exv10w41






Exhibit 10.41




Confidential Materials omitted and filed separately with the




Securities and Exchange Commission. Asterisks denote omissions.



DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT


This Development, Manufacturing and Supply Agreement (the “Agreement”) is entered into as of
January 2, 2009 (the “Effective Date”), by and between Alnylam Pharmaceuticals, Inc., a corporation
duly incorporated and existing under the laws of the State of Delaware, U.S.A, (“Alnylam”), and
Tekmira Pharmaceuticals Corporation, a corporation duly organized and existing under the laws of
the Province of British Columbia, Canada (“Tekmira”).




Recitals:



A. Alnylam and Tekmira are parties to an Amended and Restated License and Collaboration Agreement
between Alnylam and Tekmira dated effective May 30, 2008 (the “Restated Tekmira LCA”) pursuant to
which Alnylam and Tekmira have agreed to collaborate on the formulation and development of, among
other things, Alnylam Royalty Products.



B. Alnylam and Protiva Biotherapeutics Inc. (“Protiva”) are parties to an Amended and Restated
Cross-License Agreement between Alnylam and Protiva Biotherapeutics Inc. dated effective May 30,
2008 (the “Restated Protiva CLA”) pursuant to which Alnylam and Protiva have agreed to collaborate
on the formulation and development of R&D Program Products (as defined in the Restated Protiva CLA)
and pursuant to which Alnylam has obtained certain license rights with respect to Alnylam Licensed
Products.



C. Alnylam and Tekmira are parties to a Manufacturing and Supply Agreement dated effective February
7, 2007 (the “MSA”) that governs Tekmira’s supply of Alnylam Royalty Products to Alnylam pursuant
to the terms and conditions of Article 5 of the Restated Tekmira LCA.



D. Alnylam and Tekmira now wish to replace the MSA with this Agreement and to include the
Manufacture (as hereinafter defined) of Alnylam Royalty Products and Alnylam Licensed Products by
Tekmira on the terms and conditions described herein.



NOW, THEREFORE, in consideration of the mutual rights and obligations set forth in this Agreement
and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:




Article 1




Definitions and Interpretation



1.1 Definitions



For purposes of this Agreement, the following terms will have the meanings set forth below:





	1.1.1	 	“Additional Third Party Costs has the meaning set forth in Section 4.1.5.
	 
	1.1.2	 	“Adjusted GMP Batch Work Order Estimated Price” has the meaning set forth in Section 3.4.5.
	 
	1.1.3	 	“Affiliate” means with respect to a Party, (a) any corporation or business entity of which
fifty percent (50%) or more of the securities or other ownership interests representing the
equity, the voting stock or general partnership interest are owned, controlled or held,
directly or indirectly, by such Party; (b) any corporation or business entity, which, directly
or indirectly, owns, controls or holds fifty percent (50%) (or the maximum ownership interest
permitted by law) or more of the securities or other ownership interests representing the
equity, the voting stock or, if applicable, the general partnership interest, of such Party;
or (c) any corporation or business entity, fifty percent (50%) or more of the securities or
other ownership interests representing the equity of which is directly or indirectly owned,
controlled or held by the same corporation, business entity or security holders, or holders of
ownership interests, that own, control or hold




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	 	 	fifty percent (50%) or more of the securities or other ownership interests representing
the equity or the voting stock of such Party. Solely for purposes of this Agreement and
without amending or altering the effect of the contrary provision in the definition of
“Affiliate” in the Restated Tekmira LCA, all references to Tekmira in this Agreement shall
(unless expressly stated otherwise in connection with such reference) include Tekmira and
its Affiliate, Protiva. Notwithstanding the foregoing, Regulus Therapeutics LLC and its
successors and assigns are not considered Affiliates of Alnylam for purposes of this
Agreement.
	 
	1.1.4	 	“Aggregate FTE Estimate” means, with respect to any Calendar Quarter, the sum of the
Quarterly FTE Estimates applicable to all Work Orders in effect during such Calendar Quarter.
	 
	1.1.5	 	“Alnylam Equipment” has the meaning set forth in Section 6.4.1.
	 
	1.1.6	 	“Alnylam Licensed Product” shall have the meaning set forth in clause (b) of Section 1.30 of
the Restated Protiva CLA.
	 
	1.1.7	 	“Alnylam Materials” means all animal models, cell lines, tissue samples, genes, plasmids,
siRNAs, miRNA constructs, vectors, receptors and other proteins, peptides, lipids, and other
biological materials related to the Products, that in each case are provided by Alnylam to
Tekmira for use in the performance of the Supply Services, including without limitation, the
siRNA or miRNA composition incorporated into a Product.
	 
	1.1.8	 	“Alnylam Royalty Product” shall have the meaning set forth in Section 1.12 of the Restated
Tekmira LCA.
	 
	1.1.9	 	“Annual FTE Estimate” has the meaning set forth in Section 5.4.
	 
	1.1.10	 	“Appendix II Information” means the information, materials and data described in Appendix II
hereof.
	 
	1.1.11	 	“Applicable Laws” means all applicable ordinances, rules, regulations, laws, guidelines,
guidances, requirements and court orders of any kind whatsoever of any Regulatory Authority,
as amended from time to time, including without limitation, cGLP and cGMP (if applicable).
	 
	1.1.12	 	“At-Risk Batch” means [**].
	 
	1.1.13	 	“Back-Up Manufacturer” has the meaning set forth in Section 11.1.2.
	 
	1.1.14	 	“Batch” means a specific quantity of Product set forth in a Work Order that is intended to
be of uniform character and quality, within specified limits, and is produced during the same
cycle of Manufacture and which is intended to meet the Product Specifications.
	 
	1.1.15	 	“Batch Documentation” means, with respect to each non-GMP and GMP Batch delivered hereunder,
the batch documentation described in Sections 8.1.1 and 8.1.2, respectively; provided,
however, that (i) in no event (and notwithstanding anything to the contrary elsewhere in this
Agreement) shall Tekmira be required to provide any Formulation Design Know-How and (ii)
subject to the provisions of Sections 11.2 and 11.3 all Batch Documentation, and the provision
thereof hereunder shall be subject to the restrictions set forth in the Restated Tekmira LCA
and Restated Protiva CLA with respect to the use and sublicensing of Tekmira Technology,
Protiva Patent Rights and Licensed Information (as defined in such agreements).
	 
	1.1.16	 	“Bulk Product” means Product that has been Manufactured through completion of all
Manufacturing stages other than sterile filtration (unless applicable Work Order specifies
that a particular Batch of Bulk Product will have undergone sterile filtration), filling,
finishing, and packaging.
	 
	1.1.17	 	“Business Day” means a day other than Saturday, Sunday or a statutory holiday in the
Province of British Columbia, Canada or the Commonwealth of Massachusetts, U.S.A.




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	1.1.18	 	“Calendar Quarter” means each of the three-month periods ending on each of March 31, June
30, September 30 or December 31.
	 
	1.1.19	 	“Certificate of Analysis” or “CoA” means a document signed by an authorized representative
of (a) Tekmira, or of a Third Party utilized by Tekmira in its performance of the Supply
Services, as the case may be, describing, with respect to a particular Batch (i) the
characteristics of such Batch, measured on the basis of the Product Specifications for, and
testing methods applied to, the Product, (ii) the characteristics of the Tekmira Materials
incorporated into such Batch, measured on the basis of the Raw Materials Specifications for,
and testing methods applied to, such raw materials; or (b) Alnylam or its designee describing,
with respect to a particular batch or other delivery unit of Alnylam Materials, the
characteristics of such Alnylam Materials, measured on the basis of the Raw Materials
Specifications for, and testing methods applied to, Alnylam Materials.
	 
	1.1.20	 	“Certificate of Compliance” has the meaning set forth in Section 8.1.2(g).
	 
	1.1.21	 	“cGLP” means the current good laboratory practices regulations applicable to the Manufacture
of a Product that are promulgated by the Regulatory Authorities in the United States, or any
other Regulatory Authorities designated in the applicable Work Order as the applicable
Regulatory Authorities.
	 
	1.1.22	 	“cGMP” means the current good manufacturing practices regulations applicable to the
Manufacture of a Product that are promulgated by the Regulatory Authorities in the United
States, or any other Regulatory Authorities designated in the applicable Work Order as the
applicable Regulatory Authorities.
	 
	1.1.23	 	“Confidential Information” means all proprietary or confidential information and materials,
patentable or otherwise, of a Party which are disclosed by or on behalf of such Party to the
other Party hereunder, including, without limitation, chemical substances, formulations,
techniques, methodology, equipment, data, reports, know how, sources of supply, patent
positioning, business plans, and also including without limitation proprietary and
confidential information of Third Parties in possession of such Party under an obligation of
confidentiality, whether or not related to making, using or selling Products.
	 
	1.1.24	 	“Damages” means any and all costs, losses, claims, liabilities, fines, penalties, damages
and expenses, court costs, and reasonable fees and disbursements of counsel, consultants and
expert witnesses incurred by a Party hereto (including interest which may be imposed in
connection therewith).
	 
	1.1.25	 	“Dispute” has the meaning set forth in Section 16.6.1.
	 
	1.1.26	 	“Disputed Batch” has the meaning set forth in Section 8.4.1.
	 
	1.1.27	 	“Executed Batch Record” means the batch record generated by Tekmira in its Manufacture of a
specific GMP Batch, which GMP Batch record shall contain the information set forth in the MBR
for such Product at such scale and such quality of manufacture
	 
	1.1.28	 	“Executive Officers” means the Chief Executive Officer or the President of Alnylam (or
another executive officer of Alnylam designated by such Chief Executive Officer) and the Chief
Executive Officer of Tekmira (or an executive officer of Tekmira designated by such Chief
Executive Officer).
	 
	1.1.29	 	“Facilities” means Tekmira Facilities located at 100-8900 Glenlyon Parkway, Burnaby, BC V5J
5J8, Canada, and such other facilities of Tekmira or its Affiliates as may be specified in an
applicable Work Order or as may be otherwise mutually agreed in writing in advance between the
Parties from time to time. For purposes of clarity, if Alnylam enters into a direct




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	 	 	relationship with a Third Party, including a Facility, such Third Party shall not be
deemed a “Facility” hereunder to the extent that they are performing work for Alnylam
directly.
	 
	1.1.30	 	“FDA” means the United States Food and Drug Administration or any successor agency thereto.
	 
	1.1.31	 	“FDCA” means the United States Food, Drug and Cosmetic Act of 1938, as amended from time to
time, and the regulations and guidelines promulgated thereunder.
	 
	1.1.32	 	“Finished Product” means Product that has been Manufactured through completion of all
Manufacturing stages, including filling, finishing, and packaging.
	 
	1.1.33	 	“Formulation Design Know-How” means, other than Appendix II Information, Know-How bearing on
methods, procedures and/or criteria involved in the design, formulation, selection,
evaluation, or validation of one or more formulations for lipid-based siRNA or miRNA products,
where such methods, procedures and/or criteria include parameters bearing on one or more
desired or anticipated behaviors of such product when used for therapeutic purposes and may
also include parameters bearing on the manufacturability, stability, consistency, yield,
toxicity, or cost-effectiveness of such product, as well as or other factors relevant to
whether such product may be desirable as a commercially marketed therapeutic. For clarity,
the Formulation Design Know-How does not include [**]. For example, if Tekmira is required
to perform Technical Transfer with respect to a Product in accordance with Article 11 hereof,
Tekmira will transfer all information and intellectual property necessary for the Manufacture
of that Product in the same way that Tekmira Manufactured such Product at the time of
Technical Transfer such that the transferee of such Technical Transfer can reproduce the
Manufacturing Process of Tekmira for such Product, and it is understood that Formulation
Design Know-How shall not be required to complete such Technical Transfer.
	 
	1.1.34	 	“FTE” means with respect to Tekmira, the equivalent of the work of one (1) full time
employee or contractor for [**], for or on behalf of Tekmira, which equates to a total of [**]
hours per year of work performed in connection with this Agreement, and the direct management
thereof. Unless otherwise approved in particular instances by the Joint Development and
Manufacturing Committee, the Supply Services work of one individual person under this
Agreement will not account for more than one (1) FTE per year.
	 
	1.1.35	 	“FTE Portion” means, with respect to any Calendar Quarter, that portion of the Price of
Supply Services that equals the sum of the number of FTEs of work actually performed in the
provision of Supply Services in such Calendar Quarter, multiplied by the then-current FTE
Rate. For the avoidance of doubt, it is agreed that the cost of Supplies will be deemed to be
represented in the FTE Portion and thus will not be separately chargeable as part of the
Price. For further clarity, Tekmira will include in the FTE Portion FTEs for Third Party
Management Work.
	 
	1.1.36	 	“FTE Rate” means [**] per annum; provided, however, that beginning on January 1, 2012 (i.e.,
the first such adjustment will be made as of such date, to reflect CPI changes since the
Effective Date, and subsequent such adjustments will be made as of each January 1 thereafter,
to reflect CPI changes in the then-preceding year), the then-current FTE Rate shall be
adjusted by the percent change year to year in the Consumer Price index (All items) for the
Province of British Columbia, Canada as published by Statistics Canada for each year during
the term of this Agreement.
	 
	1.1.37	 	“GMP Batch” means a Batch that is intended to meet cGMP requirements.




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	1.1.38	 	“GMP Batch Forecast” means a non-binding, good faith, rolling forecast of Alnylam’s
estimated requirements for GMP Batches during the eight (8) Calendar Quarters covered by such
GMP Batch Forecast.
	 
	1.1.39	 	“GMP Batch Work Order Estimated Price” has the meaning set forth in Section 3.2.5.
	 
	1.1.40	 	“Indemnified Party” has the meaning set forth in Section 15.5.
	 
	1.1.41	 	“Indemnifying Party” has the meaning set forth in Section 15.5.
	 
	1.1.42	 	“Intellectual Property” means patents, patent applications, including without limitation
utility, model and design patents and certificates of invention and all divisionals,
continuations, continuations-in-part, reissues, renewals, extensions (including supplemental
protection certificates), additions, registrations or confirmations to or of any such patent
applications and patents, trade names, trademarks, copyrights, trade dress, industrial and
other designs, trade secrets or Know-How, and other forms of intellectual property, all
whether or not registered or capable of registration.
	 
	1.1.43	 	“Joint Development and Manufacturing Committee” means the committee formed by the Parties
under Article 2.
	 
	1.1.44	 	“Know-How” means any and all technical information and know-how owned or controlled by a
Party and its Affiliates, including without limitation, data, instructions, processes,
formulae, trade secrets, expert opinions and other information (in written or other tangible
form) including, without limitation, any chemical, pharmacological, toxicological, clinical,
assay, control and manufacturing data, biological materials, manufacturing or related
technology, analytical methodology, chemical and quality control procedures, protocols,
techniques, improvements and results of experimentation and testing.
	 
	1.1.45	 	“Manufacturing” or “Manufacture” means, with respect to a Product, all or a portion of the
activities associated with the production, manufacture and processing of such Product, and the
filling, finishing, testing, packaging, labelling, shipping, and storage of such Product,
including without limitation, formulation process scale-up for toxicology and clinical study
use, stability testing, analytical development, quality assurance and quality control, and in
the case of the Manufacturing of Product by Tekmira, the production of Bulk Product or
Finished Product using the Alnylam Materials.
	 
	1.1.46	 	“Manufacturing Process” means any and all processes (or any step in any process) used or
planned to be used by Tekmira to Manufacture Product, which, for GMP Batches, shall be as
evidenced in the Batch Documentation and/or the Master Batch Record.
	 
	1.1.47	 	“Master Batch Record” or “MBR” means the Parties’ jointly approved manufacturing and control
instructions for the Manufacture of a specific Batch.
	 
	1.1.48	 	“Materials” means Alnylam Materials and Tekmira Materials.
	 
	1.1.49	 	“Materials Costs” means the actual costs incurred by Tekmira for the procurement,
qualification, purchase, in-bound shipping and freight insurance, testing, validation, and
storage of any and all Tekmira Materials for a Product, other than Supplies.
	 
	1.1.50	 	“Method” means any compendial and non-compendial analytical method and all approved
revisions thereto, as updated from time to time.
	 
	1.1.51	 	“Minimum FTE Portion” means, [**].
	 
	1.1.52	 	“miRNA” has the meaning set forth in the Restated Tekmira LCA
	 
	1.1.53	 	“Monthly Interim Reimbursement” has the meaning set forth in Section 4.1.2.




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	1.1.54	 	 [**]
	 
	1.1.55	 	 [**]
	 
	1.1.56	 	“non-GMP Batch” means any Batch intended for non-clinical use, including those intended to
meet the requirement for pre-clinical use pursuant to cGLP requirements, such as, for example,
a batch intended for use in GLP toxicology studies.
	 
	1.1.57	 	“OOS” has the meaning set forth in Section 7.9.1.
	 
	1.1.58	 	“Party” means Alnylam or Tekmira and “Parties” means Alnylam and Tekmira.
	 
	1.1.59	 	“Person” means a natural person, a corporation, a partnership, a trust, a joint venture, a
limited liability company, any Regulatory Authority or any other entity or organization.
	 
	1.1.60	 	“Phase II Study” means (a) a dose exploration, dose response, duration of effect, kinetics,
dynamic relationship or preliminary efficacy and safety study of a Product in the target
patient population or (b) a controlled dose-ranging clinical trial to evaluate further the
efficacy and safety of a Product in the target patient population and to define the optimal
dosing regimen.
	 
	1.1.61	 	“Phase III Study” means a controlled pivotal clinical study of a Product that is
prospectively designed to demonstrate statistically whether such Product is effective and safe
for use in a particular indication in a manner sufficient to obtain Regulatory Approval to
market such Product
	 
	1.1.62	 	“Price” means the amount, measured in Canadian dollars, to be paid by Alnylam to Tekmira for
the Supply Services with respect to each Product and otherwise as provided in an applicable
Work Order, which amount shall equal the sum of (i) the FTE Portion, (ii) [**] of the
applicable Materials Costs, and (iii) [**] of the applicable Third Party Costs. For the
avoidance of doubt, Price shall not include any additional charges for use of the Tekmira
Facilities in connection with the Supply Services performed hereunder. To the extent that new
equipment is required for the performance of Supply Services, the Parties shall (x) discuss at
time of entering into the relevant Work Order whether and to what extent it would be
appropriate for Alnylam to bear a portion of the costs of such equipment and what rights each
Party would have in such equipment were Alnylam to bear some or all of the costs of such
equipment and (y) include in the Price for such Work Order any portion of the costs for such
equipment for which Alnylam has agreed to be responsible.
	 
	1.1.63	 	“Product” means any Alnylam Royalty Products or Alnylam Licensed Products. For the
avoidance of doubt, [**].
	 
	1.1.64	 	“Quality Agreement” means the new Quality Agreement to be entered into between Alnylam and
Tekmira pursuant to Section 10.1.
	 
	1.1.65	 	“Quarterly Advance Payment” has the meaning set forth in Section 4.1.1
	 
	1.1.66	 	“Quarterly FTE Estimate” has the meaning set forth in Section 3.3.
	 
	1.1.67	 	“Records” has the meaning set forth in Section 9.2.
	 
	1.1.68	 	“Regulatory Authority” means the FDA, the EMEA, Health Canada, and any other comparable
governmental authorities, whether federal, provincial, state or municipal, regulating the
manufacture, importation, distribution, marketing and/or sale of therapeutic substances in the
Territory.




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	1.1.69	 	“Representatives” means, with respect to a Person, that Person’s Affiliate and their
respective directors, officers, employees, contractors, agents, representatives and any other
Person(s) to the extent acting under their authority.
	 
	1.1.70	 	“Restated Protiva CLA” has the meaning set forth in paragraph B of the Recitals.
	 
	1.1.71	 	“Restated Tekmira LCA” has the meaning set forth in paragraph A of the Recitals.
	 
	1.1.72	 	“siRNA” means a double-stranded ribonucleic acid (RNA) composition designed to act primarily
through an RNA interference mechanism that consists of either (a) two separate oligomers of
native or chemically modified RNA that are hybridized to one another along a substantial
portion of their lengths, or (b) a single oligomer of native or chemically modified RNA that
is hybridized to itself by self-complementary base-pairing along a substantial portion of its
length to form a hairpin.
	 
	1.1.73	 	“SOP” means the duly authorized and documented standard operating procedure practised by
each of Alnylam and Tekmira in the performance of a specified process.
	 
	1.1.74	 	“Specifications” means the list of tests, references to any analytical procedures, and
appropriate acceptance criteria (a) to which Product at any stage of Manufacture should
conform to be considered acceptable for its intended use, or (b) to which raw materials
(including, but not limited to, Materials) should conform to be considered acceptable for
their intended use, in each case that are mutually approved by the Parties, as such
Specifications are amended or supplemented from time to time by mutual agreement of the
Parties in writing, it being understood, however, that references herein to “Specifications”
in the context of non-GMP Batches will not imply that such Specifications conform with the
standards of GMP, and, as such, Specifications for non-GMP Batches will be considered for
regulatory and quality control purposes to be draft Specifications. As used in this
Agreement, “Product Specifications” means the Specifications applicable to a particular
Product, and “Raw Materials Specifications” means the Specifications applicable to a
particular raw material.
	 
	1.1.75	 	“Supplies” means, unless otherwise defined in a Work Order (which Work Order definition
shall apply only to the Products to be manufactured under such Work Order), Tekmira Materials
(other than lipids and large items such as HPLC columns, filters, batch buffers, and solvents)
and consumables routinely used or consumed in the course of Tekmira’s operations generally and
that are not in any way specific to the Products or any Work Order, such as, by way of
illustration: gloves, lab chemicals, lab buffers, lab reagents, lab solvents, paper towels,
pipette tips, and test tubes.
	 
	1.1.76	 	“Supply Services” has the meaning set forth in Section 3.1.
	 
	1.1.77	 	“Technical Transfer” means the transfer, in accordance with Article 11, of Confidential
Information and Intellectual Property of Tekmira and its Affiliates (including without
limitation, Methods comprising Confidential Information or Intellectual Property of Tekmira
and its Affiliates) to Third Parties and Back-Up Manufacturers to the extent necessary to
allow such Third Parties and Back-Up Manufacturers to Manufacture a specific Product. For
clarity, it is agreed that Technical Transfer will include the provision of the Appendix II
Information but will not include the provision of any Formulation Design Know-How.
	 
	1.1.78	 	“Tekmira Equipment” has the meaning set forth in Section 6.4.1.
	 
	1.1.79	 	“Tekmira Facilities” means, subject to Section 6.2, Tekmira’s manufacturing facilities
located at 8900 Glenlyon Parkway, Burnaby, B.C. V5J 5J8, Canada.
	 
	1.1.80	 	“Tekmira Materials” means all materials (including but not limited to Supplies) to be used
by Tekmira in the performance of Supply Services other than the Alnylam Materials listed in
the applicable Work Order.




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	1.1.81	 	“Term” means the term of this Agreement, as described in Article 15.
	 
	1.1.82	 	“Territory” means all of the countries in the world and their territories and possessions.
	 
	1.1.83	 	“Third Party” means any Person other than a Party to this Agreement or an Affiliate of a
Party to this Agreement.
	 
	1.1.84	 	“Third Party Costs” means the actual costs incurred by Tekmira for the procurement,
qualification, monitoring, and purchase of any and all services, facilities, or personnel
provided by Third Parties with respect to the manufacture or supply of Products under this
Agreement, including, without limitation, the costs, charges and fees described in Section
4.1.5.
	 
	1.1.85	 	“Third Party Management Work” means work performed by Tekmira in the initiation,
maintenance, and management of Third Parties engaged by Tekmira for the procurement,
qualification, monitoring, testing, and purchase of any and all Supply Services, Facilities,
equipment, or personnel provided by such Third Parties with respect to the Manufacture of
Products under this Agreement for which Alnylam is reimbursing Third Party Costs. For purposes
of clarity, Third Party Management Work will include typical program management functions,
including without limitation legal and business development and all work devoted to
interfacing with Alnylam or its personnel with respect to such initiation, maintenance, or
management of such relationships with Third Parties.
	 
	1.1.86	 	“Work Order” means a written work order mutually approved by the Parties as described in
Section 3.3, as such Work Order is modified by approved Change Orders. No more than one Batch
may be ordered in each individual Work Order.
	 
	1.1.87	 	“Year-Specific FTE Minimum” means:






	 	(a)	 	with respect to 2009, [**] FTEs;
	 
	 	(b)	 	with respect to 2010, [**] FTEs; and
	 
	 	(c)	 	with respect to 2011, [**] FTEs.





     1.2 Work Order Definitions


Unless otherwise expressly defined in a Work Order, the capitalized terms used in such Work Order
will have the respective meanings set forth in this Agreement.




     1.3 Conflicts


In the event of a conflict between this Agreement, the Quality Agreement, a Work Order or an
attachment thereto, the terms and conditions of this Agreement shall control.




     1.4 Currency


Unless otherwise explicitly stated, all references to money or “$” in this Agreement will mean the
lawful money of Canada.




Article 2




Joint Development and Manufacturing Committee



     2.1 Manufacturing Activities Committee.


The Manufacturing Activities Committee provided for in Section 4.1 of the Restated Tekmira LCA
shall be permanently disbanded and be of no further effect as of the Effective Date. In the event
that such






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Manufacturing Activities Committee has not been formed, the Parties agree that no such
Manufacturing Activities Committee will be formed on or after the Effective Date.




     2.2 Joint Development and Manufacturing Committee Established




The Parties hereby establish a Joint Development and Manufacturing Committee that shall monitor
and coordinate communication regarding the Parties’ activities under this Agreement, as more
fully described through this Agreement by reference to the Joint Development and Manufacturing
Committee. The Joint Development and Manufacturing Committee shall facilitate the exchange of
information between the Parties with respect to the activities hereunder, shall establish
procedures for the efficient sharing of information and materials necessary for each Party’s
exercise of its rights and performance of its tasks hereunder, and shall perform such other
functions as appropriate to further the purposes of this Agreement, as determined by the Parties.



     2.3 Powers




	2.3.1	 	Subject to the more specific provisions of this Agreement, the Joint Development and
Manufacturing Committee shall have general responsibility for determining the form of Work
Orders and scheduling and planning manufacturing campaigns and other Supply Services to be
conducted under this Agreement. The Parties have adopted an initial Supply Services Plan, as
attached hereto as Appendix I, to act as a guide for the Joint Development and Manufacturing
Committee in this respect.
	 
	2.3.2	 	The Joint Development and Manufacturing Committee shall have only the powers assigned
expressly to it in this Article 2 and elsewhere in this Agreement, and the Joint Development
and Manufacturing Committee shall not have any power to amend, modify or waive compliance with
this Agreement.





     2.4 Membership




Each Party shall have an equal number of representatives on the Joint Development and
Manufacturing Committee. The Joint Development and Manufacturing Committee will initially have
four (4) members, as follows: [**] from Tekmira, and [**] from Alnylam. Either Party may
designate substitutes for its representatives if one (1) or more of such Party’s designated
representatives are unable to be present at a meeting. From time to time each Party may replace
its representatives by written notice to the other Party specifying the prior representative(s)
and their replacement(s).



     2.5 Meetings




Meetings of the Joint Development and Manufacturing Committee shall be effective only if at least
one representative of each Party is present or participating. With the prior consent of both
Parties’ representatives (such consent not to be unreasonably withheld or delayed), other
representatives of each Party or Third Parties involved with the Supply Services may attend
meetings as nonvoting participants or observers.



     2.6 Decision Making




	2.6.1	 	Actions to be taken by the Joint Development and Manufacturing Committee shall be taken only
following unanimous vote, with each Party having one (1) vote.




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	2.6.2	 	If the Joint Development and Manufacturing Committee cannot reach a unanimous decision for a
period in excess of ten (10) days from the discussion at the Joint Development and
Manufacturing Committee, unless the Parties agree to prolong such time period, the matter may
be referred to the Executive Officers by any member of the Joint Development and Manufacturing
Committee. In that event, the Executive Officers shall attempt resolution by good faith
negotiations for at least ten (10) days after such referral. If the Executive Officers are
not able to resolve such dispute within such ten (10) day period, then such dispute shall be
finally decided by arbitration in accordance with the terms described in Section 16.6.





Article 3




Scope of Supply Services and Work Orders



     3.1 Scope of Supply Services


Tekmira will provide services for Alnylam in respect of the Manufacture of Product as Bulk Product
or Finished Product, as non-GMP Batches or GMP Batches, and such other services, including without
limitation, project management, Technical Transfer, scale-up and process development, analytical
method development, stability testing, release testing, quality control, quality assurance, Third
Party Management Work, and regulatory support, as may be specified in each Work Order (“Supply
Services”). Subject to the provisions of Article 11, Alnylam agrees to obtain, and Tekmira agrees
to supply, all of Alnylam’s requirements during the Term for Bulk Product and for Finished Product
for non-GMP Batches and other non-clinical studies and for Bulk Product for clinical development,
through the completion of all Phase II Studies of such Product that are initiated prior to the
initiation of the first Phase III Study of such Product, in each case through the provision of the
Supply Services by Tekmira under this Agreement. Alnylam further agrees, in recognition of
Tekmira’s commitments and anticipated scale-up and other efforts hereunder, to pay Tekmira for at
least the Minimum FTE Portion applicable to each Calendar Quarter only during the first three years
of the Term.




     3.2 Contents and Effectiveness of Work Orders




	3.2.1	 	Each request for the Manufacture of a specific Batch will be set forth in a Work Order,
which may also specify Supply Services incidental to or otherwise directly related to the
Manufacture and supply of such Batch.
	 
	3.2.2	 	While a single Work Order may cover the Manufacture of more than one Batch of a particular
Product, no Work Order may cover (i) the Manufacture of Batches of different Products or (ii)
the Manufacture of one or more non-GMP Batches and one or more GMP Batches of the same
Product.
	 
	3.2.3	 	Each request for Supply Services other than the Manufacture of a specific Batch (“Other
Supply Services Work Orders”), such as, for example, scale up and process development
activities, will (except as stated in Section 3.2.1) be set forth in a separate Work Order
that specifically provides for such Supply Services. Either Party may prepare a draft of any
such Other Supply Services Work Order and provide it to the other Party, and, if it does so,
such other Party will accept, reject, or suggest changes to such draft Work Order in writing
within ten (10) Business Days of its receipt of such draft Work Order. No Other Supply
Services Work Order will be effective unless and until it has been agreed to and signed by
authorized representatives of both Parties. Neither Party will be obligated to enter into any
Other Supply Services Work Order, but each Party hereby agrees to be reasonable and to use
good faith in its considerations of draft Other Supply Services Work Orders submitted by the
other Party.




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	3.2.4	 	Unless otherwise determined in individual situations by the Joint Development and
Manufacturing Committee, Work Orders covering the Manufacture of a non-GMP Batch and related
Supply Services (“non-GMP Batch Work Orders”) will contain or refer to the following elements
as applicable: scope of Supply Services, an estimate of the total Price for all Supply
Services under such Work Order (the “non-GMP Batch Work Order Estimated Price”) (each such
estimate providing details regarding the projected amount of Third Party Management work and
Third Party Costs contained in such estimated Price), Specifications (it being understood that
the Specifications for a non-GMP Batch will be agreed upon by the Joint Development and
Manufacturing Committee using good faith estimates of what is reasonably achievable for such
non-GMP Batch and which Specifications may include “run-and-report” data for which Tekmira
will not be held responsible), date or dates of Alnylam’s delivery of Alnylam Materials and
associated documentation, timeframe for commencement and completion of Supply Services,
deliverables, designation of the additional Applicable Laws and Regulatory Authority(ies) that
will be applicable to the Product to be produced (it being understood that the standard for
Product produced in non-GMP Batches will be based on industry standards and norms agreed to by
the Joint Development and Manufacturing Committee), location of Facilities, reference to
Tekmira Materials and Alnylam Materials, and deviations, if any, from the terms of this
Agreement. Each Party’s representatives on the Joint Development and Manufacturing Committee
shall have the authority to sign, on behalf of their respective Parties, a non-GMP Batch Work
Order, subject to any financial limits to the signing authority of the members of the Joint
Development and Manufacturing Committee based on such Party’s internal controls.
	 
	 	 	In the event the Parties cannot agree upon the content of any non-GMP Batch Work Order or
cannot agree upon a Change Order related to any non-GMP Batch Work Order, then the Joint
Development and Manufacturing Committee shall be authorized to attempt to resolve such
disagreement. If the Joint Development and Manufacturing Committee cannot resolve such
disagreement, the matter shall be resolved in accordance with the provisions of Section
2.6.2.
	 
	3.2.5	 	Work Orders covering the Manufacture of a GMP Batch and related Supply Services (“GMP Batch
Work Orders”) shall contain or refer to the following elements as applicable: scope of Supply
Services, an estimate of the total Price for all Supply Services under such Work Order (the
“GMP Batch Work Order Estimated Price”) (each such estimate providing details regarding the
projected amount of Third Party Management Work and Third Party Costs contained in such
estimated Price), Methods, Specifications, SOPs (and other documentation such as development
or qualification of methods and/or analytics, to the extent designated by the Joint
Development and Manufacturing Committee as relevant), date or dates of Alnylam’s delivery of
Alnylam Materials and its associated documentation, timeframe for commencement and completion
of Supply Services, deliverables, designation of the additional Applicable Laws and Regulatory
Authority(ies) that will be applicable to the Product to be produced, location of Facilities,
reference to Tekmira Materials and Alnylam Materials, and deviations, if any, from the terms
of this Agreement.
	 
	3.2.6	 	With respect to GMP Batch Work Orders, Alnylam will, reasonably and in good faith, prepare a
draft of each such Work Order and provide it to Tekmira for its consideration, and Tekmira
will accept or suggest changes to such draft Work Order in writing within ten (10) Business
Days of Tekmira’s receipt of such draft Work Order. Tekmira shall be reasonable and use good
faith in its considerations of draft GMP Batch Work Orders from Alnylam. No GMP Batch Work
Order will be effective unless and until it has been agreed to and signed by authorized
representatives of both Parties; provided, however, that (i) Tekmira may suggest changes to,
but may not decline to accept, a GMP Batch Work Order to be effected in the





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	 	 	following two Calendar Quarters for a GMP Batch that was reflected in the most recent GMP
Batch Forecast for such Calendar Quarters and (ii) nothing contained herein shall require
Tekmira to accept any Work Order which contains provisions which are contrary to the
terms of this Agreement. Documents relating to the relevant project, including, without
limitation, Specifications, and any other relevant documentation, will be attachments to
the applicable GMP Batch Work Order and/or incorporated in the Work Order by reference.
	 
	3.2.7	 	Each fully signed or otherwise mutually-approved Work Order will be subject to the terms of
this Agreement and will be incorporated herein and form a part of this Agreement.





     3.3 Quarterly FTE Estimates


At least ten (10) Business Days prior to the first day of each Calendar Quarter, the Joint
Development and Manufacturing Committee will determine, based on good faith input from both Tekmira
and Alnylam, a reasonable estimate of the number of FTEs that will be required to perform the
Supply Services called for in each of the Work Orders that is, or is to be, effective as to that
upcoming Calendar Quarter (each is the “Quarterly FTE Estimate” for that Work Order).




     3.4 Change Orders




	3.4.1	 	Neither Party will make any changes to the Specifications, Methods, procedures, processes,
Materials or Alnylam Equipment used under this Agreement or set forth in a Work Order, without
the other Party’s prior written approval, such approval not to be unreasonably withheld or
delayed.
	 
	3.4.2	 	Either Party may upon written notice to other Party, request a change to a Work Order (a
“Change Order”).
	 
	3.4.3	 	Change Orders with respect to Other Supply Services Work Orders may be proposed and adopted
from time to time in the same manner as described in Section 3.2.3 for the proposal and
adoption of Other Supply Services Work Orders.
	 
	3.4.4	 	Change Orders with respect to non-GMP Batch Work Orders (“non-GMP Batch Change Orders”),
consistently with Section 3.2.4, may take the form, may be adopted, and shall include the
elements, determined to be appropriate from time to time by the Joint Development and
Manufacturing Committee, subject to any financial limits on the signing authority of the
Parties’ representatives on the Joint Development and Manufacturing Committee based on such
Party’s internal controls.
	 
	3.4.5	 	For each proposed Change Order with respect to GMP Batch Work Order (a “GMP Batch Change
Order”) submitted by Alnylam, Tekmira will, within the longer of (a) four (4) Business Days of
written notice of such Change Order from Alnylam, or (b) such time as may be required for
Tekmira to obtain necessary information from Third Party suppliers with respect to such
proposed Change Order, but not in excess of twelve (12) Business Days, indicate in writing to
Alnylam (i) whether such GMP Batch Change Order is necessary or feasible, (ii) to what extent,
if any, such GMP Batch Change Order alters the time frame, or any other parameters of
Tekmira’s performance of the Supply Services, and (iii) what effect, if any, Tekmira believes
the implementation of such GMP Batch Change Order would have on the Price of the affected
Supply Services, expressed as a revised GMP Batch Work Order Estimated Price for such Work
Order (the “Adjusted GMP Batch Work Order Estimated Price”). For each GMP Batch Change Order
initiated by Tekmira, Tekmira will indicate the information described in clauses (i) through
(iii) above as part of its written notice to Alnylam of the proposed Change Order. If





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	 	 	Alnylam accepts the terms of such GMP Batch Change Order in writing, then the relevant GMP
Batch Work Order will be deemed amended to reflect those changes set forth in such Change
Order. No GMP Batch Change Order will be effective unless and until it has been agreed to
and signed by authorized representatives of both Parties. Neither Party will be obligated
to enter into any GMP Batch Change Order, but each Party hereby agrees to be reasonable and
to use good faith in its considerations of draft GMP Batch Change Orders submitted by the
other Party; provided, however, that nothing contained herein shall require either Party to
accept any Change Order which contains provisions which are contrary to the terms of this
Agreement.
	 
	3.4.6	 	Each fully signed or otherwise mutually-approved Change Order will be subject to the terms
of this Agreement and will be incorporated herein and form a part of this Agreement.





Article 4




Invoicing and Payment



     4.1 Price of Supply Services




	4.1.1	 	On or before the first Business Day of each Calendar Quarter, Alnylam shall deliver to
Tekmira the “Quarterly Advance Payment,” which shall equal the greater of (i) the Minimum FTE
Portion for such Calendar Quarter and (ii) the Aggregate FTE Estimate for such Calendar
Quarter, multiplied by the FTE Rate.
	 
	4.1.2	 	Within thirty (30) days after the end of each of the first two calendar months in each
Calendar Quarter, Tekmira shall send Alnylam an accounting of any Materials Costs or Third
Party Costs paid or payable by Tekmira during the month preceding the delivery of such
accounting in accordance with Work Orders, including specific references to the Work Orders
under which such Materials Costs or Third Party Costs were incurred. Within thirty (30) days
after such accounting from Tekmira, Alnylam will pay or reimburse Tekmira for all such
Materials Costs and Third Party Costs (the “Monthly Interim Reimbursement(s)”).
	 
	4.1.3	 	Within thirty (30) days after the end of each Calendar Quarter, Tekmira shall send Alnylam
an accounting of the actual aggregate Price for the Supply Services actually provided by
Tekmira during such Calendar Quarter, including an itemization (by job category and whether or
not for Third Party Management Work) of the applicable FTEs devoted to such Supply Services,
the Materials Costs and Third Party Costs incurred, in each case including specific references
to the Work Orders under which such FTEs, Materials Costs and Third Party Costs were incurred;
it being understood and agreed that, unless otherwise specified in the applicable Work Order
(in which case the terms of the Work Order shall prevail):






	 	(a)	 	except with respect to activities involved in investigations of deviations from
Specifications, Tekmira will not be entitled to bill, and Alnylam shall not be required
to pay, an aggregate Price for all Supply Services under any given non-GMP Batch Work
Order (other than for the first or the second non-GMP Batch for a particular Product
attempted to be produced by Tekmira at the target production scale for such non-GMP
Batch) in excess of the lesser of:






	 	(i)	 	the sum of:
	 
	 	 	 	(1) any applicable Additional Third Party Costs, plus
	 
	 	 	 	(2)the lesser of (w) [**] of the amount estimated for such Supply Services
in such non-GMP Batch Work Order for all costs other than Third Party Costs
and Third Party Management Work and (x) the actual Price for such Supply
Services in such non-GMP Batch Work Order for all costs other than Third
Party Costs and Third Party Management Work, plus




- 13 -









 












	 	 	 	(3) the lesser of (y) [**] of the amount estimated for Third Party Costs and
Third Party Management Work in such non-GMP Batch Work Order and (z) the
actual Price for such Third Party Costs and Third Party Management Work in
such non-GMP Batch Work Order
	 
	 	or	 	 
	 
	 	(ii)	 	the sum of (1) any applicable Additional Third Party Costs
plus (2) [**] in excess of the amount estimated for such Supply Services in
such non-GMP Batch Work Order.






	 	(b)	 	except with respect to activities involved in OOS investigations, Tekmira will
not be entitled to bill, and Alnylam shall not be required to pay, an aggregate Price
for all Supply Services under any given GMP Batch Work Order in excess of the lesser
of:






	 	(i)	 	the sum of:
	 
	 	 	 	(1) any applicable Additional Third Party Costs, plus
	 
	 	 	 	(2) the lesser of (w) [**] of the amount estimated for such Supply Services
in such GMP Batch Work Order for all costs other than Third Party Costs and
Third Party Management Work and (x) the actual Price for such Supply
Services performed pursuant to such GMP Batch Work Order for all costs other
than Third Party Costs and Third Party Management Work, plus
	 
	 	 	 	(3) the lesser of (y) [**] of the amount estimated for Third Party Costs and
Third Party Management Work in such GMP Batch Work Order and (z) the actual
Price for such Third Party Costs and Third Party Management Work performed
pursuant to such GMP Batch Work Order,
	 
	 	or	 	 
	 
	 	(ii)	 	the sum of (1) any applicable Additional Third Party Costs
plus (2) [**] in excess of the amount of estimated for such Supply Services in
such GMP Batch Work Order.






	4.1.4	 	Within fifteen (15) days after such notice from Tekmira, either, as the case may be: (i)
Alnylam shall pay Tekmira the amount by which such actual aggregate Price exceeds the sum of
the Quarterly Advance Payment and all Monthly Interim Reimbursements paid by Alnylam with
respect to such Calendar Quarter pursuant to Section 4.1.1 and 4.1.2, or (ii) Tekmira shall
notify Alnylam that Alnylam has a credit (towards the next Quarterly Advance Payment payable
by Alnylam pursuant to Section 4.1.1) equal to the amount by which, if any, the sum of the
Quarterly Advance Payment and all Monthly Interim Reimbursements paid by Alnylam with respect
to such Calendar Quarter exceeds such actual aggregate Price.
	 
	4.1.5	 	Alnylam acknowledges that Tekmira may incur non-refundable Third Party Costs in connection
with its performance of Work Orders, including reservation fees, change fees and cancellation
fees associated with each reservation, change and cancellation of Manufacturing time slots
reserved exclusively for Tekmira. All of such Third Party Costs incurred by Tekmira will be
reimbursed by Alnylam to the extent (i) a reasonable estimate of the same was included in the
non-GMP Batch Work Order Estimated Price or the GMP Batch Work Order Estimated Price
applicable to such Work Order (as adjusted to reflect any applicable approved Change
Orders),or (ii) they were incurred by Tekmira due to Alnylam’s delay in delivery of Alnylam
Materials and/or associated documentation or any other action, delay or failure of Alnylam;
provided that, in each case, (x) such Third Party agreements under which Tekmira committed to
pay such reservation, change or cancellation fees, are attached to such Work Order at the time
such Work




- 14 -









 






	 	 	Order is agreed, and (y) Tekmira shall
take reasonable steps to mitigate the
out-of-pocket expenses incurred in
connection therewith. Any such Third Party
Costs described in clauses (ii) above are
referred to herein as the “Additional
Third Party Costs.” If so requested by
Alnylam, Tekmira shall provide Alnylam
with copies of receipts and/or invoices
evidencing all Third Party Costs actually
incurred by Tekmira in connection with the
Supply Services under each Work Order.





     4.2 Method of Payment


Alnylam will make all payments for Supply Services in Canadian Dollars by cheque or wire transfer
to the account specified by Tekmira. All undisputed balances remaining unpaid thirty (30) days
after the date due for payment will bear interest at the rate of the greater of one percent (1%)
per month or the prime rate plus 1%, compounded annually.




     4.3 Audit




	4.3.1	 	Access. Upon the written request of Alnylam and not more than once in each Calendar Year,
Tekmira shall permit an independent certified public accounting firm of nationally recognized
standing selected by Alnylam and reasonably acceptable to Tekmira, at Alnylam’s expense except
as set forth below, to have access during normal business hours to such of the records of
Tekmira as may be reasonably necessary to verify the accuracy of the amounts billed to Alnylam
by Tekmira pursuant hereto, including FTEs (including Third Party Management Work), Materials
Costs and Third Party Costs, for any Calendar Year ending not more than thirty-six (36) months
prior to the date of such request, for the sole purpose of verifying the basis and accuracy of
payments made under this Article 4.
	 
	4.3.2	 	Discrepancies; Default Interest. If such accounting firm identifies a discrepancy made
during such period, the appropriate Party shall pay the other Party the amount of the
discrepancy within twenty (20) Business Days of the date Alnylam delivers to Tekmira such
accounting firm’s written report so concluding, or as otherwise agreed by the Parties in
writing. Such written report shall be binding upon the Parties. The fees charged by such
accounting firm shall be paid by Alnylam, unless such discrepancy represents an overpayment by
Alnylam of more than the lesser of [**] or [**] of the total amounts due hereunder in any
Calendar Year, in which case such fees shall be paid by Tekmira. Unless an audit for such
Calendar Year has been commenced upon the expiration of thirty-six (36) months following the
end of such Calendar Year, the calculation of payments payable with respect to such Calendar
Year shall be binding and conclusive upon both Parties, and each Party shall be released from
any further liability or accountability with respect to royalties and other payments for such
Calendar Year.




4.3.3 Confidentiality. Alnylam shall treat all financial information subject to review under this
Section 4.3 in accordance with the confidentiality and non-use provisions of Article 14 of this
Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality
agreement with Tekmira obligating it to retain all such information in confidence pursuant to such
confidentiality agreement.




Article 5

Work Order Lead Times and GMP Batch Forecasts




     5.1 GMP Batch Forecasts


No later than the first Business Day of each Calendar Quarter, Alnylam shall provide Tekmira with a
GMP Batch Forecast of Alnylam’s anticipated requirements for GMP Batch production under this
Agreement, covering the Calendar Quarter in which such GMP Batch Forecast is so delivered and the
following seven (7) Calendar Quarters. Such GMP Batch Forecast shall not constitute a Work Order
for any Supply Services, but the requirements stated in each GMP Batch Forecast for the first two
Calendar






- 15 -









 







Quarters covered by such GMP Batch Forecast shall: (a) constitute Alnylam’s binding commitment to
place GMP Batch Work Orders for Supply Services to produce such volumes for delivery during such
two Calendar Quarters (it being understood that Alnylam will have submitted GMP Batch Work Orders
for the first of such Calendar Quarter during the preceding Calendar Quarter, consistent with
Section 5.2.1); and (b) constitute Tekmira’s binding commitment to provide such Supply Services
under mutually-agreed GMP Batch Work Orders; provided, however, that Tekmira will use its
commercially reasonable efforts to meet Alnylam’s needs.




     5.2 Lead Time for Work Orders




	5.2.1	 	Alnylam will provide Tekmira a draft GMP Batch Work Order with sufficient lead time to
enable both Parties to have clarified the terms of and have duly executed such GMP Batch Work
Order at least ninety (90) days before the first date of Supply Services scheduled under such
GMP Batch Work Order, or such shorter amount of time as the Parties may agree, working through
the Joint Development and Manufacturing Committee or otherwise, it being agreed that both
Parties will exert commercially reasonable efforts to shorten lead times where practicable.
Alnylam will provide Tekmira draft non-GMP Batch Work Orders and Other Supply Services Work
Orders allowing for reasonable lead times deemed to be sufficient by action of the Joint
Development and Manufacturing Committee.
	 
	5.2.2	 	Each Work Order will be governed by the terms of this Agreement and none of the terms or
conditions of either Party’s acknowledgement forms or any other forms will be applicable,
except those specifying the matters set forth in Sections 3.2 or 3.4.
	 
	5.2.3	 	Notwithstanding the foregoing, Alnylam reserves the right, on one (1) week’s prior written
notice to Tekmira, to suspend a Work Order in the event of a Serious Adverse Drug Event as
defined under Applicable Laws or a modification of Alnylam’s Product development schedule. If
such suspension occurs, Alnylam will reimburse Tekmira for any non-cancellable costs incurred
up to and including the date of such suspension and will pay Tekmira for that portion of the
Price that is allocable (on the basis of percentage of completion) to the Supply Services
conducted under the affected Work Order to the date of the suspension, upon presentation of
satisfactory evidence that such Supply Services were conducted, all in accordance with Article
4.





     5.3 Scheduling and Capacity




	5.3.1	 	Alnylam acknowledges that the late delivery of sufficient quantity and quality of any
Alnylam Materials and/or documentation by Alnylam to Tekmira may result in a delay in the
provision of Supply Services. In the event of the late delivery of any Alnylam Materials
and/or documentation for which Tekmira is not responsible, (a) Tekmira will use commercially
reasonable efforts to maintain the schedule set forth in the affected Work Order(s) and will
notify Alnylam of any necessary change to such schedule, and (b) the Parties will enter into a
Change Order to revise such schedule on mutually agreed terms. In no event shall Tekmira’s
entitlement to compensation or status as exclusive manufacturer be prejudiced by Alnylam’s
late delivery of Alnylam Materials and/or documentation.
	 
	5.3.2	 	Tekmira will maintain sufficient capacity in the Facilities to enable it to provide Supply
Services under GMP Batch Work Orders during the first two Calendar Quarters covered by
Alnylam’s most recent GMP Batch Forecast. Tekmira will give Alnylam reasonable prior written
notice of any shutdown of Facilities (that is not a regularly scheduled occurrence of which
Alnylam is already aware) or of any event that may prevent Tekmira from or delay Tekmira in
providing such Supply Services to Alnylam.




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     5.4 Post-2011 Annual FTE Estimates




	5.4.1	 	On or before December 1, 2011, the Joint Development and Manufacturing Committee will
determine an estimated number of FTEs (the “Annual FTE Estimate”) anticipated to be required
for Supply Services under this Agreement during 2012, based on the then most-current GMP Batch
Forecast for each of the Calendar Quarters in 2012, and the Parties’ then most-current
available information with respect to other Supply Services (whether with respect to non-GMP
Batches or otherwise) anticipated to be required by Alnylam and to be supplied by Tekmira
during 2012 under this Agreement. For clarity, such estimate is for planning purposes only
and shall not constitute a binding obligation of either Party.
	 
	5.4.2	 	Similarly, the Joint Development and Manufacturing Committee will determine an Annual FTE
Estimate for each subsequent calendar year during the Term, and will do so on or before
December 1 of the preceding year.





Article 6




Standards, Personnel and Equipment



     6.1 Compliance


Tekmira will provide Supply Services in accordance with this Agreement, each Work Order, Applicable
Laws, the applicable Specifications, and the relevant Quality Agreement.




     6.2 Work Location


To the extent one or more Facilities are expressly identified in a Work Order, Tekmira will perform
the applicable Supply Services only at the applicable Facilities. Tekmira shall be responsible for
ensuring that all of the Facilities meet the agreed upon regulatory standards indicated in each GMP
Batch Work Order at all relevant times. Tekmira will not change the location of any of the
Facilities or use any additional facility for the performance of Supply Services under any GMP
Batch Work Order without at least one hundred and fifty (150) days’ prior written notice to, and
prior written consent from, Alnylam or such shorter notice as is otherwise mutually agreed between
the Parties. Such consent will not be unreasonably withheld or delayed (it being understood and
agreed that Alnylam may withhold consent pending satisfactory completion of a quality assurance
audit and/or regulatory impact assessment of the new location or additional facility, as the case
may be). In addition, Alnylam may elect to permit Tekmira to proceed with use of such changed or
additional facility prior to completion of an audit, but such use will be subject to Alnylam’s
right to require Tekmira to cease use of any such facility if such facility does not pass Alnylam’s
audit.




     6.3 Personnel




	6.3.1	 	Unless otherwise set forth in this Article or in a Work Order, Tekmira will furnish all
personnel, Tekmira Material and supervision necessary to perform the Supply Services. Tekmira
will arrange for qualified personnel necessary and desirable to support Tekmira’s obligations
under this Agreement, and will take all reasonable steps to ensure that such personnel are
properly trained and proficient in the Specifications, Methods, the Manufacturing Process and
in handling the Materials and Products.
	 
	6.3.2	 	Communications and coordination between the Parties with respect to the Manufacturing
activities under this Agreement shall be conducted through the Joint Development and
Manufacturing Committee.




- 17 -









 











     6.4 Equipment




	6.4.1	 	Tekmira will, at its own expense, supply, qualify, calibrate and maintain all equipment
necessary for the Manufacture of Product, including any equipment used by Third Party
Facilities (“Tekmira Equipment”). If certain Tekmira Equipment is not deemed suitable by
Alnylam, Alnylam shall have the option of providing substitute or supplementary equipment
approved by Tekmira (which approval shall not be unreasonably withheld), in which case such
equipment supplied by Alnylam shall be deemed “Alnylam Equipment” for the purposes of this
Agreement.
	 
	6.4.2	 	All Alnylam Equipment placed in Tekmira’s possession will at all times remain the property
of Alnylam, will be visibly marked as the property of Alnylam, and will be used exclusively
for the performance of Supply Services pursuant to this Agreement. Tekmira shall ensure that
such Alnylam Equipment remains free and clear of any liens or encumbrances. Upon termination
of this Agreement or upon Alnylam’s written request, Tekmira will forthwith return to Alnylam
all Alnylam Equipment or permit Alnylam to enter onto Tekmira’s premises to retrieve all
Alnylam Equipment.
	 
	6.4.3	 	Alnylam will be responsible for the cost of the initial calibration of such Alnylam
Equipment upon delivery of same to Tekmira, and the cost of any maintenance, qualification,
and calibration, as applicable, of Alnylam Equipment will be apportioned between the Parties
in Work Orders. Tekmira shall not be required to provide or pay for spare parts for Alnylam
Equipment. To the extent Alnylam provides spare parts for Alnylam Equipment, such spare parts
will remain the property of Alnylam and will be used by Tekmira only for maintenance of
Alnylam Equipment. Tekmira will immediately notify Alnylam if at any time it believes any
Alnylam Equipment has been damaged, lost or stolen.





     6.5 Validation


Tekmira will be responsible for performing appropriate qualification and/or validation of the
Facilities, Tekmira Equipment and cleaning and maintenance processes employed in the Manufacturing
Process at the Facilities in accordance with cGLP and cGMP (as applicable), Tekmira’s SOPs, the
Quality Agreement, Applicable Laws, and in accordance with any other validation procedures
established by the Joint Development and Manufacturing Committee. Tekmira will also be responsible
for ensuring that all such qualifications and/or validations have been performed in the case of all
other Facilities or equipment, to the extent involved in the Manufacture of any GMP Batch. Tekmira
will also be responsible for ensuring that all such validated processes to the extent involved in
the Manufacture of any GMP Batch are carried out in accordance with their terms.




     6.6 Licenses and Permits


Tekmira will be responsible for obtaining, at its expense, the Facilities and any licenses or
permits and regulatory and government approvals necessary for the operation and use of the
Facilities as pharmaceutical manufacturing facilities generally (i.e., without specific regard to
the Products or the performance of Supply Services by Tekmira under this Agreement). Where any
such licenses, permits or approvals are required specifically for the performance of Supply
Services by Tekmira under this Agreement which would not otherwise be required by Tekmira, the
expense thereof shall be treated as part of Tekmira’s Third Party Costs for purposes of determining
the Price.







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Article 7




Manufacture



     7.1 Material Sourcing




	7.1.1	 	Tekmira acknowledges and agrees that Alnylam Materials are the property of Alnylam and that
Alnylam will retain all right, title and interest in and to Alnylam Materials, including all
proprietary rights thereto at each stage of Manufacture. Alnylam acknowledges and agrees
that, except for the Tekmira Materials incorporated into Product delivered to Alnylam, Tekmira
Materials are the property of Tekmira and that Tekmira will retain all right, title and
interest in and to Tekmira Materials, including all proprietary rights thereto.
	 
	7.1.2	 	Alnylam shall at its sole cost and expense (a) source, purchase and provide such quantities
of Alnylam Materials as are reasonably required for each Work Order, (b) qualify, monitor and
audit the suppliers or vendors of Alnylam Materials, and (c) notify Tekmira of any changes to
qualification procedures for such vendors or suppliers or to any raw material release or
specification procedures applicable to any Alnylam Materials.
	 
	7.1.3	 	Tekmira will pursuant to each Work Order (a) source Tekmira Materials for Products in
accordance with the Specifications, (b) qualify, monitor and audit the suppliers or vendors of
Tekmira Materials, and (c) notify Alnylam of any changes to qualification procedures for such
vendors or suppliers or to any raw material release or specification procedures applicable to
any Tekmira Materials.
	 
	7.1.4	 	Alnylam will at all times retain title to and ownership of the Alnylam Materials at each and
every stage of Manufacture. Tekmira will provide within the Facilities an area or areas where
the Alnylam Materials, Product, any intermediates (and components thereof), and any work in
process are segregated and stored in accordance with the Specifications and cGMP or cGLP, as
applicable, and in such a way as to be able at all times to clearly distinguish such Alnylam
Materials from products and materials belonging to Tekmira, or held by it for a Third Party’s
account. Tekmira will at all times take such measures as are required to protect the Alnylam
Materials, Product, any intermediates (and components thereof), and any work in process from
risk of loss or damage at all stages of Manufacture. Tekmira will ensure that the Alnylam
Materials, Product, any intermediates (and components thereof), and any work in process remain
free and clear of any liens or encumbrances. Tekmira will immediately notify Alnylam if at
any time it believes any Product or Alnylam Materials have been damaged, lost or stolen.





     7.2 Receipt and Release Testing of Raw Material




	7.2.1	 	Tekmira will receive Alnylam Materials in accordance with Tekmira SOPs and will visually
examine the packaging integrity of Alnylam Materials and ensure that damage has not occurred
during transport. If Tekmira visually detects any defect or damage in any Alnylam Materials
or the packaging thereof, Tekmira will notify Alnylam immediately or by the next Business Day
with detailed information concerning the nature of the damage and seek instructions from
Alnylam.
	 
	7.2.2	 	Alnylam shall ensure that all Alnylam Materials to be delivered to Tekmira for use in
non-GMP Batches have been released in accordance with the Raw Material Specifications for such
Alnylam Materials. In respect of GMP Batches, Alnylam shall provide all Alnylam Materials and
associated documentation to Tekmira not less than thirty (30) days prior to the initiation of
each Manufacturing campaign to enable Tekmira to perform raw material release testing on
Alnylam Materials, it being agreed that both Parties will exert commercially reasonable
efforts to shorten this lead time where practicable.




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	7.2.3	 	If Tekmira is to conduct full release testing of Alnylam Materials in accordance with the
Specifications prior to introducing each batch of Alnylam Materials into the Manufacture of
Product, Alnylam shall supply reasonably sufficient quantities of Alnylam Materials for the
purposes of raw material testing and Batch Manufacturing. Tekmira will provide Alnylam with
copies of the analytical reports, raw data and any other relevant documentation in respect of
each lot of Alnylam Materials tested, and notify Alnylam of any deficiencies in respect of any
lot of Alnylam Materials tested.





     7.3 Use of Materials and Product


Tekmira covenants and agrees with Alnylam that it will (a) use all Materials in compliance with all
Applicable Laws, (b) not use the Alnylam Materials for any reason other than the performance of the
Supply Services including, without limitation, not to analyze, characterize, modify or reverse
engineer any Alnylam Materials or take any action to determine the structure or composition of any
Alnylam Materials unless required pursuant to a signed Work Order, (c) not distribute or release
any Alnylam Materials or Product or any derivative thereof to any person other than employees of
Tekmira, Alnylam, or Third Parties approved for such purpose in any Work Order or otherwise by
Alnylam or the Joint Development and Manufacturing Committee, who require access to the Alnylam
Materials or Product in the performance of the Supply Services, (d) ensure that no Person will take
or send any Alnylam Materials or Product or any part thereof to any location, other than within the
Facilities at which the Supply Services are to be performed, and (e) ensure that all of Tekmira’s
employees having access to the Alnylam Materials and Product are made aware of and comply with the
terms of this Agreement, including the obligations of confidentiality respecting the same contained
herein.




     7.4 Responsibility for Safe Use


Tekmira shall be responsible in accordance with Applicable Laws for implementing and maintaining
health and safety procedures for the performance of Supply Services and for the handling of any
Materials or hazardous waste used in or generated by the Supply Services. Tekmria, in consultation
with Alnylam, will develop safety and handling procedures for Materials and Products. Provided
Alnylam has delivered a Material Safety Data Sheet (“MSDS”) for each of the Alnylam Materials
supplied to Tekmira, Alnylam shall have no responsibility for Tekmira’s health and safety program.




     7.5 Test Parameters


All test parameters will be as specified in the Specifications included in each Work Order.




     7.6 Manufacture of Bulk Product




	7.6.1	 	Prior to Manufacturing the first GMP Batch of a Product, Tekmira shall generate and deliver
to Alnylam, an MBR for such GMP Batch to be Manufactured and each GMP Batch shall be
Manufactured in accordance with the MBR.





     7.7 Bulk Product Release Testing




	7.7.1	 	If Alnylam in writing requests Supply Services in respect of Bulk Product release testing,
and unless otherwise stated in the Work Order for the Manufacture of Product, Tekmira will
perform release testing of the applicable Batch in accordance with the Specifications within
four (4) weeks of completion of a Manufacturing campaign.
	 
	7.7.2	 	If at any time during the Manufacture of Product, Tekmira discovers that the whole or part
of a Batch does not meet the acceptance criteria set forth in the Specifications for Product,
Tekmira will notify Alnylam in accordance with Section 7.9 and provide sufficient details to
enable Alnylam to order replacement shipments of relevant Alnylam Material and provide
instructions for the disposition of the affected Product.




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     7.8 Stability Testing


If Alnylam in writing requests Supply Services in respect of stability testing, Tekmira will design
and Alnylam will approve a study protocol and applicable SOPs to be used by Tekmira. Such study
protocols will be prepared as part of the Supply Services set forth in such Work Order.




     7.9 Testing Generally




	7.9.1	 	Tekmira will contact Alnylam within two (2) Business Days, either verbally or in written
form, of Tekmira’s discovery of any actual or suspected Out-Of-Specification (“OOS”) data with
respect to work done under or in connection with a GMP Batch Work Order, and Tekmira will
recommend the course of action to be undertaken to confirm and/or remedy such OOS, if any.
Tekmira will forward to Alnylam for Alnylam’s approval, any and all OOS reports concerning the
Product which do not stem from an assignable laboratory cause.
	 
	7.9.2	 	Tekmira will obtain Alnylam’s approval prior to necessary re-testing or re-sampling as part
of an OOS investigation with respect to work done under or in connection with a GMP Batch Work
Order. Recommendation and approval for such action will be contained in the relevant OOS
report that will be copied to Alnylam. Charges for re-testing will not apply where re-testing
stems from flawed testing done by Tekmira.





     7.10 Sample Retention — Raw Materials and Bulk Product


For each GMP Batch Manufactured by Tekmira, Tekmira will, as part of the Supply Services, retain
sufficient quantities of raw materials and Bulk Product, in appropriate material composition
container-closure systems until the later of (a) a period equal to the shelf life of the Product
into which the raw material has been incorporated plus two (2) years, or (b) such longer period as
may be required or advisable in accordance with Applicable Laws and mutually agreed by the Parties,
after which time, Tekmira will (i) obtain Alnylam’s prior approval for the destruction or disposal
of the raw material, (ii) upon receiving such approval, destroy or dispose of such raw material in
accordance with Section 7.12; and (iii) document the destruction or disposal of all such raw
material.




     7.11 Storage




	7.11.1	 	Tekmira will maintain at all times adequate facilities for the storage of Materials and will
exercise due care in handling and storing all Materials in accordance with Applicable Laws,
applicable Specifications, the Quality Agreement and this Agreement.
	 
	7.11.2	 	Alnylam’s Representatives will, upon prior written notice to Tekmira and subject to the
limitations and restrictions described in Section 9.3, have reasonable access to the
Materials, and will have the right to obtain original raw data and supporting documentation
respecting same.
	 
	7.11.3	 	Tekmira will use its reasonable efforts to visibly mark any Materials that are used
exclusively for the Manufacture of Product for Alnylam to distinguish them from other
materials.
	 
	7.11.4	 	Tekmira shall store Product and Materials for up to one (1) week after Alnylam’s acceptance
of the Product pending Alnylam’s shipper or courier pick up, provided, however, that Alnylam
is reasonably prompt in effecting its acceptance of the Product. If Alnylam’s courier or
shipper is unable to take delivery of Product within this one (1) week period following
Alnylam’s acceptance of the Product, or if Alnylam is not reasonably prompt in effecting such
acceptance, Tekmira shall be entitled to charge Alnylam for its reasonable storage costs.





     7.12 Waste Disposal


If requested by Alnylam in writing, used and unused Materials and Product will be destroyed or
disposed by Tekmira in accordance with Applicable Laws, and Alnylam shall pay Tekmira (in
accordance with Article 4) Tekmira’s actual costs incurred in or otherwise attributable to such
destruction or disposal. Tekmira will not destroy or dispose of any retained samples relating to
regulatory compliance or quality






- 21 -









 








control without giving Alnylam two (2) months prior written notice and a reasonable opportunity to
take possession of such samples.




Article 8

Delivery of Product




     8.1 Release and Batch Documentation




	8.1.1	 	For each non-GMP Batch Manufactured, within six (6) weeks following the completed processing
of the Bulk Product or such other period as the Joint Development and Manufacturing Committee
may determine to be reasonable, Tekmira will deliver to Alnylam’s designated quality assurance
representative, a copy of the CoA for such Batch and all underlying and supporting raw data
and such other data or information (other than Formulation Design Know-How) that is reasonably
available to Tekmira and that is determined by the Joint Development and Manufacturing
Committee to be appropriately deliverable to Alnylam (together, the “non-GMP Batch
Documentation”). In addition, to the extent reasonably requested by Alnylam, Tekmira will
also supply Alnylam with samples of the applicable non-GMP Batch in an amount sufficient for
Alnylam to conduct necessary testing of such non-GMP Batch.
	 
	8.1.2	 	For each GMP Batch Manufactured, Tekmira will deliver to Alnylam’s designated quality
assurance representative, the following samples and documentation duly reviewed by Tekmira’s
quality assurance representative, within six (6) weeks following the completed processing of
the Bulk Product, as applicable:






	 	(a)	 	a copy of the Executed Batch Record for the applicable GMP Batch and all
underlying or supporting raw data;
	 
	 	(b)	 	a copy of the CoA and all underlying or supporting raw data (including, without
limitation, any applicable associated method qualification and validation reports
required by cGMP);
	 
	 	(c)	 	a copy of the analytical reports for raw materials;
	 
	 	(d)	 	a copy of any investigation reports concerning the Manufacture of the
applicable GMP Batch;
	 
	 	(e)	 	all records of any relevant Third Party equivalent to (a) through (d) above;
	 
	 	(f)	 	documentation, signed by an authorized representative of Tekmira, identifying
and certifying to the country of origin for raw materials used in a particular Batch
and, if requested by Alnylam, a statement, in the form reasonably requested by Alnylam,
certifying that all raw materials used in a particular Batch are free of bovine
spongeform encephalitis and total spongeform encephalitis; provided however, that all
Alnylam Materials will be provided with the documentation and certifications set forth
in this subsection such that Tekmira will be able to rely on Alnylam’s documentation
and certifications with respect to the Alnylam Materials on which it is required to
document pursuant to this subsection; and
	 
	 	(g)	 	a certificate signed by an authorized representative of Tekmira confirming that
the GMP Batch was Manufactured in accordance with cGMP; and, based on the release
testing required to be performed by Tekmira under the Specifications, such GMP Batch
meets the applicable Specifications and is compliant with Applicable Laws (“Certificate
of Compliance”);
	 
	 	(h)	 	and any other data (other than Formulation Design Know-How) reasonably
requested by Alnylam that is either required by cGMP or that is otherwise reasonably
available to Tekmira





- 22 -









 










	 	 	(together, the “GMP Batch Documentation”, and with the non-GMP Batch Documentation, the
“Batch Documentation”). In addition, to the extent reasonably requested by Alnylam, Tekmira
will also supply Alnylam with samples of the applicable GMP Batch in an amount sufficient
for Alnylam to conduct necessary testing of such GMP Batch.






	8.1.3	 	Notwithstanding the foregoing Section 8.1.2, if the quality assurance process is halted or
delayed after completion of Manufacture of a GMP Batch for any reason, Tekmira will
immediately notify Alnylam of such delay and the reason(s) therefor and provide Alnylam with a
new estimated date for delivery of complete Batch Documentation for the applicable GMP Batch.
The period stipulated in Section 8.1.2 will be extended by the length of time to be mutually
agreed upon and recorded in writing.
	 
	8.1.4	 	If Tekmira determines that a Batch does not meet the relevant Specifications, Tekmira shall
promptly notify Alnylam of such determination, and the Parties shall discuss the appropriate
next steps.





     8.2 Shipment




	8.2.1	 	Tekmira will make Product available for pick-up by Alnylam’s shipper or courier only after
all aspects of Manufacturing are complete and all applicable documentation is complete,
including sign-off and release authorization by Alnylam and, where applicable, Tekmira’s
quality assurance personnel, and forwarded to Alnylam as set forth in Section 8.1, except as
authorized in writing by Alnylam’s head of quality assurance or as otherwise determined by the
Joint Development and Manufacturing Committee. For purposes of clarity, Tekmira will release
Product to Alnylam or its designees under quarantine prior to finalization of the deliverables
described in Section 8.1.2.
	 
	8.2.2	 	If a Work Order requires Tekmira to Manufacture only Bulk Product, risk of loss or damage to
Alnylam Materials and Product will remain with Tekmira while the same are at the Facilities
until Alnylam has taken delivery of the Product. All deliveries shall be FCA the Facilities
(Incoterms 2000). A bill of lading will be furnished to Alnylam with respect to each delivery.
Tekmira shall not be responsible for any early or late delivery caused directly or indirectly
by any national or international security, transport, customs or other measures enacted by
relevant governmental entities, in which case Alnylam shall have the option of arranging
alternative delivery methods.





     8.3 Testing and Rejection of Delivered Product




	8.3.1	 	After Alnylam or its designee(s)’ receipt of the Product and its associated documentation,
if Alnylam or its designee discovers through visual inspection any shortage of Product
comprising the delivery, any damage to the Product or packaging or shipping container or any
obvious defect detectable by the naked eye, Alnylam will notify Tekmira within five (5)
Business Days of Alnylam or its designee(s)’ receipt of the Product.
	 
	8.3.2	 	Alnylam will be entitled, at its cost and expense, to inspect the Batch Documentation
provided under Section 8.1 to ensure compliance with applicable Specifications, and to test
(using Methods set forth in the Specifications) each Batch and the documentation applicable to
such Batch to determine whether the Product complies with the CoA, and, with respect to GMP
Batches, with the MBR, Specifications, cGMP and Applicable Laws





     8.4 Sharing Batch Risk




	8.4.1	 	If Alnylam does not accept a Batch within fifteen (15) Business Days of the later of (a)
receipt of the Product as described in Section 8.3 or (b) Alnylam’s receipt and review of the
applicable Batch Documentation and samples for such Batch in accordance with Section 8.1, and
if the Parties cannot agree on a course of action, either through the Joint Development and
Manufacturing Committee or otherwise, an independent laboratory in the United States which is




- 23 -









 






	 	 	acceptable to both Parties will test the Batch in dispute (the “Disputed Batch”) to
determine whether the Disputed Batch meets Specifications, and both Parties hereby agree to
accept and be bound by the findings of such independent laboratory absent manifest error,
false documentation or wilful misconduct by such laboratory. The Parties will provide such
independent laboratory will the Specifications, Batch Documentation, and other information
required to conduct such tests and analysis necessary to make the requested findings.






	8.4.2	 	If such laboratory finds, or the Parties otherwise agree, that the Disputed Batch meets the
Specifications [**], or if Alnylam makes any use of the Disputed Batch in pre-clinical or
clinical testing, Alnylam will be deemed to have accepted such Batch and Alnylam shall, in
addition, pay the fees for such independent laboratory testing and will promptly authorize the
release of such Product and make payment to Tekmira for such Batch pursuant to Article 4.
	 
	8.4.3	 	If the Disputed Batch is an At-Risk Batch, and such independent laboratory finds, or the
Parties otherwise agree, that such At-Risk Batch failed to meet Specifications [**], Tekmira
shall provide a replacement Batch, which will be treated for purposes of Article 4 as if it
were a new Batch called for under the applicable Work Order, and the aggregate Price for the
Supply Services provided with respect to the failed At-Risk Batch and with respect to such
replacement Batch will equal the sum of the amounts called for under Article 4 for both such
Batches; provided, however, that in the event that [**], then such At-Risk Batch will (a) be
subject to Section 8.4.4., and will be treated as a Disputed Batch which is not an At-Risk
Batch for purposes of Section 8.4.4 and (b) be an At-Risk Batch for all other purposes.
	 
	8.4.4	 	If such independent laboratory finds, or the Parties otherwise agree, that a Disputed Batch
(other than an At-Risk Batch) failed to meet Specifications when delivered to Alnylam or its
designee, whether or not due to Tekmira’s negligence or a breach by Tekmira of its obligations
under this Agreement, and Alnylam makes no use of the Disputed Batch in pre-clinical or
clinical testing, Tekmira shall provide a replacement Batch, and the aggregate Price for the
Supply Services provided with respect to the failed Batch and to be provided with respect to
such replacement Batch shall equal the Price for the failed Batch plus the Materials Cost and
Third Party Costs attributable to the replacement Batch, it being understood and agreed that
Alnylam will supply and bear the costs of all Alnylam Materials to be incorporated into the
replacement Batch and Tekmira will bear the other costs incurred as a result of having to run
such replacement Batch, and, in addition, Tekmira shall, pay the fees and costs incurred in
connection with the testing conducted by the independent laboratory; provided, however, that
Alnylam shall pay the costs of the independent laboratory with respect to the testing of any
non-GMP Batch regardless of the findings of such independent laboratory .
	 
	8.4.5	 	If such independent laboratory finds, or the Parties otherwise agree, that the Disputed
Batch failed to meet Specifications due to handling, events or other causes following delivery
of such Batch to Alnylam or its designee, Tekmira shall provide a replacement Batch, which
will be treated for purposes of Article 4 as if it were a new Batch called for under the
applicable Batch Work Order, and the aggregate Price for the Supply Services provided with
respect to the failed Batch and with respect to such replacement Batch will equal the sum of
the amounts called for under Article 4 for both such Batches.





Article 9

Inspections and Inquiries




     9.1 Quality Assurance Audits of Suppliers


Tekmira will, at its expense and with reasonable frequency in accordance with current industry
standards, conduct quality assurance audits of the facilities and operations of Third Parties and
the suppliers of Tekmira Materials related to Manufacture of Product and Alnylam may, upon
reasonable prior written






- 24 -









 







notice to Tekmira, review and inspect at Tekmira’s Facilities copies of Tekmira’s audit reports,
redacted as appropriate. Tekmira will give Alnylam notice at least thirty (30) days in advance of
any such audit and allow Alnylam personnel to accompany Tekmira during such audit.




     9.2 Records


Subject to Section 11.3, Tekmira shall provide Alnylam with the Appendix II Information and, in
addition, agrees to the following:





	9.2.1	 	Tekmira will disclose to Alnylam, records, policies and procedures (including without
limitation, reports, accounts, notes, data, SOPs, and records of all information and results)
that Tekmira generates or utilizes in the Manufacture of a particular Product only to the
extent that, in Alnylam’s reasonable judgment, such records, policies and procedures are
necessary or useful for submission to a Regulatory Authority directly in connection with the
testing or approval of such Product (collectively, the “Records”);
	 
	9.2.2	 	to the extent such Records relate exclusively to Products or certain Confidential
Information of Alnylam, Tekmira will not transfer, deliver or otherwise provide any such
Records to any party other than Alnylam without the prior written approval of Alnylam, except
to Regulatory Authorities as required by Applicable Law;
	 
	9.2.3	 	Records will be available at reasonable times for inspection, examination and copying by or
on behalf of Alnylam;
	 
	9.2.4	 	all original Records of the Manufacture of Product under this Agreement will be retained and
archived by Tekmira in accordance with cGMP (if applicable) and Applicable Law, but in no case
for less than a period of five (5) years following completion of the applicable Work Order;
	 
	9.2.5	 	upon Alnylam’s written request, Tekmira will promptly provide Alnylam with copies of such
Records at a reasonable cost. Tekmira will notify Alnylam in writing prior to destroying any
Records and will cooperate with Alnylam at Alnylam’s cost, should Alnylam wish to have such
Records transferred to Alnylam or a designee.





     9.3 Access to Facilities, Personnel and Records


Subject to the restrictions set forth in the Restated Tekmira LCA and Restated Protiva CLA with
respect to the use and sublicensing of Tekmira Technology, Protiva Patent Rights and Licensed
Information (as defined in such agreements) and provided that in no event shall Tekmira be required
to provide any Formulation Design Know-How, Alnylam and its Representatives will have the right:





	9.3.1	 	to inspect those sections of Tekmira’s Facilities used in the Manufacture of the Product or
its components and to interview all relevant personnel to review and make such copies of such
Records reasonably necessary to verify Tekmira’s compliance under this Agreement, the
Specifications, cGMP, the FDCA, and any other Applicable Laws:






	 	(a)	 	twice per year during the first and annually thereafter, on ten (10) Business
Days prior notice and during regular business hours, or
	 
	 	(b)	 	without notice, in the event that Alnylam has reasonable doubt that Product has
been Manufactured by Tekmira in accordance with the terms of this Agreement; and






	9.3.2	 	to be present at Tekmira’s Facilities during any inspection of Tekmira or Tekmira’s
Facilities by any Regulatory Authorities, to be consulted when Product specific questions are
posed by Regulatory Authorities and, upon the written request of Tekmira, to observe or
participate in such inspection to the extent it relates directly to the Manufacturing of the
Product. Tekmira will






- 25 -











 






	 
	 
	 
	 
	 
	 	 	notify Alnylam promptly after learning that any such inspection is
being conducted or will be conducted, and in any event within one
Business Day of learning of same.






	 	9.4	 	Inspections and Investigations by Regulatory Authorities




Tekmira agrees to notify Alnylam as soon as practicable of any unannounced regulatory inspection,
and to notify Alnylam within one (1) Business Day following receipt of any notice of inspections or
other similar notifications by Regulatory Authorities which notice pertains to the Product being
Manufactured for supply to Alnylam pursuant to this Agreement, other matters within the scope of
this Agreement, or the Facilities to the extent it relates to the Product being Manufactured for
supply to Alnylam pursuant to this Agreement, and will provide to Alnylam within three (3) Business
Days after receipt of the above notification(s) copies of all correspondence, reports, notices,
findings and other material pertinent to such inspections, as they are received or produced by
Tekmira. Tekmira will allow, and will provide Alnylam with any required authorization to allow
Regulatory Authorities to inspect, audit and review the Facilities to the extent it relates to the
Product being Manufactured for supply to Alnylam pursuant to this Agreement, and all procedures,
practices, books, Records, and documents to the extent requested by Regulatory Authorities. Within
one (1) Business Day following Tekmira’s receipt of FDA Forms 482, 483, or warning letters in
respect of the Product, or upon receipt of similar notifications from Regulatory Authorities other
than the FDA, Tekmira will notify Alnylam thereof and will provide Alnylam copies of same upon
Alnylam’s written request. Tekmira and Alnylam agree to cooperate with each other during any
inspection, investigation or other inquiry by Regulatory Authorities, including providing
information and documentation as requested by such Regulatory Authorities. Tekmira and Alnylam also
agree to discuss any response to observations or notifications received and to give the other Party
an opportunity to comment on any proposed response before it is made. In the event of any
disagreement concerning the form or content of such response, however, Alnylam will be responsible,
acting reasonably and in good faith, for deciding the appropriate form and content of any response
relating to the Product. Tekmira will permit Alnylam Representatives to be present during such
inspections.





	 	9.5	 	Regulatory Responsibilities






	9.5.1	 	Tekmira will be responsible for maintaining and fulfilling all Applicable Laws with respect
to the Product that are imposed upon Tekmira as the manufacturer thereof. Alnylam and its
designees will only refer to or identify Tekmira in Alnylam’s Product labelling as may be
required by Applicable Laws. Tekmira will, on a timely basis, provide Alnylam with all
information that Tekmira has that is reasonably necessary and relevant to Alnylam’s
obligations to fulfill such requirements.
	 
	9.5.2	 	Alnylam will be responsible for obtaining, at its sole expense, all regulatory and
governmental approvals and permits necessary for Alnylam’s use of any Product Manufactured
under this Agreement, including, without limitation, any IND submissions and any analogous
submissions filed with appropriate Regulatory Authorities in the Territory.
	 
	9.5.3	 	Subject to the restrictions set forth in the Restated Tekmira LCA and Restated Protiva CLA
with respect to the use and sublicensing of Tekmira Technology, Protiva Patent Rights and
Licensed Information (as defined in such agreements) and provided that in no event shall
Tekmira be required to provide any Formulation Design Know-How, Tekmira will provide Alnylam
with all supporting data and information relating to the Manufacture of Product necessary for
obtaining such approvals, including, without limitation, all Records, raw data, reports,
authorizations, certificates, methodologies, Batch Documentation, Raw Material Specifications,
SOPs, standard Methods, CoAs, Certificates of Compliance and other documentation in the
possession or control of Tekmira relating to the Manufacture of Product (or any component
thereof).




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Article 10




Regulatory, Quality and Safety Issues




	 	10.1	 	Adherence to Quality Agreement




On or before January 31, 2009, the Parties shall execute a new Quality Agreement to reflect the
terms of this Agreement. Tekmira will perform all Supply Services in compliance with the terms of
the Quality Agreement.





	 	10.2	 	Withdrawals and Recalls of Product from Clinical Trials




If Alnylam is required or requested by any Regulatory Authority to recall any Product for any
reason, or should Alnylam decide voluntarily to withdraw any Product, Alnylam will be responsible
for co-ordinating such recall or withdrawal. Both Parties will cooperate fully with one another in
connection with any such recall or withdrawal.




Article 11




Back-up Manufacturer and Technical Transfer


The terms and conditions of Article 5 of the Restated Tekmira LCA shall remain in effect, but,
where there is any conflict between such terms and conditions and the terms and conditions set
forth in this Article 11, the terms of this Article 11 will take precedence during the Term with
respect to this Agreement and the Supply Services under this Agreement.





	 	11.1	 	Exclusive Manufacturing Obligations






	11.1.1	 	Alnylam hereby retains Tekmira as Alnylam’s exclusive manufacturer to Manufacture and supply
Alnylam’s requirements of the Bulk Product for each Product, in each case for toxicology and
other non-clinical studies and clinical development, through the completion of all Phase II
Studies of such Product, as the case may be, that are initiated prior to the initiation of the
first Phase III Study of such Alnylam Royalty Product or Alnylam Licensed Product, as the case
may be; provided, however, that such exclusive supply engagement shall only apply during the
Term and shall not apply to any Product (on a Product-by-Product basis):






	 	(a)	 	that Tekmira cannot or will not Manufacture (or is not or will not be able to
Manufacture), to Alnylam’s reasonable satisfaction, (w) at the requisite scale, in
sufficient quantities, within requisite timelines as set forth in the first two
Calendar Quarters contained in the most recent GMP Batch Forecast or, with respect to
non-GMP Batches, based on the agreed Work Order, and in accordance with the applicable
MBR, Specifications and other quality requirements for such Product, (x) [**]
consecutive Batches (other than At-Risk Batches) of such Product meeting the
requirements of this Agreement, (y) in accordance with all applicable laws and
regulations (including without limitation the requirements of cGMP, if applicable), and
(z) using a facility with respect to which Tekmira or its permitted subcontractor has
obtained approval from the applicable Regulatory Authorities to Manufacture and supply
such Product; or






	 	(b)	 	with respect to which Alnylam would be required to pay Tekmira an amount per
Batch that is [**] greater than the cost per GMP Batch as quoted in a bona fide offer
received by Alnylam from a Third Party (other than a Back-Up Manufacturer);
provided, that the Specifications for such Bulk Product, and the batch size,
quantity, and quality of Product would be at least reasonably comparable. In the event
that Alnylam would be entitled under this clause (b) to obtain its requirements of the
Bulk Product from a Third Party, then prior to Alnylam engaging such Third Party for
such services, Tekmira may submit a revised per GMP Batch price quote for such Bulk
Product and if Tekmira’s revised per




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	 	 	 	GMP Batch price quote is the same or better than the Third Party’s quote, Alnylam
shall continue to obtain its supply of such Bulk Product from Tekmira in accordance
with this Agreement.






	 	 	For purposes of clarity, Tekmira’s obligations to qualify a Back-Up Manufacturer and to
perform Technical Transfer will be performed in a reasonable timeframe that is consistent
with the timeframes established by the Joint Development and Manufacturing Committee for the
product development program for such Product, taking into account the need to qualify a
Back-Up Manufacturer and Manufacture Product for such first Phase III Study sufficiently in
advance of the initiation of such Phase III Study with respect to such Product in order that
Alnylam will have sufficient supplies of such Product for commencement of such Phase III
Study without delay.






	11.1.2	 	Alnylam and Tekmira shall agree from time to time on one or more additional suppliers of
Bulk Product (each a “Back-Up Manufacturer”), such that at all times, there is at least one
primary manufacturer and at least one Back-Up Manufacturer. Initially, if qualified, [**]
shall serve as a Back-Up Manufacturer acceptable to both Parties. Alnylam shall have the
right to propose such Back-Up Manufacturer(s) and Tekmira shall have the right to consent to
such Back-Up Manufacturer(s), which consent shall not be unreasonably withheld or delayed.
[**].
	 
	11.1.3	 	Subject to Section 11.3, Tekmira shall promptly provide Technical Transfer to all such
Back-Up Manufacturer(s) to the extent required to accomplish the timely qualification of such
Back-Up Manufacturer(s). Within thirty (30) days after the Effective Date, Tekmira shall
deliver to Alnylam, for review and approval, a Work Order containing a project overview for
establishing and qualifying [**] as the initial Back-Up Manufacturer. This project overview
will include contract manufacturing organization targets, timelines, equipment requirements,
and both FTE and out-of-pocket expense estimates. As part of the qualification of such Back-Up
Manufacturer, Alnylam shall have the right to have such Back-Up Manufacturer Manufacture
Products in such amounts as may be necessary to ensure successful qualification of such
Back-Up Manufacturer and as may be necessary to maintain such qualification. For clarity,
qualification shall be deemed to have occurred if the Back-Up Manufacturer’s facility is
successfully audited (no critical deficiencies observed) by a Qualified Person (as such term
is defined by the relevant Regulatory Authorities) in the applicable countries within the
European Union. In addition, any manufacturing campaigns in excess of the minimum number of
Batches required to maintain such Back-Up Manufacturer for Bulk Product shall be performed by
Tekmira under Work Orders and this Agreement. In order to monitor Alnylam’s compliance with
this provision, Alnylam will provide Tekmira with an annual forecast and a written report,
certified by an officer of Alnylam, of the quantities of finished dosage form obtained by
Alnylam from all Back-Up Manufacturers.






	 	11.2	 	Methods Transfer




Subject to Section 11.3, Tekmira will provide to each of the Third Parties utilized by Tekmira in
the performance of the Supply Services, and to each Back-Up Manufacturer, the necessary training to
enable each of them to perform the Methods each of them is entrusted or expected to perform.
Tekmira will require each such Third Party and such Back-Up Manufacturer to provide Tekmira with
documentary evidence to confirm their incorporation of each Method into their respective change
control system and their successful performance of the new or revised Method. Such Method
transfers from Tekmira will be completed in accordance with protocols to be established between
Tekmira and each transferee.





	 	11.3	 	Technical Transfer






	11.3.1	 	Alnylam acknowledges and agrees that the transfer of Confidential Information and
Intellectual Property owned or controlled by Tekmira and necessary for the Manufacture of a
specific Product




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	 	 	 	shall be used by the recipient of such Confidential Information and Intellectual Property
(be it Alnylam or a Back-Up Manufacturer, or otherwise) solely for the purpose of
Manufacturing the specific Product for which the Technical Transfer was conducted. For
avoidance of doubt Alnylam acknowledges and agrees that:






	 	(a)	 	the Confidential Information and Intellectual Property owned or controlled by
Tekmira and necessary for the Manufacture of a specific Product encompassed in any
Technical Transfer by Tekmira can only be used: (i) by the recipient of the Technical
Transfer, (ii) solely for the Manufacture or regulatory approval of the specific
Product which formed the subject of the Technical Transfer and not for any other
product (or Product), and (iii) where Alnylam is the recipient of any such Confidential
Information and Intellectual Property, [**];






	 	(b)	 	the transfer by Tekmira of Tekmira Confidential Information and Tekmira
Intellectual Property for the Manufacture of a specific Product does not grant to the
recipient of such Technical Transfer any right or license of any kind to conduct
further transfer of Tekmira Confidential Information and Tekmira Intellectual Property
to any Person, for any purpose; and






	 	(c)	 	prior to the provision of any Methods under Section 11.2 or of any Technical
Transfer or any other Tekmira Confidential Information and Tekmira Intellectual
Property to any Third Party, including without limitation an alternate supplier, such
Third Party shall be required to execute and deliver to Tekmira the written
agreement(s) of such Third Party to be bound by the foregoing provisions of this
Section 11.3.1 and by Article 14 of this Agreement, explicitly for the benefit of
Tekmira, which agreement(s) must be in form and substance reasonably acceptable to
Tekmira.






	11.3.2	 	Tekmira will perform each Technical Transfer in accordance with Technical Transfer protocols
to be established between Tekmira and each Back-Up Manufacturer, with Alnylam’s approval,
which approval shall not unreasonably withheld or delayed, all of which protocols and other
documentation arising from the performance Technical Transfer activities shall constitute the
Confidential Information of Tekmira.






	 	11.4	 	The Parties agree to negotiate in good faith at the appropriate time Tekmira’s
Manufacture of Alnylam’s requirements of the Bulk Product for Phase III Studies and
commercial sale if Tekmira or its Affiliate is qualified and capable of performing this
Manufacture in the appropriate timeframe; provided, however, that nothing in this Agreement
shall be deemed to be a binding obligation of either Party to enter into such a transaction.
	 
	 	11.5	 	As of the Effective Date, the Manufacturing Plan will terminate and be replaced by Work
Orders under this Supply Agreement.




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Article 12




Representations, Warranties and Covenants of the Parties




	12.1	 	Mutual Representations and Warranties.




Each Party represents and warrants to the other Party that as of the Effective Date of this
Agreement:





	12.1.1	 	It is duly organized and validly existing under the laws of its jurisdiction of
incorporation or formation, and has full corporate or other power and authority to enter into
this Agreement and to carry out the provisions hereof. Further, except for any approvals from
Regulatory Authorities, pricing and/or reimbursement approvals, manufacturing approvals and/or
similar approvals necessary for the Manufacture of Products, all necessary consents, approvals
and authorizations of all Regulatory Authorities required to be obtained by such Party as of
the Effective Date in connection with the execution, delivery and performance of this
Agreement to which it is a party have been obtained by the Effective Date.
	 
	12.1.2	 	It is duly authorized to execute and deliver this Agreement, and to perform its obligations
hereunder, and the person or persons executing this Agreement on its behalf has been duly
authorized to do so by all requisite corporate action.
	 
	12.1.3	 	This Agreement is legally binding upon it and enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement and does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party and by which
it may be bound, or with its charter or by-laws.
	 
	12.1.4	 	It has not, and will not during the Term, grant any right to any Third Party which would
conflict with the rights granted to the other Party hereunder. It has (or will have at the
time performance is due) maintained and will maintain and keep in full force and effect all
agreements (including license agreements) and filings (including patent filings) necessary in
such Party’s reasonable judgment to perform its obligations hereunder. Further, (a) the
execution and delivery of this Agreement by such Party, (b) the performance of such Party’s
obligations hereunder, do not conflict with or violate any requirement of applicable laws or
regulations existing as of the Effective Date and applicable to such Party.
	 
	12.1.5	 	Neither Party nor any of its Affiliates has been debarred or is subject to debarment and
neither Party nor any of its Affiliates will use in any capacity, in connection with this
Agreement or, in the case of Tekmira, in connection with the Supply Services, any person or
entity that has been debarred pursuant to Section 306 of the United States Federal Food, Drug,
and Cosmetic Act, or that is the subject of a conviction described in such section. Each
Party agrees to inform the other Party in writing immediately if it or any Person that is
performing activities in connection with this Agreement is debarred or is the subject of a
conviction described in Section 306, or if any action, suit, claim, investigation or legal or
administrative proceeding is pending or, to the best of the notifying Party’s knowledge, is
threatened, relating to the debarment or conviction of the notifying Party or any person or
entity used in any capacity by such Party or any of its Affiliates in connection with this
Agreement or the Supply Services provided hereunder.
	 
	12.2	 	Tekmira Representations and Warranties.




Tekmira represents and warrants to Alnylam that:





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	12.2.1	 	The Supply Services will be performed with care, skill and diligence in accordance with
Applicable Laws and industry standards, and by individuals who are appropriately trained and
qualified;
	 
	12.2.2	 	At the time of delivery to Alnylam, the Product Manufactured under this Agreement will not
be adulterated or misbranded under the FDCA or other Applicable Laws.






	 	12.3	 	Compliance with Law




Alnylam and Tekmira each hereby covenants to the other that it will comply with the Specifications
and Applicable Laws applicable to Manufacturing the Product, in the case of Tekmira, and use of the
Product in clinical trials, in the case of Alnylam, and to the performance of its respective
obligations hereunder.





	 	12.4	 	Exclusions of Other Warranties




EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 12, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY
AS TO ANY PRODUCT, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR
OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES,
INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE AND WARRANTY OF NON-INFRINGEMENT.




Article 13

Term and Termination





	 	13.1	 	Term and Termination






	13.1.1	 	This Agreement will take effect as of the Effective Date and, unless earlier terminated
pursuant to this Section 13, will expire upon the earlier to occur of (a) the last to occur of
the expiration or termination of the “Agreement Term” as defined in the Restated Tekmira LCA
or the expiration or termination of the licenses granted to Alnylam under Article IV of the
Restated Protiva CLA, and (b) termination of this Agreement by Alnylam pursuant to Sections
11.4 or 11.6 of the Restated Tekmira LCA (provided, however, that the reference to “Article 5”
in such Section 11.6 shall instead be deemed a reference to Article 11 of this Agreement, the
reference to the “Quality Agreement” shall mean the Quality Agreement (as defined in this
Agreement) and the reference to the “Supply Agreement” shall mean this Agreement).
	 
	13.1.2	 	Alnylam shall have the right to terminate a Work Order at any time on at least ten (10)
Business Days’ prior notice to Tekmira, subject to Alnylam’s obligations under Section 13.2
with respect to such Work Order.






	 	13.2	 	Effect of Termination






	13.2.1	 	Orderly Termination. Tekmira will, upon termination or expiration of this Agreement
or any pending Work Order, promptly cease performance of all applicable Supply Services and
will take all reasonable steps to mitigate the out-of-pocket expenses incurred in connection
therewith. In particular, Tekmira will:






	 	(a)	 	perform only those services and activities mutually agreed upon by Alnylam and
Tekmira as being necessary or advisable in connection with the close-out of any
affected pending Work Order(s);




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	 	(b)	 	immediately cancel, to the greatest extent possible, any Third Party
obligations applicable to any affected pending Work Order(s);
	 
	 	(c)	 	promptly inform Alnylam of any irrevocable commitments made in connection with
any affected pending Work Order(s), and Alnylam shall reimburse Tekmira for the Third
Party Costs attributable to such irrevocable commitments;
	 
	 	(d)	 	promptly return to the vendor for a refund all unused, unopened Materials in
Tekmira’s possession that are related to any affected pending Work Order; and
	 
	 	(e)	 	promptly inform Alnylam of any remaining unused, unreturnable Tekmira Materials
ordered pursuant to any affected pending Work Order(s), and Alnylam shall purchase the
same and Tekmira shall deliver such Materials to Alnylam (or its designee) upon payment
of [**] to Tekmira of the Materials Cost attributable thereto.






	13.2.2	 	Upon any expiration or termination of this Agreement or a pending Work Order, Alnylam (a)
will, with respect to any Product then in process, pay Tekmira for any non-cancellable costs
incurred up to and including the date of such expiration or termination and pay Tekmira for
that portion of the Price that is allocable (on the basis of percentage of completion) to the
Supply Services conducted under the affected Work Order(s) to the date of the expiration or
termination, upon presentation of satisfactory evidence that such Supply Services were
conducted, all in accordance with Article 4, and (b) will purchase from Tekmira any existing
inventories of Product acceptable in accordance with Article 8, at the price for such Product
determined under Article 4.
	 
	13.2.3	 	The termination of this Agreement for any reason will be without prejudice to:






	 	(a)	 	at Alnylam’s option and written request, and subject to the terms of this
Agreement, Tekmira will, continue to perform its obligations hereunder in respect of
any Work Orders entered into prior to the effective date of such termination, and
Alnylam will pay Tekmira for Supply Services received in accordance with such Work
Order(s);
	 
	 	(b)	 	any other legal, equitable or administrative remedies as to which either Party
may then or thereafter become entitled.






	13.2.4	 	In the event of a termination of this Agreement by either Party, the Quality Agreement will
terminate on the same effective date of termination as this Agreement, subject to any
continuing or surviving obligations as set forth in each such agreement.
	 
	13.2.5	 	In the event of termination pursuant to Section 13.1.1(b) of this Agreement, Tekmira’s
obligations under Sections 11.1.2 and 11.3 shall survive termination of this Agreement;
provided, however, that Alnylam may select, as the primary manufacturer or as a Back-Up
Manufacturer, any entity engaged in the contract manufacturing of pharmaceutical products for
unaffiliated Third Parties to be the recipient of such Technical Transfer without regard to
the requirement in Section 11.1.2 that Tekmira approve such entity; provided, further,
however, that if Alnylam selects an entity that is also engaged in the research or development
of pharmaceutical products, Tekmira shall only be required to complete such Technical Transfer
to the division, department or portion of such entity that is engaged in the contract
manufacturing of pharmaceutical products for unaffiliated Third Parties, and Alnylam shall, in
addition to the requirements set forth in Section 11.3, contractually require, explicitly for
the benefit of Tekmira, that such recipient of Technical Transfer not share any of the
information so transferred with any members of such organization not directly involved in the
contract manufacture of Products on behalf of Alnylam, or required for regulatory approval of
such Product.




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	 	13.3	 	Continuing Obligations; Survival






	13.3.1	 	Termination of this Agreement for any reason will not relieve the Parties of any obligation
accruing prior thereto and any ongoing obligations hereunder and will be without prejudice to
the rights and remedies of either Party with respect to any antecedent breach of the
provisions of this Agreement.
	 
	13.3.2	 	The following shall survive any termination or expiration of this Agreement and continue to
be enforceable: (i) the provisions of Articles 1 and 12 through 16, (ii) with respect to
Supply Services conducted prior to the effectiveness of any termination or expiration or
conducted pursuant to Section 13.2.1 following any such termination or expiration, the
provisions of Articles 4, 6 and 8, (iii) Sections 7.10, 7.11, 7.12, 9.2, 9.5, 10.1, 10.2,
11.3, and 11.4, and (iv) any provisions which by their nature are intended to survive any
termination or expiration of this Agreement.






	 	13.4	 	Other Remedies




Sections 13.1 and 13.2 will not be exclusive and will not be in lieu of any other remedies
available to a Party hereto for any default hereunder on the part of the other Party.





	 	13.5	 	Returned Materials






	13.5.1	 	Tekmira and Alnylam will each return to the other within thirty (30) days of the effective
date of termination of this Agreement, all Confidential Information, Materials and other
materials that it possesses or controls that belongs to the other, except that each Party’s
legal counsel may retain a copy of the Confidential Information for record keeping purposes;
provided, however, that, subject to Section 11.3, Back-Up Manufacturers shall have the right
to retain and continue to use any Confidential Information, Materials and other materials
which such Back-Up Manufacturer was permitted to use pursuant to Article 11 hereof prior to
termination.
	 
	13.5.2	 	Tekmira will return temperature sensitive Material in accordance with applicable
Specifications or permit Alnylam to enter onto Tekmira’s Facilities to retrieve such Material.





Article 14

Confidentiality and Intellectual Property





	14.1	 	Non-Use and Non-disclosure of Confidential Information.
	 
	14.1.1	 	Each Party agrees that all Confidential Information of a Party that is disclosed by a Party
to the other Party (a) will not be used by the receiving Party except in connection with the
activities contemplated by this Agreement or in order to further the purposes of this
Agreement, (b) will be maintained in confidence by the receiving Party, and (c) (without
prejudice to the additional restrictions and conditions of Section 11.3, where applicable)
will not be disclosed by the receiving Party to any Third Party who is not a consultant,
advisor or Back-Up Manufacturer under an obligation of confidentiality to, the receiving Party
or an Affiliate of the receiving Party, without the prior written consent of the disclosing
Party. Notwithstanding the foregoing, the receiving Party will be entitled to use and
disclose Confidential Information of the disclosing Party which (i) was known by the receiving
Party or its Affiliates prior to its date of disclosure by the disclosing Party to the
receiving Party as demonstrated by legally admissible evidence available to the receiving
Party or its Affiliates, (ii) either before or after the date of the disclosure such
Confidential Information is lawfully disclosed to the receiving Party or its Affiliates by
sources other than the disclosing Party, (iii) either before or after the date of the
disclosure by the disclosing Party to the receiving Party such Confidential Information
becomes published or otherwise part of the public domain through no fault or omission on the
part of the receiving Party or its Affiliates, (iv) is independently developed by or for the
receiving Party or its




- 33 -









 












	 	 	Affiliates without reference to or in reliance upon the Confidential Information as
demonstrated by legally admissible evidence available to the receiving Party or its
Affiliates, (v) is reasonably necessary to conduct clinical trials or to obtain regulatory
approval of the Products or for the prosecution and maintenance of patent rights, (vi) is
reasonably required in order for a Party to obtain financing or conduct discussions with
partners so long as such Third Party recipients are bound by an obligation of
confidentiality, or (vii) in the reasonable judgment of the disclosing Party is required to
be disclosed by the receiving Party to comply with applicable laws or regulations 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, provided that the receiving Party provides
prior written notice of such disclosure to the disclosing Party and takes reasonable and
lawful actions to avoid or minimize the extent of such disclosure.
	 
	 	 	If a Party is required by judicial or administrative process to disclose Confidential
Information that is subject to the non-disclosure provisions of this Section 14.1.1, such
Party shall promptly inform the other Party of the disclosure that is being sought in order
to provide the other Party an opportunity to challenge or limit the disclosure obligations.
Confidential Information that is disclosed by judicial or administrative process shall
remain otherwise subject to the confidentiality and non-use provisions of this Section
14.1.1, and the Party disclosing Confidential Information pursuant to law or court order
shall take all steps reasonably practical, including without limitation seeking an order of
confidentiality, to ensure the continued confidential treatment of such Confidential
Information. In addition to the foregoing restrictions on public disclosure, if either Party
concludes that a copy of this Agreement must be filed with the United States Securities and
Exchange Commission or similar regulatory agency in a country other than the United States,
such Party shall seek the maximum confidential treatment available under applicable law,
provide the other Party with a copy of this Agreement showing any sections as to which the
Party proposes to request confidential treatment, provide the other Party with an
opportunity to comment on any such proposal and to suggest additional portions of this
Agreement for confidential treatment, and take such Party’s reasonable comments into
consideration before filing this Agreement.
	 
	14.1.2	 	Each Party agrees that it will provide Confidential Information received from the other
Party solely to its employees, consultants and advisors, and the employees, consultants and
advisors of its Affiliates or Back-Up Manufacturers as applicable, who have a legitimate
business need to know and an obligation to maintain in confidence the Confidential Information
of the disclosing Party. The disclosing Party is liable for any breach of the non-disclosure
obligation of its consultants, advisors, Affiliates and Back-Up Manufacturers as applicable.
	 
	14.1.3	 	The Parties each acknowledge and recognizes the mutual interest in protecting business
interests and trade secret information. Consequently, except for disclosures permitted
pursuant to Section 14.1.1 and 14.1.2, either Party, its Affiliates, or their respective
employees or consultants wishing to make a publication or a disclosure to a Third Party
relating to the Product shall deliver to the other Party a copy of the proposed written
publication or an outline of an oral disclosure at least thirty (30) days prior to submission
for publication or presentation. The reviewing Party shall have the right (a) to propose
modifications to the publication or presentation for patent reasons, trade secret reasons or
business reasons, or (b) to request a reasonable delay in publication or presentation in order
to protect patentable information. If the reviewing Party requests a delay, the publishing
Party shall delay submission or presentation for a period of thirty (30) days to enable patent
applications protecting each Party’s rights in such information to be filed. Upon expiration
of such thirty (30) days, the publishing Party shall be free to proceed with the publication
or presentation. If the reviewing Party requests modifications to the publication or




- 34 -









 












	 	 	presentation, the publishing Party shall edit such
publication to prevent disclosure of trade secret or
proprietary business information prior to submission
of the publication or presentation. With respect to
any proposed publications or disclosures by
investigators or academic or non-profit
collaborators, such materials shall be subject to
review under this Section 14.1.3 to the extent that
Tekmira or Alnylam, as the case may be, has the right
and ability (after using reasonable efforts) to do
so.
	 
	14.2	 	Intellectual Property Rights




Ownership and other rights relating to any Intellectual Property first identified, discovered or
developed in the course of the activities conducted pursuant to this Agreement will be governed by
the terms and conditions of the Restated Tekmira LCA and Restated Protiva CLA.





	14.3	 	Injunctive Relief




Each Party acknowledges the competitive and technical value and the sensitive and confidential
nature of the Confidential Information and agrees that monetary damages alone will be inadequate to
protect the other Party’s interests against any actual or threatened material breach of Section
14.1 of this Agreement. Accordingly, each Party consents to the granting of specific performance
and injunctive or other equitable relief to the other Party in respect of any actual or threatened
breach of Article 11 and Section 14.1 of this Agreement, without proof of actual Damages. These
specific remedies are in addition to any other remedy to which the Parties may be entitled at law
or in equity.




Article 15

Indemnification and Insurance





	15.1	 	Indemnification by Alnylam
	 
	15.1.1	 	Alnylam agrees to indemnify, defend and hold Tekmira and its directors, officers, employees,
consultants and agents (“Tekmira Indemnities”) harmless from and against any Damages resulting
from or arising out of:






	 	(a)	 	Specifications, procedures, processes, and Alnylam Materials provided by
Alnylam and unmodified by Tekmira;
	 
	 	(b)	 	Alnylam’s use of Products;
	 
	 	(c)	 	the breach by Alnylam of its representations, warranties or obligations under
this Agreement; and
	 
	 	(d)	 	the negligence or wilful misconduct of Alnylam, its Affiliates, licensees, or
distributors, and their employees or agents;






	15.1.2	 	Notwithstanding the foregoing Section 15.1.1, Alnylam will not be required to indemnify,
defend and hold Tekmira harmless from and against any claims to the extent they arise out of
or result from, directly or indirectly:






	 	(a)	 	the breach of or inaccuracy in any of the representations, warranties or
obligations of Tekmira under this Agreement;
	 
	 	(b)	 	any breach or violation of any covenant or agreement of Tekmira in or pursuant
to this Agreement; or
	 
	 	(c)	 	the negligence or wilful misconduct of Tekmira, its Affiliates, employees,
Third Parties utilized by Tekmira in its performance of the Supply Services, or agents.




- 35 -









 












	15.2	 	Indemnification by Tekmira
	 
	15.2.1	 	Tekmira agrees to indemnify, defend and hold Alnylam and its directors, officers, employees,
consultants and agents (“Alnylam Indemnities”) harmless from and against any Damages resulting
from or arising out of:






	 	 (a)	 	the breach by Tekmira of its representations, warranties or obligations under
this Agreement; or
	 
	 	 (b)	 	the negligence or wilful misconduct of Tekmira, its Affiliates, employees,
Third Parties utilized by Tekmira in its performance of the Supply Services, or its
agents.






	15.2.2	 	Notwithstanding the forgoing Section 15.2.1, Tekmira will not be required to indemnify,
defend and hold Alnylam harmless from and against any claims to the extent they arise out of
or result from, directly or indirectly:






	 	 (a)	 	Alnylam’s provision of Specifications, procedures, processes, or Alnylam
Materials;
	 
	 	 (b)	 	Alnylam’s use of Products;
	 
	 	 (c)	 	the breach or inaccuracy in any of the representations, warranties or
obligations of Alnylam under this Agreement;
	 
	 	 (d)	 	any breach or violation of any covenant or agreement of Alnylam in or pursuant
to this Agreement; or
	 
	 	 (e)	 	the negligence or wilful misconduct of Alnylam, its Affiliates, licensees, or
distributors, and their employees or agents.






	15.3	 	Remedy




The indemnification provided for in this Agreement will not be exclusive and will not be in lieu of
any other remedies available to a Party hereto for any default hereunder on the part of the other
Party.





	15.4	 	LIMITATION OF LIABILITY




NEITHER PARTY HERETO WILL BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES
ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER OR THEREUNDER, INCLUDING LOST
PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH
DAMAGES, EXCEPT AS A RESULT OF A PARTY’S WILLFUL MISCONDUCT OR A MATERIAL BREACH OF THE
CONFIDENTIALITY AND NON-USE OBLIGATIONS IN ARTICLE 14. NOTHING IN THIS SECTION 15.4 IS INTENDED TO
LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY.





	15.5	 	Notice and Opportunity To Defend




Promptly after receipt by a Party hereto of notice of any claim which could give rise to a right to
indemnification pursuant to Sections 15.1 or 15.2, such Party (the “Indemnified Party”) will give
the other Party (the “Indemnifying Party”) written notice describing the claim in reasonable
detail. The failure of an Indemnified Party to give notice in the manner provided herein will not
relieve the Indemnifying Party of its obligations under this Section, except to the extent that
such failure to give notice materially prejudices the Indemnifying Party’s ability to defend such
claim. The Indemnifying Party will have the right, at its option, to compromise or defend, at its
own expense and by its own counsel, any such matter involving the asserted liability of the Party
seeking such indemnification. If the Indemnifying Party will undertake to compromise or defend any
such asserted liability, it will promptly (and in any event not less than ten (10) Business Days
after receipt of the Indemnified Party’s original notice) notify the Indemnified Party in writing
of its intention to do so, and the Indemnified Party agrees to cooperate fully with the
Indemnifying Party and its counsel in the compromise or defence against any






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such asserted liability. All reasonable costs and expenses incurred in connection with such
co-operation will be borne by the Indemnifying Party. If the Indemnifying Party elects not to
compromise or defend the asserted liability, fails to notify the Indemnified Party of its election
to compromise or defend as herein provided, fails to admit its obligation to indemnify under this
Agreement with respect to the claim, or, if in the reasonable opinion of the Indemnified Party, the
claim could result in the Indemnified Party becoming subject to injunctive relief or relief other
than the payment of money damages that could materially adversely affect the ongoing business of
the Indemnified Party in any manner, the Indemnified Party will have the right, at its option, to
pay, compromise or defend such asserted liability by its own counsel and its reasonable costs and
expenses will be included as part of the indemnification obligation of the Indemnifying Party
hereunder. Notwithstanding the foregoing, neither the Indemnifying Party nor the Indemnified Party
may settle or compromise any claim over the objection of the other; provided however, that consent
to settlement or compromise will not be unreasonably withheld. In any event, the Indemnified Party
and the Indemnifying Party may participate, at their own expense, in the defence of such asserted
liability. If the Indemnifying Party chooses to defend any claim, the Indemnified Party will make
available to the Indemnifying Party any books, records or other documents within its control that
are necessary or appropriate for such defence. Notwithstanding anything to the contrary in this
Section 15.5, (i) the Party conducting the defence of a claim will (A) keep the other Party
informed on a reasonable and timely basis as to the status of the defence of such claim, and (B)
conduct the defence of such claim in a prudent manner, and (ii) the Indemnifying Party will not
cease to defend, settle or otherwise dispose of any claim without the prior written consent of the
Indemnified Party (which consent will not be unreasonably withheld).





	15.6	 	Insurance






	 	(a)	 	For the term of this Agreement, any renewals thereof, and for a period of five
(5) years after the expiration of this Agreement or the earlier termination thereof
with a reputable, solvent insurer having a minimum AM Best rating of at least “A,”
Alnylam will obtain and maintain, and will cause their respective Affiliates to obtain
and maintain, at their respective sole cost and expense, comprehensive general
liability insurance and product liability insurance including clinical trial insurance
in amounts which are reasonable and customary in the pharmaceutical industry in North
America for companies of comparable size and activities; but with limits of no less
than [**] per occurrence and [**] in the aggregate providing coverage on a worldwide
basis for occurrences and claims made;
	 
	 	(b)	 	Tekmira will obtain and maintain, and will cause their respective Affiliates to
obtain and maintain, at their respective sole cost and expense, the insurance coverages
specified in Section 9.8(b) of the Restated Tekmira LCA; and
	 
	 	(c)	 	each of the Parties will maintain workplace safety insurance and/or workers
compensation insurance coverage for each of their employees, agents (delete agents),
and sub-contractors pursuant to the requirements of any applicable local, state, or
federal workplace safety insurance board and any successor agency.






	15.6.2	 	Each Party will be entitled to request the other Party to produce, from time to time, copies
of current certificates of insurance in respect of the insurance policies required to be
effected and maintained herein, and each Party will, within thirty (30) days following such
request, provide current copies of said documentation. The insured shall endeavour to provide
thirty (30) days prior written notice to the other Party in the event of cancellation.




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Article 16




General




	16.1	 	Assignment and Subcontracting




The rights and obligations covered hereunder are personal to each Party hereto and for this reason
this Agreement will not be assignable by either part in whole or in part, nor will either Party
subcontract any of its obligations hereunder without the prior written consent of the other Party;
provided however, that the restriction contained herein will in no way limit the rights of either
Party to assign or subcontract to any of its Affiliates, or to a party that acquires, by merger,
sale of assets or otherwise, all or substantially all of the business of such Party to which the
subject matter of this Agreement relates. This Agreement will be binding upon and will enure to
the benefit of the Parties hereto and to any permitted assignee or successor of either Party.
Subject to other provisions of this Section 16.1, if one Party validly assigns or subcontracts any
or all of its obligations hereunder, such assigning Party agrees to remain bound by all of its
responsibilities and obligations hereunder. Any and all assignments of this Agreement or any
interest herein not made in accordance with this Section 16.1 will be void ab initio.





	16.2	 	Amendment




This Agreement may be modified or amended only by written agreement of the Parties hereto.





	16.3	 	Captions




All section titles or captions contained in this Agreement and contained in any exhibit or appendix
referred to herein or annexed to this Agreement are for convenience only, will not be deemed a part
of this Agreement and will not affect the meaning or interpretation of this Agreement.





	16.4	 	Construction




This Agreement will be deemed to have been drafted by both Tekmira and Alnylam after extensive
negotiations and will not be construed against either Party as the draftsperson hereof.





	16.5	 	Counterparts




This Agreement may be executed in any number of counterparts, each of which will be deemed an
original but all of which together will constitute a single instrument.





	16.6	 	Dispute Resolution





     16.6.1 Disputes. The Parties shall negotiate in good faith and use reasonable efforts to
settle any dispute, controversy or claim arising from, or related to, this Agreement or to the
breach hereof (collectively, “Dispute”). In the event that the Executive Officers cannot reach an
agreement regarding a Dispute within thirty (30) days after submission to them for resolution and a
Party wishes to pursue the matter, each such Dispute that is not an “Excluded Claim” shall
be finally resolved by binding arbitration in accordance with the Commercial Arbitration Rules and
Supplementary Procedures for Large Complex Disputes of the American Arbitration Association
(“AAA”) and Section 16.6.2 below, and judgment on the arbitration award may be entered in
any court having jurisdiction thereof. As used in this Section 16.6, the term “Excluded Claim”
shall mean a dispute that concerns (a) the validity or infringement of a patent, trademark or
copyright, or (b) any antitrust, anti-monopoly or competition law or regulation, whether or not
statutory.



     16.6.2 Arbitration. The arbitration shall be conducted by a panel of three (3) persons
experienced in the pharmaceutical business who are independent of both Parties and neutral with
respect to the Dispute presented for arbitration. Within thirty (30) days after initiation of
arbitration, each Party shall select one person to act as arbitrator and the two Party-selected
arbitrators shall select a third arbitrator within thirty (30) days of their appointment. If the
arbitrators selected by the Parties are unable



- 38 -









 




or fail to agree upon the third arbitrator, the third arbitrator shall be appointed by the
AAA. The place of arbitration shall be Chicago, Illinois, USA, and all proceedings and
communications shall be in English. Either Party may apply to the arbitrators for interim
injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved.
Either Party also may, without waiving any remedy under this Agreement, seek from any court having
jurisdiction any injunctive or provisional relief necessary to protect the rights or property of
that Party pending the arbitration award. The arbitrators shall have no authority to award
punitive or any other type of damages not measured by a Party’s compensatory damages. Each Party
shall bear its own costs and expenses and attorneys’ fees, and the Party that does not prevail in
the arbitration proceeding shall pay the arbitrators’ and any administrative fees of arbitration.
Except to the extent necessary to confirm an award or as may be required by law, neither a Party
nor an arbitrator may disclose the existence, content, or results of an arbitration without the
prior written consent of both Parties. In no event shall an arbitration be initiated after the
date when commencement of a legal or equitable proceeding based on the Dispute, controversy or
claim would be barred by the applicable Massachusetts statute of limitations.





	 	(i)	 	The Parties agree that, in the event of a Dispute over the nature or quality of
performance under this Agreement, neither Party may terminate this Agreement until
final resolution of the Dispute through arbitration or other judicial determination.
The Parties further agree that any payments made pursuant to this Agreement pending
resolution of the Dispute shall be refunded promptly if an arbitrator or court
determines that such payments are not due.






	 	(ii)	 	The Parties hereby agree that any disputed performance or suspended
performances pending the resolution of the arbitration that the arbitrator determines
to be required to be performed by a Party must be completed within a reasonable time
period following the final decision of the arbitrator.






	 	(iii)	 	The Parties agree that the decision of the arbitrator shall be the sole,
exclusive and binding remedy between them regarding determination of the matters
presented to the arbitrator.






	16.6.3	 	Judgment upon the award may be entered in any court having jurisdiction, or application may
be made to such court for judicial acceptance of the award and/or an order of enforcement as
the case may be.
	 
	16.6.4	 	Either Party will be free to submit any Dispute relating to an Excluded Claim to any court
having jurisdiction over the Parties and the subject matter of the Dispute and to seek such
relief and remedies as are available in that court.
	 
	16.7	 	Entire Agreement




This Agreement and its appendices constitute the entire agreement between the Parties with respect
to the subject matter hereof and supersede all prior agreements or understandings of the Parties
relating thereto, including without limitation the MSA, but not including (unless otherwise
explicitly stated in this Agreement) the Restated Tekmira LCA or the Restated Protiva CLA.
Sections 5.3(a) and 5.3(b) are hereby stricken from the Restated Tekmira LCA, and 5.3(a) thereof
shall be renumbered to be 5.3 (and the heading of such section shall be “Phase III and Commercial
Supply.”)





	16.8	 	Force Majeure




If either Party is prevented from complying, either totally or in part, with any of the terms or
provisions set forth herein by reason of force majeure, including, by way of example and not of
limitation, fire, flood, explosion, storm, riot, war, rebellion, accidents, acts of God, acts of
governmental agencies or






- 39 -









 







instrumentalities, or any other cause or externally induced casualty beyond its reasonable control,
whether similar to the foregoing contingencies or not, said Party will provide written notice of
same to the other Party. Said notice will be provided within seven (7) days of the occurrence of
such event and will identify the requirements of this Agreement or such of its obligations as may
be affected, and to the extent so affected, said obligations will be suspended during the period of
such disability. The Party prevented from performing hereunder will use commercially reasonable
efforts to remove such disability and will continue performance of the affected obligations
whenever such causes are removed provided that the Party will throughout the period of disability
continue performance of the non-affected obligations. The Party so affected will give to the other
Party a good faith estimate of the continuing effect of the force majeure condition and the
duration of the affected Party’s non-performance. If any raw materials, facility systems or
capacity is used for both the affected Product and any other products or purposes, any necessary
allocation will be made, on a substantially pro rata basis, as between Tekmira’s needs (including
those of any Affiliate of Tekmira), Alnylam’s needs and the needs of any other Party to whom
Tekmira has firm contractual obligations. If the period of any previous actual non-performance of
Tekmira because of Tekmira force majeure conditions plus the anticipated future period of Tekmira
non-performance because of such conditions will exceed an aggregate of one hundred eighty (180)
days within any twenty-four (24) month period, Alnylam may terminate this Agreement by notice to
Tekmira and any orders for Product then outstanding will be deemed cancelled. If the period of any
previous actual non-performance of Alnylam because of Alnylam force majeure conditions plus the
anticipated future period of Alnylam non-performance because of such conditions will exceed an
aggregate of one hundred eighty (180) days within any twenty-four (24) month period, Tekmira may
terminate this Agreement by notice to Alnylam and any orders for Product then outstanding will be
deemed cancelled. When such circumstances as those contemplated herein arise, the Parties will
discuss in good faith, what, if any, modification of the terms set forth herein may be required in
order to arrive at an equitable solution.





	16.9	 	Further Assurances




The Parties will both execute and deliver such further instruments and do such further acts as may
be required to implement the intent of this Agreement.





	16.10	 	Governing Law




This Agreement will be governed and construed in accordance with the laws of the State of Delaware,
U.S.A.; provided that (i) matters of intellectual property law concerning the existence,
validity, ownership, infringement or enforcement of intellectual property shall be determined in
accordance with the national intellectual property laws relevant to the intellectual property in
question, and (ii) the application of the 1980 United Nations Convention on Contracts for the
International Sale of Goods is expressly excluded from this Agreement.





	16.11	 	Independent Contractors




This Agreement will not constitute or give rise to any employer-employee, agency, partnership or
joint venture relationship among or between the Parties, and each Party’s performance hereunder is
that of a separate, independent entity.





	16.12	 	No Implied Rights




Except as otherwise expressly provided in this Agreement between the Parties, nothing in this
Agreement will be deemed or implied to be the grant by one Party to the other of any right, title
or interest in the Product, any Confidential Information, trade mark, trade dress or any other
Intellectual Property or any other proprietary right of the other.







- 40 -









 









	16.13	 	No Joint Venture




Nothing contained herein will be deemed to create any joint venture or partnership between the
Parties hereto, and, except as is expressly set forth herein, neither Party will have any right by
virtue of this Agreement to bind the other Party in any manner whatsoever.





	16.14	 	No Third-Party Rights




No provision of this Agreement will be deemed or construed in any way to result in the creation of
any rights or obligation in any Person not a Party to this Agreement.





	16.15	 	No Waiver; Remedies




No delay on the part of Tekmira or Alnylam in exercising any right, power or privilege hereunder
will operate as a waiver thereof, nor will any waiver on the part of either Tekmira or Alnylam of
any right, power or privilege hereunder operate as a waiver of any other right, power or privilege
hereunder nor will any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege hereunder.





	16.16	 	Notices




All notices or other communications required or permitted to be given hereunder will be in writing
and will be deemed to have been duly given if delivered by hand, prepaid telex, cable, telegram or
facsimile and confirmed in writing, courier service, or mailed first class, postage prepaid, by
registered or certified mail, return receipt requested (mailed notices and notices sent by telex,
cable, telegram or courier will be deemed to have been given on the date received) as follows:





	 	 	If to Alnylam:




Alnylam Pharmaceuticals, Inc.

300 Third Street, Third Floor

Cambridge, Massachusetts 02142 U.S.A.

Telephone: 617-551-8289

Facsimile: 617-575-7315

Attn: Vice President, Legal



And to:



Faber Daeufer & Rosenberg PC

950 Winter Street, Suite 4500

Waltham, Massachusetts 02451

Telephone: 781-795-4700

Facsimile: 781-795-4747

Attention: Sumy Daeufer





	 	 	If to Tekmira:




Tekmira Pharmaceuticals Corporation

8900 Glenlyon Parkway

Burnaby, B.C. V5J 5J8 Canada

Telephone: 604 419-3200

Facsimile: 604 419-3201

Attention: To the attention of VP, Pharmaceutical Development




- 41 -









 







And to:



Fenwick & West LLP

1191 Second Avenue, 10th Floor

Seattle, WA 98101

Telephone: 206 389-4510

Facsimile: 206 389-4511

Attention: Roger M. Tolbert, Esq.



or in any case to such other address or addresses as hereafter will be furnished as provided in
this Section 16.16 by any Party hereto to the other Party.





	16.17	 	Publicity and Public Statements




Tekmira and Alnylam each agree not to disclose the terms of this Agreement in any public
statements, whether oral or written, including, but not limited to, shareholder reports,
communications with stock market analysts, statements to other customers or prospective customers,
press releases or other communications with the media, or prospectuses, without the other Party’s
prior written consent, which will not be unreasonably withheld or delayed, or as required by
Applicable Law; provided, however, that either Party may disclose any information required by the
rules and regulations of applicable securities regulatory authority or similar federal, state,
provincial or foreign authorities, as determined in good faith by the disclosing Party. Where
permitted by law, each Party will give the other reasonable advance written notice of a disclosure
required by Applicable Law and will cooperate with the other Party with respect to seeking
permitted redactions from such disclosure.





	16.18	 	Severability




If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective while this Agreement remains in effect, the legality, validity and
enforceability of the remaining provisions will not be affected thereby.





	16.19	 	No Solicitation or Hiring of Employees




Except as otherwise agreed between the Parties, until January 1, 2012, nor at any time thereafter
during the Term, neither Alnylam nor Tekmira (and neither of their respective Affiliates) will,
without the prior consent of the other Party, solicit the employment of or hire any officer or
employee who during the course of employment with the other Party was involved in a material manner
with the Supply Services under any Work Order in the five (5) months prior to such solicitation and
who when solicited or to be hired is a current employee of the other Party. For clarity, placing
an advertisement in a newspaper, periodical or other publication of general availability, or other
general recruitment activities not directed at a particular individual, do not constitute an “offer
to hire.”




[Signature page follows]





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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above
written.




	 	 	 	 
	Alnylam Pharmaceuticals, Inc.

 	 
	By:  	/s/ Barry Greene
 	 
	 	Name:  	Barry Greene 	 
	 	Title:  	President and Chief Operating Officer 	 



Date:




	 	 	 	 
	Tekmira Pharmaceuticals Corporation

 	 
	By:  	/s/ Mark J. Murray
 	 
	 	Name:  	Mark J. Murray 	 
	 	Title:  	President and Chief Executive Officer 	 



Date: January 3, 2009







- 43 -









 








APPENDIX I — INITIAL SUPPLY SERVICES PLAN




[**]






- 44 -









 








APPENDIX II




DESCRIPTION OF LICENSED INFORMATION TO BE DISCLOSED BY TEKMIRA






[**]




A total of two pages were omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.




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