Document:

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                                                                    Exhibit 10.1

                                                                  EXECUTION COPY

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

                              AMENDED AND RESTATED

                  RESEARCH COLLABORATION AND LICENSE AGREEMENT

                                  BY AND AMONG

                                MERCK & CO., INC.

                                       AND

                          ALNYLAM PHARMACEUTICALS, INC.

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                              AMENDED AND RESTATED

                  RESEARCH COLLABORATION AND LICENSE AGREEMENT

        THIS AGREEMENT effective as of July 3, 2006 (the "EFFECTIVE DATE"), by
and among MERCK & CO., INC., a corporation organized and existing under the laws
of New Jersey ("MERCK"), and ALNYLAM PHARMACEUTICALS, INC. (formerly known as
Alnylam Holding Co.), a corporation organized and existing under the laws of
Delaware ("ALNYLAM").

                                    RECITALS:

        WHEREAS, MERCK and ALNYLAM entered into a Research Collaboration and
License Agreement effective September 8, 2003 (the "ORIGINAL EFFECTIVE DATE")
(as amended by the Amendment To Research Collaboration And License Agreement
dated September 30, 2004, the "ORIGINAL AGREEMENT") to develop technology useful
for in vitro and/or in vivo target identification and/or target validation using
RNAi and to develop RNAi therapeutic products upon the terms and conditions set
forth therein;

        WHEREAS, MERCK and ALNYLAM desire to amend and restate the Original
Agreement in order to, among other things, modify the procedures by which the
Parties will collaborate in the Therapeutic Collaboration (as hereinafter
defined) and to provide more detailed financial and other terms for the conduct
of the Therapeutic Collaboration and the development of MERCK Development
Products (as hereinafter defined); and

        NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the Parties hereby agree as follows:

1.      DEFINITIONS

Unless specifically set forth to the contrary herein, the following terms,
whether used in the singular or plural, shall have the respective meanings set
forth below:

1.1     "AFFILIATE" means (except as provided for in Section 7.3.2) (i) 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 MERCK or ALNYLAM, as the case may be;
        (ii) 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 MERCK or ALNYLAM, as the case may
        be, or (iii) 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 who own, control or

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        hold fifty percent (50%) or more of the securities or other ownership
        interests representing the equity or the voting stock of MERCK or
        ALNYLAM, as the case may be.

1.2     "ALNYLAM COLLABORATION INVENTIONS" means ALNYLAM Technology
        Collaboration Inventions, ALNYLAM Therapeutic Collaboration Inventions,
        and ALNYLAM's interest in Joint Collaboration Inventions, collectively.

1.3     "ALNYLAM IN-LICENSE" means an agreement between ALNYLAM and a Third
        Party pursuant to which ALNYLAM has rights and obligations with respect
        to, or which otherwise Cover, an RNAi Therapeutic Product and which is
        necessary to Develop, Commercialize and/or Manufacture RNAi Therapeutic
        Products in the Field in the Territory, including without limitation the
        Existing ALNYLAM In-Licenses.

1.4     "ALNYLAM RNAI PATENT RIGHTS" means any and all Patent Rights in the
        Territory (which for the purposes of this Agreement shall be deemed to
        include certificates of invention and applications for certificates of
        invention and to exclude Joint Collaboration Patent Rights) which, as of
        the Original Effective Date and/or during the Collaboration Term, are
        Controlled by ALNYLAM or its Affiliates and which are necessary or
        useful to MERCK (a) for in vitro and/or in vivo target identification
        and/or target validation ("ALNYLAM TARGET IDENTIFICATION AND TARGET
        VALIDATION RNAI PATENT RIGHTS") and/or (b) in the Development,
        Manufacture or Commercialization of RNAi Therapeutic Products within the
        Therapeutic Collaboration, including, but not limited to, those listed
        on Schedule 1.4. "ALNYLAM RNAi Patent Rights" include but are not
        limited to those Patent Rights which: (i) claim or Cover RNAi
        Therapeutic Products including but not limited to improvements; or (ii)
        claim or cover ALNYLAM Collaboration Inventions; or (iii) are divisions
        or continuations of ALNYLAM RNAi Patent Rights, or constitute such
        portions of continuations-in-part as are themselves within the
        definition of ALNYLAM RNAi Patent Rights.

1.5     "ALNYLAM RNAI TECHNOLOGY" means any and all Know-How (including without
        limitation ALNYLAM Collaboration Inventions), which: (a) as of the
        Original Effective Date and/or during the Collaboration Term, is in the
        Control of ALNYLAM or its Affiliates, including without limitation, all
        Know-How of ALNYLAM's scientific advisors and consultants which is
        Controlled by ALNYLAM or its Affiliates, and (b) is necessary or useful
        to MERCK for in vitro and/or in vivo target identification and/or target
        validation and/or for the Development, Manufacture or Commercialization
        of RNAi Therapeutic Products within the Therapeutic Collaboration,
        including, but not limited to, knowledge related to (i) the RNAi pathway
        and mechanism of action in mammalian cells, (ii) informatics approaches
        to optimal siRNA design for targeting specific genes and minimizing
        off-target effects, (iii) optimal RNA chemistry for siRNA in vivo
        stability and delivery, (iv) bio-analytical methods for measurement of
        pharmacokinetics and biodistribution of siRNAs, and (v) RNAi delivery
        methods.

1.6     "ALNYLAM TECHNOLOGY COLLABORATION INVENTIONS" means any and all Know-How
        arising from the Technology Collaboration and developed or invented
        solely by

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        employees of ALNYLAM or its Affiliates or other persons not employed by
        MERCK acting on behalf of ALNYLAM during the Technology Collaboration
        Term.

1.7     "ALNYLAM THERAPEUTIC COLLABORATION INVENTIONS" means any and all
        Know-How arising from the Therapeutic Collaboration and developed or
        invented solely by employees of ALNYLAM or its Affiliates or other
        persons not employed by MERCK acting on behalf of ALNYLAM during the
        Therapeutic Collaboration Term, including but not limited to
        ALNYLAM-Assigned Therapeutic Collaboration Inventions (as defined in
        Section 11.2(d)).

1.8     "ALNYLAM THERAPEUTIC COLLABORATION IP" means any and all Know-How
        (including ALNYLAM Therapeutic Collaboration Inventions and ALNYLAM's
        rights in Joint Therapeutic Collaboration Inventions) and Patent Rights,
        which: (a) are Controlled by ALNYLAM or its Affiliates as of the
        Original Effective Date or during the Collaboration Term, and (b) are
        necessary or useful to MERCK in connection with the Therapeutic
        Collaboration and/or in the Development, Manufacture and
        Commercialization of RNAi Therapeutic Products within the Therapeutic
        Collaboration.

1.9     "BROAD RNAI TECHNOLOGY" means RNAi Technology arising from or necessary
        for the performance of a Program Workplan which relates to structural
        features, properties, motifs, synthesis, analysis, modifications,
        delivery and/or uses of siRNAs that has broader utility beyond the
        specific embodiments represented by an RNAi Therapeutic Product and/or
        particular uses of such RNAi Therapeutic Product.

1.10    "BROAD RNAI TECHNOLOGY COLLABORATION IP" means Joint Collaboration IP
        that constitutes Broad RNAi Technology.

1.11    "CALENDAR QUARTER" means the respective periods of three (3) consecutive
        calendar months ending on March 31, June 30, September 30 and December
        31.

1.12    "CALENDAR YEAR" means each successive period of twelve (12) months
        commencing on January 1 and ending on December 31.

1.13    "CLINICAL STUDY" means a Phase I Study, Phase II Study, Phase III Study
        or Post-Approval Study, as applicable.

1.14    "CO-EXCLUSIVE" means with respect to any license of rights hereunder,
        the grant of exclusive rights, but for the retention by the granting
        Party of the same rights for itself and/or its Affiliates.

1.15    "COLLABORATION" means the Technology Collaboration and the Therapeutic
        Collaboration, collectively.

1.16    "COLLABORATION TERM" means the duration of the Collaboration, as
        described more fully in Section 12.1.1.

1.17    "COMBINATION PRODUCT" means a [**] Product or an RNAi Therapeutic
        Product combined with any other clinically active ingredient. All
        references to [**] Product and

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        RNAi Therapeutic Product in this Agreement shall be deemed to include
        Combination Product, to the extent applicable.

1.18    "COMMERCIALIZATION" or "COMMERCIALIZE" means any and all activities
        directed to marketing, promoting, distributing, importing and selling a
        product, including the conduct of Post-Approval Studies, and activities
        directed to obtaining pricing and reimbursement approvals, as
        applicable.

1.19    "COMMERCIALIZATION EXPENSES" means, with respect to each Profit-Sharing
        Product, the following costs and expenses to the extent incurred by the
        Parties and/or their Related Parties in the Commercialization and
        Manufacturing of such Profit-Sharing Product in or for the United
        States:

        (a)     Cost of Goods Sold;

        (b)     Manufacturing Development Expenses incurred after the First
                Commercial Sale of such Profit-Sharing Product in the United
                States;

        (c)     Distribution Expenses;

        (d)     Sales and Marketing Expenses;

        (e)     Losses arising out of Third Party product liability claims as
                set forth in Section 10.5.3(c)(iii); and

        (f)     payments to Third Parties [**] pursuant to Section [**].

1.20    "COMMERCIALIZATION PLAN" means the multi-year business plan and annual
        profit plan relating to each Profit-Sharing Product that is mutually
        agreed between the Parties pursuant to Section 3.10.5.

1.21    "COMMERCIALLY REASONABLE EFFORTS" means the carrying out of obligations
        in a diligent and sustained manner using such effort and employing such
        resources as would normally be exerted or employed by a similarly
        situated biopharmaceutical company for a product of similar market
        potential at a similar stage of its product life.

1.22    "COMPLETION OF PHASE I" means, with respect to an RNAi Therapeutic
        Product, the completion of data analysis for those Phase I Studies of
        such RNAi Therapeutic Product that the Parties prospectively identify in
        the applicable Program Workplan as the studies the data from which would
        provide a sufficient basis to Initiate a Phase II Study.

1.23    "COMPLETION OF PHASE II" means, with respect to an RNAi Therapeutic
        Product, the completion of data analysis for those Phase II Studies of
        such RNAi Therapeutic Product that the Parties prospectively identify in
        the applicable Program Workplan as the studies the data from which would
        provide a sufficient basis to Initiate a Phase III Study.

1.24    "CONTROL", "CONTROLS" OR "CONTROLLED BY" means, with respect to any (a)
        material, Know-How or other information or (b) intellectual property
        right, the possession of

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        (whether by ownership or license, other than pursuant to this
        Agreement), or the ability of a Party or its Affiliates to grant access
        to, or a license or sublicense of, such item or right as provided for
        herein without violating the terms of any agreement or other arrangement
        with any Third Party existing at the time such Party would be required
        hereunder to grant the other Party such access or license or sublicense.

1.25    "CO-PROMOTION" means the joint promotion of an RNAi Therapeutic Product
        by both Parties and/or their respective Affiliates under the same
        product trademark(s). "CO-PROMOTE" when used as a verb shall mean to
        engage in such Co-Promotion.

1.26    "COST OF GOODS SOLD" means, with respect to a Profit-Sharing Product or
        a Royalty-Bearing Product, the reasonable internal and external costs of
        a Party incurred in Manufacturing such RNAi Therapeutic Product
        (including [**] to the extent that such costs are reasonably allocated
        to the Manufacture of such RNAi Therapeutic Product, and product testing
        and release activities relating to quality assurance and quality
        control), including: (a) to the extent that such RNAi Therapeutic
        Product is sourced from a Party, fully allocated cost of Manufacture of
        such RNAi Therapeutic Product, consisting of direct material and direct
        labor costs, plus Manufacturing overhead reasonably attributable to such
        RNAi Therapeutic Product (including without limitation all directly
        incurred Manufacturing variances and a reasonable allocation of related
        Manufacturing administrative and facilities costs (such reasonable
        allocation shall [**]) to be provided for such RNAi Therapeutic Product,
        but excluding [**]), all calculated in accordance with generally
        accepted accounting principles in the United States consistently applied
        by the applicable Party, [**], and (b) to the extent that such RNAi
        Therapeutic Product is sourced from a Third Party manufacturer, the
        actual price paid by a Party to the Third Party for the Manufacture,
        supply and packaging of such RNAi Therapeutic Product plus any
        additional reasonable costs incurred by the Party relating to managing
        the Third Party relationship. Cost of Goods Sold shall not include
        royalties paid to Third Parties. If the non-Manufacturing Party believes
        in good faith that the Cost of Goods Sold charged by the Manufacturing
        Party for such RNAi Therapeutic Product [**] or that a Third Party
        manufacturer, or an alternative Third Party manufacturer, [**] such RNAi
        Therapeutic Product [**] Cost of Goods Sold, then the Parties [**] the
        non-Manufacturing Party's [**], and the non-Manufacturing Party shall
        [**] by the JSC or JCC, as the case may be. The non-Manufacturing
        Party's [**] the cost of goods [**] shall be [**]; provided, however,
        that the non-Manufacturing Party may [**] in the event that the
        Manufacturing Party [**] Cost of Goods Sold for an RNAi Therapeutic
        Product that is [**] for the equivalent period. If the JSC or JCC [**]
        shall provide the non-Manufacturing Party [**].

1.27    "COUNTRY SALES" means the Net Sales of a Royalty-Bearing Product in a
        Calendar Year by a Party or its Related Parties in a particular country,
        converted into United States dollars as set forth in Section 9.6.

1.28    "COVER," "COVERING" OR "COVERS" means, with respect to an RNAi
        Therapeutic Product, that in the absence of a license granted under a
        Valid Claim, the Development, Manufacture or Commercialization of the
        RNAi Therapeutic Product would infringe such Valid Claim.

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1.29    "DETAIL" OR "DETAILING" means a product presentation in a face-to-face
        meeting in an individual or group practice setting between a
        professional sales representative and a targeted prescriber in which one
        or more key benefits of the Profit-Sharing Product are verbally
        presented in a balanced manner.

1.30    "DEVELOPMENT," "DEVELOPING" or "DEVELOP" means the research and
        development activities related to the generation, characterization,
        optimization, construction, expression, use and production of RNAi
        Therapeutic Products directed to any MERCK RNAi Novel Target, any other
        research and development activities related to the clinical testing and
        qualification of such RNAi Therapeutic Products for clinical testing,
        and such other tests, studies and activities as may be required or
        recommended from time to time by the JSC or JCC (in the case of
        Profit-Sharing Products) or any Regulatory Authority to obtain
        Regulatory Approval of such an RNAi Therapeutic Product, including
        toxicology studies, statistical analysis and report writing,
        pre-clinical testing, clinical studies and regulatory affairs, product
        approval and registration activities.

1.31    "DEVELOPMENT EXPENSES" means, with respect to each Program Workplan, the
        internal and external costs and expenses incurred by the Parties and/or
        their Related Parties in the Development of Profit-Sharing Products, in
        accordance with such Program Workplan and the related budget for
        Development Expenses, including without limitation:

        (a)     all costs as set forth in the applicable Program Workplan that
                are incurred in connection with the generation, characterization
                and optimization of Profit-Sharing Products directed to the
                Co-Development Target, and the subsequent pre-clinical and
                clinical Development of such Profit-Sharing Products;

        (b)     all Development-related out-of-pocket costs and expenses as set
                forth in the applicable Program Workplan that are incurred,
                including without limitation payments to investigators, contract
                research organizations (CROs), other Third Party Development
                service providers and other contract labor services, relating to
                Development activities, institutional study expenses,
                investigator meeting expenses, central laboratory expenses, data
                management, statistical designs and studies, and document
                preparation;

        (c)     fees incurred in connection with filings relating to Regulatory
                Approvals;

        (d)     Cost of Goods Sold of Profit-Sharing Product used in Development
                activities, the costs and expenses incurred to purchase and/or
                package comparator or combination drugs or devices, and costs
                and expenses of disposal of clinical supplies;

        (e)     Manufacturing Development Expenses incurred with respect to a
                Profit-Sharing Product prior to the First Commercial Sale of
                such Profit-Sharing Product in the United States;

        (f)     the costs of internal scientific, medical, technical or
                managerial personnel engaged in such efforts, which costs shall
                be determined based on the FTE Costs, unless another basis is
                otherwise agreed by the Parties in writing;

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        (g)     payments to Third Parties [**] pursuant to Section [**];

        (h)     Losses arising out of Third Party product liability claims as
                set forth in Section 10.5.3(c)(ii);

        (i)     Patent Expenses as set forth in Section 11.3.7 and costs of
                infringement suits as set forth in Section 11.6.2; and

        (j)     any other costs explicitly included in the budgets included in
                the Program Workplan.

1.32    "DISTRIBUTION EXPENSES" means, with respect to a Profit-Sharing Product,
        the expenses incurred by MERCK and its Related Parties in the
        distribution of such Profit-Sharing Product in the United States,
        calculated as a percentage of Net Sales of such Profit-Sharing Product
        on the basis of the average distribution expenses of MERCK and its
        Related Parties as a percentage of Net Sales of all products distributed
        by MERCK and its Related Parties in the United States. The Parties will
        agree upon the appropriate percentage for each Calendar Year, based upon
        company-wide financial data from the prior Calendar Year.

1.33    "EXISTING ALNYLAM IN-LICENSES" means the Third Party agreements listed
        on Schedule 1.33, as such schedule may be amended pursuant to Sections
        7.4.1 or 7.5.

1.34    "FDA" means the United States Food and Drug Administration and any
        successor governmental authority having substantially the same function.

1.35    "FIELD" shall mean the treatment and/or prophylaxis of diseases in
        humans with RNAi Therapeutic Products; provided, however, that with
        respect to the following Targets: (i) [**] (ii) any portions thereof,
        (iii) all transcript variants and allelic variants thereof, (iv) any RNA
        transcribed from within or overlapping this [**], (v) any proteins
        encoded by any such RNA transcripts and (vi) [**] such proteins, the
        Field shall exclude [**] and [**], including without limitation [**],
        and all other [**] in which [**] in the [**], including without
        limitation [**] of the [**]; but the Field shall not exclude [**] in
        which [**], such as (by way of example only) [**].

1.36    "FILING" of an NDA means the acceptance by a Regulatory Authority of an
        NDA for filing.

1.37    "FIRST COMMERCIAL SALE" means, with respect to any RNAi Therapeutic
        Product, the first sale for end use or consumption of such RNAi
        Therapeutic Product in a country after all required Regulatory Approvals
        have been granted by the Regulatory Authority of such country. For the
        avoidance of doubt, sales for clinical study purposes or compassionate
        use, named patient or similar use, shall not constitute a First
        Commercial Sale.

1.38    "FTE COSTS" means the amount determined by multiplying the number of
        FTEs allocated by a Party to perform the applicable work during the
        relevant time period, subject in the case of Profit-Sharing Products to
        any limitations set forth in the applicable Program Workplan or budget
        or otherwise established by the JSC, times the FTE Rate.

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        "FTE RATE" means initially $[**] per FTE, to increase no more than once
        annually by the percentage increase, if any, in the Consumer Price Index
        for all Urban Consumers, as published by the U.S. Department of Labor,
        Bureau of Statistics from the beginning of the prior Calendar Year.

1.39    "FULL-TIME EQUIVALENT" or "FTE" means a full time equivalent person year
        (based on consistently applied practices of the applicable Party) of
        scientific, medical, technical, quality control, quality assurance, or
        managerial work performed by or on behalf of a Party. In no event shall
        an employee account for more than one (1) FTE year.

1.40    "IND" means an Investigational New Drug application, Clinical Study
        Application, Clinical Trial Exemption, or similar application or
        submission for approval to conduct human clinical investigations filed
        with or submitted to a Regulatory Authority in conformance with the
        requirements of such Regulatory Authority.

1.41    "IND-ENABLING GLP TOXICOLOGY STUDIES" means genotoxicity, acute
        toxicology, safety pharmacology, and sub-chronic toxicology studies in
        species that satisfy applicable regulatory requirements using applicable
        good laboratory practices which meet the standard necessary for
        submission as part of an IND filing with a Regulatory Authority.

1.42    "INFORMATION" means any and all information and data, including without
        limitation all ALNYLAM RNAi Technology and MERCK RNAi Technology, and
        all other scientific, pre-clinical, clinical, regulatory, manufacturing,
        marketing, financial and commercial information or data, whether
        communicated in writing or orally or by any other method, which is
        provided by one Party to the other Party in connection with this
        Agreement.

1.43    "INITIATE", "INITIATED" or "INITIATION" means, with respect to a
        Clinical Study, the administration of the first dose to a subject in
        such Clinical Study.

1.44    "IN-LICENSES" means collectively, the ALNYLAM In-Licenses and the MERCK
        In-Licenses.

1.45    "INVENTION" means any process, method, composition of matter, article of
        manufacture, discovery or finding that is conceived and/or reduced to
        practice in the course of the performance of activities pursuant to this
        Agreement.

1.46    "JOINT COLLABORATION INVENTIONS" means Joint Technology Collaboration
        Inventions and Joint Therapeutic Collaboration Inventions, collectively.

1.47    "JOINT COLLABORATION IP" means Joint Collaboration Inventions and Joint
        Collaboration Patent Rights, collectively.

1.48    "JOINT COLLABORATION PATENT RIGHTS" means any and all Patent Rights in
        the Territory (which for the purposes of this Agreement shall be deemed
        to include certificates of invention and applications for certificates
        of invention) which claim or Cover any Joint Collaboration Inventions.
        "Joint Collaboration Patent Rights" include, but are not limited to,
        those Patent Rights which claim or cover Joint Technology Collaboration
        Inventions or Joint Therapeutic Collaboration Inventions; or are
        divisions or continuations of Joint Collaboration Patent Rights, or
        constitute such portions of

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        continuations-in-part as are themselves within the definition of Joint
        Collaboration Patent Rights.

1.49    "JOINT STEERING COMMITTEE" or "JSC" means the joint steering committee
        as more fully described in Section 4.1.1.

1.50    "JOINT TECHNOLOGY COLLABORATION INVENTIONS" means any and all Know-How
        arising from the Technology Collaboration and developed or invented
        jointly by employee(s) of MERCK and/or its Affiliate and/or a Third
        Party acting on behalf of MERCK or its Affiliate, on the one hand, and
        employee(s) of ALNYLAM and/or its Affiliate and/or a Third Party acting
        on behalf of ALNYLAM or its Affiliate, on the other hand, during the
        Technology Collaboration Term.

1.51    "JOINT THERAPEUTIC COLLABORATION INVENTIONS" means any and all Know-How
        arising from the Therapeutic Collaboration and developed or invented
        jointly by employee(s) of MERCK and/or its Affiliate and/or a Third
        Party acting on behalf of MERCK or its Affiliate, on the one hand, and
        employee(s) of ALNYLAM and/or its Affiliate and/or a Third Party acting
        on behalf of ALNYLAM or its Affiliate, on the other hand, during the
        Therapeutic Collaboration Term.

1.52    "KNOW-HOW" means all biological materials and other tangible materials,
        inventions, discoveries, improvements, practices, methods, protocols,
        formulas, knowledge, know-how, trade secrets, processes, assays, skills,
        experience, techniques and results of experimentation and testing,
        including without limitation pharmacological, toxicological and
        pre-clinical and clinical test data and analytical and quality control
        data, patentable or otherwise.

1.53    "MANUFACTURING" or "MANUFACTURE" means, as applicable, all activities
        associated with the production, manufacture, processing, filling,
        finishing, packaging, labeling, shipping, and storage of RNAi
        Therapeutic Products, including process and formulation development,
        process validation, stability testing, manufacturing scale-up,
        pre-clinical, clinical and commercial manufacture and analytical
        development, product characterization, quality assurance and quality
        control, whether such activities are conducted by (a) ALNYLAM, its
        Affiliates or a Third Party contractor of ALNYLAM, or (b) MERCK, its
        Affiliates or a Third Party contractor of MERCK.

1.54    "MANUFACTURING DEVELOPMENT EXPENSES" means, with respect to a
        Profit-Sharing Product, to the extent not included in Development
        Expenses or Cost of Goods Sold, the internal and external costs of a
        Party incurred in process development, process validation, process
        improvement, formulation development, product characterization,
        manufacturing scale-up and recovery costs, the development of SOPs and
        QA/QC methods and procedures, the production of qualification lots, all
        costs incurred in obtaining and maintaining approval for the Manufacture
        of such Profit-Sharing Product for commercial sale, and the costs of
        preparing, submitting, reviewing and developing data and information for
        the purpose of a drug master file or for submission to a Regulatory
        Authority to obtain or retain such approvals. Manufacturing Development
        Expenses shall

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        be determined by a Party in accordance with generally accepted
        accounting principles in the United States consistently applied by such
        Party.

1.55    "MERCK BROAD RNAI PATENT RIGHTS" means any and all Patent Rights in the
        Territory (which for the purposes of this Agreement shall be deemed to
        include certificates of invention and applications for certificates of
        invention and to exclude Joint Collaboration Patent Rights), which (a)
        as of the Original Effective Date and/or during the Collaboration Term,
        are Controlled by MERCK or ROSETTA or their wholly-owned subsidiaries
        and (b) are necessary or useful to ALNYLAM for in vitro and/or in vivo
        target identification and/or target validation. MERCK Broad RNAi Patent
        Rights include but are not limited to those Patent Rights which: (i)
        claim or cover MERCK Technology Collaboration Inventions; or (ii) are
        divisions or continuations of MERCK Broad RNAi Patent Rights, or
        constitute such portions of continuations-in-part as are themselves
        within the definition of MERCK Broad RNAi Patent Rights. "MERCK Broad
        RNAi Patent Rights" shall include, without limitation, those Patent
        Rights set forth in Schedule 1.55. The term "MERCK Broad RNAi Patent
        Rights" does not include any Patent Rights relating to MERCK RNAi Novel
        Targets or arising from the development of MERCK Development Products,
        including but not limited to Patent Rights relating to MERCK RNAi Novel
        Target IP.

1.56    "MERCK BROAD RNAI TECHNOLOGY" means any and all Know-How (including
        MERCK Technology Collaboration Inventions and MERCK's rights in Joint
        Technology Collaboration Inventions) which: (a) as of the Original
        Effective Date and/or during the Collaboration Term, is in the Control
        of MERCK or ROSETTA or their wholly-owned subsidiaries, and (b) is
        necessary or useful to ALNYLAM for in vitro and/or in vivo target
        identification and/or target validation including (i) data and methods
        for monitoring RNAi selectivity and potency, and (ii) approaches to
        optimal design of siRNAs, including but not limited to informatics
        approaches. "MERCK Broad RNAi Technology" does not include Know-How
        relating to MERCK RNAi Novel Targets or arising from the development of
        MERCK Development Products, including but not limited to MERCK RNAi
        Novel Target IP.

1.57    "MERCK COLLABORATION INVENTIONS" means MERCK Technology Collaboration
        Inventions, MERCK Therapeutic Collaboration Inventions, and MERCK's
        interest in Joint Collaboration Inventions, collectively.

1.58    "MERCK IN-LICENSE" means an agreement between MERCK and a Third Party
        pursuant to which MERCK has rights and obligations with respect to, or
        which otherwise Cover, an RNAi Therapeutic Product and which is
        necessary to Develop, Commercialize and/or Manufacture RNAi Therapeutic
        Products in the Field in the Territory.

1.59    "MERCK PRODUCT-SPECIFIC RNAI PATENT RIGHTS" means any and all Patent
        Rights in the Territory (which for the purposes of this Agreement shall
        be deemed to include certificates of invention and applications for
        certificates of invention and exclude Joint Collaboration Patent Rights)
        which: (a) as of the Original Effective Date and/or during the
        Collaboration Term, are Controlled by MERCK or ROSETTA or their
        wholly-owned subsidiaries, and (b) are necessary or useful to ALNYLAM in
        connection with the

                                       11
<PAGE>

        Development, Manufacturing and Commercialization of a specific RNAi
        Therapeutic Product within the Therapeutic Collaboration. MERCK
        Product-Specific RNAi Patent Rights include but are not limited to those
        Patent Rights which: (i) claim or Cover a specific RNAi Therapeutic
        Product within the Therapeutic Collaboration; or (ii) claim or cover
        MERCK Therapeutic Collaboration Inventions; or (iii) are divisions or
        continuations of MERCK Product-Specific RNAi Patent Rights, or
        constitute such portions of continuations-in-part as are themselves
        within the definition of MERCK Product-Specific RNAi Patent Rights.
        "MERCK Product-Specific RNAi Patent Rights" include, without limitation,
        those Patent Rights set forth in Schedule 1.57. The term "MERCK
        Product-Specific RNAi Patent Rights" does not include any Patent Rights
        relating to MERCK RNAi Novel Targets or arising from the development of
        MERCK Development Products, including but not limited to patents or
        patent applications relating to MERCK RNAi Novel Target IP.

1.60    "MERCK PRODUCT-SPECIFIC RNAI TECHNOLOGY" means any and all Know-How
        (including without limitation MERCK Therapeutic Collaboration Inventions
        and MERCK's rights in Joint Therapeutic Collaboration Inventions) which:
        (a) as of the Original Effective Date and/or during the Collaboration
        Term, is in the Control of MERCK or ROSETTA or their wholly-owned
        subsidiaries, and (b) is necessary or useful to ALNYLAM for the
        Development, Manufacture or Commercialization of a specific RNAi
        Therapeutic Product within the Therapeutic Collaboration, and (c) is not
        included in MERCK Broad RNAi Technology. The term "MERCK
        Product-Specific RNAi Technology" does not include Know-How relating to
        MERCK RNAi Novel Targets or arising from the development of MERCK
        Development Products, including but not limited to MERCK RNAi Novel
        Target IP.

1.61    "MERCK RNAI NOVEL TARGET" means a [**] Target that is covered by MERCK
        RNAi Novel Target IP or intellectual property Controlled by MERCK or its
        Affiliates and which MERCK deems to be a potential Target for RNAi
        Therapeutic Products. Such Target is [**] based on the judgment of
        MERCK, but would include without limitation a target for which [**] or
        [**] is [**] to [**] target activity.

        A MERCK RNAi Novel Target may also include, without limitation:

        1.      [**] for which [**] have been [**], for example in [**];

        2.      [**] that exist as [**] has been [**]; and

        3.      [**] and [**] where [**] in the public domain.

        A MERCK RNAi Novel Target must be unique to MERCK at the time presented
        to ALNYLAM; that is it must be a Target for which: (a) MERCK or its
        Affiliate [**] on the MERCK RNAi Novel Target, whether or not (b) MERCK
        believes there are [**], the claims of which would be infringed (i) by
        the use of the MERCK RNAi Novel Target within the Therapeutic
        Collaboration, or (ii) by the [**] within the Therapeutic Collaboration
        in the absence of a license.

                                       12
<PAGE>

1.62    "MERCK RNAI NOVEL TARGET IP" means any and all Know-How and Patent
        Rights Controlled by MERCK or ROSETTA or their wholly-owned subsidiaries
        as of the Original Effective Date and/or during the Collaboration Term,
        and that both: (i) are necessary or useful to ALNYLAM for research,
        development, manufacturing, marketing, use, import or sale of RNAi
        Therapeutic Products within the Therapeutic Collaboration, and (ii)
        claim or cover specific MERCK RNAi Novel Targets.

1.63    "MERCK RNAI PATENT RIGHTS" means MERCK Broad RNAi Patent Rights and
        MERCK Product-Specific Patent Rights, collectively. The term "MERCK RNAi
        Patent Rights" shall not include Patent Rights that claim or Cover MERCK
        RNAi Novel Targets or MERCK RNAi Novel Target IP.

1.64    "MERCK RNAI TECHNOLOGY" means MERCK Broad RNAi Technology and MERCK
        Product-Specific RNAi Technology, collectively.

1.65    "MERCK TECHNOLOGY COLLABORATION INVENTIONS" means any and all Know-How
        arising from the Technology Collaboration and developed or invented
        solely by employees of MERCK or its Affiliates or other persons not
        employed by ALNYLAM acting on behalf of MERCK during the Technology
        Collaboration Term.

1.66    "MERCK THERAPEUTIC COLLABORATION INVENTIONS" means any and all Know-How
        arising from the Therapeutic Collaboration and developed or invented
        solely by employees of MERCK or its Affiliates or other persons not
        employed by ALNYLAM acting on behalf of MERCK during the Therapeutic
        Collaboration Term, including but not limited to MERCK-Assigned
        Therapeutic Collaboration Inventions (as defined in Section 11.2(d)).

1.67    "MERCK THERAPEUTIC COLLABORATION IP" means any and all Know-How
        (including MERCK Therapeutic Collaboration Inventions and MERCK's rights
        in Joint Therapeutic Collaboration Inventions) and Patent Rights, which:
        (a) are Controlled by MERCK or its Affiliates as of the Original
        Effective Date or during the Collaboration Term, and (b) are necessary
        or useful to ALNYLAM in connection with the Therapeutic Collaboration
        and/or in the Development, Manufacture and Commercialization of RNAi
        Therapeutic Products within the Therapeutic Collaboration.

1.68    "[**] PRODUCT" means a [**] RNAi Therapeutic Product that contains
        siRNAs directed against [**] MERCK Novel RNAi Target.

1.69    "[**] PRODUCT TARGET" means a MERCK Novel RNAi Target against which an
        siRNA in a [**] Product is directed.

1.70    "NDA" means a New Drug Application, Biologics License Application,
        Worldwide Marketing Application, Marketing Authorization Application,
        Section 510(k) filing or similar application or submission filed with a
        Regulatory Authority in a country or group of countries to obtain
        marketing approval for a biological, pharmaceutical or other therapeutic
        or prophylactic product in that country or in that group of countries.

                                       13
<PAGE>

1.71    "NECESSARY THIRD PARTY IP" means, with respect to any country in the
        Territory, on a country-by-country basis, Know-How or Patent Rights in
        such country owned or controlled by a Third Party that Cover an RNAi
        Therapeutic Product.

1.72    "NET SALES" means the gross invoice price of an RNAi Therapeutic Product
        sold by MERCK or its Related Parties or by ALNYLAM or its Related
        Parties to the first Third Party (other than a Sublicensee of a Party)
        after deducting, if not previously deducted, from the amount invoiced or
        received:

        (a)     trade and quantity discounts actually given other than early
                payment cash discounts;

        (b)     returns, rebates, chargebacks and other allowances actually
                given;

        (c)     retroactive price reductions that are actually granted; and

        (d)     a fixed amount equal to [**] percent ([**]%) of the amount
                invoiced to cover bad debt, sales or excise taxes, early payment
                cash discounts, transportation and insurance, custom duties, and
                other governmental charges.

        With respect to sales of Combination Products, Net Sales shall be
        calculated on the basis of the gross invoice price of the RNAi
        Therapeutic Product(s) containing the same composition and concentration
        of RNAi oligonucleotide(s) or oligonucleotide-derivatives sold without
        other clinically active ingredients. In the event that the RNAi
        Therapeutic Product is sold only as a Combination Product and not sold
        without other clinically active ingredients, the Parties shall negotiate
        in good faith another basis on which to calculate Net Sales with respect
        to a Combination Product that fairly reflects the value of the RNAi
        Therapeutic Product relative to the other clinically active ingredients
        in the Combination Product, but in no event shall such calculation
        result in the gross invoice price on which to base Net Sales being less
        than [**] percent ([**]%) of the gross invoice price of such Combination
        Product.

        A percentage of the deductions set forth in paragraphs (a) through (d)
        above equal to the ratio of the Net Sales for the RNAi Therapeutic
        Product to the Net Sales of the entire Combination Product will be
        applied in calculating Net Sales for a Combination Product.

1.73    "OPT-OUT PERIOD" means the Pre-IND Filing Opt-Out Period, the Phase I
        Completion Opt-Out Period or the Phase II Completion Opt-Out Period.

1.74    "PARTY" means MERCK and/or ALNYLAM.

1.75    "PATENT RIGHTS" means all patents (including all reissues, extensions,
        substitutions, confirmations, re-registrations, re-examinations,
        invalidations, supplementary protection certificates and patents of
        addition) and patent applications (including all provisional
        applications, continuations, continuations-in-part and divisions), and
        all foreign equivalents of the foregoing.

                                       14
<PAGE>

1.76    "PHASE I STUDY" means a clinical study of an RNAi Therapeutic Product in
        human volunteers or patients the purpose of which is preliminary
        determination of safety and tolerability of a dosing regime and for
        which there are no primary endpoints (as understood by the FDA or other
        Regulatory Authorities) in the protocol relating to efficacy.

1.77    "PHASE I COMPLETION OPT-OUT PERIOD" means, with respect to an RNAi
        Therapeutic Product, the period of [**] days after the Completion of
        Phase I for such RNAi Therapeutic Product.

1.78    "PHASE II STUDY" means (a) a dose exploration, dose response, duration
        of effect, kinetics, dynamic relationship or preliminary efficacy and
        safety study of an RNAi Therapeutic Product in the target patient
        population or (b) a controlled dose ranging clinical trial to evaluate
        further the efficacy and safety of an RNAi Therapeutic Product in the
        target patient population and to define the optimal dosing regimen.

1.79    "PHASE II COMPLETION OPT-OUT PERIOD" means, with respect to an RNAi
        Therapeutic Product, the period of [**] days after the first "end of
        Phase II" meeting with the applicable Regulatory Authority has been
        concluded for such RNAi Therapeutic Product or as otherwise agreed by
        the Parties in writing.

1.80    "PHASE III STUDY" means a controlled pivotal clinical study of an RNAi
        Therapeutic Product that is prospectively designed to demonstrate
        statistically whether such RNAi Therapeutic Product is effective and
        safe for use in a particular indication in a manner sufficient to obtain
        Regulatory Approval to market such RNAi Product.

1.81    "POST-APPROVAL STUDY" means a clinical study Initiated in a country
        after receipt of Regulatory Approval for the RNAi Therapeutic Product in
        such country.

1.82    "PRE-CLINICAL DEVELOPMENT ACTIVITIES" means the Development activities
        undertaken by the Parties to (a) generate, characterize and optimize
        Profit-Sharing Products and (b) support the filing of an IND for
        Profit-Sharing Products, including without limitation, non-clinical
        studies and Manufacturing development activities.

1.83    "PRE-EXISTING ALNYLAM ALLIANCE AGREEMENTS" means the agreements listed
        on Schedule 1.83.

1.84    "PRE-EXISTING MERCK ALLIANCE AGREEMENTS" means the agreements listed on
        Schedule 1.84.

1.85    "PRE-IND FILING OPT-OUT PERIOD" means, with respect to an RNAi
        Therapeutic Product, the period commencing upon completion of the final
        IND-Enabling GLP Toxicology Study for such RNAi Therapeutic Product, and
        continuing until the later of: (a) [**] days after completion of the
        final IND-Enabling GLP Toxicology Study for such RNAi Therapeutic
        Product and (b) [**] for such RNAi Therapeutic Product to the applicable
        Regulatory Authority.

                                       15
<PAGE>

1.86    "PRODUCT TRADEMARKS" means the trademark(s), service mark(s),
        accompanying logos, trade dress and/or indicia of origin used in
        connection with the distribution, marketing, promotion and sale of [**]
        Products or RNAi Therapeutic Products in the Territory. For purposes of
        clarity, the term Product Trademark(s) shall not include, without
        limitation, the corporate names and logos of either Party, and shall
        include any internet domain names incorporating such Product Trademarks

1.87    "REGULATORY APPROVAL" means any and all approvals (including without
        limitation all applicable pricing and governmental reimbursement
        approvals) licenses, registrations, or authorizations of any Regulatory
        Authority necessary for the Development, Manufacture and
        Commercialization of an RNAi Therapeutic Product in any country,
        including the acceptance or non-rejection of INDs and the approval of
        NDAs.

1.88    "REGULATORY AUTHORITY" means any applicable government regulatory
        authority involved in granting approvals for the Development,
        Manufacturing, and/or Commercialization of an RNAi Therapeutic Product
        in the Territory, including, in the United States, the FDA.

1.89    "RELATED PARTY" means a Party's Affiliates and permitted Sublicensees,
        which term does not include wholesale distributors of such Party or its
        Affiliates who purchase RNAi Therapeutic Products from such Party or its
        Affiliates in an arm's length transaction and who have no sales,
        marketing or reporting obligation to such Party or its Affiliates. For
        purposes of clarity, such wholesale distributors do not include those
        distributors whose obligations to such Party or Affiliate include
        responsibility for sales and/or marketing efforts in a country of the
        Territory or sharing of costs and expenses with respect to sales and/or
        marketing on behalf of a Party or its Affiliates, which distributors
        shall be deemed to be permitted Sublicensees for purposes of this
        definition.

1.90    "[**]" means the [**] any portions thereof, [**] thereof, [**] any [**]
        from [**] or [**] any [**] such [**].

1.91    "RNAI PRODUCT" means a therapeutic and/or prophylactic product
        containing, comprised of or based on siRNAs or siRNA derivatives or
        other moieties effective in gene function modulation and designed to
        modulate the function of particular genes or gene products through RNA
        interference.

1.92    "RNAI TECHNOLOGY" means technology useful for in vitro and/or in vivo
        target identification and/or target validation using RNA interference.

1.93    "RNAI THERAPEUTIC PRODUCTS" means RNAi Products that are directed at
        MERCK RNAi Novel Targets and that are either (a) discovered, derived or
        developed by ALNYLAM or MERCK or any person or entity acting on either
        Party's behalf, including Affiliates, consultants and scientific
        advisors during the Therapeutic Collaboration, or (b) contributed by a
        Party to a Program in the Therapeutic Collaboration. "RNAi Therapeutic
        Products" include, but are not limited to, any and all: (i) ALNYLAM
        Therapeutic Collaboration Inventions and MERCK Therapeutic Collaboration
        Inventions that, in each case, are RNAi Products and are directed at
        MERCK RNAi Novel Targets;

                                       16
<PAGE>

        and (ii) therapeutic preparations of the RNAi Therapeutic Product in
        final form for sale by prescription, over-the-counter or any other
        method for therapeutic use, including, without limitation, any
        Profit-Sharing Products, Royalty-Bearing Products, MERCK Development
        Products and/or Combination Products.

1.94    "ROSETTA" means Rosetta Inpharmatics LLC, a wholly-owned subsidiary of
        MERCK.

1.95    "ROYALTY PAYOR" means, in relation to (a) a Royalty-Bearing Product, the
        Party obligated to pay royalties to the other Party under the terms and
        conditions of this Agreement, (b) a MERCK Development Product or a
        Profit-Sharing Product outside the United States, MERCK, and (c) a [**]
        Product in the event that MERCK does not exercise its Opt-In Right,
        ALNYLAM.

1.96    "ROYALTY RECIPIENT" means, in relation to (a) a Royalty-Bearing Product,
        the Party entitled to receive royalties from the other Party under the
        terms and conditions of this Agreement, (b) a MERCK Development Product
        or a Profit-Sharing Product outside the United States, ALNYLAM, and (c)
        a [**] Product in the event that MERCK does not exercise its Opt-In
        Right, MERCK.

1.97    "SALES AND MARKETING EXPENSES" means, with respect to a Profit-Sharing
        Product, the internal and external costs and expenses incurred by the
        Parties and their Related Parties in connection with the pre-launch
        market development, and the promotion, marketing, selling and product
        support of such Profit-Sharing Product in the United States, in
        accordance with the Commercialization Plan for such Profit-Sharing
        Product and the related budget for Sales and Marketing Expenses,
        including without limitation:

        (a)     promotional and training materials for the sales
                representatives;

        (b)     patient support program costs;

        (c)     disease management programs specifically developed for such
                Profit-Sharing Product;

        (d)     outcomes and pharmacoeconomic studies and Post-Approval Studies
                for Profit-Sharing Product;

        (e)     costs incurred in conducting joint meetings relating to
                Commercialization of such Profit-Sharing Product (excluding JCC
                meetings) prior to the date of First Commercial Sale of such
                Profit-Sharing Product in the United States (including lodging
                expenses and travel expenses associated with such a meeting);

        (f)     costs associated with Detailing to physicians;

        (g)     costs associated with market development activities and other
                similar pre-launch activities;

        (h)     Cost of Goods Sold of samples of such Profit-Sharing Product
                distributed in accordance with the Commercialization Plan;

                                       17
<PAGE>

        (i)     the costs of internal scientific, medical, technical, quality
                assurance, quality control or managerial personnel engaged in
                Commercialization efforts (including without limitation Health
                Science Associates fielded by the Parties), which costs shall be
                determined based on the FTE Costs, unless another basis is
                otherwise agreed by the Parties in writing;

        (j)     other out-of-pocket costs and expenses related to promotion,
                marketing, selling and product support of such Profit-Sharing
                Product, including without limitation costs and expenses
                associated with symposia, seminars, media advertising, market
                research and direct mailing, that are incurred in accordance
                with the applicable Commercialization Plan and the related
                budget; and

        (k)     any other costs explicitly included in the budget for the
                Commercialization Plan.

1.98    "SMALL INTERFERING RNA" or "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.

1.99    "SUBLICENSEE" means a Third Party to whom a Party grants a sublicense
        under any ALNYLAM RNAi Technology, MERCK RNAi Technology or Joint
        Collaboration IP, as the case may be, to Develop, Manufacture or
        Commercialize an RNAi Therapeutic Product in the Field in the Territory
        subject to Section 7.3 or otherwise grants rights to distribute, promote
        or sell an RNAi Therapeutic Product.

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

1.101   "TECHNOLOGY COLLABORATION" means the research activities undertaken by
        the Parties during the Technology Collaboration Term pursuant to Article
        2 of the Original Agreement, but excluding the [**] Program.

1.102   "TECHNOLOGY COLLABORATION TERM" means the period commencing on the
        Original Effective Date and ending on the Effective Date.

1.103   "TERRITORY" means all of the countries in the world, and their
        territories and possessions.

1.104   "THERAPEUTIC COLLABORATION" means the Development, Manufacture and
        Commercialization activities undertaken by the Parties with respect to
        Profit-Sharing

                                       18
<PAGE>

        Products, Royalty-Bearing Products and MERCK Development Products in the
        Field and in the Territory.

1.105   "THIRD PARTY" means an entity other than a Party and its Affiliates.

1.106   "VALID CLAIM" means a claim of: (a) an issued and unexpired patent which
        (i) covers the Manufacture or Commercialization of a [**] Product or an
        RNAi Therapeutic Product, as the case may be; (ii) has not been revoked
        or held unenforceable or invalid by a decision of a court or other
        governmental agency of competent jurisdiction, which decision is not
        appealable or has not been appealed within the time allowed for appeal,
        and (iii) has not been abandoned, disclaimed, denied or admitted to be
        invalid or unenforceable through reissue, re-examination or disclaimer
        or otherwise, or (b) a [**] within the Territory, which covers the [**]
        of a [**] Product or an RNAi Therapeutic Product, as the case may be,
        that has been [**] years from the earliest date [**] and such [**].

1.107   "WORLDWIDE SALES" means aggregate worldwide Net Sales of a
        Royalty-Bearing Product or a [**] Product in a Calendar Year by a Party
        or its Related Parties, as the case may be.

ADDITIONAL DEFINITIONS. The following terms have the meanings set forth in the
corresponding Sections of this Agreement:

<TABLE>
<CAPTION>
TERM                                                                           SECTION
------------------------------------------------------------------------    --------------
<S>                                                                         <C>
"AAA"                                                                       13.7.1
"ACQUIRED PARTY"                                                            13.3.1
"ALNYLAM-ASSIGNED THERAPEUTIC COLLABORATION INVENTIONS"                     11.2(d)
"ALNYLAM INDEMNITEES"                                                       10.5.1
"ALNYLAM TARGET IDENTIFICATION AND TARGET VALIDATION RNAI PATENT RIGHTS"    1.4
"ALNYLAM TECHNOLOGY"                                                        7.1.3(a)
"AGREEMENT TERM"                                                            12.1.2
"BANKRUPT PARTY"                                                            12.3.5
"BREACHING PARTY"                                                           12.2.1(a)
"CHANGE OF CONTROL"                                                         13.3.3
"CHANGE OF CONTROL NOTICE"                                                  13.3.1
"CODE"                                                                      12.3.5
"CO-DEVELOPMENT TARGET"                                                     3.2.2(c)
"COLLABORATION MANAGER"                                                     4.2
"CONTINUING PARTY"                                                          5.1
"CO-PROMOTION AGREEMENT"                                                    3.10.1
"CO-PROMOTION OPTION EXERCISE DATE"                                         3.10.1
"CRT AGREEMENT"                                                             7.5
"DEFENDING PARTY"                                                           11.6.4
"DISPUTE"                                                                   13.7.1
"DIVESTING PARTY"                                                           13.3.1(c)(iii)
"DROPPED MERCK DEVELOPMENT TARGET"                                          6.8
"EFFECTIVE DATE"                                                            Preamble
"EXCLUDED CLAIM"                                                            13.7.1
</TABLE>

                                       19
<PAGE>

<TABLE>
<S>                                                                         <C>
"EXPENSE SHARE REDUCTION OPTION"                                            3.9.1
"GATEKEEPER"                                                                3.2.2(a)
"HUMAN MATERIALS"                                                           10.1(e)
"INDEMNITEE"                                                                10.5.4
"INFRINGEMENT CLAIM"                                                        11.6.1
"INITIAL ENFORCEMENT RIGHTS PARTY"                                          11.5.3
"INITIAL NOTICE"                                                            6.8
"JCC"                                                                       3.10.2
"JSC"                                                                       4.1.1
"JSC CHAIRPERSON"                                                           4.1.2
"LOSSES"                                                                    10.5.1
"MERCK-ASSIGNED THERAPEUTIC COLLABORATION INVENTIONS"                       11.2(d)
"MERCK DEVELOPMENT PRODUCT"                                                 3.2.2(d)
"MERCK DEVELOPMENT TARGET"                                                  3.2.2(d)
"MERCK INDEMNITEES"                                                         10.5.2
"MERCK RNAI NOVEL TARGET INFORMATION"                                       3.2.2(b)
"MERCK TECHNOLOGY"                                                          7.1.3(a)
"NON-ACQUIRED PARTY"                                                        13.3.1
"NON-BANKRUPT PARTY"                                                        12.3.5
"NON-BREACHING PARTY"                                                       12.2.1(a)
"NOVARTIS"                                                                  Schedule 1.83
"NOVARTIS AGREEMENT"                                                        Schedule 1.83
"OPT-IN INFORMATION"                                                        2.2.2(a)
"OPT-IN NOTICE"                                                             2.2.2(b)
"OPT-IN PERIOD"                                                             2.2.2(a)
"OPT-IN RIGHT"                                                              2.2.2(a)
"OPT-OUT NOTICE"                                                            5.1(a)
"OPT-OUT PARTY"                                                             5.1(a)
"OPT-OUT POINT"                                                             5.1(b)
"OPT-OUT RIGHT"                                                             5.1
"ORIGINAL AGREEMENT"                                                        Recitals
"ORIGINAL EFFECTIVE DATE"                                                   Recitals
"PATENT EXPENSES"                                                           11.3.7
"PROFIT-SHARING PRODUCT"                                                    3.2.2(c)
"PROGRAM"                                                                   3.3
"PROGRAM WORKPLAN"                                                          3.3
"PROSECUTING PARTY"                                                         11.3.5
"PROVIDERS"                                                                 10.1(e)
"RECEIVING PARTY"                                                           12.4.1
"REGION"                                                                    12.3.6
"REQUESTED PARTY"                                                           3.7
"[**]"                                                                      2.2.1
"ROYALTY-BEARING PRODUCT"                                                   5.1
"SECONDARY ENFORCEMENT RIGHTS PARTY"                                        11.5.3
"SELECTION NOTICE"                                                          3.2.2(c)
"SIGNIFICANT PHARMACEUTICAL COMPANY"                                        13.3.3
</TABLE>

                                       20
<PAGE>

<TABLE>
<S>                                                                         <C>
"SOLE COMMERCIALIZATION PARTY"                                              13.3.1(c)(iii)
"SPC"                                                                       11.9
"[**]"                                                                      7.5
"TARGET RESPONSE NOTICE"                                                    3.2.2(a)
"TARGET SET"                                                                3.2.1
"THERAPEUTIC COLLABORATION TERM"                                            12.1.1
"TRANSFERRING PARTY"                                                        12.4.1
"U.S. CO-PROMOTION OPTION"                                                  3.10.1
"U.S. DEVELOPMENT EXPENSES"                                                 3.9.1
"U.S. OPERATING PROFIT/LOSS"                                                9.3
</TABLE>

2.      TECHNOLOGY COLLABORATION

2.1     TERMINATION OF TECHNOLOGY COLLABORATION. ALNYLAM and MERCK hereby agree
        that the Technology Collaboration shall terminate as of the Effective
        Date and the Parties will mutually agree upon the contents and format of
        a final report (if any) describing the work performed by each Party
        under the Technology Collaboration.

2.2     [**].

2.2.1   [**]. Pursuant to the terms of the Original Agreement, ALNYLAM [**] for
        the development of RNAi Products [**] and MERCK has [**] development and
        commercialization of [**].

2.2.2   MERCK OPT-IN RIGHT.

        (a)     Within [**] days of completing the [**] for the first [**]
                Product to reach such milestone, ALNYLAM shall provide MERCK
                with all information, materials and data listed on Schedule
                2.2.2 (provided that, with respect to those categories normally
                required for an IND filing, such information, materials or data
                may be omitted if the omission is approved by the relevant
                Regulatory Authority for an IND filing) ("OPT-IN INFORMATION")
                to enable MERCK to evaluate and decide whether to exercise its
                right to co-develop RNAi Products directed to the [**] Target
                under the Therapeutic Collaboration ("OPT-IN RIGHT").
                Notwithstanding the above, "Opt-In Information" shall include
                all information, materials and/or data listed on Schedule 2.2.2
                which is in ALNYLAM's or its Affiliate's possession (either by
                ownership or license) and relating to the [**] Target and any
                [**] Products developed by ALNYLAM.

        (b)     MERCK shall have a period of [**] days after receiving from
                ALNYLAM all Opt-In Information relating to the [**] Target
                ("OPT-IN PERIOD") in which to exercise its Opt-In Right by
                written notice to ALNYLAM ("OPT-IN NOTICE"). If MERCK has not
                received all Opt-In Information set forth in Schedule 2.2.2, or
                any portion thereof (other than the materials and data which may
                be omitted pursuant to the first sentence of this Section
                2.2.2(b)), MERCK shall notify

                                       21
<PAGE>

                ALNYLAM of same, which notice shall specify any missing Opt-In
                Information or any portion thereof; and ALNYLAM shall, promptly
                after receipt of such notice, provide any missing Opt-In
                Information identified in the notice to MERCK. If MERCK does not
                deliver such Opt-In Notice to ALNYLAM within the Opt-In Period,
                then MERCK shall be deemed to have declined to exercise its
                Opt-In Right, and the financial terms set forth in Section 9.4.1
                shall apply. In the event that MERCK does not deliver such
                Opt-In Notice to ALNYLAM, MERCK and its Affiliates shall (i)
                immediately return to ALNYLAM all information (including
                Information), data and materials (including all ALNYLAM
                intellectual property) relating to the [**] Products and [**]
                Target, including, but not limited to that which was provided
                pursuant to Schedule 2.2.2, (ii) have no rights under this
                Agreement to the [**] Target, and (iii) be prohibited, for a
                period of [**] months commencing on the final day of the Opt-In
                Period, from researching, developing or commercializing, either
                alone or with or through any Third Party, any RNAi Product
                directed at the [**] Target.

        (c)     Upon MERCK's giving an Opt-In Notice to ALNYLAM, MERCK shall pay
                ALNYLAM a fee of [**] Dollars ($[**]) plus [**] percent ([**]%)
                of the FTE Costs and out-of-pocket research costs which ALNYLAM
                incurred in developing the [**] Target and [**] Products from
                the date ALNYLAM elected to develop the [**] Target until the
                date of the Opt-In Notice. Thereafter, the [**] Target shall be
                deemed a Co-Development Target, the [**] Program shall be deemed
                a Program under the Therapeutic Collaboration and any [**]
                Products shall be deemed Profit-Sharing Products and shall be
                subject to all the terms of this Agreement applicable to
                Profit-Sharing Products other than the milestone payment
                provisions of Section 9.2.1.

2.3     EXCHANGE OF INFORMATION. In accordance with the provisions of Article 7,
        on an ongoing basis during the Collaboration Term:

        (a)     ALNYLAM shall disclose to MERCK all ALNYLAM RNAi Technology that
                is Controlled by ALNYLAM or its Affiliates as of the Original
                Effective Date and/or during the Technology Collaboration Term
                which has not been previously disclosed and shall provide
                updates, at least quarterly, with regard to ALNYLAM RNAi
                Technology that is Controlled by ALNYLAM or its Affiliates as of
                the Original Effective Date and/or during the Technology
                Collaboration Term, and ALNYLAM RNAi Patent Rights that are
                Controlled by ALNYLAM or its Affiliates as of the Original
                Effective Date and/or during the Technology Collaboration Term,
                including but not limited to any and all ALNYLAM RNAi Patent
                Rights filings related thereto, and ALNYLAM Therapeutic
                Collaboration IP that is Controlled by ALNYLAM or its Affiliates
                as of the Original Effective Date and/or during the first [**]
                years of the Collaboration Term, including but not limited to
                any and all ALNYLAM RNAi Patent Rights filings related thereto;

        (b)     MERCK shall disclose to ALNYLAM all MERCK Broad RNAi Technology
                that is Controlled by MERCK or ROSETTA or their wholly-owned
                subsidiaries as of the Original Effective Date and/or during the
                Technology Collaboration Term and

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<PAGE>

                MERCK Product-Specific RNAi Technology that is Controlled by
                MERCK or ROSETTA or their wholly-owned subsidiaries as of the
                Original Effective Date and/or during the first [**] years of
                the Collaboration Term which has not been previously disclosed
                and shall provide updates, at least quarterly, with regard to
                such MERCK Broad RNAi Technology that is Controlled by MERCK or
                ROSETTA or their wholly-owned subsidiaries as of the Original
                Effective Date and/or during the Technology Collaboration Term
                and MERCK Product-Specific RNAi Technology that is Controlled by
                MERCK or ROSETTA or their wholly-owned subsidiaries as of the
                Original Effective Date and/or during the first [**] years of
                the Collaboration Term, MERCK Broad RNAi Patent Rights that are
                Controlled by MERCK or ROSETTA or their wholly-owned
                subsidiaries as of the Original Effective Date and/or during the
                Technology Collaboration Term, including but not limited to any
                and all MERCK RNAi Patent Rights filings related thereto, and
                MERCK Therapeutic Collaboration IP that is Controlled by MERCK
                or ROSETTA or their wholly-owned subsidiaries as of the Original
                Effective Date and/or during the first [**] years of the
                Collaboration Term, including but not limited to any and all
                MERCK RNAi Patent Rights filings related thereto; and

        (c)     each Party shall disclose to the other any and all Joint
                Collaboration Inventions and Joint Collaboration Patent Rights
                not previously disclosed and shall provide updates, at least
                quarterly, with regard to such Joint Collaboration Inventions.

        Disclosures required by this Section 2.3 shall be subject to the
        confidentiality and non-use obligations of Third Party agreements and
        the confidentiality provisions of Section 8.1 of this Agreement.

3.      THERAPEUTIC COLLABORATION

3.1     OVERVIEW. The Parties shall collaborate in carrying out the Therapeutic
        Collaboration with the objective of developing RNAi Therapeutic Products
        for Targets associated with human diseases.

3.2     PROVISION AND SELECTION OF MERCK RNAI NOVEL TARGETS.

        3.2.1   MERCK RNAI NOVEL TARGETS. During the Therapeutic Collaboration
                Term, MERCK shall nominate nine (9) MERCK RNAi Novel Targets
                which are candidates for RNAi Therapeutic Products as follows:
                (a) three (3) such Targets within [**] days after the Effective
                Date, (b) three (3) additional Targets by [**] and (c) three (3)
                additional Targets by [**]. Each set of three (3) Targets is
                hereinafter referred to as a "TARGET SET".

        3.2.2   TARGET SELECTION. With regard to the nomination of MERCK RNAi
                Novel Targets to ALNYLAM by MERCK and notification to MERCK by
                ALNYLAM of its interest in selecting such MERCK RNAi Novel
                Targets, the following step-wise process shall apply:

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<PAGE>

                (a)     For each Target Set, MERCK shall initially disclose to
                        an individual ALNYLAM employee specified by ALNYLAM and
                        reasonably acceptable to MERCK (the "GATEKEEPER") the
                        NCBI Gene ID number (or, if a NCBI Gene ID number is not
                        available, the specific sequence of the proposed MERCK
                        RNAi Novel Target) of three (3) Targets that MERCK [**]
                        to ALNYLAM as MERCK RNAi Novel Targets for such Target
                        Set. Within [**] days following the Gatekeeper's receipt
                        of such Targets, the Gatekeeper shall notify MERCK in
                        writing (a "TARGET RESPONSE NOTICE") which, if any, of
                        such Targets is either: (a) subject to a contractual
                        obligation to a Third Party that would be breached by
                        the inclusion of such Target as a MERCK RNAi Novel
                        Target under this Agreement, or (b) the subject of an
                        internal program to which ALNYLAM has committed or
                        allocated [**] period immediately preceding MERCK's
                        disclosure of the Target Set to the Gatekeeper. The
                        Gatekeeper shall keep all information relating to the
                        proposed MERCK RNAi Novel Target strictly confidential
                        and shall not disclose such information to any other
                        individual or entity, or use such information for any
                        purpose other than verification as to whether or not
                        such Target is available for nomination as a MERCK RNAi
                        Novel Target under this Agreement. If a Target submitted
                        to the Gatekeeper is [**], then MERCK [**] as a MERCK
                        RNAi Novel Target [**] pursuant to the foregoing
                        procedure for such Target Set. For clarity,
                        notwithstanding the [**] MERCK RNAi Novel Targets
                        evaluated by the Gatekeeper [**], MERCK shall not be
                        entitled to nominate more than three (3) MERCK RNAi
                        Novel Targets in any one Target Set, or to nominate more
                        than three (3) Target Sets, in each case for ALNYLAM's
                        consideration as potential Co-Development Targets.

                (b)     MERCK shall notify ALNYLAM in writing of the MERCK RNAi
                        Novel Targets that have been identified pursuant to the
                        foregoing procedure for each Target Set and identify
                        which Targets, if any, in such Target Set are [**]
                        Targets as described in Section 3.2.3. MERCK shall
                        provide to ALNYLAM the MERCK RNAi Novel Target
                        information described in Schedule 3.2.2 ("MERCK RNAI
                        NOVEL TARGET INFORMATION") for each of the MERCK RNAi
                        Novel Targets in each Target Set [**] Targets. If
                        ALNYLAM has not received all MERCK RNAi Novel Target
                        Information set forth in Schedule 3.2.2, or any portion
                        thereof, ALNYLAM shall notify MERCK of same, which
                        notice shall specify any missing MERCK RNAi Novel Target
                        Information or any portion thereof; and MERCK shall,
                        promptly after receipt of such notice, provide to
                        ALNYLAM any missing MERCK RNAi Novel Target Information
                        identified in the notice. "MERCK RNAi Novel Target
                        Information" shall include all information, materials
                        and/or data listed on Schedule 3.2.2 which is in MERCK's
                        or ROSETTA's or their fully-owned subsidiaries' Control
                        and is directly relevant to the MERCK RNAi Novel Target.

                (c)     As expeditiously as possible, but in no event later than
                        [**] months after receiving the MERCK RNAi Novel Target
                        Information for all of the MERCK RNAi Novel Targets in a
                        Target Set ([**]), ALNYLAM shall notify MERCK

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<PAGE>

                        in writing ("SELECTION NOTICE") as to whether or not it
                        is selecting one of the MERCK RNAi Novel Targets in a
                        Target Set (and if so, which one) for the Development
                        and Commercialization by both ALNYLAM and MERCK of RNAi
                        Therapeutic Products directed at such MERCK RNAi Novel
                        Target (each such Target, a "CO-DEVELOPMENT TARGET", and
                        each such RNAi Therapeutic Product, a "PROFIT-SHARING
                        PRODUCT").

                (d)     Any MERCK RNAi Novel Target in a Target Set that is not
                        selected by ALNYLAM as a Co-Development Target shall
                        automatically be deemed a Target for which MERCK may
                        Develop and Commercialize RNAi Therapeutic Products
                        directed to such Target (each such Target a "MERCK
                        DEVELOPMENT TARGET", and each such RNAi Therapeutic
                        Product, a "MERCK DEVELOPMENT PRODUCT"). ALNYLAM and its
                        Affiliates shall (i) immediately return to MERCK all
                        information (including Information), data and materials
                        (including all MERCK intellectual property) relating to
                        the MERCK Development Targets, including, but not
                        limited to that which was provided pursuant to Schedule
                        3.2.2, (ii) have no rights under this Agreement to the
                        MERCK Development Targets, and (iii) be prohibited from
                        researching, developing or commercializing, either alone
                        or with or through any Third Party, any RNAi Product
                        directed at such MERCK Development Target.

        3.2.3   [**]. MERCK may designate [**] MERCK RNAi Novel Targets within
                the first or second Target Set ([**]) as [**] Targets. Each such
                [**] Target shall be deemed a MERCK Development Target and each
                [**] a MERCK Development Product, and ALNYLAM shall not be
                entitled to [**] Targets as Co-Development Targets. If MERCK
                nominates (a) [**] Targets in the first or second Target Set and
                ALNYLAM [**] as a Co-Development Target, or (b) [**] Targets in
                the first or second Target Set, then [**] ALNYLAM, in its sole
                discretion, may [**] as a Co-Development Target.

3.3     PROGRAM WORKPLANS. The activities to be undertaken in the course of the
        Therapeutic Collaboration for each Co-Development Target (each, a
        "PROGRAM") shall be set forth in a detailed workplan ("PROGRAM
        WORKPLAN"). The Parties agree to conduct all their Development
        activities relating to the RNAi Therapeutic Products directed to
        Co-Development Targets in accordance with the applicable Program
        Workplan. Within [**] days after the selection of each Co-Development
        Target (or, in the event that MERCK exercises it Opt-In Right with
        respect to the [**] Target and [**] Products, the date of the Opt-In
        Notice), the JSC will agree upon a Program Workplan for a Program to
        research and develop one or more RNAi Therapeutic Products directed to
        each such Co-Development Target. The focus of the Program Workplans for
        the Programs will be on generating, characterizing and optimizing RNAi
        Therapeutic Products directed to the Co-Development Targets for further
        Development in the Field, including Clinical Studies, and as
        appropriate, the conduct of these studies. Each Party will contribute to
        each Program any RNAi Therapeutic Products directed to the applicable
        Co-Development Target that have been generated by such Party prior to
        the selection of the applicable Co-Development Target, subject to any
        rights such Party may have to Third Parties. The

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<PAGE>

        Program Workplan for each Program will identify such RNAi Therapeutic
        Products (if any).

3.4     COLLABORATION ACTIVITIES. The Program Workplans shall allocate
        Development tasks between the Parties consistent with their respective
        capabilities and, to the extent possible and scientifically sound, in a
        manner to maximize the expeditious and cost-effective Development and
        Manufacture of Profit-Sharing Products. With respect to each
        Profit-Sharing Product and Program, ALNYLAM will be responsible for
        leading the Pre-Clinical Development Activities under the applicable
        Program Workplan. With respect to each Profit-Sharing Product and
        Program, the Parties will discuss their respective responsibilities
        regarding the Manufacture and supply of Profit-Sharing Products for
        non-clinical studies and Clinical Studies initiated prior to the
        Completion of Phase II. With respect to each Profit-Sharing Product and
        Program, MERCK shall be responsible for the following activities under
        the applicable Program Workplan: (a) filing the IND for all
        Profit-Sharing Products, (b) leading non-clinical and clinical
        Development activities after the applicable IND is filed and (c)
        Manufacture and supply of Profit-Sharing Products for non-clinical
        studies and Clinical Studies initiated after Completion of Phase II
        (including, without limitation, any Manufacturing activities required to
        be initiated prior to Completion of Phase II in order to supply
        Profit-Sharing Products after Completion of Phase II in accordance with
        the applicable Program Workplan).

3.5     DILIGENCE. Each Party shall use Commercially Reasonable Efforts to
        perform its respective Development and Manufacturing activities under
        the Program Workplans in accordance with this Agreement according to the
        priorities established by the Program Workplans and the JSC.

3.6     RECORDS AND REPORTS. Each Party shall maintain scientific records, in
        sufficient detail and in good scientific manner appropriate for patent
        and regulatory purposes, which shall fully and properly reflect all work
        done and results achieved in the performance of the Program Workplans by
        such Party. Each Party shall have the right, during normal business
        hours and upon reasonable notice, to inspect and copy (or request the
        other Party to copy) all records of the other Party maintained in
        connection with the work done and results achieved in the performance of
        the Programs, but solely to the extent to which such records relate to
        an Profit-Sharing Product or to the extent access to such records is
        necessary for a Party to exercise its rights under this Agreement. All
        such records and the information disclosed therein shall be maintained
        in confidence by the recipient in accordance with Article 8.

3.7     AVAILABILITY OF EMPLOYEES. Each Party (the "REQUESTED PARTY") shall make
        available its employees engaged in the Programs upon reasonable notice
        during normal business hours and at their respective places of
        employment to consult with the other Party on the progress of the
        Programs, as coordinated through the Requested Party's Collaboration
        Manager or such other individual as may be designated by the Requested
        Party.

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<PAGE>

3.8     REGULATORY MATTERS AND COMPLIANCE FOR PROFIT-SHARING PRODUCTS.

        3.8.1   OWNERSHIP AND REFERENCE RIGHT. MERCK shall own the Regulatory
                Approvals and related regulatory documents submitted to the
                applicable Regulatory Authorities for all Profit-Sharing
                Products. The Party owning any Regulatory Approval and related
                regulatory documents shall license, including for
                cross-reference purposes, transfer, provide a letter of
                reference with respect to, or take other action necessary to
                make available such Regulatory Approvals and related regulatory
                documents to the other Party as may be reasonably necessary to
                enable such other Party to fulfill its obligations under the
                applicable Program Workplan and/or Commercialization Plan and
                exercise its rights under this Agreement with respect to the
                Development and Commercialization of such Profit-Sharing
                Products in the Territory.

        3.8.2   REGULATORY COORDINATION. Except as otherwise provided in Section
                3.8.3 or the applicable Program Workplan, MERCK shall (a)
                oversee, monitor and coordinate all regulatory actions,
                communications and filings with, and submissions to, each
                Regulatory Authority, (b) be responsible for interfacing,
                corresponding and meeting with each Regulatory Authority, and
                (c) apprise ALNYLAM of all material communications from
                Regulatory Authorities in [**] as soon as reasonably possible
                but in any event within [**] business days, so as to permit
                ALNYLAM to exercise its rights under this Section 3.8, and to
                comply with its disclosure requirements under applicable
                securities laws. Except as otherwise provided in Section 3.8.3,
                ALNYLAM shall have the right at its sole expense to have a
                representative participate in all material meetings and, to the
                extent reasonably practicable for MERCK, material telephone
                discussions with the FDA with respect to Profit-Sharing
                Products.

        3.8.3   MANUFACTURING REGULATORY COMMUNICATIONS. Notwithstanding any
                provisions of Section 3.8.2 to the contrary, with respect to all
                regulatory issues related to the Manufacture of Profit-Sharing
                Products, including all matters relating to cGMP compliance, (a)
                in the case of supply of a Profit-Sharing Product for
                non-clinical studies and Clinical Studies initiated prior to the
                Completion of Phase II, ALNYLAM shall and (b) in the case of
                supply of a Profit-Sharing Product for non-clinical studies and
                Clinical Studies initiated after the Completion of Phase II
                (other than Phase III and Post-Approval Studies), MERCK shall:
                (i) be primarily responsible for overseeing, monitoring and
                coordinating all regulatory actions, communications and filings
                with, and submissions to, each Regulatory Authority; (ii) be
                primarily responsible for interfacing, corresponding and meeting
                with each Regulatory Authority; (iii) be responsible for
                maintaining all regulatory filings; (iv) notify the other Party
                as soon as possible, but in any event within [**] business days,
                of any action by a Regulatory Authority in [**] that would halt,
                delay or otherwise impair the Development of a Profit-Sharing
                Product; and (v) provide to the other Party a written report
                once per Calendar Quarter of all material communications with
                any Regulatory Authority in [**]; and (c) in the case of supply
                of a Profit-Sharing Product for Phase III Study, Post-Approval
                Study or Commercialization purposes, including all matters
                relating to cGMP

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<PAGE>

                compliance, MERCK shall: (i) oversee, monitor and coordinate all
                regulatory actions, communications and filings with, and
                submissions to, each Regulatory Authority, (ii) be responsible
                for interfacing, corresponding and meeting with each Regulatory
                Authority, (iii) be responsible for maintaining all regulatory
                filings, (iv) notify ALNYLAM as soon as possible, but in any
                event within [**] business days, of any action by a Regulatory
                Authority in [**] that would prohibit the marketing or the
                continued marketing of such Profit-Sharing Product or that would
                result in any shortage or projected shortage of such
                Profit-Sharing Product and (v) provide to ALNYLAM a written
                report once per Calendar Quarter of all material communications
                with any Regulatory Authority in [**].

        3.8.4   REPORTING ADVERSE EXPERIENCES. The Parties will develop and
                agree upon safety data exchange procedures governing the
                coordination of collection, investigation, reporting, and
                exchange of information concerning any adverse experiences, and
                any product quality and product complaints involving adverse
                experiences, related to a Profit-Sharing Product, sufficient to
                permit each Party to comply with its legal obligations.

        3.8.5   COMPLIANCE. Each Party shall conduct the Therapeutic
                Collaboration and the Development, Manufacture and
                Commercialization of Profit-Sharing Products in accordance with
                all applicable laws, rules and regulations, including without
                limitation current governmental regulations concerning good
                laboratory practices, good clinical practices and good
                manufacturing practices.

3.9     FUNDING OF THE THERAPEUTIC COLLABORATION.

        3.9.1   U.S. DEVELOPMENT EXPENSES. From the date of approval by both
                Parties of the Program Workplan with respect to a Profit-Sharing
                Product, the Parties will [**] of all Development Expenses
                incurred in the conduct of the Program Workplan for such
                Profit-Sharing Product in order to generate data primarily to
                support Regulatory Approval of such Profit-Sharing Product in
                the United States ("U.S. DEVELOPMENT EXPENSES"). For the
                avoidance of doubt, U.S. Development Expenses may include
                expenses related to Clinical Studies performed outside of the
                United States in support of Regulatory Approval in the United
                States. The applicable Program Workplan will identify each
                Clinical Study that is primarily in support of Regulatory
                Approval of a Profit-Sharing Product in the United States. Prior
                to the Initiation of the first Phase III Study with respect to
                each Profit-Sharing Product, each Party has a one-time option to
                reduce its percentage share of U.S. Development Expenses related
                to such Profit-Sharing Product ("EXPENSE SHARE REDUCTION
                OPTION"); provided, however, that in no event will such
                percentage share be less than [**] percent ([**]%). A Party may
                exercise such option by providing [**] months prior written
                notice to the other Party of such exercise and the percentage
                share of U.S. Development Expenses to be borne by such Party. In
                the event that MERCK exercises its Expense Share Reduction
                Option with respect to any Profit-Sharing Product, ALNYLAM shall
                assume final decision-making authority over the Development,
                Manufacturing and Commercialization activities for such
                Profit-Sharing Product with respect to the

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<PAGE>

                United States and the appropriate changes will be made to the
                provisions of this Agreement to reflect ALNYLAM's assumption of
                such final decision-making authority, including without
                limitation, the reallocation of responsibility for Development,
                Manufacturing and Commercialization activities and regulatory
                coordination with respect to the United States.

        3.9.2   EX-U.S. DEVELOPMENT EXPENSES. From the Effective Date, with
                respect to each Profit-Sharing Product, MERCK will bear [**]
                percent ([**]%) of the Development Expenses incurred in the
                conduct of the Program Workplan for such Profit-Sharing Product
                in order to generate data primarily to support Regulatory
                Approval of such Profit-Sharing Product in the Territory outside
                the United States.

        3.9.3   DEVELOPMENT EXPENSE BUDGET. Each Program Workplan under the
                Therapeutic Collaboration shall be accompanied by a budget
                prepared by the Parties setting forth the projected Development
                Expenses for such Program relating to the United States. Such
                Program Workplan budgets shall be reviewed and approved at least
                annually by the JSC pursuant to Section 4.1.4. U.S. Development
                Expenses identified within the budget for the applicable Program
                Workplan approved by the JSC shall initially be borne by the
                Party incurring the cost or expense, subject to reimbursement as
                provided in Section 3.9.4. ALNYLAM and MERCK shall report
                quarterly to each other on their U.S. Development Expenses with
                respect to the immediately preceding Calendar Quarter, if any,
                with such reports to be submitted within [**] days after the end
                of each Calendar Quarter. The Parties shall seek to resolve any
                questions related to such U.S. Development Expenses within [**]
                days following receipt.

        3.9.4   EXPENSE RECONCILIATION. The Party that incurs more than its
                share of the total actual U.S. Development Expenses for a
                Profit-Sharing Product shall be paid by the other Party an
                amount sufficient to reconcile to its agreed percentage of
                actual U.S. Development Expenses in each Calendar Quarter;
                provided that total actual U.S. Development Expenses for both
                Parties for the Calendar Year to date have not exceeded [**]% of
                budgeted U.S. Development Expenses for such Profit-Sharing
                Product for the Calendar Year to date. If total actual U.S.
                Development Expenses exceeded budgeted U.S. Development Expenses
                by more than [**]% for the Calendar Year to date, the
                reimbursing Party shall first pay the other Party an amount
                sufficient to cause the reimbursing Party to have borne its
                stated percentage of [**]% of the budgeted U.S. Development
                Costs. Actual U.S. Development Expenses in excess of [**]% of
                budgeted U.S. Development Expenses shall also be reimbursed if
                (a) both Parties approve the additional U.S. Development
                Expenses in advance or (b) such excess U.S. Development Expenses
                are the result of work carried out in response to a governmental
                requirement to do such work and the Party incurring such excess
                U.S. Development Expenses has notified the other Party prior to
                incurring such excess U.S. Development Expenses. Subject to the
                foregoing clause (b), any proposal to increase U.S. Development
                Expense for any Calendar Year by more than [**]% of the U.S.
                Development Expenses budgeted for such Calendar Year, if the
                Parties

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<PAGE>

                are unable to reach consensus on such issue, after referral to
                the executive officers of the Parties pursuant to Section
                13.7.1, shall not be approved. Reconciling payments under this
                Section 3.9.4 shall be made within [**] days of receipt of the
                other Party's quarterly report.

3.10    COMMERCIALIZATION AND MANUFACTURE OF PROFIT-SHARING PRODUCTS. The rights
        and obligations set forth in this Section 3.10 shall apply to both
        Parties, as applicable, in respect of each Profit-Sharing Product.

        3.10.1  U.S. CO-PROMOTION OPTION FOR PROFIT-SHARING PRODUCTS. Except in
                the event that ALNYLAM has exercised its Expense Share Reduction
                Option with respect to a Profit-Sharing Product, ALNYLAM shall
                have the option to Co-Promote such Profit-Sharing Product with
                MERCK in the United States (the "U.S. CO-PROMOTION OPTION"),
                which option shall be exercisable at any time (the "CO-PROMOTION
                OPTION EXERCISE DATE"), but no later than [**] months prior to
                the target launch date for such Profit-Sharing Product in the
                United States. If ALNYLAM exercises the U.S. Co-Promotion
                Option, the Parties' respective Co-Promotion responsibilities in
                the United States shall be negotiated in good faith and set
                forth in a definitive agreement ("CO-PROMOTION AGREEMENT") to be
                executed no later than [**] months prior to the target launch
                date for such Profit-Sharing Product in the United States. Such
                Co-Promotion Agreement shall contain terms substantially similar
                to those set forth in Schedule 3.10.1.

        3.10.2  JOINT COMMERCIALIZATION COMMITTEE. Within [**] months after
                ALNYLAM has exercised its U.S. Co-Promotion Option the Parties
                shall establish a Joint Commercialization Committee ("JCC") to
                oversee Commercialization activities in the United States
                relating to Profit-Sharing Products. The JCC will be chaired by
                MERCK and shall be comprised of three (3) named representatives
                of MERCK and three (3) named representatives of ALNYLAM. Each
                Party shall appoint its respective representatives to the JCC
                from time to time, and may substitute one or more of its
                representatives, in its sole discretion, effective upon notice
                to the other Party of such change. All JCC representatives shall
                have appropriate marketing or commercialization expertise and
                ongoing familiarity with the Profit-Sharing Products. Each Party
                shall bear its own expenses relating to attendance at such
                meetings by its representatives. The responsibilities of the JCC
                shall include overseeing the Commercialization of each
                Profit-Sharing Product, reviewing the Commercialization Plan and
                related budget for each Profit-Sharing Product and facilitating
                implementation of such Commercialization Plans and other related
                activities; provided, however, that all issues relating to
                Commercialization activities and budgets shall be subject to
                MERCK's final decision-making authority as set forth in Section
                4.4.1 and also subject to the proviso in Section 4.4.1; provided
                further, that in recognition of the importance of budgets,
                ALNYLAM shall have the full opportunity to review and comment on
                the Commercialization budget before final approval by MERCK. Any
                disputes related to Commercialization budgets shall be resolved
                as described in Section 4.5.2, but with the substitution of the
                JCC for the JSC. The meeting schedule and

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<PAGE>

                additional responsibilities of the JCC shall be determined upon
                establishment of the JCC.

        3.10.3  DILIGENCE. MERCK agrees to use Commercially Reasonable Efforts
                to Commercialize each Profit-Sharing Product in the Territory.
                Upon exercise by ALNYLAM of its U.S. Co-Promotion Option with
                respect to a Profit-Sharing Product, (a) the Parties agree to
                diligently collaborate in the Commercialization of such
                Profit-Sharing Product in the Field in the United States and (b)
                ALNYLAM agrees to use Commercially Reasonable Efforts to
                Commercialize such Profit-Sharing Product in the United States.
                Except as otherwise set forth in this Section 3.10, all
                activities shall be undertaken by the Parties in accordance with
                the Commercialization Plan developed under Section 3.10.5 and
                all sales shall be made under Product Trademark(s) selected by
                MERCK and approved by the JSC, using only professional sales
                representatives who are employees of the Parties, in the United
                States, or outside the United States, using professional sales
                representatives who are employees or direct independent
                contractors of MERCK.

        3.10.4  LEAD COMMERCIALIZATION PARTY; CERTAIN ALNYLAM RIGHTS. MERCK
                shall be responsible for developing a suitable global marketing
                strategy for each Profit-Sharing Product in the Territory and
                for sales activities, the development of marketing materials and
                the implementation of operational matters related to such
                activities including marketing, sales, supply and distribution
                of each Profit-Sharing Product in the Territory. MERCK shall be
                responsible for booking sales and shall warehouse and distribute
                the Profit-Sharing Product in the Territory. In the event that
                ALNYLAM exercises its U.S. Co-Promotion Option pursuant to
                Section 3.10.1, ALNYLAM shall have the right (but not the
                obligation) to field Health Science Associates in support of
                Profit-Sharing Products. The number and deployment of such
                Health Science Associates shall be detailed in the
                Commercialization Plan for each Profit-Sharing Product, and any
                Health Science Associates fielded by ALNYLAM shall be fully
                integrated into the efforts of MERCK's Health Science
                Associates. Regardless of whether ALNYLAM has exercised its U.S.
                Co-Promotion Option, the Parties shall mutually agree (such
                agreement not to be unreasonably withheld) upon the
                participation of key opinion leaders and/or investigators from
                time to time in meetings with investors sponsored by ALNYLAM.

        3.10.5  COMMERCIALIZATION PLAN. Prior to the [**] for a Profit-Sharing
                Product, MERCK shall prepare a statement of interest with
                respect to such Profit-Sharing Product for submission to the
                JSC. The statement of interest shall provide [**] by such
                Profit-Sharing Product. After submission of the statement of
                interest, but prior to submission of the [**] to the JSC as
                described below, [**] the Development of such Profit-Sharing
                Product shall be submitted to the JSC as they become available.
                [**] months prior to the completion of the design of the first
                Phase III Study with respect to such Profit-Sharing Product,
                MERCK shall prepare [**] for submission to the JSC. The [**]
                will [**] for such Profit-Sharing Product and [**] such
                Profit-Sharing Product. Thereafter on an annual basis (until
                such time as such responsibility shifts to the JCC pursuant to
                Section 3.10.2), MERCK shall

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                prepare a rolling [**] plan (a "COMMERCIALIZATION PLAN") for
                Commercializing such Profit-Sharing Product in the Field in the
                United States. The initial Commercialization Plan for such
                Profit-Sharing Product shall include [**] the Commercialization
                Plan. The subsequent Commercialization Plan will contain [**] in
                the United States with respect to such Profit-Sharing Product
                and shall contain [**]. Such subsequent Commercialization Plan
                is expected to include, without limitation, [**] for the
                Profit-Sharing Product. The Commercialization Plan shall also
                include, as an appendix, [**] in and for the United States after
                the First Commercial Sale of the relevant Profit-Sharing Product
                in the United States.

        3.10.6  MANUFACTURE. MERCK shall be responsible for the Manufacture and
                supply of each Profit-Sharing Product for Commercialization
                purposes. MERCK shall have the right to Manufacture the
                Profit-Sharing Product or have the Profit-Sharing Product
                Manufactured by an Affiliate or Third Party; provided that MERCK
                shall remain at all times fully liable for the Manufacture of
                the Profit-Sharing Product. In the event that MERCK uses a Third
                Party to fulfill its obligations hereunder, such Third Party
                shall be bound by confidentiality and non-use obligations which
                are no less stringent than those set forth in Article 8 of this
                Agreement.

4.      COLLABORATION MANAGEMENT

4.1     JOINT STEERING COMMITTEE. The Parties hereby establish a committee to
        facilitate the Development and Manufacturing of Profit-Sharing Products
        under the Therapeutic Collaboration as follows:

        4.1.1   COMPOSITION OF THE JOINT STEERING COMMITTEE. The Therapeutic
                Collaboration shall be conducted under the direction of a joint
                steering committee (the "JSC") comprised of two (2) named
                representatives of MERCK and two (2) named representatives of
                ALNYLAM. Each Party shall appoint its respective representatives
                to the JSC from time to time, and may substitute one or more of
                its representatives, in its sole discretion, effective upon
                notice to the other Party of such change. Each Party shall have
                at least one JSC representative who is a senior employee
                (director level or above), and all JSC representatives shall
                have appropriate research, preclinical, manufacturing, clinical
                development or commercialization expertise and ongoing
                familiarity with the Collaboration. Additional representatives
                or consultants may from time to time, by mutual consent of the
                Parties, be invited to attend JSC meetings, subject to such
                representative's and consultant's written agreement to comply
                with the requirements of Section 8.1. Each Party shall bear its
                own expenses relating to attendance at such meetings by its
                representatives.

        4.1.2   JSC CHAIRPERSON. The JSC Chairperson shall rotate every twelve
                (12) months between ALNYLAM and MERCK. The initial JSC
                Chairperson shall be a representative of ALNYLAM. The
                Chairperson's responsibilities shall include (a) scheduling
                meetings at least quarterly, but more frequently if the JSC
                determines it necessary; (b) setting agenda for meetings with
                solicited input from

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                other members; (c) confirming and delivering minutes to the JSC
                for review and approval; and (d) conducting effective meetings,
                including ensuring that objectives for each meeting are set and
                achieved.

        4.1.3   MEETINGS. The JSC shall meet in accordance with a schedule
                established by mutual written agreement of the Parties, but no
                less frequently than once per Calendar Quarter, with the
                location for such meetings alternating between ALNYLAM and MERCK
                facilities (or such other locations as is determined by the
                JSC). Alternatively, the JSC may meet by means of
                teleconference, videoconference or other similar communications
                equipment, but at least two meetings per year shall be conducted
                in person.

        4.1.4   JSC RESPONSIBILITIES. The JSC shall have the following
                responsibilities with respect to Co-Development Targets and
                Profit-Sharing Products (but shall have no oversight over MERCK
                Development Products, [**] Products or Royalty-Bearing
                Products):

                (a)     oversight of all Program activities relating to
                        Co-Development Targets and Profit-Sharing Products;

                (b)     determining the overall Development strategy for the
                        Programs and the Profit-Sharing Products in the Field in
                        the Territory;

                (c)     reviewing for approval the Program Workplans (including
                        without limitation, identifying each Clinical Study in
                        such Program Workplans that is primarily in support of
                        Regulatory Approval of a Profit-Sharing Product in the
                        United States) within [**] days after the selection of a
                        Co-Development Target by ALNYLAM (or, in the event that
                        MERCK exercises it Opt-In Right with respect to the [**]
                        Target and [**] Products, the date of the Opt-In
                        Notice), and reviewing for approval the related
                        Development Expense budgets described in Section 3.9.3
                        within [**] days after the selection of a Co-Development
                        Target by ALNYLAM (or, in the event that MERCK exercises
                        it Opt-In Right with respect to the [**] Target and [**]
                        Products, the date of the Opt-In Notice), in each case
                        with appropriate input from ALNYLAM and MERCK senior
                        management;

                (d)     reviewing for approval (i) an annual update to each
                        Program Workplan and the related Development Expense
                        budgets described in Section 3.9.3, no later than
                        December 31 of each Calendar Year, and (ii) any
                        modifications to such Program Workplans and Development
                        Expense budgets within [**] days of each submission to
                        the JSC (including without limitation, identifying each
                        Clinical Study in such updates and modifications to such
                        Program Workplans that is primarily in support of
                        Regulatory Approval of a Profit-Sharing Product in the
                        United States);

                (e)     determining each Party's responsibilities under the
                        Program Workplans consistent with Section 3.4;

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<PAGE>

                (f)     facilitating the transfer of Know-How and Information
                        between the Parties for purposes of conducting the
                        Program Workplans;

                (g)     regularly assessing the progress of the Parties in their
                        conduct of the Program Workplans and against the
                        timelines and budgets contained therein, reviewing
                        relevant data, considering issues of priority, and
                        determining which Profit-Sharing Products to advance
                        into clinical development;

                (h)     reviewing for approval any Manufacturing plans for
                        Profit-Sharing Products and overseeing activities
                        conducted thereunder;

                (i)     reviewing for approval, within the Parties' regular
                        business cycles, but no later than [**] days after a
                        proposal is made to the JSC by either Party, the entry
                        of any Profit-Sharing Product into IND-Enabling GLP
                        Toxicology Studies;

                (j)     monitoring the diligence of each Party in performing its
                        obligations with respect to the Co-Development Targets
                        and Profit-Sharing Products hereunder;

                (k)     identifying and prioritizing academic collaborations
                        relating to the Programs for review by the appropriate
                        level of management of ALNYLAM and MERCK;

                (l)     reviewing for approval the terms of any In-License under
                        Section 7.4.1;

                (m)     considering and advising on technical issues that arise
                        in the Programs; and

                (n)     performing such other activities relating to
                        Co-Development Targets and Profit-Sharing Products as
                        are contemplated under this Agreement or that the
                        Parties agree shall be the responsibility of the JSC.

4.2     APPOINTMENT OF SUBCOMMITTEES, PROJECT TEAMS AND COLLABORATION MANAGERS.
        The JSC shall be empowered to create such subcommittees of itself and
        additional project teams as it may deem appropriate or necessary. Each
        such subcommittee and project team shall report to the JSC, which shall
        have authority to approve or reject recommendations or actions proposed
        thereby subject to the terms of this Agreement. Each Party shall also
        designate a "COLLABORATION MANAGER" for each Profit-Sharing Product. The
        Collaboration Managers for the Profit-Sharing Products will be
        responsible for the day-to-day worldwide coordination of the Program for
        the applicable Profit-Sharing Product and will serve to facilitate
        communication between the Parties with respect to such Profit-Sharing
        Product. Each Party may change its designated Collaboration Manager from
        time to time upon written notice to the other Party.

4.3     REPORTS AND MINUTES. Each Party will provide the members of the JSC with
        written copies of all materials they intend to present at the JSC
        meeting. The JSC may also

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        request at any time specific data or information related to Development
        activities in the Programs or that a written report be prepared in
        advance of any meeting summarizing certain material data and information
        arising out of the conduct of such Development activities and the Party
        or appropriate committee to whom such request is made shall promptly
        provide to the other Party or JSC such report, data or information. A
        secretary shall be appointed for each meeting and shall prepare minutes
        of the meeting, which shall provide a description in reasonable detail
        of the discussions held at the meeting and a list of any actions,
        decisions or determinations approved by the JSC.

4.4     DECISION-MAKING.

        4.4.1   FINAL DECISION-MAKING. The JSC shall operate by consensus,
                however, the JSC shall not have final decision-making authority
                regarding issues relating to Pre-Clinical Development
                Activities, Development activities and Commercialization
                activities for each Profit-Sharing Product, which issues shall
                be subject to MERCK's final decision-making authority; provided,
                however, that if MERCK exercises its Expense Share Reduction
                Option with respect to any Profit-Sharing Product pursuant to
                Section 3.9.1, thereafter ALNYLAM shall have final
                decision-making authority over Development and Commercialization
                activities for such Profit-Sharing Product with respect to the
                United States.

        4.4.2   BUDGETS. As set forth in Sections 4.1.4(c) and (d), for
                Profit-Sharing Products, the JSC shall have primary
                responsibility, subject to each Party's normal budget approval
                process, for the review and approval of Development Expense
                budgets for Program Workplans, including budgets related to
                Development activities over which one Party has final
                decision-making authority pursuant to Section 4.4.1. In
                recognition of the importance of budgets, each Party shall have
                the full opportunity to review and comment on budgets before
                final approval. Any disputes related to budgets shall be
                resolved in accordance with Section 4.5.2.

        4.4.3   VOTING. With respect to decisions of the JSC, the
                representatives of each Party shall have collectively one vote
                on behalf of such Party. For each meeting of the JSC, at least
                two (2) representatives of each Party shall constitute a quorum.
                Action on any matter may be taken at a meeting, by
                teleconference, videoconference or by written agreement.

4.5     DISPUTES. The JSC shall attempt to resolve any and all disputes relating
        to Co-Development Targets or Profit-Sharing Products by unanimous
        consensus. In the event the JSC is unable to reach a unanimous consensus
        with respect to any such dispute, then the following dispute resolution
        provisions shall apply.

        4.5.1   With respect to a dispute concerning a matter provided for in
                Section 4.4.1, the Party with final decision-making authority
                shall have the authority to resolve the dispute; provided,
                however, that the Party with final decision-making authority
                shall consult with the Party without final decision-making
                authority, and give due consideration to such Party's expressed
                interests regarding all such matters, and the Party without
                final decision-making authority shall have the right to propose

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<PAGE>

                an alternative plan for good faith consideration by the JSC
                (such as, without limitation, an alternative non-clinical or
                clinical plan), and if such alternative plan is rejected, then
                the JSC shall provide the Party without final decision-making
                authority with its rationale for such decision.

        4.5.2   With respect to a dispute concerning a matter provided for in
                Section 4.4.2, the Party with final decision-making authority
                shall have the authority to resolve the dispute; provided,
                however, that the Party without final decision-making authority
                shall have the right to propose an alternative budget for good
                faith consideration by the JSC, and if such alternative budget
                is rejected, then the JSC shall provide the Party without final
                decision-making authority with its rationale for such decision.

        4.5.3   With respect to all other matters, except those relating to the
                Cost of Goods Sold of a Profit-Sharing Product as described in
                Section 1.26, if the JSC is unable to resolve such dispute, and
                the dispute is material, then the dispute shall be submitted to
                escalating levels of MERCK and ALNYLAM senior management for
                review. If the dispute cannot be resolved despite escalation,
                then the dispute resolution provisions of Section 13.7 shall
                apply.

4.6     DISSOLUTION OF JSC. The JSC shall be dissolved at the end of the
        Therapeutic Collaboration. Notwithstanding the foregoing, ALNYLAM will
        participate on the JSC until the earlier of (1) the cessation of
        Development activities with respect to Profit-Sharing Products under
        this Agreement, or (b) Commercialization of the first Profit-Sharing
        Product, after which event ALNYLAM will have the right, but not the
        obligation to participate on the JSC.

5.      OPT-OUT RIGHTS FOR PROFIT-SHARING PRODUCTS AND CO-DEVELOPMENT TARGETS

5.1     OPT-OUT RIGHTS. Each Party shall have the right to narrow the Parties'
        Therapeutic Collaboration hereunder to exclude a Co-Development Target
        and all RNAi Therapeutic Products directed to such Co-Development Target
        (an "OPT-OUT RIGHT"), subject to the following terms and conditions:

        (a)     Either Party (the "OPT-OUT PARTY") may exercise its Opt-Out
                Right with respect to a Co-Development Target by giving the
                other Party [**] days' prior written notice ("OPT-OUT NOTICE")
                of the Opt-Out Party's intent to exercise its Opt-Out Right;
                provided, however, that except in the case that information
                regarding a competing product or scientific information arises,
                either within or outside of the Therapeutic Collaboration, which
                has a significant adverse effect on the commercial value of RNAi
                Therapeutic Products directed to such Co-Development Target or
                on the probability of the development of safe and efficacious
                RNAi Therapeutic Products directed to such Co-Development
                Target, a Party may only exercise its Opt-Out Right with respect
                to a Co-Development

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<PAGE>

                Target during an Opt-Out Period for the most advanced RNAi
                Therapeutic Product directed to such Co-Development Target.

        (b)     On the effective date of the exercise of such Opt-Out Right (the
                "OPT-OUT POINT"), the definition of Co-Development Targets shall
                thereafter be narrowed to exclude the applicable Co-Development
                Target, and the definition of Programs shall thereafter be
                narrowed to exclude the Program for such Co-Development Target.

        (c)     Within [**] days of the Opt-Out Point, by notice to the Opt-Out
                Party, the other Party may elect to continue the Development and
                Commercialization of RNAi Therapeutic Products directed to the
                Target that is the subject of such Opt-Out Notice, in which
                event:

                (i)     Such other Party will thereafter be deemed the
                        "CONTINUING PARTY" with respect to RNAi Therapeutic
                        Products directed to such Target;

                (ii)    Each Profit-Sharing Product directed to such Target will
                        be deemed a "ROYALTY-BEARING PRODUCT" and the provisions
                        of Section 12.4 shall apply to each such Royalty-Bearing
                        Product;

                (iii)   The Continuing Party shall be free to Develop,
                        Manufacture and Commercialize Royalty-Bearing Products
                        directed to such Co-Development Target, in the Field in
                        the Territory, with or without a partner or collaborator
                        and without any further obligation to the Opt-Out Party
                        with respect to such activities under this Agreement,
                        subject to the continuing obligations of the Parties
                        with respect to Royalty-Bearing Products set forth in
                        Article 6 and Sections 9.2.2 and 9.4.3;

                (iv)    For a period of [**] years after the Opt-Out Point
                        neither the Opt-Out Party nor any of its Affiliates
                        shall, alone or with a Third Party, research, develop,
                        Manufacture or Commercialize RNAi Products directed to
                        such Target in the Field in the Territory; and

                (v)     The licenses granted to the Opt-Out Party by the
                        Continuing Party with respect to such RNAi Therapeutic
                        Products set forth in Article 7 shall terminate and the
                        licenses granted to the Continuing Party by the Opt-Out
                        Party with respect to such RNAi Therapeutic Products set
                        forth in Article 7 shall continue in full force and
                        effect.

        (d)     If the Party that is not the Opt-Out Party does not elect to
                become the Continuing Party with respect to the Target that is
                the subject of an Opt-Out Notice, then:

                (i)     The definition of RNAi Therapeutic Product shall
                        thereafter be narrowed to exclude any RNAi Therapeutic
                        Products directed to such Target; and

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<PAGE>

                (ii)    Except for the provisions of this Agreement that survive
                        termination of this Agreement pursuant to Section 12.5
                        and this Section 5.2, the financial, license and other
                        terms of this Agreement shall no longer apply to such
                        Target or to the Development, Manufacture and
                        Commercialization of RNAi Therapeutic Products directed
                        to such Target.

6.      DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF ROYALTY-BEARING
        PRODUCTS, MERCK DEVELOPMENT PRODUCTS AND [**] PRODUCTS

        The rights and obligations set forth in this Article 6 shall apply to
        the Continuing Party with respect to the Development, Manufacture and
        Commercialization of each Royalty-Bearing Product and/or to MERCK with
        respect to the Development, Manufacture and Commercialization of each
        MERCK Development Product and/or to ALNYLAM with respect to the
        development, manufacture and commercialization of each [**] Product if
        MERCK does not exercise its Opt-In Right.

6.1     DEVELOPMENT AND COMMERCIALIZATION.

        6.1.1   MERCK DEVELOPMENT PRODUCTS. Upon designation of a MERCK
                Development Target pursuant to Section 3.2.2(d), MERCK shall be
                solely responsible for all Development, Manufacturing and
                Commercialization activities relating to MERCK Development
                Products directed to such MERCK Development Target, and shall
                bear one hundred percent (100%) of all expenses for Development,
                Manufacture and Commercialization of such MERCK Development
                Products; provided, however, that at any time prior to the
                completion of IND-Enabling GLP Toxicology Studies of a MERCK
                Development Product, MERCK may request in writing that ALNYLAM
                perform certain Development activities with respect to such
                MERCK Development Product, and ALNYLAM, in its sole discretion,
                may agree to perform such activities for MERCK. In such event,
                MERCK will reimburse ALNYLAM for its direct out-of-pocket costs
                and expenses incurred by ALNYLAM and its Affiliates in the
                performance of such activities and the costs of internal
                scientific, medical, technical or managerial personnel of
                ALNYLAM and its Affiliates engaged in such efforts, which costs
                shall be determined based on the FTE Costs, unless another basis
                is otherwise agreed by the Parties in writing.

        6.1.2   ROYALTY-BEARING PRODUCTS. Upon designation of a Royalty-Bearing
                Product pursuant to Section 5.1, the Continuing Party shall be
                solely responsible for all Development, Manufacturing (subject
                to Section 6.4) and Commercialization activities relating to
                such Royalty-Bearing Product and shall bear one hundred percent
                (100%) of all expenses for the Development, Manufacture and
                Commercialization of such Royalty-Bearing Product incurred after
                the Opt-Out Point and the JSC and JCC shall cease to have
                oversight or management responsibility with respect to such
                Royalty-Bearing Product.

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        6.1.3   [**] PRODUCTS. Unless MERCK exercises its Opt-In Right, ALNYLAM
                shall be solely responsible for all development, manufacturing
                and commercialization activities relating to [**] Products, and
                shall bear one hundred percent (100%) of all expenses for
                development, manufacture and commercialization of such [**]
                Products.

6.2     COMPLIANCE AND DILIGENCE. After the Opt-Out Point, the Continuing Party
        shall use Commercially Reasonable Efforts to Develop, Manufacture
        (subject to Section 6.4) and Commercialize the Royalty-Bearing Product.
        All Development, Manufacturing and Commercialization activities with
        respect to such Royalty-Bearing Product shall be conducted at the
        Continuing Party's sole cost and expense and in accordance with all
        applicable laws, rules and regulations, including without limitation
        current governmental regulations concerning good laboratory practices,
        good clinical practices and good manufacturing practices. Upon
        designation of a MERCK Development Target pursuant to Section 3.2.2(d),
        MERCK shall comply with the foregoing obligations of the Continuing
        Party except that such obligation shall apply with respect to MERCK
        Development Products directed to such MERCK Development Target. ALNYLAM
        shall comply with the foregoing obligations of the Continuing Party
        except that such obligation shall apply with respect to the [**]
        Products directed to the [**] Target.

6.3     REPORTS. After the Opt-Out Point, the Continuing Party shall prepare and
        deliver to the Opt-Out Party, by no later than each [**], a written plan
        that summarizes the Development, Manufacturing and Commercialization
        activities to be undertaken in the next Calendar Year and the dates by
        which such activities are targeted to be accomplished. In addition, the
        Continuing Party shall prepare and deliver to the Opt-Out Party, by no
        later than each [**] (for the period ending December 31 of the prior
        Calendar Year), written reports which shall update any prior report
        filed hereunder, including a summary of the Continuing Party's
        Development, Manufacturing and Commercialization activities performed to
        date, as applicable. The Continuing Party shall provide the Opt-Out
        Party with written notice of (a) all filings and submissions for
        Regulatory Approval regarding Royalty-Bearing Products in a timely
        manner; and (b) all Regulatory Approvals obtained or denied within [**]
        days of receipt of written notice of such obtaining or denial; provided,
        however, that for filings and submissions for Regulatory Approval, and
        Regulatory Approvals obtained or denied, in the United States, the
        European Union, Japan, and Canada, the Continuing Party will notify the
        Opt-Out Party as soon as reasonably possible, but in any event within
        [**] business days of the Continuing Party's receipt of notice of such
        filing or submission for Regulatory Approval, or of the obtaining or
        denial of such Regulatory Approval, as the case may be. At the Opt-Out
        Party's reasonable request from time to time and without unduly
        burdening the Continuing Party, the Continuing Party shall also provide
        such other information and shall agree to meet with the Opt-Out Party as
        needed (but not more than once each year) to keep the Opt-Out Party
        reasonably informed of the Continuing Party's Development and
        Commercialization activities. Upon designation of a MERCK Development
        Target pursuant to Section 3.2.2(d), MERCK shall comply with the
        foregoing obligations of the Continuing Party except that such
        obligation shall apply with respect to all MERCK Development Products
        directed to such MERCK Development Target. ALNYLAM shall comply with the
        foregoing obligations of the Continuing Party

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<PAGE>

        except that such obligation shall apply with respect to all [**]
        Products directed to the [**] Target.

6.4     CLINICAL AND COMMERCIAL SUPPLY. In the event that ALNYLAM exercises its
        Opt-Out Rights with respect to a Profit-Sharing Product prior to the
        Completion of Phase II and MERCK is the Continuing Party for the
        Royalty-Bearing Product, at MERCK's option ALNYLAM shall continue to
        Manufacture and supply such Royalty-Bearing Product to MERCK until [**]
        months after the applicable Opt-Out Point or such earlier time as may be
        agreed by MERCK. In the event that: (a) MERCK exercises its Opt-Out
        Rights with respect to a Profit-Sharing Product during the Phase II
        Completion Opt-Out Period, (b) MERCK has commenced Manufacture of such
        Royalty-Bearing Product at the time that MERCK exercises its Opt-Out
        Rights, and (c) ALNYLAM is the Continuing Party for the Royalty-Bearing
        Product, then, at ALNYLAM's option, MERCK shall continue to Manufacture
        and supply such Royalty-Bearing Product to ALNYLAM for [**] months after
        such Opt-Out Point or such earlier time as may be agreed by ALNYLAM. The
        Continuing Party shall pay the Opt-Out Party for any such
        Royalty-Bearing Product supplied pursuant to this Section 6.4 at the
        Cost of Goods Sold of such Royalty-Bearing Product.

6.5     REGULATORY APPROVALS. Notwithstanding anything to the contrary contained
        in Section 3.8, after the Opt-Out Point for a Royalty-Bearing Product,
        the Continuing Party shall be the holder of all Regulatory Approvals
        (including IND and NDA submissions) for such Royalty-Bearing Product. To
        the extent permitted by law, and subject to any obligations the
        Continuing Party may have to Third Parties, the Opt-Out Party will
        assign to the Continuing Party, as soon as practical after the Opt-Out
        Point, all regulatory filings related to such Royalty-Bearing Product to
        the extent requested by the Continuing Party, including any draft IND
        documents, and copies of all correspondence and notes of any oral
        communication with Regulatory Authorities regarding such Royalty-Bearing
        Product. The Opt-Out Party will execute such further instruments,
        documents or certificates, as may be required to more effectively assign
        the regulatory filings to the Continuing Party. To the extent the
        Opt-Out Party cannot transfer all such Regulatory Approvals, the Opt-Out
        Party shall permit the Continuing Party to use and cross-reference such
        regulatory filings. Upon designation of a MERCK Development Target
        pursuant to Section 3.2.2(d), MERCK shall be the holder of all
        Regulatory Approvals (including IND and NDA submissions) for all MERCK
        Development Products directed to such MERCK Development Target. Unless
        MERCK exercises its Opt-In Right ALNYLAM shall be the holder of all
        Regulatory Approvals (including IND and NDA submissions) for all [**]
        Products.

6.6     MANUFACTURING REGULATORY COMMUNICATIONS. Notwithstanding any provisions
        of Section 3.8 to the contrary, with respect to all Manufacturing issues
        related to Royalty-Bearing Products and MERCK Development Products, and
        all manufacturing issues related to [**] Products, including all matters
        relating to cGMP compliance, the Continuing Party, in the case of
        Royalty-Bearing Products, MERCK in the case of MERCK Development
        Products, and ALNYLAM, in the case of [**] Products, shall: (a) oversee,
        monitor and coordinate all regulatory actions, communications and
        filings with, and submissions to, each Regulatory Authority, (b) be
        responsible for interfacing,

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        corresponding and meeting with each Regulatory Authority and (c) be
        responsible for maintaining all regulatory filings.

6.7     TECHNOLOGY TRANSFER. For a period of [**] months after the applicable
        Opt-Out Point, each Party, subject to any obligations the Party may have
        to Third Parties, shall provide to the other Party, at such other
        Party's request, any and all Know-How related to the Royalty-Bearing
        Products necessary for the other Party to perform its obligations or
        exploit its rights under this Agreement. Such technology transfer shall
        include, but not be limited to, technical assistance. The costs and
        expenses directly related to such provision of Know-How and technical
        assistance shall be calculated in accordance with the provisions related
        to Development Expenses and Commercialization Expenses, as applicable,
        and shall be borne equally by the Opt-Out Party and the Continuing
        Party. Each Party shall use such Know-How of the other Party solely for
        the purposes of performing its obligations or exploiting its rights
        under this Agreement with respect to the Royalty-Bearing Products.

6.8     RIGHT OF FIRST NEGOTIATION FOR MERCK DEVELOPMENT TARGETS. During the
        Agreement Term, MERCK agrees to promptly notify ALNYLAM in writing
        ("INITIAL NOTICE") if MERCK decides to discontinue the development and
        commercialization of all RNAi Products directed to a MERCK Development
        Target (the "DROPPED MERCK DEVELOPMENT TARGET"). Such Initial Notice
        shall include material information relating to such Dropped MERCK
        Development Target that is Controlled by MERCK and that ALNYLAM may
        reasonably need in order for ALNYLAM to evaluate the Dropped MERCK
        Development Target program, including without limitation, any
        obligations MERCK may have to any Third Parties relating to such RNAi
        Products or the Dropped MERCK Development Target; or, in the case where
        MERCK has [**]. ALNYLAM shall have [**] days after receipt of the
        Initial Notice to notify MERCK in writing of its interest in obtaining
        exclusive rights to develop and commercialize RNAi Products directed to
        such Dropped MERCK Development Target; provided, however, that ALNYLAM
        shall have no such option if MERCK [**]. If ALNYLAM notifies MERCK in
        writing within such [**] day period that it is interested in such
        Dropped MERCK Development Target, then, subject to any obligations MERCK
        may have to any Third Party relating to such RNAi Products or such
        Dropped MERCK Development Target, the Parties shall promptly commence
        good faith negotiations and MERCK will exclusively negotiate with
        ALNYLAM for a period of up to [**] months after ALNYLAM receives the
        Initial Notice in an effort to reach a mutually acceptable definitive
        agreement for the exclusive rights to develop and commercialize RNAi
        Products directed to such Dropped MERCK Development Target. If (a)
        ALNYLAM does not notify MERCK in writing within such [**] day period
        that it is interested in such Dropped MERCK Development Target, or (b)
        despite each Party's good faith efforts, ALNYLAM and MERCK are not able
        to reach agreement on and execute a definitive agreement within such
        [**] month period, then the definition of MERCK Development Target shall
        thereafter be narrowed to exclude the applicable Dropped MERCK
        Development Target.

7.      LICENSES

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7.1   LICENSE GRANTS.

      7.1.1 ALNYLAM GRANT TO MERCK. ALNYLAM hereby grants to MERCK a
            royalty-free license in the Territory, with a right to sublicense to
            its Affiliates, (a) under ALNYLAM Target Identification and Target
            Validation RNAi Patent Rights, (b) under ALNYLAM's interest in Joint
            Collaboration Patent Rights and Joint Collaboration Inventions, (c)
            under ALNYLAM Technology Collaboration Inventions, (d) to ALNYLAM
            RNAi Technology and (e) under ALNYLAM-Assigned Therapeutic
            Collaboration Inventions, that in the case of each of (a), (c) and
            (d) were Controlled by ALNYLAM or its Affiliates during the
            Technology Collaboration Term; in each case during and after the
            Collaboration Term, for the sole purpose of in vitro and/or in vivo
            target identification and/or target validation research relating to
            drug discovery and/or development activities of MERCK and/or its
            Affiliates, including in collaborations with Third Parties in which
            MERCK and/or its Affiliates has any rights (but not necessarily all
            rights) to discoveries made. The foregoing license shall be
            Co-exclusive until September 8, 2006, and thereafter shall be
            non-exclusive. Notwithstanding any other provisions of this
            Agreement, the license grant to MERCK under ALNYLAM-Assigned
            Therapeutic Collaboration Inventions shall be perpetual.

      7.1.2 MERCK GRANT TO ALNYLAM. MERCK hereby grants to ALNYLAM a
            non-exclusive, royalty-free license in the Territory, with a right
            to sublicense its Affiliates (except as set forth in Section 7.3.2),
            under (a) MERCK Broad RNAi Patent Rights that were Controlled by
            MERCK or ROSETTA or their wholly-owned subsidiaries during the
            Technology Collaboration Term, (b) MERCK Broad RNAi Technology that
            was Controlled by MERCK or ROSETTA or their wholly-owned
            subsidiaries during the Technology Collaboration Term, (c) MERCK's
            interest in Joint Collaboration Patent Rights, and (d)
            MERCK-Assigned Therapeutic Collaboration Inventions; in each case
            during and after the Collaboration Term, for the sole purpose of
            research (including, without limitation, for internal in vitro
            and/or in vivo target validation and/or target identification
            research by ALNYLAM or its Affiliates), development, manufacture,
            use, import or sale of therapeutic products based on RNA
            interference, which products are to be sold by ALNYLAM, its
            Affiliates, or its Third Party collaborators. For the avoidance of
            doubt, it is acknowledged that, with regard to research and
            development activities, such license grant shall apply only to
            research and development activities using RNA interference.
            ALNYLAM's license under MERCK-Assigned Therapeutic Collaboration
            Inventions shall be perpetual.

            The Parties agree that neither ALNYLAM nor its Affiliates have the
            right to sublicense any MERCK intellectual property, including
            without limitation MERCK RNAi Patent Rights, MERCK's interest in
            Joint Collaboration Patent Rights, and/or MERCK RNAi Technology, to
            any Third Party (including without limitation any Third Party
            collaborator) other than as expressly provided in Section 7.3. The
            Parties further agree that neither ALNYLAM nor its Affiliates have
            the right to deliver or disclose to any Third Party (including
            without

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            limitation any Third Party collaborator) any MERCK RNAi Technology
            other than as expressly provided in Section 7.3; provided, further
            that, under no circumstance other than pursuant to Section 7.1.3,
            7.1.4 or 7.1.6, shall ALNYLAM or its Affiliates provide any Third
            Party with MERCK Product-Specific RNAi Technology or MERCK
            Product-Specific RNAi Patent Rights.

      7.1.3 PROFIT-SHARING PRODUCTS.

            (a)   DEVELOPMENT LICENSES. Subject to the terms and conditions of
                  this Agreement, solely for the purpose of conducting each
                  Program in the Therapeutic Collaboration, (i) ALNYLAM hereby
                  grants to MERCK a worldwide, royalty-free, Co-exclusive
                  license, sublicensable to its Affiliates, under and to any and
                  all ALNYLAM RNAi Technology, ALNYLAM Collaboration Inventions,
                  ALNYLAM Therapeutic Collaboration IP, ALNYLAM RNAi Patent
                  Rights and ALNYLAM's interest in Joint Collaboration IP
                  (collectively, "ALNYLAM TECHNOLOGY"), to Develop
                  Profit-Sharing Products in such Program in the Field in the
                  Territory; and (ii) MERCK hereby grants to ALNYLAM a
                  worldwide, royalty-free, Co-exclusive license, sublicenseable
                  to its Affiliates (except as otherwise set forth in Section
                  7.3.2), under and to any and all MERCK RNAi Technology, MERCK
                  RNAi Patent Rights, MERCK Collaboration Inventions, MERCK
                  Therapeutic Collaboration IP, MERCK's interest in Joint
                  Collaboration IP and MERCK RNAi Novel Target IP which are
                  Controlled by MERCK or ROSETTA or their wholly-owned
                  subsidiaries (collectively, "MERCK TECHNOLOGY") to Develop
                  Profit-Sharing Products in such Program in the Field in the
                  Territory (for the avoidance of doubt, it is acknowledged
                  that, with regard to research and development activities, such
                  license grant shall apply only to research and development
                  activities using RNA interference). Such licenses shall
                  include the right for both Parties to grant sublicenses and
                  licenses as provided in Section 7.3 below.

            (b)   COMMERCIALIZATION LICENSES. Subject to the terms and
                  conditions of this Agreement, including without limitation
                  ALNYLAM's U.S. Co-Promotion Option set forth in Section
                  3.10.1, ALNYLAM hereby grants MERCK a license under and to any
                  and all ALNYLAM Technology to Commercialize Profit-Sharing
                  Products in the Field in the Territory. Such license shall be
                  exclusive in the United States with respect to each
                  Profit-Sharing Product, unless ALNYLAM exercises its U.S.
                  Co-Promotion Option, in which case such license shall be
                  Co-exclusive. Such license shall be exclusive and
                  royalty-bearing in the Territory outside the United States.
                  Subject to the terms and conditions of this Agreement, upon
                  ALNYLAM's exercise of its U.S. Co-Promotion Option, MERCK
                  hereby grants ALNYLAM a Co-exclusive license under and to any
                  and all MERCK Technology to Commercialize Profit-Sharing
                  Products in the Field in the United States. Such licenses
                  shall include the right for both Parties to grant sublicenses
                  and licenses as provided in Section 7.3 below.

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<PAGE>

            (c)   MANUFACTURING LICENSES. Subject to the terms and conditions of
                  this Agreement, only as permitted and solely for the purposes
                  set forth in Sections 3.4, 3.10.6 and 6.4, ALNYLAM hereby
                  grants MERCK a non-exclusive license under and to any and all
                  ALNYLAM Technology to Manufacture Profit-Sharing Products in
                  the Field for the Territory. Subject to the terms and
                  conditions of this Agreement, only as permitted and solely for
                  the purposes set forth in Sections 3.4 and 6.4, MERCK hereby
                  grants ALNYLAM a non-exclusive license under and to any and
                  all MERCK Technology to Manufacture Profit-Sharing Products in
                  the Field for the Territory. Such licenses shall include the
                  right for both Parties to grant sublicenses and licenses as
                  provided in Section 7.3 below.

            (d)   PRODUCT TRADEMARK LICENSES. Subject to the terms and
                  conditions of this Agreement, upon ALNYLAM's exercise of its
                  U.S. Co-Promotion Option with respect to a Profit-Sharing
                  Product, MERCK hereby grants ALNYLAM a Co-exclusive license to
                  use the Product Trademark(s) selected by MERCK and approved by
                  the JSC for such Profit-Sharing Product to Commercialize such
                  Profit-Sharing Product in the Field in the United States.
                  Furthermore, in the event that MERCK makes public use of
                  Product Trademark(s) in the Development of a Profit-Sharing
                  Product, MERCK shall grant ALNYLAM a Co-exclusive license to
                  use such Product Trademark(s) to perform its Development
                  obligations under this Agreement with respect to such
                  Profit-Sharing Product. Such licenses shall include the right
                  for both Parties to grant sublicenses and licenses as provided
                  in Section 7.3 below.

      7.1.4 ROYALTY-BEARING PRODUCTS. Subject to the terms and conditions of
            this Agreement, in relation to each Royalty-Bearing Product, the
            Opt-Out Party hereby grants the Continuing Party a license under and
            to ALNYLAM Technology (if the Opt-Out Party is ALNYLAM), or MERCK
            Technology (if the Opt-Out Party is MERCK), that is applicable to
            such Royalty-Bearing Product, to Develop, Manufacture and
            Commercialize such Royalty-Bearing Product in the Field in the
            Territory. Such license shall be exclusive and royalty-bearing for
            the royalty term of such Royalty-Bearing Product as set forth in
            Section 9.4.5 in each country in the Territory, and shall thereafter
            be a non-exclusive, royalty-free license to Develop, Manufacture and
            Commercialize such Royalty-Bearing Product in the Field in such
            country. Such licenses shall include the right to grant sublicenses
            and licenses as provided in Section 7.3 below. For the avoidance of
            doubt, it is acknowledged that such license grant shall apply only
            to such Royalty-Bearing Product and shall not apply to any other
            product, and shall apply only to research and development activities
            using RNA interference.

      7.1.5 MERCK DEVELOPMENT PRODUCTS. Subject to the terms and conditions of
            this Agreement, in relation to each MERCK Development Product,
            ALNYLAM hereby grants MERCK a license under and to ALNYLAM
            Technology which is necessary or useful to Develop, Manufacture
            and/or Commercialize such MERCK Development Product in the Field in
            the Territory. Such license shall be exclusive and royalty-bearing
            for the royalty term of such MERCK Development Product as

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<PAGE>

            set forth in Section 9.4.5 in each country in the Territory, and
            shall thereafter be a non-exclusive, royalty-free license to
            Develop, Manufacture and Commercialize such MERCK Development
            Product in the Field in such country. As applicable pursuant to
            Section 6.1.1, MERCK hereby grants ALNYLAM a worldwide,
            royalty-free, non-exclusive license under and to MERCK Technology
            which is applicable to the MERCK Development Product, to perform
            Development activities under Section 6.1.1 with respect to such
            MERCK Development Product in the Field in the Territory. Such
            licenses shall include the right to grant sublicenses and licenses
            as provided in Section 7.3 below. For the avoidance of doubt, it is
            acknowledged that such license grant shall apply only to such MERCK
            Development Product and shall not apply to any other product, and
            shall apply only to research and development activities using RNA
            interference.

      7.1.6 [**] PRODUCTS. Subject to the terms and conditions of this
            Agreement, in relation to each [**] Product, MERCK hereby grants
            ALNYLAM a license under and to MERCK Technology which is necessary
            or useful to develop, manufacture and commercialize such [**]
            Product in the Field in the Territory. Such license shall be
            exclusive and royalty-bearing for the royalty term of such [**]
            Product as set forth in Section 9.4.5 in each country in the
            Territory, and shall thereafter be a non-exclusive, royalty-free
            license to develop, manufacture and commercialize such [**] Product
            in the Field in such country. Such license shall terminate if MERCK
            exercises its Opt-In Right pursuant to Section 2.2.2. Such license
            shall include the right to grant sublicenses and licenses as
            provided in Section 7.3 below. For the avoidance of doubt, it is
            acknowledged that such license grant shall apply only to such [**]
            Product and shall not apply to any other product, and shall apply
            only to research and development activities using RNA interference.

7.2   JOINT COLLABORATION IP. Subject to the rights granted each Party under
      this Agreement, including without limitation certain Co-exclusive
      licenses, and except as otherwise provided in this Agreement, each Party
      shall have the right to practice, use, sell, keep, license or assign to
      Third Parties its interest in any Joint Collaboration IP and otherwise
      undertake all activities a sole owner might undertake with respect to such
      Joint Collaboration IP without the consent of and without accounting to
      the other Party.

7.3   SUBLICENSES AND LICENSES OF JOINT COLLABORATION IP.

      7.3.1 AFFILIATES. Subject to Section 7.3.2, each Party shall be entitled
            to grant sublicenses of its rights under this Agreement (and
            licenses under any Joint Collaboration IP) to its Affiliates for so
            long as such entity remains an Affiliate.

      7.3.2 ALNYLAM AFFILIATE RESTRICTIONS. For purposes of subsections 7.1.1,
            7.1.2, 7.1.3, 7.1.4, 7.1.5 and 7.1.6 and 7.2, where noted, the term
            "Affiliate" with respect to ALNYLAM shall not include any
            corporation or business entity of which any 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 ALNYLAM and of which [**] or more of the
            securities or other ownership interests representing the equity or
            voting stock or general

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<PAGE>

            partnership interest are owned, controlled or held by a Significant
            Pharmaceutical Company or by any investment entity affiliated with
            any such Significant Pharmaceutical Company.

      7.3.3 PROFIT-SHARING PRODUCTS. With respect to Profit-Sharing Products,
            each Party shall be entitled to grant sublicenses of its rights
            under Section 7.1.3 (and licenses under any Joint Collaboration IP)
            in connection with its activities under a Program Workplan or
            Commercialization Plan to academic collaborators, and contract
            service organizations, that in each case are approved by the JSC in
            accordance with Section 4.1.4 to perform its obligations under such
            Program Workplan or Commercialization Plan.

      7.3.4 ROYALTY-BEARING PRODUCTS, MERCK DEVELOPMENT PRODUCTS AND [**]
            PRODUCTS. Subject to the terms of Section 7.3.6, the Continuing
            Party, in the case of Royalty-Bearing Products, MERCK, in the case
            of MERCK Development Products, and ALNYLAM, in the case of [**]
            Products, shall be entitled to grant sublicenses of its rights under
            this Agreement (and licenses under any Joint Collaboration IP) with
            respect to Royalty-Bearing Products, MERCK Development Products or
            [**] Products, as the case may be, to Third Parties to Develop and
            Commercialize (or in the case of [**] Products, develop and
            commercialize) such Royalty-Bearing Products, MERCK Development
            Products or [**] Products, as the case may be. The Continuing Party
            shall notify the Opt-Out Party, MERCK shall notify ALNYLAM, and
            ALNYLAM shall notify MERCK, following the grant of any such
            sublicense or license to a Third Party, with respect to a
            Royalty-Bearing Product, MERCK Development Product or [**] Product,
            respectively.

      7.3.5 MANUFACTURING SUBLICENSES. Subject to the terms of Section 7.3.6,
            each Party entitled to Manufacture RNAi Therapeutic Products or
            manufacture [**] Products under the terms and conditions of this
            Agreement shall be entitled to grant sublicenses of its rights under
            this Agreement (and licenses under any Joint Collaboration IP) to
            Third Parties to Manufacture such RNAi Therapeutic Products or
            manufacture [**] Products; provided, that such Party shall remain
            primarily responsible with respect to such sublicense. Each such
            sublicense with respect to a Profit-Sharing Product shall require
            the approval of the JSC or JCC, as applicable. Each such sublicense
            with respect to a Royalty-Bearing Product, MERCK Development Product
            or [**] Product shall be discussed between the Parties for a period
            of up to [**] days; provided, however, that the Continuing Party, in
            the case of a Royalty-Bearing Product, or MERCK, in the case of a
            MERCK Development Product, or ALNYLAM, in the case of a [**]
            Product, may thereafter grant such sublicense in its sole
            discretion.

      7.3.6 TERMS. Each sublicense granted by a Party pursuant to Section 7.3.4
            or Section 7.3.5 shall be subject and subordinate to the terms and
            conditions of this Agreement and shall contain terms and conditions
            consistent with those in this Agreement. Agreements with any
            Commercializing or commercializing Sublicensee shall contain the
            following provisions: (a) a requirement that such

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            Sublicensee submit applicable sales or other reports consistent with
            those required hereunder; (b) an audit requirement similar to the
            requirement set forth in Section 9.5; and (c) a requirement that
            such Sublicensee comply with the confidentiality and non-use
            provisions of Article 8 with respect to both Parties' Information.

      7.3.7 LIABILITY. Each Party shall at all times be responsible for the
            performance of its Sublicensees under this Agreement.

7.4   IN-LICENSES. All licenses and other rights granted to MERCK under this
      Article 7 are subject to the rights granted to ALNYLAM under the ALNYLAM
      In-Licenses, and are also subject to and limited to the extent of the
      rights ALNYLAM has granted and is required to grant to Third Parties
      pursuant to Pre-Existing ALNYLAM Alliance Agreements. All licenses and
      other rights granted to ALNYLAM under this Article 7 are subject to the
      rights granted to MERCK under the MERCK In-Licenses, and are also subject
      to and limited to the extent of the rights MERCK has granted and is
      required to grant to Third Parties pursuant to Pre-Existing MERCK Alliance
      Agreements.

      7.4.1 IN-LICENSES FOR PROFIT-SHARING PRODUCTS. With respect to each
            Profit-Sharing Product, if either Party identifies any Necessary
            Third Party IP that at the time of identification is not Controlled
            by a Party, such Party shall notify the JSC and include in such
            notification a summary of such Necessary Third Party IP, the
            anticipated commercial terms of the necessary license and any other
            relevant information. The [**] shall [**] a license [**] with the
            [**] of the [**] and [**]. If [**], the [**] shall [**] shall [**]
            and [**] shall be [**] Party. [**], the [**] shall [**] to the [**].
            If [**], such [**] shall [**] under this Agreement. Each Party shall
            comply with all applicable terms and conditions of the In-Licenses
            of the other Party and shall take such actions as may be required to
            allow such Party to comply with its obligations thereunder,
            including obligations relating to patent matters, confidentiality,
            indemnification and diligence. The Parties agree that this Section
            7.4.1 shall not apply to any In-Licenses entered into by either
            Party or its Affiliates prior to the Original Effective Date of this
            Agreement.

      7.4.2 CONTINUATION OF LICENSES GRANTED UNDER IN-LICENSES FOR
            ROYALTY-BEARING PRODUCTS. With respect to In-Licenses of the Opt-Out
            Party in existence at the Opt-Out Point that Cover the applicable
            Royalty-Bearing Product, the Opt-Out Party will determine whether
            (a) such In-Licenses may be assigned to the Continuing Party subject
            to Third Party consent(s) and (b) the Opt-Out Party's interest in
            retaining certain rights to exploit products other than such
            Royalty-Bearing Product. If the Opt-Out Party determines that such
            In-Licenses are assignable, the Opt-Out Party will assign such
            In-Licenses to the Continuing Party subject to any Third Party
            consents. With respect to such In-Licenses which are not assignable,
            the Opt-Out Party shall maintain these licenses for the duration of
            the sublicense granted by the Opt-Out Party to the Continuing Party
            under this Agreement. All amounts payable with respect to such
            non-assignable In-Licenses shall be shared by the Opt-Out Party and
            the Continuing Party in proportion to the rights being utilized by
            the Opt-Out Party and the Continuing Party under such In-Licenses;
            provided that all amounts allocable to the rights sublicensed to the

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<PAGE>

            Continuing Party shall be paid by the Opt-Out Party subject to
            reimbursement by the Continuing Party pursuant to Section 9.4.9.2.
            Such sublicense shall remain in full force and effect under the
            terms of this Agreement so long as the Continuing Party complies
            with all obligations relevant to such In-Licenses.

      7.4.3 IN-LICENSES FOR MERCK DEVELOPMENT PRODUCTS. MERCK shall be solely
            responsible for obtaining any licenses of Necessary Third Party IP
            for the Development, Manufacturing or Commercialization of MERCK
            Development Products. Such MERCK In-Licenses shall not grant rights
            to any Third Party that conflict with the terms and conditions of
            this Agreement. The costs of MERCK In-Licenses shall be borne by
            MERCK and such MERCK In-Licenses shall include confidentiality and
            non-use provisions which are no less stringent than those set forth
            in Section 8.1 of this Agreement. In the event that ALNYLAM is
            obligated to make a payment to a Third Party under an ALNYLAM
            In-License of Necessary Third Party IP for the research,
            development, Manufacturing or Commercialization of a MERCK
            Development Product that is sublicensed to MERCK hereunder, then
            MERCK shall reimburse ALNYLAM for such payments which are reasonably
            allocable to such sublicensed rights. The Parties agree that this
            Section 7.4.3 shall not apply to any agreement entered into by
            either Party or its Affiliates prior to the Original Effective Date
            of this Agreement.

      7.4.4 IN-LICENSES FOR [**] PRODUCTS. Unless MERCK exercises its Opt-In
            Right, ALNYLAM shall be solely responsible for obtaining any
            licenses of Necessary Third Party IP for the development,
            manufacturing or commercialization of [**] Products and the costs of
            such licenses shall be borne by ALNYLAM. Such licenses shall (a) not
            grant rights to any Third Party that conflict with the terms and
            conditions of this Agreement and (b) include confidentiality and
            non-use provisions which are no less stringent than those set forth
            in Section 8.1 of this Agreement. In the event that MERCK is
            obligated to make a payment to a Third Party under a MERCK license
            of Necessary Third Party IP for the research, development,
            manufacturing or commercialization of a [**] Product that is
            sublicensed to ALNYLAM hereunder, unless MERCK exercises its Opt-In
            Right, then ALNYLAM shall reimburse MERCK for such payments which
            are reasonably allocable to such sublicensed rights. The Parties
            agree that this Section 7.4.4 shall not apply to any agreement
            entered into by either Party or its Affiliates prior to the Original
            Effective Date of this Agreement.

7.5   CERTAIN PATENT RIGHTS. Notwithstanding anything to the contrary herein,
      the licenses to ALNYLAM Technology hereunder initially shall not include
      licenses to Patent Rights licensed by ALNYLAM or its Affiliates under
      either (a) [**] or (b) [**]; provided that if any such Patent Rights
      in-licensed by ALNYLAM become issued Patent Rights that Cover a
      Profit-Sharing Product, MERCK Development Product or Royalty-Bearing
      Product with respect to which MERCK is the Continuing Party, then ALNYLAM
      shall so notify MERCK in writing, and MERCK shall have the option of
      expanding its licenses to ALNYLAM Patent Rights hereunder to include such
      issued Patent Rights by notifying ALNYLAM of such election in writing.
      Upon such election, the [**] or the [**], as the

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<PAGE>

      case may be, shall be deemed an Existing ALNYLAM In-License and Schedule
      1.33 shall be amended accordingly.

7.6   NO OTHER RIGHTS. Except as otherwise expressly provided in this Agreement,
      under no circumstances shall a Party hereto, as a result of this
      Agreement, obtain any ownership interest or other right in any Know-How or
      Patent Rights of the other Party, including items owned, controlled or
      developed by the other Party, or provided by the other Party to the
      receiving Party at any time pursuant to this Agreement.

8.    CONFIDENTIALITY AND PUBLICATION

8.1   NONDISCLOSURE OBLIGATION. All Information disclosed by one Party to the
      other Party hereunder shall be maintained in confidence by the receiving
      Party and shall not be disclosed to a non-Party or used for any purpose
      except as set forth herein without the prior written consent of the
      disclosing Party, except to the extent that such Information:

      (a)   is known by the receiving Party at the time of its receipt, and not
            through a prior disclosure by the disclosing Party, as documented by
            the receiving Party's business records;

      (b)   is in the public domain by use and/or publication before its receipt
            from the disclosing Party, or thereafter enters the public domain
            through no fault of the receiving Party;

      (c)   is subsequently disclosed to the receiving Party by a Third Party
            who may lawfully do so and is not under an obligation of
            confidentiality to the disclosing Party;

      (d)   is developed by the receiving Party independently of Information
            received from the disclosing Party, as documented by the receiving
            Party's business records;

      (e)   is deemed necessary by counsel to the receiving Party to be
            disclosed to such Party's attorneys or independent accountants for
            the sole purpose of enabling such attorneys or independent
            accountants to provide advice to the receiving Party, on the
            condition that such attorneys and independent accountants agree to
            be bound by confidentiality and non-use obligations substantially
            similar to those contained in this Agreement; provided, however,
            that the term of confidentiality for such attorneys and independent
            accountants shall be no less than [**] years; or

      (f)   is deemed necessary by a Party to be disclosed to Related Parties,
            agents, consultants, and/or other Third Parties for the Development,
            Manufacturing or Commercialization of an RNAi Therapeutic Product or
            deemed necessary by ALNYLAM to be disclosed to such entities for the
            development, manufacturing or commercialization of a [**] Product
            (in each case, for such entities to determine their interest in
            performing such activities) in accordance with this Agreement on the
            condition that such Third Parties agree to be bound by
            confidentiality and non-use obligations substantially similar to
            those contained in

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            this Agreement provided, however, that the term of confidentiality
            for such Third Parties shall be no less than [**] years.

      Any combination of features or disclosures shall not be deemed to fall
      within the foregoing exclusions merely because individual features are
      published or available to the general public or in the rightful possession
      of the receiving Party unless the combination itself and principle of
      operation are published or available to the general public or in the
      rightful possession of the receiving Party.

      Notwithstanding the obligations of confidentiality and non-use set forth
      above, a receiving Party may provide Information disclosed to it to (i)
      governmental or other Regulatory Authorities in order to obtain patents or
      to gain or maintain approval to conduct Clinical Studies or to otherwise
      Develop, Manufacture or Commercialize RNAi Therapeutic Products or to
      develop, manufacture or commercialize [**] Products; provided, that such
      disclosure shall be subject to the prior written consent of the Party
      whose Information is intended to be disclosed (which consent shall not be
      unreasonably withheld), and such Information shall be disclosed only to
      the extent reasonably necessary to obtain patents or authorizations, (ii)
      the extent required by applicable law, 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, (iii) any bona fide actual or
      prospective underwriters, investors, lenders or other financing sources
      who are obligated to keep such information confidential, to the extent
      reasonably necessary to enable such actual or prospective underwriters,
      investors, lenders or other financing sources to determine their interest
      in underwriting or making an investment in, or otherwise providing
      financing to, the receiving Party; provided, however, that in the case of
      an investor that is a Significant Pharmaceutical Company, such disclosure
      shall be subject to the prior written consent of the Party whose
      Information is intended to be disclosed (which consent shall not be
      unreasonably withheld), and (iv) in the event that the Party seeking to
      provide Information of the other Party is the Continuing Party with
      respect to a Royalty-Bearing Product, or MERCK with respect to a MERCK
      Development Product, or ALNYLAM with respect to a [**] Product, any bona
      fide actual or prospective collaborators or strategic partners with
      respect to the Development or Commercialization of such Royalty-Bearing
      Product, or MERCK Development Product, or [**] Product as the case may be,
      who are obligated to keep such information confidential; provided,
      however, that the Party and/or its Affiliates shall only disclose to
      actual or prospective collaborators and strategic partners the general
      subject matter of this Agreement, the licenses granted hereunder, the
      provisions set forth in Sections 13.2 and 13.3, the provisions of Articles
      8, 9, and 11, and such Know-How and Patent Rights relating to such
      Royalty-Bearing Product, MERCK Development Product or [**] Product as the
      receiving Party, in its reasonable judgment, considers necessary for such
      actual or prospective collaborators or strategic partners to evaluate
      their interest in such Royalty-Bearing Product, MERCK Development Product
      or [**] Product, as the case may be.

      If a Party is required by judicial or administrative process to disclose
      Information that is subject to the non-disclosure provisions of this
      Section 8.1 or Section 8.2, such Party shall promptly inform the other
      Party of the disclosure that is being sought in order to

                                       50
<PAGE>

      provide the other Party an opportunity to challenge or limit the
      disclosure obligations. Information that is disclosed by judicial or
      administrative process shall remain otherwise subject to the
      confidentiality and non-use provisions of this Section 8.1 and Section
      8.2, and the Party disclosing 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 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 Securities and Exchange Commission, such
      Party shall provide the other Party with a copy of this Agreement showing
      any sections as to which the Party proposes to request confidential
      treatment, will provide the other Party with an opportunity to comment on
      any such proposal and to suggest additional portions of the Agreement for
      confidential treatment, and will take such Party's reasonable comments
      into consideration before filing the Agreement.

8.2   PUBLICATION. MERCK and ALNYLAM each acknowledge the other Party's interest
      in publishing the results of the research and Development under the
      Collaboration. Each Party also recognizes the mutual interest in obtaining
      valid patent protection and in protecting business interests and trade
      secret information. Consequently, except for disclosures permitted
      pursuant to Section 8.1, 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 Collaboration or any Profit-Sharing 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 sixty (60) days to enable patent applications protecting each
      Party's rights in such information to be filed in accordance with Article
      11 below. Upon expiration of such sixty (60) days, the publishing Party
      shall be free to proceed with the publication or presentation. If the
      reviewing Party requests modifications to the publication or 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 8.2 to the
      extent that MERCK or ALNYLAM, as the case may be, has the right and
      ability (after using reasonable efforts) to do so. For the avoidance of
      doubt, subject to its obligations under Section 8.1, the Continuing Party
      with respect to a Royalty-Bearing Product, MERCK with respect to a MERCK
      Development Product, and ALNYLAM with respect to a [**] Product, may make
      publications and disclosures to Third Parties relating to such
      Royalty-Bearing Product, MERCK Development Product or [**] Product, as the
      case may be, without any obligation to permit the Opt-Out Party, ALNYLAM,
      or MERCK, respectively, to review or comment on such publication or
      disclosure. Furthermore, subject to its rights under Section 8.1, the
      Opt-Out Party with respect to a Royalty-Bearing Product shall have no
      right to make any publications and disclosures to Third Parties relating
      to such Royalty-Bearing Product, ALNYLAM shall have no right to make any
      publications and

                                       51
<PAGE>

      disclosures to Third Parties relating to such MERCK Development Product,
      and MERCK shall have no right to make any publications and disclosures to
      Third Parties relating to such [**] Product.

8.3   PUBLICITY/USE OF NAMES. No disclosure of the existence of, or the terms
      of, this Agreement may be made by either Party, and no Party shall use the
      name, trademark, trade name or logo of the other Party or its employees in
      any publicity, news release or disclosure relating to this Agreement or
      its subject matter, without the prior express written permission of the
      other Party, except as may be required by law or expressly permitted by
      the terms hereof.

      Notwithstanding the foregoing, prior to the execution of this Agreement by
      both Parties, the Parties shall agree in writing upon a press release to
      be issued jointly by the Parties publicizing the amended terms of the
      Collaboration. After such initial press release, neither Party shall issue
      a press release or public announcement relating to the Collaboration or
      this Agreement without the prior written approval of the other Party,
      which approval shall not be unreasonably withheld, except that a Party may
      (a) once a press release or other written statement is approved in writing
      by both Parties, make subsequent public disclosure of the information
      contained in such press release or other written statement without the
      further approval of the other Party, and (b) issue a press release or
      public announcement as required, in the reasonable judgment of such Party,
      by applicable law, including without limitation by the rules or
      regulations of the United States Securities and Exchange Commission or
      similar regulatory agency in a country other than the United States or of
      any stock exchange or Nasdaq, in each case after first notifying the other
      Party of such planned press release or public announcement at least seven
      (7) business days in advance of issuing such press release or making such
      public announcement (or, with respect to press releases and public
      announcements made pursuant to the foregoing clause (b), with as much
      advance notice as possible under the circumstances if it is not possible
      to provide notice at least seven (7) business days in advance) for the
      sole purpose of allowing the other Party to review the proposed press
      release or public announcement for the inclusion of Confidential
      Information or the use of its name.

9.    PAYMENTS; ROYALTIES AND REPORTS

9.1   ORIGINAL AGREEMENT PAYMENTS; USE OF PROCEEDS. MERCK has made all payments
      payable to ALNYLAM through the Effective Date pursuant to Section 5.1 of
      the Original Agreement. ALNYLAM shall use all payments received from MERCK
      pursuant to Section 5.1 of the Original Agreement solely for the purpose
      of funding its proposed business operations, including the subject matter
      of this Agreement, which focus on RNAi Technology and development of drugs
      based on RNA interference. Such payments are not creditable against any
      future payments by MERCK to ALNYLAM.

9.2   MILESTONE FEES.

                                       52
<PAGE>

      9.2.1 PROFIT-SHARING PRODUCTS. MERCK shall make the non-refundable,
            non-creditable milestone payments to ALNYLAM set forth below no
            later than [**] calendar days after the earliest date on which the
            corresponding milestone event has been achieved with respect to the
            first Profit-Sharing Product in each Program to achieve such
            milestone event.

<TABLE>
<CAPTION>
MILESTONE EVENT                                                   PAYMENT
---------------                                                   -------
<S>                                                               <C>
Initiation of IND-Enabling GLP Toxicology Studies                  $[**]
Submission of IND                                                  $[**]
</TABLE>

      9.2.2 ROYALTY-BEARING PRODUCTS.

            (a)   If either Party has exercised its Opt-Out Right with respect
                  to a Co-Development Target during the Phase I Completion
                  Opt-Out Period for the most advanced RNAi Therapeutic Product
                  directed to such Target, and the other Party is the Continuing
                  Party with respect to such Target and Royalty-Bearing Products
                  directed thereto, then the Continuing Party shall make a
                  non-refundable, non-creditable milestone payment to the
                  Opt-Out Party in the amount of $[**] no later than [**]
                  business days after the earliest date on which the first NDA
                  Filing for the first such Royalty-Bearing Product has been
                  achieved.

            (b)   If either Party has exercised its Opt-Out Right with respect
                  to a Co-Development Target during the Phase II Completion
                  Opt-Out Period for the most advanced RNAi Therapeutic Product
                  directed to such Target, and the other Party is the Continuing
                  Party with respect to such Target and Royalty-Bearing Products
                  directed thereto, then the Continuing Party shall make the
                  non-refundable, non-creditable milestone payments to the
                  Opt-Out Party set forth below no later than [**] business days
                  after the earliest date on which the corresponding milestone
                  event has been achieved for the first time with respect to the
                  first such Royalty-Bearing Product.

<TABLE>
<CAPTION>
MILESTONE EVENT                      PAYMENT
---------------                      -------
<S>                                  <C>
Initiation of Phase III Study         $[**]
First NDA Filing                      $[**]
</TABLE>

      9.2.3 MERCK DEVELOPMENT PRODUCTS. MERCK shall make the non-refundable,
            non-creditable milestone payments to ALNYLAM set forth below with
            respect to each MERCK Development Target, no later than [**]
            business days after the earliest

                                       53
<PAGE>

            date on which the corresponding milestone event has been achieved
            for the first time with respect to a MERCK Development Product
            directed to such MERCK Development Target. Each milestone payment
            shall be payable only once with respect to each MERCK Development
            Target, except in the case where a milestone event has been achieved
            with respect to a Multi-Target Product which is Covered by a Valid
            Claim at the time the milestone event is achieved, in which case the
            applicable milestone payment amount shall be doubled regardless of
            the number of Multi-Target Product Targets to which such
            Multi-Target Product is directed.

<TABLE>
<CAPTION>
MILESTONE EVENT                                                   PAYMENT
---------------                                                   -------
<S>                                                               <C>
Initiation of IND-Enabling GLP Toxicology Studies                  $[**]
Initiation of Phase I Study                                        $[**]
Initiation of Phase II Study                                       $[**]
Initiation of Phase III Study                                      $[**]
First NDA Filing                                                   $[**]
First NDA Regulatory Approval                                      $[**]
</TABLE>

9.3   U.S. OPERATING PROFIT/LOSS FOR PROFIT-SHARING PRODUCTS. The Parties shall
      share equally the U.S. Operating Profit/Loss for all Profit-Sharing
      Products; provided, however, that if a Party exercises its Expense Share
      Reduction Option pursuant to Section 3.9.1 to reduce its percentage share
      of U.S. Development Expenses with respect to a Profit-Sharing Product, the
      Parties' percentage shares of the U.S. Operating Profit/Loss for such
      Profit-Sharing Product shall be the same as their respective percentage
      shares of U.S. Development Expenses as adjusted pursuant to the Expense
      Share Reduction Option.

      "U.S. OPERATING PROFIT/LOSS" shall be calculated for each Profit-Sharing
      Product by determining Net Sales of such Profit-Sharing Product in the
      relevant time period in the United States and by then subtracting the
      Commercialization Expenses accrued by either Party in respect of such
      Profit-Sharing Product in the relevant time period in the United States.

      Within [**] days after submission of the first Commercialization Plan for
      such Profit-Sharing Product to the JCC, the Parties will discuss and agree
      upon the procedures for reporting, reconciliation and payments with
      respect to U.S. Operating Profit/Loss.

9.4   ROYALTIES.

      9.4.1 ROYALTIES PAYABLE ON [**] PRODUCTS. Subject to the terms and
            conditions of this Agreement, if MERCK elects, pursuant to Section
            2.2.2(b), not to exercise its Opt-In Right, or fails to do so prior
            to the expiration of the Opt-In Period, then

                                       54
<PAGE>

            ALNYLAM shall pay MERCK royalties on Net Sales of each [**] Product
            by ALNYLAM or its Related Parties as follows:

            (a)   in the event that [**] satisfied clause (a) of the definition
                  of "MERCK RNAi Novel Target" at the time [**] was presented to
                  ALNYLAM during the Technology Collaboration Term, and MERCK
                  had the belief set forth in clause (b) of such definition,
                  then ALNYLAM shall pay MERCK the royalty rates set forth
                  hereinbelow with respect to [**] Products; and

            (b)   in the event that [**] satisfied clause (a) of the definition
                  of "MERCK RNAi Novel Target" at the time [**] was presented to
                  ALNYLAM during the Technology Collaboration Term, but MERCK
                  did not have the belief set forth in clause (b) of such
                  definition, then ALNYLAM shall pay MERCK one-half of the
                  applicable royalty rate set forth hereinbelow with respect to
                  [**] Products.

<TABLE>
<CAPTION>
                                            ROYALTY
  WORLDWIDE SALES              (AS A PERCENTAGE OF WORLDWIDE SALES)
------------------------       ------------------------------------
<S>                            <C>
    $0 to $[**]                               [**]%
   $[**] to $[**]                             [**]%
$[**] to $[**]                                [**]%
Greater than $[**]                            [**]%
</TABLE>

            Royalties on Worldwide Sales in a Calendar Year shall be paid at the
            rate applicable to the portion of Worldwide Sales within each of the
            Worldwide Sales levels above. For example, if, during a Calendar
            Year, Worldwide Sales were equal to $[**], the royalties payable by
            ALNYLAM would be calculated by adding (i) [**]% of the first $[**],
            (ii) [**]% of the next $[**], and (iii) [**]% of the final $[**].

      9.4.2 ROYALTIES PAYABLE ON PROFIT-SHARING PRODUCTS. Subject to the terms
            and conditions of this Agreement, MERCK shall pay to ALNYLAM
            royalties on aggregate Net Sales in the Territory outside the United
            States of each Profit-Sharing Product by MERCK or its Related
            Parties as follows:

<TABLE>
<CAPTION>
     CALENDAR YEAR NET SALES OF THE
PROFIT-SHARING PRODUCT IN THE TERRITORY                       ROYALTY
     OUTSIDE THE UNITED STATES                   (AS A PERCENTAGE OF NET SALES)
---------------------------------------          ------------------------------
<S>                                              <C>
             $0 - $[**]                                     [**]%
            $[**] - $[**]                                   [**]%
            $[**] - $[**]                                   [**]%
         Greater than $[**]                                 [**]%
</TABLE>

                                       55
<PAGE>

              Royalties on aggregate Net Sales of the Profit-Sharing Products in
              the Territory outside the United States in a Calendar Year shall
              be paid at the rate applicable to the portion of Net Sales within
              each of the Net Sales levels above during such Calendar Year. For
              example, if, during a Calendar Year, aggregate Net Sales were
              equal to $[**], the royalties payable by MERCK would be calculated
              by adding (i) [**]% of the first $[**], (ii) [**]% of the next
              $[**], and (iii) [**]% of the final $[**].

      9.4.3   ROYALTIES PAYABLE ON ROYALTY-BEARING PRODUCTS. Subject to the
              terms and conditions of this Agreement, the Royalty Payor shall
              pay to the Royalty Recipient royalties on a country-by-country
              basis for Worldwide Sales of each Royalty-Bearing Product, such
              royalties to be calculated as set forth in Section 9.4.3.1.

      9.4.3.1 GENERAL PROCEDURE FOR CALCULATION OF ROYALTIES. For each scenario
              under which royalties are due from one Party to the other, Section
              9.4.3.2 sets forth values for the following parameters: Sublicense
              Revenue Fraction (expressed as a percentage), Royalty Rate One,
              Royalty Rate Two, Royalty Rate Three and Royalty Rate Four. The
              values set forth for these parameters in Section 9.4.3.2 shall be
              used to calculate the royalties due under each scenario in
              relation to each Royalty-Bearing Product, as follows:

              (a)   In the event that all of the Worldwide Sales for the
                    Royalty-Bearing Product are made by the Royalty Payor or its
                    Related Parties, the Royalty Payor shall pay the Royalty
                    Recipient royalties on Worldwide Sales as follows:

<TABLE>
<CAPTION>
                                                  ROYALTY
   WORLDWIDE SALES                    (AS A PERCENTAGE OF WORLDWIDE SALES)
----------------------                ------------------------------------
<S>                                   <C>
    $0 to $[**]                               Royalty Rate One
  $[**] to $[**]                              Royalty Rate Two
  $[**] to $[**]                             Royalty Rate Three
Greater than $[**]                           Royalty Rate Four
</TABLE>

              Royalties on Worldwide Sales in a Calendar Year shall be paid at
              the rate applicable to the portion of Worldwide Sales within each
              of the Worldwide Sales levels above. For example, if, during a
              Calendar Year, Worldwide Sales were equal to $[**], the royalties
              payable by the Royalty Payor would be calculated by adding (i) the
              royalties with respect to the first $[**] at Royalty Rate One,
              (ii) the royalties with respect to the next $[**] at Royalty Rate
              Two, and (iii) the royalties with respect to the final $[**] at
              Royalty Rate Three.

                                       56
<PAGE>

            (b)   In the event that all of the Worldwide Sales for the
                  Royalty-Bearing Product are made through one or more
                  Sublicensees of the Royalty Payor, the Royalty Payor shall pay
                  the Royalty Recipient the lesser of (i) an amount equal to the
                  Sublicense Revenue Fraction multiplied by the revenues
                  received by the Royalty Payor from its Sublicensees in
                  relation to such Worldwide Sales, and (ii) the amounts that
                  would be due pursuant to Section 9.4.3.1(a) if all Worldwide
                  Sales had been made directly by the Royalty Payor or its
                  Related Parties, without a Sublicensee.

            (c)   In the event that some of the Worldwide Sales for the
                  Royalty-Bearing Product are made directly by the Royalty Payor
                  or its Related Parties, and some of the Worldwide Sales for
                  the Royalty-Bearing Product, in one or more countries, are
                  made through one or more Sublicensee(s), the royalties to be
                  paid by the Royalty Payor to the Royalty Recipient shall be
                  calculated as follows:

                  (i)   The fraction of Worldwide Sales that were made in each
                        country shall be determined by dividing Country Sales in
                        such country by Worldwide Sales (such fraction, the
                        "COUNTRY FRACTION" for such country).

                  (ii)  For each country:

                        v.    "Level One Limit" shall be calculated by
                              multiplying the Country Fraction for such country
                              by $[**];

                        w.    "Level Two Threshold" shall be calculated by
                              adding one dollar to "Level One Limit";

                        x.    "Level Two Limit" shall be calculated by
                              multiplying the Country Fraction for such country
                              by $[**];

                        y.    "Level Three Threshold" shall be calculated by
                              adding one dollar to "Level Two Limit"; and

                        z.    "Level Three Limit" shall be calculated by
                              multiplying the Country Fraction for such country
                              by $[**].

                  (iii) For each country in the Territory in which Country Sales
                        are made by the Royalty Payor or its Related Parties and
                        not by a Sublicensee, the Royalty Payor shall pay the
                        Royalty Recipient royalties as follows:
<TABLE>
<CAPTION>
                                                   ROYALTY
   COUNTRY SALES IN COUNTRY IN THE           (AS A PERCENTAGE OF
              TERRITORY                         COUNTRY SALES)
--------------------------------------       -------------------
<S>                                          <C>
$0 to Level One Limit for such country       Royalty Rate One

   Level Two Threshold to Level Two          Royalty Rate Two
        Limit for such country

 Level Three Threshold to Level Three        Royalty Rate Three
      Limit for such country

  Greater than Level Three Limit for         Royalty Rate Four
           such country
</TABLE>

                                       57
<PAGE>

                  (iv)  Royalties on Country Sales of the Royalty-Bearing
                        Products in each country in the Territory in a Calendar
                        Year shall be paid at the rate applicable to the portion
                        of Country Sales within each of the Country Sales levels
                        above during such Calendar Year. For example, if, during
                        a Calendar Year, Country Sales of a Royalty-Bearing
                        Product were equal to $[**], and the Level One Limit is
                        $[**], the Level Two Limit is $[**], and the Level Three
                        Limit is $[**], then the royalties payable by the
                        Royalty Payor would be calculated by adding (i) the
                        royalties with respect to the first $[**] at Royalty
                        Rate One, (ii) the royalties with respect to the next
                        $[**] at Royalty Rate Two, (iii) the royalties with
                        respect to the next $[**] at Royalty Rate Three, and
                        (iv) the royalties with respect to the final $[**] at
                        Royalty Rate Four.

                  (v)   For each country in which Country Sales are made through
                        one or more Sublicensees of the Royalty Payor, the
                        Royalty Payor shall pay the Royalty Recipient the lesser
                        of (x) an amount equal to the Sublicense Revenue
                        Fraction multiplied by the revenues received by the
                        Royalty Payor from its Sublicensees in relation to such
                        Country Sales, and (y) the amounts that would be due
                        pursuant to Section 9.4.3.1(c)(iii) if such Country
                        Sales had been made directly by the Royalty Payor or its
                        Related Parties, without a Sublicensee.

      9.4.3.2 AFTER EXERCISE OF OPT-OUT RIGHTS. If either Party has exercised
              its Opt-Out Right with respect to a Co-Development Target, and the
              other Party elects to be the Continuing Party with respect to any
              RNAi Therapeutic Product in the Program directed to such
              Co-Development Target, then the Continuing Party shall be the
              Royalty Payor and the Opt-Out Party shall be the Royalty Recipient
              with respect to such Royalty-Bearing Product. With respect to the
              Royalty-Bearing Product in such Program that is at the most
              advanced stage of Development, the Royalty Payor shall pay the
              Royalty Recipient royalties determined by the Opt-Out Period in
              which such Opt-Out Rights were exercised, as set forth in clauses
              (a)-(c) below, or if the Opt-Out Point did not occur in an Opt-Out
              Period, determined by the Opt-Out Period most recently preceding
              the Opt-Out Point. With respect to all other Royalty-Bearing
              Products in such Program, the Royalty Payor shall pay the Royalty
              Recipient [**] percent ([**]%) of the amount of royalties
              calculated as set forth in clause (a) below for the exercise of
              the Opt-Out Right during the Pre-IND Filing Opt-Out Period;
              provided, however, that if ALNYLAM is the Opt-Out Party, in no
              event shall the royalties payable to ALNYLAM with respect to Net
              Sales in a country for any Calendar Quarter be less than the
              amount of any royalties and any portions of milestones or other
              payments under the Existing ALNYLAM In-Licenses that are
              reasonably

                                       58
<PAGE>

              allocable to the Commercialization or Manufacture of the
              Royalty-Bearing Product in or for such country in the Field.

              (a)   If such exercise by MERCK or ALNYLAM of its Opt-Out Right
                    occurred during the Pre-IND Filing Opt-Out Period, then

                    (i)   The Sublicense Revenue Fraction shall be [**] percent
                          ([**]%);

                    (ii)  Royalty Rate One shall be [**] percent ([**]%);

                    (iii) Royalty Rate Two shall be [**] percent ([**]%);

                    (iv)  Royalty Rate Three shall be [**] percent ([**]%); and

                    (v)   Royalty Rate Four shall be [**] percent ([**]%).

              (b)   If such exercise by MERCK or ALNYLAM of its Opt-Out Right
                    occurred during the Phase I Completion Opt-Out Period, then

                    (i)   The Sublicense Revenue Fraction shall be [**] percent
                          ([**]%);

                    (ii)  Royalty Rate One shall be [**] percent ([**]%);

                    (iii) Royalty Rate Two shall be [**] percent ([**]%);

                    (iv)  Royalty Rate Three shall be [**] percent ([**]%); and

                    (v)   Royalty Rate Four shall be [**] percent ([**]%).

              (c)   If such exercise by MERCK or ALNYLAM of its Opt-Out Right
                    occurred during the Phase II Completion Opt-Out Period, then

                    (i)   The Sublicense Revenue Fraction shall be [**] percent
                          ([**]%);

                    (ii)  Royalty Rate One shall be [**] percent ([**]%);

                    (iii) Royalty Rate Two shall be [**] percent ([**]%);

                    (iv)  Royalty Rate Three shall be [**] percent ([**]%); and

                    (v)   Royalty Rate Four shall be [**] percent ([**]%).

      9.4.4   ROYALTIES PAYABLE ON MERCK DEVELOPMENT PRODUCTS. Subject to the
              terms and conditions of this Agreement, MERCK shall pay to ALNYLAM
              royalties on aggregate Net Sales in the Territory of each MERCK
              Development Product by MERCK or its Related Parties as follows:

                                       59
<PAGE>

<TABLE>
<CAPTION>

      CALENDAR YEAR NET SALES OF THE                              ROYALTY
MERCK DEVELOPMENT PRODUCT IN THE TERRITORY             (AS A PERCENTAGE OF NET SALES)
------------------------------------------             ------------------------------
<S>                                                    <C>
             $0 - $[**]                                            [**]%
            $[**] - $[**]                                          [**]%
            $[**] - $[**]                                          [**]%
            $[**] - $[**]                                          [**]%
         Greater than $[**]                                        [**]%
</TABLE>

              Royalties on aggregate Net Sales of MERCK Development Products in
              the Territory in a Calendar Year shall be paid at the rate
              applicable to the portion of Net Sales within each of the Net
              Sales levels above during such Calendar Year. For example, if,
              during a Calendar Year, aggregate Net Sales were equal to $[**],
              the royalties payable by MERCK would be calculated by adding (i)
              [**]% of the first $[**], (ii) [**]% of the next $[**], and (iii)
              [**]% of the final $[**].

      9.4.5   ROYALTY TERM. The royalty payment obligations of the Royalty Payor
              with respect to each [**] Product and each RNAi Therapeutic
              Product at the rates set forth in Section 9.4.1, 9.4.2, 9.4.3 and
              9.4.4 shall be effective as of the date of First Commercial Sale
              of such [**] Product or RNAi Therapeutic Product, as the case may
              be, in a country and shall continue until the later of (a) the
              expiration of the last Valid Claim of the Patent Rights covering
              the Manufacture or Commercialization of the [**] Product or RNAi
              Therapeutic Product, as the case may be, in the country of sale
              that are licensed to such Royalty Payor under this Agreement, or
              (b) the [**] anniversary of the First Commercial Sale in such
              country, subject to the following conditions:

              (a)   only one royalty shall be due with respect to the same unit
                    of [**] Product or RNAi Therapeutic Product;

              (b)   no royalties shall be due upon the sale or other transfer
                    among a Party or its Related Parties, but in such cases the
                    royalty shall be due and calculated upon the Party's or its
                    Related Party's Net Sales to the first independent Third
                    Party;

              (c)   no royalties shall accrue on the sale or other disposition
                    of the [**] Product or RNAi Therapeutic Product by the
                    Parties or their Related Parties for use in a Clinical
                    Study; and

              (d)   no royalties shall accrue on the disposition of [**] Product
                    or RNAi Therapeutic Product in reasonable quantities by a
                    Party or its Related Parties as samples (promotion or
                    otherwise) or as donations (for example, to non-profit
                    institutions or government agencies for a non-commercial
                    purpose).

                                       60
<PAGE>

      9.4.6   ROYALTY PAYABLE UNDER MANAGED PHARMACEUTICAL CONTRACT. It is
              understood by the Parties that the applicable Royalty Payor and
              its Related Parties may sell a [**] Product or an RNAi Therapeutic
              Product, as the case may be, to an independent Third Party (such
              as a retailer or wholesaler) and may subsequently perform services
              relating to such [**] Product or RNAi Therapeutic Product, as the
              case may be, or other products, under a managed pharmaceutical
              benefits contract or other similar contract. In such cases, it is
              agreed by the Parties that Net Sales shall be based on the average
              invoice price at which similar quantities of such [**] Product or
              RNAi Therapeutic Product, as the case may be, are sold in the
              country in question to Third Parties without providing such
              services.

      9.4.7   CHANGE IN SALES PRACTICES. The Parties acknowledge that during the
              Agreement Term, a Royalty Payor's sales practices for the
              marketing and distribution of a [**] Product or an RNAi
              Therapeutic Product may change to the extent to which the
              calculation of the payment for royalties on Net Sales may become
              impractical or even impossible. In such event the Parties agree to
              meet and discuss in good faith new ways of compensating the
              Royalty Recipient to the extent currently contemplated under this
              Section 9.4.

      9.4.8   COMPULSORY LICENSES. If a compulsory license is granted to a Third
              Party with respect to a [**] Product or an RNAi Therapeutic
              Product in any country in the Territory with a royalty rate lower
              than the applicable royalty rate set forth in this Section 9.4,
              then the royalty rate to be paid by the Royalty Payor on Net Sales
              in that country under this Section 9.4 shall be reduced to the
              rate paid by the compulsory licensee.

      9.4.9   NECESSARY THIRD PARTY IP.

      9.4.9.1 PROFIT-SHARING PRODUCTS. If the Development, Manufacture or
              Commercialization of a Profit-Sharing Product by a Party in
              accordance with this Agreement infringes Necessary Third Party IP
              then:

              (a)   The amount of any portions of milestones or other payments
                    paid by either Party under all In-Licenses of such Necessary
                    Third Party IP that are reasonably allocable to the
                    Development of the Profit-Sharing Product in the Field (i)
                    in the United States, shall be included in the U.S.
                    Development Expenses for such Profit-Sharing Product and
                    shared by the Parties pursuant to Section 3.9, and (ii) in
                    the Territory outside the United States, shall be borne by
                    MERCK.

              (b)   The amount of any royalties and any portions of milestones
                    or other payments paid by either Party under all In-Licenses
                    of such Necessary Third Party IP that are reasonably
                    allocable to the Commercialization or Manufacture of the
                    Profit-Sharing Product in or for the United States in the
                    Field, shall be Commercialization Expenses for purposes of
                    calculating U.S. Operating Profit/Loss for such
                    Profit-Sharing Product pursuant to Section 9.3.

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              (c)   The applicable royalties in each country in the Territory
                    outside the United States payable by MERCK to ALNYLAM
                    pursuant to Section 9.4.2 will be (i) reduced by [**]
                    percent ([**]%) of the amount paid by MERCK and (ii)
                    increased by [**] percent ([**]%) of the amount paid by
                    ALNYLAM, in each case, of any royalties and any portions of
                    milestones or other payments under all In-Licenses of such
                    Necessary Third Party IP that are reasonably allocable to
                    the Commercialization or Manufacture of the Profit-Sharing
                    Product in or for such country in the Field; provided,
                    however, that, on a country-by-country basis, in no event
                    shall the royalties payable to ALNYLAM with respect to Net
                    Sales in a country for any Calendar Quarter be reduced below
                    the greater of (x) [**] percent ([**]%) of the royalties
                    otherwise payable by MERCK to ALNYLAM for such Calendar
                    Quarter as calculated pursuant to Section 9.4.2 or (y) [**]
                    that are reasonably allocable to the Commercialization or
                    Manufacture of the Profit-Sharing Product in or for such
                    country in the Field.

      9.4.9.2 [**] PRODUCTS, ROYALTY-BEARING PRODUCTS AND MERCK DEVELOPMENT
              PRODUCTS. If the Development, Manufacture or Commercialization of
              a Royalty-Bearing Product by a Continuing Party, or a MERCK
              Development Product by MERCK, or the development, manufacture or
              commercialization of a [**] Product by ALNYLAM, in each case in
              accordance with this Agreement, infringes Necessary Third Party
              IP, the applicable royalties in each country in the Territory
              payable to the Royalty Recipient in the case of a [**] Product
              pursuant to Section 9.4.1, a Royalty-Bearing Product pursuant to
              Section 9.4.3, or a MERCK Development Product pursuant to Section
              9.4.4, will be (a) reduced by [**] percent ([**]%) of the amount
              paid by the Royalty Payor and (b) increased by [**] percent
              ([**]%) of the amount paid by the Royalty Recipient (and not
              already reimbursed by the Royalty Payor pursuant to Section 7.4.2,
              7.4.3 or 7.4.4, as the case may be), in each case, of any
              royalties and any portions of milestones or other payments under
              all In-Licenses of such Necessary Third Party IP that are
              reasonably allocable to the Development, Manufacture and
              Commercialization of the Royalty-Bearing Product or the MERCK
              Development Product, or the development, manufacture and
              commercialization of a [**] Product, as the case may be, in or for
              such country in the Field; provided, however, that, on a
              country-by-country basis, in no event shall the royalties payable
              to the Royalty Recipient with respect to Net Sales in a country
              for any Calendar Quarter be reduced below the greater of (i) [**]
              percent ([**]%) of the royalties otherwise payable by the Royalty
              Payor to the Royalty Recipient for such Calendar Quarter as
              calculated pursuant to 9.4.1 in the case of a [**] Product,
              Section 9.4.3 in the case of Royalty-Bearing Products, or Section
              9.4.4 in the case of MERCK Development Products, and (ii) if
              ALNYLAM is the Royalty Recipient, [**] that are reasonably
              allocable to the Commercialization or Manufacture of the
              Royalty-Bearing Product or MERCK Development Product, as the case
              may be, in or for such country in the Field.

      9.4.10  BLENDED ROYALTY RATES. The Parties acknowledge and agree that the
              Patent Rights and Know-How licensed pursuant to this Agreement
              justify royalty rates of

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              differing amounts with respect to the sales of [**] Products or
              RNAi Therapeutic Products, as the case may be, which rates could
              be applied separately to [**] Products or RNAi Therapeutic
              Products involving the exercise of such Patent Rights and/or the
              incorporation of such Know-How, and that, if such royalties were
              calculated separately, royalties relating to Patent Rights and
              royalties relating to Know-How would last for different terms.
              Notwithstanding the foregoing, the Parties have determined, for
              reasons of convenience, that blended royalty rates for the Patent
              Rights and the Know-How licensed hereunder, as set forth above,
              will apply during a single royalty term. The Parties acknowledge
              and agree that nothing in this Agreement (including without
              limitation any exhibits or attachments hereto) shall be construed
              as representing an estimate or projection of either (a) the number
              of [**] Products or RNAi Therapeutic Products that will or may be
              successfully Developed or Commercialized or (b) anticipated sales
              or the actual value of any [**] Product or RNAi Therapeutic
              Product, and that the figures set forth in this Section 9.4 or
              elsewhere in this Agreement or that have otherwise been discussed
              by the Parties are merely intended to define the Parties' royalty
              payment obligations to each other in the event such sales
              performance is achieved.

      9.4.11  REPORTS; PAYMENT OF ROYALTY. During the Agreement Term, commencing
              upon the First Commercial Sale of each [**] Product or RNAi
              Therapeutic Product, as the case may be, the Royalty Payor shall
              furnish to the Royalty Recipient a quarterly written report [**],
              the Net Sales [**] of such [**] Product or RNAi Therapeutic
              Product subject to royalty payments sold by the Royalty Payor or
              its Related Parties during the reporting period and the royalties
              payable under this Agreement. Quarterly reports shall be due no
              later than the [**] day following the close of each Calendar
              Quarter. Royalties shown to have accrued by each royalty report
              shall be due and payable on the date such royalty report is due.
              Each Party shall keep complete and accurate records in sufficient
              detail to enable the royalties and other payments payable
              hereunder to be determined, including without limitation records
              of the items underlying U.S. Development Expenses and U.S.
              Operating Profit/Loss, ALNYLAM's costs and expenses with respect
              to its Development activities for MERCK Development Products
              pursuant to Section 6.1.1 and its research and development
              activities for the [**] Target and [**] Products pursuant to
              Section 2.2.2(c).

9.5   AUDITS.

      9.5.1   Upon the written request of a Party and not more than once in each
              Calendar Year, the other Party and/or its Related Parties shall
              permit an independent certified public accounting firm of
              nationally-recognized standing selected by the requesting Party
              and reasonably acceptable to the other Party, at the requesting
              Party's expense except as set forth below, to have access during
              normal business hours to such of the records of the other Party as
              may be reasonably necessary to verify the accuracy of the royalty
              and other reports hereunder for any year ending not more than
              thirty-six (36) months prior to the date of such request for the
              sole

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              purpose of verifying the basis and accuracy of payments made under
              Sections 2.2.2(c), 3.9, 6.1.1 and 13.3 and this Article 9.

      9.5.2   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 [**] business days of the date the
              requesting Party delivers to the other Party 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
              the requesting Party, unless such discrepancy represents an
              underpayment by the other Party of the lesser of [**] U.S. dollars
              ($[**]) or [**] percent ([**]%) of the total amounts due
              hereunder, in which case such fees shall be paid by the other
              Party.

      9.5.3   The Royalty Payor shall include in each sublicense granted by it
              pursuant to this Agreement a provision requiring the Sublicensee
              to make reports to the Royalty Payor, to keep and maintain records
              of sales made pursuant to such sublicense and to grant access to
              such records by the Royalty Recipient's independent accountant to
              the same extent required of the Royalty Payor under this
              Agreement.

      9.5.4   Unless an audit for such year has been commenced upon the
              expiration of thirty-six (36) months following the end of any
              year, the calculation of royalties and other payments payable with
              respect to such year shall be binding and conclusive upon both
              Parties, and the Royalty Payor and its Related Parties shall be
              released from any further liability or accountability with respect
              to royalties for such year.

      9.5.5   Each Party shall treat all financial information subject to review
              under this Section 9.5 or under any sublicense agreement in
              accordance with the confidentiality and non-use provisions of this
              Agreement, and shall cause its accounting firm to enter into an
              acceptable confidentiality agreement with the other Party and/or
              its Related Parties obligating it to retain all such information
              in confidence pursuant to such confidentiality agreement.

9.6   PAYMENT EXCHANGE RATE. All payments to be made under this Agreement shall
      be made in United States dollars and shall be paid by bank wire transfer
      in immediately available funds to such bank account in the United States
      as may be designated in writing by the receiving Party from time to time.
      In the case of sales outside the United States by each Party and its
      Related Parties, the rate of exchange to be used in computing the amount
      of currency equivalent in United States dollars due shall be made at the
      rate of exchange utilized by such Party in its worldwide accounting
      system, prevailing on the third to the last business day of the month
      preceding the month in which such sales are recorded.

9.7   INCOME TAX WITHHOLDING. If laws, rules or regulations require withholding
      of income taxes or other taxes imposed upon payments set forth in this
      Article 9, the paying Party shall make such withholding payments as
      required and subtract such withholding payments from the payments set
      forth in this Article 9. The paying Party shall submit appropriate proof
      of payment of the withholding taxes to the receiving Party within a

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      reasonable period of time. At the request of the receiving Party, the
      paying Party shall, at its cost, give the receiving Party such reasonable
      assistance, which shall include the provision of appropriate certificates
      of such deductions made together with other supporting documentation as
      may be required by the relevant tax authority, to enable the receiving
      Party to claim exemption from such withholding or other tax imposed or
      obtain a repayment thereof or reduction thereof and shall upon request
      provide such additional documentation from time to time as is reasonably
      required to confirm the payment of tax.

10.   REPRESENTATIONS AND WARRANTIES

10.1  MUTUAL REPRESENTATIONS AND WARRANTIES. Each Party represents and warrants
      to the other Party that as of the Effective Date of this Agreement:

      (a)     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.

      (b)     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.

      (c)     This Agreement is legally binding upon it, enforceable in
              accordance with its terms. The execution, delivery and performance
              of this Agreement by it 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.

      (d)     Except as set forth in Section 10.1(d) of Schedule 10 to this
              Agreement, it has not, and will not during the term of this
              Agreement, 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 to perform its obligations hereunder.

      (e)     If any human cell lines, tissue, human clinical isolates or
              similar human-derived materials ("HUMAN MATERIALS") have been or
              are to be collected and/or used in the Therapeutic Collaboration,
              each Party represents and warrants (i) that it has complied, or
              shall comply, with all applicable laws, guidelines and regulations
              relating to the collection and/or use of the Human Materials, and
              (ii) that it has obtained, or shall obtain, all necessary
              approvals and appropriate informed consents, in writing, for the
              collection and/or use of such Human Materials. Each Party shall
              provide documentation of such approvals and consents upon the
              other Party's request. Each Party further represents and warrants
              that such Human Materials may be used as contemplated in this
              Agreement without any obligation to the individuals or entities
              ("PROVIDERS") who contributed the Human Materials, including,
              without limitation, any obligation of compensation to such
              Providers or

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              any other Third Party for the intellectual property associated
              with, or commercial use of, the Human Materials for any purposes.

      (f)     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 the performance of
              its obligations in the Development, Manufacture or
              Commercialization of a [**] Product or an RNAi Therapeutic
              Product, 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 or entity that is performing
              activities under the Collaboration 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 such Party's knowledge, is threatened,
              relating to the debarment or conviction of such Party or any
              person or entity used in any capacity by such Party or any of its
              Affiliates in connection with the Development, Manufacture or
              Commercialization of a [**] Product or an RNAi Therapeutic
              Product.

10.2  ALNYLAM REPRESENTATIONS AND WARRANTIES. ALNYLAM represents and warrants to
      MERCK that as of the Effective Date of this Agreement:

      (a)     To the best of ALNYLAM's knowledge, the ALNYLAM RNAi Patent Rights
              exist and are not invalid or unenforceable, in whole or in part;

      (b)     It has not previously assigned, transferred, conveyed or otherwise
              encumbered its right, title and interest in the ALNYLAM RNAi
              Patent Rights or the ALNYLAM RNAi Technology in a manner that
              conflicts with any rights granted to MERCK hereunder; and

      (c)     Except as set forth in Section 10.2(c) of Schedule 10, there are
              no claims, judgments or settlements against or owed by ALNYLAM or
              its Affiliates or pending or threatened claims or litigation
              relating to the ALNYLAM RNAi Patent Rights or the ALNYLAM RNAi
              Technology.

10.3  MERCK REPRESENTATIONS AND WARRANTIES. MERCK represents and warrants to
      ALNYLAM that as of the Effective Date of this Agreement:

      (a)     To the best of MERCK's knowledge, the MERCK RNAi Patent Rights and
              the Patent Rights within the MERCK RNAi Technology exist and are
              not invalid or unenforceable, in whole or in part;

      (b)     It has not previously assigned, transferred, conveyed or otherwise
              encumbered its right, title and interest in the MERCK RNAi Patent
              Rights, MERCK RNAi Novel Target IP or the MERCK RNAi Technology in
              a manner that conflicts with the rights granted to ALNYLAM
              hereunder; and

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      (c)     There are no claims, judgments or settlements against or owed by
              MERCK or its Affiliates or pending or threatened claims or
              litigation relating to the MERCK RNAi Patent Rights, MERCK RNAi
              Novel Target IP or the MERCK RNAi Technology.

10.4  WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
      AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY
      OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY WITH RESPECT TO
      ANY TECHNOLOGY, [**] PRODUCTS, RNAi THERAPEUTIC PRODUCTS, GOODS, SERVICES,
      RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ALL
      IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
      AND NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING. EACH
      PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE
      DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF ANY [**] PRODUCT OR RNAi
      THERAPEUTIC PRODUCT PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL OR THAT
      ANY PARTICULAR SALES LEVEL WITH RESPECT TO THE RNAi THERAPEUTIC PRODUCTS
      WILL BE ACHIEVED.

10.5  INDEMNIFICATION.

      10.5.1  GENERAL INDEMNIFICATION BY MERCK. MERCK shall indemnify, hold
              harmless, and defend ALNYLAM, its Affiliates, and their respective
              directors, officers, employees and agents ("ALNYLAM INDEMNITEES")
              from and against any and all Third Party claims, suits, losses,
              liabilities, damages, costs, fees and expenses (including
              reasonable attorneys' fees) (collectively, "LOSSES") arising out
              of or resulting from, directly or indirectly, (a) any breach of,
              or inaccuracy in, any representation or warranty made by MERCK in
              this Agreement, or any breach or violation of any covenant or
              agreement of MERCK in or pursuant to this Agreement, or (b) the
              negligence or willful misconduct by or of MERCK, its Affiliates
              and their respective Sublicensees, and their respective directors,
              officers, employees and agents. This indemnification excludes
              Losses arising out of Third Party Infringement Claims resulting
              from MERCK's exercise in accordance with the terms of this
              Agreement of any intellectual property rights granted by ALNYLAM
              hereunder. Furthermore, MERCK shall have no obligation to
              indemnify the ALNYLAM Indemnitees to the extent that the Losses
              arise out of or result from, directly or indirectly, any breach
              of, or inaccuracy in, any representation or warranty made by
              ALNYLAM in this Agreement, or any breach or violation of any
              covenant or agreement of ALNYLAM in or pursuant to this Agreement,
              or the negligence or willful misconduct by or of any of the
              ALNYLAM Indemnitees.

      10.5.2  GENERAL INDEMNIFICATION BY ALNYLAM. ALNYLAM shall indemnify, hold
              harmless, and defend MERCK, its Affiliates and their respective
              directors, officers, employees and agents ("MERCK INDEMNITEES")
              from and against any and all Losses arising out of or resulting
              from, directly or indirectly, (a) any

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              breach of, or inaccuracy in, any representation or warranty made
              by ALNYLAM in this Agreement, or any breach or violation of any
              covenant or agreement of ALNYLAM in or pursuant to this Agreement,
              or (b) the negligence or willful misconduct by or of ALNYLAM, its
              Affiliates and their respective Sublicensees, and their respective
              directors, officers, employees and agents. This indemnification
              excludes Losses arising out of Third Party Infringement Claims
              resulting from ALNYLAM's exercise in accordance with the terms of
              this Agreement of any intellectual property rights granted by
              MERCK hereunder. Furthermore, ALNYLAM shall have no obligation to
              indemnify the MERCK Indemnitees to the extent that the Losses
              arise out of or result from, directly or indirectly, any breach
              of, or inaccuracy in, any representation or warranty made by MERCK
              in this Agreement, or any breach or violation of any covenant or
              agreement of MERCK in or pursuant to this Agreement, or the
              negligence or willful misconduct by or of any of the MERCK
              Indemnitees.

      10.5.3  PRODUCT LIABILITY.

              (a)   MERCK shall indemnify and hold harmless the ALNYLAM
                    Indemnitees from, against and in respect of any and all
                    Losses arising out of Third Party product liability claims
                    incurred or suffered by the ALNYLAM Indemnitees, or any of
                    them, directly or indirectly relating to a [**] Product or
                    an RNAi Therapeutic Product and resulting from or arising
                    out of the negligence, willful misconduct, or breach of this
                    Agreement of or by MERCK or any of the other MERCK
                    Indemnitees, except to the extent caused by the negligence,
                    willful misconduct or breach of this Agreement of or by
                    ALNYLAM or any of the other ALNYLAM Indemnitees.

              (b)   ALNYLAM shall indemnify and hold harmless the MERCK
                    Indemnitees from, against and in respect of any and all
                    Losses arising out of Third Party product liability claims
                    incurred or suffered by the MERCK Indemnitees, or any of
                    them, directly or indirectly relating to a [**] Product or
                    an RNAi Therapeutic Product and resulting from or arising
                    out of the negligence, willful misconduct, or breach of this
                    Agreement of or by ALNYLAM or any of the other ALNYLAM
                    Indemnitees, except to the extent caused by the negligence,
                    willful misconduct or breach of this Agreement of or by
                    MERCK or any of the other MERCK Indemnitees.

              (c)   Any Losses arising out of Third Party product liability
                    claims (other than such claims entitled to indemnification
                    under Sections 10.5.3(a) or (b)) shall (i) be borne by the
                    Continuing Party, to the extent such Losses were incurred
                    with respect to the Development, Manufacture or
                    Commercialization of a Royalty-Bearing Product, (ii) be
                    included in U.S. Development Expenses and shared by the
                    Parties pursuant to Section 3.9.1, to the extent such Losses
                    were incurred with respect to the Development (and/or
                    related Manufacture) of a Profit-Sharing Product in the
                    United States, (iii) be included in Commercialization
                    Expenses for purposes of calculating U.S. Operating
                    Profit/Loss pursuant to Section 9.3,

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                    to the extent such Losses were incurred with respect to the
                    Commercialization (and/or related Manufacture) of a
                    Profit-Sharing Product in the United States, (iv) be borne
                    by MERCK, to the extent such Losses were incurred with
                    respect to Development, Manufacture or Commercialization of
                    a Profit-Sharing Product in the Territory outside the United
                    States or a MERCK Development Product in the Territory, or
                    (iv) unless MERCK exercises its Opt-In Right, be borne by
                    ALNYLAM to the extent such Losses were incurred with respect
                    to the development, manufacture or commercialization of a
                    [**] Product in the Territory.

      10.5.4  INDEMNIFICATION PROCEDURE. In the event of any such claim against
              any MERCK Indemnitee or ALNYLAM Indemnitee (individually, an
              "INDEMNITEE"), the indemnified Party shall promptly notify the
              other Party in writing of the claim and the indemnifying Party
              shall manage and control, at its sole expense, the defense of the
              claim and its settlement. The Indemnitee shall cooperate with the
              indemnifying Party and may, at its option and expense, be
              represented in any such action or proceeding. The indemnifying
              Party shall not be liable for any settlements, litigation costs or
              expenses incurred by any Indemnitee without the indemnifying
              Party's written authorization. Notwithstanding the foregoing, if
              the indemnifying Party believes that any of the exceptions to its
              obligation of indemnification of the Indemnitees set forth in
              Sections 10.5.1, 10.5.2 or 10.5.3 may apply, the indemnifying
              Party shall promptly notify the Indemnitees, which shall then have
              the right to be represented in any such action or proceeding by
              separate counsel at their expense; provided, that the indemnifying
              Party shall be responsible for payment of such expenses if the
              Indemnitees are ultimately determined to be entitled to
              indemnification from the indemnifying Party.

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11.   INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS

11.1  INVENTORSHIP. Inventorship for patentable Inventions shall be determined
      in accordance with United States patent laws for determining inventorship.

11.2  OWNERSHIP OF COLLABORATION INVENTIONS. The entire right, title and
      interest in:

      (a)   ALNYLAM Technology Collaboration Inventions and ALNYLAM Therapeutic
            Collaboration Inventions shall be owned solely by ALNYLAM;

      (b)   MERCK Technology Collaboration Inventions and MERCK Therapeutic
            Collaboration Inventions shall be owned solely by MERCK;

      (c)   Joint Collaboration Inventions shall be owned jointly by ALNYLAM and
            MERCK; and

      (d)   In the event MERCK, solely or jointly with ALNYLAM, makes any
            discovery, improvement, or Invention with respect to a [**] Target
            after receiving the Opt-In Information for such [**] Target, and
            prior to the exercise of MERCK's Opt-In Right or MERCK's failure to
            do so before the expiration of the Opt-In Right exercise period,
            then MERCK shall assign the same to ALNYLAM and it shall be an
            "ALNYLAM-ASSIGNED THERAPEUTIC COLLABORATION INVENTION" and shall be
            included within the definition of an ALNYLAM Therapeutic
            Collaboration Invention. In the event ALNYLAM, solely or jointly
            with MERCK, makes any discovery, improvement, or Invention with
            respect to a MERCK RNAi Novel Target after receiving the MERCK RNAi
            Novel Target Information for such MERCK RNAi Novel Target, and prior
            to its election either: (i) to select such MERCK RNAi Novel Target
            as a Co-Development Target or (ii) to decline to do so and ALNYLAM's
            return to MERCK of all information and materials relating to the
            MERCK RNAi Novel Target (as provided in Section 3.2.2(d)), then
            ALNYLAM shall assign the same to MERCK and it shall be a
            "MERCK-ASSIGNED THERAPEUTIC COLLABORATION INVENTION" and shall be
            included within the definition of a MERCK Therapeutic Collaboration
            Inventions.

      ALNYLAM shall promptly disclose to MERCK the development, making,
      conception or reduction to practice of ALNYLAM Technology Collaboration
      Inventions, ALNYLAM Therapeutic Collaboration Inventions and Joint
      Collaboration Inventions and MERCK shall promptly disclose to ALNYLAM the
      development, making, conception or reduction to practice of MERCK
      Technology Collaboration Inventions, MERCK Therapeutic Collaboration
      Inventions and Joint Collaboration Inventions.

      ALNYLAM shall cause and ensure that each and every ALNYLAM employee, agent
      or representative, including consultants and scientific advisors, working
      on the Collaboration has assigned or will assign to ALNYLAM his/her rights
      to Inventions. MERCK shall cause and ensure that each and every MERCK
      employee, agent or representative,

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      including consultants and scientific advisors, working on the
      Collaboration has assigned or will assign to MERCK his/her rights to
      Inventions.

11.3  PROSECUTION AND MAINTENANCE OF PATENT RIGHTS.

      11.3.1  MERCK TECHNOLOGY. MERCK has the sole responsibility to, at MERCK's
              discretion, file, conduct ex parte and inter partes prosecution,
              and maintain (including the defense of any interference or
              opposition proceedings) in the Territory, all Patent Rights
              comprising MERCK Technology (other than Joint Collaboration IP),
              in MERCK's name.

      11.3.2  ALNYLAM TECHNOLOGY. ALNYLAM has the sole responsibility to, at
              ALNYLAM's discretion, file, conduct ex parte and inter partes
              prosecution, and maintain (including the defense of any
              interference or opposition proceedings) in the Territory, all
              Patent Rights comprising ALNYLAM Technology (other than Joint
              Collaboration IP), in ALNYLAM's name.

      11.3.3  JOINT COLLABORATION IP. Subject to ALNYLAM's continuing right to
              the prior review of, comment on, revision to and approval of
              material documents, which shall not be unreasonably delayed or
              withheld, MERCK has the sole responsibility to, at MERCK's
              discretion, file, conduct ex parte and inter partes prosecution,
              and maintain (including the defense of any interference or
              opposition proceedings) in the Territory, all Patent Rights
              comprising Joint Collaboration IP (other than Broad RNAi
              Technology Collaboration IP), in the names of both ALNYLAM and
              MERCK. Notwithstanding the foregoing, if (a) ALNYLAM is the
              Continuing Party with respect to a Royalty-Bearing Product and the
              Joint Collaboration IP Covers or claims such Royalty-Bearing
              Product or (b) the Joint Collaboration IP Covers or claims a [**]
              Product and MERCK has not exercised its Opt-In Right, then ALNYLAM
              shall have the sole responsibility to, at ALNYLAM's discretion,
              file, conduct ex parte and inter partes prosecution, and maintain
              (including the defense of any interference or opposition
              proceedings) in the Territory, all Patent Rights comprising Joint
              Collaboration IP Covering or claiming such Royalty-Bearing Product
              or such [**] Product in the names of both ALNYLAM and MERCK. Each
              Party shall use Commercially Reasonable Efforts to make available
              to the Prosecuting Party or its authorized attorneys, agents or
              representatives, such of its employees as the Prosecuting Party in
              its reasonable judgment deems necessary in order to assist it in
              obtaining patent protection for such Joint Collaboration IP. Each
              Party shall sign, or use Commercially Reasonable Efforts to have
              signed, all legal documents necessary to file and prosecute patent
              applications or to obtain or maintain patents in respect of such
              Joint Collaboration IP, at no cost to the Prosecuting Party.

      11.3.4  BROAD RNAI TECHNOLOGY COLLABORATION IP. Notwithstanding Section
              11.3.3, subject to MERCK's continuing right to the prior review
              of, comment on, revision to and approval of material documents
              relating to Joint Collaboration IP, which shall not be
              unreasonably delayed or withheld, and except as may be otherwise
              agreed by the Parties, ALNYLAM has the sole responsibility to, at
              ALNYLAM's

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              discretion, file, conduct ex parte and inter partes prosecution,
              and maintain, including the defense of any interference or
              opposition proceedings, in the Territory, all Patent Rights
              comprising Broad RNAi Technology Collaboration IP in the names of
              both ALNYLAM and MERCK. MERCK shall use Commercially Reasonable
              Efforts to make available to ALNYLAM or its authorized attorneys,
              agents or representatives, such of its employees as ALNYLAM in its
              reasonable judgment deems necessary in order to assist it in
              obtaining patent protection for such Broad RNAi Technology
              Collaboration IP. MERCK shall sign or use Commercially Reasonable
              Efforts to have signed all legal documents necessary to file and
              prosecute patent applications or to obtain or maintain patents in
              respect of such Broad RNAi Technology Collaboration IP, at no cost
              to ALNYLAM.

      11.3.5  CONTINGENT RIGHTS. The Party having the right to prosecute and
              maintain patents under Sections 11.3.1, 11.3.2, 11.3.3 and 11.3.4
              shall be referred to as the "PROSECUTING PARTY". In the event the
              Prosecuting Party elects not to seek or continue to seek or
              maintain patent protection on any ALNYLAM Collaboration
              Inventions, MERCK Collaboration Inventions or Joint Collaboration
              IP which are subject to the other Party's licensed rights under
              Section 7 in the Territory, the other Party shall have the right
              (but not the obligation), at its expense, to prosecute and
              maintain in any country within the Territory patent protection on
              such ALNYLAM Collaboration Inventions, MERCK Collaboration
              Inventions or Joint Collaboration IP in the name of ALNYLAM, MERCK
              or both Parties as set forth in Sections 11.3.1, 11.3.2, 11.3.3
              and 11.3.4. The previously Prosecuting Party shall use
              Commercially Reasonable Efforts to make available to the other
              Party or its authorized attorneys, agents or representatives, such
              of its employees as are reasonably necessary to assist the other
              Party in obtaining and maintaining the patent protection described
              under this Section 11.3.5. The previously Prosecuting Party shall
              sign or use Commercially Reasonable Efforts to have signed all
              legal documents necessary to file and prosecute such patent
              applications or to obtain or maintain such patents.

      11.3.6  COOPERATION. Each Party hereby agrees: (a) to make its employees,
              agents and consultants reasonably available to the other Party (or
              to the other Party's authorized attorneys, agents or
              representatives), to the extent reasonably necessary to enable
              such Party to undertake patent prosecution; (b) to provide the
              other Party with copies of all material correspondence pertaining
              to prosecution with the patent offices; (c) to cooperate, if
              necessary and appropriate, with the other Party in gaining patent
              term extensions wherever applicable to Patent Rights; and (d) to
              endeavor in good faith to coordinate its efforts with the other
              Party to minimize or avoid interference with the prosecution and
              maintenance of the other Party's patent applications.

      11.3.7  PATENT EXPENSES. The patent filing, prosecution and maintenance
              expenses incurred after the Effective Date with respect to Patent
              Rights comprised of ALNYLAM Technology and MERCK Technology
              ("PATENT EXPENSES") shall be borne by each Party having the right
              to file, prosecute and maintain such Patent Rights under this
              Section 11.3, except that Patent Expenses incurred (a) by the

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              Opt-Out Party with respect to a Royalty-Bearing Product shall be
              reimbursed in full by the Continuing Party, (b) by a Party with
              respect to a Profit-Sharing Product in the United States prior to
              the First Commercial Sale of such product in the United States
              shall be included in U.S. Development Expenses for such product
              and shared by the Parties pursuant to Section 3.9, (c) by a Party
              with respect to a Profit-Sharing Product in the United States
              after the First Commercial Sale of such product in the United
              States shall be included in Commercialization Expenses for such
              product for purposes of calculating U.S. Operating Profit/Loss
              pursuant to Section 9.3, (d) by ALNYLAM with respect to a
              Profit-Sharing Product in the Territory outside the United States
              or a MERCK Development Product in the Territory shall be
              reimbursed in full by MERCK, or (e) unless MERCK has exercised its
              Opt-In Right, by MERCK with respect to a [**] Product shall be
              reimbursed in full by ALNYLAM.

11.4  INTERFERENCE, OPPOSITION, REEXAMINATION AND REISSUE. The Parties agree
      that:

      (a)     ALNYLAM shall, within ten (10) days of learning of such event,
              inform MERCK of any request for, or filing or declaration of, any
              interference, opposition or reexamination or reissue relating to
              ALNYLAM RNAi Patent Rights.

      (b)     MERCK shall, within ten (10) days of learning of such event,
              inform ALNYLAM of any request for, or filing or declaration of,
              any interference, opposition, or reexamination or reissue relating
              to MERCK RNAi Patent Rights and Patent Rights contained in MERCK
              RNAi Novel Target IP.

      (c)     In connection with any interference with a Third Party Patent
              Right, opposition by a Third Party and not on behalf of the other
              Party, reissue, or reexamination proceeding (other than one
              instituted by the other Party) relating to ALNYLAM RNAi Patent
              Rights, MERCK RNAi Patent Rights, MERCK RNAi Novel Target IP, or
              Joint Collaboration Patent Rights, MERCK and ALNYLAM shall
              cooperate fully and shall provide each other with any information
              or assistance that either may reasonably request. Each Party shall
              keep the other Party informed of developments in any such action
              or proceeding to the extent permissible by law and to the extent
              allowed by a written agreement with a Third Party under which a
              Party has obtained rights to the applicable patent rights.

11.5  THIRD PARTY INFRINGEMENT OF COLLABORATION INTELLECTUAL PROPERTY.

      11.5.1  NOTICES. Each Party shall promptly report in writing to the other
              Party during the Agreement Term any (a) known or suspected
              infringement of any ALNYLAM Technology or MERCK Technology being
              used in the Therapeutic Collaboration, including without
              limitation any Joint Collaboration IP or (b) unauthorized use or
              misappropriation of any Information by a Third Party of which it
              becomes aware, and shall provide the other Party with all
              available evidence supporting such infringement, or unauthorized
              use or misappropriation.

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       11.5.2 RIGHTS TO ENFORCE.

       (a)    MERCK'S FIRST RIGHT.

              Subject to the provisions of Section 11.5.2(b) and the provisions
              of any Third Party agreement under which MERCK's rights in MERCK
              Technology are granted or ALNYLAM's rights in ALNYLAM Technology
              are granted and of any In-License, in respect of each (i)
              Profit-Sharing Product in the Field in the Territory, (ii)
              Royalty-Bearing Product in the Field in the Territory for which
              MERCK is the Continuing Party, and (iii) MERCK Development
              Product, MERCK shall have the sole and exclusive right to initiate
              an infringement or other appropriate suit anywhere in the world
              against any Third Party who at any time has infringed, or is
              suspected of infringing, any Patent Rights, or of using without
              proper authorization any Know-How, comprising (x) MERCK Technology
              or ALNYLAM Technology that is licensed to MERCK under Article 7
              with respect to such Profit-Sharing Product, Royalty-Bearing
              Product or MERCK Development Product, as the case may be, or (y)
              Joint Collaboration IP Covering, claiming or relating to such
              Profit-Sharing Product, Royalty-Bearing Product, or MERCK
              Development Product, as the case may be.

       (b)    ALNYLAM'S FIRST RIGHT.

              (i)    Subject to the provisions of any Third Party agreement
                     under which ALNYLAM's rights in ALNYLAM Technology or
                     MERCK's rights in MERCK Technology are granted and of any
                     In-License, in respect of (x) each Royalty-Bearing Product
                     in the Field in the Territory for which ALNYLAM is the
                     Continuing Party, and (y) unless MERCK exercises its Opt-In
                     Right, each [**] Product, ALNYLAM shall have the sole and
                     exclusive right to initiate an infringement or other
                     appropriate suit anywhere in the world against any Third
                     Party who at any time has infringed, or is suspected of
                     infringing, any Patent Rights, or of using without proper
                     authorization any Know-How, comprising ALNYLAM Technology
                     or MERCK Technology that is licensed to ALNYLAM under
                     Section 7.1 with respect to such Royalty-Bearing Product or
                     [**] Product or Joint Collaboration IP Covering, claiming
                     or relating to such Royalty-Bearing Product or [**]
                     Product.

              (ii)   ALNYLAM shall have the sole and exclusive right to initiate
                     an infringement or other appropriate suit anywhere in the
                     world against any Third Party who at any time has
                     infringed, or is suspected of infringing, any Patent
                     Rights, or of using without proper authorization any
                     Know-How, comprising Broad RNAi Technology Collaboration
                     IP.

       11.5.3 STEP-IN RIGHTS. Subject to the provisions of any Third Party
              license agreement under which ALNYLAM's rights in ALNYLAM
              Technology are granted or MERCK's rights in MERCK Technology are
              granted, and of any In-Licenses, if the

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              Party with the first right to enforce (the "INITIAL ENFORCEMENT
              RIGHTS PARTY") ALNYLAM Technology, MERCK Technology, Joint
              Collaboration IP or Broad RNAi Technology Collaboration IP under
              Section 11.5.2 fails to initiate a suit or take other appropriate
              action that it has the initial right to initiate or take pursuant
              thereto within [**] days after becoming aware of the basis for
              such suit or action, then the other Party (the "SECONDARY
              ENFORCEMENT RIGHTS PARTY") may, in its discretion, provide the
              Initial Enforcement Rights Party with written notice of such
              Secondary Enforcement Rights Party's intent to initiate a suit or
              take other appropriate action. If the Secondary Enforcement Rights
              Party provides such notice and the Initial Enforcement Rights
              Party fails to initiate a suit or take such other appropriate
              action within [**] days after receipt of such notice from the
              Secondary Enforcement Rights Party, then the Secondary Enforcement
              Rights Party shall have the right to initiate a suit or take other
              appropriate action that it believes is reasonably required to
              protect its ownership interest in and to, or licensed interest
              under, as applicable, ALNYLAM Technology and MERCK Technology,
              including without limitation, Joint Collaboration IP.

       11.5.4 PROCEDURES; EXPENSES AND RECOVERIES. The Party having the right to
              initiate any infringement suit under Section 11.5.2 above shall
              have the sole and exclusive right to select counsel for any such
              suit and shall pay all expenses of the suit, including attorneys'
              fees and court costs and reimbursement of the other Party's
              reasonable out-of-pocket expense in rendering assistance requested
              by the initiating Party, except that such expenses in respect of
              any Profit-Sharing Product in the United States (i) prior to the
              First Commercial Sale of such Profit-Sharing Product in the United
              States shall be included in U.S. Development Expenses for such
              product and shared by the Parties pursuant to Section 3.9.1, and
              (ii) after the First Commercial Sale of such Profit Sharing
              Product in the United States shall be Commercialization Expenses
              for purposes of calculating U.S. Operating Profit/Loss pursuant to
              Section 9.3. If required under applicable law in order for the
              initiating Party to initiate and/or maintain such suit, or if
              either Party is unable to initiate or prosecute such suit solely
              in its own name or it is otherwise advisable to obtain an
              effective legal remedy, in each case, the other Party shall join
              as a party to the suit and will execute and cause its Affiliates
              to execute all documents necessary for the initiating Party to
              initiate litigation to prosecute and maintain such action. In
              addition, at the initiating Party's request, the other Party shall
              provide reasonable assistance to the initiating Party in
              connection with an infringement suit at no charge to the
              initiating Party except for reimbursement by the initiating Party
              of reasonable out-of-pocket expenses incurred in rendering such
              assistance. The non-initiating Party shall have the right to
              participate and be represented in any such suit by its own counsel
              at its own expense. If the Parties obtain from a Third Party, in
              connection with such suit, any damages, license fees, royalties or
              other compensation (including any amount received in settlement of
              such litigation), such amounts shall be allocated as follows:

              (a)    In all cases, to reimburse each Party for all expenses of
                     the suit, including attorneys' fees and disbursements,
                     court costs and other litigation expenses; and

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              (b)    If the infringement by the Third Party is related to a
                     Profit-Sharing Product in the United States (i) prior to
                     the First Commercial Sale of the Profit-Sharing Product in
                     the United States, the balance shall be applied to
                     reimburse the Parties for U.S. Development Expenses in
                     accordance with their share of such expenses as set forth
                     in Section 3.9.1 and (ii) after the First Commercial Sale
                     of the Profit-Sharing Product in the United States, the
                     balance shall be deemed Net Sales for the purpose of
                     calculating U.S. Operating Profit/Loss for such
                     Profit-Sharing Product pursuant to Section 9.3; or

              (c)    If the infringement by the Third Party is related to a
                     Profit-Sharing Product in the Territory outside the United
                     States, the remaining amount shall be treated as if it were
                     Net Sales of MERCK, with ALNYLAM receiving a royalty on
                     such remaining amount pursuant to the terms of Section
                     9.4.2, and the balance being retained by MERCK; or

              (d)    If the infringement by the Third Party is related to a
                     Royalty-Bearing Product, the remaining amount shall be
                     treated as if it were Net Sales of the Continuing Party,
                     with the other Party receiving a royalty on such remaining
                     amount pursuant to the terms of Section 9.4.3, and the
                     balance being retained by the Continuing Party; or

              (e)    If the infringement by the Third Party is related to a
                     MERCK Development Product, the remaining amount shall be
                     treated as if it were Net Sales of MERCK, with ALNYLAM
                     receiving a royalty on such remaining amount pursuant to
                     the terms of Section 9.4.4, and the balance being retained
                     by MERCK; or

              (f)    If the infringement by the Third Party is related to a [**]
                     Product, unless MERCK has exercised its Opt-In Right, the
                     remaining amount shall be treated as if it were Net Sales
                     of ALNYLAM, with MERCK receiving a royalty on such
                     remaining amount pursuant to the terms of Section 9.4.1,
                     and the balance being retained by ALNYLAM.

11.6   CLAIMED INFRINGEMENT.

       11.6.1 NOTICE. In the event that a Third Party at any time provides
              written notice of a claim to, or brings an action, suit or
              proceeding against, any Party, or any of their respective
              Affiliates or Sublicensees, claiming infringement of its patent
              rights or unauthorized use or misappropriation of its know-how,
              based upon an assertion or claim arising out of the Development,
              Manufacture or Commercialization of RNAi Therapeutic Products in
              the Field in the Territory ("INFRINGEMENT CLAIM"), such Party
              shall promptly notify the other Party of the claim or the
              commencement of such action, suit or proceeding, enclosing a copy
              of the claim and all papers served. Each Party agrees to make
              available to the other Party its advice and counsel regarding the
              technical merits of any such claim at no cost to

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              the other Party and to offer reasonable assistance to the other
              Party at no cost to the other Party.

       11.6.2 PROFIT-SHARING PRODUCTS. Any Infringement Claim brought against
              either Party or its Affiliates or Sublicensees arising out of the
              Development, Manufacture or Commercialization of any
              Profit-Sharing Product in the Field in the Territory, shall be
              defended by MERCK if it so desires; provided, however, that
              ALNYLAM shall defend any such Infringement Claim relating to Broad
              RNAi Technology, if it so desires. All litigation costs and
              expenses incurred by the Defending Party (defined below) in
              connection with such Infringement Claim, and all damages, payments
              and other amounts awarded against, or payable by, either Party
              under any settlement with such Third Party (a) with respect to the
              United States (i) prior to the First Commercial Sale of the
              Profit-Sharing Product in the United States, shall be U.S.
              Development Expenses for such Profit-Sharing Product as set forth
              in Section 3.9 and (ii) after the First Commercial Sale of the
              Profit-Sharing Product in the United States, shall be
              Commercialization Expenses for purposes of calculating U.S.
              Operating Profit/Loss in respect of such Profit-Sharing Product
              pursuant to Section 9.3, and (b) with respect to the Territory
              outside the United States, shall be borne by MERCK.

       11.6.3 ROYALTY-BEARING PRODUCTS, MERCK DEVELOPMENT PRODUCTS AND [**]
              PRODUCTS. In respect of any Royalty-Bearing Product, the
              applicable Continuing Party shall assume full responsibility for
              any Infringement Claims brought against either Party or its
              Affiliates or Sublicensees arising out of the Development,
              Manufacture or Commercialization of such Royalty-Bearing Product.
              All liabilities, damages, costs and expenses arising out of such
              Third Party Infringement Claims shall be borne by the Continuing
              Party. In respect of any MERCK Development Product, (a) MERCK
              shall assume full responsibility for any Infringement Claims
              brought against either Party or its Affiliates or Sublicensees
              arising out of the Development, Manufacture or Commercialization
              of such MERCK Development Product and (b) all liabilities,
              damages, costs and expenses arising out of such Third Party
              Infringement Claims shall be borne by MERCK. Unless MERCK
              exercises its Opt-In Right, in respect of any [**] Product, (i)
              ALNYLAM shall assume full responsibility for any Infringement
              Claims brought against either Party or its Affiliates or
              Sublicensees arising out of the development, manufacture or
              commercialization of such [**] Product and (ii) all liabilities,
              damages, costs and expenses arising out of such Third Party
              Infringement Claims shall be borne by ALNYLAM.

       11.6.4 PROCEDURE. The Party having the initial right to defend an
              Infringement Claim shall be referred to as the "DEFENDING Party."
              The Defending Party shall have the sole and exclusive right to
              select counsel for any Infringement Claim; provided, that it shall
              consult with the other Party with respect to selection of counsel
              for such defense. The Defending Party shall keep the other Party
              informed, and shall from time to time consult with the other Party
              regarding the status of any such claims and shall provide the
              other Party with copies of all documents filed in, and all written
              communications relating to, any suit brought in

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              connection with such claims. The other Party shall also have the
              right to participate and be represented in any such claim or
              related suit, at its own expense. The other Party shall have the
              sole and exclusive right to control the defense of an Infringement
              Claim in the event the Defending Party fails to exercise its right
              to assume such defense within [**] days following written notice
              from the other Party of such Infringement Claim. No Party shall
              settle any claims or suits involving rights of another Party
              without obtaining the prior written consent of such other Party,
              which consent shall not be unreasonably withheld. Notwithstanding
              the foregoing, the provisions of this Section 11.6.4 shall only
              apply to a MERCK Development Product to the extent any ALNYLAM
              Technology Covering or claiming such MERCK Development Product is
              licensed to MERCK pursuant to Section 7.1 and to a [**] Product to
              the extent any MERCK Technology Covering or claiming such [**]
              Product is licensed to ALNYLAM pursuant to Section 7.1.

       11.6.5 LIMITATIONS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ARTICLE 10,
              THE FOREGOING STATES THE ENTIRE RESPONSIBILITY OF ALNYLAM AND
              MERCK, AND THE SOLE AND EXCLUSIVE REMEDY OF ALNYLAM OR MERCK, AS
              THE CASE MAY BE, IN THE CASE OF ANY CLAIMED INFRINGEMENT OF ANY
              THIRD PARTY PATENT RIGHTS OR UNAUTHORIZED USE OR MISAPPROPRIATION
              OF ANY THIRD PARTY'S KNOW-HOW.

11.7   OTHER INFRINGEMENT RESOLUTIONS. In the event of a dispute or potential
       dispute that has not ripened into a demand, claim or suit of the types
       described in Sections 11.5 and 11.6 of this Agreement (e.g., actions
       seeking declaratory judgments and revocation proceedings), the same
       principles governing control of the resolution of the dispute, consent to
       settlements of the dispute, and implementation of the settlement of the
       dispute (including the sharing in and allocating the payment or receipt
       of damages, license fees, royalties and other compensation) shall apply.

11.8   PRODUCT TRADEMARKS.

       11.8.1 OWNERSHIP OF PRODUCT TRADEMARKS. MERCK shall own the Product
              Trademarks for Profit-Sharing Products and MERCK Development
              Products in the Territory and shall be responsible for filing and
              maintaining the Product Trademarks for such RNAi Therapeutic
              Products in the Territory (including payment of costs associated
              therewith), subject to reimbursement of such costs in the United
              States as Commercialization Expenses for purposes of calculating
              U.S. Operating Profit/Loss for such Profit-Sharing Product
              pursuant to Section 9.3. Each Party shall have the right to
              monitor the quality of Profit-Sharing Products in accordance with
              reasonable procedures to be agreed upon by the Parties. The
              Continuing Party shall own the Product Trademarks for
              Royalty-Bearing Products and shall be solely responsible for
              filing and maintaining the Product Trademarks for such RNAi
              Therapeutic Products in the Territory (including payment of costs
              associated therewith). Promptly after exercising its Opt-Out Right
              with respect to such Royalty-Bearing Product, MERCK shall assign
              to ALNYLAM all Product

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              Trademarks for such Royalty-Bearing Product Controlled by MERCK in
              accordance with terms and conditions to be negotiated by the
              Parties in good faith. Unless MERCK exercises its Opt-In Right,
              ALNYLAM shall own the Product Trademarks for [**] Products and
              shall be solely responsible for filing and maintaining the Product
              Trademarks for such [**] Products in the Territory (including
              payment of costs associated therewith).

       11.8.2 THIRD PARTY INFRINGEMENT.

              (a)    PROFIT-SHARING PRODUCTS. In the event that either Party
                     becomes aware of any infringement of a Product Trademark
                     for a Profit-Sharing Product by a Third Party, it shall
                     promptly notify the other and the Parties shall consult
                     with each other and jointly determine the best way to
                     prevent such infringement, including without limitation by
                     the institution of legal proceedings against such Third
                     Party. All out-of-pocket costs, including attorneys' fees,
                     relating to such legal proceedings incurred (a) with
                     respect to the United States (i) prior to the First
                     Commercial Sale of the Profit-Sharing Product in the United
                     States shall be included in U.S. Development Expenses for
                     such Profit-Sharing Product and shared by the Parties
                     pursuant to Section 3.9.1 and (ii) after the First
                     Commercial Sale of the Profit-Sharing Product in the United
                     States shall be included in Commercialization Expenses for
                     purposes of calculating U.S. Operating Profit/Loss for such
                     Profit-Sharing Product pursuant to Section 9.3 and (b) in
                     the Territory outside the United States shall be borne
                     solely by MERCK.

              (b)    ROYALTY-BEARING PRODUCTS, MERCK DEVELOPMENT PRODUCTS AND
                     [**] PRODUCTS. The applicable Continuing Party shall assume
                     full responsibility, at its sole cost and expense, for any
                     infringement of a Product Trademark for a Royalty-Bearing
                     Product by a Third Party. MERCK shall assume full
                     responsibility, at its sole cost and expense, for any
                     infringement of a Product Trademark for a MERCK Development
                     Product by a Third Party. Unless MERCK has exercised its
                     Opt-In Right, ALNYLAM shall assume full responsibility, at
                     its sole cost and expense, for any infringement of a
                     Product Trademark for a [**] Product by a Third Party.

       11.8.3 CLAIMED INFRINGEMENT. If a Third Party challenges the Parties'
              right to commercialize a Profit-Sharing Product under the selected
              Product Trademark, the JSC shall consider the grounds for such
              challenge and recommend to MERCK a course of action in the
              affected market based on an assessment of the legal merits of such
              Third Party claim. The foregoing procedure shall also be followed
              in the event of an objection to the selected Product Trademark
              raised by a Regulatory Authority. In the case of a Royalty-Bearing
              Product, the Continuing Party will defend and indemnify the
              Opt-Out Party for and against any claims of infringement of the
              rights of a Third Party by the use of a Product Trademark in
              connection with such Royalty-Bearing Product. In the case of a
              MERCK

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              Development Product, MERCK will defend and indemnify ALNYLAM for
              and against any claims of infringement of the rights of a Third
              Party by the use of a Product Trademark in connection with such
              MERCK Development Product. In the case of a [**] Product, unless
              MERCK has exercised its Opt-In Right, ALNYLAM will defend and
              indemnify MERCK for and against any claims of infringement of the
              rights of a Third Party by the use of a Product Trademark in
              connection with such [**] Product.

11.9   PATENT TERM EXTENSIONS. The Parties shall use reasonable efforts to
       obtain all available supplementary protection certificates ("SPC") and
       other extensions of Patent Rights (including those available under the
       Hatch-Waxman Act) Covering or claiming RNAi Therapeutic Products. Each
       Party shall execute such authorizations and other documents and take such
       other actions as may be reasonably requested by the other Party to obtain
       such extensions. The Parties shall cooperate with each other in gaining
       patent term restorations, extensions and/or SPCs wherever applicable to
       such Patent Rights. The Party first eligible to seek patent term
       restoration or extension of any such Patent Rights or any SPC related
       thereto shall have the right to do so; provided, that if in any country
       the first Party has an option to extend the patent term for only one of
       several patents, the first Party shall consult with the other Party
       before making the election. If more than one patent is eligible for
       extension or patent term restoration, the Parties shall agree upon a
       strategy that shall maximize patent protection and commercial value for
       RNAi Therapeutic Products. All filings for such extensions and
       certificates shall be made by the Party to whom responsibility for
       prosecution and maintenance of such Patent Rights are assigned, provided,
       that in the event that the Party to whom such responsibility is assigned
       elects not to file for an extension or SPC, such Party shall (i) inform
       the other Party of its intention not to file and (ii) grant the other
       Party the right to file for such extension or SPC in the patentee's name
       and such Party shall provide all necessary assistance in connection
       therewith. The provisions of this Section 11.9 shall also apply to Patent
       Rights Covering or claiming a MERCK Development Product to the extent
       such Patent Rights are included in ALNYLAM Technology licensed to MERCK
       with respect to such MERCK Development Product pursuant to Section 7.1
       and to a [**] Product to the extent such Patent Rights are included in
       MERCK Technology licensed to ALNYLAM with respect to such [**] Product
       pursuant to Section 7.1.

11.10  PATENT CERTIFICATION. To the extent required by law or permitted by law,
       the Parties shall use Commercially Reasonable Efforts to maintain with
       the applicable Regulatory Authorities during the Agreement Term correct
       and complete listings of applicable Patent Rights for RNAi Therapeutic
       Products and [**] Products being commercialized, including all so called
       "Orange Book" listings required under the Hatch-Waxman Act. The
       provisions of this Section 11.10 shall apply to Patent Rights Covering or
       claiming a MERCK Development Product to the extent such Patent Rights are
       included in ALNYLAM Technology licensed to MERCK with respect to such
       MERCK Development Product pursuant to Section 7.1 and to a [**] Product
       to the extent such Patent Rights are included in MERCK Technology
       licensed to ALNYLAM with respect to such [**] Product pursuant to Section
       7.1.

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12.    TERM AND TERMINATION

12.1   TERM AND EXPIRATION.

       12.1.1 COLLABORATION TERM. Except as otherwise provided herein, the term
              of the Collaboration shall commence on the Original Effective Date
              and continue until the end of the Therapeutic Collaboration Term
              as set forth below ("COLLABORATION TERM"). The term of the
              Therapeutic Collaboration shall commence on the one (1) year
              anniversary of the Original Effective Date and continue for a
              period of four (4) years and thereafter until the date on which no
              Profit-Sharing Products are being Developed or Commercialized by
              the Parties ("THERAPEUTIC COLLABORATION TERM"). Expiration of the
              Therapeutic Collaboration shall only affect the terms,
              responsibilities and activities undertaken in accordance with the
              Therapeutic Collaboration and shall not affect the other terms of
              this Agreement.

       12.1.2 EXPIRATION OF AGREEMENT. This Agreement shall be effective as of
              the Original Effective Date and, unless terminated earlier
              pursuant to Sections 12.2 below, this Agreement shall continue in
              effect until expiration of all royalty obligations and
              profit-sharing obligations hereunder ("AGREEMENT TERM"). Upon
              expiration of the Agreement Term, all licenses of the Parties
              under Article 7 then in effect shall become fully paid-up,
              perpetual, non-exclusive licenses.

12.2   TERMINATION FOR CAUSE.

       12.2.1 CAUSE FOR TERMINATION. This Agreement may be terminated at any
              time during the Agreement Term:

              (a)    upon written notice by either Party (the "NON-BREACHING
                     PARTY") if the other Party (the "BREACHING PARTY") is in
                     breach of its material obligations hereunder by causes and
                     reasons within its control and has not cured such breach
                     within ninety (90) days after notice requesting cure of the
                     breach; provided, however, in the event of a good faith
                     dispute with respect to the existence of a material breach,
                     the ninety (90) day cure period shall be tolled until such
                     time as the Dispute is resolved pursuant to Section 13.6
                     hereof; or

              (b)    by either Party upon the filing or institution of
                     bankruptcy, reorganization, liquidation or receivership
                     proceedings, or upon an assignment of a substantial portion
                     of the assets for the benefit of creditors by the other
                     Party; provided, however, in the case of any involuntary
                     bankruptcy or receivership proceeding such right to
                     terminate shall only become effective if the Party consents
                     to the involuntary bankruptcy, receivership or such
                     proceeding is not dismissed within ninety (90) days after
                     the filing thereof.

12.3   EFFECT OF TERMINATION FOR CAUSE.

       12.3.1 MATERIAL BREACH RELATING TO THE DEVELOPMENT OR COMMERCIALIZATION
              OF A ROYALTY-BEARING PRODUCT. If the material breach has, or is
              reasonably likely to have, a material adverse effect for the
              Non-Breaching Party with respect to the

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              Development, Manufacture or Commercialization of a particular
              Royalty-Bearing Product in either a particular Region or Regions
              or with respect to the entire Territory, then this Agreement shall
              not terminate in its entirety, nor with respect to such
              Royalty-Bearing Product or in the Territory outside of any
              affected Region(s), provided that with respect to all affected
              Region(s):

              (a)    except to the extent such licenses are necessary for the
                     Breaching Party to perform its obligations under clause (c)
                     below, the licenses granted to the Breaching Party under
                     this Agreement with respect to the Development, Manufacture
                     and Commercialization of such Royalty-Bearing Product in
                     such affected Region(s) shall terminate;

              (b)    the Breaching Party hereby grants to the Non-Breaching
                     Party an exclusive (even as to the Breaching Party),
                     non-royalty-bearing, perpetual license under (i) ALNYLAM
                     RNAi Technology, ALNYLAM Collaboration Inventions, ALNYLAM
                     Therapeutic Collaboration IP and ALNYLAM RNAi Patent Rights
                     if the Breaching Party is ALNYLAM, or (ii) MERCK RNAi
                     Technology, MERCK RNAi Patent Rights, MERCK Therapeutic
                     Collaboration IP, MERCK Collaboration Inventions and MERCK
                     RNAi Novel Target IP if the Breaching Party is MERCK, to
                     Develop, Manufacture and Commercialize such Royalty-Bearing
                     Product in the Field in such affected Region(s); provided,
                     however, that to the extent such license includes a
                     sublicense under Necessary Third Party IP, -------
                     including without limitation the Existing ALNYLAM
                     In-Licenses, the non-Breaching Party shall be fully
                     responsible for all royalties, milestones or other payments
                     under such In-Licenses reasonably allocable to such
                     Royalty-Bearing Product in such affected Region(s);

              (c)    in the event that the Breaching Party is Manufacturing and
                     supplying the Royalty-Bearing Product pursuant to Section
                     6.4, the Breaching Party shall have the obligation, if
                     requested by the Non-Breaching Party, to continue to
                     Manufacture and supply the Royalty-Bearing Product for such
                     affected Region(s) in accordance with, and for the time
                     period described in, Section 6.4; and

              (d)    in the event that the Non-Breaching Party is Manufacturing
                     and supplying the Royalty-Bearing Product pursuant to
                     Section 6.4, the Breaching Party shall have the obligation
                     to reimburse the Non-Breaching Party for any committed and
                     non-refundable or non-creditable costs or expenses incurred
                     by the Non-Breaching Party, as of the date of notice of
                     termination, with respect to the supply of such
                     Royalty-Bearing Product for the Breaching Party for such
                     affected Region(s), and shall purchase, at the Cost of
                     Goods Sold, any Royalty-Bearing Product Manufactured and
                     supplied by the Non-Breaching Party for such Region(s), as
                     well as any work in progress, raw materials, intermediates
                     or components relating to the Royalty-Bearing Product, in
                     each case in accordance with, and for the time period
                     described in Section 6.4.

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       12.3.2 MATERIAL BREACH RELATING TO THE DEVELOPMENT OR COMMERCIALIZATION
              OF A PROFIT-SHARING PRODUCT. If the material breach has, or is
              reasonably likely to have, a material adverse effect on the
              Development, Manufacture or Commercialization of a particular
              Profit-Sharing Product in either a particular Region or Regions or
              with respect to the entire Territory, then this Agreement shall
              not terminate in its entirety, nor with respect to such
              Profit-Sharing Product in the Territory outside of any affected
              Region(s), provided that with respect to all affected Region(s):

              (a)    the licenses granted to the Breaching Party under this
                     Agreement with respect to the Development, Manufacture and
                     Commercialization of such Profit-Sharing Product in the
                     affected Region(s) shall terminate;

              (b)    the licenses granted to the Non-Breaching Party by the
                     Breaching Party with respect to such Profit-Sharing Product
                     in the affected Region(s) pursuant to Article 7 shall
                     continue in full force and effect; and

              (c)    the Non-Breaching Party shall have the right to Develop,
                     Manufacture and Commercialize such Profit-Sharing Product
                     in the Field in the affected Region(s), either alone or in
                     collaboration with Third Parties, without any financial
                     obligation to the Breaching Party; provided, however, that
                     to the extent the licenses in Section 12.3.2(b) include a
                     sublicense under Necessary Third Party IP, including
                     without limitation the Existing ALNYLAM In-Licenses, the
                     Non-Breaching Party shall be fully responsible for all
                     royalties, milestones or other payments under such
                     In-Licenses reasonably allocable to such Profit-Sharing
                     Product in the affected Region(s).

       12.3.3 MATERIAL BREACH RELATING TO THE DEVELOPMENT OR COMMERCIALIZATION
              OF A MERCK DEVELOPMENT PRODUCT OR [**] PRODUCT. If the material
              breach has, or is reasonably likely to have, a material adverse
              effect on the Development, Manufacture or Commercialization of a
              particular MERCK Development Product in a particular Region or
              Regions or with respect to the entire Territory, or a material
              adverse effect on the development, manufacture or
              commercialization of a particular [**] Product in a particular
              Region or Regions or with respect to the entire Territory, then in
              either case this Agreement shall not terminate in its entirety,
              nor with respect to such MERCK Development Product or [**]
              Product, as the case may be, in the Territory outside of any
              affected Region(s); provided that with respect to such all
              affected Region(s) the licenses granted to the Breaching
              Party under this Agreement with respect to such MERCK Development
              Product or [**] Product, as the case may be, and, in the case of
              the MERCK Development Product, the prohibition in Section
              3.2.2(d)(iii) with respect to such MERCK Development Product,
              shall terminate.

       12.3.4 OTHER MATERIAL BREACHES. If the material breach does not have, or
              is not reasonably likely to have, a material adverse effect on the
              Development, Manufacture or Commercialization of any RNAi
              Therapeutic Product or [**]

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              Product, then the Non-Breaching Party shall be entitled to pursue
              any and all remedies available to it for such breach, including
              without limitation, damages and specific performance, other than
              the termination of this Agreement in whole or in part.

       12.3.5 TERMINATION UPON BANKRUPTCY OF A PARTY. If this Agreement is
              terminated by either Party (the "NON-BANKRUPT PARTY") pursuant to
              Section 12.2.1(b) due to the rejection of this Agreement by or on
              behalf of the other Party (the "BANKRUPT PARTY") under Section 365
              of the United States Bankruptcy Code (the "CODE"), all licenses
              and rights to licenses granted under or pursuant to this Agreement
              by the Bankrupt Party to the Non-Bankrupt Party are, and shall
              otherwise be deemed to be, for purposes of Section 365(n) of the
              Code, licenses of rights to "intellectual property" as defined
              under Section 101(35A) of the Code. The Parties agree that the
              Non-Bankrupt Party, as a licensee of such rights under this
              Agreement, shall retain and may fully exercise all of its rights
              and elections under the Code, and that upon commencement of a
              bankruptcy proceeding by or against the Bankrupt Party under the
              Code, the Non-Bankrupt Party shall be entitled to a complete
              duplicate of or complete access to (as the Non-Bankrupt Party
              deems appropriate) any such intellectual property and all
              embodiments of such intellectual property. Such intellectual
              property and all embodiments thereof shall be promptly delivered
              to the Non-Bankrupt Party (i) upon any such commencement of a
              bankruptcy proceeding upon written request therefore by the
              Non-Bankrupt Party, unless the Bankrupt Party elects to continue
              to perform all of its obligations under this Agreement, or (ii) if
              not delivered under (i) above, upon the rejection of this
              Agreement by or on behalf of the Bankrupt Party upon written
              request therefore by the Non-Bankrupt Party. The foregoing
              provisions are without prejudice to any rights the Non-Bankrupt
              Party may have arising under the Code or other applicable law.

       12.3.6 DEFINITION OF REGION. For purposes of this Article 12, "REGION"
              shall mean any of the following regions in the Territory: (a) the
              United States; (b) the European Union, (c) the region comprised of
              the following countries: Australia, Bangladesh, Bhutan, Brunei,
              Darussalam, Burma, Cambodia, China (including Hong Kong), India,
              Indonesia, Japan, Laos, Macao, Malaysia, Mongolia, Nepal, New
              Zealand, Papua New Guinea, Pakistan, Philippines, Republic of
              Korea, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam; and (d)
              the region comprised of the countries of the world not included in
              clauses (a), (b) or (c) above.

12.4   OTHER CONSEQUENCES OF TERMINATION OR THE EXERCISE OF OPT-OUT RIGHTS.

       12.4.1 OTHER CONSEQUENCES OF TERMINATION. For purposes of this Section
              12.4.1, "TRANSFERRING PARTY" shall mean the Breaching Party or the
              Opt-Out Party, as the case may be, and "RECEIVING PARTY" shall
              mean the Non-Breaching Party or the Continuing Party, as the case
              may be. In addition to the consequences set forth in Sections 5.2
              and 12.3 and without limiting any other legal or equitable
              remedies that a Party may have, in the event of a termination
              pursuant to Section

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              12.2 with respect to the Region(s) to which such termination
              applies, or upon the exercise by a Party of its Opt-Out Rights
              pursuant to Section 5.2:

              (a)    with respect to each Royalty-Bearing Product or
                     Profit-Sharing Product that is the subject of the material
                     breach or the exercise of an Opt-Out Right, the
                     Transferring Party shall:

                     (i)    promptly provide, or cause to be provided, to the
                            Receiving Party all Know-How it Controls that
                            pertains to the applicable Royalty-Bearing Product
                            or Profit-Sharing Product not previously provided by
                            it to the Receiving Party reasonably necessary for
                            the practice of the license rights granted to such
                            other Party under this Agreement;

                     (ii)   promptly transfer, or cause to be transferred, to
                            the Receiving Party, subject to the completion of
                            the on-going Clinical Studies under subsection (c)
                            below, as applicable, all Regulatory Approvals and
                            related regulatory documents and publicly disclosed
                            Product Trademarks for the applicable
                            Royalty-Bearing Product or Profit-Sharing Product in
                            its possession (only with respect to the terminated
                            Region(s), in the event of termination pursuant to
                            Section 12.2), or, if transfer or assignment of any
                            such Regulatory Approvals is not legally
                            permissible, the Transferring Party shall grant the
                            Receiving Party, the right to access, use and
                            cross-reference such Regulatory Approvals and
                            related regulatory documents;

                     (iii)  promptly transfer, or cause to be transferred, to
                            the Receiving Party any and all tangible
                            manifestations and embodiments of the other Party's
                            Know-How and other materials provided by it pursuant
                            to this Agreement in respect of such Royalty-Bearing
                            Product or Profit-Sharing Product (provided, that in
                            the event of termination pursuant to Section 12.2,
                            such transfer shall only be to the extent necessary
                            to enable the Receiving Party to exercise its rights
                            with respect to the terminated Region(s);

                     (iv)   promptly assign, or cause to be assigned, to the
                            Receiving Party upon the Receiving Party's request,
                            any Third Party agreements to which the Transferring
                            Party is a party, to the extent such agreements
                            relate to the Development, Manufacture or
                            Commercialization of the applicable Royalty-Bearing
                            Product or Profit-Sharing Product (in the terminated
                            Region(s), in the event of termination pursuant to
                            Section 12.2);

              (b)    The Breaching Party will allow the Non-Breaching Party, or
                     its contract research organization, to complete any
                     on-going Clinical Studies already Initiated by the
                     Breaching Party or its contract research organization (with
                     respect to the terminated Region(s), in the event of
                     termination pursuant to Section 12.2), or if this is not
                     reasonably practicable, the Breaching Party will complete
                     such Clinical Studies at the Non-Breaching Party's expense.
                     At the option of the Non-Breaching Party, the Breaching
                     Party will assign

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                     to the Non-Breaching Party, all investigator and other
                     agreements relating to other clinical trials (with respect
                     to the terminated Region(s), in the event of termination
                     pursuant to Section 12.2), to the extent legally
                     permissible; and

              (c)    The Transferring Party will cooperate in any reasonable
                     manner requested by the Receiving Party to achieve a smooth
                     transition of the development, manufacturing, marketing and
                     sales of the Royalty-Bearing Product or Profit-Sharing
                     Product to it or its licensees as contemplated by Section
                     5.2 or 12.3, as applicable, such as transfer of its
                     Know-How relating to Manufacturing and assistance in
                     connection with regulatory matters relating to the transfer
                     of the Royalty-Bearing Product or Profit-Sharing Product.

12.5   EFFECT OF EXPIRATION OR TERMINATION; SURVIVAL. Expiration or termination
       of the Agreement shall not relieve the Parties of any obligation accruing
       prior to such expiration or termination. Any expiration or termination of
       this Agreement shall be without prejudice to the rights of either Party
       against the other accrued or accruing under this Agreement prior to
       expiration or termination, including, without limitation, the obligation
       to pay royalties for RNAi Therapeutic Products and [**] Products sold
       prior to such expiration or termination. The provisions of Articles 8,
       11, and 13 and Sections 10.5, 12.3, 12.4 and 12.5 shall survive the
       expiration or termination of the Agreement. Except as set forth in this
       Article 12, upon termination or expiration of this Agreement all other
       rights and obligations cease.

13.    MISCELLANEOUS

13.1   FORCE MAJEURE. Neither Party shall be held liable to the other Party nor
       be deemed to have defaulted under or breached the Agreement for failure
       or delay in performing any obligation under this Agreement when such
       failure or delay is caused by or results from causes beyond the
       reasonable control of the affected Party including, but not limited to,
       embargoes, war, acts of war (whether war be declared or not),
       insurrections, riots, civil commotions, strikes, lockouts or other labor
       disturbances, fire, floods, or other acts of God, or acts, omissions or
       delays in acting by any governmental authority or the other Party. The
       affected Party shall notify the other Party of such force majeure
       circumstances as soon as reasonably practical, and shall promptly
       undertake all reasonable efforts necessary to cure such force majeure
       circumstances.

13.2   ASSIGNMENT. Except as provided in this Section 13.2, this Agreement may
       not be assigned or otherwise transferred, nor may any right or obligation
       hereunder be assigned or transferred, by either Party without the consent
       of the other Party. Either Party may, without the other Party's consent,
       assign this Agreement and its rights and obligations hereunder in whole
       or in part to an Affiliate. In any event, the assigning Party shall
       remain responsible for the performance by its Affiliate of this Agreement
       or any obligations hereunder so assigned to such Affiliate, and such
       assignment shall terminate, and all rights so assigned shall revert to
       the assigning Party, if and when such Affiliate

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       ceases to be an Affiliate of the assigning Party. Furthermore, in
       connection with a Change of Control (as defined below) of a Party,
       subject to the provisions of Section 13.3, such Party may assign this
       Agreement and its rights and obligations hereunder in whole to the
       surviving entity or acquirer upon ninety (90) days' prior written
       notification to the other Party. Any attempted assignment not in
       accordance with this Section 13.2 shall be void.

       Notwithstanding the foregoing, the rights of any permitted assignee of
       ALNYLAM's rights to practice any of MERCK's intellectual property,
       including but not limited to MERCK RNAi Patent Rights, MERCK RNAi
       Technology and MERCK RNAi Novel Target IP, shall remain subject to the
       limitations set forth in this Agreement.

13.3   CHANGE OF CONTROL.

       13.3.1 In the event of a Change of Control of a Party, such Party (the
              "ACQUIRED PARTY") shall provide prompt written notice to the other
              Party (the "NON-ACQUIRED PARTY") of the effective date of such
              Change of Control ("CHANGE OF CONTROL NOTICE"), the Parties will
              promptly discuss and agree in good faith on procedures with
              respect to any subject matter of this Agreement that is not
              addressed by this Section 13.3, and each Party will ensure the
              confidentiality of Information of the Parties. Furthermore, for
              each Co-Development Target, the Non-Acquired Party may elect, by
              written notice to the Acquired Party within [**] days after
              receipt of the Change of Control Notice, to no longer participate
              in the Development and Commercialization of any Profit-Sharing
              Products directed to such Co-Development Target. If the
              Non-Acquired Party makes such an election, then effective on the
              date the Non-Acquired Party makes its election:

              (a)    for each Profit-Sharing Product with respect to which the
                     end of the Phase II Completion Opt-Out Period has not
                     occurred as of the effective date of the Change of Control:

                     (i)    if the Acquired Party elects to become the
                            Continuing Party for such Profit-Sharing Product,
                            (w) such Profit-Sharing Product will be deemed a
                            Royalty-Bearing Product, (x) the provisions of
                            Sections 5.1(c) and 12.4 shall apply to such
                            Royalty-Bearing Product, with the Non-Acquired Party
                            deemed to be the Opt-Out Party with respect to such
                            Royalty-Bearing Product and the "Opt-Out Point" for
                            such Royalty-Bearing Product deemed to be the date
                            the Non-Acquired Party makes its election, (y) the
                            Acquired Party shall pay the Non-Acquired Party
                            milestones and royalties with respect to such
                            Royalty-Bearing Product, calculated as set forth in
                            Sections 9.2.2 and 9.4.3.2 respectively, in each
                            case as if the Non-Acquiring Party has exercised
                            Opt-Out Rights in respect of such Royalty-Bearing
                            Product during the Opt-Out Period in which the
                            Opt-Out Point occurred, or if the Opt-Out Point does
                            not occur during an Opt-Out Period, then as if the
                            exercise of Opt-Out Rights occurred during the
                            Opt-Out Period next succeeding the Opt-Out Point,
                            and (z) the Continuing Party

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                            shall be free to Develop, Manufacture and
                            Commercialize such Royalty-Bearing Product in the
                            Field in the Territory, with or without a partner or
                            collaborator and without any further obligation to
                            the Non-Acquired Party with respect to such
                            activities under this Agreement, subject to the
                            continuing obligations of the Parties with respect
                            to Royalty-Bearing Products set forth in Articles 6
                            and 9; and

                     (ii)   if the Acquired Party does not elect to become the
                            Continuing Party for such Profit-Sharing Product,
                            the definition of RNAi Therapeutic Product shall
                            thereafter be narrowed to exclude such product and
                            the financial, license and other terms of this
                            Agreement shall no longer apply to such product or
                            the Development, Manufacture and Commercialization
                            of such product.

              (b)    for each Profit-Sharing Product with respect to which a
                     Phase III Clinical Trial has been Initiated, but with
                     respect to which an NDA has not been filed as of the
                     effective date of the Change of Control:

                     (i)    in the Territory outside of the United States, MERCK
                            shall retain the right to Develop, Manufacture and
                            Commercialize such Profit-Sharing Product and the
                            obligation to pay royalties with respect thereto to
                            ALNYLAM pursuant to Section 9.4.2; and

                     (ii)   in the United States, such Profit-Sharing Product
                            shall be deemed a Royalty-Bearing Product, the
                            provisions of Sections 5.1(c) and 12.4 will apply to
                            such Royalty-Bearing Product, with the Non-Acquired
                            Party deemed to be the Opt-Out Party with respect to
                            such Royalty-Bearing Product and the "Opt-Out Point"
                            for such Royalty-Bearing Product deemed to be the
                            date the Non-Acquired Party makes its election;
                            provided, however, that the Acquired Party shall pay
                            the Non-Acquired Party (x) within [**] days after
                            making such election, $[**] for such Royalty-Bearing
                            Product; (y) a non-refundable, non-creditable
                            milestone payment in the amount of $[**] no later
                            than [**] business days after the date of the first
                            NDA Filing with respect to such Royalty-Bearing
                            Product; and (z) royalties on Net Sales of such
                            Royalty-Bearing Product calculated as set forth in
                            Section 9.4.3.1, with the following values:

                            (1)    The Sublicense Revenue Fraction shall be [**]
                                   percent ([**]%);

                            (2)    Royalty Rate One shall be [**] percent
                                   ([**]%);

                            (3)    Royalty Rate Two shall be [**] percent
                                   ([**]%);

                            (4)    Royalty Rate Three shall be [**] percent
                                   ([**]%); and

                            (5)    Royalty Rate Four shall be [**] percent
                                   ([**]%).

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              (c)    for each Profit-Sharing Product with respect to which an
                     NDA has been filed:

                     (i)    in the Territory outside of the United States, MERCK
                            shall retain the right to Develop, Manufacture and
                            Commercialize such Profit-Sharing Product and the
                            obligation to pay royalties with respect thereto to
                            ALNYLAM pursuant to Section 9.4.2;

                     (ii)   in the United States, the Non-Acquired Party may
                            elect, by written notice to the Acquired Party
                            within [**] days after receipt of the Change of
                            Control Notice, to change the Commercialization
                            arrangements for such Profit-Sharing Product such
                            that MERCK shall have the sole right to
                            Commercialize the Profit-Sharing Product in the
                            United States (unless MERCK has exercised its
                            Expense Share Reduction Option with respect to such
                            Profit-Sharing Product, in which case the
                            Non-Acquired Party may elect to change such
                            Commercialization arrangements such that ALNYLAM
                            shall have the sole right to Develop and
                            Commercialize the Profit-Sharing Product in the
                            United States). If the Non-Acquired Party does not
                            so elect within such period, the Commercialization
                            arrangements between the Parties in existence in the
                            United States for such Profit-Sharing Product on the
                            effective date of the Change of Control shall
                            continue; and

                     (iii)  if the Non-Acquired Party elects to change the
                            Commercialization arrangements between the Parties
                            within the United States for such Profit-Sharing
                            Product as set forth in clause (ii) above, such
                            change will be implemented during a transition
                            period not to exceed [**] days after the date of
                            such election and the Parties will cooperate to
                            ensure the orderly implementation of such
                            transition. Furthermore, the Party receiving sole
                            Commercialization rights (the "SOLE
                            COMMERCIALIZATION PARTY") shall pay to the other
                            Party (the "DIVESTING PARTY") in respect of such
                            Profit-Sharing Product, a percentage share of U.S.
                            Operating Profit/Loss for such Profit-Sharing
                            Product as calculated pursuant to Section 9.3, equal
                            to the Divesting Party's percentage share of U.S.
                            Development Expenses on the effective date of the
                            Change of Control. Such share of U.S. Operating
                            Profit/Loss shall be reported and paid on a
                            quarterly basis. Each quarterly report of U.S.
                            Operating Profit/Loss provided to the Divesting
                            Party shall include information about Net Sales of
                            the Profit-Sharing Product comparable to the
                            information specified for royalty reports in Section
                            9.4.11, and shall also include information in
                            summary form concerning the Commercialization
                            Expenses deducted from Net Sales of such
                            Profit-Sharing Product to calculate U.S. Operating
                            Profit/Loss during the applicable Calendar Quarter.
                            Quarterly reports shall be due no later than the
                            [**] day following the close of each Calendar
                            Quarter. If the

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                            Divesting Party believes in good faith that the
                            Commercialization Expenses in any Calendar Quarter
                            expressed as a percentage of Net Sales exceed the
                            reasonable and customary amount of Commercialization
                            Expenses for products comparable to the
                            Profit-Sharing Product, the Parties shall discuss
                            the Divesting Party's concerns and the Sole
                            Commercialization Party shall consider the Divesting
                            Party's concerns in good faith.

       13.3.2 Upon MERCK's receipt of a Change of Control Notice, with regard to
              both: (a) all MERCK Development Targets and MERCK Development
              Products directed thereto and (b) if MERCK does not elect to cease
              participation in the Development and Commercialization of
              Profit-Sharing Products directed to particular Co-Development
              Targets, then with respect to such Co-Development Targets and the
              Profit-Sharing Products directed thereto, MERCK may elect to
              modify the terms of this Agreement such that: (i) the Parties
              shall promptly discuss and agree in good faith on procedures with
              respect to the operation of the JSC and the JCC, (ii) MERCK's
              obligation to provide reports on the status of Programs shall be
              limited to a summary report, (iii) the Gatekeeper shall be
              replaced by an individual specified by MERCK and reasonably
              acceptable to ALNYLAM, (iv) MERCK may terminate the U.S.
              Co-Promotion Option at its sole discretion, and (v) MERCK's
              obligation to provide royalty reports shall be limited to
              reporting MERCK's total worldwide royalty obligations.

       13.3.3 For purposes of this Section 13.3, a "CHANGE OF CONTROL" of a
              Party shall be deemed to occur if such Party is involved in a
              merger, reorganization or consolidation in which its shareholders
              immediately prior to such transaction would hold fifty percent
              (50%) or less of the securities or other ownership or voting
              interests representing the equity of the surviving entity
              immediately after such merger, reorganization or consolidation, or
              if there is a sale of all or substantially all of such Party's
              assets or business relating to this Agreement, or if a
              "Significant Pharmaceutical Company" (as defined below)
              effectively acquires control of the management and policies of
              such Party. A "SIGNIFICANT PHARMACEUTICAL COMPANY" is a
              pharmaceutical company, biotechnology company, or group of such
              companies acting in concert, with annual sales of human
              pharmaceutical products greater than [**] U.S. dollars ($[**]).

13.4   SEVERABILITY. If any one or more of the provisions contained in this
       Agreement is held invalid, illegal or unenforceable in any respect, the
       validity, legality and enforceability of the remaining provisions
       contained herein shall not in any way be affected or impaired thereby,
       unless the absence of the invalidated provision(s) adversely affects the
       substantive rights of the Parties. The Parties shall in such an instance
       use their best efforts to replace the invalid, illegal or unenforceable
       provision(s) with valid, legal and enforceable provision(s) which,
       insofar as practical, implement the purposes of this Agreement.

13.5   NOTICES. All notices which are required or permitted hereunder shall be
       in writing and sufficient if delivered personally, sent by facsimile (and
       promptly confirmed by personal

                                       90
<PAGE>

       delivery, registered or certified mail or overnight courier), sent by
       nationally-recognized overnight courier or sent by registered or
       certified mail, postage prepaid, return receipt requested, addressed as
       follows:

       If to ALNYLAM, to:            ALNYLAM PHARMACEUTICALS, INC.
                                     300 Third Street
                                     Cambridge, MA  02142
                                     Attention: Chief Executive Officer
                                     Facsimile No.: (617) 551-8101

                     and:            FABER DAEUFER & ROSENBERG, P.C.
                                     1050 Winter Street, Suite 1000
                                     Waltham, MA 02451
                                     and after June 1, 2006, to:
                                     950 Winter Street, Suite 4500
                                     Waltham, MA 02451
                                     Attention: Sumy C. Daeufer
                                     Facsimile No.: (781) 795-4747

       If to MERCK, to:              MERCK & CO., INC.
                                     One Merck Drive
                                     P.O. Box 100, WS3A-65
                                     Whitehouse Station, NJ 08889-0100
                                     Attention: Office of Secretary
                                     Facsimile No.: (908) 735-1246

                     and:            MERCK & CO., INC.
                                     One Merck Drive
                                     P.O. Box 100, WS2A-30
                                     Whitehouse Station, NJ 08889-0100
                                     Attention: Chief Licensing Officer
                                     Facsimile: (908) 735-1214

       or to such other address as the Party to whom notice is to be given may
       have furnished to the other Party in writing in accordance herewith. Any
       such notice shall be deemed to have been given: (a) when delivered if
       personally delivered or sent by facsimile on a business day; (b) on
       receipt if sent by nationally-recognized overnight courier; and/or (c) on
       receipt if sent by mail.

13.6   APPLICABLE LAW. The Agreement shall be governed by and construed in
       accordance with the laws of the State of New York and the patent laws of
       the United States without reference to any rules of conflict of laws or
       renvoi.

13.7   DISPUTE RESOLUTION.

       13.7.1 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

                                       91
<PAGE>

              or to the breach hereof (collectively, "DISPUTE"). In particular,
              the CEO of ALNYLAM and the Executive Vice-President of Worldwide
              Basic Research for MERCK shall attempt to resolve all Disputes. In
              the event that the CEO and the Executive Vice-President cannot
              reach an agreement regarding a Dispute, 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 13.7.2 below, and judgment on the
              arbitration award may be entered in any court having jurisdiction
              thereof. As used in this Section 13.7, 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.

       13.7.2 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
              or fail to agree upon the third arbitrator, the third arbitrator
              shall be appointed by the AAA. The place of arbitration shall be
              New York, New York, and all proceedings and communications shall
              be in English.

              (a)    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.

              (b)    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 New York statute of
                     limitations.

              (c)    The Parties agree that, in the event of a Dispute over the
                     nature or quality of performance under this Agreement,
                     neither Party may terminate the Agreement until final
                     resolution of the Dispute through arbitration or other

                                       92
<PAGE>

                     judicial determination. The Parties further agree that any
                     payments made pursuant to this Agreement pending resolution
                     of the Dispute shall be refunded if an arbitrator or court
                     determines that such payments are not due.

              (d)    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.

              (e)    The Parties hereby agree that any monetary payment to be
                     made by a Party pursuant to a decision of the arbitrator
                     shall be made in United States dollars, free of any tax or
                     other deduction. The Parties further 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.

13.8   ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire
       understanding of the Parties with respect to the Collaboration and
       licenses granted hereunder. All express or implied agreements and
       understandings, either oral or written, with regard to the Collaboration
       and the licenses granted hereunder are superseded by the terms of this
       Agreement. On the Effective Date, the Original Agreement shall be amended
       and restated in its entirety by this Agreement and the Original Agreement
       shall thereafter be of no further force and effect. The Agreement
       (including Schedules hereto) may be amended, or any term hereof modified,
       only by a written instrument duly-executed by authorized representatives
       of both Parties hereto.

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

13.10  INDEPENDENT CONTRACTORS. It is expressly agreed that ALNYLAM and MERCK
       shall be independent contractors and that the relationship between
       ALNYLAM and MERCK shall not constitute a partnership, joint venture or
       agency. ALNYLAM shall not have the authority to make any statements,
       representations or commitments of any kind, or to take any action, which
       shall be binding on MERCK, without the prior written consent of MERCK,
       and MERCK shall not have the authority to make any statements,
       representations or commitments of any kind, or to take any action, which
       shall be binding on ALNYLAM without the prior written consent of such
       Party.

13.11  WAIVER. The waiver by either Party hereto of any right hereunder, or of
       the failure of the other Party to perform, or of a breach by the other
       Party, shall not be deemed a waiver of any other right hereunder or of
       any other breach or failure by such other Party whether of a similar
       nature or otherwise.

                                       93
<PAGE>

13.12  CUMULATIVE REMEDIES. No remedy referred to in this Agreement is intended
       to be exclusive, but each shall be cumulative and in addition to any
       other remedy referred to in this Agreement or otherwise available under
       law.

13.13  WAIVER OF RULE OF CONSTRUCTION. Each Party has had the opportunity to
       consult with counsel in connection with the review, drafting and
       negotiation of this Agreement. Accordingly, the rule of construction that
       any ambiguity in this Agreement shall be construed against the drafting
       Party shall not apply.

13.14  COUNTERPARTS. The Agreement may be executed in two or more counterparts,
       each of which shall be deemed an original, but all of which together
       shall constitute one and the same instrument.

13.15  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, 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 8. NOTHING IN THIS SECTION 13.15 IS INTENDED TO
       LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER
       PARTY.

13.16  BINDING EFFECT. As of the Effective Date, this Agreement shall be binding
       upon and inure to the benefit of the Parties and their respective
       permitted successors and permitted assigns.

13.17  NO THIRD PARTY BENEFICIARIES. Except as expressly contemplated herein, no
       Third Party, including any employee of any Party to this Agreement, shall
       have or acquire any rights by reason of this Agreement.

         [THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]

                                       94
<PAGE>

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

MERCK & CO., INC.                           ALNYLAM PHARMACEUTICALS, INC.

By:    /s/ Stephen H. Friend                By:    /s/ John M. Maraganore
    -----------------------------------         --------------------------------
Name: Stephen H. Friend                      Name: John M. Maraganore
Title: Executive Vice President              Title: President & Chief Executive
  Advanced Technology & Oncology                    Officer

                                       95
<PAGE>

                                  SCHEDULE 1.4

                           ALNYLAM RNAI PATENT RIGHTS

A.     ALNYLAM THERAPEUTIC RNAI PATENT RIGHTS

1.4.1  PATENTS AND PATENT APPLICATIONS OWNED BY ALNYLAM OR LICENSED FROM THIRD
       PARTIES OTHER THAN ISIS PHARMACEUTICALS, INC.

ALNYLAM RNAi Patent Rights include all claims of the patents and patent
applications listed in Schedule 1.4.1, attached, explicitly excluding [**]. The
patents and patent applications listed in Schedule 1.4.1 are either owned by
Alnylam or licensed from Third Parties other than Isis Pharmaceuticals, Inc.
("Isis").

1.4.2  PATENTS AND PATENT APPLICATIONS LICENSED FROM ISIS

ALNYLAM RNAi Patent Rights also include rights to a broad portfolio of patents
and patent applications ("the Isis Patents") licensed to Alnylam by Isis
pursuant to the Strategic Collaboration & License Agreement between Isis and
Alnylam dated March 11, 2004 ("the Isis Patents"). The Isis Patents are
described in Schedules 1-27 and 1-28 of the Isis Agreement, which are appended
to, and incorporated by reference into, this Schedule 1.4. Schedule 1.4.2(a)
lists those Isis Patents classified in the Isis Agreement as "Isis Current Motif
and Mechanism Patents" and listed in Schedule 1-28 of the Isis Agreement.
Schedule 1.4.2(b) lists those Isis Patents classified in the Isis Agreement as
"Isis Current Chemistry Patents" and listed in Schedule 1-27 of the Isis
Agreement.

B.     ALNYLAM TARGET IDENTIFICATION AND TARGET VALIDATION RNAI PATENT RIGHTS

ALNYLAM Target Identification and Target Validation RNAi Patent Rights comprise
those Patent Rights listed under ALNYLAM Therapeutic RNAi Patent Rights
excluding the claims of the patents and patent applications listed in Schedule
1.4.1 whose case numbers have the following prefixes: [**].

                                       96
<PAGE>

                                 SCHEDULE 1.4.1:
                           ALNYLAM RNAI PATENT RIGHTS

<TABLE>
<CAPTION>
Case No.   Title   Country   Type   Application No.   Filing Date   Publication No.   Publication Date   Patent No.   Issue Date
--------   -----   -------   ----   ---------------   -----------   ---------------   ----------------   ----------   ----------
<S>        <C>     <C>       <C>    <C>               <C>           <C>               <C>                <C>          <C>

</TABLE>

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

                                       97
<PAGE>

          SCHEDULE 1.4.2(a), ISIS CURRENT MOTIF AND MECHANISM PATENTS:
                       SCHEDULE 1-28 FROM ISIS AGREEMENT

             SCHEDULE 1-28 ISIS CURRENT MOTIF AND MECHANISM PATENTS

<TABLE>
<CAPTION>
ISIS DOCKET                      PATENT   GRANT                        3RD
  NUMBER      COUNTRY   STATUS   NUMBER   DATE    TITLE   3RD PARTY   PARTY
-----------   -------   ------   ------   -----   -----   ---------   -----
<S>           <C>       <C>      <C>      <C>     <C>     <C>         <C>

</TABLE>

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

                                                       Schedule 1.4.2(a), Page 1

                                       98
<PAGE>

               SCHEDULE 1.4.2(b), ISIS CURRENT CHEMISTRY PATENTS:
                       SCHEDULE 1-27 FROM ISIS AGREEMENT

                  SCHEDULE 1-27 ISIS CURRENT CHEMISTRY PATENTS

<TABLE>
<CAPTION>
ISIS DOCKET                      PATENT   GRANT                        3RD
  NUMBER      COUNTRY   STATUS   NUMBER   DATE    TITLE   3RD PARTY   PARTY
-----------   -------   ------   ------   -----   -----   ---------   -----
<S>           <C>       <C>      <C>      <C>     <C>     <C>         <C>

</TABLE>

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

                                                       Schedule 1.4.2(b), Page 1
                                      99
<PAGE>

                                  SCHEDULE 1.33

                          EXISTING ALNYLAM IN-LICENSES

Existing ALNYLAM In-Licenses shall include the following Third Party agreements:

                                      [**]

                                      100

<PAGE>

                                  SCHEDULE 1.55

                         MERCK BROAD RNAI PATENT RIGHTS

<TABLE>
<CAPTION>
TITLE        FILING DATE       INT. PUB. NO.       SERIAL NO.
-----        -----------       -------------       ----------
<S>          <C>               <C>                 <C>
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]              [**]                [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]

[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]              [**]                [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]

[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
[**]         [**]              [**]                [**]
[**]         [**]                                  [**]
[**]         [**]                                  [**]
</TABLE>

                                      101
<PAGE>

                                  SCHEDULE 1.59

                    MERCK PRODUCT-SPECIFIC RNAI PATENT RIGHTS

                                      [**]

                                      102
<PAGE>

                                  SCHEDULE 1.83

                    PRE-EXISTING ALNYLAM ALLIANCE AGREEMENTS

Research Collaboration and License Agreement between Novartis Institutes for
BioMedical Research, Inc. ("NOVARTIS") and Alnylam Pharmaceuticals, Inc. dated
October 12, 2005, together with the Addendum Re: Influenza Program to Research
Collaboration and License Agreement effective as of February 17, 2006 (as
further amended from time to time, the "NOVARTIS AGREEMENT").

Strategic Collaboration & License Agreement between Isis Pharmaceuticals, Inc.,
and Alnylam Pharmaceuticals, Inc., dated March 11, 2004, together with Letter
Agreements dated March 9, 2004 and March 11, 2004, respectively, and as amended
on June 14, 2005.

License and Option Agreement between GeneCare Research Institute Co., Ltd and
Alnylam Pharmaceuticals, Inc., dated January 6, 2005, together with a
Side-Letter Agreement dated January 6, 2005.

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

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

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

                                       103

<PAGE>

                                  SCHEDULE 1.84

                     PRE-EXISTING MERCK ALLIANCE AGREEMENTS

[**]

                                      104
<PAGE>

                                 SCHEDULE 2.2.2

                             [**] OPT-IN INFORMATION

1.     Product description

[**]

                                      105
<PAGE>

                                 SCHEDULE 3.2.2

                       MERCK RNAI NOVEL TARGET INFORMATION

[**]

                                      106
<PAGE>

SCHEDULE 3.10.1

                        U.S. CO-PROMOTION AGREEMENT TERMS

Commercialization:

      -     ALNYLAM shall co-promote the Profit-Sharing Product in the United
            States by providing a minimum number of medical sales
            representatives, such minimum number to be determined by the Parties
            based upon the Commercialization Plan and consistent with the
            physician audience to which such Profit-Sharing Product will be
            marketed. The costs of ALNYLAM's co-promotion efforts (consistent
            with the Commercialization Plan) shall be included in
            Commercialization Expenses for purposes of calculating U.S.
            Operating Profit/Loss.

      -     ALNYLAM shall commit the required number of medical sales
            representatives to support such Profit-Sharing Product in the United
            States as set forth in the definitive Co-Promotion Agreement
            relating to such Profit-Sharing Product that is executed by the
            Parties pursuant to Section 3.10.1 of this Agreement. In the event
            that [**] the [**] of [**] at the [**] of such [**] in the United
            States, the Parties, [**] Co-Promotion Agreement, shall [**] in the
            United States. [**] will [**] is [**]. Commencing [**] after such
            launch, [**] shall [**] of [**] the Parties.

      -     ALNYLAM's U.S. Co-Promotion activity shall be fully integrated into
            MERCK's U.S. promotion effort for such Profit-Sharing Product.

      -     The Co-Promotion Agreement will also contain, without limitation,
            provisions with respect to the following matters: sales and
            marketing responsibilities of the Parties; content, production and
            approval of marketing materials and marketing activities; sales
            training; compliance; regulatory interactions; and recalls.

                                      107
<PAGE>

                                   SCHEDULE 10

                                   EXCEPTIONS

Section 10.1(d):

All licenses and other rights granted to MERCK under this Agreement are subject
to the rights granted to ALNYLAM under the ALNYLAM In-Licenses, and are also
subject to and limited to the extent of, the rights ALNYLAM has granted and is
required to grant to Third Parties pursuant to Pre-Existing Alliance Agreements.
All licenses and other rights granted to ALNYLAM under this Agreement are
subject to the rights granted to MERCK under the MERCK In-Licenses, and are also
subject to and limited to the extent of, the rights MERCK has granted and is
required to grant to Third Parties pursuant to Pre-Existing MERCK Alliance
Agreements.

Section 10.2(c):

There are currently multi-party oppositions against the following European
patents included in ALNYLAM RNAi Patent Rights:

      (i)   Alnylam Europe AG European patent number 1144623. Amended claims for
            this patent were upheld in the oral phase of the opposition
            proceedings on June 21 and 22, 2006.

      (ii)  Alnylam Europe AG European patent number 1214945.

      (iii) CRT European patent number 1230375.

A single party has also opposed Alnylam Europe AG Australian patent number
778474.

                                      108exv10w2

 

Exhibit 10.2

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

TERMINATION AGREEMENT

     THIS TERMINATION AGREEMENT, dated July 3, 2006 (this “Agreement”), is made by and
between Merck & Co., Inc., a corporation organized and existing under the laws of New Jersey
(“Merck”) and Alnylam Pharmaceuticals, Inc., a corporation organized and existing under the
laws of Delaware (“Alnylam”; Merck and Alnylam together are referred to herein as the
“Parties”).

     WHEREAS, the Parties entered into a Collaboration and License Agreement, effective as of June
29, 2004 (the “Collaboration Agreement”), pursuant to which the Parties agreed to
collaborate in the research, development and commercialization of RNAi Products directed to certain
targets, including but not limited to VEGF, in the Field;

     WHEREAS, Merck and Alnylam no longer desire to collaborate in the research, development and
commercialization of RNAi Products directed to VEGF or any Additional Program Targets in the Field;

     WHEREAS, the Parties now desire to terminate the Collaboration Agreement and provide for the
return of rights to VEGF and VEGF Products to Alnylam on the terms and conditions set forth herein;

     NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:

	1.	 	Termination; Survival. Effective as of the date of this Agreement (the
“Termination Date”) the Parties hereby terminate the Collaboration Agreement.
Notwithstanding Section 12.4 of the Collaboration Agreement, all rights and obligations of the
Parties under the Collaboration Agreement shall terminate except as otherwise expressly set
forth in this Agreement. Terms defined in the Collaboration Agreement and used either in this
Agreement or in the provisions of the Collaboration Agreement which, pursuant to this
Agreement, shall continue to apply, shall have the meanings given to them in the Collaboration
Agreement.
	 
	2.	 	VEGF. Effective as of the Termination Date:

	 	(a)	 	Alnylam shall be free to develop, manufacture and commercialize all Ophthalmic
Products directed to VEGF, in the Field in the Territory, with or without a partner or
collaborator and without any further obligation to Merck with respect to such activities,
subject to the continuing obligations of the Parties set forth in this Agreement;
	 
	 	(b)	 	Merck hereby grants Alnylam a license under MERCK Technology solely to Develop,
Manufacture and Commercialize Ophthalmic Products directed to VEGF in the Field in the
Territory. Such license shall be exclusive and royalty-bearing for the royalty term of an
Ophthalmic Product as set forth in Section 8.3.3 of the Collaboration Agreement in each
country in the Territory,

Confidential

1

 

EXECUTION COPY

	 	 	 	and shall thereafter be a non-exclusive, royalty-free license to Develop, Manufacture and
Commercialize such Ophthalmic Product in the Field in such country. Such license shall
include the right to grant sublicenses and licenses as provided in Section 7.2 of the
Collaboration Agreement as if such Ophthalmic Products are Royalty-Bearing Products and
Alnylam is the Continuing Party, and such license shall be subject to the terms of Section
7.4. Subject to the rights granted each Party under this Agreement, each Party shall have the
right to use, sell, keep, license or assign its interest in Joint Collaboration IP and
otherwise undertake all activities a sole owner might undertake with respect to such Joint
Collaboration IP without the consent of and without accounting to the other Party;
	 
	 	(c)	 	for a period of [**] after the Termination Date, neither Merck nor any of its
Affiliates shall, alone or with a Third Party, research, develop, manufacture or
commercialize RNAi Products directed to VEGF in the Field in the Territory;
	 
	 	(d)	 	the provisions of Sections 8.3.2, 8.3.3, 8.3.4, 8.3.5, 8.3.6.2, 8.3.7, 8.3.8, 8.4,
8.5, and 8.6 of the Collaboration Agreement shall apply to royalties payable by Alnylam
to Merck in respect of Ophthalmic Products directed to VEGF as if such Ophthalmic
Products are Royalty-Bearing Products and Alnylam is the Royalty Payor and Continuing
Party; provided, that (x) with respect to the Ophthalmic Product directed to VEGF
at the most advanced stage of Development as of the Termination Date:

	 	(i)	 	The Sublicense Revenue Fraction shall be [**] percent ([**]%);
	 
	 	(ii)	 	Royalty Rate One shall be [**] percent ([**]%);
	 
	 	(iii)	 	Royalty Rate Two shall be [**] percent ([**]%);
	 
	 	(iv)	 	Royalty Rate Three shall be [**] percent ([**]%); and
	 
	 	(v)	 	Royalty Rate Four shall be [**] percent ([**]%); and

(y) royalties shall be payable in respect of all other Ophthalmic Products directed to
VEGF at a rate of [**] percent ([**]%) of the applicable rate set forth above;

	 	(e)	 	the provisions of Article 9 of the Collaboration Agreement shall continue to apply,
and the provisions of such Article pertaining to Royalty-Bearing Products for which
Alnylam is the Continuing Party shall also apply to Ophthalmic Products directed to VEGF;
provided, that Alnylam may also disclose the subject matter of this Agreement to
any bona fide actual or prospective collaborators, strategic partners or sublicensees
with respect to Ophthalmic Products directed to VEGF who are obligated to keep such
information confidential;
	 
	 	(f)	 	the provisions of Sections 10.5.1, 10.5.2, 10.5.3(a), 10.5.3(b) and 10.5.4 and
Article 11 of the Collaboration Agreement shall continue to apply, and the provisions of
Section 10.5.3(c) and Article 11 shall apply to Ophthalmic Products directed to VEGF as
if such Ophthalmic

Confidential

2

 

EXECUTION
COPY

	 	 	 	Products are Royalty-Bearing Products and Alnylam is the Continuing Party; provided,
that (x) the reference in Section 11.4.2.2(a) of the Collaboration Agreement to Section 7.1 of
the Collaboration Agreement shall instead be a reference to Section 2(b) of this Agreement,
and (y) the reference in Section 11.4.4(d) of the Collaboration Agreement to Section 8.3.2
shall instead be a reference to Section 2(d) of this Agreement; and
	 
	 	(g)	 	in addition to the provisions set forth above, with respect to the Ophthalmic
Products directed to VEGF, Merck shall, at ALNYLAM’s request:

	 	(i)	 	provide, or cause to be provided, to Alnylam as soon as reasonably
practicable all Know-How that (i) Merck Controls at the Termination Date that
pertains to such Ophthalmic Products and (ii) has not been previously provided by it
to Alnylam and (iii) is reasonably necessary for the practice of the license rights
granted to Alnylam under this Agreement; and
	 
	 	(ii)	 	return, or cause to be returned, to Alnylam as soon as reasonably
practicable any and all tangible manifestations and embodiments of Alnylam’s
Know-How and other materials provided by Alnylam pursuant to the Collaboration
Agreement in respect of such Ophthalmic Products.

	3.	 	Miscellaneous.

	 	(a)	 	Entire Agreement. This Agreement and the provisions of the Collaboration
Agreement which, pursuant to this Agreement, shall continue to apply contain the entire
understanding of the Parties with respect to the subject matter hereof. All express or
implied agreements and understandings, either oral or written, with regard to such
subject matter are superseded by the terms of this Agreement. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly-executed by
authorized representatives of both Parties hereto.
	 
	 	(b)	 	Assignment. Except as provided in this Section 3(b), this Agreement may
not be assigned or otherwise transferred, nor may any right or obligation hereunder be
assigned or transferred, by either Party without the consent of the other Party.
However, either Party may, without the other Party’s consent, assign this Agreement and
its rights and obligations hereunder in whole or in part to an Affiliate or to a party
that acquires, by merger, sale of assets or otherwise, all or substantially all of the
business of the assigning Party to which the subject matter of this Agreement relates.
The assigning Party shall remain responsible for the performance by its assignee of this
Agreement or any obligations hereunder so assigned to such assignee.
	 
	 	(c)	 	Representations and Warranties. Each Party represents and warrants to the other
Party that as of the Effective Date of this Agreement:

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EXECUTION COPY

	 	(i)	 	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.
	 
	 	(ii)	 	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.
	 
	 	(iii)	 	This Agreement is legally binding upon it and enforceable in accordance
with its terms. The execution, delivery and performance of this Agreement by it
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.

	 	(d)	 	Further Assurances. Each Party shall take, or cause to be taken, all
appropriate action and do, or cause to be done, all things necessary, proper or advisable
under applicable law or otherwise to consummate and make effective the transactions
contemplated by this Agreement.
	 
	 	(e)	 	Miscellaneous Provisions. Other than Sections 13.2 and 13.7, the
provisions of Article 13 of the Collaboration Agreement shall also apply to this
Agreement.

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

	 	 	 	 	 	 	 	 	 
	MERCK & CO., INC.	 	 	 	ALNYLAM PHARMACEUTICALS, INC.
	 
	 	 	 	 	 	 	 	 
	BY:

	 	/s/ Stephen J. Friend
	 	 	 	BY:
	 	/s/ John M. Maraganore
	 

	 	 
	 	 	 	 	 	 
	NAME:

	 	Stephen H. Friend
	 	 	 	NAME:
	 	John M. Maraganore
	TITLE:

	 	Executive Vice President,

Merck Research Laboratories
	 	 	 	TITLE:
	 	President & Chief Executive Officer

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