**Exhibiot 10.20**

 

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**SETTLEMENT AGREEMENT AND MUTUALGENERAL RELEASE**

 

This Settlement Agreement and Mutual General Release(hereinafter referred to as this “Release Agreement”) is entered into as of the19th day of October, 2005 by and between PRAECIS PHARMACEUTICALS, INC., acorporation organized and existing under the laws of the State of Delawarehaving its principal place of business at 830 Winter Street, Waltham,Massachusetts 02451, USA (hereinafter referred to as “Praecis”) and SCHERINGAG, a corporation organized and existing under the laws of Germany having itsprincipal place of business at 13442 Berlin, Germany (hereinafter referred toas “Schering”), who may be referred to individually herein as a “Party” andcollectively as the “Parties”

 

**WITNESSETH:**

 

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

 

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

 

NOW THEREFORE, in consideration of the foregoingrecitals and the mutual covenants and agreements contained herein, and forother valuable consideration, the Parties, intending to be legally bound, doagree as follows:

 

**1.****                                     ****Definitions**

 

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

 

**2.****                                     ****Termination of Agreement**

 

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

 

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**3.****                                     ****Reversion of Licenses**

 

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

 

**4.****                                     ****Settlement Payment**

 

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

 

UBS AG

ABA number 026007993

UBS Financial Services Inc.

Account number XXX-XX-XXXXXX-000

F/C PRAECIS Pharmaceuticals Inc.

Praecis’ account number CP-XXXXX

 

**5.****                                     ****Extinguishment of Schering’sPayment Obligations**

 

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

 

**6.****                                     ****General Releases**

 

**(a)****                                 ****Schering’s Release.**

 

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

 

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

 

**(b)****                                 ****Praecis’ Release.**

 

Effective upon its receipt of the aforementioned SettlementPayment, Praecis hereby fully releases, remises, acquits and foreverdischarges Schering and its parents, subsidiaries, affiliates, and all theiragents, servants, heirs, administrators, executors, insurers, employees,officers, directors, shareholders, legal representatives and all other relatedentities, predecessors, successors and assigns from any and all claims,demands, judgments, damages, liabilities, costs or expenses (including attorney’sfees or court costs),****actions orcauses of action at law or in equity, whether based in contract, tort, statute,regulation or any other legal or equitable theory of recovery, whether director indirect, whether known or unknown, whether presently discoverable orundiscoverable, whether suspected or claimed, arisen or yet to arise, which itever had, now has****or may in the future haveagainst Schering by reason of any matter, cause or thing whatsoever arising onor before the date of this Release Agreement and in any way related to the Agreementand/or the manufacture, Commercialization, Development, Improvement, MarketingAuthorization Application, licensing, supply and/or distribution of the Product,excluding claims, actions or causes of action under this Release Agreement.

 

**7.****                                     ****Confidentiality**

 

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

 

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**8.****                                     ****No Admission of Liability**

 

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

 

**9.****                                      Adviceof Counsel.**

 

Eachparty has had the opportunity to obtain the advice of counsel with respect tothis Release Agreement, and in executing this Release Agreement, there was nopromise or representation made other than as set forth herein.

 

**10.****                               Bindingon Successors and Assigns.**

 

ThisRelease Agreement shall be binding upon and inure to the benefit of each Party’srespective successors and assigns.

 

**11.****                               Executionin Counterparts.**

 

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

 

**12.****                              ****Termination.**

 

If Praecis has not received the Settlement Paymentby 12:00 noon (Boston time) on Thursday, October 27, 2005, Praecis may, bynotice to Schering, terminate this Release Agreement whereupon this ReleaseAgreement shall be void abinitio and without any force oreffect.

 

**13.****                              ****Governing Law; Jurisdiction.**

 

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

 

**[Remainder of this page intentionallyleft blank; Signature Page Follows]**

 

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**IN WITNESS WHEREOF, **Schering and Praecis have caused this Settlement Agreement and MutualGeneral Release to be executed as of the date stated above by their respectiveauthorized representatives.

 
| Berlin, Germany: October 19, 2005 | Waltham, Massachusetts: October 19, 2005 |
|----------------------------------------|-----------------------------------------------|
| SCHERING AKTIENGESELLSCHAFT            | PRAECIS PHARMACEUTICALS, INC.            |
|                                   |                                          |
| By:                                    | /s/ Steffen Schroeder                         | /s/ Oliver Kohlhaas |   | By: | /s/ Kevin F. McLaughlin |   |
|                                   | Name: Steffen Schroeder                       | Oliver Kohlhaas |   |   | Name: Kevin F. McLaughlin |   |
|                                   | Title: Legal Department                       | Head of Strategy  and Business  Development Europe |   |   | Title: President and Chief Executive Officer |   |

 

[Signature Page to Settlement Agreementand Mutual Geneal Release]

 

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