**Exhibit10.4**

 

FIRST AMENDMENT TOACQUISITION ANDCONSTRUCTION LOAN AGREEMENT

 

This FIRSTAMENDMENT TO ACQUISITION AND CONSTRUCTION LOAN AGREEMENT (this “Amendment”), ismade as of the 28th day of June 2004, by and between 830 WINTERSTREET LLC, a Delaware limited liability company, having an address of c/oPraecis Pharmaceuticals Incorporated, 830 Winter Street, Waltham, Massachusetts02451 (“Borrower”) and ANGLO IRISH BANK CORPORATION PLC, with an address at 84State Street, Boston, Massachusetts 02109 (“Lender”).

 

WITNESSETH:

 

Reference is hereby madeto the following facts:

 

A.                                   Lenderhas made that certain Loan (the “Loan”) to the Borrower, which Loan is securedby certain real property and improvements located at 830 Winter Street inWaltham, Middlesex County, Massachusetts (the “Property”).  In connection therewith, the Borrowerexecuted and delivered to the Lender (or caused to be executed and delivered tothe Lender), among other things, the following (collectively, together with allother documents and instruments heretofore executed and delivered in connectionwith the Loan, and all amendments and modifications thereto, the “Existing LoanDocuments”):

 

1.                                       Thatcertain Acquisition and Construction Loan Agreement (the “Original LoanAgreement”), dated as of July 11, 2000, between the Borrower and theLender;

 

2.                                       Thatcertain Promissory Note (the “Original Note”), dated as of July 11, 2000,made by the Borrower, payable to the order of the Lender, in the originalprincipal amount of $33,000,000.00;

 

3.                                       Thatcertain Construction Mortgage and Security Agreement (the “Original Mortgage”),dated as of July 11, 2000, from the Borrower, as mortgagor, to the Lender,as mortgagee, filed with the Middlesex South Registry District of the LandCourt (the “Land Court”) as Document No. 1144043;

 

4.                                       Thatcertain Assignment of Leases and Rents (the “Original Assignment of Leases”),dated as of July 11, 2000, from the Borrower, as assignor, to the Lender,as assignee, filed with the Land Court as Document No. 1144044;

 

5.                                       Thatcertain Collateral Assignment and Security Agreement in respect of Contracts,Licenses and Permits (the “Original Collateral Assignment

 

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of Contracts, Licensesand Permits”), dated as of July 11, 2000, made by the Borrower in favor ofthe Lender;

 

6.                                       Thatcertain Guaranty of Costs and Completion (the “Costs and Completion Guaranty”)dated as of July 11, 2000, made by Praecis Pharmaceuticals Incorporated(the “Guarantor”) in favor of Lender;

 

7.                                       Thatcertain Guaranty of Non-Recourse Exceptions (the “Original Non-RecourseExceptions Guaranty”) dated as of July 11, 2000, made by Guarantor infavor of Lender;

 

8.                                       Thatcertain Environmental Compliance and Indemnity Agreement (the “OriginalEnvironmental Indemnity”), dated as of July 11, 2000, made jointly andseverally by the Borrower and the Guarantor in favor of the Lender;

 

9.                                       Thosecertain UCC-1 Financing Statements (collectively, the “Original UCC-1 FinancingStatements”) filed with the Secretary of State of Massachusetts and with theLand Court as Document No. 11044045; and

 

10.                                 Certainother collateral security documents.

 

**B.**                                     Prior to the date hereof, Project Completion hasbeen achieved, the Loan has been fully funded by the Lender to the Borrower andthe Initial Term has been extended to July 30, 2004 in accordance with theterms of the Existing Loan Documents.

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C.                                     Lenderand Borrower have agreed to further extend the maturity date of the Loan and tomodify and amend the Loan in certain respects. In connection therewith the Borrower, the Lender and the Guarantor, asapplicable, have agreed as follows: (i) to modify and amend the Original LoanAgreement, pursuant to this Amendment; (ii) to modify and amend the OriginalNote pursuant to that certain First Amendment to Note (the “First Note Amendment”),of even date herewith; (iii) to modify and amend the Original Mortgage pursuantto that certain First Amendment to Construction Mortgage and Security Agreement(the “First Mortgage Amendment”), of even date herewith; (iv) to modify andamend the Original Assignment of Leases, pursuant to that certain FirstAmendment to Assignment of Leases and Rents (the “First Assignment of LeasesAmendment”), of even date herewith; (v) to modify, amend and reaffirm theOriginal Collateral Assignment of Contracts, Licenses and Permits pursuant tothat certain First Amendment to Collateral Assignment and Security Agreement inrespect of Contracts, Licenses and Permits (the “First Collateral Assignment ofContracts, Licenses and Permits Amendment”), of even date herewith; (vi) tomodify, amend and reaffirm the Original Non-Recourse Exceptions Guaranty,pursuant to that certain First Amendment to and Reaffirmation of Guaranty ofNon-Recourse Exceptions (the “First Non-Recourse Exceptions GuarantyAmendment”), of even date herewith; (vii) to modify, amend and reaffirm theOriginal Environmental Indemnity, pursuant to that certain First Amendment toand Reaffirmation of Environmental Compliance and Indemnity Agreement (the“First

 

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Environmental IndemnityAmendment”), of even date herewith; (viii) to modify the Original UCC-1Financing Statements pursuant to UCC-3 Financing Statements and to file a newUCC-1 Financing Statement with the Secretary of the State of Delaware(collectively, the “Financing Statement Amendments”) of even dateherewith.  This Amendment, the FirstLoan Agreement Amendment, the First Mortgage Amendment, the First Assignment ofLeases Amendment, the First Collateral Assignment of Contracts, Licenses andPermits Amendment, the First Non-Recourse Exceptions Guaranty Amendment, theFirst Environmental Indemnity Amendment, the Financing Statement Amendments,together with all other documents and instruments being executed concurrentlyherewith, are referred to herein collectively as the “Amendment Documents.”

 

D.                                    TheOriginal Loan Agreement, as modified and amended by this Amendment, ishereinafter referred to as the “Loan Agreement.”  All capitalized words and phrases used in this Amendment and nototherwise defined herein shall have the meanings ascribed to them in the LoanAgreement.

 

NOW, THEREFORE, inconsideration of $10.00 and other good and valuable consideration, the receipt,sufficiency and delivery of which are hereby acknowledged, the Borrower, theGuarantors, and the Lender hereby agree as follows:

 

1.                                       Agreementto Make Advances.  Notwithstandinganything to the contrary contained in the Original Loan Agreement, including,without limitation, the provisions of Section 2 thereof, the Borrowerhereby acknowledges and agrees that Project Completion has been achieved andthat the Lender has no further obligation to make any further Advances withrespect to the Loan.

 

2.                                       NoteTerm and Extension Terms. Section 4 of the Loan Agreement is herebydeleted in its entirety and replaced with the following:

 

“4.                                 TheNote; Term and Extension Term.

 

The obligation of theBorrower to pay the Loan Amount plus accrued interest thereon, shall beevidenced by the Note and payable in accordance therewith.  In the event the Note is lost, destroyed ormutilated at any time prior to payment in full of the indebtedness evidencedthereby, the Borrower shall execute a new note substantially in the form of theNote.

 

The Note provides for anew term (the “New Term”) commencing on the date hereof and ending onJuly 30, 2009, or such earlier date, if any, to which the scheduledmaturity date is accelerated under the terms of the Note or such later date, ifany, to which the scheduled maturity date is extended as set forth below (the“Maturity Date”).  The New Term issubject to two (2), one-year extension rights

 

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upon satisfaction of the conditions set forth belowwith respect to each such extension option and subject, in all events, to therights of acceleration in the Note:

 

(a)                                  Borrowerand Guarantor shall have delivered to Lender a “date-down” certificatecertifying to Lender’s satisfaction that all the representations and warrantiescontained herein or in any of the other Loan Documents are true and complete inall material respects as of the date of the request for the extension and thedate of commencement of the extension period (subject, with respect to anyrepresentation that relates expressly to an earlier date, any update thereofacceptable to Lender having the effect of making such representation thencurrently accurate);

 

(b)                                 NoDefault or Event of Default shall exist;

 

(c)                                  Borrowershall have given Lender written notice of Borrower’s request to exercise itsextension right at least thirty (30) days, but no more than one hundred twenty(120) days, before the Maturity Date (or, in the case of a second one-yearextension, the Maturity Date, as previously extended);

 

(d)                                 Notwithstandinganything to the contrary contained in this Agreement, including, withoutlimitation, the provisions set forth in Section 11.10 hereof, (i) the thenoutstanding principal balance of the Loan shall not exceed 55% of the AppraisedValue; it being acknowledged and agreed that Lender shall have the right torequire Borrower, at Borrower’s sole cost and expense, to obtain an updatedAppraisal, satisfactory to Lender in all respects; and (ii) the Debt ServiceCoverage Ratio shall equal or exceed 135%; it being acknowledged and agreedthat, for purposes of calculating the Debt Service Coverage Ratio for thetwelve (12) month period prior to any extension, the term “Debt ServiceCharges” shall mean the sum of:  (i) allregularly scheduled payments, charges, fees and expenses payable by the Borrowerbased on an interest rate equal to the greater of (A) 6.5% or (B) the Cost ofFunds Rate (as defined in the Note); provided, however, indetermining the Cost of Funds Rate for purposes of this Section 4(d) only,the maturity period shall be five (5) years, (ii) all fees and charges payableby Borrower hereunder and under the Loan Documents, (iii) all regularlyscheduled payments, charges, fees and expenses payable by the Borrower withrespect to all other Indebtedness of the Borrower, and (iv) the costs andexpenses payable by the Borrower with respect to all credit enhancements, ifany, relating to the Loan;

 

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(e)                                  Allof the conditions set forth in §7 of this Agreement, to the extent applicable,shall continue to be satisfied;

 

(f)                                    Borrowershall have paid, for each such extension, an extension fee equal to 1/8% of theoutstanding principal amount of the Loan as of the date of the proposedextension, plus reimbursed Lender for all third-party fees and expensesincurred by Lender (including reasonable attorney fees and costs) in connectionwith such extension;

 

(g)                                 Atthe election of Lender, Borrower shall have provided evidence to Lender thatBorrower has placed into effect for the extension period an interest rateprotection arrangement satisfactory to Lender;

 

(h)                                 theKey Lease shall be amended pursuant to an amendment satisfactory to Lender inall material respects, providing for a Base Rent (as defined in the Key Lease)equal to the then Fair Market Value (as defined below);

 

(i)                                     Withoutlimiting clause (b) above, no breach of any covenants imposed upon Borrower orGuarantor shall exist, including, without limitation, the Guarantor FinancialCovenants set forth in Section 11.12 of this Agreement;

 

(j)                                     Withoutlimiting clause (i) above, EBITDA (as defined below) for the fiscal year thenending on December 31, 2008, shall be not less than $7,500,000.00 andEBITDA for the fiscal year then ending on December 31, 2009, as estimatedby Borrower, based upon EBITDA for the first (1st) fiscal quarter offiscal year 2009, to Lender’s reasonable satisfaction, shall be not less than$10,000,000.00; and

 

(k)                                  Withinfifteen (15) days of any request therefor, Borrower and Guarantor shall haveexecuted and delivered to Lender such agreements and documents as Lender mayreasonably require incident to the extension.”

 

3.                                       AdditionalArrangement Fee. The Borrower agrees to pay to the Lender on the date ofthis Amendment a non-refundable additional arrangement fee in the amount of$250,000.00.

 

4.                                       ProjectApprovals.  Notwithstanding anythingto the contrary contained in the Original Loan Agreement, including, withoutlimitation, Section 9.21

 

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and Schedule 3 ofthe Original Loan Agreement, Borrower hereby represents and warrants that ithas obtained all Project Approvals and that all Project Approvals have beenvalidly issued and are in full force and effect.

 

5.                                       BorrowerFinancial Covenants. Section 11.10 of the Loan Agreement is hereby deleted in itsentirety and replaced with the following:

 

“11.10  Borrower Financial Covenants.

 

(a)                                  Loanto Value.  The Borrower covenantsand agrees that, so long as the Loan is outstanding, the Borrower will notpermit the outstanding principal amount of the Loan to exceed 65% of theAppraised Value of the Project. Compliance with the foregoing shall be tested commencing onJuly 30, 2004, and thereafter on a annual basis; provided that Borrowershall not be in breach of this covenant unless Lender has given Borrower noticeof such deficiency and Borrower has failed within thirty (30) days thereafterto pay down the principal of the Loan to a sufficient extent so as to eliminateany deficiency, together with payment of any applicable prepayment or the likecharges.

 

(b)                                 DebtService Coverage Ratio.  TheBorrower covenants and agrees that, with respect to the twelve (12) monthperiod ending on December 31, 2004 and each ensuing twelve (12) monthperiod thereafter, the Borrower’s Net Operating Income shall be not less than130% of Borrower’s Debt Service Charges (“Debt Service Coverage Ratio”).  Compliance with the foregoing shall betested quarterly on each of January 1, April 1, July 1 and October 1in each calendar year.  If, based on itsreview of the Borrower’s most recent financial statement and such other factorsas the Lender reasonably deems appropriate, the Lender determines that Borrowerdoes not meet the Debt Service Coverage Ratio requirement, then, within thirty(30) days after notice thereof from the Lender, the Borrower shall have theright to cure such deficiency by paying down the outstanding principal balanceof the Loan so as to comply with this requirement.”

 

6.                                       FinancialCovenants of Guarantor.  Thefollowing Section 11.12 hereby is added to the end of Article 11 ofthe Loan Agreement:

 

“11.12 GuarantorFinancial Covenants.  Borrowercovenants and agrees that, for so long as the Loan or any portion thereofremains unpaid:

 

(a)                                  NetWorth. Guarantor shall at all times maintain a Net Worth (as defined below)of not less than $75,000,000.00. Compliance with

 

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the foregoing shall betested commencing on December 31, 2006 and thereafter on an annual basis.

 

(b)                                 LiquidAssets. Guarantor shall at all times maintain liquid assets which aretotally unencumbered (whether in favor of Lender or anyone else) and as towhich there are no restrictions upon use thereof imposed by any agreement towhich Guarantor or any of its property may be bound, of not less than$25,000,000.00 (consisting of Cash or Cash Equivalents (as defined below) orobligations of, or guaranteed (or quasi-guaranteed) by, the United States ofAmerica, having a maturity of not more than one (1) year). Compliance with theforegoing shall be tested quarterly on each of January 1, April 1,July 1 and October 1 in each calendar year.

 

(c)                                  MinimumEBITDA.  Guarantor shall not permitEBITDA to be less than the following amounts for the following fiscal periods:

 

| **Period**                                                 |   | **Amount** |
|------------------------------------------------------------|--------|------------|
|                                                       |   |       |
| For the fiscal year  then ending on December 31, 2006 |   | $          | 1,000,000 |
|                                                       |   |       |
| For the fiscal year  then ending on December 31, 2007 |   | $          | 5,000,000 |
|                                                       |   |       |
| For the fiscal year  then ending on December 31, 2008 |   | $          | 7,500,000 |
|                                                       |   |       |
| For the fiscal year  then ending on December 31, 2009 |   | $          | 10,000,000 |

 

(d)                                 GuarantorCertificate of Compliance.  Borrowershall deliver to Lender a copy of the Guarantor’s 10-K financial report (the“10-K”) within five (5) business days of filing the same with the SEC (asdefined below) and separate certificate, duly certified as true, correct andcomplete by an authorized officer of Guarantor showing a calculation ofGuarantor’s EBITDA for the fiscal year then ended (the “EBITDACertificate”).  In the event that (i) no10-K is filed with the SEC within 90 days after the end of Guarantor’s fiscalyear or (ii) the Guarantor at any time ceases to be registered with orotherwise subject to the SEC’s 10-K reporting requirements, Guarantor shallprovide an Accountant’s Annual Financial Statement (as defined below) to Lenderno later than one hundred twenty (120) days after the end of each fiscal yearand the EBITDA Certificate.”

 

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Lender agrees that itshall not charge any additional fee in connection with any waiver by Lendersolely of any of the covenants set forth in Sections 5 or 6 of this Amendment;it being expressly acknowledged and agreed that nothing contained herein shallbe deemed to be a waiver by Lender of any of the covenants contained herein orrequire Lender to waive any of said covenants and that any waiver by Lender ofany of the covenants contained herein shall not be deemed to be a waiver ofsaid covenants, or to require Lender to waive any of said covenants, at anysubsequent time.

 

7.                                       Notices.  The name “David Drumm” in the second noticeaddress in Section 22 of the Loan Agreement is hereby deleted and replacedwith the name “Owen O’Neill”.  Thenotice addresses for Borrower are hereby deleted in their entirety and replacedwith the following:

 

830 Winter Street LLC

c/o PRAECISPHARMACEUTICALS INCORPORATED

830 Winter Street

Waltham,  MA 02451

Attn:  Kevin F. McLaughlin

 

With a copy to:

 

Goodwin Procter LLP

Exchange Place

Boston,  MA 02109

Attn:  Michael H. Glazer, P.C.

 

8.                                       NewDefinitions.  The followingdefinitions are hereby added, in the appropriate alphabetical order, to Schedule 1of the Loan Agreement:

 

Accountant’sAnnual Financial Statement means an original signedcounterpart of the Guarantor’s annual financial statement, which statementshall have been prepared by, and bear the unqualified opinion of, theGuarantor’s independent certified public accountants, reasonably acceptable tothe Lender, including, at a minimum (with comparative information for the thenprior fiscal year) a balance sheet, income statement, statement of changes inShareholders’ Equity and statement of cash flows.

 

Cash and CashEquivalents means, collectively, the sum of (i) cash (ii)notes, bonds or other obligations of the United States of America or any agencythereof that as to principal and interest constitute direct obligations of orare guaranteed (or quasi-guaranteed) by the United States of America, (iii)certificates of deposit or other deposit instruments or accounts of banks ortrust companies organized under the laws of the United States or any state 

 

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thereof that have capitaland surplus of at least $100,000,000, (iv) commercial paper that is rated notless than prime-one or A-1 or their equivalents by Moody’s Investors Service,Inc. or Standard & Poor’s Comstock, respectively, or their successors, (v)any repurchase agreement secured by any one or more of the foregoing, (vi)Investments, classified in accordance with GAAP as current assets, in moneymarket investment programs registered under the Investment Company Act of 1940,as amended, which are administered by reputable financial institutions havingcapital and surplus of at least $500,000,000 and the portfolios of which arelimited to Investments of the character described in the foregoing subclauses(ii) through (v), and (vii) time deposits maturing no more than 30 days fromthe date of creation thereof with commercial or savings banks and savings andloan associations each having membership in the FDIC or the deposits of whichare insured by the FDIC and in amounts not exceeding the maximum amounts ofinsurance thereunder to the extent constituting Investments..

 

Fair Market RentalValue means the Base Rent under the Key Lease determined in accordancewith this paragraph.  Borrower shallprovide Lender with its quotation of the “Fair Market Rental Value” prior to,or together with a request for an extension of the Maturity Date.  If, Lender disagrees with Borrower’squotation and the parties cannot agree upon the Fair Market Rental Value withinthirty (30) days following the date Borrower delivered its quotation to Lender,then the Fair Market Value shall be submitted to appraisal as follows:  Within fifteen (15) days after theexpiration date of such thirty (30) day period, Lender and Borrower shall eachgive notice to the other specifying the name and address of the appraiser eachhas selected.  Such appraisers shallhave a period of thirty (30) days after the date on which Lender has named itsappraiser to determine whether Borrower’s quotation of “Fair Market RentalValue” is consistent with market conditions and, if not, what the “Fair MarketRental Value” shall be.  If appraisersare unable to agree within such thirty (30) day period, they shall, not laterthan fifteen (15) days after the end of such thirty (30) day period, select athird appraiser by agreement between them. The three (3) appraisers shall then have thirty (30) additional daysafter the selection of the third arbitrator to reach agreement, by majorityvote, on the “Fair Market Rental Value”. If the Borrower’s appraisers and the Lender’s appraisers fail to selectsuch a third arbitrator, then at the election of either Borrower or Lender, the“Fair Market Rental Value” shall be determined by arbitration in accordancewith the Real Estate Valuation Rules of the American Arbitration Association(“AAA”), which election may be exercised only by the electing party’sinitiation of proceedings by filing a demand for arbitration in triplicate withthe AAA and concurrently therewith giving notice to the other party statingthat such arbitration proceedings have been commenced.  None of such appraisers shall be

 

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employees of Lender or Borroweror their affiliates or of each other and all such appraisers shall beexperienced in the leasing, valuation and appraisal of commercial real estatein Waltham, Massachusetts.  Borrowershall pay the fees and expenses for all of the appraisers and for each party’scounsel.  Any decision of the appraisersshall be in writing and shall be final and conclusive on all parties.

 

Net Worthmeans, as at any date of determination, Stockholders’ Equity.

 

EBITDAmeans, for any period, an amount equal to net income of the Guarantor for suchperiod, as determined in accordance with GAAP, plus the following to the extentdeducted in computing such net income for such period:  (i) Interest Charges for such period, (ii)taxes on income for such period, (iii) depreciation for such period, and (iv)amortization for such period.

 

Interest Chargesmeans, for any period, without duplication, all interest paid or required to bepaid in cash on any particular indebtedness (including outstanding letters ofcredit) for which such calculations are being made all as determined inaccordance with GAAP.

 

SECmeans the United States Securities and Exchange Commission.

 

Stockholders’Equity means the amount reported as “stockholders’ equity” onthe Guarantor’s balance sheet and determined in accordance with GAAP.”

 

9.                                       GAAP.  The definition of the term “Generallyaccepted accounting principals” as set forth on Schedule 1 of theLoan Agreement is hereby amended to include the phrase “or GAAP” in theunderlined text before the definition.

 

10.                                 LoanAmount.  The definition of the term“Loan Amount” as set forth on Schedule 1 of the Loan Agreement ishereby amended by deleting the amount of “Thirty Three Million” and replacingit with the amount of “$32,253,210.47”.

 

11.                                 CertainOther Definitions.  All referencesin the Loan Agreement to the Note shall be deemed to refer to the OriginalNote, as amended by the First Note Amendment; all references in the LoanAgreement to the Security Deed shall be deemed to refer to the OriginalMortgage, as amended by the First Mortgage Amendment; all references in theLoan Agreement to the Assignment of Leases shall be deemed to refer to theOriginal Assignment of Leases, as amended by the First Assignment of LeasesAmendment; all references in the Loan Agreement to the Indemnity Agreementshall be deemed to refer to the Original Environmental Indemnity, as amendedand reaffirmed by the First Environmental Indemnity Amendment; all referencesin the Loan Agreement to the Guaranty shall be deemed to refer collectively, tothe Guaranty of Costs and

 

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Collection and theOriginal Non-Recourse Exception Guaranty, as amended and reaffirmed by theFirst Non-Recourse Exception Guaranty Amendment; All references in the LoanAgreement to the Assignment of Project Documents shall mean the OriginalCollateral Assignment of Contracts, Licenses and Permits as amended by theFirst Collateral Assignment of Contracts, Permits and Licenses Amendment; allreferences in the Loan Agreement to the Financing Statements shall mean theOriginal Financing Statements, as amended and supplemented by the FinancingStatement Amendments; and all references in the Loan Agreement to the LoanDocuments shall be deemed to refer to the Existing Loan Documents, as modified,amended and supplemented by the Amendment Documents.

 

12.                                 Representationsand Warranties.  Borrower representsand warrants that (i) no act or omission has occurred or failed to occur whichconstitutes (or which with the passage of time or giving of notice (or both))an Event of Default, and (ii) it has no claims, defenses, counterclaims orset-offs against Lender in connection with the Loan, nor any basis for any suchclaim, defense, counterclaim or set-off. All of the warranties, representations and covenants of the Borrowercontained in the Original Loan Agreement are hereby remade, reaffirmed andratified as of the date hereof.  Exceptas expressly set forth herein, the Original Loan Agreement and all of theterms, conditions and provisions thereof, shall remain unaltered and unmodifiedand in full force and effect.

 

[Signatures onnext page.]

 

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IN WITNESS WHEREOF, eachof the Lender and the Borrower have caused this Amendment to be executed as aninstrument under seal, as of the date set forth above, by the duly authorizedrepresentatives thereof.

 
|   | BORROWER:                             |
|--------|---------------------------------------|
|   |                                  |
|   | 830 WINTER STREET LLC,                |
|   | a Delaware limited  liability company |
|   |                                  |
|   | By:                                   | PRAECIS PHARMACEUTICALS  INCORPORATED, a Delaware  corporation, its sole member |
|   |                                  |   |
|   |                                  |   |
|   |                                  | By: |  /s/ Kevin F.  McLaughlin | (seal) |
|   |                                  |   | Name: |   |   |
|   |                                  |   | Title: | Exec. V.P. and C.F.O. |   |
|   |                                  |   | Hereunto duly  authorized |
|        |                                       |  |  |  |  |  |  |  |

 

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|   | LENDER:                            |
|--------|------------------------------------|
|   |                               |
|   | ANGLO IRISH BANK  CORPORATION  PLC |
|   |                               |
|   |                               |
|   | By:                                | /s/ Paul Doyle | (seal) |
|   |                               | Name: | Paul Doyle |
|   |                               | Title: | Vice President |
|   |                               | Hereunto duly  authorized |
|        |                                    |  |  |  |

 

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FIRST AMENDMENTAND ALLONGE TO PROMISSORY NOTE

 

**ThisFIRST AMENDMENT AND ALLONGE TO PROMISSORY NOTE (this “Amendment”), is made asof the 28th day of June, 2004, by and between 830 WINTER STREET LLC,a Delaware limited liability company, having an address of c/o PraecisPharmaceuticals Incorporated, 830 Winter Street, Waltham, Massachusetts 02451(“Borrower”) and ANGLO IRISH BANK CORPORATION PLC, having an address at 84State Street, Boston, Massachusetts 02109 (“Lender”).**

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W I T N E S S E TH:

 

Reference is hereby madeto the following facts:

 

A.                                   Lenderhas made that certain Loan (the “Loan”) to the Borrower, which Loan is securedby certain real property and improvements located at 830 Winter Street inWaltham, Middlesex County, Massachusetts (the “Property”).  In connection therewith, the Borrower executedand delivered to the Lender (or caused to be executed and delivered to theLender), among other things, the following (collectively, together with allother documents and instruments heretofore executed and delivered in connectionwith the Loan, and all amendments and modifications thereto, the “Existing LoanDocuments”):

 

1.                                       Thatcertain Acquisition and Construction Loan Agreement (the “Original LoanAgreement”), dated as of July 11, 2000, between the Borrower and theLender;

 

2.                                       Thatcertain Promissory Note (the “Original Note”), dated as of July 11, 2000,made by the Borrower, payable to the order of the Lender, in the originalprincipal amount of $33,000,000.00;

 

3.                                       Thatcertain Construction Mortgage and Security Agreement (the “Original Mortgage”),dated as of July 11, 2000, from the Borrower, as mortgagor, to the Lender,as mortgagee, filed with the Middlesex South Registry District of the LandCourt (the “Land Court”) as Document No. 1144043;

 

4.                                       Thatcertain Assignment of Leases and Rents (the “Original Assignment of Leases”),dated as of July 11, 2000, from the Borrower, as assignor, to the Lender,as assignee, filed with the Land Court as Document No. 1144044;

 

5.                                       Thatcertain Collateral Assignment and Security Agreement in respect of Contracts,Licenses and Permits (the “Original Collateral Assignment of Contracts,Licenses and Permits”), dated as of July 11, 2000, made by the Borrower infavor of the Lender;

 

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6.                                       Thatcertain Guaranty of Costs and Completion (the “Costs and Completion Guaranty”)dated as of July 11, 2000, made by Praecis Pharmaceuticals Incorporated(the “Guarantor”) in favor of Lender;

 

7.                                       Thatcertain Guaranty of Non-Recourse Exceptions (the “Original Non-RecourseExceptions Guaranty”) dated as of July 11, 2000, made by Guarantor infavor of Lender;

 

8.                                       Thatcertain Environmental Compliance and Indemnity Agreement (the “OriginalEnvironmental Indemnity”), dated as of July 11, 2000, made jointly andseverally by the Borrower and the Guarantor in favor of the Lender;

 

9.                                       Thosecertain UCC-1 Financing Statements (collectively, the “Original UCC-1 FinancingStatements”) filed with the Secretary of State of Massachusetts and with theLand Court as Document No. 11044045; and

 

10.                                 Certainother collateral security documents.

 

**B.**                                     Prior to the date hereof,Project Completion has been achieved, the Loan has been fully funded by theLender to the Borrower and the Initial Term has been extended to July 30,2004 in accordance with the terms of the Existing Loan Documents.

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**C.**                                     Lender and Borrower haveagreed to further extend the maturity date of the Loan and to modify and amendthe Loan in certain respects.  Inconnection therewith the Borrower, the Lender and the Guarantor, as applicable,have agreed as follows: (i) to modify and amend the Original Note pursuant tothis Amendment; (ii) to modify and amend the Original Loan Agreement, pursuantto that certain First Amendment to Acquisition and Construction Loan Agreement(the “First Loan Agreement Amendment”), of even date herewith; (iii) to modifyand amend the Original Mortgage pursuant to that certain First Amendment toConstruction Mortgage and Security Agreement (the “First Mortgage Amendment”),of even date herewith; (iv) to modify and amend the Original Assignment ofLeases, pursuant to that certain First Amendment to Assignment of Leases andRents (the “First Assignment of Leases Amendment”), of even date herewith; (v)to modify, amend and reaffirm the Original Collateral Assignment of Contracts,Licenses and Permits pursuant to that certain First Amendment to Collateral Assignmentand Security Agreement in respect of Contracts, Licenses and Permits (the“First Collateral Assignment of Contracts, Licenses and Permits Amendment”), ofeven date herewith; (vi) to modify, amend and reaffirm the OriginalNon-Recourse Exceptions Guaranty, pursuant to that certain First Amendment toand Reaffirmation of Guaranty of Non-Recourse Exceptions (the “FirstNon-Recourse Exceptions Guaranty Amendment”), of even date herewith; (vii) tomodify, amend and reaffirm the Original Environmental Indemnity, pursuant tothat certain First Amendment to and Reaffirmation of Environmental Complianceand Indemnity Agreement (the “First Environmental Indemnity Amendment”), ofeven date herewith; (viii) to modify the Original UCC-1

 

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**FinancingStatements pursuant to UCC-3 Financing Statements and to file a new UCC-1Financing Statement with the Secretary of the State of Delaware (collectively,the “Financing Statement Amendments”) of even date herewith.  This Amendment, the First Loan AgreementAmendment, the First Mortgage Amendment, the First Assignment of LeasesAmendment, the First Collateral Assignment of Contracts, Licenses and PermitsAmendment, the First Non-Recourse Exceptions Guaranty Amendment, the FirstEnvironmental Indemnity Amendment, the Financing Statement Amendments, togetherwith all other documents and instruments being executed concurrently herewith,are referred to herein collectively as the “Amendment Documents.”**

** **

D.                                    TheOriginal Note, as modified and amended by this Amendment, is hereinafterreferred to as the “Note.”  Allcapitalized words and phrases used in this Amendment and not otherwise definedherein shall have the meanings ascribed to them in the Loan Agreement.

 

NOW, THEREFORE, inconsideration of $10.00 and other good and valuable consideration, the receipt,sufficiency and delivery of which are hereby acknowledged, the Borrower and theLender hereby agree as follows:

 

1.                                       CurrentPrincipal Balance.  As of the dateof this Amendment, the outstanding principal balance of the Loan is$32,253,210.47.  Notwithstanding anyprovision contained in the Loan Agreement to the contrary (including, withoutlimitation, the provisions of Section 2 thereof), the Borrower herebyacknowledges and agrees that the Project Completion has been achieved and thatthe Lender has no further obligation to make any further Advances with respectto the Loan.

 

2.                                       MaturityDate.  The date of “July 30,2003” set forth in the twelfth (12th) line of the first paragraph ofthe Note (as such date has been extended to July 30, 2004 by mutualagreement of the Lender and the Borrower pursuant to the terms of the LoanAgreement) is hereby deleted and replaced with the date “July 30, 2009.”  All references in the Original Note or inany other Loan Document to the “Maturity Date” shall mean July 30, 2009 orsuch earlier date, if any, to which the scheduled Maturity Date is accelerated,or such latter date, if any, to which the scheduled Maturity Date is extended,under the terms of the Loan Agreement; it being acknowledged and agreed thatthe New Term is subject to two (2) one-year extension rights upon thesatisfaction of certain conditions set forth in Section 4 of the LoanAgreement.

 

3.                                       InterestRate.  Section 3 of the Notehereby is deleted in its entirety and replaced with the following:

 

“Section 3.1. Fixed Rate.  From andafter the date hereof, through and until April 26, 2009, principal amountsoutstanding under the Loan shall bear interest at 5.95% per annum.

 

3

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Section 3.2. Eurodollar Rate.  From andafter April 26, 2009, and during any extension period provided for inSection 4 of the Loan Agreement, principal amounts outstanding under theLoan shall bear interest at the Eurodollar Rate, subject to the conditions andlimitations provided for in this Note.”

 

Section 3.3.  Selection To Be Made.  During any period in which the EurodollarRate or the Cost of Funds Rate (as defined below) is in effect, Borrower shallselect, and thereafter may change the selection of, the applicable InterestPeriod, from the alternatives otherwise provided for in this Note, by givingLender a Notice of Interest Period Selection: (i) prior to the end of each Interest Period or (ii) on any Business Dayon which Borrower desires to convert from the Eurodollar Rate to the Cost ofFunds Rate or from the Cost of Funds Rate to the Eurodollar Rate.

 

Section 3.4.  Notice.  A “Notice of Interest Period Selection” shall be a writtennotice, given by cable, tested telex, telecopier (with authorized signature),or by telephone if immediately confirmed by such a written notice, from anAuthorized Representative of Borrower which: (i) is irrevocable; (ii) is received by Lender not later than 10:00 o’clockA.M. Eastern Time at least three (3) Business Days prior to the first day ofthe Interest Period to which such selection is to apply, and (iii) as to eachselected interest period option, sets forth the aggregate principal amount(s)to which such interest period option(s) shall apply.

 

Section 3.5.  If No Notice.  If Borrower fails to select an InterestPeriod option in accordance with the foregoing prior to the last day of theapplicable Interest Period all outstanding principal amounts shall be convertedto an Interest Period of one (1) month.

 

Section 3.6.  Telephonic Notice.  Without any way limiting Borrower’sobligation to confirm in writing any telephonic notice, Lender may act withoutliability upon the basis of telephonic notice believed by Lender in good faithto be from Borrower prior to receipt of written confirmation.  In each case Borrower hereby waives theright to dispute Lender’s record of the terms of such telephonic Notice ofInterest Period Selection.

 

Section 3.7.  Conversion to Cost of Funds Rate.  At any time and from time to time during anyperiod in which the Eurodollar Rate or the Cost of Funds Rate is in effect, theparties may agree to convert the interest rate under this Note for the nextsucceeding Interest Period (an “Interest Rate Conversion”) (a) from theEurodollar Rate to the Cost of Funds Rate or (b) from the Cost of Funds Rate tothe Eurodollar Rate, as applicable. After such Interest Rate Conversion, for the applicable Interest Period,the principal amount outstanding under the Loan shall bear interest at the Cost

 

4

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of Funds Rate or theEurodollar Rate, as applicable, subject to the conditions and limitationsprovided for in this Note.

 

5.                                       Paymentof Interest and Principal. The date “July 1, 2000” in the third (3rd) line ofSection 4.1 is hereby deleted and replaced with the date “July 1,2004”.

 

6.                                       Amortization.  Section 4.2 of the Note hereby isdeleted in its entirety and replaced with the following:

 

“4.2                           AmortizationInstallment Payments of Principal. Commencing on the date hereof, and thereafter throughout the term of theLoan, Borrower shall pay, on the first day of each month, a monthly principalinstallment on the Loan in accordance with that certain amortizationschedule attached hereto as Schedule A and made a part hereof(the “Amortization Schedule”); provided, however, at any timeduring the term of the Loan, Lender shall have the right, as determined byLender from time to time, to modify the Amortization Schedule, as necessary, inorder to fully amortize the outstanding balance of the Loan over a period oftwenty-five (25) years.”

 

7.                                       Amendmentof and Additions to Certain Definitions Relating to Interest Rate.

 

(a)                                  Thefollowing definitions hereby are added to the end of Section 5 of theNote:

 

“5.14.                  Cost of Funds.  The term “Cost of Funds” means for eachInterest Period applicable to a Cost of Funds Advance, the rate of interest asdetermined by the Lender to be then available to Lender in the Eurodollar InterestRate Swap Market for U.S. Dollar deposits in amounts approximately equal to theapplicable portion of the Loan, with maturity periods not longer than thenumber of days remaining in the lesser of (i) the applicable Interest Period,or (ii) the number of days remaining in the term of the Loan.

 

5.15                           Costof Funds Advance.  The term “Cost ofFunds Advance” means any principal outstanding under this Note which pursuantto this Note bears interest at the Cost of Funds Rate.

 

5.16                           Costof Funds Rate.  The term “Cost ofFunds Rate” means the per annum rate of interest equal to the then-applicableCost of Funds plus two hundred (200) basis points.

 

5

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5.17                           PrimeRate Advance.  The term “Prime RateAdvance” means any principal outstanding under this Note which pursuant to thisNote bears interest at the Prime Rate.”

 

(b)                                 Sections5.12 and 5.13 of the Note hereby are deleted in their entirety.

 

(c)                                  Section 5.13of the Note hereby is amended by deleting the name “Fleet National Bank” andreplacing the same with the words “the Lender”.

 

8.                                       Amendmentto Certain Additional Provisions Relating to Interest Rate Selection.  Section 6 of the Note hereby is amendedas follows:

 

(a)                                  Theterm “Variable” in Section 6.1 hereby is deleted and replaced with theterm “Prime”.

 

(b)                                 Clause(b) in Section 6.2 hereby is deleted in its entirety and replaced with thefollowing:

 

“(b) all principalamounts outstanding under this Note shall bear interest at the Prime Rate.”

 

(c)                                  Sections6.4 and 6.5 of the Note hereby are deleted in their entirety.

 

9.                                       Amendmentto Certain Waivers, Consents and Agreements.  The following clause hereby is added to Section 8 of theNote immediately after the end of clause (e)(iii):  “and (iv) syndication and/or participation of the Loan;”

 

10.                                 CertainOther Definitions.  All referencesin the Note to the Loan Agreement shall be deemed to refer to the Original LoanAgreement, as amended by the First Amendment; all references in the Note to theConstruction Mortgage and Security Agreement shall be deemed to refer to theOriginal Mortgage, as amended by the First Mortgage Amendment; all referencesin the Note to the Assignment of Leases and Rents shall be deemed to refer tothe Original Assignment of Leases as amended by the First Assignment of LeasesAmendment; and all references in the Note to the Loan Documents shall be deemedto refer to the Existing Loan Documents, as modified, amended and supplementedby the Amendment Documents.

 

11.                                 Reaffirmation.  Except as expressly set forth herein, theOriginal Note and all of the terms, conditions and provisions thereof, shallremain unaltered and unmodified and in full force and effect.  All of the warranties, representations andcovenants of the Borrower contained in the Original Note are hereby remade,reaffirmed and ratified as of the date hereof.

 

6

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IN WITNESS WHEREOF, each of the Borrower and theLender have caused this Amendment to be executed as an instrument under seal,as of the date set forth above, by the duly authorized representatives thereof.

 

 
|   | BORROWER:                             |
|--------|---------------------------------------|
|   |                                  |
|   | 830 WINTER STREET LLC,                |
|   | a Delaware limited  liability company |
|   |                                  |
|   | By:                                   | Praecis Pharmaceuticals  Incorporated, a Delaware  corporation, its sole member |
|   |                                  |   |
|   |                                  |   |
|   |                                  | By: |  /s/ Kevin F.  McLaughlin | (seal) |
|   |                                  |   | Name: |   |   |
|   |                                  |   | Title: | Exec. V.P. and C.F.O. |   |
|   |                                  |   | Hereunto duly  authorized |
|        |                                       |  |  |  |  |  |  |  |

 

7

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|   | LENDER:                            |
|--------|------------------------------------|
|   |                               |
|   | ANGLO IRISH BANK  CORPORATION  PLC |
|   |                               |
|   |                               |
|   | By:                                | /s/ Paul Doyle | (seal) |
|   |                               | Name: | Paul Doyle |   |
|   |                               | Title: | Vice President |   |
|   |                               | Hereunto duly  authorized |

 

8

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FIRST AMENDMENT TOCONSTRUCTION MORTGAGE AND SECURITY AGREEMENT

 

**THISFIRST AMENDMENT TO CONSTRUCTION MORTGAGE AND SECURITY AGREEMENT (this“Amendment”), is made as of the 28th day of June, 2004, by andbetween 830 WINTER STREET LLC, a Delaware limited liability company, having anaddress of c/o Praecis Pharmaceuticals Incorporated, 830 Winter Street,Waltham, Massachusetts 02451 (“Borrower”) and ANGLO IRISH BANK CORPORATION PLC,having an address at 84 State Street, Boston, Massachusetts  02109 (the “Lender”).**

** **

WITNESSETH:

 

Reference is hereby madeto the following facts:

 

A.                                   Lenderhas made that certain Loan (the “Loan”) to the Borrower, which Loan is securedby certain real property and improvements located at 830 Winter Street inWaltham, Middlesex County, Massachusetts (the “Property”).  In connection therewith, the Borrower executedand delivered to the Lender (or caused to be executed and delivered to theLender), among other things, the following (collectively, together with allother documents and instruments heretofore executed and delivered in connectionwith the Loan, and all amendments and modifications thereto, the “Existing LoanDocuments”):

 

1.                                       Thatcertain Acquisition and Construction Loan Agreement (the “Original LoanAgreement”), dated as of July 11, 2000, between the Borrower and theLender;

 

2.                                       Thatcertain Promissory Note (the “Original Note”), dated as of July 11, 2000,made by the Borrower, payable to the order of the Lender, in the originalprincipal amount of $33,000,000.00;

 

3.                                       Thatcertain Construction Mortgage and Security Agreement (the “Original Mortgage”),dated as of July 11, 2000, from the Borrower, as mortgagor, to the Lender,as mortgagee, filed with the Middlesex South Registry District of the LandCourt (the “Land Court”) as Document No. 1144043;

 

4.                                       Thatcertain Assignment of Leases and Rents (the “Original Assignment of Leases”),dated as of July 11, 2000, from the Borrower, as assignor, to the Lender,as assignee, filed with the Land Court as Document No. 1144044;

 

5.                                       Thatcertain Collateral Assignment and Security Agreement in respect of Contracts,Licenses and Permits (the “Original Collateral Assignment

 

----

 

of Contracts, Licensesand Permits”), dated as of July 11, 2000, made by the Borrower in favor ofthe Lender;

 

6.                                       Thatcertain Guaranty of Costs and Completion (the “Costs and Completion Guaranty”)dated as of July 11, 2000, made by Praecis Pharmaceuticals Incorporated(the “Guarantor”) in favor of Lender;

 

7.                                       Thatcertain Guaranty of Non-Recourse Exceptions (the “Original Non-RecourseExceptions Guaranty”) dated as of July 11, 2000, made by Guarantor infavor of Lender;

 

8.                                       Thatcertain Environmental Compliance and Indemnity Agreement (the “OriginalEnvironmental Indemnity”), dated as of July 11, 2000, made jointly andseverally by the Borrower and the Guarantor in favor of the Lender;

 

9.                                       Thosecertain UCC-1 Financing Statements (collectively, the “Original UCC-1 FinancingStatements”) filed with the Secretary of State of Massachusetts and with theLand Court as Document No. 11044045; and

 

10.                                 Certainother collateral security documents.

 

**B.**                                     Prior to the date hereof,Project Completion has been achieved, the Loan has been fully funded by theLender to the Borrower and the Initial Term has been extended to July 30,2004 in accordance with the terms of the Existing Loan Documents.

** **

C.                                     Lenderand Borrower have agreed to further extend the maturity date of the Loan and tomodify and amend the Loan in certain respects. In connection therewith the Borrower, the Lender and the Guarantor, asapplicable, have agreed as follows: (i) to modify and amend the OriginalMortgage pursuant to this Amendment; (ii) to modify and amend the Original LoanAgreement, pursuant to that certain First Amendment to Acquisition andConstruction Loan Agreement (the “First Loan Agreement Amendment”), of evendate herewith; (iii) to modify and amend the Original Note pursuant to thatcertain First Amendment and Allonge to Promissory Note (the “First NoteAmendment”), of even date herewith; (iv) to modify and amend the OriginalAssignment of Leases, pursuant to that certain First Amendment to Assignment ofLeases and Rents (the “First Assignment of Leases Amendment”), of even dateherewith; (v) to modify, amend and reaffirm the Original Collateral Assignmentof Contracts, Licenses and Permits pursuant to that certain First Amendment toCollateral Assignment and Security Agreement in respect of Contracts, Licensesand Permits (the “First Collateral Assignment of Contracts, Licenses andPermits Amendment”), of even date herewith; (vi) to modify, amend and reaffirmthe Original Non-Recourse Exceptions Guaranty, pursuant to that certain FirstAmendment to and Reaffirmation of Guaranty of Non-Recourse Exceptions (the“First Non-Recourse Exceptions Guaranty Amendment”), of even date herewith;(vii) to modify, amend and reaffirm the Original Environmental Indemnity,pursuant to that certain First Amendment to and Reaffirmation of Environmental

 

2

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Compliance and IndemnityAgreement (the “First Environmental Indemnity Amendment”), of even dateherewith; (viii) to modify the Original UCC-1 Financing Statements pursuant toUCC-3 Financing Statements and to file a new UCC-1 Financing Statement with theSecretary of the State of Delaware (collectively, the “Financing StatementAmendments”) of even date herewith. This Amendment, the First Loan Agreement Amendment, the First NoteAmendment, the First Assignment of Leases Amendment, the First CollateralAssignment of Contracts, Licenses and Permits Amendment, the First Non-RecourseExceptions Guaranty Amendment, the First Environmental Indemnity Amendment, theFinancing Statement Amendments, together with all other documents andinstruments being executed concurrently herewith, are referred to hereincollectively as the “Amendment Documents.”

 

D.                                    TheOriginal Mortgage, as modified and amended by this Amendment, is hereinafterreferred to as the “Mortgage.”  Allcapitalized words and phrases used in this Amendment and not otherwise definedherein shall have the meanings ascribed to them in the Loan Agreement.

 

NOW, THEREFORE, inconsideration of $10.00 and other good and valuable consideration, the receipt,sufficiency and delivery of which are hereby acknowledged, the Borrower and theLender hereby agree as follows:

 

1.                                       Allreferences in the Mortgage to the Note shall be deemed to refer to the OriginalNote, as amended by the First Note Amendment; and all references in theMortgage to the Loan Agreement shall be deemed to refer to the Original LoanAgreement, as amended by the First Loan Agreement Amendment; all references inthe Mortgage to the Assignment of Leases shall be deemed to refer to theOriginal Assignment of Leases, as amended by the First Assignment of LeasesAmendment; and all references in the Mortgage to the Loan Documents shall bedeemed to refer to the Existing Loan Documents, as modified, amended andsupplemented by the Amendment Documents.

 

2.                                       Theterm “THIRTY-THREE MILLION DOLLARS ($33,000,000.00)” set forth in Paragraph Aon page 3 of the Original Mortgage is hereby deleted and replaced with the term“THIRTY-TWO MILLION, TWO HUNDRED FIFTY THREE THOUSAND, TWO HUNDRED TEN DOLLARSand 47/100 ($32,253,210.47)”.

 

3.                                       Allof the warranties, representations and covenants of the Borrower contained inthe Original Mortgage are hereby remade, reaffirmed and ratified as of the datehereof.

 

4.                                       Exceptas expressly set forth herein, the Original Mortgage and all of the terms,conditions and provisions thereof, shall remain unaltered and unmodified and infull force and effect.

 

[Signatures onnext page.]

 

3

----

 

IN WITNESS WHEREOF, ofthe Borrower and Lender have caused this Amendment to be executed as aninstrument under seal, as of the date set forth above, by the duly authorizedrepresentatives thereof.

 

 
|   | BORROWER:                             |
|--------|---------------------------------------|
|   |                                  |
|   | 830 WINTER STREET LLC,                |
|   | a Delaware limited  liability company |
|   |                                  |
|   | By:                                   | Praecis Pharmaceuticals  Incorporated, a Delaware  corporation, its sole member |
|   |                                  |   |
|   |                                  |   |
|   | By:                                   | /s/ Kevin F. McLaughlin |   |
|   |                                  | Name: |   |   |
|   |                                  | Title: | Exec. V.P. and C.F.O. |   |
|   |                                  | Hereunto duly  authorized |
|        |                                       |  |  |  |  |

 

4

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|   | LENDER:                            |
|--------|------------------------------------|
|   |                               |
|   | ANGLO IRISH BANK  CORPORATION  PLC |
|   |                               |
|   |                               |
|   | By:                                | /s/ Paul Doyle | (seal) |
|   |                               | Name: | Paul  Doyle |   |
|   |                               | Title: | Vice  President |   |
|   |                               | Hereunto duly  authorized |
|   |                               |   |
|   |                               |   |
|   | By:                                | /s/ Owen O’Neill | (seal) |
|   |                               | Name: | Owen  O’Neill |   |
|   |                               | Title: | President |   |
|   |                               | Hereunto duly  authorized |
|        |                                    |  |  |  |  |

 

5

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| STATE OF MASSACHUSETTS | )      |
|------------------------|--------|
|                   | ) SS.  |
| COUNTY OF MIDDLESEX    | )      |
|                   |   |
|                   |   |
|                   |   |   | , 2004 |

 

 

Then personally appearedbefore me the above-named Kevin F. McLaughlin, the EVP and CFO of PraecisPharmaceuticals Incorporated, the sole member of 830 Winter Street LLC (theBorrower described above), on its behalf, and acknowledged the foregoinginstrument to be his/her free act and deed and the free act and deed of thesuch corporation in its capacity as such sole member.

 

 
|   | /s/ Lena M. Bergfors            |   |
|--------|---------------------------------|--------|
|   | [AFFIX NOTARIAL SEAL]           |
|   | Notary Public                   |
|   | My Commission expires:  3/31/06 |

 

6

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| COMMONWEALTH OF  MASSACHUSETTS | )                   |
|--------------------------------|---------------------|
|                           | ) SS.               |
| COUNTY OF SUFFOLK              | )                   |
|                           |                |
|                           |                |
|                           | June 28,  2004 |

 

 

Then personally appearedthe above named Paul Doyle, the Vice President of Anglo Irish Bank CorporationPLC, who swore to me that he executed the same in his capacity as VicePresident of Anglo Irish Bank Corporation PLC, as the free act and deed ofAnglo Irish Bank Corporation PLC on its behalf, before me,

 

 
|   | /s/ [illegible  signature]       |   |
|--------|----------------------------------|--------|
|   | [AFFIX NOTARIAL SEAL]            |
|   | Notary Public                    |
|   | My Commission expires:  10/25/07 |

 

 
| COMMONWEALTH OF  MASSACHUSETTS | )                   |
|--------------------------------|---------------------|
|                           | ) SS.               |
| COUNTY OF SUFFOLK              | )                   |
|                           |                |
|                           |                |
|                           | June 28,  2004 |

 

Then personally appearedthe above named Owen O’Neill, the President of Anglo Irish Bank CorporationPLC, who swore to me that he executed the same in his capacity as President ofAnglo Irish Bank Corporation PLC, as the free act and deed of Anglo Irish BankCorporation PLC on its behalf, before me,

 
|   | /s/ [illegible  signature]       |   |
|--------|----------------------------------|--------|
|   | [AFFIX NOTARIAL SEAL]            |
|   | Notary Public                    |
|   | My Commission expires:  10/25/07 |

 

7

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FIRST AMENDMENT TOCOLLATERAL ASSIGNMENT AND SECURITY AGREEMENT IN RESPECT OF CONTRACTS, LICENSES,AND PERMITS

 

**THISFIRST AMENDMENT TO COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT IN RESPECT OFCONTRACTS, LICENSES, AND PERMITS (this “Amendment”), is made as of the 28thday of June, 2004, by and between 830 WINTER STREET LLC, a Delaware limitedliability company, having an address of c/o Praecis PharmaceuticalsIncorporated, 830 Winter Street, Waltham, Massachusetts 02451 (“Borrower”) andANGLO IRISH BANK CORPORATION PLC, having an address at 84 State Street, Boston,Massachusetts  02109 (the “Lender”).**

** **

WITNESSETH:

 

Reference is hereby madeto the following facts:

 

A.                                   Lenderhas made that certain Loan (the “Loan”) to the Borrower, which Loan is securedby certain real property and improvements located at 830 Winter Street inWaltham, Middlesex County, Massachusetts (the “Property”).  In connection therewith, the Borrowerexecuted and delivered to the Lender (or caused to be executed and delivered tothe Lender), among other things, the following (collectively, together with allother documents and instruments heretofore executed and delivered in connectionwith the Loan, and all amendments and modifications thereto, the “Existing LoanDocuments”):

 

1.                                       Thatcertain Acquisition and Construction Loan Agreement (the “Original LoanAgreement”), dated as of July 11, 2000, between the Borrower and theLender;

 

2.                                       Thatcertain Promissory Note (the “Original Note”), dated as of July 11, 2000,made by the Borrower, payable to the order of the Lender, in the originalprincipal amount of $33,000,000.00;

 

3.                                       Thatcertain Construction Mortgage and Security Agreement (the “Original Mortgage”),dated as of July 11, 2000, from the Borrower, as mortgagor, to the Lender,as mortgagee, filed with the Middlesex South Registry District of the LandCourt (the “Land Court”) as Document No. 1144043;

 

4.                                       Thatcertain Assignment of Leases and Rents (the “Original Assignment of Leases”),dated as of July 11, 2000, from the Borrower, as assignor, to the Lender,as assignee, filed with the Land Court as Document No. 1144044;

 

5.                                       Thatcertain Collateral Assignment and Security Agreement in respect of Contracts,Licenses and Permits (the “Original Collateral Assignment

 

----

 

of Contracts, Licensesand Permits”), dated as of July 11, 2000, made by the Borrower in favor ofthe Lender;

 

6.                                       Thatcertain Guaranty of Costs and Completion (the “Costs and Completion Guaranty”)dated as of July 11, 2000, made by Praecis Pharmaceuticals Incorporated(the “Guarantor”) in favor of Lender;

 

7.                                       Thatcertain Guaranty of Non-Recourse Exceptions (the “Original Non-RecourseExceptions Guaranty”) dated as of July 11, 2000, made by Guarantor infavor of Lender;

 

8.                                       Thatcertain Environmental Compliance and Indemnity Agreement (the “Original EnvironmentalIndemnity”), dated as of July 11, 2000, made jointly and severally by theBorrower and the Guarantor in favor of the Lender;

 

9.                                       Thosecertain UCC-1 Financing Statements (collectively, the “Original UCC-1 FinancingStatements”) filed with the Secretary of State of Massachusetts and with theLand Court as Document No. 11044045; and

 

10.                                 Certainother collateral security documents.

 

**B.**                                     Prior to the date hereof,Project Completion has been achieved, the Loan has been fully funded by theLender to the Borrower and the Initial Term has been extended to July 30,2004 in accordance with the terms of the Existing Loan Documents.

** **

C.                                     Lenderand Borrower have agreed to further extend the maturity date of the Loan and tomodify and amend the Loan in certain respects. In connection therewith the Borrower, the Lender and the Guarantor, asapplicable, have agreed as follows: (i) to modify and amend the OriginalCollateral Assignment of Contracts, Licenses and Permits pursuant to thisAmendment; (ii) to modify and amend the Original Loan Agreement, pursuant tothat certain First Amendment to Acquisition and Construction Loan Agreement(the “First Loan Agreement Amendment”), of even date herewith; (iii) to modifyand amend the Original Note pursuant to that certain First Amendment andAllonge to Promissory Note (the “First Note Amendment”), of even date herewith;(iv) to modify and amend the Original Assignment of Leases, pursuant to thatcertain First Amendment to Assignment of Leases and Rents (the “First Assignmentof Leases Amendment”), of even date herewith; (v) to modify, amend and reaffirmthe Original Mortgage pursuant to that certain First Amendment to ConstructionMortgage and Security Agreement (the “First Mortgage Amendment”), of even dateherewith; (vi) to modify, amend and reaffirm the Original Non-RecourseExceptions Guaranty, pursuant to that certain First Amendment to andReaffirmation of Guaranty of Non-Recourse Exceptions (the “First Non-RecourseExceptions Guaranty Amendment”), of even date herewith; (vii) to modify, amendand reaffirm the Original Environmental Indemnity, pursuant to that certainFirst Amendment to and Reaffirmation of Environmental Compliance and IndemnityAgreement (the “First Environmental Indemnity

 

2

----

 

Amendment”), of even dateherewith; (viii) to modify the Original UCC-1 Financing Statements pursuant toUCC-3 Financing Statements and to file a new UCC-1 Financing Statement with theSecretary of the State of Delaware (collectively, the “Financing StatementAmendments”) of even date herewith. This Amendment, the First Loan Agreement Amendment, the First NoteAmendment, the First Assignment of Leases Amendment, the First MortgageAmendment, the First Non-Recourse Exceptions Guaranty Amendment, the FirstEnvironmental Indemnity Amendment, the Financing Statement Amendments, togetherwith all other documents and instruments being executed concurrently herewith,are referred to herein collectively as the “Amendment Documents.”

 

D.                                    TheOriginal Collateral Assignment of Contracts, Permits and Licenses, as modifiedand amended by this Amendment, is hereinafter referred to as the “Assignment ofContracts.”  All capitalized words andphrases used in this Amendment and not otherwise defined herein shall have themeanings ascribed to them in the Loan Agreement.

 

NOW, THEREFORE, inconsideration of $10.00 and other good and valuable consideration, the receipt,sufficiency and delivery of which are hereby acknowledged, the Borrower and theLender hereby agree as follows:

 

1.                                       Allreferences in the Assignment of Contracts to the Note shall be deemed to referto the Original Note, as amended by the First Note Amendment; and allreferences in the Assignment of Contracts to the Loan Agreement shall be deemedto refer to the Original Loan Agreement, as amended by the First Loan AgreementAmendment; all references in the Assignment of Contracts to the Security Deedshall be deemed to refer to the Original Mortgage, as amended by the FirstMortgage Amendment, all references in the Assignment of Contracts to theAssignment of Leases shall be deemed to refer to the Original Assignment ofLeases, as amended by the First Assignment of Leases Amendment; and allreferences in the Assignment of Contracts to the Loan Documents shall be deemedto refer to the Existing Loan Documents, as modified, amended and supplementedby the Amendment Documents.

 

2.                                       ExhibitB is hereby deleted and replaced with the Exhibit B attached hereto and made apart hereof.

 

3.                                       Allof the warranties, representations and covenants of the Borrower contained inthe Original Mortgage are hereby remade, reaffirmed and ratified as of the datehereof.

 

4.                                       Exceptas expressly set forth herein, the Original Mortgage and all of the terms,conditions and provisions thereof, shall remain unaltered and unmodified and infull force and effect.

 

[Signatures onnext page.]

 

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IN WITNESS WHEREOF, ofthe Borrower and Lender have caused this Amendment to be executed as aninstrument under seal, as of the date set forth above, by the duly authorizedrepresentatives thereof.

 

 
|   | BORROWER:                             |
|--------|---------------------------------------|
|   |                                  |
|   | 830 WINTER STREET LLC,                |
|   | a Delaware limited  liability company |
|   |                                  |
|   | By:                                   | Praecis Pharmaceuticals  Incorporated, a Delaware  corporation, its sole member |
|   |                                  |   |
|   |                                  |   |
|   | By:                                   | /s/ Kevin F. McLaughlin |   |
|   |                                  | Name: |   |   |
|   |                                  | Title: | Exec. V.P. and C.F.O. |   |
|   |                                  | Hereunto duly  authorized |
|        |                                       |  |  |  |  |  |  |  |  |

 

4

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|   | LENDER:                            |
|--------|------------------------------------|
|   |                               |
|   | ANGLO IRISH BANK  CORPORATION  PLC |
|   |                               |
|   |                               |
|   | By:                                | /s/ Paul Doyle | (seal) |
|   |                               | Name: | Paul Doyle |
|   |                               | Title: | Vice President |
|   |                               | Hereunto duly  authorized |
|        |                                    |  |  |  |

 

5

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## **EXHIBITB**

 

### **Assigned Contracts and Permits**

 

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FIRST AMENDMENT TOASSIGNMENT OF LEASES AND PROFITS

 

**THISFIRST AMENDMENT TO FIRST AMENDMENT TO ASSIGNMENT OF LEASES AND PROFITS (this“Amendment”), is made as of the 28th day June, 2004, by and between830 WINTER STREET LLC, a Delaware limited liability company, having an addressof c/o Praecis Pharmaceuticals Incorporated, 830 Winter Street, Waltham,Massachusetts 02451 (“Borrower”) and ANGLO IRISH BANK CORPORATION PLC, with anaddress at 84 State Street, Boston, Massachusetts 02109 (“Lender”).**

** **

WITNESSETH:

 

Reference is hereby madeto the following facts:

 

A.                                   Lenderhas made that certain Loan (the “Loan”) to the Borrower, which Loan is securedby certain real property and improvements located at 830 Winter Street inWaltham, Middlesex County, Massachusetts (the “Property”).  In connection therewith, the Borrowerexecuted and delivered to the Lender (or caused to be executed and delivered tothe Lender), among other things, the following (collectively, together with allother documents and instruments heretofore executed and delivered in connectionwith the Loan, and all amendments and modifications thereto, the “Existing LoanDocuments”):

 

1.                                       Thatcertain Acquisition and Construction Loan Agreement (the “Original LoanAgreement”), dated as of July 11, 2000, between the Borrower and theLender;

 

2.                                       Thatcertain Promissory Note (the “Original Note”), dated as of July 11, 2000,made by the Borrower, payable to the order of the Lender, in the originalprincipal amount of $33,000,000.00;

 

3.                                       Thatcertain Construction Mortgage and Security Agreement (the “Original Mortgage”),dated as of July 11, 2000, from the Borrower, as mortgagor, to the Lender,as mortgagee, filed with the Middlesex South Registry District of the LandCourt (the “Land Court”) as Document No. 1144043;

 

4.                                       Thatcertain Assignment of Leases and Rents (the “Original Assignment of Leases”),dated as of July 11, 2000, from the Borrower, as assignor, to the Lender,as assignee, filed with the Land Court as Document No. 1144044;

 

5.                                       Thatcertain Collateral Assignment and Security Agreement in respect of Contracts,Licenses and Permits (the “Original Collateral Assignment

 

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of Contracts, Licensesand Permits”), dated as of July 11, 2000, made by the Borrower in favor ofthe Lender;

 

6.                                       Thatcertain Guaranty of Costs and Completion (the “Costs and Completion Guaranty”)dated as of July 11, 2000, made by Praecis Pharmaceuticals Incorporated(the “Guarantor”) in favor of Lender;

 

7.                                       Thatcertain Guaranty of Non-Recourse Exceptions (the “Original Non-RecourseExceptions Guaranty”) dated as of July 11, 2000, made by Guarantor infavor of Lender;

 

8.                                       Thatcertain Environmental Compliance and Indemnity Agreement (the “OriginalEnvironmental Indemnity”), dated as of July 11, 2000, made jointly andseverally by the Borrower and the Guarantor in favor of the Lender;

 

9.                                       Thosecertain UCC-1 Financing Statements (collectively, the “Original UCC-1 FinancingStatements”) filed with the Secretary of State of Massachusetts and with theLand Court as Document No. 11044045; and

 

10.                                 Certainother collateral security documents.

 

**B.**                                     Prior to the date hereof,Project Completion has been achieved, the Loan has been fully funded by theLender to the Borrower and the Initial Term has been extended to July 30,2004 in accordance with the terms of the Existing Loan Documents.

** **

C.                                     Lenderand Borrower have agreed to further extend the maturity date of the Loan and tomodify and amend the Loan in certain respects. In connection therewith the Borrower, the Lender and the Guarantor, asapplicable, have agreed as follows: (i) to modify and amend the OriginalAssignment of Leases pursuant to this Amendment; (ii) to modify and amend theOriginal Loan Agreement, pursuant to that certain First Amendment toAcquisition and Construction Loan Agreement (the “First Loan AgreementAmendment”), of even date herewith; (iii) to modify and amend the OriginalMortgage pursuant to that certain First Amendment to Construction Mortgage andSecurity Agreement (the “First Mortgage Amendment”), of even date herewith;(iv) to modify and amend the Original Note, pursuant to that certain FirstAmendment and Allonge to Note  (the“First Note Amendment”), of even date herewith; (v) to modify, amend andreaffirm the Original Collateral Assignment of Contracts, Licenses and Permitspursuant to that certain First Amendment to Collateral Assignment and SecurityAgreement in respect of Contracts, Licenses and Permits (the “First CollateralAssignment of Contracts, Licenses and Permits Amendment”), of even dateherewith; (vi) to modify, amend and reaffirm the Original Non-RecourseExceptions Guaranty, pursuant to that certain First Amendment to andReaffirmation of Guaranty of Non-Recourse Exceptions (the “First Non-RecourseExceptions Guaranty Amendment”), of even date herewith; (vii) to modify, amendand reaffirm the Original Environmental Indemnity, pursuant to that certainFirst Amendment to and Reaffirmation of Environmental 

 

2

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Compliance and IndemnityAgreement (the “First Environmental Indemnity Amendment”), of even dateherewith; (viii) to modify the Original UCC-1 Financing Statements pursuant toUCC-3 Financing Statements and to file a new UCC-1 Financing Statement with theSecretary of the State of Delaware (collectively, the “Financing StatementAmendments”) of even date herewith. This Amendment, the First Loan Agreement Amendment, the First MortgageAmendment, the First Note Amendment, the First Collateral Assignment ofContracts, Licenses and Permits Amendment, the First Non-Recourse ExceptionsGuaranty Amendment, the First Environmental Indemnity Amendment, the FinancingStatement Amendments, together with all other documents and instruments beingexecuted concurrently herewith, are referred to herein collectively as the“Amendment Documents.”

 

D.                                    TheOriginal Assignment of Leases, as modified and amended by this Amendment, ishereinafter referred to as the “Assignment of Leases.”  All capitalized words and phrases used inthis Amendment and not otherwise defined herein shall have the meaningsascribed to them in the Loan Agreement.

 

NOW, THEREFORE, inconsideration of $10.00 and other good and valuable consideration, the receipt,sufficiency and delivery of which are hereby acknowledged, the Borrower and theLender hereby agree as follows:

 

1.                                       Section 2.Aof the Assignment of Leases is hereby deleted in its entirety and replaced withthe following:

 

“A.                             Thepayment of the principal sum, interests, charges and indebtedness evidenced bythe Note, including any extensions, renewals, replacement or replacements, modificationsand amendments thereof, in the original amount of up to Thirty-Two Million, TwoHundred Fifty Three Thousand, Two Hundred Ten Dollars and 47/100($32,253,210.47) given by Borrower to the order of Lender;”

 

2.                                       Allreferences in the Assignment of Leases to the Note shall be deemed to refer tothe Original Note, as amended by the First Note Amendment; all references inthe Assignment of Leases to the Security Deed shall be deemed to refer to theOriginal Mortgage, as amended by the First Mortgage Amendment; all referencesin the Assignment of Leases to the Loan Agreement shall be deemed to refer tothe Original Loan Agreement, as amended by the First Loan Agreement Amendment;and all references in the Assignment of Leases to the Loan Documents shall bedeemed to refer to the Existing Loan Documents, as modified, amended andsupplemented by the Amendment Documents.

 

3.                                       Allof the warranties, representations and covenants of the Borrower contained inthe Original Assignment of Leases are hereby remade, reaffirmed and ratified asof the date hereof.

 

3

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4.                                       Exceptas expressly set forth herein, the Original Assignment of Leases and all of theterms, conditions and provisions thereof, shall remain unaltered and unmodifiedand in full force and effect.

 

IN WITNESS WHEREOF, eachof the Lender and the Borrower have caused this Amendment to be executed as aninstrument under seal, as of the date set forth above, by the duly authorizedrepresentatives thereof.

 

 
|   | BORROWER:                             |
|--------|---------------------------------------|
|   |                                  |
|   | 830 WINTER STREET LLC,                |
|   | a Delaware limited  liability company |
|   |                                  |
|   | By:                                   | Praecis Pharmaceuticals  Incorporated, a Delaware  corporation, its sole member |
|   |                                  |
|   |                                  |
|   | By:                                   | /s/ Kevin F. McLaughlin | (seal) |
|   |                                  | Name: |   |   |
|   |                                  | Title: | Exec. V.P. and C.F.O. |   |
|   |                                  | Hereunto duly  authorized |
|        |                                       |  |  |  |  |  |

 

4

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|   | LENDER:                            |
|--------|------------------------------------|
|   |                               |
|   | ANGLO IRISH BANK  CORPORATION  PLC |
|   |                               |
|   | By:                                | /s/ Paul Doyle | (seal) |
|   |                               | Name: | Paul  Doyle |   |
|   |                               | Title: | Vice  President |   |
|   |                               | Hereunto duly  authorized |
|   |                               |   |
|   |                               |   |
|   | By:                                | /s/ Owen O’Neill | (seal) |
|   |                               | Name: | Owen  O’Neill |   |
|   |                               | Title: | President |   |
|   |                               | Hereunto duly  authorized |
|        |                                    |  |  |  |  |

 

5

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| STATE OF MASSACHUSETTS | )                   |
|------------------------|---------------------|
|                   | ) SS.               |
| COUNTY OF MIDDLESEX    | )                   |
|                   |                |
|                   |                |
|                   | June 24,  2004 |

 

Then personally appearedbefore me the above-named Kevin F. McLaughlin, the EVP and CFO of PraecisPharmaceuticals Incorporated, the sole member of 830 Winter Street LLC (theBorrower described above), on its behalf, and acknowledged the foregoinginstrument to be his/her free act and deed and the free act and deed of thesuch corporation in its capacity as such sole member.

 

 
|   | /s/ Lena M. Bergfors            |   |
|--------|---------------------------------|--------|
|   | [AFFIX NOTARIAL SEAL]           |
|   | Notary Public                   |
|   | My Commission expires:  3/31/06 |

 

6

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| COMMONWEALTH OF MASSACHUSETTS | )                   |
|-------------------------------|---------------------|
|                          | ) SS.               |
| COUNTY OF SUFFOLK             | )                   |
|                          |                |
|                          |                |
|                          | June 28,  2004 |

 

Then personally appearedthe above named Paul Doyle, the Vice President of Anglo Irish Bank CorporationPLC, who swore to me that he executed the same in his capacity as VicePresident of Anglo Irish Bank Corporation PLC, as the free act and deed ofAnglo Irish Bank Corporation PLC on its behalf, before me,

 

 
|   | /s/ [illegible  signature]       |   |
|--------|----------------------------------|--------|
|   | [AFFIX NOTARIAL SEAL]            |
|   | Notary Public                    |
|   | My Commission expires:  10/25/07 |

 

 
| COMMONWEALTH OF  MASSACHUSETTS | )                   |
|--------------------------------|---------------------|
|                           | ) SS.               |
| COUNTY OF SUFFOLK              | )                   |
|                           |                |
|                           |                |
|                           | June 28,  2004 |

 

Then personally appearedthe above named Owen O’Neill, the President of Anglo Irish Bank CorporationPLC, who swore to me that he executed the same in his capacity as President ofAnglo Irish Bank Corporation PLC, as the free act and deed of Anglo Irish BankCorporation PLC on its behalf, before me,

 

 
|   | /s/ [illegible  signature]       |   |
|--------|----------------------------------|--------|
|   | [AFFIX NOTARIAL SEAL]            |
|   | Notary Public                    |
|   | My Commission expires:  10/25/07 |

 

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