Exhibit
4.1


AMENDMENT
NO. 1


TO


RIGHTS AGREEMENT


AMENDMENT NO. 1, dated as of December 20, 2006 (“First Amendment”), to
the Rights Agreement (the “Rights Agreement”), January 24, 2001, between
PRAECIS PHARMACEUTICALS INCORPORATED, a Delaware corporation (the “Company”)
and American Stock Transfer and Trust Company, a New York banking corporation,
as rights agent (the “Rights Agent”).


WHEREAS, the Company and the Rights Agent have previously entered into
the Rights Agreement; and


WHEREAS, the Board of Directors of the Company (the “Board”) has
determined that it is in the best interests of the Company and its stockholders
to amend the Rights Agreement as set forth herein immediately prior to and in
connection with the execution of the Agreement and Plan of Merger by among
SmithKline Beecham Corporation, a Pennsylvania corporation (“Parent”), Pilgrim
Acquisition Corporation , a newly-formed Delaware corporation and a
wholly-owned subsidiary of Parent (“Merger Sub”), and the Company (as the same
may be amended from time to time the “Merger Agreement”), pursuant to which,
among other things, (i) Merger Sub will commence a cash tender offer (the “Offer”)
to purchase all of the outstanding shares of common stock, par value $0.01 per
share, of the Company and (ii) Merger Sub shall merge with and into the Company
(the “Merger”), with the Company continuing as the surviving corporation; and


WHEREAS, the Company desires to amend the Rights Agreement prior to
entering into the Merger Agreement to render the Rights inapplicable to the
Merger Agreement, the Offer, the Merger and the other transactions contemplated
by the Merger Agreement; and


WHEREAS, Section 27 of the Rights Agreement provides that prior to the
Distribution Date, the Rights Agent shall, if the Company so directs,
supplement or amend any provision of the Rights Agreement without the approval
of any holders of certificates representing shares of Common Stock; and


WHEREAS, the Board has determined that it is in the best interests of
the Company and its stockholders and consistent with the objectives of the
Board in adopting the Rights Agreement to amend the Rights Agreement prior to
entering into the Merger Agreement to except from the operation of the Rights
Agreement the Merger Agreement, the Offer, the Merger and the other
transactions contemplated by the Merger Agreement; and


WHEREAS, at a duly convened special meeting, the Board approved the
amendment of the Rights Agreement in the manner set forth herein; and


WHEREAS, the Company has delivered to the Rights Agent a certificate,
dated as of the date hereof, of an appropriate officer of the Company
certifying that this First Amendment is in compliance with the terms of Section
27 of the Rights Agreement and instructing the Rights Agent to execute and
deliver this First Amendment, and this First Amendment has been executed









 



 


and delivered by the Rights Agent and the Company
prior to the Company entering into the Merger Agreement.


NOW, THEREFORE, in consideration of the foregoing, the mutual
agreements herein set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Rights Agent hereby agree as follows:


1.                                       Amendment
of Section 1.  Section 1 of the
Rights Agreement is supplemented to add the following definitions in the proper
alphabetical order:


“‘Effective Time’
shall have the meaning set forth in the Merger Agreement.”


“‘Merger Agreement’
shall mean the Agreement and Plan of Merger by and among the Company, Parent
and Merger Sub, as it may be amended from time to time.”


“‘Merger’ shall
have the meaning set forth in the Merger Agreement.”


“‘Merger Sub’
shall mean Pilgrim Acquisition Corporation, a Delaware corporation and a wholly
owned subsidiary of Parent.”


“‘Parent’ shall
mean SmithKline Beecham Corporation, a Pennsylvania corporation.”


“‘Offer’ shall
mean the tender offer provided for in the Merger Agreement, as such offer may
be amended from time to time.”


“‘Transactions’
shall mean (i) the announcement, approval, execution, delivery or
amendment of the Merger Agreement, (ii) the announcement, commencement or
amendment of the Offer, or the acceptance for payment of, or purchase or
payment for, shares of Common Stock pursuant to the Offer, (iii) the
announcement or consummation of the Merger, or (iv) the consummation of any of
the other transactions contemplated by the Merger Agreement.”


2.                                       Amendment
to Definition of “Acquiring Person.” Section 1(a) of the Rights Agreement
is amended to add the following sentence after the last sentence thereof: “Notwithstanding
the foregoing or any provision to the contrary in this Agreement, neither
Parent nor Merger Sub, nor any of their respective Subsidiaries, Affiliates or
Associates, are, nor shall any of them be deemed to be, an Acquiring Person by
virtue of the Transactions.”









 



 


3.                                       Amendment
to Definition of “Distribution Date.” Section 1(k) of the Rights Agreement
is amended to add the following proviso to the end of the last sentence of such
section: “; provided, however, that notwithstanding the
foregoing, a Distribution Date shall not occur or be deemed to have occurred as
a result of the Transactions.”


4.                                       Amendment
to Definition of “Section 11(a)(ii) Event.” Section 1(cc) of the Rights
Agreement is amended to add the following proviso to the end of the last
sentence of such section: “; provided, however, that
notwithstanding the foregoing, a Section 11(a)(ii) Event shall not occur or be
deemed to have occurred as a result of the Transactions.”


5.                                       Amendment
to Definition of “Section 13 Event.” Section 1(dd) of the Rights Agreement
is amended to add the following proviso to the end of the last sentence of such
section: “; provided, however, that notwithstanding the
foregoing, a Section 13 Event shall not occur or be deemed to have occurred as
a result of the Transactions “


6.                                       Amendment
to Definition of “Stock Acquisition Date.” Section 1(ff) of the Rights
Agreement is amended to add the following proviso to the end of the last
sentence of such section: “; provided, however, that
notwithstanding the foregoing, a Stock Acquisition Date shall not occur or be
deemed to have occurred as a result of the Transactions.”


7.                                       Amendment
to Definition of “Triggering Event.” Section 1(kk) of the Rights Agreement
is amended to add the following proviso to the end of the last sentence of such
section: “; provided, however, that notwithstanding the
foregoing, a Triggering Event shall not occur or be deemed to have occurred as
a result of the Transactions.”


8.                                       Amendment
to Section (3)(a).  Section 3(a) of
the Rights Agreement is amended and restated in its entirety to read as
follows:


“(a) Until the earlier of (i) the close of business
on the tenth day after the Stock Acquisition Date (or, if the tenth day after
the Stock Acquisition Date occurs before the Record Date, the close of business
on the Record Date), or (ii) the close of business on the tenth Business Day
(or such later date as the Board shall determine) after the date that a tender
or exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d- 2(a) of the General Rules and









 



 


Regulations under the Exchange Act, if upon
consummation thereof, such Person would become an Acquiring Person, in either
instance other than pursuant to a Qualified Offer (the earlier of (i) and (ii)
being herein referred to as the ‘Distribution Date’, provided, however,
that notwithstanding the foregoing, a Distribution Date shall not occur or be
deemed to have occurred as a result of the Transactions), (x) the Rights will
be evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Common Stock registered in the names of the holders of
the Common Stock (which certificates for Common Stock shall be deemed also to
be certificates for Rights) and not by separate certificates, and (y) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company).  As soon as practicable after the Distribution
Date, the Rights Agent will send by first-class, insured, postage-prepaid mail,
to each record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more right certificates, in substantially the form of Exhibit B
hereto (the ‘Rights Certificates’), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein.  In the event that an adjustment in the number
of Rights per share of Common Stock has been made pursuant to Section 11(p)
hereof, at the time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights.  As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates.”


9.                                       Amendment
to Section (7)(a).  Section 7(a) of
the Rights Agreement is amended and restated in its entirety to read as
follows:


“(a) Subject to Section 7(e) hereof, at any time
after the Distribution Date, the registered holder of any Rights Certificate
may exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part
upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-thousandths of a share (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earliest of (i)
5:00 P.M., New York City time, on February 5, 2011, or such later date as may
be established by the Board of Directors prior to the expiration of the Rights
(such date, as it may be extended by the Board, the ‘Final Expiration Date’,
(ii) the time at which the Rights are redeemed or exchanged as provided in
Section 23 and Section 24









 



 


hereof, or (iii) the
Effective Time (the earliest of (i), (ii) and (iii) being herein referred to as
the ‘Expiration Date’).”


10.                                 Amendment
to Section 11(a)(ii).  Section
11(a)(ii) of the Rights Agreement is amended to add the following proviso to
the end of the last sentence of such section: “; provided, however,
that notwithstanding the foregoing, no provision for adjustment shall be made
pursuant to this Section 11(a)(ii) as a result of the Transactions.”


11.                                 Amendment
to Section 13(a).  Section 13(a) of
the Rights Agreement is amended to add the following proviso to the end of the
last sentence of such section: “; provided, however, that
notwithstanding the foregoing, no provision for adjustment shall be made
pursuant to this Section 13(a) as a result of the Transactions.”


12.                                 Addition
of new Section 25(c).  A new Section
25(c) is hereby added reading in its entirety as follows:


“(c) Notwithstanding the foregoing or any provision
to the contrary in this Agreement, the Company shall not be required to give
any notice contemplated by this Section 25 in connection with the Merger
provided that the Company will endeavor to provide the Rights Agent with notice
of the Effective Time.”


13.                                 Termination
of Merger Agreement.  This First
Amendment shall terminate automatically and be of no further force and effect
from and after the termination of the Merger Agreement prior to the Purchase
Time (as defined in the Merger Agreement), whereupon the Rights Agreement shall
automatically be the same as it existed immediately prior to the execution and
delivery of this First Amendment; provided that for the avoidance of doubt,
such termination of this First Amendment shall not affect the validity and
effect of this First Amendment prior to such termination.


14.                                 Definitions.  Terms not otherwise defined in this First
Amendment shall have the meaning ascribed to such terms in the Rights
Agreement.  The term “Agreement” or “Rights
Agreement” as used in the Rights Agreement shall be deemed to refer to the
Rights Agreement as amended hereby, and all references to the Agreement or
Rights Agreement shall be deemed to include this First Amendment.


15.                                 Governing
Law.  This First Amendment shall be
governed by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflict of laws.









 



 


16.                                 Counterparts
and Facsimile Signature.  This First
Amendment may be executed in counterparts, each of which shall be deemed an
original, but which together shall constitute one and the same instrument.  This First Amendment may be executed by
facsimile signature.


17.                                 Descriptive
Headings.  Descriptive headings of
the several Sections of this First Amendment are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.


18.                                 Severability.  If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or unenforceable.


19.                                 Effectiveness.  This First Amendment shall be effective as of
the date first written above, and except as expressly set forth herein, the
Rights Agreement shall remain in full force and effect and otherwise shall be
unaffected hereby.


IN WITNESS WHEREOF, the parties hereto have caused
this First Amendment to be duly executed as of the day and year first above
written.


	
  

  	
  PRAECIS PHARMACEUTICALS INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Edward C. English

  
	
   

  	
  By:

  	
  Name:

  	
  Edward C. English

  
	
   

  	
   

  	
  Title:

  	
  Vice President, Chief Financial Officer and
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN STOCK TRANSFER AND
  TRUST COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Herbert J. Lemmer

  
	
   

  	
  By:

  	
  Name:

  	
  Herbert J. Lemmer

  
	
   

  	
   

  	
  Title:

  	
  Vice President