EXECUTION COPY COLLABORATION AGREEMENT

Collaboration Agreement

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Title: EXECUTION COPY COLLABORATION AGREEMENT
Governing Law: Delaware Date: 5/16/2005
Law Firm: Wilmer Cutler Pickering Hale and Dorr LLP

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EXECUTION COPY

Exhibit 10.1

Confidential Materials omitted and filed

separately with the Securities and exchange

Commission. Asterisks denote omissions.

COLLABORATION AGREEMENT

BY AND BETWEEN

ALNYLAM PHARMACEUTICALS, INC.

AND

MEDTRONIC, INC.

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Table of Contents

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ARTICLE 1 Definitions.................................................................... 1

Section 1.1 Affiliate............................................................ 1

Section 1.2 Alnylam FTE Cost..................................................... 1

Section 1.3 Alnylam Intellectual Property........................................ 2

Section 1.4 Alnylam Know-How..................................................... 2

Section 1.5 Alnylam Patent Rights................................................ 2

Section 1.6 Alnylam siRNA........................................................ 2

Section 1.7 Blocking Third Party Intellectual Property........................... 2

Section 1.8 [**]................................................................. 2

Section 1.9 Collaboration Program................................................ 2

Section 1.10 Collaboration Term................................................... 2

Section 1.11 Commercialization or Commercialize................................... 2

Section 1.12 Commercially Reasonable Efforts...................................... 3

Section 1.13 Confidential Information............................................. 3

Section 1.14 Control or Controlled................................................ 3

Section 1.15 Cover, Covering or Covered........................................... 4

Section 1.16 CPI.................................................................. 4

Section 1.17 Develop or Development............................................... 4

Section 1.18 Development Candidate................................................ 4

Section 1.19 Device............................................................... 4

Section 1.20 Device-Related....................................................... 4

Section 1.21 Discover or Discovery................................................ 4

Section 1.22 [**]................................................................. 4

Section 1.23 Exclusivity Field.................................................... 4

Section 1.24 Executive Officers................................................... 4

Section 1.25 FDA.................................................................. 5

Section 1.26 Field................................................................ 5

Section 1.27 First Commercial Sale................................................ 5

Section 1.28 GAAP................................................................. 5

Section 1.29 Gene Target.......................................................... 5

Section 1.30 Gross Margin......................................................... 5

Section 1.31 IND.................................................................. 5

Section 1.32 Joint Intellectual Property.......................................... 5

Section 1.33 Joint Know-How....................................................... 5

Section 1.34 Joint Patent Rights.................................................. 5

Section 1.35 JRDC Representative.................................................. 5

Section 1.36 Know-How............................................................. 5

Section 1.37 Licensed Product..................................................... 6

Section 1.38 Listed Alnylam Third Party Agreement................................. 6

Section 1.39 Major Market......................................................... 6

Section 1.40 Manufacturing Cost................................................... 6

Section 1.41 Medtronic Device..................................................... 6

Section 1.42 Medtronic Intellectual Property...................................... 6

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Section 1.43 Medtronic Know-How................................................... 6

Section 1.44 Medtronic Patent Rights.............................................. 6

Section 1.45 NDA.................................................................. 6

Section 1.46 Net Sales............................................................ 7

Section 1.47 Neurodegenerative Disease............................................ 7

Section 1.48 Party................................................................ 7

Section 1.49 Patent Rights........................................................ 7

Section 1.50 PDP Decision Milestone............................................... 8

Section 1.51 Person............................................................... 8

Section 1.52 Phase I Study........................................................ 8

Section 1.53 Phase II(a) Study.................................................... 8

Section 1.54 Phase II(b) Study.................................................... 8

Section 1.55 Phase III Study...................................................... 8

Section 1.56 Pivotal Study........................................................ 8

Section 1.57 Product.............................................................. 8

Section 1.58 Product.............................................................. 8

Section 1.59 Product Development Program.......................................... 8

Section 1.60 Product Development Term............................................. 8

Section 1.61 Regulatory Approval.................................................. 9

Section 1.62 Regulatory Authority................................................. 9

Section 1.63 Royalty Term......................................................... 9

Section 1.64 siRNA................................................................ 9

Section 1.65 siRNA-Attributable Portion........................................... 9

Section 1.66 siRNA Cost of Goods.................................................. 9

Section 1.67 Target Indication.................................................... 9

Section 1.68 Technology Development Term.......................................... 9

Section 1.69 Territory............................................................ 10

Section 1.70 Third Party.......................................................... 10

Section 1.71 Valid Claim.......................................................... 10

Section 1.72 Workplan............................................................. 10

Section 1.73 Additional Definitions............................................... 10

ARTICLE 2 Collaboration Program.......................................................... 11

Section 2.1 General.............................................................. 11

Section 2.2 JRDC................................................................. 11

Section 2.3 Management of Collaboration Program.................................. 12

Section 2.4 Decisionmaking....................................................... 16

Section 2.5 Term of Collaboration Program........................................ 17

Section 2.6 Exclusivity and Diligence Obligations................................ 17

Section 2.7 [**] Alnylam siRNAs Used In Collaboration Program Activities

for Which Alnylam has Primary Responsibility......................... 19

Section 2.8 Supply of Alnylam siRNAs to Medtronic................................ 19

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ARTICLE 3 Grant of Rights................................................................ 19

Section 3.1 Alnylam Grants....................................................... 19

Section 3.2 Medtronic Covenant Not to Sue........................................ 22

Section 3.3 Retained Rights...................................................... 22

ARTICLE 4 Financial Provisions........................................................... 23

Section 4.1 Equity Investments and Payments for Additional Product

Development Programs................................................. 23

Section 4.2 Milestone Payments for Product Development Programs.................. 24

Section 4.3 Royalty Payments..................................................... 24

Section 4.4 Duration of Royalty Payments......................................... 25

Section 4.5 Royalties Payable Only Once.......................................... 25

Section 4.6 Reductions to Section 4.2 and Section 4.3 Payments After Product

Development Program Terminations..................................... 26

Section 4.7 Credits Against Future Royalties..................................... 26

Section 4.8 Royalty Reports and Accounting....................................... 26

Section 4.9 Currency Exchange.................................................... 27

Section 4.10 Tax Withholding...................................................... 27

Section 4.11 Late Payments........................................................ 27

ARTICLE 5 Intellectual Property Ownership, Protection and Related Matters................ 28

Section 5.1 Ownership of Inventions.............................................. 28

Section 5.2 Prosecution and Maintenance of Patent Rights......................... 29

Section 5.3 Third Party Infringement............................................. 30

Section 5.4 Claimed Infringement; Claimed Invalidity............................. 32

Section 5.5 Patent Term Extensions............................................... 32

Section 5.6 Patent Marking....................................................... 32

Section 5.7 Maintain Licenses in Force........................................... 33

ARTICLE 6 Confidentiality................................................................ 33

Section 6.1 Confidential Information............................................. 33

Section 6.2 Disclosures to Employees, Consultants and Advisors................... 34

Section 6.3 Term ................................................................ 34

Section 6.4 Publicity............................................................ 34

Section 6.5 Publications......................................................... 34

ARTICLE 7 Representations and Warranties................................................. 35

Section 7.1 Representations of Authority......................................... 35

Section 7.2 Consents............................................................. 35

Section 7.3 No Conflict.......................................................... 35

Section 7.4 Enforceability....................................................... 35

Section 7.5 Employee Obligations................................................. 35

Section 7.6 Intellectual Property................................................ 36

Section 7.7 No Warranties........................................................ 36

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ARTICLE 8 Term and Termination........................................................... 36

Section 8.1 Term................................................................. 36

Section 8.2 Termination For Material Breach...................................... 36

Section 8.3 Termination Upon Termination of the Supply Agreement................. 37

Section 8.4 Termination For Convenience.......................................... 37

Section 8.5 Effect of Termination................................................ 38

Section 8.6 Survival............................................................. 40

ARTICLE 9 Miscellaneous Provisions....................................................... 40

Section 9.1 Indemnification...................................................... 40

Section 9.2 Governing Law and Waiver of Jury Trial............................... 42

Section 9.3 Assignment........................................................... 42

Section 9.4 Amendments........................................................... 42

Section 9.5 Notices.............................................................. 42

Section 9.6 Force Majeure........................................................ 43

Section 9.7 Independent Contractors.............................................. 43

Section 9.8 No Strict Construction............................................... 44

Section 9.9 Headings............................................................. 44

Section 9.10 No Implied Waivers; Rights Cumulative................................ 44

Section 9.11 Severability......................................................... 44

Section 9.12 Execution in Counterparts; Facsimile Signatures...................... 44

Section 9.13 No Consequential or Punitive Damages................................. 44

Section 9.14 Interpretation....................................................... 44

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Schedule 1.5 Alnylam Patent Rights

Schedule 1.38 Listed Alnylam Third Party Agreements

Schedule 3.1(e) Burdens on Alnylam Intellectual Property Imposed by

Existing Alnylam Contractual Obligations

Schedule 4.3(b) Medtronic Financial Obligations With Respect to Listed

Alnylam Third Party Agreements

Exhibit A PDP Decision Milestone Criteria

Exhibit B Form of Initial Technology Development Program Workplan

Exhibit C Material Terms of Investment Agreement

Exhibit D Initial Press Release

Exhibit E Permitted Disclosures

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COLLABORATION AGREEMENT

This Collaboration Agreement (the "Agreement") is entered into as of the

8th day of February, 2005 (the "Effective Date") by and between Alnylam

Pharmaceuticals, Inc., a corporation organized and existing under the laws of

the State of Delaware and having its principal office at 300 Third Street,

Cambridge, Massachusetts 02142 ("Alnylam"), and Medtronic, Inc., a corporation

organized and existing under the laws of the State of Minnesota and having its

principal office at 710 Medtronic Parkway, Minneapolis, Minnesota 55432

("Medtronic").

INTRODUCTION

1. Alnylam is engaged in the business of discovering and developing

siRNA-based therapeutics.

2. Medtronic is engaged in the business of developing and marketing

medical devices.

3. Alnylam and Medtronic are interested in collaborating in the discovery,

development and commercialization of siRNA-based therapeutics for the treatment

of certain diseases using implanted infusion devices for the direct delivery of

siRNAs to the human nervous system.

NOW, THEREFORE, in consideration of the respective representations,

warranties, covenants and agreements contained herein, and for other valuable

consideration, the receipt and adequacy of which are hereby acknowledged,

Alnylam and Medtronic agree as follows:

Article I

Definitions

When used in this Agreement, each of the following terms shall have the meanings

set forth in this Article I:

Section 1.1 "Affiliate". Affiliate of a specified Person shall mean any

Person that controls, is controlled by, or is under common control with such

Person. For purposes of this Section 1.1, "control" shall mean (a) in the case

of corporate entities, direct or indirect ownership of at least fifty percent

(50%) of the stock or shares having the right to vote for the election of

directors, and (b) in the case of non-corporate entities, direct or indirect

ownership of at least fifty percent (50%) of the equity interest with the power

to direct the management and policies of such non-corporate entities.

Section 1.2 "Alnylam FTE Cost". Alnylam FTE Cost shall mean the product

obtained by multiplying (a) the number of full-time-equivalent person-years

(each consisting of a total of [**]) of scientific, technical or managerial work

by Alnylam personnel on or directly related to the Product Development Program

by (b) an annual cost per full-time-equivalent person-year to be agreed by the

Parties in connection with the Proceed-to-PDP Determination, increased or

decreased annually by the percentage increase or decrease in the CPI as of

December 31 of the

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then most recently ended calendar year over the level of the CPI on December 31

of the calendar year most recently ended prior to the Proceed-to-PDP

Determination (i.e., the first such increase or decrease would occur on January

1 of the calendar year following the calendar year in which the Proceed-to-PDP

Determination occurs).

Section 1.3 "Alnylam Intellectual Property". Alnylam Intellectual

Property shall mean Alnylam Know-How and Alnylam Patent Rights, collectively.

Section 1.4 "Alnylam Know-How". Alnylam Know-How shall mean any Know-How,

other than Joint Know-How, that (a) either (i) is in Alnylam's possession on the

Effective Date or (ii) Alnylam develops or acquires during the Collaboration

Term, (b) is useful to Discover, Develop and Commercialize Alnylam siRNAs and/or

Licensed Products, and (c) is Controlled by Alnylam or used by Alnylam in the

Collaboration Program.

Section 1.5 "Alnylam Patent Rights". Alnylam Patent Rights shall mean

Patent Rights Controlled by Alnylam Covering Alnylam Know-How, including those

set forth on Schedule 1.5, but excluding Joint Patent Rights.

Section 1.6 "Alnylam siRNA". Alnylam siRNA shall mean any siRNA (a) the

Discovery, Development, manufacture, Commercialization or other use of which

uses Alnylam Know-How or Joint Know-How or is Covered by Alnylam Patent Rights

or Joint Patent Rights and (b) made available or approved by Alnylam for

Development in the Collaboration Program.

Section 1.7 "Blocking Third Party Intellectual Property". Blocking Third

Party Intellectual Property shall mean, on a Licensed Product-by-Licensed

Product and country-by-country basis, Valid Claims that (a) are not Controlled

by Alnylam and not Controlled as of the Effective Date by Medtronic and (b)

Cover an siRNA contained in or used in such Licensed Product in such country.

For the avoidance of doubt, Valid Claims Controlled by Alnylam under a [**]

shall not constitute Blocking Third Party Intellectual Property.

Section 1.8 "[**] shall mean, with respect to an Alnylam siRNA included

in a Product Development Program, achievement of [**] agreed by the Parties

pursuant to Sections 2.3(c)(i), 2.3(c)(iii) and 2.3(c)(iv) as constituting

reasonable evidence of [**].

Section 1.9 "Collaboration Program". Collaboration Program shall mean the

research and development program to be performed by the Parties pursuant to this

Agreement to develop Licensed Products, consisting of the Technology Development

Program and the Product Development Program(s).

Section 1.10 "Collaboration Term". Collaboration Term shall mean the

period commencing on the Effective Date and ending on the earliest of (a) the

end of the Technology Development Term, [**] (b) the end of all Product

Development Terms, (c) the date (if any) on which the Collaboration Term is

terminated by mutual written agreement of the Parties, and (d) the date of

termination of this Agreement in accordance with the provisions hereof.

Section 1.11 "Commercialization" or "Commercialize". Commercialization or

Commercialize shall mean any activities directed to marketing, promoting,

distributing,

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importing, offering to sell, and/or selling a product, whether before or after

Regulatory Approval for such product has been obtained.

Section 1.12 "Commercially Reasonable Efforts". Commercially Reasonable

Efforts shall mean the efforts, expertise and resources normally used by a Party

to Discover, Develop and Commercialize a product or compound owned by it or to

which it has rights, which is of similar market potential at a similar stage in

its development or product life, taking into account issues of safety and

efficacy, product profile, difficulty in developing the product or compound,

competitiveness of the marketplace for the product, the proprietary position of

the compound or product, the regulatory structure involved, the availability and

level of reimbursement for such treatment by third party payors or health

insurance plans, the potential total profitability of the applicable product(s)

marketed or to be marketed and other relevant factors affecting the cost, risk

and timing of Development and the total potential reward to be obtained if a

product is Commercialized. The Parties agree that Commercially Reasonable

Efforts shall not require a Party to expend efforts, expertise and resources

that such Party would not normally expend to Discover, Develop and Commercialize

a product or compound owned by it or to which it has rights, taking into account

the foregoing factors.

Section 1.13 "Confidential Information". Confidential Information shall

mean all Know-How or other information that is of a confidential and proprietary

nature to a Party. Confidential Information includes Know-How or other

information (whether or not patentable) regarding a Party's technology,

products, business information or objectives and reports and audits under

Section 4.8, and all biological materials of a Party. Notwithstanding the

foregoing, Confidential Information shall not include Know-How or other

information that:

(a) was known or used by the receiving Party or its Affiliates prior

to its date of disclosure to the receiving Party as demonstrated by

contemporaneous written records; or

(b) either before or after the date of the disclosure to the

receiving Party is lawfully disclosed to the receiving Party or its Affiliates

by sources other than the disclosing Party rightfully in possession of such

Know-How or other information and not bound by confidentiality obligations to

the disclosing Party; or

receiving Party or its Affiliates is or becomes published or otherwise is or

becomes part of the public domain through no breach hereof on the part of the

receiving Party or its Affiliates; or

(d) is independently developed by or for the receiving Party or its

Affiliates without reference to or reliance upon the Confidential Information of

the disclosing Party as demonstrated by contemporaneous written records.

Section 1.14 "Control" or "Controlled". Control or Controlled, with

respect to any (a) Know-How or other information or materials or (b)

intellectual property right, shall mean the possession (whether by license or

ownership) by a Party of the ability to grant to the other Party access and/or a

license as provided herein without violating the terms of any agreement with any

Third Party existing as of the Effective Date or thereafter during the term of

this Agreement.

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Section 1.15 "Cover", "Covering" or "Covered". Cover, Covering or

Covered, with respect to a product or technology, shall mean that, but for a

license granted to a Person under a Valid Claim included in the Patent Rights

under which such license is granted, the Discovery, Development, manufacture,

Commercialization and/or other use of such product or practice of such

technology by such Person would infringe such Valid Claim.

Section 1.16 "CPI". CPI shall mean the Consumer Price Index - Urban Wage

Earners and Clerical Workers, U.S. City Average, All Items, 1982-84 = 100,

published by the United States Department of Labor, Bureau of Labor Statistics

(or its successor equivalent index) in the United States.

Section 1.17 "Develop" or "Development". Develop or Development shall

mean preclinical and clinical siRNA and/or Device development activities,

including test method development and stability testing, Device design,

siRNA-Device compatibility testing, toxicology, animal efficacy studies,

formulation, quality assurance/quality control development, statistical

analysis, clinical studies, regulatory affairs, product approval and

registration.

Section 1.18 "Development Candidate". Development Candidate shall mean an

Alnylam siRNA that is designated as a Development Candidate in connection with a

[**] or thereafter designated as a Development Candidate by mutual agreement of

the Parties.

Section 1.19 "Device". Device shall mean any implanted infusion device

for delivery of therapeutics to the human nervous system.

Section 1.20 "Device-Related". Device-Related, with respect to Know-How

or Patent Rights, shall mean relating specifically to the design or physical

features of a Device, any [**] a Device (excluding [**]), any hardware component

of a Device, any software that controls a Device and/or any associated medical

devices or accessories, such as [**], and any use or implantation of any of the

foregoing, but not relating specifically to an siRNA ([**]) to be delivered by

such Device.

Section 1.21 "Discover" or "Discovery". Discover or Discovery shall mean

any activities conducted to discover and characterize siRNAs as potential

therapeutics in the Field and to support the designation of the same as

Development Candidates in connection with the Proceed-To-PDP Determination or

thereafter in connection with an Additional Product Development Program.

Section 1.22 "[**]". [**]shall mean an [**] produced [**].

Section 1.23 "Exclusivity Field". Exclusivity Field, with respect to a

[**], shall mean the treatment of Target Indications for which a Licensed

Product is to be Commercialized, using Devices for the direct delivery of siRNAs

to the human nervous system [**]. Notwithstanding the foregoing, (a) the

Exclusivity Field shall not include [**] and (b) the term `direct delivery to

the human nervous system' does not encompass [**].

Section 1.24 "Executive Officers". Executive Officers shall mean

Medtronic's Senior Vice President of Medicine and Technology (or the officer or

employee of Medtronic then

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serving in a substantially equivalent capacity) and Alnylam's Chief Operating

Officer (or the officer or employee of Alnylam then serving in a substantially

equivalent capacity).

Section 1.25 "FDA". FDA shall mean the United States Food and Drug

Administration.

Section 1.26 "Field". Field shall mean the treatment of Neurodegenerative

Diseases using Devices for the direct delivery of siRNAs to the human nervous

system[**], it being understood that "direct delivery to the human nervous

system" does not encompass [**]. For the avoidance of doubt, the parties agree

that treatment of a Neurodegenerative Disease does not include [**].

Notwithstanding the foregoing, the Field shall not include [**].

Section 1.27 "First Commercial Sale". First Commercial Sale, with respect

to a Licensed Product, shall mean the first commercial sale of such Licensed

Product by Medtronic, its Affiliates, distributors and/or agents. Sales for test

marketing or clinical trial purposes shall not constitute a First Commercial

Sale.

Section 1.28 "GAAP". GAAP shall mean then current United States generally

accepted accounting principles, consistently applied.

Section 1.29 "Gene Target". Gene Target shall mean [**].

Section 1.30 "Gross Margin". Gross Margin, with respect to a Licensed

Product, shall mean: (a) (i) the Net Sales of such Licensed Product for the

applicable time period, times (ii) the [**] of such Licensed Product, less (b)

the [**] of such Licensed Product.

Section 1.31 "IND". IND means an application submitted to a Regulatory

Authority to initiate human clinical trials, including (a) an Investigational

New Drug application or any successor application or procedure filed with the

FDA, (b) except where otherwise specifically provided in this Agreement, any

foreign equivalent of a U.S. Investigational New Drug application, and (c) all

supplements and amendments that may be filed with respect to the foregoing.

Section 1.32 "Joint Intellectual Property". Joint Intellectual Property

shall mean Joint Know-How and Joint Patent Rights, collectively.

Section 1.33 "Joint Know-How". Joint Know-How shall mean any Know-How

that is developed or acquired jointly by the Parties in the course of the

Collaboration Program, excluding [**].

Section 1.34 "Joint Patent Rights". Joint Patent Rights shall mean Patent

Rights that Cover Joint Know-How.

Section 1.35 "JRDC Representative". JRDC Representative shall mean a

Party's representative designated by such Party to serve on the JRDC pursuant to

Section 2.2.

Section 1.36 "Know-How". Know-How shall mean any tangible or intangible

know-how, expertise, discoveries, inventions, information, data or materials,

including ideas, concepts,

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formulas, methods, procedures, designs, technologies, compositions, plans,

applications, technical data, samples, chemical compounds and biological

materials and all derivatives, modifications and improvements thereof.

Section 1.37 "Licensed Product". Licensed Product shall mean a Product

within the Field that includes, as an active pharmaceutical ingredient, an

Alnylam siRNA for delivery via a Medtronic Device.

Section 1.38 "Listed Alnylam Third Party Agreement". Listed Alnylam Third

Party Agreement shall mean any agreement listed on Schedule 1.38.

Section 1.39 "Major Market". Major Market shall mean any of [**].

Section 1.40 "Manufacturing Cost". Manufacturing Cost, with respect to the

manufacture and/or supply of Alnylam siRNAs for incorporation into Licensed

Products, shall mean (a) if either Party or an Affiliate of either Party

manufactures such Alnylam siRNAs, such Party's and/or its Affiliates' aggregate

manufacturing costs, which aggregate costs shall consist of (i) internal and

out-of-pocket costs of raw materials, labor and other variable costs directly

incurred in the manufacture of such Alnylam siRNAs and (ii) reasonable and

appropriate allocations (excluding [**]) pursuant to GAAP of Alnylam siRNA

manufacturing overhead costs, or (b) if [**] to a Third Party, such Party's

aggregate internal and out-of-pocket costs of procuring such [**] from the Third

Party, testing such [**] and putting such [**].

Section 1.41 "Medtronic Device". Medtronic Device shall mean any Device

sold by Medtronic.

Section 1.42 "Medtronic Intellectual Property". Medtronic Intellectual

Property shall mean Medtronic Know-How and Medtronic Patent Rights,

collectively.

Section 1.43 "Medtronic Know-How". Medtronic Know-How shall mean any

Know-How, other than Joint Know-How and Know-How related to [**] siRNAs, that

(a) either (i) is in Medtronic's possession on the Effective Date or (ii)

Medtronic develops or acquires during the Collaboration Term, (b) is useful to

Discover, Develop and Commercialize Alnylam siRNAs and/or Licensed Products, and

Program.

Section 1.44 "Medtronic Patent Rights". Medtronic Patent Rights shall mean

Patent Rights Controlled by Medtronic Covering Medtronic Know-How, but excluding

Joint Patent Rights.

Section 1.45 "NDA". NDA shall mean an application submitted to a

Regulatory Authority for marketing approval of a product, including (a) a New

Drug Application, Product License Application or Biologics License Application

filed with FDA or any successor applications or procedures, (b) a foreign

equivalent of a U.S. New Drug Application, Product License Application or

Biologics License Application or any successor applications or procedures, and

foregoing.

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Section 1.46 "Net Sales". Net Sales, with respect to a particular Licensed

Product in a particular period, shall mean the gross amount invoiced by

Medtronic, its Affiliates and/or its sublicensees on sales or other dispositions

(excluding sales or dispositions for use in clinical trials or other scientific

testing, in either case for which Medtronic receives no revenue) of the Licensed

Product to unrelated Third Parties during such period, less the following

deductions:

(a) Trade, cash and quantity discounts actually allowed and taken

directly with respect to such sales or other dispositions;

(b) Tariffs, duties, excises, sales taxes or other taxes imposed

upon and paid directly with respect to the delivery, sale or use of the Licensed

Product and included and separately stated in the applicable invoice (excluding

national, state or local taxes based on income);

recalls or returns or because of reasonable and customary chargebacks, refunds,

rebates or retroactive price reductions;

(d) Amounts previously included in Net Sales of Licensed Products

that are written-off by Medtronic as uncollectible in accordance with

Medtronic's standard practices for writing off uncollectible amounts

consistently applied; provided that if any such written-off amounts are

subsequently collected, such collected amounts shall be included in Net Sales in

the period in which they are subsequently collected; and

(e) Freight, insurance and other transportation charges incurred in

shipping a Licensed Product to Third Parties, included and separately stated in

the applicable invoice.

Such amounts shall, subject to the provisions of Sections 4.8 and 4.9, be

determined from the books and records of Medtronic, its Affiliates and/or its

sublicensees, maintained in accordance with GAAP, consistently applied.

Section 1.47 "Neurodegenerative Disease". Neurodegenerative Disease shall

mean a disease of the brain and/or spinal cord in humans that is characterized

by the chronic and progressive death of neurons which leads to the loss of

normal neural function. Such diseases include, but are not limited to,

Parkinson's disease, Huntington's disease, Alzheimer's disease, and amyotrophic

lateral sclerosis. For the avoidance of doubt, Neurodegenerative Disease shall

not include [**].

Section 1.48 "Party". Party shall mean Alnylam or Medtronic; "Parties"

shall mean Alnylam and Medtronic. As used in this Agreement, references to

"Third Parties" do not include a Party or its Affiliates.

Section 1.49 "Patent Rights". Patent Rights shall mean United States and

foreign patents, patent applications and/or provisional patent applications,

utility models and utility model applications, design patents or registered

industrial designs and design applications or applications for registration of

industrial designs, and all substitutions, divisionals, continuations,

continuation-in-part applications, continued prosecution applications, reissues,

reexaminations and extensions thereof.

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Section 1.50 "PDP Decision Milestone". PDP Decision Milestone shall mean

the satisfaction of the criteria set forth in Exhibit A with respect to [**]

Alnylam siRNA.

Section 1.51 "Person". Person shall mean any corporation, limited or

general partnership, limited liability company, joint venture, trust,

unincorporated association, governmental body, authority, bureau or agency, any

other entity or body, or an individual.

Section 1.52 "Phase I Study". Phase I Study shall mean a study of an siRNA

or Product in human volunteers or patients the purpose of which is preliminary

determination of safety and tolerability of a dosing regime and for which there

are no primary endpoints (as recognized by FDA or other Regulatory Authorities)

in the protocol relating to efficacy.

Section 1.53 "Phase II(a) Study". Phase II(a) Study shall mean a

preliminary efficacy and safety study of an siRNA or Product in the target

patient population designed to demonstrate Clinical Proof of Concept.

Section 1.54 "Phase II(b) Study". Phase II(b) Study shall mean a study of

an siRNA or Product to evaluate further any preliminary efficacy observed for,

and the safety of, the siRNA or Product in the target patient population and/or

to provide data that may be useful in the design of subsequent studies of the

siRNA or Product such as Phase III Studies or Pivotal Studies.

Section 1.55 "Phase III Study". Phase III Study shall mean a controlled

study to confirm with statistical significance the efficacy and safety of an

siRNA or Product performed to obtain marketing and/or manufacturing approval for

the product in any country.

Section 1.56 "Pivotal Study". Pivotal Study shall mean a human clinical

study, including any Phase III Study, the results of which, if the study

endpoints are met, would provide data necessary to support Regulatory Approval

for a Licensed Product in a Major Market. A Pivotal Study shall be deemed to

have commenced when the first patient has been dosed in such study or, in the

case of a study determined to meet the criteria of a Pivotal Study as set forth

above after the first patient has been dosed, when such study is determined to

meet such criteria.

Section 1.57 "Primary Sequence or Chemical Modification Know-How". Primary

Sequence or Chemical Modifications Know-How shall mean information about the

primary sequence of any siRNA or chemical modifications incorporated into any

siRNA.

Section 1.58 "Product". Product shall mean a human therapeutic product

that includes siRNA(s) as active pharmaceutical ingredient(s) delivered or

approved for delivery via a Device.

Section 1.59 "Product Development Program". Product Development Program

shall mean the Initial Product Development Program and any Additional Product

Development Program(s).

Section 1.60 "Product Development Term". Product Development Term, with

respect to a Product Development Program, shall mean the period commencing on

(a) with respect to the Initial Product Development Program, the date on which a

Proceed-to-PDP Determination is made, and (b) with respect to each Additional

Product Development Program, the date on which the Parties mutually agree to

commence such Product Development Program in accordance with

<PAGE>

Section 2.3(c)(iii), and, subject to [**], ending on the earliest date on which

at least one Licensed Product for the treatment of each Target Indication

designated for such Product Development Program has been commercially launched.

Section 1.61 "Regulatory Approval". Regulatory Approval shall mean the

approval of the applicable Regulatory Authority necessary for the marketing and

sale of a Licensed Product for a particular indication in a country, excluding

separate pricing and/or reimbursement approvals that may be required.

Section 1.62 "Regulatory Authority". Regulatory Authority shall mean a

federal, national, multinational, state, provincial or local regulatory agency,

department, bureau or other governmental entity with authority over the testing,

manufacture, use, storage, import, promotion, marketing or sale of a Product in

a country or territory.

Section 1.63 "Royalty Term". Royalty Term, with respect to each Licensed

Product in each country of the Territory, shall mean the period of time ending

on the latest date on which the manufacture, use or sale of such Licensed

Product in such country is Covered by a Valid Claim of Alnylam Patent Rights.

Section 1.64 "siRNA". siRNA means a composition designed to act primarily

through an RNAi mechanism which 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.

Section 1.65 "siRNA-Attributable Portion". siRNA-Attributable Portion,

with respect to any Licensed Product, shall mean the proportion of the end user

price of[**]such Licensed Product attributable, as determined jointly by both

Parties, to the Alnylam siRNA(s) incorporated in such Licensed Product (as

compared to the Medtronic Device incorporated in such Licensed Product), which

determination shall be made by the Parties prior to [**]. In making such

determination, the Parties shall consider [**], as well as any other factors

that the Parties may find relevant to such determination.

Section 1.66 "siRNA Cost of Goods". siRNA Cost of Goods, with respect to a

Licensed Product, shall mean (a) either (i) Manufacturing Cost amounts [**], or

(ii) if Medtronic [**], Manufacturing Cost amounts incurred by [**] incorporated

into the Licensed Product, and (b) additional amounts attributable to the

Licensed Product reimbursable by [**]).

Section 1.67 "Target Indication". Target Indication, with respect to an

Alnylam siRNA, shall mean each human disease or condition that is designated as

a Target Indication with respect to such Alnylam siRNA in accordance with

Section 2.3(c)(i) or 2.3(c)(iii).

Section 1.68 "Technology Development Term". Technology Development Term

shall mean the period commencing on the Effective Date and, subject to early

termination pursuant to Section 2.3(e) or 2.3(f), ending on the earlier of (a)

the date on which either Party notifies the other Party that such Party [**] or

(b) the [**] anniversary of the Effective Date (or, if the Parties have, prior

to the date of such

<PAGE>

[**] anniversary, elected to extend the Technology Development Term, then the

date of expiration of such extension).

Section 1.69 "Territory". Territory shall mean, subject to Section 8.2(b),

all countries of the world.

Section 1.70 "Third Party". Third Party shall mean any Person other than

Alnylam or Medtronic and their respective Affiliates.

Section 1.71 "Valid Claim". Valid Claim shall mean a claim (a) of any

issued, unexpired patent that has not been revoked or held unenforceable or

invalid by a decision of a court or governmental agency of competent

jurisdiction from which no appeal can be taken, or with respect to which an

appeal is not taken within the time allowed for appeal, and that has not been

disclaimed or admitted to be invalid or unenforceable through reissue,

disclaimer or otherwise, or (b) of any published patent application that has not

been cancelled, withdrawn or abandoned, nor been pending for more than seven (7)

years from the filing date of the earliest patent application from which such

patent application claims priority.

Section 1.72 "Workplan". Workplan shall mean a work plan describing the

activities to be undertaken during each phase of the Collaboration Program, as

adopted, updated or amended pursuant to Section 2.3, including during the

Technology Development Program, the Initial Product Development Program

(consisting of the [**] Development Program[**] Development Program) and each

Additional Product Development Program.

Section 1.73 Additional Definitions. Each of the following definitions is

set forth in the section of this Agreement indicated below:

<TABLE>

Definition Section

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

<S> <C>

"Additional Product Development Program" 2.3(c)(iii)

"Agreement" Preamble

"Alnylam" Preamble

"Alnylam Discontinuation Notice" 2.3(e)

"Alnylam Indemnified Parties" 9.1(a)

"Breaching Party" 8.2(a) or 8.2(c)

"[**] Development Program" 2.3(c)(i)

"[**] Development Program Workplan" 2.3(c)(i)

"[**] Development Program" 2.3(c)(ii)

"[**] Development Program Workplan" 2.3(c)(ii)

"Device Inventions" 5.1(b)

"Effective Date" Preamble

"Electing Party" 5.2(c)

"Exclusive Negotiation Period" 2.6(e)(ii)

"First Equity Investment" Exhibit C

---------

"Indemnified Party" 9.1(c)

"Indemnifying Party" 9.1(c)

"Initial Product Development Program" 2.3(c)(i)

"Invalidity Claim" 5.4(c)

</TABLE>

<PAGE>

<TABLE>

<S> <C>

"Investment Agreement" 4.1(a)

"Jointly Developed Inventions" 5.1(c)

"JRDC" 2.2

"KOL Panel" 2.3(c)(iv)

"Losses" 9.1(a)

"Mayo" 2.6(a)

"Medtronic" Preamble

"Medtronic Discontinuation Notice" 2.3(f)

"Medtronic Indemnified Parties" 9.1(b)

"Non-Breaching Party" 8.2(a) or 8.2(c)

"Non-Electing Party" 5.2(c)

"Pre-IND PDP Termination" 2.3(e)

"Pre-Phase I PDP Termination" 2.3(e)

"Pre-PoC PDP Termination" 2.3(e)

"Pre-Tox PDP Termination" 2.3(e)

"Proceed-to-PDP Determination" 2.3(c)(i)

"Program Data" 5.1(e)

"Right of Access" 5.1(e)

"RoFN Notice" 2.6(e)(i)

"RoFN Offer" 2.6(e)(iii)

"RoFN Opportunity" 2.6(e)

"RoFN Response Notice" 2.6(e)(i)

"RoFN Response Period" 2.6(e)(i)

"SEC" 6.1

"Second Equity Investment" Exhibit C

---------

"Severed Clause" 9.11

"Sole Inventions" 5.1(c)

"Supply Agreement" 2.8

"Technology Development Program" 2.3(b)

"Technology Development Program Workplan" 2.3(b)

"Third Equity Investment" Exhibit C

---------

"Third Party Infringement Claim" 5.4(a)

</TABLE>

Article II

Collaboration Program

Section 2.1 General. Pursuant to the terms of this Agreement, the Parties

have agreed to collaborate on the Discovery, Development, manufacture and

Commercialization of Licensed Products. The objective of the Collaboration

Program is to Discover and Develop Licensed Products. Both Parties will be

engaged in the conduct of the Collaboration Program, and shall be responsible

for various Collaboration Program activities as set forth in this Agreement.

Section 2.2 JRDC. The Parties shall establish a Joint Research and

Development Committee (the "JRDC"), comprised of three (3) JRDC Representatives

designated by Alnylam and three (3) JRDC Representatives designated by

Medtronic, each of which JRDC Representatives shall be of the seniority and

experience appropriate for service on the JRDC in

<PAGE>

light of the functions, responsibilities and authority of the JRDC. Each Party

shall make its designation of its JRDC Representatives not later than thirty

(30) days after the Effective Date. The JRDC shall meet within thirty (30) days

after the Effective Date and, thereafter, at least quarterly until the end of

the Collaboration Term, to (a) review the efforts of the Parties in the conduct

of the Collaboration Program, (b) review and, subject to Section 2.4, approve

proposed updates and amendments to the Workplan, (c) consider and determine

whether [**] and (d) otherwise oversee and direct the Collaboration Program

activities undertaken hereunder. For the avoidance of doubt, neither the JRDC

nor any of its members has the authority to make the [**] without written

authorization by each Party's Executive Officer. The location of such meetings

of the JRDC shall alternate between Minneapolis, MN and Cambridge, MA, unless

otherwise agreed by the JRDC. The JRDC may also meet by means of a telephone or

video conference call, and may take action by vote at a meeting or telephone or

video conference call, or pursuant to a written vote. Each Party may change any

one or more of its JRDC Representatives at any time upon written notice to the

other Party. Each Party shall use Commercially Reasonable Efforts to cause its

JRDC Representatives to attend the meetings of the JRDC. If a Party's JRDC

Representative is unable to attend a meeting, such Party may designate an

alternate to attend such meeting in place of the absent JRDC Representative. In

addition, each Party may, at its discretion, invite non-voting employees, and,

with the consent of the other Party, consultants or scientific advisors

(provided they are engaged as such under obligations of confidentiality) to

attend the meetings of the JRDC. The JRDC shall be dissolved and its activities

and authority terminated at the end of the Collaboration Term.

Section 2.3 Management of Collaboration Program.

(a) Workplan. The Parties shall undertake the specific Collaboration

Program activities in accordance with the relevant Workplan. Any JRDC

Representative may, at any time or from time to time, submit any proposed

additions, updates or amendments to the Workplan to the JRDC for its review. Any

such additions, updates or amendments shall not become effective until approved

in writing by the JRDC, and, in the case of the initial adoption of a new

Workplan or a material addition, update or amendment to an existing Workplan or

a significant change in the target date for completion of an activity in an

existing Workplan, approved in writing by each Party's Executive Officer. The

JRDC shall review and consider any such proposed Workplans, additions, updates

or amendments on an expeditious basis, and all such Workplans, additions,

updates and amendments approved as set forth above shall, subject to Section

2.4, constitute and be deemed part of this Agreement for all purposes and

incorporated herein.

(b) Technology Development Program. During the Technology

Development Term, Alnylam will lead, and Medtronic will cooperate with Alnylam

with respect to, a program (the "Technology Development Program") whose goal is

to achieve the [**]; provided that Medtronic will lead, and Alnylam will

cooperate with Medtronic with respect to, all Technology Development Program

activities relating directly to the design, configuration, assembly, filling or

re-filling of Devices. Alnylam shall be responsible for [**] the Technology

Development Program for siRNA Discovery and Development and Medtronic shall be

responsible for [**] the Technology Development Program for Device Development;

provided that Medtronic shall be responsible for [**] the Technology Development

Program [**] performed during such studies, where such [**] to be agreed by the

Parties and specified in the applicable Workplan. The Technology Development

Program will be conducted in accordance with a Workplan to be

<PAGE>

mutually agreed to by the Parties within forty-five (45) days after the

Effective Date, in substantially the form attached as Exhibit B (the "Technology

Development Program Workplan"), which shall initially address, in reasonable

detail, the roles and responsibilities of each Party with respect to (i) the

design and identification of Alnylam siRNAs [**], (ii) the assessment of such

Alnylam siRNAs [**] as potential Development Candidates and (iii) the evaluation

of Devices, or prototypes thereof[**] to determine their compatibility with, and

suitability to deliver, Alnylam siRNAs. The JRDC shall monitor the progress of

the Technology Development Program on a regular basis, and shall be responsible

for determining if and when the [**] has been achieved with respect to [**]

Alnylam siRNA.

(i) First Development Candidate. Following a determination by

the JRDC that the [**] has been achieved, each Party shall determine whether it

desires to continue the Collaboration Program by initiating the Initial Product

Development Program (as defined below) with respect to a first Alnylam siRNA. If

both Parties desire to so continue, the Parties shall discuss which Alnylam

siRNA will initially be designated as the first Development Candidate for such

Initial Product Development Program, or what further work may be required before

designating an Alnylam siRNA as such Development Candidate, and what

indication(s) to designate as Target Indication(s) for such Development

Candidate, which Target Indication(s) shall be [**] corresponding to the Alnylam

siRNA(s) to be included in the Initial Product Development Program. If the

Parties reach a preliminary agreement upon such designations of a Development

Candidate (or work required prior to making such designation) and Target

Indication(s), the Parties shall negotiate a new Workplan (the [**]Development

Program Workplan" and the portion of the Initial Product Development Program

covered by such new Workplan the "[**] Development Program") in accordance with

Section 2.3(a), which shall (A) include plans and budgets for the designation,

if still pending, and Development of such Development Candidate for the

designated Target Indication(s), (B) specify the responsibilities of each Party

in performing clinical study activities, such as filing INDs with Regulatory

Authorities, the selection of centers, negotiation and execution of clinical

agreements, training, monitoring, data collection, notice of adverse events and

other regulatory requirements and (C) agree upon [**] for the Initial Product

Development Program, and to the extent reasonably feasible at the time such

Workplan is prepared, on [**]; provided that to the extent it is not reasonably

feasible at the time such Workplan is prepared to specify [**] for the Initial

Product Development Program, the [**] shall be subject to the approval of both

Parties, or by [**] in the absence of such joint approval, prior to [**], which

approval determinations shall be based solely on [**]t. The Parties acknowledge

that in the course of the Initial Product Development Program, the Parties (but

not the JRDC) may modify the [**] for the Initial Product Development Program,

and [**], by amending the relevant Workplan as set forth in Section 2.3(a) to

reflect such modification(s). The mutual agreement of the Parties to proceed

with implementation of such [**] Development Program Workplan and the Parties'

execution of the Investment Agreement shall constitute the Parties'

determination (the "Proceed-to-PDP Determination") to commence and carry out a

program (the "Initial Product Development Program") for the Development of such

Development Candidate as a Licensed Product for the treatment of the Target

Indication(s), a primary goal of which shall be to achieve Regulatory Approval

of such Licensed Product for the treatment of such Target Indication(s).

<PAGE>

(ii) Workplans. The [**] Development Program Workplan

negotiated by the Parties prior to the Proceed-to-PDP Determination shall

specify that [**]; provided that Medtronic will lead, and Alnylam will cooperate

with Medtronic with respect to all Product Development Program activities (i)

relating directly to the design, configuration, assembly, filling or re-filling

of Devices, [**] Product Development Program [**]y. Alnylam shall be responsible

for [**] to the designated Development Candidate in the course of the [**]

Development Program activities assigned to it pursuant to the [**] Development

Program Workplan (including the [**]; provided that, if a [**] is achieved is

designed with the intention that [**] may be determined based on an [**], then

Alnylam shall [**]and Medtronic shall be responsible for all subsequent costs of

such clinical study[**] and Medtronic shall [**] [**] Development Program [**].

Following the achievement of [**], the Parties shall, subject to any early

termination of the Initial Product Development Program, adopt additional

Workplan(s) to cover further Development of the designated Development Candidate

and of applicable Devices (each such additional Workplan, a "[**] Development

Program Workplan" and the portions of the Initial Product Development Program

covered by each such additional Workplan, collectively, the "[**] Development

Program"). Medtronic shall be responsible for [**]Development Program. Each [**]

Development Program Workplan shall specify as appropriate, in all requisite

detail, [**] in connection with any activities to be performed by Alnylam

pursuant to [**] Development Program Workplan. In connection with such

activities, Medtronic shall [**] through the Supply Agreement as described in

Section 2.8, (y) [**] in accordance with the [**] Development Program Workplan,

and (z) the [**] internal resources used by Alnylam in accordance with the [**]

Development Program Workplan. Notwithstanding the foregoing, Medtronic shall

[**] Alnylam's JRDC Representatives performing JRDC responsibilities or by

Alnylam employees or agents for activities not assigned to Alnylam in the [**]

Development Program Workplan [**] in accordance with Section 2.3(b)).

(iii) Additional Product Development Programs. At any time

during the Collaboration Term, the Parties may mutually agree (w) to initiate

additional program(s) (each, an "Additional Product Development Program") to

Discover and Develop additional Alnylam siRNA(s), Development Candidate(s) and

Licensed Product(s), (x) to adopt additional Workplan(s) for any such Additional

Product Development Program(s), including [**] in connection with any activities

performed by Alnylam with respect to such Additional Product Development

Program(s), (y) on the Target Indication(s) for Alnylam siRNA(s) within each

such Additional Product Development Program, [**] for each such Additional

Product Development Program, and to the extent reasonably feasible at the time

any such Workplan is prepared, on [**] (provided that to the extent it is not

reasonably feasible at the time such Workplan is prepared to specify [**] for

such Additional Product Development Program, the [**] shall be subject to the

approval of both Parties, or [**] in the absence of such joint approval, prior

to [**], which approval determinations shall be based solely on [**]), and (z)

pursuant to Section 4.1(b), on [**] prior to achievement of [**] in such

Additional Development Program(s) in [**] to such Additional Development

Program(s). Additional Development relating to [**] a Product Development

Program separate from an existing Product Development Program in which such

siRNA is Developed for [**]; provided that all such additional Development shall

be [**].

(iv) Determination of [**]. If the Parties are unable to agree

on (A) the [**] any Product Development Program, (B) [**] or (C) [**] in any

Product Development Program, then, in either case, the Parties shall submit such

dispute to [**]. One member of any

<PAGE>

[**] shall be nominated by Alnylam, one member shall be nominated by Medtronic

and the third shall be selected by the two members nominated by the Parties. If

the Parties pursue more than one Product Development Program, the Parties may

elect to [**] for different Product Development Programs in order to [**] of the

respective Product Development Programs. The determination of [**] as to such

dispute shall be binding on both Parties. Each Party shall be responsible for

[**] nominated by it and the Parties shall share equally in [**]l. The Parties

may also elect by mutual agreement to use [**] for guidance on other issues that

may arise in the course of the Collaboration Program.

(d) Collaboration Program Responsibilities. Each Party agrees to use

its Commercially Reasonable Efforts in good faith to (i) undertake the

responsibilities assigned to such Party in the Workplan, (ii) perform its

obligations hereunder in a scientifically sound and workmanlike manner; (iii) as

appropriate, make available to the other Party those resources set forth in the

Workplan; and (iv) carry out all work done in the course of the Collaboration

Program in material compliance with all applicable federal, state or local laws,

regulations and guidelines governing the conduct of such work. Either Party may

perform its Collaboration Program responsibilities hereunder through its

Affiliates or through the use of Third Party contractors such as contract

research organizations, contract employees, consultants and the like who merely

conduct activities on behalf of such Party, are subject to such Party's

supervision and control and will not have any rights (other than non-exclusive

research rights) in any intellectual property created in connection such

activities; provided that such Party shall remain primarily liable for its

obligations under this Agreement.

(e) Discontinuation of Certain Technology Development Program and

Product Development Program Activities by Alnylam. Notwithstanding anything to

the contrary in this Agreement, Alnylam may, in its sole discretion, by written

notice to Medtronic (an "Alnylam Discontinuation Notice"), discontinue (i) its

Technology Development Program activities with respect to any Alnylam siRNA or

indication or (ii) its Product Development Program activities, if in Alnylam's

business judgment the continuation of such activities is not reasonably likely

to result in the completion of Alnylam's Technology Development Program or

Product Development Program activities at an acceptable cost (in view of

Alnylam's expected return from any resulting Licensed Products), and no such

discontinuation shall constitute a breach of Alnylam's obligations hereunder.

Any such discontinuation shall constitute a termination of the Technology

Development Program or Product Development Program, as applicable; provided that

[**]. Such a termination of a Product Development Program by Alnylam shall

constitute (A) a [**] with respect to an Alnylam siRNA included in such Product

Development Program, (B) a [**] with respect to an Alnylam siRNA included in

such Product Development Program, (C) a [**] with respect to an Alnylam siRNA

included in such Product Development Program, or (D) a [**] with respect to an

Alnylam siRNA included in such Product Development Program. Subject to any other

provision of this Agreement under which [**], termination of a Product

Development Program pursuant to this Section 2.3(e) shall not result in [**]

with respect to any Alnylam siRNA(s) included in such Product Development

Program or in [**] provided that [**].

(f) Discontinuation of Certain Technology Development Program and

Product Development Program Activities by Medtronic. Notwithstanding anything to

the contrary in this Agreement, Medtronic may, in its sole discretion, by

written notice to Alnylam at

<PAGE>

any time (a "Medtronic Discontinuation Notice"), discontinue (i) its Technology

Development Program activities with respect to any Alnylam siRNA or indication,

or (ii) its Product Development Program activities for an Alnylam siRNA included

in such Product Development Program, if in Medtronic's business judgment the

continuation of such activities is not reasonably likely to result in the

completion of the Technology Development Program or Product Development Program

activities at an acceptable cost (in view of Medtronic's expected return from

any resulting Licensed Products), and no such discontinuation shall constitute a

breach of Medtronic's obligations hereunder. Any such discontinuation shall

constitute a termination of the Technology Development Program or Product

Development Program and Medtronic's licenses hereunder with respect to all

Alnylam siRNAs included in such Technology Development Program or Product

Development Program, as applicable.

(g) Failure to Advance Alnylam siRNAs After [**]. Notwithstanding

any other provision of this Agreement, if an Alnylam siRNA included in a Product

Development Program (i) has achieved [**]but[**]with respect to such Alnylam

siRNA or any other Alnylam siRNA included in the same Product Development

Program prior to [**] on which such Alnylam siRNA [**], or (ii) has achieved

[**] but [**] with respect to such Alnylam siRNA or any other Alnylam siRNA

included in the same Product Development Program prior to [**] on which such

Alnylam siRNA achieved [**] (provided however, that if prior to such [**]

anniversary [**] has been completed but Medtronic becomes aware or determines,

as a result of [**], that an [**], such [**] deadline shall automatically be

extended to the [**]), then, in either such event, Alnylam may, at its option,

notify Medtronic that it intends to terminate such Product Development Program

and Medtronic's licenses hereunder with respect to all Alnylam siRNAs included

in such Product Development Program, which termination (together with any

related consequences of such termination set forth in Article VIII) shall be

Alnylam's sole and exclusive remedy and Medtronic's sole and exclusive liability

for such failure to advance. Such terminations will take effect on [**] unless

(A) if the basis for such notice is [**] with respect to an Alnylam siRNA

included in such Product Development Program is commenced prior to the [**], (B)

if the basis for such notice is [**] with respect to an Alnylam siRNA included

in such Product Development Program has been [**] prior to the [**] or (C) if

the basis for such notice is [**], prior to the [**] Medtronic provides to

Alnylam a [**], as applicable, which [**] is reasonably acceptable to Alnylam,

and thereafter Medtronic [**] in accordance with such [**].

Section 2.4 Decisionmaking. All decisions of the JRDC shall be made by

unanimous vote of the JRDC Representatives, with each Party's JRDC

Representatives collectively having one vote, and the goal of all decision

making shall be to achieve consensus. Upon fifteen (15) days prior written

notice, either Party may convene a special meeting of the JRDC for the purpose

of resolving any failure to reach agreement on a matter within the scope of the

authority and responsibility of the JRDC. If the JRDC is unable to reach

agreement on any matter so referred to it for resolution by one or more of the

Parties within thirty (30) days after the matter is so referred to it, such

matter shall be referred to the Executive Officers for resolution. If the matter

is not resolved by the Executive Officers within thirty (30) days after referral

to the Executive Officers, then:

(a) if such matter relates primarily to Collaboration Program

activities with respect to any Alnylam siRNA or Development Candidate that has

not yet achieved [**], Alnylam shall have the right to decide the matter;

<PAGE>

(b) if such matter relates primarily to Collaboration Program

activities with respect to any Alnylam siRNA or Development Candidate that has

achieved [**], Medtronic shall have the right to decide the matter;

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