Exhibiot 10.20


 




	
   

  	
  EXECUTION

  
	
   

  	
  COPY

  






 


SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE


 


This Settlement Agreement and Mutual General Release
(hereinafter referred to as this “Release Agreement”) is entered into as of the
19th day of October, 2005 by and between PRAECIS PHARMACEUTICALS, INC., a
corporation organized and existing under the laws of the State of Delaware
having its principal place of business at 830 Winter Street, Waltham,
Massachusetts 02451, USA (hereinafter referred to as “Praecis”) and SCHERING
AG, a corporation organized and existing under the laws of Germany having its
principal place of business at 13442 Berlin, Germany (hereinafter referred to
as “Schering”), who may be referred to individually herein as a “Party” and
collectively as the “Parties”


 


WITNESSETH:


 


WHEREAS, Praecis and Schering had entered into a
License, Supply and Distribution Agreement dated April 27, 2004 (the “Agreement”)
for the pharmaceutical product(s) containing an active ingredient known as “PPI-149”,
defined as the “Product” in the Agreement, and marketed under the Praecis
trademark of PLENAXIS®;


 


WHEREAS the Parties wish to terminate the Agreement and
release each other from any and all claims arising thereunder;


 


NOW THEREFORE, in consideration of the foregoing
recitals and the mutual covenants and agreements contained herein, and for
other valuable consideration, the Parties, intending to be legally bound, do
agree as follows:


 


1.                                      Definitions


 


All capitalized terms, unless defined herein, shall
have the meanings ascribed to them as set forth in the Agreement.


 


2.                                      Termination of Agreement


 


The Agreement is terminated in its entirety and in
all countries by Schering pursuant to Section 16.2(a) effective September 28,
2005. As the Parties acknowledge that the Agreement has been validly terminated
in its entirety, Praecis shall be entitled to Develop, manufacture and Commercialize
the Product in any and all countries in the Territory.


 

















 


3.                                      Reversion of Licenses


 


Any and all rights and licenses in or with respect
to the Product that were granted to Schering in the Agreement have reverted
back to Praecis, effective September 28, 2005.


 


4.                                      Settlement Payment


 


No later than 16:00 Central European Time five (5) business
days after Schering receives an executed copy of this Release Agreement by fax
or email, Schering shall pay to Praecis the sum of $4,000,000.00 (Four Million
U.S. Dollars) (hereinafter referred to as the “Settlement Payment”) by wire transfer
to Praecis’ account in accordance with the following wire transfer instructions:


 


UBS AG


ABA number 026007993


UBS Financial Services Inc.


Account number XXX-XX-XXXXXX-000


F/C PRAECIS Pharmaceuticals Inc.


Praecis’ account number CP-XXXXX


 


5.                                      Extinguishment of Schering’s
Payment Obligations


 


Upon Praecis’ receipt of the Settlement Payment,
Schering shall have no further obligation to pay Praecis any Milestone Payments
under Article VIII  and/or Schedule 8.1
of the Agreement and/or any other provision under the Agreement and/or any
other compensation regardless of whether any additional “Events” for Milestone
Payments occur before Praecis’ receipt of the Settlement Payment. Upon receipt
of the Settlement Payment, Praecis agrees that it shall not seek any further
payment or other compensation from Schering. Schering shall have no
responsibility for income taxes or other taxes, if any, that may be payable
by Praecis as a result of the receipt of the Settlement Payment by Praecis, and
any such tax liability shall be the responsibility of Praecis.


 


6.                                      General Releases


 


(a)                                  Schering’s Release.


 


In consideration for the covenants stated herein,
Schering hereby fully releases, remises, acquits and forever discharges
Praecis and its parents, subsidiaries, affiliates, and all their agents,
servants, heirs, administrators, executors, insurers, employees, officers,
directors, shareholders, legal representatives and all other related entities,
predecessors, successors and assigns from any


 


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and all claims, demands,
judgments, damages, liabilities, costs or expenses (including attorney’s fees
or court costs), actions or causes of action at
law or in equity, whether based in contract, tort, statute, regulation or any
other legal or equitable theory of recovery, whether direct or indirect, whether
known or unknown, whether presently discoverable or undiscoverable, whether
suspected or claimed, arisen or yet to arise, which it ever had, now has or may in the future have against Praecis by reason of
any matter, cause or thing whatsoever arising on or before the date of this
Release Agreement and in any way related to the Agreement and/or the manufacture,
Commercialization, Development, Improvement, Marketing Authorization
Application, Licensed Activities, supply and/or distribution of the Product, excluding
claims, actions or causes of action under this Release Agreement.


 


(b)                                  Praecis’ Release.


 


Effective upon its receipt of the aforementioned Settlement
Payment, Praecis hereby fully releases, remises, acquits and forever
discharges Schering and its parents, subsidiaries, affiliates, and all their
agents, servants, heirs, administrators, executors, insurers, employees,
officers, directors, shareholders, legal representatives and all other related
entities, predecessors, successors and assigns from any and all claims,
demands, judgments, damages, liabilities, costs or expenses (including attorney’s
fees or court costs), actions or
causes of action at law or in equity, whether based in contract, tort, statute,
regulation or any other legal or equitable theory of recovery, whether direct
or indirect, whether known or unknown, whether presently discoverable or
undiscoverable, whether suspected or claimed, arisen or yet to arise, which it
ever had, now has or may in the future have
against Schering by reason of any matter, cause or thing whatsoever arising on
or before the date of this Release Agreement and in any way related to the Agreement
and/or the manufacture, Commercialization, Development, Improvement, Marketing
Authorization Application, licensing, supply and/or distribution of the Product,
excluding claims, actions or causes of action under this Release Agreement.


 


7.                                      Confidentiality


 


The terms and conditions of this Release Agreement
shall be confidential and shall be subject to the Confidentiality obligations
of the Parties set forth in Article XII of the Agreement, which terms
shall survive termination.


 


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8.                                      No Admission of Liability


 


This Release
Agreement and the Settlement Payment represent a compromise and settlement of
the dispute and are not an admission of liability on the part of either
Party, nor an admission that either Party bears any fault or concedes any point,
and is solely for the purpose of avoiding the expense and inconvenience of litigation
and terminating the Agreement.


 


9.                                      Advice
of Counsel.


 


Each
party has had the opportunity to obtain the advice of counsel with respect to
this Release Agreement, and in executing this Release Agreement, there was no
promise or representation made other than as set forth herein.


 


10.                               Binding
on Successors and Assigns.


 


This
Release Agreement shall be binding upon and inure to the benefit of each Party’s
respective successors and assigns.


 


11.                               Execution
in Counterparts.


 


This document may be executed in counterparts. Signatures
delivered by facsimile or email shall be enforceable as originals.


 


12.                               Termination.


 


If Praecis has not received the Settlement Payment
by 12:00 noon (Boston time) on Thursday, October 27, 2005, Praecis may, by
notice to Schering, terminate this Release Agreement whereupon this Release
Agreement shall be void ab  initio and without any force or
effect.


 


13.                               Governing Law; Jurisdiction.


 


The provisions of Section 18.12 of the
Agreement shall apply to this Release Agreement.


 


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left blank; Signature Page Follows]


 


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IN WITNESS WHEREOF, Schering and Praecis have caused this Settlement Agreement and Mutual
General Release to be executed as of the date stated above by their respective
authorized representatives.


 


	
  Berlin, Germany: October 19, 2005

  	
  Waltham, Massachusetts: October 19, 2005

  
	
  SCHERING AKTIENGESELLSCHAFT

  	
  PRAECIS PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Steffen Schroeder

  	
  /s/ Oliver Kohlhaas

  	
   

  	
  By:

  	
  /s/ Kevin F. McLaughlin

  	
   

  
	
   

  	
  Name: Steffen Schroeder

  	
  Oliver Kohlhaas

  	
   

  	
   

  	
  Name: Kevin F. McLaughlin

  	
   

  
	
   

  	
  Title: Legal Department

  	
  Head of Strategy

  and Business

  Development Europe

  	
   

  	
   

  	
  Title: President and Chief Executive Officer

  	
   

  



 


[Signature Page to Settlement Agreement
and Mutual Geneal Release]


 


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