Document:

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         THIS WARRANT AND SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
         HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
         (THE "1933 ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR
         HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
         RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL)
         REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
         REQUIRED UNDER THE 1933 ACT.

                                WARRANT AGREEMENT

                       To Purchase Shares of Common Stock

                      PRAECIS PHARMACEUTICALS INCORPORATED
                    (formerly Pharmaceutical Peptides, Inc.)

                   Dated as of March 29, 1995 (the "Effective
               Date") Re-Issued as of August 12, 1998 (the "First
                              Re-Issue Date"), and
             again as of July 31, 2000 (the "Second Re-Issue Date")

         WHEREAS, PRAECIS PHARMACEUTICALS INCORPORATED (formerly known as
Pharmaceutical Peptides, Inc.), a Delaware corporation (the "Company"),
entered into a Warrant Agreement dated as of March 29, 1995 (the "Original
Warrant Agreement") with Comdisco, Inc. (the "Original Warrantholder"),
whereby the Company granted the Original Warrantholder the right to purchase
14,925 shares of the Company's Series A Convertible Preferred Stock; and

         WHEREAS, pursuant to and in accordance with the Original Warrant
Agreement, the Original Warrantholder transferred to Gregory Stento (the
"Warrantholder"), effective as of August 12, 1998, the Original
Warrantholder's rights under the Original Warrant Agreement with respect to
the purchase of 1,703 shares of the Company's Series A Convertible Preferred
Stock (the "First Warrant Transfer"), and in connection therewith the Company
entered into a Warrant Agreement with the Warrantholder reflecting and giving
effect to the First Warrant Transfer (the "Original "Stento Warrant"); and

         WHEREAS, pursuant to and in accordance with Section (4)(f) of
Article Fifth of the Company's Amended and Restated Certificate of
Incorporation filed with the Secretary of State of Delaware on April 30, 1998
(hereinafter the "Certificate"), upon the consummation of its initial public
offering on May 2, 2000, the Company converted all of its shares of Preferred
Stock into Common Stock, and in accordance with its terms the Original Stento
Warrant automatically converted into a Warrant to purchase 12,722 shares of
the Company's Common Stock, par value $.01 per share (the "Common Stock").

         WHEREAS, pursuant to and in accordance with the Original Stento
Warrant, the Warrantholder has transferred to Russo and Hale LLP ("Russo and
Hale"), effective as of July 31,

<PAGE>

2000, the Warrantholder's rights under the Original Stento Warrant with
respect to the purchase of 2,862 shares of the Company's Common Stock (the
"Second Warrant Transfer"), and in connection therewith the Company entered
into a Warrant Agreement with Russo and Hale reflecting and giving effect to
the Second Warrant Transfer; and

         WHEREAS, the Company and the Warrantholder acknowledge the Second
Warrant Transfer and, accordingly, the Company is reissuing, as of July 31,
2000, the Warrant provided for in the Original Stento Warrant, and the
Company and the Warrantholder are entering into this Warrant Agreement to
reflect the Second Warrant Transfer and the Warrantholder's right to purchase
9,860 shares of Common Stock as set forth herein; and

         NOW, THEREFORE, in consideration of the foregoing, and the mutual
covenants and agreements contained herein, the Company and the Warrantholder
agree as follows:

1.       GRANT OF THE RIGHT TO PURCHASE COMMON STOCK.

         The Company hereby grants to the Warrantholder, and the
Warrantholder is entitled, upon the terms and subject to the conditions
hereinafter set forth, to subscribe for and purchase from the Company, 9,860
fully paid and non-assessable shares of Common Stock at a purchase price of
$1.35 per share (the "Exercise Price"). The number and purchase price of such
shares are subject to adjustment as provided in Section 8 hereof.

2.       TERM OF THE WARRANT AGREEMENT.

         Except as otherwise provided for herein, the term of this Warrant
Agreement and the right to purchase Common Stock as granted herein commenced
as of the Effective Date and shall be exercisable for a period which
commenced as of the Effective Date and which ends on the later of (i) the
date ten (10) years after the Effective Date, or (ii) the date two (2) years
from the effective date of the Company's initial public offering.

3.       EXERCISE OF THE PURCHASE RIGHTS.

         The purchase rights set forth in this Warrant Agreement are
exercisable by the Warrantholder, in whole or in part, at any time, or from
time to time, prior to the expiration of the term set forth in Section 2
above, by tendering to the Company at its principal office a notice of
exercise in the form attached hereto as Exhibit I (the "Notice of Exercise"),
duly completed and executed. Promptly upon receipt of the Notice of Exercise
and the payment of the purchase price in accordance with the terms set forth
below, and in no event later than twenty-one (21) days thereafter, the
Company shall issue to the Warrantholder a certificate for the number of
shares of Common Stock purchased and shall execute the Acknowledgment of
Exercise in the form attached hereto as Exhibit II indicating the number of
shares which remain subject to future purchases, if any. In the event of an
initial public offering, and if specifically requested by the Underwriter(s),

                                       2

<PAGE>

Warrantholder will agree to lockup provisions equivalent to but not to exceed
those required of the other common shareholders.

         The Exercise Price may be paid at the Warrantholder's election
either (i) by cash or check, or (ii) by surrender of Warrants ("Net
Issuance") as determined below. If the Warrantholder elects the Net Issuance
method, the Company will issue Common Stock in accordance with the following
formula:

                  X = Y(A-B)
                      ------
                        A

Where:            X =      the number of shares of Common Stock to be issued to
                           the Warrantholder.

                  Y =      the number of shares of Common Stock as to which the
                           Warrants are being exercised under this Warrant
                           Agreement.

                  A =      the current fair market value of one (1) share of
                           Common Stock.

                  B =      the Exercise Price.

         As used herein, current fair market value of Common Stock shall mean
with respect to each share of Common Stock:

         (i)      if traded on a securities exchange, the fair market value
         shall be deemed to be the average of the closing prices over a
         twenty-one (21) day period ending three days before the day the current
         fair market value of the securities is being determined; or

         (ii)     if actively traded over-the-counter, the fair market value
         shall be deemed to be the average of the closing bid and asked prices
         quoted on the NASDAQ system (or similar system) over the twenty-one
         (21) day period ending three days before the day the current fair
         market value of the securities is being determined;

         (iii)    if at any time the Common Stock is not listed on any
         securities exchange or quoted in the NASDAQ System or the
         over-the-counter market, the current fair market value of Common Stock
         shall be the highest price per share which the Company could obtain
         from a willing buyer (not a current employee or director) for shares of
         Common Stock sold by the Company, from authorized but unissued shares,
         as determined in good faith by its Board of Directors, unless the
         Company shall become subject to a merger, acquisition or other
         consolidation pursuant to which the Company is not the surviving party,
         in which case the fair market value of Common Stock shall be deemed to
         be the value received by the holders of the Company's Common Stock on a
         common equivalent basis pursuant to such merger or acquisition.

                                       3

<PAGE>

         Upon partial exercise by either cash or Net Issuance, the Company shall
promptly issue an amended Warrant Agreement representing the remaining number of
shares purchasable hereunder. All other terms and conditions of such amended
Warrant Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.

4.       RESERVATION OF SHARES.

         (a)       AUTHORIZATION AND RESERVATION OF SHARES. During the term
of this Warrant Agreement, the Company will at all times have authorized and
reserved a sufficient number of shares of its Common Stock to provide for the
exercise of the rights to purchase Common Stock as provided for herein.

         (b)       REGISTRATION OR LISTING. If any shares of Common Stock
required to be reserved hereunder require registration with or approval of
any governmental authority under any Federal or State law (other than any
registration under the 1933 Act, as then in effect, or any similar Federal
statute then enforced, or any state securities law), or listing on any
domestic securities exchange, before such shares may be issued, the Company
will, at its expense and as expeditiously as possible, use its reasonable
best efforts to cause such shares to be duly registered, listed or approved
for listing on such domestic securities exchange, as the case may be.

5.       NO FRACTIONAL SHARES OR SCRIP.

         No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrant, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.

6.       NO RIGHTS AS SHAREHOLDER.

         This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrant.

7.       WARRANTHOLDER REGISTRY.

         The Company shall maintain a registry showing the name and address of
the registered holder of this Warrant Agreement.

8.       ADJUSTMENT RIGHTS.

         The purchase price per share and the number of shares of Common Stock
purchasable hereunder are subject to adjustment, as follows:

         (a)       MERGER AND SALE OF ASSETS. If at any time there shall be a
capital reorganization reclassifying or otherwise altering shares of Common
Stock (other than a combination, reclassifica-

                                       4

<PAGE>

tion, exchange or subdivision of shares otherwise provided for herein), or a
merger or consolidation of the Company with or into another corporation when
the Company is not the surviving corporation, or the sale of all or
substantially all of the Company's properties and assets to any other person
(hereinafter referred to as a "Merger Event"), then, as a part of such Merger
Event, lawful provision shall be made so that the Warrantholder shall
thereafter be entitled to receive, upon exercise of the Warrant, the number
of shares of common stock or other securities of the successor corporation
resulting from such Merger Event, equivalent in value to that which would
have been issuable if Warrantholder had exercised this Warrant immediately
prior to the Merger Event. In any such case, appropriate adjustment (as
determined in good faith by the Company's Board of Directors) shall be made
in the application of the provisions of this Warrant Agreement with respect
to the rights and interest of the Warrantholder after the Merger Event to the
end that the provisions of this Warrant Agreement (including adjustments of
the Exercise Price and number of shares of Common Stock purchasable) shall be
applicable to the greatest extent possible.

         (b)      RECLASSIFICATION OF SHARES. If the Company at any time
shall, by combination, reclassification, exchange or subdivision of
securities or otherwise, change any of the securities as to which purchase
rights under this Warrant Agreement exist into the same or a different number
of securities of any other class or classes, this Warrant Agreement shall
thereafter represent the right to acquire such number and kind of securities
as would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
Agreement immediately prior to such combination, reclassification, exchange,
subdivision or other change.

         (c)      SUBDIVISION OR COMBINATION OF SHARES. If the Company at any
time shall combine or subdivide its Common Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.

         (d)      STOCK DIVIDENDS. If the Company at any time shall issue any
shares of Common Stock by means of a dividend or other distribution on the
Common Stock (except any distribution specifically provided for in the
foregoing subsections (a) or (b)), then the Exercise Price shall be adjusted,
from and after the record date of such dividend or distribution, to that
price determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction (i) the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to
such dividend or distribution, and (ii) the denominator of which shall be the
total number shares of Common Stock outstanding immediately after such
dividend or distribution. The Warrantholder shall thereafter be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number of
shares of Common Stock (calculated to the nearest whole share) obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of shares of Common Stock issuable upon the exercise hereof
immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment.

                                       5

<PAGE>

         (e)      ANTIDILUTION RIGHTS. A true and correct copy of the
Certificate, as amended through the Second Re-Issue Date, is attached hereto
as Annex A. The Company shall promptly provide the Warrantholder with any
restatement, amendment, modification or waiver of the Certificate.

         (f)      NOTICE OF ADJUSTMENTS. If: (i) the Company shall declare
any dividend or distribution upon its Common Stock, whether in cash,
property, stock or other securities; (ii) the Company shall offer for
subscription prorata to the holders of any class of its Common Stock any
additional shares of stock of any class or other rights; (iii) there shall be
any Merger Event; or (iv) there shall be any voluntary or involuntary
dissolution, liquidation or winding up of the Company; then, in connection
with each such event, the Company shall send to the Warrantholder: (A) at
least twenty (20) days' prior written notice of the date on which the books
of the Company shall close or a record shall be taken for such dividend,
distribution, subscription rights (specifying the date on which the holders
of Common Stock shall be entitled thereto) or for determining rights to vote
in respect of such Merger Event, dissolution, liquidation or winding up; and
(B) in the case of any such Merger Event, dissolution, liquidation or winding
up, at least twenty (20) days' prior written notice of the date when the same
shall take place (and specifying the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such Merger Event, dissolution, liquidation
or winding up). In the case of a public offering, the Company shall give
Warrantholder at least twenty (20) days written notice prior to the effective
date thereof.

         Each such written notice shall set forth, in reasonable detail, (i)
the event requiring an adjustment (if any adjustment is required), (ii) the
amount of the adjustment (if any adjustment is required), (iii) the method by
which such adjustment was calculated (if any adjustment is required), (iv)
the Exercise Price after giving effect to such adjustment (if any adjustment
is required), and (v) the number of shares subject to purchase hereunder
after giving effect to such adjustment (if any adjustment is required), and
shall be given by first class mail, postage prepaid, addressed to the
Warrantholder, at the address as shown on the books of the Company.

         (g)      TIMELY NOTICE. Failure to timely provide such notice
required by subsection (f) above shall entitle Warrantholder to retain the
benefit of the applicable notice period notwithstanding anything to the
contrary contained in any insufficient notice received by Warrantholder. The
notice period shall begin on the date Warrantholder actually receives a
written notice containing all the information specified above.

9.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

         (a)      RESERVATION OF COMMON STOCK. The Common Stock issuable upon
exercise of the Warrantholder's rights has been (or, in the case of Common
Stock issuable pursuant to Section 8(e), will be) duly and validly reserved
and, when issued in accordance with the provisions of this Warrant Agreement,
will be validly issued, fully paid and non-assessable, and will be free of
any taxes, liens, charges or encumbrances of any nature whatsoever; provided,
however, that the Common Stock issuable pursuant to this Warrant Agreement
may be subject to restrictions on transfer under state and/or Federal
securities laws. The Company has made available to the Warrantholder true,
correct

                                       6

<PAGE>

and complete copies of its Certificate, as heretofore amended. The issuance
of certificates for shares of Common Stock upon exercise of the Warrant shall
be made without charge to the Warrantholder for any issuance tax in respect
thereof, or other cost incurred by the Company in connection with such
exercise and the related issuance of shares of Common Stock. The Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved and the issuance and delivery of any certificate in a name
other than that of the Warrantholder.

         (b)      DUE AUTHORITY. The execution and delivery by the Company of
this Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire
the shares of Common Stock, have been duly authorized by all necessary
corporate action on the part of the Company, and this Warrant Agreement is
not inconsistent with the Company's Certificate, as amended through the
Second Re-Issue Date, or Bylaws, as amended through the Second Re-Issue Date,
does not contravene any law or governmental rule, regulation or order
applicable to it, does not and will not contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or other
instrument to which it is a party or by which it is bound, and this Warrant
Agreement constitutes legal, valid and binding agreements of the Company,
enforceable in accordance with their respective terms.

         (c)      CONSENTS AND APPROVALS. No consent or approval of, giving
of notice to, registration with, or taking of any other action in respect of
any state, Federal or other governmental authority or agency is required with
respect to the execution, delivery and performance by the Company of its
obligations under this Warrant Agreement, except for the filing of notices
pursuant to Regulation D under the 1933 Act if such Regulation is being
relied upon, which filing will be effective by the time required thereby.

         (d)      ISSUED SECURITIES. All issued and outstanding shares of
Common Stock or any other securities of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. All outstanding
shares of Common Stock and any other securities were issued in full
compliance with all Federal and state securities laws.

         (e)      INSURANCE. The Company has in full force and effect
insurance policies, with extended coverage, insuring the Company and its
property and business against such losses and risks, and in such amounts, as
are customary for corporations engaged in a similar business and similarly
situated and as otherwise may be required pursuant to the terms of any other
contract or agreement.

         (f)      COMMITMENTS TO REGISTER SECURITIES. As of the Second
Re-Issue Date, except as disclosed in the Company's Registration Statement,
as amended, under the 1933 Act which was declared effective by the SEC on
April 26, 2000, the Company is not, pursuant to the terms of any agreement in
existence as of the Second Re-Issue Date, under any obligation to register
under the 1933 Act any of its presently outstanding securities or any of its
securities which may hereafter be issued.

                                       7

<PAGE>

         (g)      EXEMPT TRANSACTION. Subject to the accuracy of the
Warrantholder's representations in Section 10 hereof and assuming no
circumstances at the time of the exercise of this Warrant which would render
unavailable the exemption referred to in this subparagraph (g), the issuance
of the Common Stock upon exercise of this Warrant will constitute a
transaction exempt from the registration requirements of Section 5 of the
1933 Act, in reliance upon Section 4(2) thereof.

         (h)      COMPLIANCE WITH RULE 144. At the written request of the
Warrantholder, who proposes to sell Common Stock issuable upon the exercise
of the Warrant in compliance with Rule 144 promulgated by the SEC, the
Company shall furnish to the Warrantholder, within ten days after receipt of
such request, a written statement confirming the Company's compliance with
the filing requirements of the SEC as set forth in such Rule, as such Rule
may be amended from time to time.

10.      REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDERS.

         This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:

         (a)      INVESTMENT PURPOSE. The right to acquire Common Stock
represented by this Warrant Agreement and the Common Stock issuable upon
exercise of the Warrantholder's rights contained herein will be acquired for
investment and not with a view to the sale or distribution of any part
thereof, and the Warrantholder has no present intention of selling or
engaging in any public distribution of the same except pursuant to a
registration or exemption from the registration requirements of Section 5 of
the 1933 Act.

         (b)      PRIVATE ISSUE. The Warrantholder understands (i) that the
issuance of this Warrant and the Common Stock issuable upon exercise of this
Warrant is not registered under the 1933 Act or qualified under applicable
state securities laws on the ground that the issuances are or will be exempt
from the registration and qualifications requirements thereof, and (ii) that
the Company's reliance on such exemption is predicated on the representations
set forth in this Section 10. In addition, the Warrantholder consents to the
placement of a legend on any certificate or other document evidencing this
Warrant, the Common Stock issuable upon exercise of this Warrant or any
Common Stock issuable upon conversion of the Common Stock, such legend
stating that such securities have not been registered under the 1933 Act or
under any state securities or "blue sky" laws and setting forth or referring
to the restrictions on transferability and sale thereof, including the
restrictions set forth herein, until such time as such restrictions are not
longer applicable.

         (c)      DISPOSITION OF WARRANTHOLDER'S RIGHTS. In no event will the
Warrantholder make a disposition of any of its rights to acquire Common Stock
or Common Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion
of counsel (which counsel may either be inside or outside counsel to the
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act

                                       8

<PAGE>

is available. Notwithstanding the foregoing, the restrictions imposed upon
the transferability of any of its rights to acquire Common Stock or Common
Stock issuable on the exercise of such rights do not apply to transfers from
the beneficial owner of any of the aforementioned securities to its nominee
or from such nominee to its beneficial owner, and shall terminate as to any
particular share of Common Stock when (1) such security shall have been
effectively registered under the 1933 Act and sold by the holder thereof in
accordance with such registration or (2) such security shall have been sold
without registration in compliance with Rule 144 under the 1933 Act, or (3) a
letter shall have been issued to the Warrantholder at its request by the
staff of the SEC or a ruling shall have been issued to the Warrantholder at
its request by the SEC stating that no action shall be recommended by such
staff or taken by the SEC, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever
the restrictions imposed hereunder shall terminate, as hereinabove provided,
the Warrantholder or holder of a share of Common Stock then outstanding as to
which such restrictions have terminated shall be entitled to receive from the
Company, without expense to such holder, one or more new certificates for the
Warrant or for such shares of Common Stock not bearing any restrictive legend.

         (d)      FINANCIAL RISK. The Warrantholder has such knowledge and
experience in financial and business matters as to be capable of evaluating
the merits and risks of its investment, and has the ability to bear the
economic risks of its investment.

         (e)      RISK OF NO REGISTRATION. The Warrantholder understands that
if the Company does not register with the SEC pursuant to Section 12 of the
1933 Act, or file reports pursuant to Section 15(d) of the Securities
Exchange Act of 1934, as amended, or if a registration statement covering the
securities under the 1933 Act is not in effect when it desires to sell (i)
the rights to purchase Common Stock pursuant to this Warrant Agreement, or
(ii) the Common Stock issuable upon exercise of the right to purchase, it may
be required to hold such securities for an indefinite period. The
Warrantholder also understands that any sale of its rights as the
Warrantholder to purchase Common Stock or Common Stock which might be made by
it in reliance upon Rule 144 under the 1933 Act may be made only in
accordance with the terms and conditions of that Rule.

11.      TRANSFERS.

         Subject to the terms and conditions contained in Section 10 hereof,
this Warrant Agreement and all rights hereunder are transferable in whole or
in part by the Warrantholder and any successor transferee, provided, however,
in no event shall the number of transfers of the rights and interests in all
of the Warrants exceed a total of three (3) transfers. The transfer shall be
recorded on the books of the Company upon receipt by the Company of a notice
of transfer in the form attached hereto as Exhibit III (the "Transfer
Notice"), at its principal offices and the payment to the Company of all
transfer taxes and other governmental charges imposed on such transfer.

                                       9

<PAGE>

12.      MISCELLANEOUS.

         (a)      EFFECTIVE DATE. The provisions of this Warrant Agreement
(except for references to instruments dated after the Effective Date) shall
be construed and shall be given effect in all respects as if it had been
executed and delivered by the Company as of the Effective Date. This Warrant
Agreement shall be binding upon any successors or assigns of the Company.

         (b)      ATTORNEY'S FEES. In any litigation, arbitration or court
proceeding between the Company and the Warrantholder relating hereto, the
prevailing party shall be entitled to attorneys' fees and expenses and all
costs of proceedings incurred in enforcing this Warrant Agreement.

         (c)      GOVERNING LAW. This Warrant Agreement shall be governed by
and construed for all purposes under and in accordance with the laws of the
State of Illinois.

         (d)      COUNTERPARTS. This Warrant Agreement may be executed in
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.

         (e)      NOTICES. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal
delivery, facsimile transmission (provided that the original is sent by
personal delivery or mail as hereinafter set forth) or seven (7) days after
deposit in the United States mail, by registered or certified mail, addressed
(i) to the Warrantholder at 49 Tanglewood Road, Wellesley, Massachusetts
02481, attention: Gregory Stento, and (ii) to the Company at 1 Hampshire
Street, Cambridge, Massachusetts 02139-1572, attention: President (and/or if
by facsimile, (617) 494-8414) or at such other address as any such party may
subsequently designate by written notice to the other party.

         (f)      REMEDIES. In the event of any default hereunder, the
non-defaulting party may proceed to protect and enforce its rights either by
suit in equity and/or by action at law, including but not limited to an
action for damages as a result of any such default, and/or an action for
specific performance for any default where a party will not have an adequate
remedy at law and where damages will not be readily ascertainable. The
Company expressly agrees that it shall not oppose, on the grounds that on
adequate remedy at law exists, an application by the Warrantholder or any
other person entitled to the benefit of this Agreement requiring specific
performance of any or all provisions hereof or enjoining the Company from
continuing to commit any such breach of this Agreement.

         (g)      NO IMPAIRMENT OF RIGHTS. The Company will not, by amendment
of its Certificate or through any other means, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms.

                                       10

<PAGE>

         (h)      SURVIVAL. The representations, warranties, covenants and
conditions of the respective parties contained herein or made pursuant to this
Warrant Agreement shall survive the execution and delivery of this Warrant
Agreement.

         (i)      SEVERABILITY. In the event any one or more of the
provisions of this Warrant Agreement shall for any reason be held invalid,
illegal or unenforceable, the remaining provisions of this Warrant Agreement
shall be unimpaired, and the invalid, illegal or unenforceable provision
shall be replaced by a mutually acceptable valid, legal and enforceable
provision, which comes closest to the intention of the parties underlying the
invalid, illegal or unenforceable provision.

         (j)      AMENDMENTS. Any provision of this Warrant Agreement may be
amended by a written instrument signed by the Company and by the
Warrantholder.

         (k)      ADDITIONAL DOCUMENTS. The Company shall supply such
documents as may be reasonably necessary to confirm the Company's compliance
with its obligations hereunder (subject to reasonable confidentiality
restrictions) as the Warrantholder may from time to time reasonably request.

         IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be executed by its officers thereunto duly authorized as of the
Effective Date.

                                    Company: PRAECIS PHARMACEUTICALS
                                    INCORPORATED

                                    By: /s/ Kevin F. McLaughlin
                                       ------------------------------
                                    Title:  Sr. V.P. and CFO
                                          ---------------------------

                                    Warrantholder: Gregory Stento

                                         /s/ Gregory Stento
                                     --------------------------------

                                       11

<PAGE>

                                    EXHIBIT I

                               NOTICE OF EXERCISE

To:_______________________

(1)      The undersigned Warrantholder hereby elects to purchase
         _______________________________________ shares of the Common Stock of
         PRAECIS PHARMACEUTICALS INCORPORATED (the "Company"), pursuant to the
         terms of the Warrant Agreement effective as of July 31, 2000 between
         the Company and the undersigned, as transferee of the rights of
         Comdisco, Inc. ("Comdisco"), with respect to the purchase of up to
         9,860 shares of the Company's Common Stock, originally granted to
         Comdisco pursuant to the terms of the Warrant Agreement originally
         dated as of March 29, 1995, reissued as of August 12, 1998, and
         reissued again as of July 31, 2000 (the "Warrant Agreement"), between
         the Company and Gregory Stento and tenders herewith payment of the
         purchase price for such shares in full, together with all applicable
         transfer taxes, if any.

(2)      In exercising its rights to purchase the Common Stock of the Company,
         the undersigned hereby confirms and acknowledges the investment
         representations and warranties made in Section 10 of the Warrant
         Agreement.

(3)      Please issue a certificate or certificates representing said shares of
         Common Stock in the name of the undersigned or in such other name as is
         specified below.

____________________
(Name)

____________________
(Address)

Warrantholder: GREGORY STENTO

_____________________

Date:________________

                                        12

<PAGE>

                                                     EXHIBIT II

                                             ACKNOWLEDGMENT OF EXERCISE

         The undersigned ________________________________     , hereby
acknowledges receipt of the "Notice of Exercise" from Gregory Stento, to
purchase _______     shares of the Common Stock of PRAECIS PHARMACEUTICALS
INCORPORATED pursuant to the terms of the Warrant Agreement, and further
acknowledges that _________     shares remain subject to purchase under the
terms of the Warrant Agreement.

                                     Company: PRAECIS PHARMACEUTICALS
                                              INCORPORATED

                                     By:_____________________________

                                     Title:__________________________

                                     Date:___________________________

                                        13

<PAGE>

                                   EXHIBIT III

                                 TRANSFER NOTICE

(To transfer or assign the foregoing Warrant Agreement execute this form and
supply required information. Do not use this form to purchase shares.)

         FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to

___________________________________________________________________________
                                 (Please Print)

whose address is___________________________________________________________
___________________________________________________________________________

                               Dated_______________________________________

                               Holder's Signature__________________________

                               Holder's Address____________________________

___________________________________________________________________________
Signature Guaranteed:______________________________________________________

      NOTE:               The signature to this Transfer
                          Notice must correspond with the name as it
                          appears on the face of the Warrant
                          Agreement, without alteration or enlargement
                          or any change whatever. Officers of
                          corporations and those acting in a fiduciary
                          or other representative capacity should file
                          proper evidence of authority to assign the
                          foregoing Warrant Agreement.

                                       14<PAGE>

                                                                    EXHIBIT 10.1

                      PRAECIS PHARMACEUTICALS INCORPORATED
                          EMPLOYEE STOCK PURCHASE PLAN

         PRAECIS PHARMACEUTICALS INCORPORATED, a Delaware corporation (the
"Company"), establishes this Employee Stock Purchase Plan (the "Plan") so that
Eligible Employees (as defined herein), if any, may be granted options to
purchase Common Stock, par value $.01 per share, of the Company ("Common
Stock").

1.      PURPOSE.

         The Plan provides Eligible Employees an opportunity to acquire shares
of Common Stock under circumstances which enable them to obtain the income tax
benefits described in Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). The Plan is intended to provide employees an incentive to
continue to promote the Company's best interests and to enhance its long-term
performance.

2.      DEFINITIONS.

         Wherever used, the following words and phrases will have the meanings
stated below unless a different meaning is plainly required by the context:

"Affiliated Company" means any subsidiary corporation of the Company, as defined
in Section 424(f) of the Code.

"Applicable Grant Date" means for any Option the date on which such Option was
granted, which shall be a Semiannual Grant Date.

"Board" means the Board of Directors of the Company.

"Committee" means a committee appointed by the Board to which the Board may (but
shall not be required to) delegate its powers to administer the Plan.

"Compensation" means the total cash remuneration a Participant receives during
an Exercise Period as salary or wages, including overtime pay and bonuses and
excluding all other forms of remuneration.

"Disability" means permanent and total disability as defined in Section 22(e)(3)
of the Code.

<PAGE>

"Effective Date" means July 3, 2000.

"Eligible Employee" means each person who, on an applicable Semiannual Grant
Date, is employed by the Company or an Affiliated Company and has been an
employee for six (6) or more months at that date. An employee will not be
eligible to participate during an Exercise Period if his or her customary
employment as of the first day of the period is either (i) less than 20 hours
per week or (ii) 5 months or less on a calendar year basis. No employee will be
eligible if he or she is on an applicable Semiannual Grant Date an owner of 5%
or more of the outstanding capital stock of the Company or an Affiliated
Company, as determined under Section 424(d) of the Code.

"Exercise Date" means any date on which an Eligible Employee purchases Common
Stock pursuant to an Option under the Plan, which shall, with respect to each
Option, be the last day of the Exercise Period in which such Option is granted.

"Exercise Period" means the approximate six-month period commencing on each of
July 3, 2000, January 1, 2001, July 2, 2001 and December 31, 2001 and ending at
5 p.m. (Boston time) on each of December 31, 2000, July 1, 2001, December 30,
2001 and June 30, 2002, respectively. If the Plan is terminated, then the
Exercise Period in which it is terminated shall end on the date immediately
preceding the effective date of such termination.

"Fair Market Value Per Share of Common Stock" on the day of determination shall
mean the last sale price per share of Common Stock on such day reported on the
Nasdaq National Market as published in The Wall Street Journal or, if no such
sale is so reported, the average of the reported closing bid and asked prices on
such day in the over-the-counter market, as furnished by the National
Association of Securities Dealers Automated Quotation System, or, if such price
at the time is not available from such system, as furnished by any similar
system then engaged in the business of reporting such prices and selected by the
Board or, if there is no such system, as furnished by any member of the National
Association of Securities Dealers, selected by the Board. If the Common Stock is
neither reported on the Nasdaq National Market nor traded on the
over-the-counter market, fair market value shall be such value as the Board, in
good faith, determines. Notwithstanding any provision of the Plan to the
contrary, no determination made with respect to the Fair Market Value Per Share
of Common Stock subject to an Option shall be inconsistent with Section 423 of
the Code.

"Initial Notice Period" means the period beginning on the Effective Date and
ending on the 15th day thereafter.

                                        2

<PAGE>

"Notice Period" means that period beginning 30 days prior to the applicable
Semiannual Grant Date (other than the first Semiannual Grant Date) and ending
on the 15th day prior to said date.

"Option" means an option granted hereunder which will entitle an Eligible
Employee to purchase shares of Common Stock.

"Option Price" means the lower of: (1) 85% of the Fair Market Value Per Share of
Common Stock as of the Applicable Grant Date on which the Option being exercised
was granted or (2) 85% of the Fair Market Value Per Share of Common Stock as of
the Exercise Date on which such Option is exercised.

"Participant" means an Eligible Employee who has elected to participate in the
Plan during the period between such election and the termination of such
Eligible Employee's participation in the Plan.

"Retirement" means a termination of a Participant's employment with the Company
on or after the first day of the month of a Participant's 65th birthday.

"Semiannual Grant Date" means each of July 3, 2000, January 1, 2001, July 2,
2001 and December 31, 2001.

"Withholding Account" means a bookkeeping record of all amounts withheld during
an Exercise Period for a specific Eligible Employee, which are available for the
exercise of an Option granted hereunder. Specific segregation of funds is not
required.

3.       ADMINISTRATION.

         The Plan shall be administered by the Board, which, to the extent it
shall determine, may delegate its powers with respect to the administration of
the Plan (except its powers to terminate or amend the Plan) to the Committee. If
the Board chooses to appoint a Committee, references hereinafter to the Board
shall be deemed to refer to the Committee. Subject to the express provisions of
the Plan, the Board may interpret the Plan, prescribe, amend and rescind rules
and regulations relating to it, determine the terms and provisions of the
Options granted hereunder and make all other determinations necessary or
advisable for the administration of the Plan; provided, however, that all such
interpretations, rules, determinations, terms and conditions shall be made and
prescribed in the context of preserving the tax treatment of the Options under
this Plan granted to Eligible Employees subject to United States federal income
taxation and preserving the tax treatment of the Plan itself under Section 423
of the Code. The determinations of the Board on all matters regarding the Plan
shall be conclusive.

                                        3

<PAGE>

4.       MAXIMUM SHARES TO BE GRANTED UNDER THE PLAN.

         The aggregate number of shares of Common Stock available for issuance
upon the exercise of Options granted pursuant to Section 5 shall be Forty
Thousand (40,000) as of July 3, 2000, with an additional Forty Thousand
(40,000) shares available as of each of January 1, 2001, July 2, 2001 and
December 31, 2001, subject to adjustment as set forth below or pursuant to
Section 9. Shares of Common Stock delivered pursuant to the Plan will be
authorized but unissued shares or treasury shares. In the event that any Option
granted pursuant to Section 5 expires or is terminated, surrendered or cancelled
without being exercised, in whole or in part, for any reason, the number of
shares of Common Stock theretofore subject to such Option shall again be
available as shares underlying Options which may be granted for grant at the
next Semiannual Grant Date pursuant to Section 5 and shall increase the
aggregate number of shares of Common Stock underlying Options available for
grant during the succeeding Exercise Period.

5.       ELIGIBILITY FOR PARTICIPATION AND GRANTING OF OPTIONS.

         (a) Each employee of the Company who enrolls in the Plan and who is an
Eligible Employee on an applicable Semiannual Grant Date is granted without any
further action by the Board an Option hereunder which will entitle him or her to
purchase, on the immediately following Exercise Date at the Option Price per
share for Options granted on such date, shares of Common Stock equal in value up
to ten percent (10%) of the Eligible Employee's Compensation during the Exercise
Period divided by such applicable Option Price per share of Common Stock.

         (b) If the number of shares of Common Stock for which Options are
granted pursuant to Section 5(a) exceeds the applicable number provided for in
Section 4, then the Options granted under Section 5(a) to all Eligible Employees
shall, in a nondiscriminatory manner, be reduced on a pro rata basis in a manner
which the Board determines to be consistent with Section 423 of the Code.

         (c) No Eligible Employee shall be granted an Option under the Plan
which permits his or her rights to purchase stock under all employee stock
purchase plans (as defined in Section 423 of the Code) of the Company and any
Affiliated Company to accrue at a rate which exceeds $25,000 of fair market
value of such stock (determined at the time of the grant of such Option) for
each calendar year in which such Option is outstanding at any time. Any Option
granted under the Plan shall be deemed to be modified to the extent necessary to
satisfy this Section 5(c).

                                        4

<PAGE>

6.       TERMS OF OPTIONS.

         (a) Each Option shall automatically be exercised on the last day of the
Exercise Period for such Option, using the funds which have accrued in a
Participant's Withholding Account as of such day, unless the Participant
withdraws from the Plan or is deemed to withdraw during the Exercise Period. An
Option granted hereunder may be exercised only through the use of the funds
which have accrued in a Participant's Withholding Account. Any Option, to the
extent unexercised on the Exercise Date, shall expire on the Exercise Date.

         (b) As soon as reasonably possible following exercise in accordance
with Section 6(a) and upon the Participant's written request, a certificate
representing the whole number of shares of Common Stock purchased, registered in
the name of the Participant, shall be delivered to the Participant or to such
other person designated by the Participant, including, without limitation, the
Participant's broker.

         (c) A Participant shall be deemed to have withdrawn from participation
in the Plan upon the occurrence of any of the following events:

                  (i) VOLUNTARY DISCONTINUANCE WHILE EMPLOYED. A Participant
may discontinue his or her election and withdraw from the Plan by giving written
notice to the Company no later than the last day of the Notice Period within
that Exercise Period, specifying that the Participant is so withdrawing from the
Plan; provided, however, that a Participant who shall have discontinued his or
her election to participate and withdrawn from the Plan may not participate in
the Plan during the next following Exercise Period.

                  (ii) TERMINATION OF EMPLOYMENT. Unless employment has
terminated due to Retirement, Disability or death, a Participant will be deemed
to have discontinued participation on the first day of the Exercise Period in
which such Participant's termination of employment occurs and amounts withheld
from compensation during the Exercise Period will be refunded.

                  (iii) RETIREMENT. In the event a Participant's employment
terminates because of Retirement during the first three months of an Exercise
Period, the Participant will be deemed to have discontinued participation on the
first day of the Exercise Period in which Retirement occurs and amounts withheld
from Compensation during the Exercise Period will be refunded. If Retirement
occurs during the last three months of the Exercise Period, the Participant will
continue to participate through the balance of the Exercise Period in which
Retirement occurs (without further withholding) unless he or she elects a
voluntary discontinuance within the Notice Period for that Exercise Period.

                                        5

<PAGE>

                  (iv) DEATH OR DISABILITY. In the event the employment of the
Participant by the Company or an Affiliated Company terminates as a result of
the Participant's Disability or death, the Participant will be deemed to
participate (without further withholding) through the balance of the Exercise
Period in which death or Disability occurs, unless he or she (or the executor,
administrator or representative, as the case may be) elects a voluntary
discontinuance within the Notice Period for that Exercise Period.

                  (v) LEVY OR ATTACHMENT. The filing with or levying upon the
Company or the custodian of any judgment, attachment, garnishee or other court
order affecting the Participant's account under the Plan will automatically
terminate such Participant's participation in the Plan and amounts withheld from
compensation during the Exercise Period will be refunded.

                  (vi) PLAN TERMINATION/EXPIRATION. Subject to Section 12(b),
termination of the Plan will terminate the participation of all Participants in
the Plan.

         (d) A Participant's employment shall not be deemed terminated by reason
of a transfer to another employer which is related to the Company within the
meaning of Sections 424(e) or (f) of the Code. A Participant who has elected
participation under the Plan who is absent from work with the Company or with an
Affiliated Company because of temporary disability (any disability other than a
permanent and total Disability) or who is on leave of absence for a period of
less than 90 days shall not, during the period of any such absence, be deemed,
by virtue of such absence alone, to have terminated employment. In the case of a
leave of absence which is longer than 90 days, a Participant will not be deemed
to have terminated employment until the later of the 91st day of such leave or,
if later, such date as the Participant's reemployment rights are not protected
by contract or law.

         (e) Upon the discontinuance of an election and withdrawal from the Plan
by a Participant, all withheld amounts in such Participant Withholding Account
shall be transferred to such Participant within thirty (30) days of such
discontinuance and withdrawal, except to the extent such withheld amounts are
applied to the exercise of an Option as provided above. In no event shall any
amounts be withheld from a Participant's Compensation for allocation to such
Participant's Withholding Account after the date such Participant's employment
shall cease.

         (f) In no event may any discontinuance of a Participant's election and
withdrawal from the Plan be in respect to a portion rather than all of such
Participant's Withholding Account on such date.

                                        6

<PAGE>

7.       PAYMENT FOR COMMON STOCK THROUGH WITHHOLDING.

         (a)  EMPLOYEE CONTRIBUTIONS

         Each Eligible Employee may elect to participate in the Plan by filing
an enrollment application and payroll withholding form with his or her
employer's payroll department during the Initial Notice Period or during a
Notice Period, which election shall be effective in the case of an election
filed during the Initial Notice Period, for the Exercise Period commencing on
the Effective Date and all subsequent Exercise Periods, or, in the case of an
election filed during a Notice Period, for the next Exercise Period and for all
subsequent Exercise Periods, until, in any case, such Participant's
participation in the Plan terminates. Each Eligible Employee who elects to
participate shall specify the amount of his or her contributions to be made by
payroll deduction by specifying a whole percentage from 1% to 10% of such
Participant's Compensation payable for each payroll period.

         No interest shall accrue or be payable to any Participant in the Plan
with respect to any sums withheld at the Participant's election, whether such
sums be applied to purchase Common Stock, or are returned to the Participant.

         Payroll deductions may be increased by a Participant only during a
subsequent Notice Period, but may be decreased, upon the Participant's written
election, effective as of the first payroll period for which it is
administratively practical to put the decrease into effect.

         (b)  APPLICATION OF PAYROLL CONTRIBUTIONS

         The Company shall maintain a separate account into which it shall
deposit all amounts withheld for payment of shares of Common Stock and shall
maintain sufficient records reflecting each Participant's Withholding Account.

         On the last day of each Exercise Period all amounts in a Participant's
With holding Account shall be paid over to the Company in payment of the Option
Price for the number of whole shares of Common Stock which can be purchased on
such date with such withheld total amount, unless otherwise directed in
accordance with Section 6 above. In lieu of fractional shares, unapplied cash
shall be carried forward to the next Exercise Period unless the Participant
requests a cash payment.

8.       TRANSFERABILITY OF OPTIONS AND COMMON STOCK.

         (a) No Option may be transferred, assigned, pledged or hypothecated
(whether by operation of law or otherwise), except as provided by will or the
applicable laws of descent or distribution, and no Option shall be subject to
execu-

                                       7
<PAGE>

tion, attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of an Option, or levy of attachment or
similar process upon the Option not specifically permitted herein shall be null
and void and without effect. An Option may be exercised only by the Eligible
Employee during his or her lifetime, or by his or her legal representative if
permitted by Section 423 of the Code, or pursuant to Section 6 by his or her
estate or the person who acquires the right to exercise such Option upon his or
her death by bequest or inheritance.

         (b) Participants in the Plan who wish to avail themselves of the
favorable tax benefits of Section 423 of the Code may not transfer or otherwise
dispose of shares of Common Stock acquired by them or on their behalf under the
Plan (other than in the case of a Participant's death) until after the later of
one year from the date of acquisition of said shares and two years after the
Applicable Grant Date of the Option pursuant to which said shares of Common
Stock were acquired.

         (c) Each Eligible Employee who receives shares of Common Stock pursuant
to the Plan agrees, by electing to participate, to notify the Company, in
writing, immediately after such Participant makes a Disqualifying Disposition of
any shares acquired pursuant to the exercise of an Option under the Plan. A
Disqualifying Disposition is any disposition (including any sale) of such shares
before the later of two years after the Applicable Grant Date for said Option or
one year after the receipt of shares pursuant to the exercise of said Option. If
the Participant has died before such stock is sold, these holding period
requirements do not apply and no Disqualifying Disposition can occur
thereafter.

9.       ADJUSTMENT PROVISIONS.

         The aggregate number of shares of Common Stock with respect to which
Options may be granted, the aggregate number of shares of Common Stock subject
to each outstanding Option and the Option Price per share of each Option shall
all be appropriately adjusted if any of the following occur after the Plan's
adoption by the Board: any increase or decrease in the number of shares of
issued Common Stock resulting from a subdivision or consolidation of shares,
whether through reorganization, recapitalization, stock split, stock
distribution or combination of shares, or the payment of a share dividend or
other increase or decrease in the number of such shares outstanding effected
without receipt of consideration by the Company. Adjustments shall be made
according to the sole discretion of the Board, and its decision shall be binding
and conclusive.

10.      DISSOLUTION, MERGER AND CONSOLIDATION.

         Upon the dissolution or liquidation of the Company, or upon a merger or
consolidation of the Company in which the Company is not the surviving corpora-

                                       8
<PAGE>

tion, the holder of each Option then outstanding under the Plan will thereafter
be entitled to receive at the next Exercise Date upon the exercise of such
Option for each share of Common Stock as to which such Option shall be
exercised, as nearly as reasonably may be determined, the cash, securities
and/or property which a holder of one share of the Common Stock was entitled to
receive upon and at the time of such transaction. The Board shall take such
steps in connection with such transactions as the Board shall deem necessary to
assure that the provisions of this Section 10 shall thereafter be applicable, as
nearly as reasonably may be determined, in relation to the said cash, securities
and/or property as to which such holder of such Option might thereafter be
entitled to receive.

11.      STOCKHOLDER APPROVAL.

         The Plan is subject to approval by the holders of a majority of the
outstanding shares of Common Stock (and the holders of any other class of stock
to the extent required by law, agreement or Section 423 of the Code) within 12
months before or after the date of adoption of the Plan by the Board. The Plan
shall be null and void and of no effect if the foregoing condition is not
fulfilled.

12.      MISCELLANEOUS.

         (a) LEGAL AND OTHER REQUIREMENTS. The obligations of the Company to
sell and deliver Common Stock under the Plan shall be subject to all applicable
laws, regulations, rules and approvals, including, but not by way of limitation,
the effectiveness of a registration statement under the Securities Act of 1933,
as amended, if deemed necessary or appropriate by the Company. Certificates for
shares of Common Stock issued hereunder may be legended to such effect as the
Board shall deem appropriate.

         (b) TERMINATION AND AMENDMENT OF PLAN. Except as provided in the
following sentence, the Plan may be terminated or amended by the stockholders of
the Company, by the Board, or by the Committee, including amendment of the Plan
from time to time to designate corporations whose employees may be offered
options under the Plan from among a group consisting of the Company and any
corporation which is or becomes its Affiliate. Amendments effecting: (1) any
increase in the aggregate number of shares of Common Stock which may be issued
under the Plan (other than an increase merely reflecting a change in
capitalization such as a stock dividend or stock split) or (2) changing the
designation of corporations whose employees may be offered options under the
Plan, except designations described in the preceding sentence, must be approved
by the stockholders of the Company within twelve (12) months after such
amendment is adopted by the Board or by the Committee or such amendment is void
ab initio. No amendment to the Plan shall affect any Options theretofore granted
or any Common Stock theretofore acquired by a

                                        9

<PAGE>

Participant, unless such amendment shall expressly so provide and unless any
Participant to whom an Option has been granted who would be adversely affected
by such amendment consents in writing thereto. Unless otherwise determined by
the Board, no Options will be granted under the Plan after December 31, 2001.
The Plan shall expire on June 30, 2002, unless extended or earlier terminated in
accordance with the terms hereof.

         (c) WITHHOLDING TAXES. Upon a Disqualifying Disposition, within the
meaning of Section 8(d), of any shares of Common Stock received pursuant to the
exercise of any Option under the Plan, the Company shall have the right to
require the Participant to remit to the Company an amount sufficient to satisfy
all federal, state and local requirements as to income tax withholding and
employee contributions to employment taxes or, alternatively, in the Board's
sole discretion, the Company may withhold all such amounts from other
compensation due to the Participant by the Company.

         (d) RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or any agreement
entered into pursuant to the Plan shall confer upon any Eligible Employee or
other optionee the right to continue in the employment of the Company or any
Affiliated Company or affect any right which the Company or any Affiliated
Company may have to terminate the employment of such Eligible Employee or other
optionee.

         (e) RIGHTS AS A STOCKHOLDER. A Participant shall not have any right as
a stockholder of the Company with respect to shares of Common Stock issuable
pursuant to the exercise of an Option hereunder, unless and until a certificate
or certificates for such shares of Common Stock are issued to him or her or the
Company reflects the Participant's ownership in its stock ledger or other
appropriate record of Common Stock ownership.

         (f) LEAVES OF ABSENCE. The Board shall be entitled to make such rules,
regulations and determinations as it deems appropriate under the Plan in respect
of any leave of absence taken by any Eligible Employee, provided such rules are
consistent with Section 423 of the Code.

         (g) NOTICES. Every direction, revocation or notice authorized or
required by the Plan shall be deemed delivered to the Company (1) on the date it
is personally delivered to the Treasurer of the Company (or such other person as
may be designated by the Company from time to time with notice given to each
Participant) at its principal executive offices or (2) three business days after
it is sent by registered or certified mail, postage prepaid, addressed to the
Treasurer of the Company (or such other person as may be designated by the
Company from time to time with notice given to each Participant) at such offices
or (3) on the date on which delivery was guaranteed by a third party business
(such as Federal Express and including the

                                        10

<PAGE>

postage service); and shall be deemed delivered to a Participant (A) on the date
it is personally delivered to him or her or (B) three business days after it is
sent by registered or certified mail, postage prepaid, addressed to him or her
at the last address shown for him or her on the records of the Company or of any
Affiliate or (C) on the date on which delivery was guaranteed by a third party
business (such as Federal Express and including the postal service), provided
that the documents were sent to him or her at the last address shown for him or
her on the records of the Company or of any Affiliate.

         (h) All Eligible Employees shall have the same rights and privileges
under the Plan, except that the amount of Common Stock which may be purchased
under Options granted under the Plan shall bear a uniform relationship to the
Compensation of Eligible Employees. All rules and determinations of the Board in
the administration of the Plan shall be uniformly and consistently applied to
all persons in similar circumstances.

         (i) APPLICABLE LAW. All questions pertaining to the validity,
construction and administration of the Plan and Options granted hereunder shall
be determined in conformity with the laws of the Commonwealth of Massachusetts,
to the extent not inconsistent with Section 423 of the Code and the regulations
thereunder.

                                       11

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