
Licensee to its products), price reductions, rebates to managed care organizations or social and
welfare systems, charge backs or reserves for chargebacks, cash sales incentives (but only to the
extent it is a sales related deduction which is accounted for within Licensee on a
product-by-product basis), cash discounts, government mandated rebates and similar types of rebates
(e.g., Pharmaceutical Price Regulation Scheme, Medicaid, each as consistently applied by Licensee
to its products), volume (quantity) discounts, taxes (value added or sales taxes, government
mandated exceptional taxes and other taxes directly linked to the gross sales amount).



     In the case where a Licensed Product is a Combination Product, the Parties shall meet
approximately [**] prior to commercial launch of such Combination Product to negotiate in good
faith and agree to an appropriate adjustment to Net Sales to reflect the relative significance of
the RNAi Compound and the other pharmaceutically active agent(s) contained in the Combination
Product. If the Parties are unable to agree upon such adjustment to Net Sales, royalties with
respect to a Combination Product in a country shall be equal to the rates set forth in Section
5.4(a), multiplied by a fraction whose numerator is Licensee’s published sales price in such
country for an equivalent dosage of RNAi Compound contained in a given Combination Product, and
whose denominator is Licensee’s published sale prices in such country for an equivalent dosage of
all active pharmaceutical ingredients contained therein. If the numerator or denominator cannot be
determined in the manner set forth above within ninety (90) days following the meeting between the
Parties described in the first sentence of this paragraph, then such matter shall be determined by
binding arbitration conducted by one (1) arbitrator in accordance with the rules of Judicial
Arbitration and Mediation Services, Inc. (JAMS). The arbitration shall be held in the State of
Delaware and shall not last for a period longer than six (6) months. In such arbitration, the
arbitrator shall be an independent expert in worldwide marketing in the pharmaceutical industry
mutually acceptable to the Parties or, if the Parties are unable to agree upon such arbitrator,
shall be selected by the President of the JAMS office located in the State of Delaware.



     “Novartis” shall mean Novartis Institutes for BioMedical Research, Inc.



     “Novartis Agreement” shall mean the Research Collaboration and License Agreement,
effective as of October 12, 2005, by and between Alnylam and Novartis, as amended by the Addendum
Re: Influenza Program effective as of December 13, 2005, Amendment No. 1 to such Addendum effective
as of March 14, 2006, and Amendment No. 2 to such Addendum effective as of May 5, 2006, and as the
same may be amended from time to time after the Execution Date in accordance with Section 2.7(c).



     “Novartis Exclusivity Term” shall mean the “Exclusivity Term” as defined in the
Novartis Agreement.



     “[**]” shall have the meaning set forth in Section 2.7(b).



10









 





     “[**]” shall have the meaning set forth in Section 2.7(b)(ii).



     “Option Term” shall mean the period commencing on the Effective Date and ending on the
fifth (5th) anniversary thereof.



     “Other Transaction Documents” shall mean (a) the Common Stock Purchase Agreement, and
(b) the Share Purchase Agreement.



     “Party” shall mean Alnylam or Licensee, as the case may be; “Parties” shall
mean both Alnylam and Licensee.



     “Patent Rights” shall mean all patents (including all reissues, extensions,
substitutions, confirmations, re-registrations, re-examinations, invalidations, supplementary
protection certificates and patents of addition) and patent applications (including all provisional
applications, continuations, continuations-in-part and divisionals), and foreign equivalents of any
of the foregoing.



     “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 human clinical trial in any country that would satisfy
the requirements of 21 C.F.R. § 312.21(a), as amended from time to time, and the foreign equivalent
thereof.



     “Phase II Study” shall mean a human clinical trial, for which the primary endpoints
include a determination of dose ranges and/or a preliminary determination of efficacy in patients
being studied as described in 21 C.F.R. § 312.21(b), or similar clinical study in a country other
than the United States.



     “Phase III Study” shall mean a human clinical trial that is prospectively designed to
demonstrate statistically whether a product is safe and effective for use in humans in a manner
sufficient to obtain regulatory approval to market such product in patients having the disease or
condition being studied as described in 21 C.F.R. § 312.21(c), or a similar clinical study in a
country other than the United States.



     “Pre-Existing Alliance Agreements” shall mean the agreements set forth on Schedule
E.



     “Pre-Existing Alliance Parties” shall mean the Third Party counterparties to
Pre-Existing Alliance Agreements and their respective successors in interest.



     “Primary Field” shall mean the treatment or prophylaxis of all Indications in the
Primary Therapeutic Areas, where such treatment or prophylaxis comprises an RNAi Compound
complementary to, and functional in mediating the RNAi of, a Target known or believed to be
primarily implicated in one or more Primary Therapeutic Areas.



11









 





     “Primary Therapeutic Area” shall mean each of the disease area fields set forth on
Schedule A to this Agreement.



     “Product Liability Claim” shall mean, with respect to a product, any Third Party
claim, suit, action, proceeding, liability or obligation involving any actual or alleged death or
bodily injury arising out of or resulting from the use of such product.



     “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.



     “Required Third Party Payments” shall mean royalty payments to a Third Party made by
Licensee under Third Party agreements (other than Listed Alnylam Third Party Agreements or
Pre-Existing Alliance Agreements) to license Patent Rights Covering such Third Party’s technology
if, in the absence of such license, the licensed use by Licensee of the Licensed Patent Rights
licensed by Alnylam under Section 2.1(a) would infringe such Patent Rights; provided,
however, that Required Third Party Payments shall not include any royalties or
other amounts payable to obtain access to (a) a specific Target or Targets so that such Target or
Targets can be the subject of research and development efforts, or (b) Third Party delivery
technologies (other than Delivery Patent Rights) which may be necessary or useful for delivery of
double-stranded oligonucleotide molecules, or manufacturing techniques for such delivery
technologies.



     “RNAi Compound” shall mean any compound that, in vitro or otherwise, functions through
the mechanism of RNAi and consists of or encodes double-stranded oligonucleotides, and which
double-stranded oligonucelotides optionally may be 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.



     “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 (provided that either (x) such Licensed Product is Covered by a Valid Claim of a Licensed
Patent Right in such country at the time of such First Commercial Sale in such country, or (y) the
Manufacture of such Licensed Product is Covered by a Valid Claim of a Licensed Patent Right in the
country or countries in which such Licensed Product is Manufactured) and concluding on the
expiration of the later of (a) the last to expire Licensed Patent Right containing a Valid Claim
Covering the Development, Commercialization or Manufacture of such Licensed Product in that
country, (b) the last to expire Licensed Patent Right containing a Valid Claim Covering the
Manufacture of such Licensed Product in the



12









 







country or countries in which such Licensed Product was Manufactured, or (c) ten (10) years
from the date of First Commercial Sale of such Licensed Product in such country. For the avoidance
of doubt, if (x) a Licensed Product is not Covered by a Valid Claim of a Licensed Patent Right in a
country at the time of such First Commercial Sale in such country, and (y) the Manufacture of such
Licensed Product is not Covered by a Valid Claim of a Licensed Patent Right in the country or
countries in which such Licensed Product is Manufactured at the time of First Commercial Sale, but
at any time following First Commercial Sale, the Licensed Product, or the Manufacture thereof, is
Covered by a Valid Claim of any patent under the Licensed Patent Rights that issues following the
time of such First Commercial Sale, then the Royalty Term shall commence with respect to such
Licensed Product at the time of such issuance.



     “Share Purchase Agreement” shall mean the Share Purchase Agreement entered into by and
among Licensee, Licensee’s Affiliate, Alnylam and Alnylam Europe AG on the Execution Date.



     “Submitted Target” shall have the meaning set forth in Section 2.6.



     “Supplemental Therapeutic Area” shall mean each of the disease area fields set forth
on Schedule B to this Agreement.



     “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 (including any splice variant thereof), cellular entity
or nucleic acid described in clause (a); or (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.



     “Technology Transfer Period” shall have the meaning set forth in Section 3.1(a).



     “Technology Transfer Plan” shall have the meaning set forth in Section 3.1(a).



     “Terminated Patent Rights” shall have the meaning set forth in Section 5.4(f).



     “Third Party” shall mean any Person other than Alnylam or Licensee and their
respective Affiliates.



     “Third Party Infringement Claim” shall have the meaning set forth in Section
2.8(a)(i).



     “UBC” shall mean the University of British Columbia.



     “UBC Sublicense Agreement” shall mean the Sublicense Agreement between Tekmira
Pharmaceuticals Corporation (formerly INEX Pharmaceuticals Corporation) and Alnylam
Pharmaceuticals, Inc., dated January 8, 2007.



13









 





     “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 [**] from the
earliest priority date for such patent application.



ARTICLE II




GRANT OF RIGHTS;




INTELLECTUAL PROPERTY MATTERS




     2.1 License Grants.



     (a) License Grants to Licensee.



          (i) Alnylam hereby grants to Licensee and its Affiliates a non-exclusive, worldwide,
perpetual, irrevocable, royalty-bearing right and license, subject to the terms and conditions of
this Agreement and to Alnylam Third Party Obligations, under the Licensed Intellectual Property to
engage in any and all Discovery, Development, Commercialization and Manufacturing activities in the
Field (and, to the extent expressly permitted in Section 2.5(a), any Additional Field), including
to make, have made, use, offer for sale, sell and import Licensed Products in the Field (and, to
the extent expressly permitted in Section 2.5(a), any Additional Field).




          (ii) Alnylam Europe AG hereby grants to Licensee and its Affiliates a non-exclusive,
worldwide, perpetual, irrevocable, royalty-bearing right and license, subject to the terms and
conditions of this Agreement and to Alnylam Third Party Obligations, under Alnylam Europe AG’s
rights to the Architecture and Chemistry Patent Rights licensed to Alnylam Europe AG pursuant to
the terms of the Max Planck European License Agreement, to engage in any and all Discovery,
Development, Commercialization and Manufacturing activities in the Field (and, to the extent
expressly permitted in Section 2.5(a), any Additional Field), including to make, have made, use,
offer for sale, sell and import Licensed Products in the Field (and, to the extent expressly
permitted in Section 2.5(a), any Additional Field).




     (b) Sublicense Rights. Subject to Alnylam Third Party Obligations, Licensee shall
have the right to grant sublicenses within the scope of the licenses granted to it in Section
2.1(a), on a Licensed Product-by-Licensed Product basis, to a Third Party in the Field (and, to the
extent expressly permitted in Section 2.5(a), any Additional Field) solely for purposes of
Developing and/or Commercializing a Licensed Product which has achieved the appropriate stage of
Development (as determined by Licensee using its reasonable business judgment in the management of
such Licensed Product within its portfolio of products, but in no event [**] other than to Third
Party contractors, including contract research organizations, contract employees, consultants,
contract manufacturers and the like in connection with the licensed activities); provided,
however, that in no event shall Licensee grant any sublicense of



14









 







any right granted to Licensee under Section 2.1(a) for the Development and/or
Commercialization of any Third Party product unless such product is licensed by Licensee from such
Third Party and Licensee and such Third Party are collaborating on the Development and/or
Commercialization of such Third Party product. Each such sublicense agreement shall be consistent
with the terms and conditions of this Agreement. Licensee shall remain liable to Alnylam and
Alnylam Europe AG for each of its sublicensees’ failure to comply with all applicable restrictions,
limitations and obligations under the sublicense agreement and this Agreement. No sublicense
granted by Licensee hereunder may be assigned, transferred or further sublicensed to any Third
Party without the prior written consent of Alnylam or Alnylam Europe AG, as the case may be.
Licensee shall provide a redacted copy of such sublicense agreement to Alnylam (such redactions to
exclude only the financial terms of such sublicense and other information normally redacted from a
document filed with the U.S. Securities and Exchange Commission), (x) if such sublicense impacts
upon one or more of the following countries: USA, Germany, France, United Kingdom, Italy, Spain,
and Japan (“Major Market Countries”), and (y) upon request by Alnylam, in any country other
than those listed under clause (x) above.



     2.2 No Other Rights. Only the licenses granted to Licensee under Section 2.1(a) hereof shall
be of legal force and effect and are limited to the scope expressly granted. Accordingly, except
for the rights expressly granted under Section 2.1(a) hereof, no license, right, title or interest
of any nature whatsoever is granted hereunder by implication, estoppel, reliance or otherwise, by
Alnylam or Alnylam Europe AG to Licensee, and any of Alnylam’s or Alnylam Europe AG’s rights to
Licensed Intellectual Property not specifically licensed to Licensee under Section 2.1(a) hereof
shall be retained by Alnylam or Alnylam Europe AG, as the case may be. For purposes of clarity,
nothing contained in this Agreement shall prevent or restrict Alnylam or Alnylam Europe AG from (a)
granting to any Third Party any non-exclusive licenses under Alnylam’s or Alnylam Europe AG’s
rights, as the case may be, in any Licensed Intellectual Property, or (b) subject to the provisions
of Section 2.5(b)(i), granting to any Third Party any exclusive licenses under Alnylam’s or Alnylam
Europe AG’s rights in any Licensed Intellectual Property outside of the then-current Field.



     2.3 Certain License Limitations.



     (a) Pre-Existing Alliance Agreements.



          (i) The grants by Alnylam and Alnylam Europe AG under Licensed Intellectual Property set forth
in Section 2.1(a) are subject to, and are limited to the extent of, the rights that Alnylam has
previously granted and is required to grant under Licensed Intellectual Property to Pre-Existing
Alliance Parties under the terms of the Pre-Existing Alliance Agreements. As and to the extent
that such rights previously granted to Pre-Existing Alliance Parties under Licensed Intellectual
Property (whether such rights are previously or subsequently exercised) lapse, terminate or
otherwise revert to Alnylam, they shall be automatically included in the non-exclusive rights under
Licensed Intellectual Property granted to Licensee in the Field under Section 2.1(a).




          (ii) Licensee acknowledges that a Pre-Existing Alliance Party may from time to time request
rights under Licensed Intellectual Property with respect to a





15









 







particular Target that Alnylam is required, pursuant to the terms of a Pre-Existing Alliance
Agreement, to grant such rights to such Pre-Existing Alliance Party with respect to such Target.




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



          (i) For the avoidance of doubt, the grants by Alnylam under Licensed Intellectual Property set
forth in Section 2.1(a) include, subject to Section 2.3(b)(ii), the sublicense of Licensed
Intellectual Property that is not owned by Alnylam or Alnylam Europe AG. Licensee’s rights and
licenses under such Licensed Intellectual Property are limited to the rights granted by Listed
Counterparties to Alnylam under the Listed Alnylam Third Party Agreements and by Max Planck to
Alnylam Europe AG under the Max Planck European License Agreement, and Licensee shall comply, and
cause its Affiliates and Licensee Partners to comply, with those restrictions and other terms
applicable to sublicensees under such agreements, certain of which restrictions and terms are
summarized on Schedule D-2. Without limiting the generality of the foregoing, Licensee
acknowledges that certain obligations are imposed on sublicensees of certain of the sublicensed
Licensed Intellectual Property, and agrees to comply (to the extent access to obligations and
requirements have been made available to Licensee in unredacted form), and to require its
Affiliates and Licensee Partners to comply, with such obligations and requirements.
Notwithstanding the above, at the request of Licensee, which request shall be made within the [**]
period prior to First Commercial Sale of the first Licensed Product, Alnylam shall use commercially
reasonable efforts to seek to harmonize the accounting and royalty reporting provisions under the
Listed Third Party Agreements with the accounting and royalty reporting provisions set forth in
this Agreement.




          (ii) Notwithstanding anything to the contrary herein, the licenses to Licensed Patent Rights
hereunder initially shall not include licenses to Patent Rights licensed by Alnylam or its
Affiliates under the Non-Exclusive License Agreement between [**] and Alnylam, dated [**] (the
“[**] Agreement”), which Patent Rights Licensee shall have the option, exercisable upon
written notice to Alnylam hereunder, to license, on a Licensed Collaboration Product-by-Licensed
Collaboration Product basis, upon commencement of a Discovery Collaboration hereunder. Upon such
election, (x) the license granted to Licensee under Alnylam’s rights to Delivery Patent Rights
pursuant to Section 2.1(a) shall include such Patent Rights with respect to the designated Licensed
Collaboration Product(s), (y) Schedule C shall be amended to include such Patent Rights,
and (z) the [**] Agreement shall be deemed a Listed Alnylam Third Party Agreement and Schedule
D-1 and Schedule D-2 shall be amended accordingly.




     2.4 Blocked Targets; Gatekeeper.



     (a) Blocked Targets.



          (i) From time to time during the term of this Agreement but no more frequently than [**]
(except as set forth in clause (ii) of this Section 2.4(a)), following an affirmative decision by
Licensee to initiate a program directed to the Discovery, Development or Commercialization of RNAi
Compounds directed to a particular Target,





16









 







Licensee 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, option,
right of first refusal or similar right under a Pre-Existing Alliance Agreement. The Gatekeeper
shall, within [**] days following the Gatekeeper’s receipt of such complete written request from
Licensee, notify Licensee in writing whether or not such Target is on the Blocked Target List;
provided, however, that in no event will the Gatekeeper directly or indirectly
notify or communicate to any other Alnylam employee or consultant or any Alnylam Affiliate or Third
Party the contents or the existence of Licensee’s inquiry hereunder without Licensee’s prior
written consent, which may be withheld at Licensee’s sole discretion.




          (ii) If Alnylam becomes aware of the removal of any Target from the Blocked Target List,
Alnylam shall notify Licensee of such removal (but not the identity of the Target which was
removed) and Licensee shall have the right to inquire of the Gatekeeper pursuant to, and in
compliance with, clause (i) above whether or not a Target is on the Blocked Target List;
provided, however, that the [**] limit set forth in clause (i) above on the
frequency of inquiries which may be made of the Gatekeeper shall not apply with respect to an
inquiry made under this Section 2.4(a)(ii), nor shall an inquiry made under this Section 2.4(a)(ii)
be counted towards such [**] limit.




          (iii) Notwithstanding the foregoing, the Parties acknowledge that 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 2.3(a)(ii) and the provisions of Section 2.3(a)(ii) shall
control.




     (b) Gatekeeper. Subject to the provisions of Section 2.7(b), the inquiries and
responses made by one Party to the other in connection with Section 2.4(a) shall be made in writing
to the attention of a designated employee of Alnylam mutually agreeable to both Parties (the
“Gatekeeper”) who will be bound by confidentiality obligations to both Parties. 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 his or her determination.



     2.5 Additional Fields; Field Option.



     (a) Additional Fields.



          (i) Licensee shall initially conduct Discovery, Development, Commercialization and
Manufacturing activities directed to Targets only with respect to Indications in the Field. After
Licensee’s completion of a Phase II Study with respect to any Licensed Product directed to a
specific Target in the Field, Licensee may engage in Discovery, Development, and/or Manufacturing
activities directed to such Target for any Indication (each, an “Additional Indication”) in
any Additional Field (if such Additional Field has not been the subject of Licensee’s exercise of a
Field Option) without having to pay a Field Option Fee; provided, however,
that (A) Licensee shall notify Alnylam of its extension of Discovery, Development and/or
Manufacturing activities directed to such Target for such Additional Indication in such Additional
Field, and (B) Licensee shall pay Alnylam the





17









 







following amounts (which shall be in addition to any event payments which may be owed under
Section 5.3 below and except as provided in clause (ii) below) upon achievement of the following
events by Licensee, its Affiliates or Licensee Partners with respect to each such Additional
Indication:




	 	 	 	 	 
	 	 	Payment for
	 	 	Licensed Products
	Development Event:	 	(in [**]):
	Initiation of Phase III for each Additional Indication
	 	$	[**]	 
	Filing of an NDA for each Additional Indication
	 	$	[**]	 
	Regulatory Approval for each Additional Indication
	 	$	[**]	 






          (ii) Notwithstanding the foregoing provisions of clause (i) above, Licensee shall pay Alnylam
the following amounts (which shall be in addition to any event payments which may be owed under
Section 5.3 below and in lieu of any amounts which may otherwise be owed under clause (i) above)
upon achievement of the following events by Licensee, its Affiliates or Licensee Partners solely
with respect to a Licensed Product with respect to which Licensee extends its activities for the
first time to an Additional Indication in a given Additional Field:




	 	 	 	 	 
	 	 	Payment for
	 	 	Licensed Products
	Development Event:	 	(in [**]):
	Initiation of Phase III for a Licensed Product for the
first Additional Indication in a given Additional Field
	 	$	[**]	 
	Filing of an NDA for a Licensed Product for the first
Additional Indication in a given Additional Field
	 	$	[**]	 
	Regulatory Approval for a Licensed Product for the first
Additional Indication in a given Additional Field
	 	$	[**]	 






          (iii) The amounts paid under subsections (i) and (ii) of this Section 2.5(a) for Additional
Indications within a given Additional Field shall be fully creditable against Field Option Fees
which may be paid by Licensee pursuant to Section 5.6 for such Additional Field. In no event shall
the total event payments made under this provision exceed $[**] for a given Additional Field.




          (iv) For the avoidance of doubt, in no event shall Licensee conduct Discovery, Development,
Commercialization and Manufacturing activities directed to any Target in any Additional Field other
than as permitted in this Section 2.5. In the event that the




18









 







Parties are unable to agree on
whether or not Licensee’s activities fall within or outside the Primary Field or any Additional
Field in a manner prohibited by this Agreement, the Parties shall submit such dispute to a panel
(the “Field Definition Panel”) consisting of three (3) independent experts in clinical
development, with each Party having the right to select a single expert and the two (2) selected
experts selecting the third expert by mutual agreement. Such third expert shall serve as the
chairperson of the Field Definition Panel. The selection of the experts for the Field Definition
Panel shall occur within thirty (30) days following the Parties’ decision to submit such dispute to
such a panel, and the Parties shall consult with such Field Definition Panel for a period not to
exceed thirty (30) days from the selection of such experts. The Field Definition Panel shall
render a decision with respect to such dispute, based on a majority vote, with each expert having
one (1) vote, within ten (10) days following the end of such consultation period, which decision
shall be binding on the Parties. In the event that the Field Definition Panel determines that
Licensee’s Discovery, Development, Commercialization or Manufacturing activities are being
conducted in any Additional Field in a manner which is prohibited hereunder, Licensee shall, within
ten (10) Business Days after such determination by the Field Definition Panel, cease such
proscribed activity.




     (b) Field Option.



          (i) During the Option Term, if Alnylam intends to grant to any Third Party (other than Listed
Counterparties or Pre-Existing Alliance Parties, subject to the terms of the applicable Listed
Alnylam Third Party Agreements or Pre-Existing Alliance Agreements, as the case may be) an
exclusive license to any Additional Field(s) which is not included in the then-current Field,
Alnylam shall notify Licensee thereof (“Field Extension Opportunity”). Licensee shall have
the right to extend the licenses granted under Section 2.1(a) to include the Additional Field(s)
covered by such Field Extension Opportunity by notifying Alnylam in writing of such intent within
sixty (60) days after Alnylam’s notice and paying the Field Option Fee for each such Additional
Field pursuant to Section 5.6. For the avoidance of doubt, Alnylam and Alnylam Europe AG shall
have the right to grant to any Third Party any exclusive licenses under Alnylam’s or Alnylam Europe
AG’s rights, as the case may be, in any Licensed Intellectual Property in any Additional Field to
which Licensee has not extended its licenses granted under Section 2.1(a) pursuant to Licensee’s
exercise of the Field Option under this Section 2.5(b).




          (ii) From time to time during the Option Term, Licensee shall have the right, upon written
notice to Alnylam, to request the extension of the license granted under Section 2.1(a) to include
one or more Additional Field(s) (“Field Option”) in which Licensee has a good faith
intention to seek to Discover, Develop, Commercialize and Manufacture RNAi Compounds or RNAi
Products, which right shall be subject to any agreement which Alnylam may have entered into with a
Third Party with respect to such Additional Field(s) following Licensee’s rejection of, or failure
to pay the Field Option Fee for, any Field Extension Opportunity pursuant to clause (i) above.
Upon Licensee’s payment of the Field Option Fee for each such Additional Field pursuant to Section
5.6, the licenses granted to Licensee under Section 2.1(a) shall include such Additional Field(s).




     2.6 Designated Target Option. From time to time during the Novartis Exclusivity Term,
Licensee shall have the right, upon written notice to Alnylam, to select any



19









 




Target in the Field
which is not a Blocked Target for submission by Alnylam to Novartis pursuant to the terms of the
Novartis Agreement (a “Submitted Target”). Alnylam shall promptly provide notice to
Novartis of the Submitted Target(s) in accordance with the provisions of the Novartis Agreement,
and Licensee shall cooperate with Alnylam in providing any information reasonably requested by
Novartis (but not the identity of Licensee or any of Licensee’s RNAi Compounds) in order for
Novartis to determine whether or not to pursue Discovery, Development and/or Commercialization
activities directed to such Submitted Target. If Novartis notifies Alnylam that it wishes (as such
term is used in the Novartis Agreement) to pursue Discovery, Development and/or Commercialization
activities directed to such Submitted Target, then Alnylam shall so notify Licensee promptly upon
Alnylam’s receipt of such notification, and such Target shall be deemed a Blocked Target for
purposes of this Agreement. If Alnylam receives notice from Novartis that Novartis has no interest
in pursuing Discovery, Development and/or Commercialization activities directed to such Submitted
Target, or if Novartis otherwise waives its right to such Submitted Target under the terms of the
Novartis Agreement, then Alnylam shall notify Licensee promptly upon Alnylam’s receipt of such
notification or waiver. In such event, such rejected or waived Submitted Target shall be deemed a
“Designated Target” for all purposes under this Agreement, Licensee shall be deemed to have
exercised its option with respect to such Submitted Target (each, a “Designated Target Option”),
and Licensee shall be free, upon [**] pursuant to Section 5.5, to Discover, Develop, Commercialize
or Manufacture RNAi Compounds and RNAi Products directed to such Designated Target in accordance
with the terms hereof without further risk of such Target becoming a Blocked Target.




     2.7 Special Provisions Relating to Novartis.



     (a) Compliance with Novartis Agreement. It is the intent of the Parties that this
Agreement be construed in a manner which is consistent with and in compliance with the terms of the
Novartis Agreement in all respects.



     (b) Alnylam Change of Control. In the event that, at any time during the [**], an
Alnylam Change of Control occurs in which [**] (other than [**] or any controlled [**]) is the
acquiring entity (a “[**]”), it shall be a condition precedent to such [**] that:



          (i) Section 2.4(b) of this Agreement shall be amended to provide that the “Gatekeeper” shall
not be a designated employee of Alnylam but instead (A) shall be a Third Party who shall have no
material relationship (other than as Gatekeeper) with Alnylam, [**], (B) shall be mutually
agreeable to both Parties and (C) shall be bound by confidentiality obligations to both Parties,
and to the extent that the consent of [**] shall be required for such amendment, such consent shall
have been obtained; and




          (ii) [**], to the extent required, shall have agreed [**] that the[**] contained therein
(i.e., [**] thereof) shall terminate upon such [**] and that [**] as a result of any obligations
under the [**] or as a result of any other actions [**] in connection with [**] hereunder after the
date of the agreement providing for such [**] or, if there is no [**], after the date of such [**].




20









 







Alnylam agrees that the [**] shall include the consent of [**], as applicable, required by clause
(i) above and the agreement of [**], as applicable, to the amendment required by clause (ii) above.
If, notwithstanding the foregoing, the [**] shall occur without the amendment and consent
contemplated by clause (i) above or without the agreement and amendment contemplated by clause (ii)
above, then (A) [**] and (B) Alnylam shall pay to Licensee an amount equal to [**]. Each Party
agrees that if the [**] shall occur without the amendment and consent contemplated by clause (i)
above or without the agreement and amendment contemplated by clause (ii) above, the damages that
Licensee and its Affiliates would suffer would be irreparable and difficult to calculate with
certainty but in such event the amounts payable by Alnylam pursuant to the immediately preceding
sentence shall constitute fair and reasonable amounts and not penalties.




     (c) No Adverse Amendments. Alnylam agrees not to enter into any amendment or
modification to the [**] which would have an adverse impact on Licensee’s rights under this
Agreement, without the prior written consent of Licensee. Without limiting the foregoing, the
Parties acknowledge and agree that the following amendments/modifications would have an adverse
impact on Licensee’s rights under this Agreement: [**]; (iv) any amendment that would require
Alnylam to provide to [**] any Confidential Information of Licensee; and (v) any provision that is
inconsistent with the obligations of Alnylam to Licensee hereunder.



     (d) Specific Performance. The Parties hereto agree that irreparable damage would
occur if any provision of this Section 2.7 were not performed in accordance with the terms hereof
and that Licensee shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement or to enforce specifically the performance of the terms and provisions hereof in any
federal court located in the State of Delaware or any Delaware state court, in addition to any
other remedy to which they are entitled at law or in equity.



     2.8 Certain Intellectual Property Matters



     (a) Claimed Infringement.



          (i) 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, with respect to Licensee, Licensee
Partners, 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 Discovery, Development, Commercialization or
Manufacture of Licensed Products, where such claim, action, suit or proceeding and/or the defense
thereof involves, or is likely to involve, the validity, scope and/or enforceability of the
Licensed Intellectual Property (“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.




          (ii) Within thirty (30) days after delivery of the notification required to be delivered under
clause (i) above, as between Alnylam and Licensee and subject to Alnylam Third Party Obligations,
Alnylam shall, upon written notice thereof to Licensee,





21









 







assume control of the defense of those aspects of any such Third Party Infringement Claim
which involve the validity, scope and/or enforceability of Licensed Intellectual Property (either
alone or in combination with any other Patent Rights or Know-How), and Licensee shall, upon written
notice thereof to Alnylam, assume control of the defense of any other Third Party Infringement
Claim or aspect thereof, as the case may be. Licensee and Alnylam, subject to Alnylam Third Party
Obligations, 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.




          (iii) The Party controlling the action, suit, proceeding, claim or defense under Section
2.8(a) shall not agree to any settlement of such action, suit, proceeding, claim or defense without
the prior written consent of the other Party, which shall not be unreasonably withheld, conditioned
or delayed; provided, that Alnylam may settle or compromise any action, suit,
proceeding, claim or defense relating to Licensed Intellectual Property without the prior written
consent of Licensee.




     (b) Trademarks. Each Party and its Affiliates shall retain all right, title and
interest in and to its and their respective corporate names and logos. Licensee 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 “Roche” or any other trademarks or trade dress of Licensee or its
Affiliates.



     (c) Enforcement of Licensed Intellectual Property. Alnylam shall take reasonable
measures to protect and, to the extent Alnylam has such a right, to enforce the Licensed
Intellectual Property in the Field, consistent with prudent commercial practices in the
biotechnology industry.



     (d) Notice of Changes. Within sixty (60) days after each anniversary of the Effective
Date, Alnylam shall provide to Licensee an updated Schedule C that reflects any changes to
the list of Licensed Patent Rights set forth on Schedule C which have occurred during the
prior year.



     2.9 Obligation to Maintain Listed Alnylam Third Party Agreements. Alnylam shall use
commercially reasonable efforts to maintain the Listed Alnylam Third Party Agreements in full force
and effect as they relate to the Licensed Patent Rights. If a Listed Alnylam Third Party Agreement
provides Alnylam with the opportunity to assume prosecution of any Licensed Patent Right or risk
that such right will be abandoned, then Alnylam shall take reasonable measures to prosecute such
Licensed Patent Right in the Field, consistent with prudent commercial practices in the
biotechnology industry.



22









 





ARTICLE III




TECHNOLOGY TRANSFER;




JOINT FUTURE TECHNOLOGY COMMITTEE




     3.1 Technology Transfer.



     (a) Initial Technology Transfer.



          (i) Within a period of [**] months following the Effective Date (“Technology Transfer
Period”), Alnylam shall complete the activities assigned to Alnylam as set forth on the
technology transfer plan attached hereto as Schedule F (as it may be amended from time to
time by mutual agreement of the Parties, the “Technology Transfer Plan”), at no additional
cost to Licensee (subject to subsection 3.1(d) below), to effect the transfer to Licensee (or its
designated Affiliate(s)) of Licensed Intellectual Property that is reasonably necessary for the
exercise of Licensee’s rights under the licenses granted pursuant to Section 2.1(a) and for the
operation of the facility in Kulmbach, Germany which is being transferred to Licensee pursuant to
the terms of the Share Purchase Agreement (“Kulmbach Facility”). Alnylam shall make
available to Licensee such number of technical personnel as may be set forth in the Technology
Transfer Plan to answer any questions or provide instruction as reasonably requested by Licensee
concerning the items delivered pursuant to this Section 3.1(a), in connection with Licensee’s
Discovery, Development, Commercialization and Manufacture of Licensed Products hereunder and the
operation of the Kulmbach Facility.




          (ii) During the Technology Transfer Period, Licensee shall conduct, and shall cause Licensee’s
applicable Affiliate(s) to conduct, the activities assigned to Licensee (and/or its Affiliates) as
set forth on the Technology Transfer Plan, at no additional cost to Alnylam, to effect the transfer
to Alnylam (or its designated Affiliate(s)) of Know-How which is reasonably necessary to enable
Alnylam (or its Affiliate(s)) to transfer the performance of the activities conducted at the
Kulmbach Facility prior to the Effective Date to an alternate facility in Cambridge, MA, U.S.A,
designated by Alnylam.




     (b) Technology Transfer to Alnylam After Technology Transfer Period. Without limiting
Licensee’s obligations under Section 3.1(a), following the end of the Technology Transfer Period,
Licensee shall conduct, and shall cause Licensee’s applicable Affiliates to conduct, the activities
assigned to Licensee and/or its Affiliates as set forth in the Technology Transfer Plan, at no
additional cost to Alnylam, to effect the transfer to Alnylam (or its designated Affiliate(s)) of
Know-How associated with, or arising from, the Discovery, Development, Commercialization and/or
Manufacturing activities performed by Licensee (and/or its Affiliate(s)) and its or its Affiliates’
employees and subcontractors at the Kulmbach Facility on behalf of Alnylam and/or its Affiliates
before and/or during the Transition Period (as defined in the Share Purchase Agreement). Licensee
shall make available to Alnylam such number of technical personnel as may be set forth in the
Technology Transfer Plan to answer any questions or provide instruction as reasonably requested by
Alnylam concerning the items delivered pursuant to this Section 3.1(b).



23









 





     (c) Management of Transition Activities. Each Party shall designate personnel to the
Joint Transition Team (as defined in the Share Purchase Agreement) who shall be responsible for
coordinating the technology transfer activities under the Technology Transfer Plan. Each Party
shall cooperate with the other Party in such other Party’s conduct of technology transfer
activities under the Technology Transfer Plan.



     (d) Additional Services. If Licensee desires that Alnylam continue to provide
technology transfer services with respect to Licensed Intellectual Property (i) beyond the scope of
the Technology Transfer Plan, or (ii) following the end of the Technology Transfer Period, Alnylam
shall, at its discretion and upon mutual agreement of the Parties on the terms of such services
(including, as necessary, an amended Technology Transfer Plan), continue to provide such services
on terms to be agreed upon by the Parties.



     3.2 Joint Future Technology Committee. Within thirty (30) days after the Effective Date, the
Parties shall establish a “Joint Future Technology Committee”, comprised of at least one
(1) representative from each of Licensee and Alnylam, to exchange information and facilitate
discussions concerning any Future Technology Patent Rights which may arise during the Option Term.
Unless otherwise agreed by the Parties, the Joint Future Technology Committee shall remain in
effect during the Option Term and shall meet on a bi-annual basis, in a manner and at a location
mutually agreed by the Parties (including via telephone). During the Option Term, either Party may
notify the other Party of its interest in obtaining a license under such other Party’s rights to
any Future Technology Patent Rights. Upon such notification and subject to any rights of Third
Parties to such Future Technology Patent Rights, the Parties shall negotiate in good faith for a
period not to exceed one hundred twenty (120) days the terms of any license to such Future
Technology Patent Rights, provided that neither Party shall be obligated to grant
any licenses to the other Party. For the avoidance of doubt, the Joint Future Technology Committee
shall have no decision-making authority with respect to the acquisition or grant of any licenses
under any Future Technology Patent Rights.



ARTICLE IV




DISCOVERY COLLABORATION




     4.1 Discovery Collaboration. Within [**] months following the Effective Date during the
Option Term (“Initial Discovery Collaboration Opportunity Period”), Licensee shall propose
to Alnylam at least [**] Targets which are not Blocked Targets with respect to which Licensee has
an interest in entering into a Discovery Collaboration with Alnylam (“Discovery Collaboration
Opportunity”), and shall provide to Alnylam any available information concerning such Targets
which Licensee reasonably believes may be material to Alnylam in its evaluation of such Discovery
Collaboration Opportunity and the rationale for pursuing an RNAi Compound directed to such Target.
If Alnylam has an interest in pursuing any such Discovery Collaboration Opportunity with Licensee
with respect to one or more of the proposed Targets (each, a “Collaboration Target”), then
Alnylam shall so respond within thirty (30) days of Licensee’s notice. If any such Collaboration
Target is not already a Designated Target at the time of Licensee’s proposal of the Discovery
Collaboration Opportunity directed to such Collaboration Target, then Licensee shall submit such



24









 







Collaboration Target(s) to Novartis during the Novartis Exclusivity Term in accordance with
Section 2.6 hereof. In the event that Novartis rejects or waives such Collaboration Target and
such Collaboration Target becomes a Designated Target hereunder, [**], and the Parties shall
negotiate in good faith, for a period not to exceed six (6) months, the terms of a Discovery
Collaboration Opportunity directed to such Designated Target in accordance with Section 4.2. If
the Parties are unable to negotiate the terms of a Discovery Collaboration Opportunity within such
six (6) month period, the Parties shall refer the matter(s) under negotiation to the Chief
Executive Officer of Alnylam and the Global Head of Pharma Research of Licensee, for discussion and
resolution within a thirty (30) day period. Licensee shall have no obligation to pursue more than
[**]; provided, that, the Parties shall enter into at least [**] directed to at least [**] within
the Option Term.



     4.2 Minimum Terms. The terms of any Discovery Collaboration negotiated between the Parties
pursuant to Section 4.1 shall include, at a minimum, the following: (a) each Party shall be
responsible for the costs of its own employees who perform work under the Discovery Collaboration,
(b) Licensee shall pay to Alnylam event payments and royalties with respect to Licensed
Collaboration Product(s) which shall be in addition to those which would have been payable by
Licensee with respect to such Licensed Collaboration Product(s) had Licensee independently
Discovered, Developed, Commercialized and/or Manufactured such Licensed Collaboration Product(s) as
Licensed Product(s) outside of any Discovery Collaboration, which shall be commensurate with
Alnylam’s contributions to the Discovery Collaboration (taking into account, at a minimum, the
Patent Rights referred to in subsection (c) below which shall be licensed to Licensee in connection
with such Discovery Collaboration in addition to the Licensed Patent Rights); (c) the grant of
licenses under each Party’s rights to Patent Rights and Know-How developed by such Party, its
Affiliates and/sublicensees, either individually or jointly with each other, during and in the
performance of the Discovery Collaboration; (d) the rights and obligations of each Party with
respect to prosecution, maintenance and enforcement of the intellectual property rights set forth
in the immediately preceding clause (c); and (e) termination rights. Upon finalization of the
terms of any Discovery Collaboration pursuant to this Section 4.2, the Parties shall (x) develop a
research plan in accordance with which each Party shall perform activities specified under such
Discovery Collaboration, and (y) establish a joint steering committee made up of an equal number of
representatives from each Party to oversee, review and coordinate the activities of the Parties
under such Discovery Collaboration. Notwithstanding the foregoing, if there is an Alnylam Change
of Control, then Licensee shall have the right not to (i) begin, or continue, to propose Discovery
Collaboration Opportunities pursuant to Section 4.1, (ii) begin, or continue to engage in, any
negotiations with Alnylam with respect to any such Discovery Collaboration Opportunity, or (iii)
continue with any ongoing Discovery Collaboration.



ARTICLE V




FINANCIAL PROVISIONS




     5.1 Equity Investment. As of the Execution Date, the Parties have entered into the Common
Stock Purchase Agreement pursuant to which Licensee has agreed to purchase shares of Alnylam’s
Common Stock (as defined in the Common Stock Purchase



25









 







Agreement) for a total consideration of Forty-Two Million Four Hundred Sixty-Two Thousand Five
Hundred dollars ($42,462,500).



     5.2 License Grant Consideration. In consideration of the rights granted to Licensee under
this Agreement as of the Effective Date, Licensee shall pay, or cause to be paid, to Alnylam Two
Hundred Seventy-Three Million Five Hundred Five Thousand Five Hundred dollars ($273,505,500) within
ten (10) Business Days following the Effective Date.



     5.3 Event Payments.



     (a) Development Events. In connection with the Discovery and Development of Licensed
Products that are Covered by a Valid Claim of Licensed Patent Rights, or the Manufacture of which
Licensed Products is Covered by a Valid Claim of a Licensed Patent Right, and directed against a
given Target hereunder, Licensee shall pay, or cause to be paid, to Alnylam the following payments
upon the achievement of the events set forth below:



	 	 	 	 	 
	 	 	Payment for
	 	 	Licensed Products
	Development Event:	 	(in [**]):
	Initiation of GLP Toxicology Studies
	 	$	[**]	 
	Initiation of the first Phase I Study
	 	$	[**]	 
	Initiation of the first Phase II Study
	 	$	[**]	 
	Initiation of the first Phase III Study for the first Indication
	 	$	[**]	 
	Initiation of first Phase III Study for a second Indication
	 	$	[**]	 
	First filing of an NDA in the U.S. for the first Indication
	 	$	[**]	 
	First filing of an NDA in the EU for the first Indication
	 	$	[**]	 
	First filing of an NDA in Japan for the first Indication
	 	$	[**]	 
	First filing of an NDA in the U.S. or EU for a second Indication
	 	$	[**]	 
	Regulatory Approval in the U.S. for the first Indication
	 	$	[**]	 
	Regulatory Approval in the EU for the first Indication
	 	$	[**]	 
	Regulatory Approval in Japan for the first Indication
	 	$	[**]	 
	Regulatory Approval in the U.S. or EU for a second Indication
	 	$	[**]	 






26









 






     (b) Sales Events. With respect to each Target, Licensee shall pay, or cause to be
paid, to Alnylam the following payments based on Net Sales of Licensed Products that are Covered by
a Valid Claim of Licensed Patent Rights, or the Manufacture of which Licensed Products is Covered
by a Valid Claim of a Licensed Patent Right, upon the achievement of the events set forth below:



	 	 	 	 	 
	 	 	Payment for
	 	 	Licensed Products
	Sales Event:	 	(in [**]):
	Aggregate worldwide Annual Net Sales of all Licensed
Product(s) directed to such Target reach or exceed $[**]
(≥$[**])
	 	$[**]
	Aggregate worldwide Annual Net Sales of all Licensed
Product(s) directed to such Target reach or exceed $[**]
(≥$[**])
	 	$[**]






     (c) Achievement of Events. Licensee shall notify Alnylam within thirty (30) days
following achievement or occurrence of an event under Section 2.5(a) and this Section 5.3, and
Alnylam shall deliver to Licensee an invoice for such event. Each event payment under Section
2.5(a) and this Section 5.3 shall be deemed earned as of the achievement or occurrence of the
related event and shall be paid by Licensee within sixty (60) days following such achievement or
occurrence.



     (d) Event Payments Payable Only Once. Each event payment under this Section 5.3 shall
be payable only once in relation to each Target. By way of example, in the event that Licensee
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 event payments have been paid, Licensee shall not be
required to make any event payments previously paid under this Section 5.3 with respect to any
back-up Licensed Product(s) directed at such Target. In addition, if, with respect to the
Development of a Licensed Product, Licensee satisfies an event under this Section 5.3, Licensee
shall pay to Alnylam all earlier event payments under this Section 5.3 that have not otherwise been
paid with respect to such Target (regardless of whether such earlier events have been satisfied).



     5.4 Royalties.



     (a) Royalty Rate. Subject to subsections (b)-(g) of this Section 5.4, during each
relevant Royalty Term, Licensee shall pay, or cause to be paid, to Alnylam the following royalties
on Annual Net Sales of each Licensed Product:



27









 





	 	 	 	 	 
	 	 	Royalty Rate
	Annual Net Sales of a Licensed Product (on a	 	Applicable to Such
	Target-by-Target basis) during the applicable	 	Annual Net Sales
	calendar year:	 	of Such Licensed Product:
	Less than or equal to $[**]:
	 	 	[**]	%
	Greater than $[**], but less than or
equal to $[**]:
	 	 	[**]	%
	Greater than $[**], but less than or
equal to $[**]:
	 	 	[**]	%
	Greater than $[**], but less than or
equal to $[**]
	 	 	[**]	%
	Greater than $[**], but less than or
equal to $[**]:
	 	 	[**]	%
	Greater than $[**], but less than or
equal to $[**]
	 	 	[**]	%
	Greater than $[**]:
	 	 	[**]	%





By way of example, if Annual Net Sales of a Licensed Product are [**] dollars and no deductions
were to apply under Sections 5.4(b)-(g), then the royalty payable by Licensee to Alnylam would be
as follows:




	 	 	 	 	 
	$[**] million at [**]%
	 	=   $[**] million
	$[**] million at [**]%
	 	=  $[**] million
	$[**] million at [**]%
	 	=  $[**] million
	$[**] million at [**]%
	 	=  $[**] million
	$[**] million at [**]%
	 	=  $[**] million
	$[**] million at [**]%
	 	=  $[**] million
	$[**] million at [**]%
	 	=  $[**] million
	Total Royalty Due
	 	=  $[**] million





For the avoidance of doubt, Licensee’s obligation to pay royalties under this Section 5.4 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 Licensed Patent Rights.




     (b) Expiration of Patent Coverage. If no Valid Claim of Licensed Patent Rights Covers
a Licensed Product in a given country, and the Manufacture of such Licensed
Product is not Covered by a Valid Claim of Licensed Patent Rights in the country of
manufacture, then the royalty rate applicable to such Licensed Product in such country shall be
reduced to [**] percent ([**]%) of the rate set forth in Section 5.4(a) above for any



28









 




remaining
portion of the Royalty Term which applies to such Licensed Product in such country.




     (c) Royalty Stacking. Licensee shall be entitled to deduct, from the royalty payments
payable by Licensee under Section 5.4(a) for a reporting period, [**] percent ([**]%) of Required
Third Party Payments paid by Licensee with respect to Licensed Products during the applicable
reporting period; provided that in no event shall a deduction under this subsection
(c) reduce any royalty payment payable by Licensee under Section 5.4(a) by more than [**] percent
([**]%).



     (d) Payments in Respect of Alnylam In-Licenses. In addition to any royalty set forth
in Section 5.4(a) during the Royalty Term, Licensee shall reimburse Alnylam for [**] percent
([**]%) of all 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 Net Sales of Licensed Products;
provided that in no event shall the royalty payments payable by Licensee hereunder
in respect of such Listed Alnylam Third Party Payments in any reporting period exceed in the
aggregate [**] percent ([**]%) of Net Sales of Licensed Products for such reporting period. The
Parties shall cooperate to coordinate such reimbursements by Licensee in a manner that ensures all
amounts payable by Licensee hereunder pursuant to Listed Alnylam Third Party Agreements are paid in
a timely manner and otherwise in compliance with such Listed Alnylam Third Party Agreements.
Licensee shall have the right to have an independent public accountant reasonably acceptable to
Alnylam audit Alnylam’s books and records solely for purposes of verifying such Listed Alnylam
Third Party Payments, which right shall be exercisable [**] per year solely with respect to records
covering up to the [**] calendar years prior to audit notification, upon reasonable advance notice
and during Alnylam’s business hours, subject to the confidentiality provisions of Article VI
hereof. Audit results and findings shall be shared by Licensee and Alnylam. If the audit reveals
an overpayment by Licensee under this Section 5.4(d), the amount of such overpayment shall be
credited towards any future reimbursement amounts payable by Licensee under this Section 5.4(d),
subject to Section 5.4(e). If the audit reveals an underpayment by Licensee, Licensee shall make
up such underpayment within thirty (30) days. The failure of Licensee to request verification of
any Listed Alnylam Third Party Payments hereunder within the [**] calendar year period set forth
above shall be deemed acceptance of the calculation of such Listed Alnylam Third Party Payments.



     (e) Deductions. Notwithstanding anything in this Agreement to the contrary, in no
event shall total deductions under Sections 5.4(b) and 5.4(c) reduce any quarterly royalty payment
by Licensee in respect of Net Sales of a given Licensed Product to less than [**]. Alnylam shall
have the burden of demonstrating the amount of royalty payments payable to Third Parties pursuant
to Listed Alnylam Third Party Agreements. Any deductions allowable under Sections 5.4(b) and
5.4(c) which cannot be used against any quarterly royalty payment due to the foregoing limitation
may be carried forward and used against future quarterly royalty payments, subject to the
limitation set forth above.



     (f) Loss of Listed Alnylam Third Party Agreements. If Alnylam ceases to be a licensee
of Licensed Patent Rights (as such, “Terminated Patent Rights”) under any



29









 




Listed Alnylam
Third Party Agreement (other than as a result of any action or omission by Licensee) and Licensee
directly licenses such Terminated Patent Rights from that Third Party, then Licensee may deduct the
full amount of any [**] paid to such Third Party for such license(s) that is attributable to
Licensed Products Covered by such Terminated Patent Rights from any royalties otherwise payable to
Alnylam hereunder; provided, that prior to Licensee entering into any such license of such
Terminated Patent Rights from such Third Party, Licensee shall notify Alnylam of its intent to do
so and shall provide to Alnylam an opportunity to explain its rationale for ceasing to license such
Terminated Patent Rights and Licensee shall consider in good faith such rationale. If Licensee
does not agree with Alnylam’s rationale, then, at Licensee’s request, Alnylam shall use
commercially reasonable efforts to reinstate the license for such Terminated Patent Rights within a
sixty (60) day period; provided, however, that Alnylam shall not be required to continue to
undertake such efforts if the Third Party requires payments which are incremental to what would
otherwise be owed to such Third Party had such Terminated Patent Rights not been terminated, or the
imposition of additional terms and conditions. If Alnylam is unable to reinstate the license, then
Licensee may obtain a direct license for such Terminated Patent Rights from such Third Party;
provided, that in no event shall total deductions under this Section 5.4(f) reduce any quarterly
royalty payment by Licensee in respect of Net Sales of a given Licensed Product to less than [**].




     (g) Duration of Royalty Payments; First Commercial Sale. The royalties payable under
Section 5.4(a) shall be paid on a country-by-country basis on each Licensed Product commencing upon
the occurrence of the First Commercial Sale of such Licensed Product until the expiration of the
applicable Royalty Term for such Licensed Product. Licensee shall notify Alnylam of the occurrence
of First Commercial Sale of each Licensed Product within fifteen (15) days of its occurrence.



     5.5 [**]. If Licensee exercises the [**] with respect to a Target pursuant to Section 2.6,
and such Target is deemed a [**] hereunder, then Licensee shall pay Alnylam a fee (the [**]) of (a)
[**] Dollars ($[**]) for each of the first [**] Targets to be [**] pursuant to Licensee’s exercise
of the [**] in any calendar year, (b) following the [**] of the [**] Target as a [**] hereunder in
any calendar year, [**] Dollars ($[**]) for each of the next [**] Targets [**] pursuant to
Licensee’s exercise of the [**] hereunder; (c) following the [**] of the [**] Target as a [**]
hereunder in any calendar year, [**] Dollars ($[**]) for each of the next [**] Targets [**]
pursuant to Licensee’s exercise of the [**] hereunder; and (d) following the [**] of the [**]
Target as a [**] hereunder in any calendar year, [**] Dollars ($[**]) for each Target [**] pursuant
to Licensee’s exercise of the [**] hereunder. Licensee shall pay such [**] within thirty (30) days
following receipt of Alnylam’s invoice with respect to the [**] hereunder.



     5.6 Field Option Fee. If Licensee exercises the Field Option with respect to any Additional
Field pursuant to Section 2.5, Licensee shall pay Alnylam a fee (the “Field Option Fee”) of
[**] Dollars ($[**]) for each such Additional Field. Licensee shall pay such Field Option Fee
within thirty (30) days following receipt of Alnylam’s invoice therefor.



     5.7 Most Favored Licensee. During the Option Term, in the event that Alnylam grants to a
Third Party (other than Listed Counterparties or Pre-Existing Alliance



30









 




Parties) rights including a
non-exclusive, worldwide license under the Licensed Intellectual Property to Discover, Develop,
Manufacture and Commercialize Licensed Products, at a royalty rate (taking into account any
obligations to make payments to Third Parties) that is more favorable to such Third Party than the
royalty rate (taking into account any obligations to make payments to Third Parties) set forth in
Section 5.4 of this Agreement with respect to such license grant, then the royalty rate (taking
into account any obligations to make payments to Third Parties) under this Agreement shall be
reduced or adjusted to such more favorable Third Party royalty rate on a prospective basis from the
effective date of Alnylam’s agreement with such Third Party with respect to such rights.
Notwithstanding the foregoing, if (a) the Third Party has paid cash or other consideration, or
there are other elements of the overall transaction with such Third Party, that justifies a royalty
rate below the rate set forth in Section 5.4 of this Agreement, or (b) the license has been granted
as part of a joint venture or similar collaborative agreement, then such royalty rate reduction
shall not apply. For the avoidance of doubt, such more favorable royalty rate shall have no
retroactive effect and shall not apply to any royalties which have been paid by Licensee or which
have otherwise accrued under this Agreement prior to the date of such reduction or adjustment.




     5.8 Payment of Royalty. Licensee shall calculate royalties on Net Sales quarterly as of March
31, June 30, September 30 and December 31 (each being the last day of an “Accounting
Period”) and shall pay royalties on Net Sales within the sixty (60) days after the end of each
Accounting Period in which such Net Sales occur. Royalties on Net Sales shall be paid by Licensee
in U.S. Dollars.



     5.9 Currency Computation. Whenever calculating royalties requires conversion from any
currency, Licensee shall make such conversion as follows: When calculating the Adjusted Gross
Sales for countries other than the United States of America, Licensee shall convert the amount of
such sales in currencies other than Swiss Francs into Swiss Francs using for internal foreign
currency translation Licensee’s then current standard practices actually used on a consistent basis
in preparing its audited financial statements. Upon converting the amount of Adjusted Gross Sales
into Swiss Francs, Licensee shall convert into US Dollars (or other currency), using the daily rate
(Reuters) at the last working day for the applicable period.



     5.10 Reporting. With each payment Licensee shall provide in writing for the relevant
Accounting Period the following information split by U.S., each of the Major Market Countries, and
rest of world (a) Adjusted Gross Sales; (b) Net Sales; (c) the total royalties payable for the
applicable period; and (d) any other information necessary for Alnylam to comply with its reporting
and payment obligations to Third Parties under Alnylam Third Party Obligations, subject to
Alnylam’s obligations under Section 2.3(b)(i).



     5.11 Withholding Taxes. Any tax required to be withheld by Licensee under the laws of any
country for the account of Alnylam shall be promptly paid by Licensee for and on behalf of Alnylam
to the appropriate governmental authority, and Licensee shall furnish Alnylam with proof of payment
of such tax. Any such tax actually paid on Alnylam’s behalf shall be deducted from royalty
payments due to Alnylam hereunder. Licensee shall
assist Alnylam in minimizing the withholding taxes applicable to any payment made by Licensee
and in claiming tax refunds at Alnylam’s request.



31









 





     5.12 Financial Records. Licensee shall keep, and shall require its Affiliates and Licensee
Partners to keep, for [**] years, full, true and accurate books of account containing all
particulars that may be necessary for the purpose of calculating all amounts payable under this
Agreement or to verify compliance with this Agreement. Such books of accounts shall be kept at
their principal place of business.



     5.13 Audits by Alnylam. At the expense of Alnylam, Alnylam has the right to engage an
independent public accountant reasonably acceptable to Licensee to perform, on behalf of Alnylam,
an audit of such books and records of Licensee and its Affiliates and Licensee Partners, that are
deemed necessary by Alnylam’s independent public accountant to verify amounts paid or payable under
this Agreement for the period or periods requested by Alnylam and the correctness of any report or
payments made under this Agreement. Upon timely request and at least thirty (30) Business Days’
prior written notice from Alnylam, such audit shall be conducted in the countries specifically
requested by Alnylam, during regular business hours in such a manner as to not unnecessarily
interfere with Licensee’s (or its Affiliates’ or Licensee Partners’, as the case may be) normal
business activities, and shall be limited to results in the [**] calendar years prior to audit
notification. Such audit shall not be performed more frequently than [**] per calendar year nor
more frequently than [**]with respect to records covering any specific period of time. All
information, data documents and abstracts herein referred to shall be used only for the purpose of
verifying royalty statements and other amounts payable under this Agreement, or compliance with
this Agreement, shall be treated as Confidential Information of Licensee subject to the obligations
of this Agreement and need neither be retained more than [**] year after completion of an audit
hereof, if an audit has been requested; nor more than [**] years from the end of the calendar year
to which each shall pertain; nor more than [**] year after the date of termination of this
Agreement. Audit results and findings shall be shared by Licensee and Alnylam. If the audit
reveals an overpayment, Alnylam shall reimburse Licensee for the amount of the overpayment within
thirty (30) days. If the audit reveals an underpayment, Licensee shall make up such underpayment
within thirty (30) days with interest as set forth in Section 5.14 below. In addition, if the
underpayment is equal to or greater than five percent (5%) of the amount that was otherwise due,
Licensee shall pay all of the costs of such audit. The failure of Alnylam to request verification
of any royalty calculation within the period during which corresponding records must be maintained
shall be deemed acceptance of the royalty reporting.



     5.14 Late Payments. Licensee shall pay interest to Alnylam on the aggregate amount of any
payments that are not paid on or before the date such payments are due under this Agreement at a
rate per annum equal to the lesser of the one month London Interbank Offering Rate of interest plus
one percent (1%), as reported by The Wall Street Journal for the applicable period, or the highest
rate permitted by applicable law, calculated on the number of days such payment is delinquent.



32









 





ARTICLE VI




CONFIDENTIAL INFORMATION




     6.1 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, and shall not otherwise be
disclosed by the receiving Party to any other Person, 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 or its Affiliates 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 or its
Affiliates, is lawfully disclosed to the receiving Party or its Affiliates by sources other than
the disclosing Party who are rightfully in possession of the Confidential Information and not
subject to an obligation of confidentiality or non-use owed to the disclosing Party; or



     (c) either before or after the date of the disclosure to the receiving Party or its
Affiliates, becomes published or generally known to the public other than through the wrongful act
or default of the receiving Party or its Affiliates or its or its Affiliates’ representatives; or



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



     Notwithstanding anything set forth herein to the contrary, this Article VI 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 6.1, 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, 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, or pursuant to relevant accounting standards, such as IFRS or GAAP, 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 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 or legal
process to be disclosed. 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



33









 







to the extent Alnylam is contractually obligated to do so pursuant to Alnylam Third Party
Obligations and to potential and existing investors, lenders and acquirors; provided,
that Alnylam shall redact such portions as Licensee reasonably requests.



     6.2 Employee and Advisor Obligations. Each Party agrees that it may provide Confidential
Information received from the other Party (including the terms of this Agreement) only to its and
its Affiliates’ (a) employees, consultants, advisors and contractors who have a need to know such
information in order for the receiving Party to exercise its rights or perform its obligations
under this Agreement, and (b) potential and existing investors, lenders and acquirors, in each case
who have an obligation to treat such information and materials as confidential under terms no less
restrictive than those set forth herein.



     6.3 Publicity. Upon execution of this Agreement, the Parties shall jointly issue a press
release announcing the execution of this Agreement in form and substance substantially as set forth
on Schedule G hereto. Thereafter, neither Party shall issue any press release or public
announcement relating to this Agreement or any Discovery Collaboration without the prior written
approval of the other Party, which approval shall not be unreasonably withheld, conditioned or
delayed, except that a Party may issue a press release or public announcement if required by Law,
including by the rules or regulations of the United States Securities and Exchange Commission or
similar regulatory agency in a country other than the United States or of any stock exchange or
NASDAQ or pursuant to relevant accounting standards, such as IFRS or GAAP; 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 this
Agreement as is necessary to comply with applicable Law. Alnylam shall not issue any press release
or public announcement relating to Licensed Products without the prior written approval of
Licensee. The rights of approval and notice granted to a Party in accordance with the preceding
sentence shall only apply for the first time that specific information is to be disclosed, and
shall not apply to the subsequent disclosure of substantially similar information that has
previously been made public other than through a breach of this Agreement by the issuing Party or
its Affiliates.



ARTICLE VII




REPRESENTATIONS AND WARRANTIES




     7.1 Mutual Representations and Warranties.



     (a) Representations of Authority. Each Party represents and warrants to the other
Party that, as of the Effective Date, 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.



34









 





     (c) No Conflict. Each Party represents and warrants to the other Party that the
execution and delivery of this Agreement and the performance of its obligations hereunder (i) does
not violate or conflict with the provisions of its certificate of incorporation or by-laws, (ii)
does not conflict with or violate any requirement of applicable Laws effective as of the Effective
Date, and (iii) does 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) Authorization and Binding Nature. Each Party represents and warrants to the other
Party that the execution, delivery and performance of this Agreement and the performance of all
obligations hereunder have been duly authorized by all requisite corporate action on the part of
such Party and this Agreement constitutes valid and legally binding obligations of such Party,
limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the enforcement of creditors’ rights generally and (ii) as may be limited by
laws relating to the availability of specific performance, injunctive relief or other equitable
remedies.



     (e) Employee Obligations. Each Party represents and warrants that all of its
employees, officers and consultants 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 the Confidential Information of such Party and of a Third
Party which such Party may receive.



     7.2 Representations and Warranties of Alnylam. Alnylam represents and warrants to Licensee
that, as of the Effective Date:



     (a) Organization and Good Standing. Alnylam is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware.



     (b) Non-Infringement. To Alnylam’s knowledge, (i) no Third Party is currently
infringing or misappropriating any Licensed Intellectual Property, it being understood that there
may be Third Parties that are conducting research or clinical development under the “safe harbor”
exemption from patent infringement under 35 USC 271(e)(1) or similar exemptions in other
jurisdictions, and (ii) the practice of the Licensed Intellectual Property as contemplated under
this Agreement does not violate the intellectual property rights of any Third Party.



     (c) Validity. All Licensed Intellectual Property that is owned by Alnylam, and, to
the best of Alnylam’s knowledge, all Licensed Intellectual Property that is licensed by Alnylam
pursuant to Listed Alnylam Third Party Agreements, is in full force and effect and all necessary
registration, maintenance, and renewal fees for such Licensed Intellectual Property have been paid
on time. Except for those oppositions or challenges which are publicly disclosed in Alnylam’s
filings with the U.S. Securities and Exchange Commission, no Third Party has initiated a suit or
other proceedings to challenge the validity of the Licensed Patent Rights. Alnylam has no reason
to believe that the Licensed Patent Rights are other than valid and enforceable.



35









 





     (d) Litigation. Alnylam and its Affiliates are not aware of any pending or threatened
claim or litigation (nor has Alnylam received notice of a potential claim or litigation) (i) which
alleges that any issued patents of a Third Party would be infringed by the Development and
Commercialization of any Licensed Product hereunder or (ii) that questions the validity of this
Agreement or the right of Alnylam to enter into this Agreement, or to consummate the transactions
contemplated hereby. To Alnylam’s knowledge, there are no legal actions or investigations pending
or threatened involving the employment by or with Alnylam of any of Alnylam’s current or former
officers, their use in connection with Alnylam’s business or any information or techniques
allegedly proprietary to any of their former employers, or their obligations under any agreements
with prior employers or alleging a violation of Law. Alnylam is not a party to any order, writ,
injunction, judgment or decree of any court. There is no action, suit, proceeding or investigation
by Alnylam currently pending or that Alnylam intends to initiate.



     (e) Authority. Alnylam and its Affiliates have the right and authority to grant the
licenses to Licensee set forth in Section 2.1(a) of this Agreement as contemplated under this
Agreement.



     (f) Certain Exclusive Rights. Alnylam has granted exclusive licenses under Licensed
Intellectual Property to Third Parties, or options to acquire exclusive licenses under Licensed
Intellectual Property, for an aggregate of no more than [**] Targets.



     (g) Listed Alnylam Third Party Agreements. Schedule D-1 identifies all Listed
Alnylam Third Party Agreements existing as of the Effective Date, and Schedule D-2
summarizes certain relevant Alnylam Third Party Obligations under such Listed Alnylam Third Party
Agreements, including without limitation Listed Alnylam Third Party Payment obligations. All
Listed Alnylam Third Party Agreements are in full force and effect, and no dispute presently exists
between Alnylam and such Listed Counterparties and Pre-Existing Alliance Parties that would place
in jeopardy any of the licenses granted by Alnylam under this Agreement.



     (h) Pre-Existing Alliance Agreements. Schedule E identifies all Pre-Existing
Alliance Agreements existing as of the Effective Date.



     (i) Isis. Alnylam, through its Affiliate or a Third Party collaborator, has commenced
an IND-Enabling Study for [**] product candidate as set forth in Section 5.2(b) of the Listed
Alnylam Third Party Agreement with Isis Pharmaceuticals, Inc. Alnylam presently has the exclusive
right under the “Isis Patents” (as defined on Schedule C) and the right to grant
sublicenses under the Listed Alnylam Third Party Agreement with Isis Pharmaceuticals, Inc.



     (j) Protecting IP Rights. Alnylam and its Affiliates have taken reasonable measures
to protect the Licensed Intellectual Property, consistent with prudent commercial practices in the
biotechnology industry.



     (k) Completeness. Schedule C provides a complete listing of the Licensed
Patent Rights as of the Effective Date. Alnylam does not Control as of the Effective Date any



36









 







Patent Rights other than the Licensed Patent Rights that Cover (a) the general structure,
architecture, or design of double-stranded oligonucleotide molecules which engage RNAi mechanisms
in a cell; (b) chemical modifications of double-stranded oligonucleotides (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 double-stranded oligonucleotides in
(a); (c) manufacturing techniques for the double-stranded oligonucleotide molecules or chemical
modifications of (a) and (b); or (d) all uses or applications of double-stranded oligonucleotide
molecules or chemical modifications in (a) or (b); (e) delivery technologies necessary or useful
for delivery of double-stranded oligonucleotide molecules; or (f) manufacturing techniques for the
delivery technologies in clause (e); but excluding Patent Rights which specifically relate to
Blocked Targets.



     (l) Forthrightness. Alnylam has not intentionally withheld or omitted any information
from Licensee which Alnylam believes would be material in Licensee’s decision to enter into this
Agreement.



     7.3 Representations and Warranties of Licensee. Licensee represents and warrants to Alnylam
that, as of the Effective Date, Licensee is not engaged in a dispute with UBC.



     7.4 No Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTIONS 7.1, 7.2 or 7.3, OR IN
THE COMMON STOCK PURCHASE AGREEMENT, OR IN THE SHARE 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. This Agreement shall be effective as of the Effective Date and shall continue,
subject to Sections 8.2, 8.3 and 8.4, 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 Section 8.2, 8.3 or 8.4. Notwithstanding the foregoing, in the event that the
Effective Date does not occur on or before December 15, 2007, this Agreement shall terminate
automatically on December 15, 2007 and be of no further force or effect, unless otherwise agreed
upon by the Parties.



     8.2 Termination for Cause.



     (a) Licensee may terminate this Agreement upon sixty (60) calendar days’ prior written notice
to Alnylam upon the material breach by Alnylam of any of its representations, warranties or
obligations under this Agreement; provided that such



37









 







termination shall become effective only if (i) Alnylam fails to remedy or cure the breach
within such sixty (60) day period, or (ii) if such breach cannot be remedied or cured through the
application of commercially reasonable efforts within such sixty (60) day period, and Alnylam has
(within such time period) submitted a plan for cure as promptly as is reasonably practicable (but
in no event beyond an additional sixty (60) day period) through the application of commercially
reasonable efforts with a remedy or cure period reasonably acceptable to Licensee, then after the
earlier of the remedy or cure date accepted by Licensee or the date Alnylam ceases to use
commercially reasonable efforts to remedy or cure such breach.



     (b) Alnylam may terminate this Agreement upon sixty (60) calendar days’ prior written notice
to Licensee upon the material breach by Licensee of any of its representations, warranties or
obligations under this Agreement; provided that such termination shall become
effective only if (i) Licensee fails to remedy or cure the breach within such sixty (60) day
period, or (ii) if such breach cannot be remedied or cured through the application of commercially
reasonable efforts within such sixty (60) day period, and Licensee has (within such time period)
submitted a plan for cure as promptly as is reasonably practicable (but in no event beyond an
additional sixty (60) day period) through the application of commercially reasonable efforts with a
remedy or cure period reasonably acceptable to Alnylam, then after the earlier of the remedy or
cure date accepted by Alnylam or the date Licensee ceases to use commercially reasonable efforts to
remedy or cure such breach.



     8.3 Termination for Patent Challenge. If Licensee or any of its Affiliates or Licensee
Partners initiates, maintains or supports any action to (a) oppose the grant of a patent, or (b)
challenge the validity, patentability, enforceability and/or scope of an issued patent, in each
case under the Licensed Patent Rights, then Alnylam shall have the right, upon thirty (30) days’
prior written notice to Licensee, to terminate this Agreement; provided, however,
that if Licensee or any of its Affiliates or Licensee Partners, as relevant, cease such
opposition or challenge within such thirty (30) day period, then Alnylam shall not have the right
to terminate this Agreement.



     8.4 Termination At Will. Licensee shall have the right to terminate this Agreement on a
Licensed Product-by-Licensed Product, Licensed Patent Right-by-Licensed Patent Right, and
country-by-country basis after the first (1st) anniversary of the Effective Date for any
reason upon one hundred and eighty (180) days prior written notice to Alnylam; provided,
however, that if royalties were payable for any of the prior four (4) Accounting
Periods or are currently payable hereunder with respect to such Licensed Product in such country,
Licensee shall continue to comply with the terms of this Agreement with respect to such Licensed
Product in such country as if the Agreement had not terminated hereunder, as such terms relate to
the payment of royalties and event payments with respect to such Licensed Product in such country,
and the related accounting provisions of this Agreement.



     8.5 Effect of Expiration or Termination. Unless otherwise expressly set forth herein, all
rights and obligations of the Parties hereunder shall terminate as of the effective date of such
expiration or termination.



38









 





     (a) Termination by Licensee For Alnylam Breach. If Licensee terminates this Agreement
pursuant to Section 8.2(a), then the licenses granted to Licensee under Section 2.1(a) shall
continue subject only to the restrictions set forth in Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6 and
2.7, and Licensee’s obligation to pay to Alnylam the royalties and event payment amounts due under
Sections 2.5(a), 5.3 and 5.4 and under any applicable terms of the Discovery Collaboration as they
become due; provided, however, that Licensee may withhold [**] percent
([**]%) of each event and royalty payment due hereunder until the actual amount of damages owed by
Alnylam to Licensee with respect to the breach of this Agreement resulting in such termination is
determined, whereupon such withheld amount shall be credited against such damages and any amount
remaining shall be paid to Alnylam within thirty (30) days after such determination.



     (b) Termination by Alnylam For Licensee Breach or Patent Challenge; Termination by
Licensee For Convenience. If (i) Alnylam terminates this Agreement pursuant to Section 8.2(b)
or 8.3, or (ii) Licensee terminates this Agreement, in its entirety or with respect to certain
Licensed Products or Licensed Patent Rights, pursuant to Section 8.4, then all provisions of this
Agreement, including the licenses granted under Section 2.1(a) by Alnylam to Licensee hereunder,
shall terminate with respect to the Agreement in its entirety or, solely with respect to a
termination of a Licensed Product or Licensed Patent Right by Licensee under the immediately
preceding clause (ii), with respect to such terminated Licensed Product or Licensed Patent Right.



     (c) Paid-Up License. Upon the expiration of the Royalty Term applicable to any
Licensed Product in a country, subject to Alnylam Third Party Obligations, Licensee’s and its
Affiliates’ licenses under Section 2.1(a) with respect to such Licensed Product in such country
shall become a fully paid-up, royalty-free license, with the right to sublicense, to Discover,
Develop, Commercialize or Manufacture such Licensed Product in such country.



     (d) 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
event payments, that have accrued as of the date of such expiration or termination, as the case may
be, and the provisions set forth in Sections 2.5(a), 5.3-5.6 and 5.8-5.14 (with respect to each of
the foregoing Sections, solely to the extent that any amounts are due but unpaid thereunder),
Section 8.4, this Section 8.5, and Articles VI and IX hereof, shall survive such expiration or
termination.



ARTICLE IX




MISCELLANEOUS




9.1 Indemnification.




     (a) By Alnylam. Alnylam shall defend, indemnify and hold harmless Licensee, 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



39









 




obligations pursuant to 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;
except to the extent that such claims arise out of any negligence or willful misconduct of Licensee
or its Affiliates, Licensee Partners or sublicensees, or any of their respective directors,
officers, employees and agents.




     (b) By Licensee. Licensee shall defend, indemnify and hold harmless Alnylam, its
Affiliates and their respective directors, officers, employees and agents at Licensee’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 Licensee of any of its representations, warranties or obligations pursuant to this
Agreement, or (ii) the negligence or willful misconduct of Licensee or its Affiliates, Licensee
Partners 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





40









 




responsible for the fees 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 in
effect in the State of Delaware, 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: Vice President — Legal
	 

	 	Fax: (617) 551-8101
	 
	 	 
	 

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

	 	WilmerHale LLP
	 

	 	60 State Street
	 

	 	Boston, MA 02109
	 

	 	Attention: Steven D. Singer, Esq.
	 

	 	Fax: (617) 526-5000
	 
	 	 
	 

	 	If to Licensee:
	 
	 	 
	 

	 	F. Hoffmann-La Roche Ltd






41









 






	 	 	 
	 

	 	Grenzacherstrasse 124
	 

	 	4070 Basel
	 

	 	Switzerland
	 

	 	Attention: Legal Department
	 

	 	Fax: 41 61 688 1396
	 
	 	 
	And:

	 	Hoffmann-La Roche Inc.
	 

	 	340 Kingsland Street
	 

	 	Nutley, New Jersey 07110
	 

	 	USA
	 

	 	Attention: Corporate Secretary
	 

	 	Fax: (973) 235-3500
	 
	 	 
	 

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

	 	F. Hoffmann-La Roche Ltd
	 

	 	Grenzacherstrasse 124
	 

	 	4070 Basel
	 

	 	Switzerland
	 

	 	Attention: Pharma Partnering
	 

	 	Fax: 41 61 688 7990






     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
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.



42









 





     9.6 Integration. This Agreement constitutes the entire agreement between the Parties with
respect to the within subject matter and supersedes all previous agreements, whether written or
oral; provided, that the Parties acknowledge the contemporaneous execution and
delivery of the Other Transaction Documents, which shall not be superseded by this Agreement. 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 Licensee may assign this Agreement in whole
or in part without the prior written consent of the other Party and such attempted assignment shall
be deemed null and void; provided, however, that either Party may assign this
Agreement without the prior written consent of the other Party (a) to an Affiliate of such Party,
provided that the assigning Party shall remain primarily liable hereunder for the performance of
all obligations by the assignee, or (b) to a Third Party in connection with a merger, sale or
transfer of all or substantially all of the assigning Party’s business (in the case of Licensee,
its pharmaceutical business related to RNAi technology and in the case of an assignment from
Alnylam to [**] to which this Agreement relates, provided that such assignee shall agree in writing
to be bound by the terms and conditions of this Agreement. 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.



     9.10 Waivers. No failure on the part of Licensee 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,



43









 







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 (A) THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY WITH
RESPECT TO THIRD PARTY CLAIMS UNDER SECTION 9.1 OR (B) REMEDIES AVAILABLE TO EITHER PARTY WITH
RESPECT TO A BREACH OF ARTICLE VI.



     9.12 Actions of Affiliates. Except as set forth in Section 9.15 below, 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.



     9.14 No Third Party Beneficiaries. Except as expressly set forth in this Agreement, no Person
other than the Parties and their respective Affiliates and permitted assignees hereunder shall be
deemed an intended third party beneficiary hereunder or have any right to enforce any obligation of
this Agreement. Notwithstanding the foregoing, the Parties agree that UBC shall be deemed a third
party beneficiary of, and shall have the right to enforce directly against Licensee, its Affiliates
and/or Licensee Partners, certain terms of this Agreement as set forth in the UBC Sublicense
Agreement.



     9.15 Alnylam Europe AG. Solely for the limited purposes of Sections 2.1, 2.2 and 2.3 hereof,
Alnylam Europe AG shall be a party to this Agreement. Alnylam Europe AG shall have no other right
or obligation other than as set forth under the aforementioned provisions of this Agreement.



     9.16 Bankruptcy. All licenses (and to the extent applicable rights) granted under or pursuant
to this Agreement by Alnylam and its Affiliates to Licensee are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of Title 11, US Code (the “Bankruptcy Code”) licenses of rights
to “intellectual property” as defined under Section 101(60) of the Bankruptcy Code. Unless
Licensee elects to terminate this Agreement, the Parties agree that Licensee shall retain and may
fully exercise all of its rights and elections under the Bankruptcy Code, subject to the continued
performance of its obligations under this Agreement.



[Remainder of This Page Intentionally Left Blank]




44









 








     IN WITNESS WHEREOF, Alnylam, Alnylam Europe AG and Licensee have caused this License and
Collaboration Agreement to be duly executed by their authorized representatives, as of the date
first written above.



	 	 	 	 	 
	 	F. HOFFMANN-LA ROCHE LTD

 	 
	 	By:  	/s/
Nigel Sheeil	 
	 	 	Name:  	Nigel Sheeil	 
	 	 	Title:  	Vice President	 
	 
	 	Global Head Licensing
HOFFMANN-LA ROCHE INC.

 	 
	 	By:  	/s/
Warwick S. Bedwell	 
	 	 	Name:  	Warwick S. Bedwell	 
	 	 	Title:  	Vice President	 
	 
	 	Global Head of Business Development
ALNYLAM PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/
John Maraganore	 
	 	 	Name:  	John Maraganore	 
	 	 	Title:  	President & CEO	 
	 
	 	Solely for purposes of Sections 2.1, 2.2 and 2.3

hereof:





ALNYLAM EUROPE AG

 	 
	 	By:  	/s/
Kreutzer Bossko
	 
	 	 	Name:  	Kreutzer Bossko	 
	 	 	Title:  	 	 
	 




45









 





Schedule A




Primary Therapeutic Areas



Cancer: Targets principally involved in [**], excluding Targets involved in [**], including,
without limitation, [**], but excluding Targets of [**].



Hepatic: Targets principally involved in [**], including, without limitation, [**], but excluding
Targets of [**].



Metabolic Disease: Targets principally involved in diseases of metabolism, including, without
limitation, [**], but excluding Targets of [**].



Pulmonary Disease: Targets principally involved in diseases of the pulmonary system, including,
without limitation, [**], but excluding Targets of [**].




Page 1 of 1, Schedule A









 








Schedule B




Supplemental Therapeutic Areas



Autoimmune Disease: Targets principally involved in [**]. Such disorders include, without
limitation[**], but excluding Targets of [**].



Bacterial Infection: Targets principally involved in bacterial infection [**], including, without
limitation, Targets [**].



Cardiovascular: Targets principally involved in diseases of the heart or of the vascular system,
including, without limitation, [**], but excluding Targets of [**].



Oral: Targets principally involved in diseases of the oral cavity, including, without limitation,
[**], but excluding Targets of [**].



Dermatology: Targets principally involved in diseases of the skin, including, without limitation,
[**], but excluding Targets of [**].



Endocrine: Targets principally involved in diseases of the endocrine system, including, without
limitation, [**], but excluding [**] and excluding Targets of [**].



Ex Vivo Therapy: Genes that are targeted as part of ex vivo therapy, including, without
limitation, [**] including, without limitation, [**].



Gastrointestinal: Targets principally involved in diseases of the gastrointestinal system,
including, without limitation, [**], but excluding Targets of [**].



Genitourinary: Targets principally involved in diseases of the genitourinary system, including,
without limitation, [**], but excluding Targets of [**].



Hematology: Targets principally involved in [**], including, without limitation, [**], but
excluding Targets of [**].



Inflammatory Disease: Targets principally involved in [**]. Such disorders include, without
limitation, those [**], including [**], but excluding Targets of [**].



Musculoskeletal Disease: Targets principally involved in diseases of the muscles, ligaments or
bone, including, without limitation, [**], but excluding targets of [**].



Neurological Disease: Targets principally involved in [**], including, without limitation, [**],
but excluding those [**].



Ophthalmic Disease: Targets principally involved in diseases of the eye, including, without
limitation, [**], but excluding Targets of [**].



Parasitic Disease: Targets principally involved in parasitic [**], including, without limitation,
Targets [**].




Page 1 of 3, Schedule B









 







Renal Disease: Targets principally involved in diseases of the kidney, including, without
limitation, [**], but excluding Targets of [**].



Transplantation Medicine: Targets principally involved in [**], but excluding Targets of [**].



Viral Disease: Targets principally involved in viral [**], including, without limitation, Targets
[**].




Page 2 of 3, Schedule B









 








Schedule C




Licensed Patent Rights



[**]




 









 








Schedule C(1)



[**]




 









 








Alnylam Pharmaceutical, Inc.

Core Patents




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CaseNumber	 	InvTitle	 	 	Country	 	 	CaseType	 	 	AppNumber	 	 	FilDate	 	 	PubNumber	 	 	PubDate	 	 	PatNumber	 	 	IssDate	 	 	ApplicationStatus	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 




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



[**]



A total of 5
pages have been omitted pursuant to a request for confidential
treatment.




 









 








PATENT RIGHTS CONTROLLED BY TEKMIRA (INEX) THROUGH AN OWNERSHIP INTEREST




 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Inex File Number	 	Title	 	 	Serial/ Patent Numbers	 	 	Inventors	 	 	Owner	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 




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



[**]



A total of 9
pages have been omitted pursuant to a request for confidential
treatment.



 









 








PATENT RIGHTS CONTROLLED BY TEKMIRA (INEX) UNDER A LICENSE FROM A THIRD PARTY




 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Inex File Number	 	Title	 	 	Serial/ Patent Numbers	 	 	Inventors	 	 	Owner	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 




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



[**]



A total of
16 pages have been omitted pursuant to a request for confidential
treatment.




 









 








M.I.T. Patent Rights



M.I.T. Case No. [**]



I. United States Patents and Applications



[**]



II. International (non-U.S.) Patents and Applications



[**]



M.I.T. Case No. [**]



I. United States Patents and Applications



[**]




 









 








CANCER RESEARCH/STANFORD

PATENT RIGHTS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CaseNumber	 	InvTitle	 	 	Country	 	 	CaseType	 	 	AppNumber	 	 	FilDate	 	 	ApplicationStatus	 	 	PubNumber	 	 	PubDate	 	 	PatNumber	 	 	IssDate	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 




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



[**]



A total of
2 pages have been omitted pursuant to a request for confidential
treatment.




 









 








Schedule C(2)




PATENTS AND PATENT APPLICATIONS LICENSED FROM ISIS PHARMACEUTICALS INC.



Schedule C(2)(a): Isis Chemistry Patents




 









 








Isis Current Chemistry Patents




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Isis
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Docket
	 	Country
	 	 	 	Patent
	 	Grant
	 	 	 	 	 	3rd
	Number
	 	Name
	 	Status
	 	Number
	 	Date
	 	Title
	 	3rd Party
	 	Party





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



[**]



A total of
51 pages have been omitted pursuant to a request for confidential
treatment.



 









 








Isis Current Chemistry Patents (June 2007 Updates)




	 	 	 	 	 	 	 	 	 	 	 
	Isis Docket	 	 	 	 	 	 	 	 	 	 
	Number
	 	Country
	 	Status
	 	Serial Number
	 	Filing Date
	 	Title
	 
	 	 
	 	 
	 	 
	 	 
	 	 




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



[**]




 










 








Isis Current Chemistry Patents (as at June 27, 2007)




	 	 	 	 	 	 	 	 	 	 	 
	Isis Docket	 	 	 	 	 	 	 	 	 	 
	Number
	 	Country
	 	Status
	 	Serial Number
	 	Filing Date
	 	Title
	 
	 	 
	 	 
	 	 
	 	 
	 	 




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



[**]


A total of
3 pages have been omitted pursuant to a request for confidential
treatment.




 









 








Schedule C(2)(b): Isis Motif and Mechanism Patents



 



 




 









 








Isis Current Motif and Mechanism Patents (June 2007 Updates)




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Patent
	 	Grant
	 	 	 	3rd
	 	3rd
	Isis Docket Number
	 	Country
	 	Status
	 	Number
	 	Date
	 	Title
	 	Party
	 	Party





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



[**]



A total of
10 pages have been omitted pursuant to a request for confidential
treatment.



 









 








Isis Current Mechanism and Motif Patents (June 2007 Updates)




	 	 	 	 	 	 	 	 	 	 	 
	Isis Docket
	 	 	 	 	 	 	 	Filing	 	 
	Number
	 	Country
	 	Status
	 	Serial Number
	 	Date
	 	Title
	 
	 	 
	 	 
	 	 
	 	 
	 	 




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



[**]




 









 








Isis Future Motif and Mechanism Patents (as at June 2007)




	 	 	 	 	 	 	 	 	 	 	 
	Isis Docket
	 	 	 	 	 	 	 	Filing	 	 
	Number
	 	Country
	 	Status
	 	Serial Number
	 	Date
	 	Title
	 
	 	 
	 	 
	 	 
	 	 
	 	 




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



[**]



A total of
3 pages have been omitted pursuant to a request for confidential
treatment.



 









 








Schedule D-1




Listed Alnylam Third Party Agreements



Copies of the following agreements, some in redacted form, have been, or shall be, made available
to Licensee as of the Effective Date:





	 	1.	 	Co-Exclusive License Agreement between Max Planck Innovation GmbH (formerly
Garching Innovation GmbH) and Alnylam Pharmaceuticals, Inc., dated December 20, 2002,
as amended by Amendment dated July 2, 2003, and the Requirements Amendment effective
June 15, 2005
	 
	 	2.	 	Co-Exclusive License Agreement between Max Planck Innovation GmbH (formerly
Garching Innovation GmbH) and Alnylam Europe AG (formerly Ribopharma AG), dated July
30, 2003, as amended by the Requirements Amendment effective June 15, 2005
	 
	 	3.	 	Licence Agreement between Cancer Research Technology Ltd. and Alnylam
Pharmaceuticals, Inc., dated July 18, 2003
	 
	 	4.	 	Agreement between the Board of Trustees of the Leland Stanford Junior
University and Alnylam Pharmaceuticals, Inc., dated September 17, 2003
	 
	 	5.	 	Strategic Collaboration & License Agreement between Isis Pharmaceuticals,
Inc., and Alnylam Pharmaceuticals, Inc., dated March 11, 2004, as supplemented or
amended by letter agreements dated March 9, 2004 (as amended by letter agreement dated
October 28, 2005), March 11, 2004, and June 10, 2005
	 
	 	6.	 	Amended and Restated Exclusive Patent License Agreement between Alnylam
Pharmaceuticals, Inc. and Massachusetts Institute of Technology, dated May 9, 2007
	 
	 	7.	 	License and Collaboration Agreement between Tekmira Pharmaceuticals
Corporation (formerly INEX Pharmaceuticals Corporation) and Alnylam Pharmaceuticals,
Inc., dated January 8, 2007
	 
	 	8.	 	The Sublicense Agreement between Tekmira Pharmaceuticals Corporation
(formerly INEX Pharmaceuticals Corporation) and Alnylam Pharmaceuticals, Inc., dated
January 8, 2007




Page 1 of 1, Schedule D-1









 











Schedule D-2




Certain Alnylam Third Party Obligations




     This Schedule D-2 highlights certain obligations of, or restrictions on, Alnylam
and/or its sublicensees of Licensed Intellectual Property under Listed Alnylam Third Party
Agreements, including without limitation Listed Third Party Payment obligations, which are
applicable to Licensee under this Agreement, in each case subject to the terms and conditions of
such Listed Alnylam Third Party Agreements. The summaries set forth in this Schedule D-2
are not intended to be comprehensive or inclusive of all obligations or restrictions which may be
applicable to sublicensees of Licensed Intellectual Property under such Listed Alnylam Third Party
Agreements.



     Unless otherwise expressly stated, capitalized terms not otherwise defined in this
Schedule D-2 shall have the meanings ascribed to them in the applicable Listed Alnylam
Third Party Agreement, and references to sections, articles, schedules or exhibits made in this
Schedule D-2 shall be to sections, articles, schedules or exhibits, as the case may be, in
or to such applicable Listed Alnylam Third Party Agreement.



Page 1 of 37, Schedule D-2









 





MAX PLANCK (US)





	1.	 	Co-Exclusive License Agreement between Max Planck Innovation (formerly Garching Innovation
GmbH) (“Max Planck”) and Alnylam Pharmaceuticals, Inc. (“Alnylam”), dated
December 20, 2002, as amended by Amendment dated July 2, 2003 and the Requirement Amendment
(“Requirement Amendment”) effective June 15, 2005 (as amended, “Max Planck US
License Agreement”)





Limitations on License Grant (Section 2.1)





	•	 	Alnylam’s co-exclusive license is limited to a
license to develop, make, have made, use, sell
and import Licensed Products in the Field.






	•	 	Owners retain the right to practice under the
Patent Rights for research, teaching, education,
non-commercial collaboration and publication
purposes. The German and the U.S. federal
government retain a royalty-free, non-exclusive,
non-transferable license to practice any
government-funded invention claimed in any Patent
Rights for government purposes.





Certain Sublicense Terms (Sections 2.4 and 11.8)





	•	 	Immediately after the signature of each
sublicense granted under the Max Planck US
License Agreement, Alnylam is required to provide
Max Planck with a copy of the signed sublicense
agreement.






	•	 	Sublicensees are required to perform their
sublicense agreement in accordance with the Max
Planck US License Agreement. If Max Planck
determines that Alnylam or any of its
Sublicencees has failed to fulfill any of its
obligations under Section 4 (including without
limitation diligence and reporting obligations),
then Max Planck may treat such failure as a
material breach in accordance with Section 11.7.






	•	 	In the event that any license granted to Alnylam
under the Max Planck US License Agreement is
terminated, any sublicense under such license
granted prior to termination of said license
shall remain in full force and effect, provided
that (i) the Sublicensee is not then in breach of
its sublicense agreement; and (ii) the
Sublicensee agrees to be bound to Max Planck as
licensor under the terms and conditions of the
sublicense agreement, provided that Max Planck
shall have no other obligation than to leave the
sublicense granted by Alnylam in place.





Diligence and Reporting (Sections 4.1 and 4.2; Sections 1 and 3 of Requirement Amendment)





	•	 	Sublicensees are required to use commercially reasonable efforts
to develop and to introduce into the commercial market Licensed
Products at the earliest practical date.




Page 2 of 37, Schedule D-2









 












	•	 	Sublicensees are required to furnish information to Alnylam for
inclusion in its reports to Max Planck, which reports are due
within 30 days after the end of each calendar quarter with
Alnylam’s standard R&D report, on the progress of its efforts
during the immediately preceding calendar quarter to develop and
commercialize Licensed Products for each indication and
sub-indication within the Field. The report shall also contain a
discussion of intended R&D efforts for the calendar quarter in
which the report is submitted.






	•	 	Under the Requirement Amendment, Alnylam is required to comply
with certain operational and reporting obligations relating to
Alnylam Europe AG.





Royalty Payment Obligation (Sections 5.2 and 5.3)





	•	 	The following running royalties are payable to
Max Planck on Net Sales of therapeutic and
prophylactic Licensed Products by Alnylam and
its Sublicensees:






	 	(i)	 	[**]% ([**] percent) of the first US$[**] US Dollars) of annual accumulated
Net Sales of all Licensed Products;
	 
	 	(ii)	 	[**]% ([**] percent) of annual accumulated Net Sales of all Licensed Products
between US$[**] US Dollars) and US$[**] US Dollars);
	 
	 	(iii)	 	[**]% ([**] percent) of annual accumulated Net Sales of all Licensed
Products between US$[**] US Dollars) and US$[**] US Dollars);
	 
	 	(iv)	 	[**]% ([**] percent) of annual accumulated Net Sales of all Licensed Products
between US$[**] US Dollars) and US$[**] US Dollars);
	 
	 	(v)	 	[**]% ([**] percent) of annual accumulated Net Sales of all Licensed Products
between US$[**] US Dollars) and US$[**] US Dollars); and
	 
	 	(vi)	 	[**]% ([**] percent) of annual accumulated Net Sales of all Licensed
Products above US$[**] US Dollars).






	•	 	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 any Sublicensee
for Licensed Products without the prior written consent of Max
Planck.






	•	 	In the event any 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 up to [**]% of any
additional running royalties to be paid to such third party may be
deducted, up to [**]% ([**] percent) of the running royalties
stated in Section 5.2, from the date such running royalties must




Page 3 of 37, Schedule D-2









 












	 	 	be paid 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 a Sublicensee takes a license to
a third party target, in no event is a deduction allowed on any license fees
for such target from running royalties due to Max Planck under the Max Planck
US License Agreement.






	•	 	If (i) 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 [**] years 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 [**] years 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.





Royalty Payment and Reports (Sections 5.4 and 5.5)





	•	 	Within 30 days after the end of each calendar
half year, Alnylam is required to deliver a
detailed report to Max Planck for the
immediately preceding calendar half year showing
at least (i) the number of Licensed Products
sold by Alnylam and its Sublicensees in each
country, (ii) the gross price charged by Alnylam
and its Sublicensees for each Licensed Products
in each country, (iii) the calculation of Net
Sales, and (iv) the resulting running royalties
due to Max Planck according to those figures.
If no running royalties are due to Max Planck,
the report shall so state.






	•	 	Running royalties shall be payable for each
calendar half year, and shall be due to Max
Planck within 60 days after the end of each
calendar half year.





Bookkeeping and Auditing (Sections 5.6 and 5.7)





	•	 	Sublicensees are obliged to keep complete and
accurate books on any reports and payments due to
Max Planck under the Max Planck US License
Agreement, which books shall contain sufficient
information to permit Max Planck to confirm the
accuracy of any reports and payments made to Max
Planck. Upon Max Planck’s request, Alnylam, or
agents appointed by Max Planck for Alnylam, shall
check the books of its Sublicensees for Max
Planck, once a year. This right of auditing by
Max Planck shall expire five years after each
report or payment has been made. Alnylam shall
have the right to check the books of its
Sublicensees according to Section 5.6. All
payments made by Sublicensees under the Max
Planck US License Agreement are nonrefundable and
noncreditable against each other.




Page 4 of 37, Schedule D-2









 











Compliance with Laws (Section 10.1)





	•	 	Alnylam is required to use commercially
reasonable efforts to comply with all local,
state, federal, and international laws and
regulations relating to the development,
manufacture, use and sale of Licensed Products.





Non-Use of Owners Names (Section 10.2)





	•	 	Sublicensees are prohibited from using the name
of “Massachusetts Institute of Technology”,
“University of Massachusetts”, “Whitehead
Institute”, “Max Planck Institute”, “Max Planck
Society”, “Garching Innovation” or any variation,
adaptation, or abbreviation thereof, or of any of
its trustees, officers, faculty, students,
employees, or agents, or any trademark owned by
any of the Owners, in any promotional material or
other public announcement or disclosure without
the prior written consent of the Owners or in the
case of an individual, the consent of that
individual.





Termination for Patent Challenge (Section 11.5)





	•	 	To the extent legally enforceable, if any
Sublicensee attacks, or has attacked or supports
an attack through a third party, the validity of
any of the Patent Rights, Alnylam shall have the
right to terminate the sublicense agreement
immediately; upon request of Max Planck, Alnylam
shall have the obligation to terminate such
sublicense agreement.




Page 5 of 37, Schedule D-2









 











MAX PLANCK (EUROPEAN)





	2.	 	Co-Exclusive License Agreement between Max Planck and Alnylam Europe AG (formerly Ribopharma
AG), dated July 30, 2003, as amended by the Requirement Amendment effective June 15, 2005 (as
amended, “Max Planck European License Agreement”)





Limitations on License Grant (Sections 2.1 and 11.9)





	•	 	Alnylam Europe AG’s co-exclusive license is
limited to a license to develop, make, have
made, use, sell and import Licensed Products in
the Field.






	•	 	The Approving Owners retain the right to
practice under the Patent Rights for research,
teaching, education, non-commercial
collaboration and publication purposes. The
German and the U.S. federal government retain a
royalty-free, non-exclusive, non-transferable
license to practice any government-funded
invention claimed in any Patent Rights for
government purposes.






	•	 	In countries where it is legally impossible to
grant license to jointly owned patent rights
without the approval of all joint owners,
Max-Planck-Gesellschaft zur Foerderung der
Wissenschaften e.V. (“Max Planck Gesellschaft”)
has agreed to partially assign its ownership
position in the Joint Patent Rights in such
countries to Alnylam Europe AG, restricted to
develop, make, have made, use, sell and import
Licensed Products in the Field, whereby Alnylam
Europe AG is allowed to further assign such
ownership position, restricted to develop,
make, have made, use, sell and import Licensed
Products in the Field in such countries to
Third Parties and Sublicensees only with the
prior written approval of Max Planck (formerly
Garching Innovation GmbH), which shall not
unreasonably be withheld. In any event, the
ownership position assigned to Alnylam Europe
AG and, as the case may be, sub-assigned by
Alnylam Europe AG to its assignees, shall
entitle neither Alnylam Europe AG nor its
assignees to any actions, claims or anything
which exceed the rights granted to them under
the Patent Rights by the Max Planck European
License Agreement.






	•	 	If Max Planck Gesellschaft has partially
assigned its ownership position in the Joint
Patent Rights in certain countries to Alnylam
Europe AG according to Section 2.1, Alnylam
Europe AG is obligated to cost-free re-assign
such ownership position in such countries to
Max Planck Gesellschaft on or before the
effective date of termination of the Max Planck
European License Agreement. In the event that
Alnylam Europe AG has further assigned its
ownership position in certain countries in
accordance with Section 2.1, such further
assignment shall remain in full force and
effect, provided that (a) the sub-assignee is
not then in breach of its sub-assignment
agreement; and (b) the sub-assignee agrees to
be bound to Max Planck as assignor under the
terms and conditions of the sub-assignment
agreement, provided that Max Planck shall have
no other obligation than to leave the
sub-assignment granted by Alnylam Europe AG in
place.




Page 6 of 37, Schedule D-2









 











Royalty Payment Obligation (Section 5.2 and 5.3)





	•	 	The same royalty rates and substantially
similar deductions apply with respect to Net
Sales of Licensed Products as those set forth
under the Max Planck US License Agreement.
Alnylam or Alnylam Europe AG shall only pay
royalties on sales of such Licensed Products to
a Third Party.






	•	 	Notwithstanding the foregoing, in no event
shall royalties be due under both the Max
Planck European License Agreement and the Max
Planck US License Agreement on the Net Sale of
a particular Licensed Product.





Other Obligations and Restrictions





	•	 	Other obligations and restrictions under the
Max Planck European License Agreement are
substantially similar to those set forth in the
summary above with respect to the Max Planck US
License Agreement.






	•	 	Section 12.7 states that in the event of any
discrepancies between the Max Planck European
License Agreement and Max Planck US License
Agreement due to the fact that the Max Planck
US License Agreement does not reflect, among
other things, that UMASS’ ownership position in
the Joint Patent Rights is excluded from the
Joint Patent Rights with respect to the Max
Planck US License Agreement and the Max Planck
European License Agreement, the Max Planck
European License Agreement shall prevail.




Page 7 of 37, Schedule D-2









 











CANCER RESEARCH TECHNOLOGY





	3.	 	Licence Agreement between Cancer Research Technology Ltd. (“CRT”) and Alnylam, dated
July 18, 2003 (“CRT Agreement”)





Limitations on License Grants (Sections 2.1 and 2.3)





	•	 	Alnylam’s license is limited to the Field under
the CRT Patent Rights to research, develop,
have developed, use, keep, make, have made,
import, have imported, sell, have sold and
otherwise dispose of Licensed Products. Except
as necessary for the development and/or sale of
Licensed Products in the Field, Alnylam does
not have rights to make use of the CRT Patent
Rights for any diagnostic application, as
research tools or reagents, for target
validation, or for small molecule drug
discovery.






	•	 	CRT and Cancer Research UK shall have the right
to use, and CRT 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 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.





Certain Sublicense Terms (Section 2.4)





	•	 	Any Sub-license entered into by Alnylam must be
limited to the Field and contain restrictions
in equivalent terms to those set out in Clause
2.1.






	•	 	Any Sub-license shall terminate automatically
on the expiry or termination for whatever
reason of the CRT Agreement. If the CRT
Agreement is terminated pursuant to Clause 10,
CRT has agreed to enter into a direct licensing
arrangement with any Sub-licensee on terms
substantially similar to those contained in the
CRT Agreement save that any license granted by
CRT to any Sub-licensee shall be consistent
with the terms of the Sub-license granted by
Alnylam (or its Affiliate) in relation to
field, territory, exclusivity, rights to
sub-license and payment provisions. However,
if the CRT Agreement is terminated by Alnylam
pursuant to Clause 10.2, the foregoing shall
apply save that the granting of such license by
CRT shall be subject to CRT’s consent. Nothing
in Clause 2.4 shall confer upon CRT any
obligation to enter into a direct licensing
arrangement with the Sub-licensee where the
Sub-licensee is in default of its obligations
under the Sub-license. CRT shall not be
expected to take any responsibility for any
disputes between Alnylam (or its Affiliate) and
its Sub-licensees relating to the terms of the
Sub-license(s) and notwithstanding the
foregoing, CRT shall not be obliged to enter
into a direct license with a Sub-licensee in
circumstances in which the Sub-licensee
reserves any right to maintain a claim against
CRT where such claim was previously maintained
against




Page 8 of 37, Schedule D-2









 












	 	 	Alnylam (or its Affiliate).
	 
	 	 	Sublicensees are required to undertake to CRT directly to allow the same access
to the books and records as CRT has to Alnylam’s books and records under the
CRT Agreement.






	•	 	Sublicensees are restricted with respect to
rights to assign in equivalent terms to those
set out in Clause 15 and any further
sublicensing must be subject to the terms of
Clause 2.4.





Royalty Payment Obligation (Sections 3.2.1 and 3.3)





	•	 	Royalties of [**]% of Net Sales of Royalty
Licensed Products in the Field are payable to
CRT.






	•	 	If at any time prior to or during the period
for the payment of royalties under the CRT
Agreement in relation to any particular
territory, a Sub-licensee elects in its
reasonable opinion to take a license from a
Third Party to any Blocking IP to develop,
make, sell, or otherwise dispose of Licensed
Products, the royalties set forth in Clause
3.2.1 shall be reduced by [**]% of the amount
paid to such Third Party to access said
Blocking IP. In no event shall the royalty
payable to CRT be reduced below [**]%.





Royalty Reports and Payment (Sections 4.2.1 and 5.1)





	•	 	Royalty payments are required to be made to CRT
within 30 days of the end of the Quarter in
which sales of the relevant Licensed Products
took place.






	•	 	Following the earlier of first commercial sale
of a Licensed Product in the Field by Alnylam
or its Affiliate or the grant of a Sub-license,
Alnylam is required to prepare an annual
statement showing all monies due to CRT under
the CRT Agreement for the previous calendar
year, on a country by country basis. The
statement shall include the number of units of
each Royalty Licensed Product sold in each
country in which sales occurred, and shall be
submitted to CRT within 60 Business Days of
March 31st of each year. If CRT gives notice
pursuant to the CRT Agreement that it does not
accept the statement, Alnylam shall make
available to an independent accountant all
books and records required for the purpose of
certifying such statement.





Books and Records (Section 5.2)





	•	 	Sub-licensees are required to keep true and
accurate records and books of account
containing all data necessary for calculating
amounts payable to CRT. Such records and books
of account shall be kept for 5 years following
the end of the calendar year to which they
relate, and shall, upon reasonable notice
having been given by CRT, be open at all
reasonable times on Business Days for
inspection by an independent firm of
accountants.




Page 9 of 37, Schedule D-2









 











Diligence and Reporting (Article 6)





	•	 	Alnylam shall use reasonable efforts to
develop, make, market, sell, and otherwise
dispose of Licensed Products in all therapeutic
areas within the Field and market each Licensed
Product in the Field throughout the United
States, Europe and Japan.






	•	 	If CRT believes that Alnylam has failed to meet
the diligence requirements set forth in Clause
6, but Alnylam fails to reestablish diligence
within [**] of receipt of notice from CRT,
CRT’s remedy is limited to, at CRT’s
discretion, termination of Alnylam’s license
under the CRT Patent Rights in the particular
territory or therapeutic area or, with respect
to Clause 6.2, indication within the cancer
therapeutic area for which Alnylam has failed
to meet the diligence requirements. For the
sake of clarity, should Alnylam’s license be
terminated in respect of a therapeutic area or
territory pursuant to Clause 6.3, CRT shall be
free to offer such therapeutic area or
territory to a potential licensee.






	•	 	Within 30 days of the end of each Year, Alnylam
shall provide CRT with a written report of the
steps taken by Alnylam, its Affiliates and
Sub-licensees to comply with the performance
obligations of Clause 6.1 and Clause 6.2.
Alnylam’s annual statement shall also include a
detailed description of therapeutic areas and
territories under development and an overview
of Alnylam’s development plans for the
forthcoming year (itself or through Affiliates
or Sub-licensees).






	•	 	If Alnylam intends to undertake a Phase I
Clinical Trial of any Licensed Product in the
UK, Alnylam shall, at its option, notify CRT
with the particulars of the proposed
investigation, and allow Cancer Research UK the
opportunity of conducting or procuring the
conduct of the investigation on behalf of
Alnylam or participate in such an
investigation, subject to the agreement of
terms acceptable to Alnylam, CRT and Cancer
Research UK.





Claimed Infringement (Sections 7.4 and 7.5)





	•	 	Alnylam shall, at its option and at its own
cost, defend and enforce or shall procure the
defence or enforcement of the rights under the
CRT Patent Rights. If Alnylam opts not to
defend or enforce the relevant CRT Patent
Rights, Alnylam shall grant to CRT (if CRT so
requests) any and all rights that would be
necessary for CRT to undertake the enforcement
or defence. If Alnylam is unable to grant such
rights, then it shall, at CRT’s request, grant
to CRT the right to conduct such an action in
its name. Alnylam shall provide, at CRT’s
request and CRT’s reasonable expense, such
reasonable assistance as CRT may reasonably
request in any such proceedings.




Page 10 of 37, Schedule D-2









 











Limitation of Liability (Section 8.6)





	•	 	It is agreed that CRT shall not be liable to
Alnylam’s Sub-licensees in contract, tort,
negligence, breach of statutory duty or
otherwise for any loss, damage, cost or expense
of an indirect or consequential nature
(including any economic loss or other loss of
turnover, profits, business or goodwill)
arising out of or in connection with the CRT
Agreement or the subject matter thereof.





Termination for Patent Challenge (Section 10.5)





	•	 	CRT may terminate the CRT Agreement upon 30
days’ written notice to Alnylam if Alnylam or
its Affiliate commences legal proceedings, with
the exception of interference proceedings
declared by the USPTO or any other patent
office, contesting the validity of the CRT
Patent Rights; or commences itself, or provides
any material assistance to a Third Party in
relation to, legal proceedings contesting the
ownership of the CRT Patent Rights. Any
actions taken concerning determination of
priority of invention under US patent law
between a CRT Patent Right and claims in a
patent or patent application which is owned by
or licensed by Alnylam or its Affiliate shall
not be considered a contest of validity or
ownership under Clause 10.5.






Page 11 of 37, Schedule D-2









 





STANFORD





	4.	 	Agreement between the Board of Trustees of the Leland Stanford Junior University
(“Stanford”) and Alnylam, dated September 17, 2003 (“Stanford Agreement”)





Limitations on License Grant (Articles 3 and 4)




	•	 	Alnylam’s license is limited to a license in the
Licensed Field of Use to make, have made, use,
have used, sell, have sold, import, and have
imported Licensed Product in the Licensed
Territory.
	 
	•	 	Stanford may practice the Invention and use the
Technology for its own bona fide research,
including sponsored research and collaborations.
Stanford has the right to publish any information
included in Technology and Licensed Patents.
	 
	•	 	The Stanford Agreement is subject to all of the
terms and conditions of Title 25 USC 200-204,
including an obligation that Licensed Product
sold or produced in the U.S. be “manufactured
substantially in the U.S.” Alnylam shall take
all reasonable action necessary on its part as
licensee to enable Stanford to satisfy its
obligations to the U.S. Government under Title
35.





Diligence and Reporting (Article 5)




	•	 	Alnylam is required to use all commercially
reasonable efforts and diligence to develop,
manufacture, and sell or lease Licensed Product
and to diligently develop markets for the
Licensed Product. In particular, Alnylam is
required to meet the milestones shown in Appendix
A to the Stanford Agreement, which shall satisfy
Alnylam’s diligence obligations. If Alnylam in
good faith fails to meet a milestone set forth on
Appendix A, and Alnylam fails to reestablish
diligence within [**], Stanford may terminate the
Stanford Agreement.
	 
	•	 	Stanford may terminate the Stanford Agreement if
Alnylam or a sublicensee has not sold Licensed
Product for any [**] period after Alnylam’s or a
sublicensee’s first commercial sale of Licensed
Product.
	 
	•	 	On or before September 30 of each year until
Alnylam markets a Licensed Product, Alnylam is
required to make a written annual report covering
the preceding year ending June 30, regarding
progress toward commercialization of Licensed
Product. The report must include, as a minimum,
information (e.g., summary of work completed, key
scientific discoveries, summary of work in
progress, current schedule of anticipated events
or milestones and market plans for introduction
of Licensed Product) sufficient to enable
Stanford to satisfy reporting requirements of the
U.S. Government, and for Stanford to ascertain
progress by Alnylam toward meeting the diligence
requirements of Article 5.




Page 12 of 37, Schedule D-2









 











Royalty Payment Obligation (Article 6)





	•	 	On each anniversary of the Effective Date, a
minimum yearly royalty of $[**]must be paid to
Stanford, which payments are non-refundable but
creditable against earned royalties to the extent
provided in Section 6.4.
	 
	•	 	Earned royalties of [**]% of Net Sales for
Licensed Product are payable to Stanford, subject
to the following:






	 	(i)	 	Royalty Payments are 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”).
	 
	 	(ii)	 	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 [**]% 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 [**]%.






	 	(iii)	 	Only one royalty is due on each Licensed Product, regardless of whether its
manufacture, use, importation, or sale is covered by more than one patent or patent
application included in Licensed Patents, and no further royalties will be due for use
of such Licensed Product by Alnylam or its sublicensee’s customers.






	•	 	Creditable payments under the Stanford Agreement
will be an offset against each earned royalty
payment which is required to be paid under Section
6.3 until the entire credit is exhausted.
	 
	•	 	If the Stanford Agreement is not terminated in
accordance with other provisions, royalties must
continue to be paid on all Licensed Products that
are either sold or produced under the license
granted in Article 3, whether or not such Licensed
Products are produced before the Effective Date or
sold after the Licensed Patents have expired.




Page 13 of 37, Schedule D-2









 











Certain Sublicense Terms (Sections 13.3-13.5)




	•	 	Any sublicense granted by Alnylam under the
Stanford Agreement must be subject and subordinate
to the terms and conditions of the Stanford
Agreement.
	 
	•	 	Sublicensees may not further sublicense, except
that Sublicensees may further sublicense rights
under Licensed Patents only as needed or implied
in the course of distribution or performance of
service as required for the sale to an end user of
Licensed Products.
	 
	•	 	Any sublicense will expressly include the
provisions of Articles 7, 8 and 9 for the benefit
of Stanford.
	 
	•	 	If a sublicensee desires that its sublicense
survive the termination of the Stanford Agreement,
Stanford has agreed that the sublicense will
revert to Stanford subject to the transfer of all
obligations, including the payment of royalties
specified in the sublicense, to Stanford or its
designee, if the Stanford Agreement is terminated.
	 
	•	 	Alnylam will provide Stanford in confidence a copy
of all relevant portions of any sublicenses
granted pursuant to Article 13.





Royalty Reports, Payments, and Accounting (Article 7)




	•	 	Beginning with the first sale of a Licensed
Product, Alnylam is required to make written
reports (even if there are no sales) and
earned royalty payments within 30 days after
the end of each calendar quarter. The report
must be in the form of Appendix B to the
Stanford Agreement and state the number,
description, and aggregate Net Sales of
Licensed Product during the completed calendar
quarter, and calculation of earned royalty
payment due. With each report, royalty
payments due for the completed calendar
quarter must be paid.
	 
	•	 	A written report is due within 90 days after
the license expires under Section 3.2.
Alnylam is required to continue to make
reports after the license has expired, until
all Licensed Product produced have been sold
or destroyed. Royalty payments must also
continue to be made, concurrent with the
submittal of each post-termination report.
	 
	•	 	Records must be kept and maintained for 3
years showing the manufacture, sale, use, and
other disposition of products sold or
otherwise disposed of under the license,
including general-ledger records of cash
receipts and expenses, as well as other
information sufficient to determine royalties
due, including production records, customers,
and serial numbers, and related information in
sufficient detail to enable Alnylam to
determine the royalties payable under the
Stanford Agreement.




Page 14 of 37, Schedule D-2









 






	•	 	An independent certified public accountant
selected by Stanford and acceptable to Alnylam
is permitted to examine such books and records
from time to time (but no more than once a
year) to the extent necessary to verify the
royalty and termination reports as detailed in
the Stanford Agreement.





Negation of Warranties (Article 8)




	•	 	Stanford has represented and warranted to
Alnylam that, to the best of Stanford’s OTL
knowledge, Stanford is the sole owner of
Stanford Licensed Patents and has the right to
enter into the Stanford Agreement and to grant
the rights and licenses set forth therein.
	 
	•	 	Notwithstanding the foregoing, nothing in the
Stanford Agreement or any sublicense agreement
shall be construed as:






(i) Stanford’s warranty or representation as to the validity or scope of any Licensed
Patent;




(ii) A warranty or representation that anything made, used, sold, or otherwise disposed of
under any license granted under the Stanford Agreement or any sublicense agreement is or
will be free from infringement of patents, copyrights, and other rights of third parties;




(iii) An obligation to bring suit against third parties for infringement, except as
described in Article 12 of the Stanford Agreement;




(iv) Granting by implication, estoppel, or otherwise any licenses or rights under patents
or other rights of Stanford or other persons other than Licensed Patents, regardless of
whether the patents or other rights are dominant or subordinate to any Licensed Patents; or




(v) An obligation to furnish any technology or technological information.




Except as expressly set forth in the Stanford Agreement, it is acknowledged and agreed that
Stanford makes no representations and extends no warranties of any kind, either express or
implied. There are no express or implied warranties of merchantability or fitness for a
particular purpose, or that Licensed Products will not infringe any patent, copyright,
trademark, or other rights, or any other express or implied warranties.




	•	 	Nothing in the Stanford Agreement or any sublicense
agreement grants any sublicensee any express or
implied license or right under or to U.S. Patent
4,656,134 entitled “Amplification of Eucaryotic
Genes” or any patent application corresponding
thereto.




Page 15 of 37, Schedule D-2









 











Indemnification and Insurance (Article 9)




	•	 	Alnylam is required to indemnify, hold harmless,
and defend Stanford and Stanford Hospitals and
Clinics, and their respective trustees, officers,
employees, students, and agents against all claims
for death, illness, personal injury, property
damage, and improper business practices arising out
of the manufacture, use, sale, or other disposition
of Invention, Licensed Patents, Licensed Products,
by Alnylam or any sublicensee, or their customers
except to the extent such claims are due to the
gross negligence or willful misconduct of Stanford.
Upon notification to Alnylam in writing of any
such claim, Alnylam shall manage and control, at
its own expense, the defense of such claim and its
settlement. Alnylam agrees not to settle any such
claim against Stanford without Stanford’s written
consent where such settlement would include any
admission of liability on the part of Stanford,
where the settlement would impose any restriction
on the conduct by Stanford of any of its
activities, or where the settlement would not
include an unconditional release of Stanford from
all liability for claims that are the subject
matter of such claim.
	 
	•	 	Subject to Section 9.1, neither Stanford nor
Alnylam shall be liable to each other for any loss
profit, expectation, punitive or other indirect,
special, consequential, or other damages
whatsoever, in connection with any claim arising
out of or related to the Stanford Agreement whether
grounded in tort (including negligence), strict
liability, contract, or otherwise.
	 
	•	 	Alnylam shall at all times comply, through
insurance or self-insurance, with all statutory
workers’ compensation and employers’ liability
requirements covering all employees with respect to
activities performed under the Stanford Agreement.
	 
	•	 	Alnylam shall maintain, during the term of the
Stanford Agreement, Comprehensive General Liability
Insurance, including Product Liability Insurance
prior to commercialization, with a reputable and
financially secure insurance carrier to cover the
activities of Alnylam and its sublicensees. Upon
initiation of human clinical trials of any Licensed
Product, such insurance will provide minimum limits
of liability of Five Million Dollars and will
include Stanford and Stanford Hospitals and
Clinics, and their respective trustees, directors,
officers, employees, students, and agents as
additional insureds. Insurance will be written to
cover claims incurred, discovered, manifested, or
made during or after the expiration of the Stanford
Agreement and must be placed with carriers with
ratings of at least A- as rated by A.M. Best.
Alnylam will furnish a Certificate of Insurance
evidencing primary coverage and additional insured
requirements and requiring thirty (30) days prior
written notice of cancellation or material change
to Stanford. Alnylam will advise Stanford, in
writing, that it maintains excess liability
coverage (following form) over primary insurance
for at least the minimum limits set forth above.
All insurance of Alnylam will be primary coverage;
insurance of Stanford and Stanford Hospitals and
Clinics will be excess and noncontributory.




Page 16 of 37, Schedule D-2









 











Marking (Article 10)




	•	 	Before the issuance of Licensed Patents, Licensed
Products made, sold, or otherwise disposed of under
the license grant must be marked with the words
“Patent Pending,” and following the issuance of one
or more patents, with the numbers of the Licensed
Patents.





Use of Stanford Names and Marks (Article 11)




	•	 	Stanford’s prior written consent is required for
the use of its name or the names of faculty,
students, employees or, or any trademark, service
mark, trade name, or symbol of Stanford or Stanford
Hospitals and Clinics, or any that is associated
with any of them. Any use of Stanford’s name will
be limited to statements of fact and will not imply
endorsement of Alnylam’s products or services.




Page 17 of 37, Schedule D-2









 











ISIS





	5.	 	Strategic Collaboration & License Agreement between Isis Pharmaceuticals, Inc.
(“Isis”), and Alnylam, dated March 11, 2004, as supplemented or amended by letter
agreements dated March 9, 2004 (as amended by letter agreement dated October 28, 2005), March
11, 2004, and June 10, 2005 (as amended, “Isis Agreement”)





Limitations on License Grant (Section 5.1)




	•	 	Alnylam’s licenses are limited to a license to research, develop, make, have made, use, import, offer to
sell and sell Double Stranded RNA and Double Stranded RNA Products.
	 
	•	 	The license excludes any right to practice the Isis Excluded Technology.
	 
	•	 	Isis retains its rights in the Isis Patent Rights and in the Joint Patents (x) exclusively for the Isis
Exclusive Targets and (y) exclusively for the Isis Encumbered Targets.
	 
	•	 	Licenses to Isis Patent Rights that are joint patents with Third Parties (i.e., invented by one or more
Isis inventors and one or more non-Isis inventors) are licensed subject to the retained rights of any
non-Isis inventors and their assignees and licensees. Any such retained rights of non-Isis inventors and
their assignees and licensees existing as of the Effective Date are set forth in Exhibit 5.3(c) attached
to the Addendum Transmittal to the Isis Agreement.
	 
	•	 	Licenses to Isis Patent Rights that are subject to contractual obligations between Isis and Third Parties
in effect as of the Effective Date are licensed subject to the restrictions and other terms described in
Exhibit 5.3(d) attached to the Addendum Transmittal to the Isis Agreement.
	 
	•	 	The license to Licensed Know-How under the Isis Agreement is subject to the non-disclosure obligations
set forth in Article 12 of the Isis Agreement.





Certain Sublicense Terms (Sections 5.2, 5.3 and 14.4)




	•	 	Alnylam cannot sublicense its right to grant
Naked Sublicenses under the Isis Agreement
except that Alnylam may permit its
sublicensees to grant further sublicenses in
connection with an Alnylam Product.
	 
	•	 	The rights of any sublicensee under any
permitted sublicense granted in accordance
with Section 5.2 will survive the termination
of the Isis Agreement.





Royalty Payment Obligations (Section 7.2)




	•	 	Royalties are payable to Isis on sales of Alnylam
Products, equal to [**]% of Net Sales.




Page 18 of 37, Schedule D-2









 






	•	 	The royalty may be reduced 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 (as defined in the Isis
Agreement); 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.





Payment Terms (Section 9.1)




	•	 	Royalties payable under the Isis Agreement are
payable on a quarterly basis within 45 days after
the end of each calendar quarter. Alnylam is
required to provide Isis with a report setting forth
(i) gross sales of Alnylam Products by Alnylam, its
Affiliates and sublicensees, (ii) all deductions
from such gross sales taken in calculating Net
Sales, (iii) Net Sales of Alnylam Products by
Alnylam, its Affiliates and sublicensees, (iv)
royalties payable based on such Net Sales and (v)
all other information relevant to the calculation of
such royalties, on a product-by-product and
country-by-country basis, for each calendar quarter
within [**] after the end of such calendar quarter.




Page 19 of 37, Schedule D-2









 











MIT





	6.	 	Amended and Restated Exclusive Patent License Agreement between Massachusetts Institute of
Technology (“MIT”) and Alnylam, dated May 9, 2007 (“MIT Agreement”)





Limitations on License Grant (Sections 2.1 and 2.5)




	•	 	Alnylam’s license is limited to a license to
develop, make, have made, use and import
Library Products and Licensed Processes to
develop, make, have made, use, sell, offer to
sell, lease, and import Licensed Products in
the Field in the Territory and to develop and
perform Licensed Processes in the Field in the
Territory.
	 
	•	 	Alnylam may permit third parties (i) to use
Library Products and Licensed Processes for the
purpose of research with academic or nonprofit
institutions and contract research, including
for the conduct of clinical trials of a
Licensed Product, and (ii) to sell Licensed
Products under an agency, consignment or
equivalent arrangement, wherein such rights are
not sublicense rights.
	 
	•	 	Alnylam does not have the right to sell or
offer for sale the Library Products separately
from a sale or offer for sale of a Licensed
Product.
	 
	•	 	MIT retains the right to practice under the
Patent Rights for research, teaching, and
educational purposes.
	 
	•	 	The U.S. federal government retains a
royalty-free, non-exclusive, non-transferable
license to practice any government-funded
invention claimed in any Patent Rights as set
forth in 35 USC 201-211, and the regulations
promulgated thereunder, as amended, or any
successor statutes or regulations.
	 
	•	 	The Patent Rights shall not be asserted against
non-for-profit research institutions that
practice the Patent Rights for research funded
by (i) the institutions themselves, (ii)
not-for profit foundations, or (iii) any
federal, state or municipal government. If
Alnylam wants to assert the Patent Rights
against not-for-profit research institutions it
may only do so if the infringement activity of
the not-for-profit research institution was
performed in the fulfillment of research
sponsored by a for-profit entity and the
assertion of infringement must be limited to
those specific activities.





Certain Sublicense Terms (Section 2.3)




	•	 	Alnylam may grant sublicenses under
commercially reasonable terms and conditions
during the Exclusive Period.
	 
	•	 	The sublicense must incorporate terms and
conditions sufficient to enable Alnylam and its
Affiliates to comply with the MIT Agreement.
Such sublicenses




Page 20 of 37, Schedule D-2









 












	 	 	shall also include provisions to provide that if Sublicensee brings a Patent
Challenge against MIT (except as required under a court order or subpoena),
Alnylam may terminate the sublicense.
	 
	•	 	Alnylam shall promptly furnish MIT with a fully
signed photocopy of any sublicense agreement, which
copy may be redacted except with respect to terms
directly relevant to Alnylam’s obligations under
the MIT Agreement.
	 
	•	 	Upon termination of the MIT Agreement, any
Sublicensee not then in default shall have the
right to seek a license from MIT, and MIT agrees to
negotiate such licenses in good faith under
reasonable terms and conditions.





U.S. Manufacturing Requirement (Section 2.4)




	•	 	Library Products, whether or not part of Licensed
Products, used or sold in the U.S. shall be
manufactured substantially in the U.S.





Diligence and Reporting (Sections 3.1 and 3.2)




	•	 	Sublicensees are required to use diligent efforts
to develop Library Products and Licensed Products
and to introduce Licensed Products into the
commercial market; thereafter Sublicensees are
required to make Licensed Products reasonably
available to the public. Specifically, the
following obligations must be fulfilled:






(i) Written reports are due within [**] days after the end of each calendar year on the
progress of efforts during the immediately preceding calendar year to develop and
commercialize Licensed Products. Such reports shall include the number of [**], a
description of [**], and the [**] that have been tested. The report shall also contain a
discussion of intended efforts and sales projections for the year in which the report is
submitted.




(ii) Within [**] after the Effective Date, [**] shall be evaluated for use in [**] of RNAi
Products.




(iii) Prior to [**], at least [**] shall be advanced to [**] studies in support of [**] for
[**] studies.




(iv) Filing of [**] for Licensed Product [**] by [**].




(v) Commencement of [**] for a Licensed Product within [**] for such Licensed Product.




(vi) First Commercial Sale of a Licensed Product within [**] for each such Licensed
Product.




	•	 	If any Sublicensee is determined to have failed to fulfill any obligation under Sections
3.1(a) and 3.1(c) — (g), MIT may treat such failure as a material breach in




Page 21 of 37, Schedule D-2









 












	 	 	accordance with Section 12.3(b), subject to any mutually-agreed upon changes to
such diligence requirements pursuant to Section 3.2.





Royalty Payment Obligations (Section 4.1)




	•	 	Royalties of [**]% of Net Sales of Licensed Products
and Licensed Processes are due within [**] days of
the end of each calendar quarter.
	 
	•	 	If Alnylam or an Affiliate is legally required to
pay royalties to one or more third parties in order
to obtain a license or similar right necessary to
practice the Patent Rights, Alnylam shall be
entitled to a credit up to [**] percent ([**]%) of
the amounts payable to such third parties against
the royalties due to MIT for the same Reporting
Period; provided, however, that (i) in no event will
royalties due to MIT under Section 4.1(c), when
aggregated with any other offsets and credits
allowed under the MIT Agreement, be less than [**]%
of Net Sales in any Reporting Period, and (ii)
royalties due to third parties with respect to [**]
patents (see Appendix B to MIT Agreement) shall not
qualify for purposes of the offset against royalties
under Section 4.1(d).
	 
	•	 	Multiple royalties are not due if the manufacture,
use, lease, or sale of any Licensed Product or the
performance of any Licensed Process is covered by
more than one of the Patent Rights.





Royalty Payment and Reports (Sections 5.1 and 5.2)




	•	 	Royalties are payable for each Reporting Period
and are due to MIT within [**] days of the end
of each Reporting Period.
	 
	•	 	Prior to the First Commercial Sale of a Licensed
Product or first commercial performance of a
Licensed Process, Alnylam is required to deliver
annual reports within [**] days of the end of
each calendar year, containing information
concerning the immediately preceding year, as
further described in Section 5.2.
	 
	•	 	The date of First Commercial Sale of a Licensed
Product or commercial performance of a Licensed
Process must be reported to MIT within [**] days
of its occurrence.
	 
	•	 	After First Commercial Sale of a Licensed
Product or commercial performance of a Licensed
Process, reports are required to be delivered to
MIT within [**] days of the end of each
Reporting Period containing information
concerning the immediately preceding Reporting
Period, as further described in Section 5.2.
	 
	•	 	Section 5.2 states that reports must include,
among other things, information concerning the
number of Licensed Products sold, leased, or
distributed, the number of [**], a description
of Licensed Processes performed in each country
as may be pertinent to a royalty accounting,
gross price charged in each country, calculation
of Net Sales in each country (including a
listing of applicable




Page 22 of 37, Schedule D-2









 






	 	 	deductions), total royalty payable on Net Sales, the exchange rate used for
conversion, [**] categorized by rights relating to [**], and the [**]. If no
amounts are due to MIT for any Reporting Period, the report shall so state.





Recordkeeping and Audit Rights (Section 5.4)




	•	 	Sublicensees are required to maintain complete and
accurate records reasonably relating to (i) the
rights and obligations under the MIT Agreement,
and (ii) any amounts payable to MIT in relation to
the MIT Agreement, which records shall contain
sufficient information to permit MIT to confirm
the accuracy of any reports and payments delivered
to MIT and compliance in other respects with the
MIT Agreement. Such records shall be retained for
at least [**] years following the end of the
calendar year to which they pertain, during which
time a certified public accountant selected by MIT
may inspect such records upon advance notice and
during normal business hours solely for the
purpose of verifying any reports and payments or
compliance in other respects with the MIT
Agreement.





Claimed Infringement (Section 7.3)




	•	 	If a Patent Challenge is brought against Alnylam
by a third party, MIT, at its option, shall have
the right within 20 days after commencement of
such action to take over the sole defense of the
action. If MIT does not exercise this right,
Alnylam may take over the sole defense of such
action, subject to Sections 7.4 and 7.5.





Compliance with Laws (Sections 11.1 and 11.2)




	•	 	Alnylam is required to use reasonable commercial
efforts to comply with all commercially material
laws and regulations relating to development,
manufacture, use, and sale of Library Products,
Licensed Products, and Licensed Processes.
	 
	•	 	Sublicensees are required to comply with all
United States laws and regulations controlling the
export of certain commodities and technical data.





Non-Use of MIT Name (Section 11.3)




	•	 	Sublicensees are prohibited from using the
name of “Massachusetts Institute of
Technology”, “Lincoln Laboratory” or any
variation, adaption or abbreviation thereof,
or of any of MIT’s trustees, officers,
faculty, students, employees or agents, or
any trademark owned by MIT, or any terms of
the MIT Agreement in any promotional material
or other public announcement or disclosure
without MIT’s prior written consent, which
may be withheld in MIT’s sole discretion.





Marking of Library and Licensed Products (Section 11.4)




	•	 	To the extent commercially feasible and
consistent with prevailing business
practices, Sublicensees are required to mark
all Library Products (whether or not sold as
part of Licensed Products) that are
manufactured or sold under the MIT




Page 23 of 37, Schedule D-2









 






	 	 	Agreement with the number of each issued patent under the Patent Rights that
applies to such Library Product.





Termination for Patent Challenge (Section 12.5)




	•	 	If a Sublicensee brings a Patent Challenge
(except as required under a court order or
subpoena), MIT may send a written demand to
Alnylam to terminate the sublicense. If Alnylam
fails to so terminate such sublicense within 30
days of MIT’s demand, MIT may immediately
terminate the MIT Agreement and/or the license
granted thereunder.





Effect of Early Termination (Section 12.6)




	•	 	Upon any early termination of the MIT Agreement,
Sublicensees may complete and sell any
work-in-progress and inventory of Licensed
Products that exist as of the date of
termination, provided that such Sublicensees
shall continue to pay applicable royalties, and
shall complete and sell all work-in-progress and
inventory of Licensed Products within six months
of the date of termination.




Page 24 of 37, Schedule D-2









 











TEKMIRA





	7.	 	License and Collaboration Agreement between Tekmira Pharmaceuticals Corporation (formerly
INEX Pharmaceuticals Corporation) (“Tekmira”) and Alnylam, dated January 8, 2007
(“Tekmira Agreement”)





Limitations on License Grant (Sections 6.1 and 6.4)




	•	 	Alnylam’s licenses are limited to a license to
Develop, Manufacture and Commercialize Alnylam
Royalty Products in the Alnylam Field and in
and for the Territory.
	 
	•	 	Section 6.4 states that all licenses and other
rights granted to Alnylam with respect to INEX
Technology under Article 6 are subject to (i)
the rights granted to Tekmira, and to Tekmira’s
ability to grant rights to Alnylam under the
INEX In-Licenses, and (ii) the provisions of
the UBC Sublicense Documents governing or
relating to the rights sublicensed to Alnylam.





Certain Sublicense Terms (Sections 6.2 and 14.4(b))




	•	 	Alnylam may grant sublicenses to Third Parties
to Develop, Manufacture and Commercialize
Alnylam Royalty Products; provided, that (i)
with respect to any sublicense of Alnylam’s
rights under Section 6.1.1(a) in respect of any
Alnylam Royalty Product for which Tekmira has
not initiated Manufacturing of batches of
finished dosage form for GLP toxicology
studies, Alnylam is required to use
Commercially Reasonable Efforts to facilitate a
business discussion between Tekmira and
Alnylam’s Sublicensee (other than Tekmira or
its Affiliates) with respect to the provision
of manufacturing services by Tekmira to such
Sublicensee; and (ii) with respect to any
sublicense of Alnylam’s rights under Section
6.1.1(a) in respect of any Alnylam Royalty
Product for which Tekmira has initiated
Manufacturing of batches of finished dosage
form for GLP toxicology studies, Alnylam’s
Sublicensee (other than Tekmira or its
Affiliates) shall be required to obtain its
requirements of the bulk finished dosage form
of such Alnylam Royalty Product from Tekmira on
the terms set forth in Article 5, however,
Tekmira agrees to negotiate in good faith with
Alnylam and/or Alnylam’s Sublicensee either an
alternate or modified supply arrangement or the
release of such Sublicensee from such exclusive
supply obligation in return for reasonable
compensation to Tekmira.
	 
	•	 	Each license and/or sublicense granted by
Alnylam pursuant to Section 6.2.2 must be
subject and subordinate to the terms and
conditions of the Tekmira Agreement and must
contain terms and conditions consistent with
those in the Tekmira Agreement, including,
without limitation, the requirements of Section
6.4. Commercializing Sublicensees are required
to: (i) submit applicable sales or other
reports consistent with those required under
the Tekmira Agreement; (ii) comply with an
audit requirement similar to the requirement
set forth in Section 7.6; and (iii) comply with
the confidentiality and non-use provisions of
Article 8 with




Page 25 of 37, Schedule D-2









 






	 	 	respect to both Parties’ Confidential Information. If Alnylam becomes aware of
a material breach of any sublicense by a Third Party Sublicensee, Alnylam is
required to promptly notify Tekmira of the particulars of same and take all
Commercially Reasonable Efforts to enforce the terms of such sublicense.
	 
	•	 	Any sublicense granted by Alnylam shall survive
termination of the licenses or other rights granted
to Alnylam under the Tekmira agreement in accordance
with Article 6, and be assumed by Tekmira as long as
(i) the Sublicensee is not then in breach of its
license and/or sublicense agreement, (ii) the
Sublicensee agrees in writing to be bound to Tekmira
as a licensor under the terms and conditions of the
license and/or sublicense agreement, and (iii) the
Sublicensee agrees in writing that in no event shall
Tekmira assume any obligations or liabilities, or be
under any obligation or requirement of performance,
under any such license and/or sublicense extending
beyond Tekmira’s obligations and liabilities under
the Tekmira Agreement.





Diligence and Annual Reports (Section 6.7)




	•	 	Alnylam is required to use Commercially Reasonable
Efforts to Develop and Commercialize an Alnylam
Royalty Product in the Territory.
	 
	•	 	Alnylam is required to deliver to Tekmira an annual
report, due no later than December 31 of each
Contract Year during the Agreement Term, which
summarizes the major activities undertaken by
Alnylam during the preceding twelve (12) months to
Develop and Commercialize its Royalty Products in
the Territory in the applicable field. The report
will include an outline of the status of any such
Royalty Products in clinical trials and the
existence of any sublicenses with respect to such
Royalty Products which have not been previously
disclosed.





Compliance with Laws (Section 6.8)




	•	 	Alnylam is required to conduct its obligations under
the Tekmira Agreement in accordance with all
applicable laws, rules and regulations, including
without limitation current governmental regulations
concerning good laboratory practices, good clinical
practices and cGMP, as applicable.





Royalty Payment Obligations (Sections 7.3 and 7.4; Section 6.1.3)




	•	 	Royalties are payable to Tekmira on Net
Sales of Alnylam Royalty Products in the
Territory as follows:





	 	 	 
	Aggregate Calendar Year Net Sales of the	 	Royalty
	Alnylam Royalty Product in the Territory	 	(as a percentage of Net Sales)
	on the first $[**] — $[**]
	 	[**]%
	On the subsequent $[**] — $[**]
	 	[**]%
	Greater than $[**]
	 	[**]%






Page 26 of 37, Schedule D-2









 






	•	 	Notwithstanding the foregoing, in the event that an Alnylam Royalty Product is comprised of
a formulation Covered by or employing any Third Party Liposome Patent Rights then subject to
the terms and conditions of the Tekmira Agreement, royalties on Net Sales of Alnylam Royalty
Products in the Territory shall be calculated as follows:





	 	 	 
	Aggregate Calendar Year Net Sales of the	 	Royalty
	Alnylam Royalty Product in the Territory	 	(as a percentage of Net Sales)
	on the first $[**] — $[**]
	 	[**]%
	On the subsequent $[**] — $[**]
	 	[**]%
	Greater than $[**]
	 	[**]%







	•	 	Royalties on Alnylam Royalty Products at the rates set forth above are payable on a
country-by-country and product-by-product basis commencing on the date of First Commercial
Sale of such Alnylam Royalty Product in a country and continuing until the later of the
expiration of the last Valid Claim Covering the Manufacture or Commercialization of such
Alnylam Royalty Product in the country of sale, subject to the following conditions:






	 	(i)	 	only one royalty shall be due with respect to the same unit of Alnylam
Royalty Product;
	 
	 	(ii)	 	no royalties shall be due upon the sale or other transfer among a Party and
its Related Parties, but in such cases the royalty shall be due and calculated upon
such Party’s or its Related Party’s Net Sales to the first independent Third Party;
	 
	 	(iii)	 	no royalties shall accrue on the sale or other disposition of the Alnylam
Royalty Product by a Party or its Related Parties for use in a clinical study
sponsored by such Party or under an IND prior to Regulatory Approval of such Alnylam
Royalty Product in the applicable jurisdiction; and
	 
	 	(iv)	 	no royalties shall accrue on the disposition of an Alnylam Royalty Product in
reasonable quantities by a Party or its Related Parties as samples (promotion or
otherwise) or as donations (for example, to non-profit institutions for a
non-commercial purpose).






	•	 	If the Development, Manufacture or Commercialization of an Alnylam Royalty Product in
accordance with the Tekmira Agreement infringes Necessary Third Party IP, the applicable
royalties in each country in the Territory payable to Tekmira will be reduced by [**] percent
([**]%) of the amount paid by Alnylam of any royalties under all licenses of such Necessary
Third Party IP that are reasonably allocable to the Development, Manufacture and
Commercialization of the Alnylam Royalty Product in or for such country in the Alnylam Field;
provided, however, that, on a country-by-country basis, in no event shall the
royalties payable to Tekmira with respect to Net Sales in a country for any Calendar Quarter
be reduced below the greater of: (i) [**] percent ([**]%) of the




Page 27 of 37, Schedule D-2









 






	 	 	royalties otherwise payable to Tekmira for such Calendar Quarter as calculated
pursuant to Section 7.3, and (ii) the amount of any royalties payable under the
In-licenses of Alnylam that are reasonably allocable to the Commercialization
or Manufacture of the Alnylam Royalty Product in or for such country in the
Field (where the royalties are calculated by adding one percentage point to the
applicable royalty rate(s) in the applicable In-License(s)).
	 
	•	 	In the event that Alnylam is required to make any
payments to UBC in respect of the INEX Technology
or INEX Collaboration IP licensed to Alnylam
pursuant to the UBC Sublicense Agreement, then
Alnylam shall be entitled to offset any amounts
payable by Alnylam to Tekmira under the Tekmira
Agreement by the amount of Alnylam’s payments to
UBC until such amounts have been credited in
full.





Royalty Reports; Payment (Section 7.3.4)




	•	 	During the Agreement Term, commencing upon the
First Commercial Sale of an Alnylam Royalty
Product, Alnylam is required to provide to
Tekmira a quarterly written report showing the
quantity of Alnylam Royalty Products sold in each
country (as measured in saleable units of
product), the gross sales of such Alnylam Royalty
Product in each country, total deductions for
such Alnylam Royalty Product for each country
included in the calculation of Net Sales, the Net
Sales in each country of such Alnylam Royalty
Product subject to royalty payments sold by
Alnylam and its Related Parties during the
reporting period and the royalties payable with
respect to such Alnylam Royalty Product under the
Tekmira Agreement. Quarterly reports are due no
later than the twenty-fifth (25th) day following
the close of each Calendar Quarter. Royalties
shown to have accrued by each royalty report are
due and payable on the date such royalty report
is due.
	 
	•	 	Complete and accurate records must be kept in
sufficient detail to enable the royalties and
other payments payable under the Tekmira
Agreement to be determined.





Audit Rights (Section 7.6)




	•	 	Upon the written request of Tekmira and not more
than once in each Calendar Year, a Sublicensee
must permit an independent certified public
accounting firm of nationally recognized standing
selected by Tekmira and reasonably acceptable to
such Sublicensee to have access during normal
business hours to such of the records of
Sublicensee as may be reasonably necessary to
verify the accuracy of the royalty and other
financial reports required to be delivered under
the Tekmira Agreement for any Calendar Year
ending not more than [**] months prior to the
date of such request, for the sole purpose of
verifying the basis and accuracy of payments made
under Article 7.




Page 28 of 37, Schedule D-2









 











Claimed Infringement (Section 10.4)




	•	 	Alnylam may, if it so desires, defend any
Infringement Claim brought against either Alnylam
or Tekmira or its Affiliates or Sublicensees
arising out of the Development, Manufacture or
Commercialization of any Alnylam Royalty Product
in the Alnylam Field in the Territory. Alnylam
must keep Tekmira informed, and from time to time
consult with Tekmira regarding the status of any
such claims and provide Tekmira with copies of
all documents filed in, and all written
communications relating to, any suit brought in
connection with such claims. Tekmira also has
the right to participate and to be presented in
any such claim or related suit. If Alnylam fails
to exercise its right to assume such defense
within thirty (30) days following written notice
of such Infringement Claim, Tekmira has the sole
and exclusive right to control the defense of
such Infringement Claim.






	Patent Certification (Section 10.8)






	•	 	To the extent required or permitted by law,
Alnylam is required to use Commercially
Reasonable Efforts to maintain with the
applicable Regulatory Authorities during the
Agreement Term correct and complete listings of
applicable Patent Rights for Alnylam Royalty
Products being commercialized, including all so
called “Orange Book” listings required under the
Hatch-Waxman Act.





Termination for Patent Challenge (Section 11.5)




	•	 	If any Sublicensee asserts in any court or other
governmental agency of competent jurisdiction
that an INEX Patent Right or a Patent Right
Controlled by Tekmira by virtue of the INEX-UBC
License Agreement and sublicensed to Alnylam
pursuant to the UBC Sublicense (in either case,
an “INEX Patent”) is invalid, unenforceable, or
that no issued Valid Claim embodied in such INEX
Patent excludes a Third Party from making, having
made, using, selling, offering for sale,
importing or having imported an Alnylam Royalty
Product in such jurisdiction, then Tekmira shall
be entitled, upon written notice to Alnylam, to
terminate all licenses granted to Alnylam for
such Alnylam Royalty Product(s) covered by such
INEX Patent that is under challenge in the
applicable jurisdiction; provided however, that
Tekmira shall not terminate such license if
within thirty (30) days of Alnylam’s receipt of
Tekmira’s notification under the Tekmira
Agreement:






	 	(i)	 	it is confirmed by written notice to Tekmira that Sublicensee no longer
intends to challenge the validity or enforceability of such INEX Patent; or
	 
	 	(ii)	 	documentation is provided to Tekmira to confirm Sublicensee’s withdrawal of
its filing, submission, or other process commenced in any




Page 29 of 37, Schedule D-2









 






	 	 	 	court or other governmental agency of competent jurisdiction to challenge the
validity or enforceability of any such INEX Patent.




Page 30 of 37, Schedule D-2









 











TEKMIRA/UBC





	8.	 	The Sublicense Agreement between Tekmira and Alnylam, dated January 8, 2007 (“UBC
Sublicense Agreement”)





Limitations on License Grant (Sections 3.1 and 16.1)




	•	 	Alnylam’s sublicense is limited to a license to
research, develop, manufacture, have made,
distribute, import, use, sell and have sold
Products in and for the Alnylam Field.
	 
	•	 	University retains the right to use the
Technology without charge in any manner
whatsoever for non-commercial research,
scholarly publication, educational or other
non-commercial use.
	 
	•	 	The UBC Sublicense Agreement and the license
granted thereunder terminates on the expiration
of a term of 20 years from the Date of
Commencement or the expiration of the last
Patent, whichever event shall last occur,
unless earlier terminated as a result of the
termination of Alnylam’s rights to INEX
Technology (as that term is defined in the
Tekmira Agreement) under the Tekmira Agreement.
Upon expiry of the UBC Sublicense Agreement,
the licenses become perpetual, fully-paid up,
worldwide licenses to use and sublicense the
Technology and to manufacture, have made,
distribute, import, use and sell Products in
the Alnylam Field, without further payment of
Royalties to Tekmira.





Certain Sublicense Terms (Section 4.2)




	•	 	Alnylam may grant sublicenses to third parties
with respect to the Technology upon written
notice to Tekmira and the University, provided
that the Sublicensee agree (i) to perform the
terms of the UBC Sublicense Agreement as if
such Sublicensee were Alnylam under the UBC
Sublicense Agreement; (ii) to represent that
Sublicensee is not, as of the effective date of
the relevant sublicense agreement, engaged in a
dispute with the University; and (iii) to be
subject to a written sublicense agreement that
contains terms consistent with “the terms of
this Agreement” described in Section 4.2(c) and
that provides that the University is a third
party beneficiary of, and has the right to
enforce directly against the sublicensee, the
terms in such sublicense agreement that are
consistent with the terms listed in Section
4.2(c)(ii).
	 
	•	 	Section 4.2(c)(ii) states that the “terms of
this Agreement” means (i) the terms set forth
in the UBC Sublicense Agreement; (ii) terms in
such sublicense agreement consistent with
Sections 1.3, 1.7, 2.1, 2.2, 2.3, 2.4, 2.5,
2.6, 2.7, 2.8 and 2.13 of the Consent Agreement
among Alnylam, Tekmira and the University of
even date with the UBC Sublicense Agreement
(“Consent Agreement”); and (iii) other
customary and reasonable terms, including but
not limited to terms relating to breach and
termination, that are consistent with Alnylam’s
obligations to Tekmira under the UBC Sublicense
Agreement and the Tekmira Agreement.




Page 31 of 37, Schedule D-2









 











The terms of the Consent Agreement referenced in clause (ii) above are set forth below:




	 	1.3	 	Alnylam Consent to Certain Disclosures to the University. Alnylam consents
to Tekmira disclosing to the University: (i) Alnylam’s report to Tekmira made pursuant
to Article 10.8 of the UBC Sublicense Agreement; and (ii) copies of Alnylam’s
sublicenses provided to Tekmira pursuant to Article 4.3 of the UBC Sublicense
Agreement; solely for the purposes of calculation of royalties under the UBC License,
determining compliance with Section 10.8 of the License Agreement between Tekmira and
University dated July 1, 1998, as amended by an Amendment Agreement dated July 11,
2006, and a Second Amendment Agreement dated January 8, 2007 (as amended, the “UBC
License”) and determining compliance with Article 5 of the UBC Sublicense
Agreement, and the University shall use reasonable efforts to ensure that all
information provided to the University or its representatives pursuant to this Section
1.3 remains confidential and is treated as such by the University.
	 
	 	1.7	 	Rights of the University. In consideration of the University providing its
consent in the Consent Agreement, Tekmira and Alnylam agree that the University shall
be entitled to rely upon any rights provided to the University pursuant to the terms
of the UBC Sublicense Agreement, notwithstanding that the University is not a party to
the UBC Sublicense Agreement.
	 
	 	2.1	 	Limited Warranties. Alnylam and its Affiliates expressly acknowledge and
agree that:






(a) Except as expressly set out in Section 2.1(c) of the Consent Agreement,
the University makes no representations, conditions, or warranties, either express
or implied, with respect to the Technology, Improvements, Patents or any Products.
Without limiting the generality of the foregoing, the University specifically
disclaims any implied warranty, condition, or representation that the Technology,
Improvements, Patents or Products: (i) shall correspond with a particular
description; (ii) are of merchantable quality; (iii) are fit for a particular
purpose; or (iv) are durable for a reasonable period of time.




(b) Except as expressly set out in Section 2.1(c) of the Consent Agreement,
nothing in the UBC License, the Consent Agreement, or the UBC Sublicense Agreement
shall be construed as: (i) a warranty or representation by the University as to
title to the Technology, the Patents or any improvement or that anything made,
used, sold or otherwise disposed of under the license granted in the Consent
Agreement is or will be free from infringement of patents, copyrights, trademarks,
industrial design or other intellectual property rights, (ii) an obligation by the
University to bring or prosecute or defend actions or suits against third



Page 32 of 37, Schedule D-2









 







parties for infringement of patents, copyrights, trademarks, industrial
designs or other intellectual property or contractual rights, or (iii) the
conferring by the University of the right to use in advertising or publicity the
name of the University or UBC Trademarks.




(c) The University agrees that the warranty set forth in Section 7.4 of the
UBC License will inure to the benefit of Alnylam and its sublicensees. For
avoidance of doubt, such warranty is exactly as stated in the UBC License and its
inclusion in the Consent Agreement will not change its terms in any way including,
but not limited to, changing the date of such warranty from June 30, 2001.




	 	2.2	 	Disclaimer of Product Liability. Alnylam and its Affiliates expressly
acknowledge and agree that the University shall not be liable for any damages, or any
other loss, whether direct, indirect consequential, incidental, or special which
Alnylam or its Affiliates, or any further sublicense under any sublicense agreements
between Alnylam and such further sublicensee, suffer, arising from any defect, error,
fault, or failure to perform with respect to the Technology, Patents, Improvements or
any Products, even if the University has been advised of the possibility of such
defect, error, fault, or failure. Alnylam and its Affiliates acknowledge that they
have been advised by the University to undertake their own due diligence with respect
to the Technology, Patents, Improvements and Products.
	 
	 	2.3	 	Indemnification of the University. Alnylam and its Affiliates indemnify,
hold harmless and defend the University, its Board of Governors, officers, employees,
faculty, students, invitees and agents (the “UBC Indemnitees”) against any and
all claims (including all legal fees and disbursements incurred in association
therewith) arising out of the exercise of any rights under the Consent Agreement, the
UBC License or the UBC Sublicense Agreement, including, without limiting the
generality of the foregoing, against any damages or losses, consequential or
otherwise, arising from or out of the use of the Technology, Patents, Improvements or
Product(s) sublicensed under the UBC Sublicense Agreement by Alnylam or its Related
Parties, or their respective customers or end-users howsoever the same may arise. For
greater clarity, it is confirmed that, without limiting the generality of the
foregoing, the indemnification by Alnylam and its Affiliates of the UBC Indemnitees
set out in the Consent Agreement shall include an obligation to indemnify the UBC
Indemnitees against any and all subrogated claims which may be brought against the UBC
Indemnitees by any person(s) or entities (including without limitation Alnylam, its
Related Parties, their respective customers or end-users, or their respective
insurers) which may not have waived their rights of subrogation against the UBC
Indemnitees, and shall also include, without limiting any of the foregoing, an
obligation to indemnify the UBC Indemnitees against any and all claims relating to any
injury or death to any person or damage to




Page 33 of 37, Schedule D-2









 












	 	 	 	any property caused by any Product, whether claimed by reason of breach of
warranty, negligence, product defect or otherwise, and regardless of the form in
which any such claim is made.
	 
	 	2.4	 	Monetary Cap Respecting UBC License. The University’s liability, whether
under the express or implied terms of the Consent Agreement, the UBC License or the
UBC Sublicense Agreement, in tort (including negligence), or at common law, for any
loss or damage suffered by Alnylam or its Related Parties, whether direct, indirect,
special, or any other similar or like damage, to the extent that such losses or damage
may arise or does arise from any breaches of the UBC License, the Consent Agreement or
the UBC Sublicense Agreement by UBC Indemnitees, shall be limited to the sum of $[**].
	 
	 	2.5	 	Disclaimer of Consequential Losses by the University. In no event shall the
University be liable for consequential or incidental damages arising from any breach
or breaches of the UBC License, the UBC Sublicense Agreement or the Consent Agreement.
	 
	 	2.6	 	Litigation. Provided that Tekmira has obtained the University’s consent
required by Article 7 of the UBC License, Tekmira’s right to prosecute litigation in
Article 7 of the UBC License may be exercised by Alnylam pursuant to Sections 7.5 and
7.6 of the UBC Sublicense Agreement.
	 
	 	2.7	 	UBC Trademarks. Alnylam shall not use any of the University’s trademarks or
make reference to the University or its name in any advertising or publicity
whatsoever, without the prior written consent of the University, except as required by
law. Nothing in the Consent Agreement shall prevent Alnylam from making or issuing
factual statements to the public regarding its business or use of the Patent. If
Alnylam is required by law to act in contravention of this provision, Alnylam shall
provide the University with sufficient advance notice in writing to permit the
University to bring an application or other proceeding to contest the requirement.
	 
	 	2.8	 	Confidentiality of Terms. Alnylam requires of the University, and the
University agrees insofar as it may be permitted to do so at law, that the Consent
Agreement, the UBC Sublicense Agreement and each part of each of them, is confidential
and shall not be disclosed to third parties, as Alnylam claims that such disclosure
would or could reveal commercial, scientific or technical information and would
significantly harm Alnylam’s competitive position and/or interfere with Alnylam’s
negotiations with prospective sublicensees. Notwithstanding anything contained in
this Section 2.8, the parties to the Consent Agreement acknowledge and agree that the
University may identify the title of the Consent Agreement and/or the UBC Sublicense
Agreement, the parties to the Consent Agreement and/or the UBC Sublicense Agreement,
the inventors of the Technology,




Page 34 of 37, Schedule D-2









 












	 	 	 	the term of the Consent Agreement and/or the UBC Sublicense Agreement, and the
consideration actually paid to the University pursuant to the Consent Agreement
and/or the UBC Sublicense Agreement.
	 
	 	2.13	 	Alnylam Warranties. Alnylam warrants and represents to the University that:






(a) Alnylam is a corporation duly organized, existing, and in good standing
under the laws of Delaware and has the power, authority, and capacity to enter into
the Consent Agreement and to carry out the transactions contemplated by the Consent
Agreement, all of which have been duly and validly authorized by all requisite
corporate proceedings;




(b) the execution, delivery and performance by Alnylam of the Consent
Agreement and the UBC Sublicense Agreement do not contravene or constitute a
default under any provision of applicable law or its articles or by-laws (or
equivalent documents) or of any judgment, injunction, order, decree or other
instrument binding upon Alnylam; and




(c) the Consent Agreement constitutes a valid and binding agreement of
Alnylam, enforceable against Alnylam in accordance with its terms.




	•	 	Alnylam is required to furnish Tekmira with a copy of
each sublicense granted within 30 days after execution.
Any such copy may contain reasonable redactions as
Alnylam may make, provided that such redactions do not
include provisions necessary to demonstrate compliance
with the requirements of the UBC Sublicense Agreement.
If University requests of Tekmira that a less redacted
version of any sublicense be provided to University,
Alnylam agrees to discuss in good faith with Tekmira and
the University the University’s concerns.
	 
	•	 	Sublicensee is required to observe and perform similar
terms and conditions to those in the UBC Sublicense
Agreement and those terms set forth in Section 4.2(c),
including, without limitation, a restriction on the
grant of further sublicenses without notice to Tekmira
and the University.
	 
	•	 	Any sublicense granted by Alnylam under the UBC
Sublicense Agreement shall survive termination of the
licenses or other rights granted to Alnylam under the
UBC Sublicense Agreement, and be assumed by Tekmira, as
long as (i) the sublicensee is not then in breach of its
sublicense agreement, (ii) the sublicensee agrees in
writing to be bound to Tekmira as a sublicensor and to
the University under the terms and conditions of the UBC
Sublicense Agreement, and (iii) the sublicensee agrees
in writing that in no event shall Tekmira assume any
obligations or liabilities, or be under any obligation
or requirement of performance, under any such sublicense
extending beyond Tekmira’s obligations and liabilities
under the UBC Sublicense Agreement.




Page 35 of 37, Schedule D-2









 











Royalty Obligations (Section 5.0)




	•	 	The consideration for the rights granted to Alnylam to
the Technology under the UBC Sublicense Agreement, and
the consideration for the rights granted by Tekmira to
Alnylam to other technologies under the Tekmira
Agreement, is the payment by Alnylam of milestones and
royalties in accordance with the terms of Article 7 of
the Tekmira Agreement.





Claimed Infringement (Section 7.7)




	•	 	If any complaint alleging infringement or violation of
any patent or other proprietary rights is made against
Alnylam (or a sublicensee of Alnylam) with respect to
the manufacture, use or sale of Product, the following
procedure shall be adopted:






	 	(i)	 	Alnylam shall promptly notify Tekmira upon receipt of any such complaint and
shall keep Tekmira fully informed of the actions and positions taken by the
complainant and taken or proposed to be taken by Tekmira (on behalf of itself or a
sublicensee);
	 
	 	(ii)	 	all costs and expenses incurred by Alnylam (or any sublicensee of Alnylam) in
investigating, resisting, litigating and settling such a complaint, including the
payment of any award or damages and/or costs to any third party, shall be paid by
Alnylam (or any sublicensee of Alnylam, as the case may be); and
	 
	 	(iii)	 	if as a result of such suit it is decided that a Product infringes any valid
claim on a patent owned by another, Tekmira shall consider fair distribution of
Royalty Income.





Use of Trademarks (Section 10.1)




	•	 	No use of or reference to the UBC Trade-marks or the
University or its name is allowed in any advertising
or publicity whatsoever, without the prior written
consent of the University, except as required by law.





Diligence and Reporting (Section 10.2)




	•	 	Alnylam is required to use its reasonable commercial
efforts to promote, market and sell the Products and
utilize the Technology and to meet or cause to be met
the market demand for the Products and the utilization
of the Technology.
	 
	•	 	Alnylam is required to deliver to Tekmira an annual
report, due on December 31 of each year during the
term of the UBC Sublicense Agreement, which summarizes
the major activities Alnylam has undertaken in the
course of the preceding 12 months to develop and
commercialize and/or market the Technology. The
report must include an outline of the status of any
Products in clinical trials and the existence of any
sublicenses of the Technology.




Page 36 of 37, Schedule D-2









 











Compliance with Laws (Section 18.0)




	•	 	Alnylam is required to comply with all laws,
regulations and ordinances, whether Federal,
Provincial, Municipal or otherwise with respect to the
Technology and/or the UBC Sublicense Agreement.





Page 37 of 37, Schedule D-2









 





Schedule E




Pre-Existing Alliance Agreements



Copies of the following agreements, some in redacted form, have been, or shall be, made available
to Licensee as of the Effective Date:





	 	1.	 	Strategic Collaboration & License Agreement between Isis Pharmaceuticals,
Inc., and Alnylam Pharmaceuticals, Inc., dated March 11, 2004, as supplemented or
amended by letter agreements dated March 9, 2004 (as amended by letter agreement dated
October 28, 2005), March 11, 2004, and June 10, 2005
	 
	 	2.	 	License and Collaboration Agreement between Tekmira Pharmaceuticals
Corporation (formerly INEX Pharmaceuticals Corporation) and Alnylam Pharmaceuticals,
Inc., dated January 8, 2007
	 
	 	3.	 	The Research Collaboration and License Agreement, effective as of October 12,
2005, by and between Alnylam and Novartis, as amended by the Addendum Re: Influenza
Program effective as of December 13, 2005, Amendment No. 1 to such Addendum effective
as of March 14, 2006, and Amendment No. 2 to such Addendum effective as of May 5, 2006
	 
	 	4.	 	Amended and Restated Research Collaboration and License Agreement between
Merck & Co., Inc, Alnylam Pharmaceuticals, Inc. and Alnylam Holding Co., dated July 3,
2006
	 
	 	5.	 	Amended and Restated Collaboration Agreement by and between Alnylam Pharmaceuticals, Inc. and
Medtronic, Inc., dated July 27, 2007
	 
	 	6.	 	Collaboration and License Agreement by and between Alnylam Pharmaceuticals,
Inc. and Biogen Idec MA Inc., dated September 20, 2006





Page 1 of 1, Schedule E









 





Schedule F




Technology Transfer Plan




The Technology Transfer Plan outlined below between Licensee and Alnylam is designed to ensure that
all capabilities and know-how related to the discovery and development of RNAi Therapeutics are
efficiently and rapidly exchanged between both sites. The list of information and technologies to
be transferred is divided into RNAi Pharmaceutics [**] and RNAi Platform [**]. This will ensure
that both Licensee and Alnylam will have acquired the knowledge and skills required in the
development of RNAi Therapeutics from both a theoretical and practical standpoint.



The Technology Transfer Plan, as well as the Transition Services Plan (see Schedule A of Share
Purchase Agreement) will be overseen and managed by the Joint Transitional Team (JTT), as outlined
in the Share Purchase Agreement.



It is envisioned that the Technology transfer will take place in three stages:




	 	1)	 	Plan roll-out (from Execution Date to Effective Date). This stage would
involve establishing contact with technology transfer counterparts in Licensee,
Kulmbach Facility and Alnylam and begin writing SOPs. A preliminary list of Licensee,
Kulmbach Facility and Alnylam contacts is shown in Table 1; this will be finalized
during the plan roll-out period.
	 
	 	2)	 	Technology Transfer Period (as defined in Section 3.1). This stage would
involve finalization and transfer of SOPs between Licensee and Alnylam. This would
involve frequent email and videoconference interactions. Face to face meetings will
be utilized as required to ensure efficient transfer of technologies and
capabilities. Ideally all technology transfer would be completed by this end of this
phase.
	 
	 	3)	 	Additional technology transfer phase (up to [**] after end of Technology
Transfer Period). Any additional technology transfer will be performed as required.





Page 1 of 9, Schedule F









 





Table 1: Initial Proposed list of Contacts

Involved in Licensee/ Kulmbach Facility/Alnylam Technology Transfer




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Licensee	 	Kulmbach	 	 
	Technology	 	Contact	 	Facility Contact	 	Alnylam Contact
	Alnylam to Licensee/Kulmbach Facility (RNAi Therapeutics)	 	 	 	 
	1. Drug Substance
Information
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	2.1. Drug Product
Information: Overall
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	 
	2.2 Drug Product
Information: Safety/tox
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	3. Drug Substance
Manufacturing
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Alnylam to Licensee/ Kulmbach Facility (RNAi Platform)	 	 	 	 
	4. Mid Scale Synthesis
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	5. Large Scale Synthesis
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	6. Conjugation Chemistry
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	7. Liposomal
Formulations
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	8. Pulmonary
Formulations
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	9. Analytic Methods
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	10. 5’RACE Assay
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	11. In vivo Models
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Licensee/ Kulmbach Facility to Alnylam (RNAi Platform)	 	 	 	 
	12. Bioinformatics and
Database Systems
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	13. Small-scale
Synthesis
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	14. Conjugation
Chemistry
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	15. Peptide Formulations
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	16. Bioanalytics and
Analytics
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	17. IFN and TNF Assays
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	18. In vitro Models
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	19. In vivo Models
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 






Page 2 of 9, Schedule F









 





RNAi Therapeutics Transfer from Alnylam to Licensee





	1.	 	Drug Substance Information: Alnylam shall provide to Licensee the
following test information for typical siRNA drug substance used in [**] studies and
those used in [**] studies. Alnylam shall also provide to Licensee analogous
information for typical reference standards.





	 	 	 	 	 
	 	 	 Typical Method
	General Test	 	(alternate if available)
	Appearance, solubility, pH of solution, molecular
weight
	 	 	[**]	 
	Identity (individual strands and duplex)
	 	 	[**]	 
	Purity
	 	 	[**]	 
	Assay (%w/v)
	 	 	[**]	 
	Moisture content (if powder)
	 	 	[**]	 
	Organic volatiles
	 	 	[**]	 
	Heavy metals (if any)
	 	 	 	 
	Sterility/bioburden
	 	 	[**]	 
	Bacterial endotoxins
	 	 	[**]	 
	Stability indicating test method
	 	 	[**]	 
	Other tests as relevant for the molecule depending on the chemical
modifications involved







	2.	 	Drug Product Information (2.1 Overall, and 2.2 Safety/Tox): Alnylam shall
provide to Licensee the following information about siRNA drug products that have
been subjected to more detailed characterization [**]. The information that will be
provided for the drug product is:






	 	a.	 	Formulation composition
	 
	 	b.	 	Formulation manufacturing procedure with in-process
control specifications. Terminal sterilization procedure (if applicable) or
in-process controls that are typically relevant of the dosage form [**]
	 
	 	c.	 	If new/novel formulation excipient(s) ([**]) involved
then Alnylam shall provide to Licensee the following additional information
about that excipient(s):






	 	i.	 	Analytical profile
	 
	 	ii.	 	Physico-chemical characterization
	 
	 	iii.	 	Synthesis procedure
	 
	 	iv.	 	Analytical release specification
	 
	 	v.	 	Storage condition




Page 3 of 9, Schedule F









 






	 	vi.	 	Safety/toxicity data supporting its
human use on a chronic basis and any associated genotoxicity and
immunostimulation.
	 
	 	vii.	 	Justification for the use of the
desired excipient






	 	d.	 	Experience with different batch sizes and batch record
information if available
	 
	 	e.	 	Equipment train (and specific parts if applicable)
	 
	 	f.	 	In addition to the above information, subject to
availability, Alnylam will supply the following test information for drug
product batches, their release specifications, and their stability (ICH
protocol)





	 	 	 	 	 
	 	 	 Typical Method
	General Test	 	(alternate if available)
	Appearance
	 	 	 	 
	Assay for siRNA (%w/v)
	 	 	[**]	 
	Moisture content (if powder)
	 	 	 	 
	Particle size of the dosage form (if applicable)
	 	 	[**]	 
	Osmolarity (if applicable)
	 	 	 	 
	Sterility/bioburden
	 	 	[**]	 
	Bacterial endotoxins
	 	 	[**]	 
	Stability indicating test method
	 	 	[**]	 
	Other test methods and experience with other dosage forms [**]
	For dispersed systems [**], Alnylam shall provide to Licensee additional
information about [**] for the stability batches and their physico-chemical
stability.
	Alnylam shall provide to Licensee information on the impact of [**] on the
product’s in vivo performance, [**]
	Alnylam shall provide to Licensee other applicable dosage form experience that
would enable Licensee to transition/integrate the technology within Licensee
and/or to third party contract manufacturer.







	3.	 	Drug Substance Manufacturing:






	 	a.	 	Synthesis/manufacturing technology






	 	i.	 	Overview on technology landscape:
existing technologies, IP, CMO’s
	 
	 	ii.	 	Technology used at Alnylam for small
and large scale production
	 
	 	iii.	 	License terms for any IP covering
synthesis and manufacturing technology
	 
	 	iv.	 	Preferred partners




Page 4 of 9, Schedule F









 






	 	v.	 	Knowledge of commercial suppliers and
capacity of main players






	 	b.	 	Raw materials incl. solid support, HPLC columns






	 	i.	 	Specifications
	 
	 	ii.	 	Suppliers
	 
	 	iii.	 	Costs
	 
	 	iv.	 	Solid supports: screened/tested?
Advantages/disadvantages, regeneration/recycling?
	 
	 	v.	 	HPLC columns: technologies available,
handling, containment, life times, costs, suppliers
	 
	 	vi.	 	Any animal-derived raw materials?






	 	c.	 	Process






	 	i.	 	Description of chemistry involved
	 
	 	ii.	 	Detailed process flow and step description
	 
	 	iii.	 	Equipment/capacities/equipment suppliers
	 
	 	iv.	 	Overall and step yields, processing time
	 
	 	v.	 	Reproducibility
	 
	 	vi.	 	Critical steps, intermediates
	 
	 	vii.	 	Scale-up issues
	 
	 	viii.	 	Process validation
	 
	 	ix.	 	Safety, health and environmental issues






	 	d.	 	Analytics






	 	i.	 	Description of analytical methods for
API characterization [**], single strand and duplex
	 
	 	ii.	 	Specifications and release methods
	 
	 	iii.	 	IPC methods
	 
	 	iv.	 	API stability, storage conditions, issues
	 
	 	v.	 	Impurity profiles: what is
acceptable, characterization of product-related compounds
	 
	 	vi.	 	Endotoxin, adventitious agents
control
	 
	 	vii.	 	Comparability strategy
	 
	 	viii.	 	History of difficulties with
analytical methodologies






	 	e.	 	Costs






	 	i.	 	Experience to date with typical
manufacturing costs per development phase, at pre-commercial scale






	 	f.	 	API CMC development






	 	i.	 	Typical development times, costs
	 
	 	ii.	 	Typical API supply requirements per
phase
	 
	 	iii.	 	Supply outsourcing: typical lead
times, technical transfer issues





RNAi Platform Transfer from Alnylam to Licensee





	4.	 	Mid-scale Synthesis






	 	a.	 	Sourcing of raw materials and reagents
	 
	 	b.	 	SOP for synthesis and purification




Page 5 of 9, Schedule F









 






	 	c.	 	SOP for analytic characterization
	 
	 	d.	 	List of equipment required






	5.	 	Large-scale synthesis






	 	a.	 	Sourcing of raw materials and reagents
	 
	 	b.	 	SOP for synthesis and purification
	 
	 	c.	 	SOP for analytic characterization
	 
	 	d.	 	List of equipment required






	6.	 	Conjugation chemistry






	 	a.	 	Overview of [**] conjugates synthesized






	 	i.	 	Sourcing of raw materials and reagents
	 
	 	ii.	 	Detailed synthesis schemes
	 
	 	iii.	 	Analytic characterization
	 
	 	iv.	 	Summary of Issues/Difficulties
	 
	 	v.	 	Summary of in vitro and in vivo results
to date with [**] conjugates






	b.	 	Overview of [**] conjugates synthesized






	 	i.	 	Sourcing of raw materials and reagents
	 
	 	ii.	 	Detailed synthesis schemes
	 
	 	iii.	 	Analytic characterization
	 
	 	iv.	 	Summary of Issues/Difficulties
	 
	 	v.	 	Summary of in vitro and in vivo results
to date with [**] conjugates






	c.	 	Overview of [**] conjugates synthesized






	 	i.	 	Sourcing of raw materials and reagents
	 
	 	ii.	 	Detailed synthesis schemes
	 
	 	iii.	 	Analytic characterization
	 
	 	iv.	 	Summary of Issues/Difficulties
	 
	 	v.	 	Summary of in vitro and in vivo results
to date with [**] conjugates






	7.	 	Liposomal formulations






	 	a.	 	Overview of [**] formulations tested






	 	i.	 	Sourcing of raw materials and reagents
	 
	 	ii.	 	Detailed synthesis schemes
	 
	 	iii.	 	Analytic characterization
	 
	 	iv.	 	Summary of Issues/Difficulties






	 	b.	 	Summary of in vitro and in vivo results to date with [**]
	 
	 	c.	 	SOP for synthesis of [**]
	 
	 	d.	 	SOP for preparing [**] formulations
	 
	 	e.	 	SOP for analytic characterization methods for [**] formulations
	 
	 	f.	 	List of formulation and analytic equipment required






	8.	 	[**] formulations






	 	a.	 	List of equipment required
	 
	 	b.	 	SOP for preparing [**] formulations
	 
	 	c.	 	Analytic characterization methods






	9.	 	Analytic methods




Page 6 of 9, Schedule F









 












	 	a.	 	Summary of analytic methods tried and results






	10.	 	5’ RACE assay for evaluation of RNAi-mediated silencing






	 	a.	 	Primer design
	 
	 	b.	 	Sourcing of reagents and kits
	 
	 	c.	 	Experimental SOP






	11.	 	In vivo models for evaluation of RNAi delivery and activity






	 	a.	 	Animal models for delivery of siRNA to liver [**]






	 	i.	 	Typical experimental design
	 
	 	ii.	 	Experimental SOP for in vivo [**]
studies in rodent and non-human primate (where performed)
	 
	 	iii.	 	Experimental SOP for in vitro
[**] activity assays in rodent and non-human primate (where
performed).




Page 7 of 9, Schedule F









 











RNAi Platform Transfer From Kulmbach Facility to Alnylam





	12.	 	Bioinformatics and database systems






	 	a.	 	Transfer of bioinformatic search capability at Alnylam






	 	i.	 	Detailed information around the IT
programs and sequence databases required to perform bioinformatic
searches
	 
	 	ii.	 	Detailed SOP for carrying out and
analyzing bioinformatic searches






	 	b.	 	[**] siRNA chemical compound information storage database at
Alnylam






	13.	 	Small–scale synthesis






	 	a.	 	Overview of equipment requirements and small-scale process
procedures
	 
	 	b.	 	Detailed SOP for synthesis, annealing, and QC






	14.	 	Conjugation chemistry






	 	a.	 	Overview of [**] conjugates synthesized






	 	i.	 	Sourcing of raw materials and reagents
	 
	 	ii.	 	Detailed synthesis schemes
	 
	 	iii.	 	Analytic characterization
	 
	 	iv.	 	Summary of Issues/Difficulties
	 
	 	v.	 	Summary of in vitro and in vivo results
to date






	 	b.	 	Experimental design and SOP for in vitro and in vivo screening






	 	i.	 	[**] conjugates
	 
	 	ii.	 	[**] conjugates






	15.	 	[**] formulations






	 	a.	 	Overview of [**] investigated
	 
	 	b.	 	Synthesis and/or sourcing of [**]
	 
	 	c.	 	Formulation studies (including physico-chemical characterization
and SOP)
	 
	 	d.	 	Summary of in vitro and in vivo results to date
	 
	 	e.	 	Experimental design and SOP for in vitro and in vivo screening






	16.	 	Bioanalytics and analytics






	 	a.	 	Summary of analytic methods tried and results
	 
	 	b.	 	Summary of bioanalytic methods tried and results






	17.	 	IFN/[**] Assays






	 	a.	 	SOP for [**] interferon [**] induction assay
	 
	 	b.	 	Knowledge of specific siRNA sequence motifs that are known
immunostimulators
	 
	 	c.	 	Summary on the role of chemical modifications in abrogating
immunostimulation






	18.	 	In vitro models for evaluation of RNAi delivery and activity






	 	a.	 	In vitro [**] screening model






	 	 i.	 	[**] design
	 
	 	 ii.	 	[**] construction




Page 8 of 9, Schedule F









 






	 	iii.	 	Design of typical siRNA screen
	 
	 	iv.	 	Experimental SOP






	 	b.	 	In vitro cell line-based screen of [**] target






	 	i.	 	Cell transfection optimization procedure
	 
	 	ii.	 	mRNA assay readout [**] – design and
optimization
	 
	 	iii.	 	Design of typical siRNA screen
	 
	 	iv.	 	Experimental SOP






	19.	 	In vivo models for evaluation of RNAi delivery and activity






	 	a.	 	[**] model to analyse silencing in multiple tissues






	 	i.	 	Typical experimental design
	 
	 	ii.	 	Experimental SOP






	 	b.	 	[**] lung model [**]






	 	i.	 	Typical experimental design
	 
	 	ii.	 	Experimental SOP





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Schedule G




Press Release




			
	 	 	 
	Media release
	 	






Basel, 9 July 2007




Roche and Alnylam form major alliance on RNAi therapeutics





	–	 	Roche accesses Nobel Prize winning technology for drug
discovery and development
	 
	–	 	Alnylam’s site in Germany to become Roche’s Center of
Excellence for RNAi therapeutics
	 
	–	 	Alnylam to receive 331 million US dollars in upfront payments
and equity investment





Roche and the US-based biopharmaceutical company Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY)
announced today that they have entered into a major alliance in which Roche obtains a non-exclusive
license to Alnylam’s technology platform for developing RNAi (RNA interference) therapeutics. The
alliance will initially cover four therapeutic areas: oncology, respiratory diseases, metabolic
diseases, and certain liver diseases. Alnylam and Roche also will collaborate on RNAi drug
discovery for one or more disease targets in these therapeutic areas. In addition, Roche will
acquire Alnylam’s European research site located in Kulmbach, Germany (Bavaria), subject to
regulatory approval. This site will become Roche’s Center of Excellence for RNAi therapeutics
discovery.



RNAi is a potential foundation for a whole new class of human therapeutic products. RNAi is a
natural mechanism that the body uses to inhibit expression of certain genes.



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Harnessing the activity of RNAi creates a direct opportunity to develop specific and potent drugs
against diseases that are difficult to treat.



“Alnylam has made significant advances in RNAi therapeutics, one of the most promising approaches
to tomorrow’s healthcare technology. Working together with Alnylam provides us with new
capabilities to target complex diseases within our focus areas,” said Lee E. Babiss, Head of Roche
Global Pharma Research. “Our mission is to find novel solutions for patients who suffer from
difficult to treat diseases and we will be fully committed to this goal, together with our new
colleagues located at the acquired site in Kulmbach.”



“We are pleased to form this new alliance with Roche, which is widely recognised for its commitment
to innovation in biotechnology. We look forward to working together to advance our transformative
technology into a whole new class of drugs,” said John Maraganore, Ph.D., President and Chief
Executive Officer of Alnylam. “Such significant support from Roche will also strengthen Alnylam’s
efforts to build a leading innovation-based biopharmaceutical company. Indeed, together with our
demonstrated commitment to scientific excellence, advancement of our pipeline and unparalleled
intellectual property estate, we believe that this new alliance greatly extends our leadership
position in the discovery and development of RNAi therapeutics.”



Alnylam-Roche Collaboration



Alnylam has granted to Roche a non-exclusive license providing Roche access to broad Alnylam
intellectual property (IP) and know-how, including fundamental, chemistry and delivery IP.
Indications will initially include oncology, respiratory disease, metabolic disease and certain
liver diseases. Alnylam maintains the right to non-exclusively license its IP to additional
partners in potential future agreements. In addition, Alnylam and Roche will collaborate on one or
more disease targets to be identified in the future in exchange for milestone and royalty payments.



The transaction includes Roche’s acquisition of Alnylam’s European research site in Kulmbach,
Germany (Bavaria), with about 40 employees. The team in Kulmbach will remain dedicated to RNAi
therapeutics discovery as a new Center of Excellence for RNAi therapeutics within Roche’s global
research organisation.



The alliance could be valued at over 1 billion US dollars in consideration of upfront payments,
potential product milestone payments for multiple products and field expansion payments, excluding
potential royalties on future sales of commercial products. Under the terms of the agreement, Roche
will pay Alnylam 331 million US dollars in upfront cash payments and equity investment, including
1.975 million shares of Alnylam common stock the Roche Venture Fund agreed to purchase at 21.50 US
dollars per share, representing just less than five percent of Alnylam’s outstanding common stock.
Roche will also pay Alnylam milestones on products as they advance in development and
commercialisation as well as royalties on future sales of commercial products. Further, Roche may
pay Alnylam field expansion payments to increase the number of therapeutic areas.



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The close of the agreements, including Roche’s purchase of Alnylam shares and purchase of Alnylam’s
site in Germany, is subject to certain regulatory approvals and is expected to occur within
approximately 30 days.



About RNAi



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



About Alnylam Pharmaceuticals



Alnylam is a biopharmaceutical company developing novel therapeutics based on RNA interference, or
RNAi. The company is applying its therapeutic expertise in RNAi to address significant medical
needs, many of which cannot effectively be addressed with small molecules or antibodies, the
current major classes of drugs. Alnylam is leading the translation of RNAi as a new class of
innovative medicines with peer-reviewed research efforts published in the world’s top scientific
journals including Nature, Nature Medicine, and Cell. The company is leveraging these capabilities
to build a broad pipeline of RNAi therapeutics; its most advanced program is in Phase II human
clinical trials for the treatment of respiratory syncytial virus (RSV) infection. In addition, the
company is developing RNAi therapeutics for the treatment of influenza, hypercholesterolemia, and
liver cancers, amongst other diseases. The company’s leadership position in fundamental patents,
technology, and know-how relating to RNAi has enabled it to form major alliances with leading
companies including Merck, Medtronic, Novartis, Biogen Idec, and Roche. The company, founded in
2002, maintains global headquarters in Cambridge, Massachusetts. For more information, visit
www.alnylam.com.



About the Roche Venture Fund



The Roche Venture Fund makes investments in early stage biotech and diagnostics companies to
support innovative technologies and medicines. Based in Basel, Switzerland, the Roche Venture Fund
manages a portfolio of over 25 companies in 10 countries.



About Roche



Headquartered in Basel, Switzerland, Roche is one of the world’s leading research-focused
healthcare groups in the fields of pharmaceuticals and diagnostics. As one of the



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world’s biggest biotech companies and an innovator of products and services for the early
detection, prevention, diagnosis and treatment of diseases, the Group contributes on a broad range
of fronts to improving people’s health and quality of life. Roche is one of the world leaders in
in-vitro diagnostics and drugs for cancer and transplantation, a market leader in virology and
active in other major therapeutic areas such as autoimmune diseases, inflammation, metabolism and
central nervous system. In 2006 sales by the Pharmaceuticals Division totalled 33.3 billion Swiss
francs, and the Diagnostics Division posted sales of 8.7 billion Swiss francs. Roche employs
roughly 75,000 people worldwide and has R&D agreements and strategic alliances with numerous
partners, including majority ownership interests in Genentech and Chugai. Additional information
about the Roche Group is available on the Internet at www.roche.com.



Roche Group Media Office



Phone: +41 61 688 8888 / e-mail: basel.mediaoffice@roche.com




	–	 	Daniel Piller (Head of Roche Group Media Office)
	 
	–	 	Katja Prowald (Head of Science Communications)
	 
	–	 	Martina Rupp
	 
	–	 	Baschi Dürr
	 
	–	 	Claudia Schmitt






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