ALKERMES INC
10-Q, 1996-11-14
PHARMACEUTICAL PREPARATIONS
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<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q



        [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

             For the quarterly period ended September 30, 1996

        [ ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

               For the transaction period from __________ to __________

Commission file number 0-19267


                                 ALKERMES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         PENNSYLVANIA                                          23-2472830
- ----------------------------------------                    -------------------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                             Identification No.)


    64 Sidney Street, Cambridge, MA                            02139-4136
- ----------------------------------------                    -------------------
(Address of principal executive offices)                       (Zip Code)


Registrant's telephone number including area code:  (617) 494-0171
                                                   ----------------------------

                                 Not Applicable
- --------------------------------------------------------------------------------
              Former name, former address, and former fiscal year,
                          if changed since last report

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X   No
                                              ---    ---

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

             Class                     Shares Outstanding as of November 8, 1996
             -----                     -----------------------------------------
Common Stock, par value $.01                        18,471,827



<PAGE>   2


                         ALKERMES, INC. AND SUBSIDIARIES


                                      INDEX
                                      -----


                                                                       Page No.
                                                                       --------

PART I - FINANCIAL INFORMATION

          Item 1.    Consolidated Financial Statements

                     Consolidated Balance Sheets                           3
                     - September 30, 1996 and March 31, 1996

                     Consolidated Statements of Operations                 4
                     - Three months ended September 30, 1996 and 1995
                       Six months ended September 30, 1996 and 1995

                     Consolidated Statement of Shareholders' Equity        5
                     - Six months ended September 30, 1996

                     Consolidated Statements of Cash Flows                 6
                     - Six months ended September 30, 1996 and 1995

                     Notes to Consolidated Financial Statements            7

          Item 2.    Management's Discussion and Analysis of               8
                     Financial Condition and Results of Operations

PART II - OTHER INFORMATION

          Item 6.    Exhibits and Reports on Form 8-K                     11

SIGNATURES                                                                14

EXHIBIT INDEX                                                             15


                                      (2)

<PAGE>   3


ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS:


<TABLE>
                                  ALKERMES, INC. AND SUBSIDIARIES

                                     CONSOLIDATED BALANCE SHEETS
                                             (Unaudited)
<CAPTION>


                                                                                                                  
                                                                     September 30,        March 31,
                                                                         1996              1996
                                                                     ------------      -------------

<S>                                                                  <C>               <C>          
                               ASSETS
Current Assets:
     Cash and cash equivalents                                       $   4,666,212     $     445,150
     Short-term investments                                             43,528,307        31,929,214
     Prepaid expenses and other current assets                           3,304,047         1,957,477
                                                                     -------------     -------------
        Total current assets                                            51,498,566        34,331,841
                                                                     -------------     -------------
Property, Plant and Equipment:
     Land                                                                  225,000           225,000
     Building                                                            1,275,000         1,275,000
     Furniture, fixtures and equipment                                  10,688,835         9,864,501
     Leasehold improvements                                              2,159,765         2,008,193
     Construction in progress                                                 --             147,326
                                                                     -------------     -------------
                                                                        14,348,600        13,520,020
        Less accumulated depreciation and amortization                  (6,150,332)       (5,097,882)
                                                                     -------------     -------------
                                                                         8,198,268         8,422,138
                                                                     -------------     -------------
Investments                                                              1,380,833         1,372,789
                                                                     -------------     -------------
Other Assets                                                               657,733           747,377
                                                                     -------------     -------------
Other Investments                                                          451,155           877,928
                                                                     -------------     -------------
                                                                     $  62,186,555     $  45,752,073
                                                                     =============     =============


                  LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
     Accounts payable and accrued expenses                           $   2,444,141     $   3,522,178
     Long-term obligations--current portion                              3,926,696         2,925,756
                                                                     -------------     -------------
        Total current liabilities                                        6,370,837         6,447,934
                                                                     -------------     -------------
Long-Term Obligations                                                   12,415,499         9,876,347
                                                                     -------------     -------------
Other Long-Term Liabilities                                              1,173,260           915,241
                                                                     -------------     -------------
Deferred Revenue                                                         5,000,000         5,000,000
                                                                     -------------     -------------
Shareholders' Equity:
     Capital stock, par value $.01 per share:
       Authorized, 5,000,000 shares; none issued
     Common stock, par value $.01 per share:
       Authorized 40,000,000 shares; issued 18,448,011 shares at
       September 30, 1996 and 15,966,942 shares at March 31, 1996          184,480           159,669
     Additional paid-in capital                                        147,945,624       124,239,023
     Receivable for warrants and deferred compensation                    (196,448)         (317,682)
     Cumulative foreign currency translation adjustments                   (16,717)          (24,354)
     Unrealized gain on marketable securities                               90,000           502,500
     Accumulated deficit                                              (110,779,980)     (101,046,605)
                                                                     -------------     -------------
        Total shareholders' equity                                      37,226,959        23,512,551
                                                                     -------------     -------------
                                                                     $  62,186,555     $  45,752,073
                                                                     =============     =============
</TABLE>



See notes to consolidated financial statements.


                                      (3)
<PAGE>   4


                         ALKERMES, INC. AND SUBSIDIARIES
<TABLE>

                                             CONSOLIDATED STATEMENTS OF OPERATIONS
                                                          (Unaudited)
<CAPTION>




                                                     Three Months     Three Months      Six Months      Six Months
                                                        Ended            Ended            Ended            Ended
                                                     September 30,    September 30,    September 30,   September 30,
                                                        1996             1995              1996             1995
                                                     ------------     -------------    -------------   -------------

<S>                                                  <C>              <C>              <C>              <C>        
Revenues:
   Research and development revenue under
     collaborative arrangements                      $ 3,437,956      $   552,482      $ 5,914,865      $ 1,398,099
   Research and development revenue under
     collaborative arrangement with related party           --          2,605,244        1,415,313        5,218,753
   Interest income                                       644,232          371,985        1,171,960          744,015
                                                     -----------      -----------      -----------      -----------
                                                       4,082,188        3,529,711        8,502,138        7,360,867
                                                     -----------      -----------      -----------      -----------

Expenses:
   Research and development                            6,942,545        5,037,279       13,555,944       10,039,422
   General and administrative                          1,626,487        1,203,330        4,069,618        2,295,912
   Interest expense                                      302,540          249,296          609,951          454,867
                                                     -----------      -----------      -----------      -----------
                                                       8,871,572        6,489,905       18,235,513       12,790,201
                                                     -----------      -----------      -----------      -----------

Net loss                                             $(4,789,384)     $(2,960,194)     $(9,733,375)     $(5,429,334)
                                                     ===========      ===========      ===========      =========== 

Net loss per weighted average number of common
  shares                                             $     (0.26)     $     (0.22)     $     (0.54)     $     (0.40)
                                                     ===========      ===========      ===========      =========== 

Weighted average number of common shares
  outstanding                                         18,416,041       13,726,702       17,873,780       13,650,851
                                                     ===========      ===========      ===========      =========== 
</TABLE>



See notes to consolidated financial statements.


                                      (4)

<PAGE>   5


                         ALKERMES, INC. AND SUBSIDIARIES

<TABLE>
                                  CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                                   (Unaudited)
<CAPTION>

                                                                                                       Receivable  
                                                              Common Stock          Additional        for Warrants 
                                                              ------------            Paid-in         and Deferred 
                                                           Shares      Amount         Capital         Compensation 
                                                           ------      ------         -------         ------------ 


<S>                                                     <C>           <C>           <C>                 <C>        
Balance, April 1, 1996                                  15,966,942    $159,669      $124,239,023        ($317,682) 

Issuance of common stock 4/96 through 6/96,                                                                        
   net of issuance costs of $65,000                      2,398,204      23,982        23,346,771               --  

Amortization of receivable for warrants                         --          --                --           34,687  

Amortization of compensation relating to grant                                                                     
   of stock options and awards made                             --          --                --           43,274  

Unrealized loss on marketable securities                        --          --                --               --  

Cumulative foreign currency translation adjustments             --          --                --               --  

Net loss for period                                             --          --                --               --  
                                                        ----------------------------------------------------------
Balance, June 30, 1996                                  18,365,146     183,651       147,585,794         (239,721) 
                                                                                                                   
Issuance of common stock 7/96 through 9/96                  82,865         829           359,830               --  

Amortization of compensation relating to grant                                                                     
   of stock options and awards made                             --          --                --           43,273  

Unrealized loss on marketable securities                        --          --                --               --  

Cumulative foreign currency translation adjustments             --          --                --               --  

Net loss for period                                             --          --                --               --  
                                                        ----------------------------------------------------------
Balance, September 30, 1996                             18,448,011    $184,480      $147,945,624        ($196,448) 
                                                        ==========================================================

<CAPTION>


                                                           Cumulative       Unrealized
                                                        Foreign Currency    Gain (Loss)
                                                           Translation     on Marketable     Accumulated
                                                           Adjustments      Securities         Deficit           Total
                                                           -----------      ----------         -------           -----

<S>                                                         <C>              <C>         <C>                 <C>        
Balance, April 1, 1996                                      $(24,354)        $502,500    $(101,046,605)      $23,512,551

Issuance of common stock 4/96 through 6/96,
   net of issuance costs of $65,000                               --               --               --        23,370,753

Amortization of receivable for warrants                           --               --               --            34,687

Amortization of compensation relating to grant
   of stock options and awards made                               --               --               --            43,274

Unrealized loss on marketable securities                          --         (206,250)              --          (206,250)

Cumulative foreign currency translation adjustments            7,134               --               --             7,134

Net loss for period                                               --               --       (4,943,991)       (4,943,991)
                                                            -------------------------------------------------------------
Balance, June 30, 1996                                       (17,220)         296,250     (105,990,596)       41,818,158

Issuance of common stock 7/96 through 9/96                        --               --               --           360,659

Amortization of compensation relating to grant
   of stock options and awards made                               --               --               --            43,273

Unrealized loss on marketable securities                          --         (206,250)              --          (206,250)

Cumulative foreign currency translation adjustments              503               --               --               503

Net loss for period                                               --               --       (4,789,384)       (4,789,384)
                                                            -------------------------------------------------------------
Balance, September 30, 1996                                 $(16,717)         $90,000    $(110,779,980)      $37,226,959
                                                            =============================================================

</TABLE>



See notes to consolidated financial statements.



                                      (5)

<PAGE>   6


                         ALKERMES, INC. AND SUBSIDIARIES
<TABLE>

                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (Unaudited)
<CAPTION>
                                                                         Six Months      Six Months
                                                                            Ended           Ended
                                                                        September 30,    September 30,
                                                                            1996             1995
                                                                        -------------    -------------

<S>                                                                      <C>              <C>          
Cash flows from operating activities:
  Net loss                                                               $( 9,733,375)    $( 5,429,334)
  Adjustments to reconcile net loss to net cash used by
     operating activities:
     Depreciation and amortization                                          1,136,331          820,820
     Amortization of amounts receivable for warrants and compensation
      relating to grant of stock options and awards made                      121,234          281,423
     Adjustments to other investments                                          14,273           59,995
     Changes in assets and liabilities:
       Prepaid expenses and other current assets                           (1,347,434)         238,674
       Accounts payable and accrued expenses                               (1,074,230)         156,201
       Deferred revenue from Alkermes Clinical Partners, L.P.                    --         (1,210,000)
       Other long-term liabilities                                            258,019           30,806
       Deferred revenue                                                          --          5,000,000
                                                                         ------------     ------------ 
         Net cash used by operating activities                            (10,625,182)         (51,415)
                                                                         ------------     ------------ 

Cash flows from investing activities:
  Additions to property, plant and equipment, net                            (839,059)      (1,130,347)
  Purchases of short-term investments, net                                (11,599,093)     (17,691,625)
  (Purchases) sales of investments, net                                        (8,044)       2,989,188
  Investment in Alkermes Clinical Partners, L.P.                                 --           (113,463)
  Other assets                                                                 10,500           40,500
  Repayment of loan to Alkermes Clinical Partners, L.P.                          --          4,735,000
                                                                         ------------     ------------ 
         Net cash used by investing activities                            (12,435,696)     (11,170,747)
                                                                         ------------     ------------ 

Cash flows from financing activities:
  Proceeds from issuance of common stock, net                              23,731,412       12,912,568
  Proceeds from issuance of long-term debt                                  5,000,000             --
  Payment of long-term obligations                                         (1,458,497)      (1,341,790)
                                                                         ------------     ------------ 
         Net cash provided by financing activities                         27,272,915       11,570,778
                                                                         ------------     ------------ 


Effect of exchange rate changes on cash                                         9,025           (4,398)
                                                                         ------------     ------------ 

Net increase in cash and cash equivalents                                   4,221,062          344,218
Cash and cash equivalents, beginning of period                                445,150        1,086,627
                                                                         ------------     ------------ 
Cash and cash equivalents, end of period                                 $  4,666,212     $  1,430,845
                                                                         ============     ============

Supplementary information:
  Interest paid                                                          $    334,172     $    257,446
                                                                         ============     ============
</TABLE>



See notes to consolidated financial statements.


                                      (6)
<PAGE>   7


                         ALKERMES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------


1.  BASIS OF PRESENTATION
    ---------------------

The consolidated financial statements for the three and six month periods ended
September 30, 1996 and 1995, are unaudited and include all adjustments which, in
the opinion of management, are necessary to present fairly the results of
operations for the periods then ended. All such adjustments are of a normal
recurring nature. These financial statements should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended March 31, 1996,
which includes consolidated financial statements and notes thereto for the years
ended March 31, 1996, 1995 and 1994. In addition, the financial statements
include the accounts of Alkermes Controlled Therapeutics, Inc., Alkermes
Controlled Therapeutics Inc. II, Alkermes Investments, Inc., Alkermes Europe,
Ltd. and Alkermes Development Corporation II, wholly owned subsidiaries of the
Company.

The results of the Company's operations for any interim period are not
necessarily indicative of the results of the Company's operations for any other
interim period or for a full fiscal year.

The preparation of the Company's financial statements in conformity with
generally accepted accounting principles necessarily requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

2.  NEW ACCOUNTING PRONOUNCEMENTS
    -----------------------------

In March 1995, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed of" which requires
the Company to review for impairment of long-lived assets, certain identifiable
intangibles and goodwill related to those assets whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. In certain situations, an impairment loss would be recognized. The
Company adopted SFAS No. 121 in the quarter ended June 30, 1996. The adoption
did not have a material effect on the Company's consolidated financial position,
results of operations or cash flows.

In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation" which is effective in fiscal 1997 for the Company. The Company
intends to continue to account for its stock-based transactions with employees
in accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" and will include the pro forma disclosures required
by SFAS No. 123 at March 31, 1997. The adoption of SFAS No. 123 did not have a
material impact on the Company's consolidated financial position, results of
operations or cash flows.

3.  LONG-TERM DEBT
    --------------

In September 1996, the Company amended its loan with an existing bank and
increased the principal amount of the loan by $5,000,000, securing the existing
and the additional principal amounts with the building and the real property
pursuant to a mortgage and certain of the Company's equipment pursuant to a
security agreement. The additional principal amount of the loan is payable over
five years in equal monthly installments of $83,333, which commenced November
1, 1996 and bears interest at the fixed rate of 8.54% per annum. The financial
covenants and the cash collateral remained the same under the terms of the
amended loan agreement.


                                      (7)
<PAGE>   8


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS

INTRODUCTION

Alkermes is developing sophisticated products based on innovative drug delivery
technologies. Since its inception in 1987, the Company has devoted substantially
all of its resources to its research and development programs. Alkermes has not
received any revenue from the sales of products. The Company has been
unprofitable since inception and expects to incur substantial additional
operating losses over the next several years. At September 30, 1996, the Company
had an accumulated deficit of approximately $111 million.

The Company has funded its operations primarily through public offerings and
private placements of equity securities, bank loans and payments under research
and development agreements with collaborators, including Alkermes Clinical
Partners, L.P. ("Clinical Partners"), a research and development limited
partnership whose operations commenced in April 1992. Funding from Clinical
Partners ended as of June 30, 1996. The Company intends to develop its product
candidates in collaboration with others on whom the Company will rely for
funding, development, manufacturing and/or marketing.

FORWARD-LOOKING STATEMENTS

Any statements set forth below or otherwise made in writing or orally by the
Company with regard to its expectations as to financial results and other
aspects of its business may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Although the
Company makes such statements based on assumptions which it believes to be
reasonable, the Company's business is subject to significant risks and there can
be no assurance that actual results will not differ materially from the
Company's expectations. Accordingly, the Company hereby identifies the following
important factors, among others, which could cause its results to differ from
any results which might be projected, forecasted or estimated by the Company in
any such forward-looking statements: (i) the Company and its collaborators could
not be permitted by regulatory authorities to undertake additional clinical
trials for RMP-7[Trademark], ProLease[Registered Trademark] or
Medisorb[Registered Trademark]; (ii) product candidates could be ineffective or
unsafe during clinical trials; (iii) the Company could incur difficulties or
set-backs in obtaining the substantial additional funding required to continue
research and development programs and clinical trials; (iv) even if product
candidates appear promising at an early stage of development, product candidates
could fail to receive necessary regulatory approvals, be difficult to
manufacture on a large scale, be uneconomical, fail to achieve market
acceptance, be precluded from commercialization by proprietary rights of third
parties or experience substantial competition in the marketplace; (v)
technological change in the biotechnology or pharmaceutical industries could
render the Company's product candidates obsolete or noncompetitive; (vi)
disputes with collaborators, termination of collaborations or failure to
negotiate acceptable new collaborative arrangements for ProLease and Medisorb
technologies, which are not independently commercializable could occur; (vii)
disputes with Clinical Partners over rights to the RMP[Trademark] technology and
RMP-7 could occur, or the Company could fail to purchase this technology from
Clinical Partners, or, if the Company did purchase RMP technology from Clinical
Partners (a) in shares of the Company's common stock, the Company's shareholders
would be substantially diluted or (b) in cash, the Company's capital resources
would be substantially depleted; and (viii) difficulties or set-backs in
obtaining and enforcing Alkermes' patents and with the patent rights of others
could occur.


                                      (8)
<PAGE>   9



RESULTS OF OPERATIONS

The Company's research and development revenue under collaborative arrangement
with related party for the three and six months ended September 30, 1996 was
zero and $1,415,313 compared to $2,605,244 and $5,218,753 for the corresponding
periods of the prior year. This revenue was received from Clinical Partners
under a product development agreement for RMP-7 entered into in March 1992. The
decrease in such revenue for the three and six months ended September 30, 1996
as compared to the corresponding periods of the prior year was a result of the
completion of the funding pursuant to the product development agreement during
the quarter ended June 30, 1996. Alkermes intends to use its own resources to
develop RMP-7. The Company's research and development revenue under
collaborative arrangements for the three and six months ended September 30, 1996
was $3,437,956 and $5,914,865 compared to $552,482 and $1,398,099 for the
corresponding periods of the prior year. The increase in such revenue for the
three and six months ended September 30, 1996 as compared to the corresponding
periods of the prior year was mainly a result of the funding received under new
or expanded collaborative agreements related to the Company's ProLease and
Medisorb technologies.

Interest income for the three and six months ended September 30, 1996 was
$644,232 and $1,171,960 compared to $371,985 and $744,015 for the corresponding
periods of the prior year. The increase in such revenue for the three and six
months ended September 30, 1996 as compared to the corresponding periods of the
prior year was primarily a result of the investment of the net proceeds of
approximately $22.9 million received upon the consummation of a public offering
of the Company's common stock in May 1996.

The Company's total operating expenses were $8,871,572 and $18,235,513 for the
three and six months ended September 30, 1996 as compared to $6,489,905 and
$12,790,201 for the three and six months ended September 30, 1995. Research and
development expenses for the three and six months ended September 30, 1996 were
$6,942,545 and $13,555,944 compared to $5,037,279 and $10,039,422 for the
corresponding periods of the prior year. The increase in research and
development expenses for the three and six months ended September 30, 1996 as
compared to the three and six months ended September 30, 1995 was mainly the
result of salary and related benefits and other operating costs associated with
the acquisition of the Medisorb technology and certain related assets in March
1996. During the three and six months ended September 30, 1996, there was also
an increase in purchases of lab supplies and clinical expenses related primarily
to the Company's RMP-7, ProLease and Medisorb programs, partially offset by a
reduction in the preclinical costs of the Company's RMP-7 program which were
completed during the prior year.

General and administrative expenses for the three and six months ended September
30, 1996 were $1,626,487 and $4,069,618 compared to $1,203,330 and $2,295,912
for the corresponding periods of the prior year. The increase in the three and
six months ended September 30, 1996 as compared to the three and six months
ended September 30, 1995 was mainly the result of salary and related benefits
and other operating costs associated with the acquisition of the Medisorb
technology and certain related assets in March 1996 as well as an increase in
patent legal costs. In addition, there were non-cash charges related to the
write-down of the Company's investment in Clinical Partners in the three months
ended June 30, 1996.

The Company does not believe that inflation and changing prices have had a
material impact on its results of operations.


                                      (9)
<PAGE>   10



LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1996, the Company had current assets totaling $51,498,566,
primarily consisting of $4,666,212 in cash and cash equivalents and $43,528,307
in Government obligations having a maturity of less than one year; and current
liabilities of $6,370,837. The Company's short-term investment objectives are,
first, to assure conservation of principal, and second, to obtain investment
income. As a result, the Company invests primarily in high grade government or
government-backed securities.

In September 1996, the Company amended its loan with an existing bank and
increased the principal amount of the loan by $5,000,000, securing the existing
and the additional principal amounts with the building and the real property
pursuant to a mortgage and certain of the Company's equipment pursuant to a
security agreement.

In May 1996, the Company completed a public offering of 2,300,000 shares of its
common stock at $10 per share. Net proceeds to the Company were approximately
$22.9 million.

The Company's research and development costs to date have been financed
primarily by sales of equity securities and research and development
collaborative arrangements. The Company expects to incur significant research
and development and other costs, including costs related to preclinical studies,
clinical trials and facilities expansion. The research and development revenue
from Clinical Partners ended during the quarter ended June 30, 1996. Such
funding was not sufficient to complete clinical trials and seek regulatory
approval of RMP-7. As a result, Alkermes intends to use its own resources to
develop RMP-7, but may be forced to seek alternative sources of funding,
including additional collaborators. Therefore, the Company expects that its
research and development and other costs will exceed revenues significantly for
the next several years, which will result in continuing losses from operations.
The Company's capital expenditures for equipment, facilities and building
improvements have been financed to date primarily with proceeds from bank loans
and the sales of equity securities. The Company will continue to pursue
opportunities to obtain additional financing in the future. Such financing may
be sought through various sources, including equity offerings, bank borrowings,
lease arrangements relating to fixed assets or other financing methods. The
source, timing and availability of any financings will depend on market
conditions, interest rates and other factors.

The Company's future capital requirements will depend on many factors, including
continued scientific progress in its research and development programs, the
magnitude of these programs, progress with preclinical testing and clinical
trials, the time and costs involved in obtaining regulatory approvals, the costs
involved in filing, prosecuting and enforcing patent claims, competing
technological and market developments, the establishment of additional
collaborative arrangements, the cost of manufacturing facilities and of
commercialization activities and arrangements and the cost of product
in-licensing and any possible acquisitions.

The Company will need to raise substantial additional funds for longer-term
product development, regulatory approvals and manufacturing or marketing
activities that it might undertake in the future. There can be no assurance that
additional funds will be available on favorable terms, if at all. If adequate
funds are not available, the Company may be required to curtail significantly
one or more of its research and development programs and/or obtain funds through
arrangements with collaborative partners or others that may require the Company
to relinquish rights to certain of its technologies, product candidates or
future products.


                                      (10)
<PAGE>   11



PART II.  OTHER INFORMATION

<TABLE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits:
<CAPTION>
                       Number                     Exhibit
                       ------                     -------

                       <S>      <C>
                       3.1(a)   Second Amended and Restated Articles of Incorporation, as
                                filed with the Pennsylvania Secretary of State on July 23,
                                1991 (Incorporated by reference to Exhibit 4.1(a) to the
                                Company's Report on Form 10-Q for the quarter ended June 30,
                                1991).

                       3.1(b)   Statement of Change of Registered Office, as filed with the
                                Pennsylvania Secretary of State on July 23, 1991
                                (Incorporated by reference to Exhibit 4.1(b) to the
                                Company's Report on Form 10-Q for the quarter ended June 30,
                                1991).

                       3.1(c)   Amendment to the Second Amended and Restated Articles of
                                Incorporation, as filed with the Pennsylvania Secretary of
                                State on November 1, 1991. (Incorporated by reference to
                                Exhibit 4.1(c) to the Company's Report on Form 10-Q for the
                                quarter ended September 30, 1991).

                       3.1(d)   Amendment to the Second Amended and Restated Articles of
                                Incorporation, as filed with the Pennsylvania Secretary of
                                State on February 12, 1993. (Incorporated by reference to
                                Exhibit 4.1(d) to the Company's Report on Form 10-Q for the
                                quarter ended December 31, 1992).

                       3.2      Amended and Restated By-Laws of Alkermes, Inc., effective as
                                of July 1, 1994. (Incorporated by reference to Exhibit 4.2
                                to the Company's Report on Form 10-Q for the quarter ended
                                June 30, 1994).

                       4.1      Specimen of Common Stock Certificate of Alkermes, Inc.
                                (Incorporated by reference to Exhibit 4 to the Company's
                                Registration Statement on Form S-1, as amended (File No.
                                33-40250)).

                       4.2      Form of 1992 Warrant to purchase 2,800 shares of the
                                Company's Common Stock. (Incorporated by reference to
                                Exhibit 4.2 to the Company's Report on Form 10-K for the
                                fiscal year ended March 31, 1992).

                       4.3      Form of 1995 Warrant to purchase 300 shares of the Company's
                                Common Stock. (Incorporated by reference to Exhibit 4.3 to
                                the Company's Report on Form 10-K for the fiscal year ended
                                March 31, 1992).
</TABLE>



                                      (11)

<PAGE>   12


        Number                     Exhibit
        ------                     -------

        4.4       Form of Global Warrant Certificate for 1994 Class A
                  Warrants. (Incorporated by reference to Exhibit 4.6 to the
                  Company's Report on Form 10-Q for the quarter ended December
                  31, 1994).

        4.5       Form of Global Warrant Certificate for 1994 Class B
                  Warrants. (Incorporated by reference to Exhibit 4.7 to the
                  Company's Report on Form 10-Q for the quarter ended December
                  31, 1994).

        4.6       Form of Global Warrant Certificate for 1994 Affiliate
                  Warrants. (Incorporated by reference to Exhibit 4.8 to the
                  Company's Report on Form 10-Q for the quarter ended December
                  31, 1994).

        4.7       Form of Global Warrant Certificate for 1994 Incentive
                  Warrants. (Incorporated by reference to Exhibit 4.9 to the
                  Company's Report on Form 10-Q for the quarter ended December
                  31, 1994).

        4.8       Warrant Agreement, dated as of November 18, 1994, by and
                  between the Company and The First National Bank of Boston.
                  (Incorporated by reference to Exhibit 4.10 to the Company's
                  Report on Form 10-Q for the quarter ended December 31,
                  1994).

        10.1      Allonge to Note, dated as of September 27, 1996, executed by
                  Fleet National Bank, Alkermes Controlled Therapeutics, Inc.
                  and the Registrant.

        10.2      Allonge to Note, dated as of September 27, 1996, executed by
                  Fleet National Bank, Alkermes Controlled Therapeutics, Inc.
                  and the Registrant.

        10.3      Letter Agreement, dated September 27, 1996, by and among
                  Fleet National Bank, Alkermes Controlled Therapeutics, Inc.,
                  Alkermes Controlled Therapeutics Inc. II and the  Registrant.*

        10.4      Security Agreement, dated as of September 27, 1996, from the
                  Registrant, Alkermes Controlled Therapeutics, Inc. and
                  Alkermes Controlled Therapeutics Inc. II to Fleet National
                  Bank.

        10.5      Pledge Agreement, dated as of September 27, 1996, from the
                  Registrant to Fleet National Bank.

        10.6      Mortgage and Security Agreement, dated as of September 27,
                  1996, from Alkermes Controlled Therapeutics Inc. II to Fleet
                  National Bank.



                                      (12)

<PAGE>   13


           Number                     Exhibit
           ------                     -------
           10.7     Environmental Indemnity Agreement, dated as of September 27,
                    1996, from the Registrant and Alkermes Controlled
                    Therapeutics Inc. II to Fleet National Bank.

           10.8     Promissory Note, dated September 27, 1996, from the
                    Registrant and Alkermes Controlled Therapeutics Inc. II to
                    Fleet National Bank.

           11       Statement regarding computation of per share loss.

           27       Financial Data Schedule.

*    Confidential status has been requested for certain portions thereof. Such
     provisions have been filed separately with the Commission.

(b)  The Registrant has filed no Reports on Form 8-K during the quarter ended
     September 30, 1996.


                                      (13)

<PAGE>   14


                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                            ALKERMES, INC.
                                            (Registrant)



Date:  November 14, 1996                     By: /s/ Richard F. Pops
                                               ----------------------
                                                Richard F. Pops
                                                Chief Executive Officer
                                                  (Principal Executive Officer)


Date:  November 14, 1996                     By: /s/ Michael J. Landine
                                               ---------------------------------
                                                Michael J. Landine
                                                Senior Vice President, Chief
                                                 Financial Officer and Treasurer
                                                 (Principal Financial and
                                                   Accounting Officer)




                                      (14)
<PAGE>   15


                                  EXHIBIT INDEX


    Exhibit
    Number            Description
    ------            -----------

    3.1(a)     Second Amended and Restated Articles of Incorporation, as filed
               with the Pennsylvania Secretary of State on July 23, 1991
               (Incorporated by reference to Exhibit 4.1(a) to the Company's
               Report on Form 10-Q for the quarter ended June 30, 1991).

    3.1(b)     Statement of Change of Registered Office, as filed with the
               Pennsylvania Secretary of State on July 23, 1991 (Incorporated by
               reference to Exhibit 4.1(b) to the Company's Report on Form 10-Q
               for the quarter ended June 30, 1991).

    3.1(c)     Amendment to the Second Amended and Restated Articles of
               Incorporation, as filed with the Pennsylvania Secretary of State
               on November 1, 1991. (Incorporated by reference to Exhibit 4.1(c)
               to the Company's Report on Form 10-Q for the quarter ended
               September 30, 1991).

    3.1(d)     Amendment to the Second Amended and Restated Articles of
               Incorporation, as filed with the Pennsylvania Secretary of State
               on February 12, 1993. (Incorporated by reference to Exhibit
               4.1(d) to the Company's Report on Form 10-Q for the quarter ended
               December 31, 1992).

    3.2        Amended and Restated By-Laws of Alkermes, Inc., effective as of
               July 1, 1994. (Incorporated by reference to Exhibit 4.2 to the
               Company's Report on Form 10-Q for the quarter ended June 30,
               1994).

    4.1        Specimen of Common Stock Certificate of Alkermes, Inc.
               (Incorporated by reference to Exhibit 4 to the Company's
               Registration Statement on Form S-1, as amended (File No.
               33-40250)).

    4.2        Form of 1992 Warrant to purchase 2,800 shares of the Company's
               Common Stock. (Incorporated by reference to Exhibit 4.2 to the
               Company's Report on Form 10-K for the fiscal year ended March 31,
               1992).

    4.3        Form of 1995 Warrant to purchase 300 shares of the Company's
               Common Stock. (Incorporated by reference to Exhibit 4.3 to the
               Company's Report on Form 10-K for the fiscal year ended March 31,
               1992).


                                      (15)
<PAGE>   16



     Exhibit
     Number    Description
     ------    -----------

     4.4       Form of Global Warrant Certificate for 1994 Class A Warrants.
               (Incorporated by reference to Exhibit 4.6 to the Company's Report
               on Form 10-Q for the quarter ended December 31, 1994).

     4.5       Form of Global Warrant Certificate for 1994 Class B Warrants.
               (Incorporated by reference to Exhibit 4.7 to the Company's Report
               on Form 10-Q for the quarter ended December 31, 1994).

     4.6       Form of Global Warrant Certificate for 1994 Affiliate Warrants.
               (Incorporated by reference to Exhibit 4.8 to the Company's Report
               on Form 10-Q for the quarter ended December 31, 1994).

     4.7       Form of Global Warrant Certificate for 1994 Incentive Warrants.
               (Incorporated by reference to Exhibit 4.9 to the Company's Report
               on Form 10-Q for the quarter ended December 31, 1994).

     4.8       Warrant Agreement, dated as of November 18, 1994, by and between
               the Company and The First National Bank of Boston. (Incorporated
               by reference to Exhibit 4.10 to the Company's Report on Form 10-Q
               for the quarter ended December 31, 1994).

     10.1      Allonge to Note, dated as of September 27, 1996, executed by
               Fleet National Bank, Alkermes Controlled Therapeutics, Inc. and
               the Registrant.

     10.2      Allonge to Note, dated as of September 27, 1996, executed by
               Fleet National Bank, Alkermes Controlled Therapeutics, Inc. and
               the Registrant.

     10.3      Letter Agreement, dated September 27, 1996, by and among Fleet
               National Bank, Alkermes Controlled Therapeutics, Inc., Alkermes
               Controlled Therapeutics Inc. II and the Registrant. *

     10.4      Security Agreement, dated as of September 27, 1996, from the
               Registrant, Alkermes Controlled Therapeutics, Inc. and Alkermes
               Controlled Therapeutics Inc. II to Fleet National Bank.

     10.5      Pledge Agreement, dated as of September 27, 1996, from the
               Registrant to Fleet National Bank.

     10.6      Mortgage and Security Agreement, dated as of September 27, 1996,
               from Alkermes Controlled Therapeutics Inc. II to Fleet National
               Bank.


                                      (16)

<PAGE>   17



     Exhibit
     Number    Description
     ------    -----------

     10.7      Environmental Indemnity Agreement, dated as of September 27,
               1996, from the Registrant and Alkermes Controlled Therapeutics
               Inc. II to Fleet National Bank.

     10.8      Promissory Note, dated September 27, 1996, from the Registrant
               and Alkermes Controlled Therapeutics Inc. II to Fleet National 
               Bank.
     
     11        Statement regarding computation of per share loss.

     27        Financial Data Schedule.

*    Confidential status has been requested for certain portions thereof. Such
     provisions have been filed separately with the Commission.


                                      (17)

<PAGE>   1
                                                                   Exhibit 10.1


                                 ALLONGE TO NOTE

     Reference is made to that certain $3,187,496 original principal amount
promissory note dated December 23, 1994 (the "1994 Note") made by Alkermes, Inc.
("Alkermes") and payable to the order of Fleet Bank of Massachusetts, N.A.
("Fleet Mass"). Fleet National Bank (the "Bank") is the successor by merger to
Fleet Mass. For good and valuable consideration, receipt and sufficiency are
hereby acknowledged, the Bank, Alkermes and Alkermes Controlled Therapeutics,
Inc., a Pennsylvania corporation and a wholly-owned subsidiary of Alkermes ("ACT
I") agree as follows:

     1. The 1994 Note is hereby modified:

     a. By providing that all references in the 1994 Note to the "Bank" will be
deemed to refer to Fleet National Bank.

     b. By providing that all references in the 1994 Note to a "Letter
Agreement" will be deemed to refer to that certain letter agreement dated
September 27, 1996 among the Bank, Alkermes, ACT I and Alkermes Controlled
Therapeutics Inc. II.

     c. By deleting in its entirety the first sentence of the seventh paragraph
in the text of the 1994 Note and by substituting in its stead the following:

     "This note is the 1994 Note referred to in, and is entitled to the benefits
     of, the Letter Agreement and the Security Agreement (as defined in the
     Letter Agreement)."

     2. ACT I and Alkermes are hereby substituted for Alkermes as, and hereby
assume the obligations of, the "Borrower" described in the 1994 Note. Each of
ACT I and Alkermes agrees that it is jointly and severally liable for the
payment and performance of the 1994 Note.

     3. Except as expressly affected hereby, the 1994 Note remains in full force
and effect.

     Executed, as an instrument under seal, as of this 27th day of September,
1996.

                                             ALKERMES, INC.


                                             By: /s/ Michael Landine
                                                -------------------------------
                                                Name: Michael Landine
                                                Title: Senior Vice President
                                                       and CFO

<PAGE>   2


                                             ALKERMES CONTROLLED
                                              THERAPEUTICS, INC.


                                             By: /s/ Michael Landine
                                                -------------------------------
                                                Name: Michael Landine
                                                Title: Vice President


                                             FLEET NATIONAL BANK


                                             By: /s/ Catherine Bruton
                                                -------------------------------
                                                Name: Catherine Bruton
                                                Title: VP




                                      -2-

<PAGE>   1
                                                                   Exhibit 10.2


                                 ALLONGE TO NOTE

     Reference is made to that certain $1,500,000 original principal amount
promissory note dated December 19, 1995 (the "1995 Note") made by Alkermes, Inc.
("Alkermes") and payable to the order of Fleet Bank of Massachusetts, N.A.
("Fleet Mass"). Fleet National Bank (the "Bank") is the successor by merger to
Fleet Mass. For good and valuable consideration, receipt and sufficiency are
hereby acknowledged, the Bank, Alkermes and Alkermes Controlled Therapeutics,
Inc., a Pennsylvania corporation and a wholly-owned subsidiary of Alkermes ("ACT
I") agree as follows:

     1.   The 1995 Note is hereby modified:

     a. By providing that all references in the 1995 Note to the "Bank" will be
deemed to refer to Fleet National Bank.

     b. By providing that all references in the 1995 Note to a "Letter
Agreement" will be deemed to refer to that certain letter agreement dated
September 27, 1996 among the Bank, Alkermes, ACT I and Alkermes Controlled
Therapeutics Inc. II.

     c. By deleting in its entirety the first sentence of the seventh paragraph
in the text of the 1995 Note and by substituting in its stead the following:

     "This note is the 1995 Note referred to in, and is entitled to the benefits
     of, the Letter Agreement and the Security Agreement (as defined in the
     Letter Agreement)."

     2. ACT I and Alkermes are hereby substituted for Alkermes as, and hereby
assume the obligations of, the "Borrower" described in the 1995 Note. Each of
ACT I and Alkermes agrees that it is jointly and severally liable for the
payment and performance of the 1995 Note.

     3. Except as expressly affected hereby, the 1995 Note remains in full force
and effect.

     Executed, as an instrument under seal, as of this 27th day of September,
1996.

                                         ALKERMES, INC.



                                         By /s/ Michael Landine
                                           ------------------------------------
                                           Name: Michael Landine
                                           Title: Senior Vice President and CFO


<PAGE>   2

                                         ALKERMES CONTROLLED THERAPEUTICS, INC.



                                         By /s/ Michael Landine
                                           --------------------------------
                                           Name: Michael Landine
                                           Title: Vice President

                                         FLEET NATIONAL BANK



                                         By /s/ Catherine Bruton
                                           --------------------------------
                                           Name: Catherine Bruton
                                           Title: VP




                                      -2-

<PAGE>   1
                                                                    Exhibit 10.3


                                 ALKERMES, INC.
                                64 Sidney Street
                               Cambridge, MA 02139

                                                              September 27, 1996

Fleet National Bank
75 State Street
Boston, MA  02109


Gentlemen:

     This letter agreement will set forth certain understandings among Alkermes,
Inc., a Pennsylvania corporation ("Alkermes"), Alkermes Controlled Therapeutics,
Inc., a Pennsylvania corporation and a wholly-owned Subsidiary of Alkermes ("ACT
I"), Alkermes Controlled Therapeutics Inc. II, a Pennsylvania corporation and a
wholly-owned Subsidiary of Alkermes ("ACT II") (Alkermes, ACT I and ACT II being
hereinafter referred to collectively as the "Borrowers" and individually as a
"Borrower") and Fleet National Bank (the "Bank") with respect to the Term Loans
(hereinafter defined). The Bank is the successor by merger to Fleet Bank of
Massachusetts, N.A. ("Fleet Mass"). This letter agreement is intended to amend
and restate in its entirety that certain letter agreement dated November 19,
1992 between Alkermes and Fleet Mass, as heretofore amended (as so amended, the
"Prior Loan Agreement"), with the result that this letter agreement will be
deemed to replace and supersede the Prior Loan Agreement. In consideration of
the mutual promises contained herein and in the other documents referred to
below, and for other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, the Borrowers and the Bank agree as follows:

     I. AMOUNTS AND TERMS
        -----------------
 
     1.1. REFERENCE TO DOCUMENTS. Reference is made to (i) that certain
$3,187,496 original principal amount promissory note dated December 23, 1994
made by Alkermes and payable to the order of Fleet Mass, as amended by Allonge
to Note of even date herewith among Alkermes, ACT I and the Bank (said December
23, 1994 promissory note, as so amended, being hereinafter referred to as the
"1994 Note"), (ii) that certain $1,500,000 original principal amount promissory
note dated December 19, 1995 made by Alkermes and payable to the order of Fleet
Mass, as amended by Allonge to Note of even date herewith among Alkermes, ACT I
and the Bank (said December 19, 1995 promissory note, as so amended, being
hereinafter referred to as the "1995 Note"), (iii) that certain $5,000,000
original principal amount promissory note of even date herewith (the "Ohio Term
Note") made by Alkermes and ACT II jointly and severally and payable to the
order of the Bank, (iv) that certain Security Agreement of even date herewith
(as same may be amended from time to time, the "Security Agreement") from the
Borrowers to the 



     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           

<PAGE>   2

Bank, and (v) that certain Pledge Agreement of even date herewith (as same may
be amended from time to time, the "Pledge") from Alkermes to the Bank.

     1.2. THE 1994 TERM LOAN; THE 1994 NOTE. Fleet Mass has made a loan (the
"1994 Term Loan") to Alkermes in the original principal amount of $3,187,496,
the Bank having succeeded to the rights of Fleet Mass thereunder and ACT I
having become jointly and severally liable (together with Alkermes) in respect
thereof. The 1994 Term Loan was made in order to finance or refinance the
purchase by Alkermes and/or ACT I of certain of the items of equipment (the
"Equipment") listed on Exhibit A attached to the Security Agreement. Alkermes
and ACT I represent that, at the date hereof, each such item of Equipment has
been actually delivered to Alkermes and/or ACT I by the vendor, has been
installed at the Cambridge Premises (hereinafter defined) and has become
operational. The 1994 Term Loan is evidenced by the 1994 Note, and interest
thereon shall be payable at the times and at the rate provided for in the 1994
Note. Overdue principal shall bear interest at a rate per annum equal to the sum
of two (2%) percent plus the per annum rate otherwise payable under the 1994
Note (but in no event in excess of the maximum rate from time to time permitted
by then applicable law), payable on demand. Each of Alkermes and ACT I hereby
irrevocably authorizes the Bank to make or cause to be made, on a schedule
attached to the 1994 Note or on the books of the Bank, at or following the time
of making the 1994 Term Loan and of receiving any payment of principal of the
1994 Term Loan, an appropriate notation reflecting each such transaction and the
then unpaid principal balance of the 1994 Term Loan. The amount so noted shall
constitute presumptive evidence as to the amount owed jointly and severally by
Alkermes and ACT I with respect to principal of the 1994 Term Loan. Failure of
the Bank to make any such notation shall not, however, affect any obligation of
any Borrower or any right of the Bank hereunder or under the 1994 Note.

     1.3. THE 1995 TERM LOAN; THE 1995 NOTE. In addition to the 1994 Term Loan,
Fleet Mass also made a loan (the "1995 Term Loan") to Alkermes in the original
principal amount of $1,500,000, the Bank having succeeded to the rights of Fleet
Mass thereunder and ACT I having become jointly and severally liable (together
with Alkermes) in respect thereof. The 1995 Term Loan was made in order to
finance or refinance the purchase by Alkermes and/or ACT I of certain items of
the Equipment listed on Exhibit A to the Security Agreement. Alkermes and ACT I
represent that, at the date hereof, each such item of Equipment has been
actually delivered to Alkermes and/or ACT I by the vendor, has been installed at
the Cambridge Premises and has become operational. The 1995 Term Loan is
evidenced by the 1995 Note, and interest thereon shall be payable at the times
and at the rate provided for in the 1995 Note. Overdue principal shall bear
interest at a rate per annum equal to the sum of two (2%) percent plus the per
annum rate otherwise payable under the 1995 Note (but in no event in excess of
the maximum rate from time to time permitted by then applicable law), payable on
demand. Each of Alkermes and ACT I hereby irrevocably authorizes the Bank to
make or cause to be made, on a schedule attached to the 1995 Note or on the
books of the Bank, at or following the time of making the 1995 Term Loan and of
receiving any payment of principal of the 1995 Term Loan, an appropriate
notation reflecting each such transaction and the then unpaid principal balance
of the 1995 Term Loan. The amount so noted shall constitute presumptive evidence
as to the amount owed jointly and severally by Alkermes and ACT I with respect
to principal of the 1995 Term Loan. Failure of 


                                      -2-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           

<PAGE>   3

the Bank to make any such notation shall not, however, affect any obligation of
any Borrower or any right of the Bank hereunder or under the 1995 Note.

     1.4. OHIO TERM LOAN; OHIO TERM NOTE. At the date hereof, the Bank is making
a term loan (the "Ohio Term Loan") to Alkermes and ACT II in the original
principal amount of $5,000,000. The Ohio Term Loan is being made in order to
finance or refinance the purchase by ACT II of certain land and the buildings
thereon located in Wilmington, Clinton County, Ohio and certain equipment
therein and certain equipment in a facility leased by ACT II in Blue Ash, Ohio
(the premises owned or leased by ACT II in Wilmington, Ohio and Blue Ash, Ohio
being hereinafter referred to collectively as the "Ohio Premises"). The Ohio
Term Loan is evidenced by the Ohio Term Note, and interest thereon shall be
payable at the times and at the rate provided for in the Ohio Term Note. Overdue
principal shall bear interest at a rate per annum equal to the sum of two (2%)
percent plus the per annum rate otherwise payable under the Ohio Term Note (but
in no event in excess of the maximum rate from time to time permitted by then
applicable law), payable on demand. Each of Alkermes and ACT II hereby
irrevocably authorizes the Bank to make or cause to be made, on a schedule
attached to the Ohio Term Note or on the books of the Bank, at or following the
time of making the Ohio Term Loan and of receiving any payment of principal of
the Ohio Term Loan, an appropriate notation reflecting each such transaction and
the then unpaid principal balance of the Ohio Term Loan. The amount so noted
shall constitute presumptive evidence as to the amount owed jointly and
severally by Alkermes and ACT II with respect to principal of the Ohio Term
Loan. Failure of the Bank to make any such notation shall not, however, affect
any obligation of any Borrower or any right of the Bank hereunder or under the
Ohio Term Note.

     1.5. ADDITIONAL TERM LOANS. The Bank may in the future, in its discretion,
make additional term loans (the "Additional Term Loans") to Alkermes (or, if
appropriate, to Alkermes and one or more of the other Borrowers) in such amounts
and on such terms as are mutually satisfactory to the Bank and Alkermes. Each
Additional Term Loan will be represented by a promissory note (each, an
"Additional Term Note") made by Alkermes (and, if appropriate, one or more of
the other Borrowers). Principal of each Additional Term Loan will be paid as
provided for in the related Additional Term Note. Interest on each Additional
Loan will be paid at the times and at the rate provided for in the related
Additional Term Note. The inclusion in this letter agreement of references to
"Additional Term Loans" and "Additional Term Notes" shall in no event be deemed
to constitute a commitment or agreement on the part of the Bank to make any
Additional Loan or Loans.

     1.6. PRINCIPAL REPAYMENT. Alkermes and ACT I shall repay (and are jointly
and severally obligated to repay) principal of the 1994 Term Loan in the
installments set forth in the 1994 Note; Alkermes and ACT I shall repay (and are
jointly and severally obligated to repay) principal of the 1995 Term Loan in the
installments set forth in the 1995 Note; Alkermes and ACT II shall repay (and
are jointly and severally obligated to repay) principal of the Ohio Term Loan in
the installments set forth in the Ohio Term Note; and Alkermes (and, if
appropriate, one or more of the other Borrowers) shall repay principal of each
Additional Term Loan in the installments set forth in the related Additional
Term Note. The Borrowers may prepay, at any time, the whole or any portion of
any Term Loan; provided that each such principal prepayment 

                                      -3-

     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           

<PAGE>   4

shall be accompanied by (i) payment of all interest under the relevant Note
accrued but unpaid to the date of payment and (ii) the additional payment, if
any, required by the next following paragraph. Any partial prepayment of
principal of any Note will be applied to installments of principal of such Note
thereafter coming due in inverse order of normal maturity.

     The following provisions shall apply to the 1994 Term Loan, to the 1995
Term Loan, to the Ohio Term Loan and to each Additional Term Loan which bears
interest at a fixed rate: If, due to voluntary prepayment by any Borrower, or
due to acceleration of the maturity of any Note, or due to any other reason, the
Bank receives payment (a "Prepayment") of all or any portion of any installment
of principal of any Term Loan prior to the regularly-scheduled due date for such
installment, the Borrowers which are (or were) obligated for such Term Loan
shall upon demand forthwith pay to the Bank (and shall be jointly and severally
obligated so to pay) an amount equal to the Make-Whole Amount (hereinafter
defined) applicable to such Prepayment. As used herein, the "Make-Whole Amount"
applicable to each Prepayment of any installment of any Note means the product
of (x) the principal amount being so prepaid, times (y) the Make-Whole Rate
(hereinafter defined), expressed as a decimal times (z) a decimal determined by
dividing (A) the number of days scheduled to elapse from the date of such
Prepayment through the date on which such installment was to have normally
become due by (B) 360, discounted to present value using the Reinvestment Rate
(hereinafter defined) as the discount factor. As used herein, the "Make-Whole
Rate" is a rate per annum equal to the excess, if any, of (x) the effective
annual yield of the relevant Term Loan over (y) the Reinvestment Rate, but in no
event less than zero. The "Reinvestment Rate" is a per annum rate of interest
determined by the Bank in its reasonable discretion to represent the effective
annual yield which the Bank could obtain if at the Prepayment date the Bank were
to reinvest a sum equal to the amount of the Prepayment, such sum to be
reinvested in U.S. Treasury obligations maturing on or about the regularly
scheduled due date of such Prepayment. The Bank may use reasonable methods of
estimation and interpolation in determining the appropriate Reinvestment Rate.

     1.7. PAYMENTS BY BORROWERS. The Bank may charge any deposit account of any
Borrower at the Bank with the amount of all payments of interest, principal and
other sums due (after the expiration of any applicable grace period), from time
to time, under this letter agreement and/or any Note; and will immediately
thereafter notify the relevant Borrower of the amount so charged. The failure of
the Bank so to charge any account or to give any such notice shall not affect
any obligation of the Borrowers to pay interest, principal or other sums as
provided herein or in any Note.

     Whenever any payment to be made to the Bank hereunder or under any Note
shall be stated to be due on a day which is not a Business Day, such payment may
be made on the next succeeding Business Day, and interest payable on each such
date shall include the amount thereof which shall accrue during the period of
such extension of time. All payments by any Borrower hereunder and/or in respect
of any Note shall be made net of any impositions or taxes and without deduction,
set-off or counterclaim, notwithstanding any claim which any Borrower may now or
at any time hereafter have against the Bank. All payments of interest, principal
and any other sum payable hereunder and/or under any Note shall be made to the
Bank, in immediately available funds, at its Principal Office or otherwise as
the Bank may from time to 

                                      -4-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   5

time direct. All payments received by the Bank after 12:00 noon on any day shall
be deemed received as of the next succeeding Business Day. All monies received
by the Bank shall be applied first to fees, charges, costs and expenses payable
to the Bank under this letter agreement, any Note and/or any of the other Loan
Documents, next to interest then accrued on account of the Term Loans and only
thereafter to principal of the Term Loans, being applied against principal
installments in inverse order of normal maturity. All interest payable hereunder
and/or under any Note shall be calculated on the basis of a 360-day year for the
actual number of days elapsed.

     1.8. PLEDGED COLLATERAL. Alkermes has deposited with the Bank and has
pledged to the Bank and will maintain with the Bank at all times, as security
for payment of the Term Loans and performance of the Borrowers' obligations
hereunder, cash and/or readily-marketable Government Securities, as to which the
Bank shall have a first lien, with an aggregate fair market value of not less
than the Required Minimum Value. The "Required Minimum Value", as determined at
any time, shall mean the lesser of (x) $1,000,000 or (y) 50% of the then
outstanding aggregate principal amounts of the Term Loans; provided, however,
that at all times from and after the occurrence of any failure on the part of
Alkermes to comply for any reason with Section 3.6 and/or Section 3.7 below
(without waiving or releasing any default of Alkermes or any right or remedy of
the Bank consequent upon such failure), the Required Minimum Value will be
deemed to mean 100% of the then outstanding aggregate principal amounts of the
Term Loans. If at any time after the above-described percentage shall have been
increased to 100% pursuant to the proviso contained in the immediately preceding
sentence Alkermes shall achieve compliance with both Section 3.6 and Section 3.7
for two consecutive fiscal quarters (as evidenced by the quarterly financial
statements submitted by Alkermes to the Bank) and there shall then exist no
Event of Default nor any event or circumstance which, with the passage of time
or the giving notice or both could become an Event of Default, the Required
Minimum Value shall be reduced automatically to the lesser of (x) $1,000,000 or
(y) 50% of the then outstanding aggregate principal amounts of the Term Loans.
If, following any such reduction, Alkermes shall at any time again fail to
comply for any reason with Section 3.6 and/or Section 3.7, then (without waiving
or releasing any default of Alkermes or any right or remedy of the Bank
consequent upon such failure) the Required Minimum Value will be increased again
to 100% of the then outstanding aggregate principal amounts of the Term Loans
and the relevant percentage will not thereafter be decreased even if Alkermes
subsequently achieves compliance with said Sections. At any time when the
Required Minimum Value is less than $1,000,000, the Required Minimum Value shall
be calculated no less frequently than quarterly.

     II. REPRESENTATIONS AND WARRANTIES
         ------------------------------

     2.1. REPRESENTATIONS AND WARRANTIES. In order to induce the Bank to enter
into this letter agreement, the Borrowers jointly and severally warrant and
represent to the Bank as follows:

     (a) Each of Alkermes, ACT I and ACT II is a corporation duly organized,
validly existing and in good standing under the laws of Pennsylvania and each
has full corporate power to own its property and conduct its business as now
conducted and as contemplated to be conducted, to grant the security interests
contemplated by the Security Agreement, the Pledge 

                                      -5-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   6

and the Mortgage and to enter into and perform this letter agreement and the
other Loan Documents in which it is named as a party. Alkermes and ACT I are
duly qualified to do business and are in good standing in Massachusetts. ACT II
is duly qualified to do business and is in good standing in Ohio. Alkermes, ACT
I and ACT II are duly qualified to do business and are in good standing in each
other jurisdiction in which (i) the relevant Borrower maintains any
manufacturing plant, sales office, warehouse or other physical facility or in
which the character of the properties owned or the nature of the activities
conducted by such Borrower makes such qualification necessary and (ii) the
failure so to qualify would have a material adverse effect on such Borrower's
business or financial condition. All of the jurisdictions described in the
immediately preceding sentence are listed on item 2.1(a)(i) of the attached
Disclosure Schedule. Except as listed on item 2.1(a)(ii) of the attached
Disclosure Schedule, no Borrower has any Subsidiaries and is not a member of any
partnership or joint venture. All such Subsidiaries are (except as otherwise
noted on said item 2.1(a)(ii)) wholly-owned by Alkermes.

     (b) To the best of the Alkermes' knowledge, each record and/or beneficial
owner of 5% or more of the outstanding capital stock of Alkermes is listed on
item 2.1(b) of the attached Disclosure Schedule. Alkermes is the record and
beneficial owner of 100% of the outstanding capital stock of each of ACT I and
ACT II.

     (c) The execution, delivery and performance by Alkermes, ACT I and ACT II
of this letter agreement and each of the other Loan Documents have been duly
authorized by all necessary corporate and other action and do not and will not:

     (i)  violate any provision of, or require any filings, registration,
          consent or approval under, any law, rule, regulation (including,
          without limitation, Regulation U of the Board of Governors of the
          Federal Reserve System), order, writ, judgment, injunction, decree,
          determination or award presently in effect having applicability to any
          Borrower;

     (ii) violate any provision of the respective charters or by-laws of the
          Borrowers, or result in a breach of or constitute a default or require
          any waiver or consent under any indenture or loan or credit agreement
          or any other agreement, lease or instrument to which any Borrower is a
          party or by which any Borrower or any of their respective properties
          may be bound or affected; or

    (iii) result in, or require, the creation or imposition of any lien,
          security interest or other encumbrance (other than in favor of the
          Bank) upon or with respect to any of the properties now owned or
          hereafter acquired by any Borrower.

     (d) This letter agreement and each of the other Loan Documents in which any
Borrower is named as a party has been duly executed and delivered by each
relevant Borrower and is a legal, valid and binding obligation of such Borrower,
enforceable against such Borrower in accordance with its respective terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws or equitable principles from time to time in
effect relating to or affecting the rights of creditors generally.

                                      -6-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   7

     (e) Except as described in item 2.1(e) of the attached Disclosure Schedule,
there are no actions, suits, proceedings or investigations pending or, to the
knowledge of any Borrower, threatened by or against any Borrower or any
Subsidiary of Alkermes before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which could
prevent or hinder the consummation of the transactions contemplated hereby or
call into question the validity of this letter agreement or any of the other
Loan Documents or any other instrument provided for or contemplated by this
letter agreement or any of the other Loan Documents or any action taken or to be
taken in connection with the transactions contemplated hereby or thereby or
which in any single case or in the aggregate, if adversely determined, would be
reasonably likely to result in any material adverse change in the business,
prospects, condition, affairs or operations of any Borrower or any such
Subsidiary.

     (f) No Borrower is in violation of any term of its charter or by-laws as
now in effect, the violation of which would be reasonably likely to have a
material adverse effect on the financial condition, business or prospects of
such Borrower. No Borrower is in material violation of any material term of any
mortgage, indenture or judgment, decree or order, or any other instrument,
contract or agreement to which it is a party or by which any of its property is
bound.

     (g) All federal, state and local tax returns, reports and estimates of each
Borrower and/or any Subsidiary of Alkermes required to be filed have been duly
filed or extensions have been granted and the relevant Borrower (or such
Subsidiary, as the case may be) has paid all taxes, assessments, impositions,
fees and other governmental charges due in respect of such returns, reports or
estimates, except to the extent that any such taxes, assessments, impositions,
fees or other charges are being contested in good faith by appropriate
proceedings which serve to stay the enforcement thereof and as to which the
relevant Borrower shall have set aside on its books adequate reserves.

     (h) Each Borrower and each Subsidiary of Alkermes is in compliance with all
requirements of law, federal, foreign, state and local, and all requirements of
all governmental bodies or agencies having jurisdiction over it, the conduct of
its business, the use of its properties and assets, and all premises occupied by
it, failure to comply with any of which (singly or in the aggregate) would be
reasonably likely to have a material adverse effect upon the assets, business,
financial condition or prospects of any Borrower or any such Subsidiary. Without
limiting the foregoing, each Borrower and each Subsidiary of Alkermes has all
material franchises, licenses, permits, certificates and authorizations needed
for the use of its properties and all premises occupied by it, as now owned and
used.

     (i) The financial statements of Alkermes as at March 31, 1996, heretofore
delivered to the Bank, are complete and accurate in all material respects and
fairly present the financial condition of Alkermes and its Subsidiaries as at
the date thereof and for the periods covered thereby. No Borrower has any
liability, contingent or otherwise, not disclosed in the aforesaid financial
statements or in any notes thereto that could materially affect the financial
condition of such Borrower. Since the date of said March 31, 1996 financial
statements, there has been no 


                                      -7-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   8

material adverse development in the business or condition of any Borrower other
than normal monthly operating losses previously disclosed in writing to the Bank
and (except as disclosed in the notes to said financial statements) no Borrower
has entered into any transactions other than in the ordinary course.

     (j) The principal place of business and chief executive offices of each
Borrower are located at 64 Sidney Street, Cambridge, MA 02139 (the "Cambridge
Premises"). Except as described in item 2.1(j) of the attached Disclosure
Schedule, (i) all of the books and records of each Borrower are located at the
Cambridge Premises (and certain books and records of ACT II may also be located
at the Ohio Premises), (ii) no assets of Alkermes or ACT I are located at any
location other than the Cambridge Premises, and (iii) no assets of ACT II are
located at any location other than the Ohio Premises. The Borrowers are tenants
in the Cambridge Premises and the record owner of the Cambridge Premises is
Forest City 64 Sidney Street, Inc.

     (k) Each Borrower owns or has a valid right to use the patents, patent
rights or licenses, trademarks, trademark applications, trademark rights and
trade names or trade name rights or franchises now being used or necessary to
conduct its business, and, to the best of each Borrower's knowledge, the conduct
of its business as now operated does not conflict with valid patents, patent
rights or licenses, trademarks, trademark rights and trade names and trade name
rights or franchises of others in any manner that could materially adversely
affect in any manner the business or assets or condition, financial or
otherwise, of such Borrower.

     (1) To the best of each Borrower's knowledge, none of the executive
officers or key employees of such Borrower is subject to any agreement in favor
of anyone, other than such Borrower, which limits or restricts that person's
right to engage in the type of business activity conducted or proposed to be
conducted by such Borrower or which grants to anyone other than such Borrower
any rights in any inventions or other ideas susceptible to legal protection
developed or conceived by any such officer or key employee while in the
employment or service of such Borrower.

     (m) No Borrower is a party to any contract or agreement, the terms of which
now has or, as far as can be foreseen, would be reasonably likely to have a
material adverse effect on the financial condition, business or properties of
such Borrower. Each Borrower's material contracts and long-term commitments are
listed on item 2.1(m) of the attached Disclosure Schedule.

     III. AFFIRMATIVE COVENANTS AND REPORTING REQUIREMENTS
          ------------------------------------------------

     Without limitation of any covenants and agreements contained in the
Security Agreement or elsewhere, the Borrowers jointly and severally agree that
so long as any portion of any Term Loan or any of the other Obligations shall be
outstanding:

     3.1. LEGAL EXISTENCE; QUALIFICATION; COMPLIANCE. Each Borrower will
maintain its corporate existence and good standing in the jurisdiction of its
incorporation. Each Borrower will qualify to do business and remain qualified
and in good standing in each jurisdiction where (i) it maintains any
manufacturing plant, sales office, warehouse or other physical facility or in

                                      -8-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   9

which the character of the properties owned or the nature of the activities
conducted by such Borrower makes such qualification necessary and (ii) the
failure so to qualify would have a material adverse effect on such Borrower's
business or financial condition. Each Borrower will comply (and will use its
best efforts to cause each Subsidiary of Alkermes to comply) with its charter
documents and by-laws, all contractual requirements by which it or any of its
properties may be bound and all applicable laws, rules and regulations
(including, without limitation, ERISA and those relating to environmental
protection) other than (i) laws, rules or regulations the validity or
applicability of which the relevant Borrower or such Subsidiary shall be
contesting in good faith by proceedings which serve as a matter of law to stay
the enforcement thereof and (ii) those charter or by-law provisions or
contractual requirements or laws, rules and regulations the failure to comply
with any of which could not (singly or in the aggregate) reasonably be expected
to materially adversely affect the financial condition, business or prospects of
such Borrower or any such Subsidiary.

     3.2. MAINTENANCE OF PROPERTY; INSURANCE. Each Borrower will maintain and
preserve all of the properties used in its business in good working order and
condition, ordinary wear and tear excepted, making all necessary repairs thereto
and replacements thereof. Each Borrower will maintain all such insurance as may
be required under the Security Agreement and will also maintain, with
financially sound and reputable insurers, insurance with respect to its property
and business against such liabilities, casualties and contingencies and of such
types and in such amounts as shall be customary for companies conducting a
business similar to that of such Borrower in similar locales.

     3.3. PAYMENT OF TAXES AND CHARGES. Each Borrower will pay and discharge
(and will use its best efforts to cause each Subsidiary of Alkermes to pay and
discharge) all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or property, or upon this letter agreement or any
notes evidencing Obligations, including, without limitation, taxes, assessments,
charges or levies relating to real and personal property, the Collateral,
franchises, income, unemployment, old age benefits, withholding, or sales or
use, prior to the date on which penalties would attach thereto, and all lawful
claims (whether for any of the foregoing or otherwise) which, if unpaid, might
give rise to a lien upon any property of any Borrower or any such Subsidiary,
except any of the foregoing which is being contested in good faith and by
appropriate proceedings which serve as a matter of law to stay the enforcement
thereof and for which the relevant Borrower has established and is maintaining
adequate reserves. Each Borrower will pay in a timely manner, all material lease
obligations, all material trade debt, material purchase money obligations,
material equipment lease obligations and all of its other material Indebtedness.
Each Borrower will fully, faithfully and punctually perform and fulfill all
material covenants and agreements under any material leases of real estate,
material agreements relating to purchase money debt, material equipment leases
and other material contracts.

     3.4. CONDUCT OF BUSINESS. Each Borrower will continue (and will use its
best efforts to cause each of Alkermes' Subsidiaries to continue) to engage in
business of the same general type as now conducted by such Borrower (or such
Subsidiary, as the case may be). No Borrower will, directly or through any
Subsidiary or other entity, enter into any other lines of business, 


                                      -9-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   10

businesses or ventures which are not of the same general type as the businesses
now conducted by the Borrowers and Alkermes' Subsidiaries.

     3.5. REPORTING REQUIREMENTS. The Borrowers will furnish to the Bank:

          (i) Within ninety (90) days after the end of each fiscal year of
          Alkermes, a copy of the annual audit report for such fiscal year of
          Alkermes, including therein the consolidated balance sheet of Alkermes
          and Subsidiaries as at the end of such fiscal year and related
          statements of operations, stockholders' equity and cash flow for the
          fiscal year then ended. The annual financial statements shall be
          certified by independent public accountants selected by the Board of
          Directors of Alkermes and reasonably acceptable to the Bank, such
          certification to be in such form as is generally recognized as
          "unqualified". Such annual financial statements shall be accompanied
          by an unaudited consolidating balance sheet of Alkermes and its
          Subsidiaries, prepared by Alkermes' management.

          (ii) Within forty-five (45) days after the end of each fiscal quarter
          of Alkermes, the consolidated balance sheet of Alkermes and
          Subsidiaries and related statements of operations and stockholders'
          equity and cash flow, unaudited but certified by the chief financial
          officer or controller of Alkermes to be accurate in all material
          respects and to present fairly the financial condition of Alkermes as
          of the date thereof and for the periods covered thereby, and to have
          been prepared in accordance with generally accepted accounting
          principles consistently applied (subject to normal year-end
          adjustments). Such balance sheets shall be as at the end of such
          fiscal quarter and such statements of operations and stockholders'
          equity and cash flow shall be for such fiscal quarter and for the
          period from the beginning of the fiscal year to the end of such fiscal
          quarter, in each case with comparative statements for the
          corresponding period in the prior fiscal year. Such quarterly
          statements shall be accompanied by an unaudited consolidating balance
          sheet of Alkermes and its Subsidiaries, prepared by Alkermes'
          management.

          (iii) At the time of delivery of each quarterly or annual statement of
          Alkermes, a certificate executed by the chief financial officer or
          controller of Alkermes stating that he or she has reviewed this letter
          agreement and the other Loan Documents and has no knowledge of any
          default by any Borrower in the performance or observance of any of the
          provisions of this letter agreement or of any of the other Loan
          Documents or, if he or she has such knowledge, specifying each such
          default and the nature thereof. Each such certificate shall also set
          forth the calculations necessary to evidence compliance with ss.ss.3.6
          and 3.7 as of the last day of the applicable reporting period.

          (iv) Promptly after receipt, a copy of all audits or reports submitted
          to Alkermes by independent public accountants in connection with any
          annual, special or interim audits of the books of Alkermes and any
          letter of comments directed by such accountants to the management of
          Alkermes.

                                      -10-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   11

          (v) Promptly upon same becoming publicly available, one copy of each
          financial statement, report, notice or proxy statement sent by
          Alkermes to stockholders or the holders of debt securities generally,
          and of each regular or periodic report and any registration statement,
          prospectus or listing application filed by Alkermes with the National
          Association of Securities Dealers, any securities exchange or the
          Securities and Exchange Commission or any successor agency.

          (vi) As soon as possible and in any event within five (5) days after
          any Borrower has knowledge of the occurrence or existence of any Event
          of Default or any event which, with the giving of notice or the
          passage of time or both, could constitute an Event of Default, the
          statement of such Borrower setting forth details of such Event of
          Default or event and the action which the Borrowers propose to take
          with respect thereto.

          (vii) Promptly after the commencement thereof, notice of all actions,
          suits and proceedings before any court or governmental department,
          commission, board, bureau, agency or instrumentality, domestic or
          foreign, affecting any Borrower or any Subsidiary of Alkermes, which,
          if adversely determined, would be reasonably likely to result in a
          material adverse effect on the business or financial condition of any
          Borrower. For the purposes of this Paragraph (vii), an action will not
          be deemed likely to result in a material adverse effect if it seeks
          monetary damages only and in an amount not in excess of $100,000.

          (viii) Promptly after any Borrower has knowledge thereof, written
          notice of any development or circumstance which would be reasonably
          likely to have a material adverse effect on any Borrower or any of
          Alkermes' Subsidiaries or any of their respective businesses,
          properties, assets or condition, financial or otherwise; provided that
          this Paragraph (viii) will not be deemed to apply to normal monthly
          operating losses of the Borrowers consistent with the Borrowers' prior
          operating history and normal industry experience.

          (ix) Promptly upon request, such other information respecting the
          financial condition, operations, receivables, inventory, machinery or
          equipment of any Borrower or any Subsidiary of Alkermes as the Bank
          may from time to time reasonably request.

     3.6. CASH BALANCE. Alkermes will maintain at all times an Unencumbered Cash
Balance of not less than $12,500,000.

     3.7. CASH RATIO. Alkermes will maintain, as at the end of each fiscal
quarter of Alkermes, a Cash Ratio of not less than 2.0 to 1.

                                      -11-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           

<PAGE>   12

     3.8. BOOKS AND RECORDS. Each Borrower will maintain complete books, records
and accounts, accurate in all material respects, which will at all times fairly
reflect all of its transactions in accordance with generally accepted accounting
principles consistently applied. Each Borrower will, at any reasonable time and
from time to time (and at any time following the occurrence of an Event of
Default), permit the Bank, and any agents or representatives thereof, to examine
and make copies of and take abstracts from the financial records and books of
account of, and visit the properties of such Borrower and any of Alkermes'
Subsidiaries, and to discuss the affairs, finances and accounts of any Borrower
and any of Alkermes' Subsidiaries with their respective managers, officers and
independent accountants, all of whom are hereby authorized and directed to
cooperate with the Bank in carrying out the intent of this ss.3.8; provided,
however, that certain areas of the Borrowers' facilities may be restricted for
reasons of health and safety and that certain aspects of the Borrowers' business
are highly confidential and the Bank will not be permitted access to such
restricted areas or such confidential information in the Borrowers' possession.

     IV. NEGATIVE COVENANTS.
         ------------------

     Without limitation of any covenants and agreements contained in the
Security Agreement or elsewhere, the Borrowers jointly and severally agree that,
unless the prior written consent of the Bank has been obtained, so long as any
portion of any Term Loan or any of the other Obligations shall be outstanding:

     4.1. INDEBTEDNESS. No Borrower will create, incur, assume or suffer to
exist any Indebtedness, except for:

          (i) Indebtedness owed to the Bank, including, without limitation, the
          Indebtedness represented by the 1994 Note, the 1995 Note, the Ohio
          Term Note and any Additional Term Note hereafter delivered by any
          Borrower;

          (ii) Indebtedness of such Borrower for taxes, assessments and
          governmental charges or levies not yet due and payable;

          (iii)unsecured current liabilities of any Borrower (other than for
          money borrowed or the deferred purchase price of property) incurred
          upon customary terms in the ordinary course of business;

          (iv)   obligations under long-term leases of real estate;

          (v)    Permitted Purchase Money Indebtedness;

          (vi) reimbursement obligations not in excess of $800,000 in the
          aggregate in connection with any letter of credit which any Borrower
          is required to provide under the rules and regulations of the Nuclear
          Regulatory Commission ("NRC Obligations");

                                      -12-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   13

          (vii) any Indebtedness hereafter assumed by any Borrower in connection
          with any Acquisition or permitted merger, which Indebtedness had been
          an obligation of the acquired or merged entity prior to such
          Acquisition or merger, but not any refinancing or extension thereof;

          (viii) any guaranties or other arrangements whereby responsibility is
          assumed for the obligations of others; but only to the extent that
          such guaranties or other arrangements are permitted by ss.4.3 below;
          and

          (ix) Indebtedness not otherwise described above that is existing at
          the date of this letter agreement, all of which is listed on item 4.1
          of the attached Disclosure Schedule.

     4.2. LIENS. No Borrower will create, incur, assume or suffer to exist any
mortgage, deed of trust, pledge, lien, security interest, or other charge or
encumbrance (including the lien or retained security title of a conditional
vendor) of any nature (collectively, "Liens") upon or with respect to any of its
property or assets, now owned or hereafter acquired, except that the foregoing
restrictions shall not apply to:

          (i) Liens for taxes, assessments or governmental charges or levies on
          property of any Borrower if the same shall not at the time be
          delinquent or thereafter can be paid without interest or penalty or
          are being contested in good faith and by appropriate proceedings which
          serve as a matter of law to stay the enforcement thereof and as to
          which adequate reserves have been made;

          (ii) Liens imposed by law, such as carriers', warehousemen's and
          mechanics' liens and other similar Liens arising in the ordinary
          course of business for sums not yet due or which are being contested
          in good faith and by appropriate proceedings which serve as a matter
          of law to stay the enforcement thereof and as to which adequate
          reserves have been made;

          (iii) Liens arising out of pledges or deposits under workmen's
          compensation laws, unemployment insurance, social security, retirement
          benefits or similar legislation;

          (iv)  Liens in favor of the Bank;

          (v)   Permitted Purchase Money Liens;

          (vi) rights of other parties under development arrangements with any
          Borrower involving the licensing out from such Borrower of rights to
          technology and the sublicensing of such rights back to such Borrower;

          (vii) rights of the United States government in certain technology,
          the development of which is or was funded in whole or in part by the
          United States government;

                                      -13-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   14

          (viii) liens arising out of pledges or grants of security interests
          (not including security interests in any of the Collateral) securing
          NRC Obligations, provided that the amount so secured will never exceed
          $800,000;

          (ix) security deposits under leases of any Borrower's premises;

          (x) other Liens existing at the date hereof, but only to the extent
          and with the relative priorities set forth on item 4.2 of the attached
          Disclosure Schedule; or

          (xi) Liens securing Indebtedness hereafter assumed by any Borrower
          pursuant to clause (vii) of ss.4.1 above in connection with an
          Acquisition or permitted merger and not incurred in contemplation of
          such Acquisition or permitted merger; provided that no such Lien will
          encumber any assets of any Borrower other than the specific assets
          which were owned by the acquired or merged entity and which were
          encumbered by such Lien immediately prior to the relevant acquisition
          or merger.

     4.3. GUARANTIES. No Borrower will assume, guarantee, endorse or otherwise
become directly or contingently liable in connection with any obligations of any
other Person, except (i) guaranties or other assumptions of liability not
exceeding $500,000 in aggregate principal amount and (ii) guaranties by
endorsement for deposit or collection in the ordinary course of business.

     4.4. LOANS AND ADVANCES. No Borrower will make any loans or advances to any
Person, including, without limitation, any Borrower's directors, officers and
employees, except advances to employees in the ordinary course and payment of
moving and other expenses relating to recruitment and the like, all of which
loans and advances will not exceed, in the aggregate, $1,000,000 outstanding at
any one time.

     4.5. ACQUISITIONS. No Borrower will, directly or indirectly, except as
specifically permitted by this ss.4.5, make any Acquisition. A Borrower may make
Acquisitions of Persons that engage in business of the same general type as now
conducted by such Borrower or any Subsidiary; provided that (i) Alkermes does
not, in connection with any such Acquisition, issue securities representing in
the aggregate more than fifty percent (50%) of the voting power of Alkermes and
(ii) after giving effect to each such Acquisition each Borrower remains in
compliance with all covenants and conditions of this letter agreement. A
Borrower may also make an Acquisition consisting of the purchase of shares of
stock in another corporation, provided that (i) such purchase is made for
investment purposes, (ii) such stock is publicly traded, (iii) the shares of
stock so purchased do not constitute 5% or more of the outstanding shares of the
class of stock to which they belong, and (iv) such stock will in no event be
includable in Alkermes' Unencumbered Cash Balance for the purpose of computing
compliance with ss.ss.3.7 and 3.8 above.

     4.6. MERGERS. Alkermes will not merge or consolidate with any Person,
except that Alkermes may participate in any merger in which Alkermes is the
surviving entity so long as (i) Richard F. Pops and Michael J. Landine continue
as the management of the surviving entity and 

                                      -14-

     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           

<PAGE>   15


(ii) after giving effect to such merger each Borrower remains in compliance with
all covenants and conditions of this letter agreement. Neither ACT I nor ACT II
will merge or consolidate with any Person, other than a merger into Alkermes in
which Alkermes is the surviving entity; provided that each of ACT I and ACT II
may merge into another wholly-owned Subsidiary of Alkermes with the prior
written consent of the Bank, such consent not to be unreasonably withheld.

     4.7. TRANSFER OF ASSETS. No Borrower will sell, lease, transfer or
otherwise dispose of all or any material portion of its assets (whether in one
or more transactions), except that (i) any Borrower may dispose of obsolete or
worn out equipment (exclusive of the Collateral), (ii) any Borrower may replace
equipment (exclusive of the Collateral) with upgraded equipment and may
thereafter dispose of the equipment so upgraded and replaced, and (iii) any
Borrower may engage in research and development transactions (each, an "R&D
Transaction") involving the licensing of such Borrower's rights in certain
technology to other Persons and the licensing back of such rights to such
Borrower, provided that after giving effect to each such R&D Transaction each
Borrower remains in compliance with all covenants and conditions of this letter
agreement.

     4.8. CHANGE OF ADDRESS, ETC. No Borrower will change its name or legal
structure, nor will any Borrower move its chief executive office or principal
place of business from the Cambridge Premises, nor will any Borrower remove any
books or records from the Cambridge Premises, from its location described in
Schedule 2.1(j) attached hereto or, in the case of ACT II, from the Ohio
Premises, nor will any Borrower keep any Collateral at any location other than
the Cambridge Premises and the Ohio Premises without, in each instance, giving
the Bank at least thirty (30) days' prior written notice and providing all such
financing statements, certificates and other documentation as the Bank may
request in order to maintain the perfection and priority of the security
interests granted or intended to be granted pursuant to the Security Agreement.

     4.9. HAZARDOUS WASTE. Except as provided below, no Borrower will dispose of
or suffer or permit to exist any hazardous material or oil on any site or vessel
owned, occupied or operated by such Borrower or any Subsidiary of Alkermes, nor
shall any Borrower store (or permit any such Subsidiary to store) on any site or
vessel owned, occupied or operated by such Borrower or any such Subsidiary, or
transport or arrange the transport of, any hazardous material or oil (the terms
hazardous material, oil, site and vessel, respectively, being used herein with
the meanings given those terms in Mass. Gen. Laws, Ch. 21E or any comparable
terms in any comparable statute in effect in any other relevant jurisdiction).
To the extent that a Borrower has knowledge of the following, each Borrower
shall provide the Bank with written notice of (i) the intended storage or
transport of any hazardous material or oil by such Borrower or any Subsidiary of
Alkermes, (ii) any known release or threat of release of any hazardous material
or oil at or from any site or vessel owned, occupied or operated by such
Borrower or any Subsidiary of Alkermes, and (iii) any incurrence of any expense
or loss by any government or governmental authority in connection with the
assessment, containment or removal of any hazardous material or oil for which
expense or loss such Borrower or any Subsidiary of Alkermes may be liable.
Notwithstanding the foregoing, each Borrower and the Subsidiaries of Alkermes
may use, store and transport, and need not notify the Bank of the use, storage
or transportation of, (x) oil in reasonable quantities, as fuel for heating of
their respective facilities or for vehicles or machinery 


                                      -15-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   16

used in the ordinary course of their respective businesses and (y) hazardous
materials that are solvents, cleaning agents or other materials used or produced
in the ordinary course of the respective business operations of such Borrower
and such Subsidiaries, in reasonable quantities, as long as in any case such
Borrower or the relevant Subsidiary has obtained and maintains in effect any
necessary governmental permits, licenses and approvals, complies with all
requirements of applicable federal, state and local law relating to such use,
storage or transportation, follows the protective and safety procedures that a
prudent businessperson conducting a business the same as or similar to that of
such Borrower or the relevant Subsidiary would follow, and disposes of such
materials (not consumed in the ordinary course) only through appropriately
licensed providers of removal services. Further, no Borrower will be deemed to
have violated this ss.4.9 if it fails to comply with any of the aforesaid
requirements of federal, state and local law provided that all of the following
requirements are met: (i) the violation of law (taking into consideration both
the type of violation and the particular hazardous materials involved) is of a
de minimis nature and would not be reasonably likely to jeopardize in any way
the continued operations of any Borrower or any such Subsidiary nor lead to any
material fine or expense, (ii) such Borrower reports each such violation to the
Bank and to all appropriate governmental agencies immediately upon becoming
aware of same, (iii) such Borrower promptly commences and thereafter diligently
prosecutes to completion all appropriate remedial action (including, in any
event, all such actions and within such time limits as may be established by the
Massachusetts Department of Environmental Protection or any other relevant
governmental agency), and (iv) no suit or other legal action based on or
relating to any such violation is commenced against any Borrower or any such
Subsidiary by any such governmental agency, by any abutter to any of the
premises of any Borrower or any such Subsidiary or by any other Person.

     4.10. NO MARGIN STOCK. No proceeds of any Term Loan shall be used to
purchase or carry any margin security (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System).

     V. DEFAULT AND REMEDIES
        --------------------

     5.1. EVENTS OF DEFAULT. The occurrence of any one of the following events
shall constitute an Event of Default hereunder:

     (a) The Borrowers shall fail to make any payment of principal of or
interest on any Note within five (5) days after the date when due; or

     (b) Any representation or warranty of any Borrower contained herein shall
at any time prove to have been incorrect in any material respect when made or
any representation or warranty made by any Borrower in connection with the
execution and delivery of this letter agreement or any other instrument,
document, certificate or statement executed and delivered in connection with any
Term Loan shall at any time prove to have been incorrect in any material respect
when made; or

                                      -16-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   17

     (c) Any Borrower shall default in the performance or observance of any
agreement or obligation under any of ss.ss.3.1 (as relates to legal existence
only), 3.5, 3.6 or 3.7, or Article IV; or

     (d) Any Borrower shall default in the performance or observance of any
agreement or obligation under the first sentence of ss.3.3 and such failure
continues uncured for ten (10) days; or

     (e) Any Borrower shall default in the performance of any other term,
covenant or agreement contained in this letter agreement and such default shall
continue unremedied for thirty (30) days after notice thereof shall have been
given to such Borrower; or

     (f) Any default on the part of any Borrower or any Subsidiary of Alkermes
shall exist, and shall remain unwaived or uncured beyond the expiration of any
applicable notice and/or grace period, under the Security Agreement, the
Mortgage or any other contract, agreement or understanding now existing or
hereafter entered into with or for the benefit of the Bank (or any affiliate of
the Bank); or

     (g) Any obligation of any Borrower for the payment of borrowed money in
excess of $50,000 (other than to the Bank hereunder or under any Note) is
declared to be due and payable prior to its stated maturity or is not paid or
discharged when due or within any permitted grace period after such due date or
there shall occur any event which constitutes, or which with the giving of
notice or the passage of time or both would constitute, an event of default
under any instrument, agreement or evidence of Indebtedness of any Borrower and
has not been waived by the holder of such obligation for borrowed money;
provided that no Event of Default will be deemed to have occurred under this
paragraph (g) with respect to any Indebtedness if payment of or default under
such Indebtedness, after notice thereof having been given to the Bank, is being
contested by the relevant Borrower in good faith and by appropriate proceedings
and such contest operates to prevent the other party to such instrument,
agreement or evidence of Indebtedness from exercising its remedies against such
Borrower or any of such Borrower's properties; or

     (h) Any Borrower shall be dissolved, or any Borrower or any Subsidiary of
Alkermes shall become insolvent or bankrupt or shall cease paying its debts as
they mature or shall make an assignment for the benefit of creditors, or a
trustee, receiver or liquidator shall be appointed for any Borrower or any such
Subsidiary or for a substantial part of any Borrower's or any such Subsidiary's
property, or bankruptcy, reorganization, arrangement, insolvency or similar
proceedings shall be instituted by or against any Borrower or any such
Subsidiary under the laws of any jurisdiction (except for an involuntary
proceeding filed against a Borrower or any such Subsidiary which is dismissed
within ninety (90) days following the institution thereof); or

     (i) Any attachment, execution or similar process shall be issued or levied
against all or any portion of the Collateral or against all or any other
substantial part of the assets of any Borrower and such attachment, execution or
similar process shall not be paid, stayed, released, vacated or fully bonded
within twenty (20) days after its issue or levy; or

                                      -17-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   18

     (j) Any final uninsured judgment in excess of $100,000 shall be entered
against any Borrower or any Subsidiary of Alkermes by any court of competent
jurisdiction and the same remains unsatisfied for more than thirty (30) days,
unless the same has been appealed and a stay of enforcement thereof has been
obtained and remains in effect; or

     (k) Any Borrower or any Subsidiary of Alkermes shall fail to meet its
minimum funding requirements under ERISA with respect to any employee benefit
plan (or other class of benefit which the PBGC has elected to insure) or any
such plan shall be the subject of termination proceedings (whether voluntary or
involuntary) and there shall result from such termination proceedings a
liability of such Borrower or any such Subsidiary to the PBGC which in the
reasonable opinion of the Bank may have a material adverse effect upon the
financial condition of such Borrower or such Subsidiary; or

     (1) The Security Agreement, the Mortgage or any other Loan Document shall
for any reason (other than due to payment in full of all amounts secured or
evidenced thereby or due to discharge in writing by the Bank) not remain in full
force and effect; or

     (m) Any Person or "group" (as defined in Section 13(d) of the Securities
Exchange Act of 1934, as amended) acquires or holds more than fifty percent
(50%) of the outstanding voting stock of Alkermes; or either or both of ACT I
and/or ACT II ceases to be a wholly-owned Subsidiary of Alkermes, other than due
to a merger of ACT I or ACT II into Alkermes or (with the prior written consent
of the Bank, such consent not to be unreasonably withheld) due to a merger of
ACT I or ACT II into another wholly-owned Subsidiary of Alkermes.

     5.2. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence and during the
continuance of any Event of Default, in addition to any other rights and
remedies available to the Bank, hereunder or otherwise, the Bank may exercise
any one or more of the following rights and remedies (all of which shall be
cumulative):

     (a) Declare the entire unpaid principal amounts of the Notes then
outstanding, all interest accrued and unpaid thereon and all other amounts
payable under this letter agreement, and all other Indebtedness of each Borrower
to the Bank, to be forthwith due and payable, whereupon the same shall become
forthwith due and payable, without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived by the Borrowers.

     (b) Exercise all rights and remedies hereunder, under the Notes, and under
the Security Agreement, the Pledge, the Mortgage and each and any other
agreement with or for the benefit of the Bank; and exercise all other rights and
remedies which the Bank may have under applicable law.

     5.3. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, the Bank is hereby authorized at any time or
from time to time, without presentment, demand, protest or other notice of any
kind to any Borrower or to any other Person, all of which are hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or


                                      -18-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   19

special) and any other Indebtedness at any time held or owing by the Bank or any
affiliate thereof to or for the credit or the account of any Borrower against
and on account of the obligations and liabilities of any Borrower to the Bank
under this letter agreement or otherwise, irrespective of whether or not the
Bank shall have made any demand hereunder and although said obligations,
liabilities or claims, or any of them, may then be contingent or unmatured and
without regard for the availability or adequacy of other collateral. Each
Borrower also grants to the Bank, effective upon the occurrence and during the
continuance of an Event of Default, a security interest with respect to all its
deposits and all securities or other property in the possession of the Bank or
any affiliate of the Bank from time to time, and, upon the occurrence of any
Event of Default, the Bank may exercise all rights and remedies of a secured
party under the Uniform Commercial Code.

     VI. MISCELLANEOUS
         -------------

     6.1. COSTS AND EXPENSES. The Borrowers agree to pay (and shall be jointly
and severally obligated to pay) on demand all reasonable costs and expenses
(including, without limitation, reasonable legal fees) of the Bank in connection
with the preparation, execution and delivery of this letter agreement, the
Security Agreement, the Pledge, the Mortgage, any Note and all other instruments
and documents to be delivered in connection with any Term Loan and any
amendments or modifications of any of the foregoing, or in connection with the
examination, review or administration of any of the foregoing, as well as the
reasonable costs and expenses (including, without limitation, the reasonable
fees and out-of-pocket expenses of legal counsel) incurred by the Bank in
connection with administering, preserving, enforcing or exercising any rights or
remedies under this letter agreement, the Security Agreement, the Pledge, the
Mortgage, any Note and all other instruments and documents delivered or to be
delivered hereunder or in connection herewith, all whether or not legal action
is instituted. In addition, the Borrowers shall be jointly and severally
obligated to pay any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of this letter agreement,
the Security Agreement, the Pledge, the Mortgage, any Note and all other
instruments and documents to be delivered in connection with any Obligation. Any
fees, expenses or other charges which the Bank is entitled to receive from the
Borrowers under this Section shall bear interest from the date of any demand
therefor until the date when paid at a rate per annum equal to the lesser of two
(2%) percent plus the per annum rate payable under the 1995 Note or the maximum
rate permitted by then applicable law.

     6.2. CAPITAL ADEQUACY; INCREASED COSTS. If the Bank shall have determined
that the adoption or phase-in after the date hereof of any applicable law, rule
or regulation regarding capital requirements for banks or bank holding
companies, or any change therein after the date hereof, or any change after the
date hereof in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof (whether or not having the force of law) has or would
have the direct effect of reducing the return on the Bank's capital with respect
to any Term Loan to a level below that which the Bank could have achieved
(taking into consideration the Bank's policies with respect to capital adequacy
immediately before such adoption, phase-in, change or compliance and assuming
that the Bank's capital was fully utilized prior to such adoption, phase-in,
change or compliance) but for such adoption, phase-in, change 

                                      -19-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   20

or compliance by any amount deemed by the Bank to be material: (i) the Bank
shall promptly after its determination of such occurrence give notice thereof to
the Borrowers; and (ii) the Borrowers shall pay to the Bank (and shall be
jointly and severally obligated so to pay) as an additional fee from time to
time on demand such amount as the Bank certifies to be the amount that will
compensate it for such reduction.

     If, at any time prior to the payment in full of any Term Loan, there shall
be any increase in the cost to the Bank of making or maintaining such Term Loan
for any period prior to the date of such payment in full or any reduction in the
amount of payment received by the Bank from any Borrower due to either (i) the
introduction or effectiveness after the date hereof of any change (including,
without limitation, any change as to applicable Impositions, reserve
requirements or FDIC assessment) with respect to, or with respect to the
interpretation of, any law or regulation, or (ii) compliance with any written
guideline or request effective or issued after the date hereof from any central
bank or other governmental authority having or claiming jurisdiction over the
Bank, then (i) the Bank shall promptly after its determination of such
occurrence give notice thereof to the Borrowers; and (ii) the Borrowers shall
pay to the Bank (and shall be jointly and severally obligated so to pay) as an
additional fee from time to time on demand such amount as the Bank certifies to
be the amount that will compensate the Bank for such increase in cost or
reduction in payments. Additional amounts payable under this paragraph shall in
no event include income taxes of the Bank.

     A certificate of the Bank claiming compensation under this Section shall be
conclusive in the absence of manifest error. Such certificate shall set forth
the nature of the occurrence giving rise to such compensation, the additional
amount or amounts to be paid to it hereunder and the method by which such
amounts were determined. In determining such amounts, the Bank may use any
reasonable averaging and attribution methods. No failure on the part of the Bank
to demand compensation on any one occasion shall constitute a waiver of its
right to demand such compensation on any other occasion and no failure on the
part of the Bank to deliver any certificate in a timely manner shall in any way
reduce any obligation of any Borrower to the Bank under this Section.

     6.3. FACILITY FEES. At the date hereof, the Borrowers are paying to the
Bank a facility fee of $25,000 in respect of the Ohio Term Loan. Said facility
fee, as well as all facility fees heretofore paid by Alkermes to Fleet Mass
under the Prior Loan Agreement and any facility fee hereafter required to be
paid in connection with any Additional Term Loan, are non-refundable and are in
addition to any balances and fees required by the Bank or any of its affiliates
in connection with any other services made available to any Borrower.

     6.4. OTHER AGREEMENTS. The provisions of this letter agreement are not in
derogation or limitation of any obligations, liabilities or duties of any
Borrower under any of the other Loan Documents or any other agreement with or
for the benefit of the Bank. No inconsistency in default provisions between this
letter agreement and any of the other Loan Documents or any such other agreement
will be deemed to create any additional grace period or otherwise derogate from
the express terms of each such default provision. No covenant, agreement or
obligation of any Borrower contained herein, nor any right or remedy of the Bank
contained herein, shall in 

                                      -20-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   21

any respect be limited by or be deemed in limitation of any inconsistent or
additional provisions contained in any of the other Loan Documents or any such
other agreement.

     6.5. GOVERNING LAW. This letter agreement shall be governed by, and
construed and enforced in accordance with, the laws of The Commonwealth of
Massachusetts.

     6.6. ADDRESSES FOR NOTICES, ETC. All notices, requests, demands and other
communications provided for hereunder shall be in writing and shall be given or
delivered by (i) personal service, (ii) certified or registered United States
mail, postage and registration or certification charges prepaid, (iii)
recognized overnight delivery service, charges prepaid, or (iv) telecopy or
other means of electronic transmission, if confirmed promptly by any of the
methods specified in clauses (i), (ii), or (iii) of this sentence, to the
parties at the following respective addresses:

               If to the Borrowers:

               Alkermes, Inc.
               Alkermes Controlled Therapeutics, Inc.
               Alkermes Controlled Therapeutics Inc. II
               64 Sidney Street
               Cambridge, MA 02139
               Attention: Michael J. Landine, Senior Vice President
                           and Chief Financial Officer

               If to the Bank:

               Fleet National Bank
               High Technology Group
               75 State Street
               Boston, MA 02109
               Attention: Catherine M. Bruton, Vice President

or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the other party complying as to delivery with
the terms of this Section. All such notices, requests, demands and other
communications shall be effective (i) when delivered by personal service, (ii)
upon transmission when sent by telecopy or other means of electronic
transmission, (iii) two (2) days after deposit in the United States mails, if
sent postage prepaid, certified or registered mail, return receipt requested,
addressed as aforesaid, or (iv) one (1) day after same is given to a recognized
overnight delivery service, addressed as aforesaid.

     6.7. ELECTRONIC FILING. The Bank agrees to use reasonable efforts to
provide to Alkermes copies of any of this letter agreement, the Security
Agreement, the Pledge, the Mortgage, the Allonges to the 1994 and 1995 Notes,
the Ohio Note and any other document which is produced and stored in a computer
file by the Bank's counsel and which relates to the Loans and any amendments and
supplements hereto or thereto, such copies to be provided in a 


                                      -21-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           

<PAGE>   22

computer-readable format if so requested by Alkermes in connection with its
public filings. Alkermes will bear the costs, if any, relating to such
computer-readable copies.

     VII. DEFINED TERMS
          -------------

     7.1. DEFINITIONS. In addition to terms defined elsewhere in this letter
agreement, as used in this letter agreement, the following terms have the
following respective meanings:

     "Acquisition" - Any purchase or other acquisition by any Borrower or any of
its Subsidiaries of: (i) any capital stock of, or other equity interest in, any
Person other than any corporation which is a Subsidiary of such Borrower on the
date hereof or (ii) any assets of such Person, if such assets include all or
substantially all of the fixed assets and inventory of such Person or of any
business division, line of business or business operation conducted by such
Person.

     "Business Day" - Any day which is not a Saturday, nor a Sunday nor a public
holiday under the laws of the United States of America or The Commonwealth of
Massachusetts applicable to a national bank.

     "Cambridge Premises" - As defined in Subsection 2.1(j) above.

     "Cash-Equivalents" - Any of the following: (i) readily marketable direct
obligations of or obligations guarantied by, the United States of America or any
agency thereof and entitled to the full faith and credit of the United States of
America, (ii) demand deposits with the Bank or with any other commercial bank
chartered by the United States or by any state and having undivided capital and
surplus of not less than $100,000,000, or (iii) interests in mutual funds,
substantially all of the assets of which shall be governmental obligations of
the type described in clause (i) of this sentence.

     "Cash Ratio" - As at any date as of which same is to be determined, the
ratio of (x) Alkermes' then Unencumbered Cash Balance to (y) all then
outstanding Indebtedness of the Alkermes and its Subsidiaries on a consolidated
basis.

     "Collateral" - All property which is described as "Collateral" in the
Security Agreement and/or the Pledge.

     "ERISA" - The Employee Retirement Income Security Act of 1974, as amended.

     "FDIC" - The Federal Deposit Insurance Corporation or any successor
thereto.

     "Government Securities" - Debt securities issued or guaranteed by the
United States government or any agency thereof and secured by the full faith and
credit of the United States.

                                      -22-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   23

     "Impositions" - All present and future taxes, impositions, levies,
deductions, charges and withholdings applicable to the Bank with respect to any
Term Loan, excluding, however any income taxes imposed on the Bank.

     "Indebtedness" - The total of all obligations of a Person, whether current
or long-term, senior or subordinated, which in accordance with generally
accepted accounting principles would be included as liabilities upon such
Person's balance sheet at the date as of which Indebtedness is to be determined,
and shall also include guaranties, endorsements (other than for collection in
the ordinary course of business) or other arrangements whereby responsibility is
assumed for the obligations of others, whether by agreement to purchase or
otherwise acquire the obligations of others, including any agreement, contingent
or otherwise, to furnish funds through the purchase of goods, supplies or
services for the purpose of payment of the obligations of others.
Notwithstanding the foregoing, (i) for the purposes of Sections 3.7, 4.1 and
5.1(g) above, "Indebtedness" will not be deemed to include the obligations of
Alkermes to Genentech, Inc. in respect to an amount of up to $3,500,000 (and the
interest thereon) which has been invested by Genentech, Inc. in a development
project of Alkermes on terms substantially identical to those disclosed by
Alkermes to the Bank under cover letter dated December 6, 1994; provided that
the terms of such investment shall permit Alkermes' obligation to repay such
amount to be satisfied (at Alkermes' option) either by the payment of cash or by
the issuance to Genentech, Inc. of stock in Alkermes; and (ii) for the purposes
of Sections 3.7 and 4.1 above, "Indebtedness" will not be deemed to include any
liabilities accrued by Alkermes for levelized rent which are included in "Other
Long-Term Liabilities" on Alkermes' balance sheet. Furthermore, for the purposes
of Sections 3.7, 4.1 and 5.1(g) above, "Indebtedness" will not be deemed to
include the obligations of ACT I and Alkermes to Schering Corporation
("Schering") to repay certain royalties in an amount of up to $[         ] (and
the interest thereon) which were paid to ACT I pursuant to the Prepaid Royalty
Agreement between ACT I, Alkermes and Schering dated July 26, 1995; provided
that (and only for so long as) Alkermes' and ACT I's obligations to repay such
amount may (at Alkermes' option) be satisfied either by the payment of cash or
by issuance to Schering of stock in Alkermes.

     "Loan Documents" - Each of this letter agreement, the Notes, the Security
Agreement, the Pledge, the Mortgage and each other instrument, document or
agreement evidencing, securing, guaranteeing or relating in any way to any Term
Loan, all whether now existing or hereafter arising or entered into.

     "Mortgage" - The Mortgage and Security Agreement of even date herewith from
ACT II to the Bank, encumbering property of ACT II in Wilmington, Clinton
County, Ohio.

     "Note" - Any of the 1994 Note, the 1995 Note, the Ohio Term Note or any
Additional Term Note, in each case as the context may require.

     "Notes" - All of the following: the 1994 Note, the 1995 Note and the Ohio
Term Note (and, when issued, each Additional Term Note).

                                      -23-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   24

     "Obligations" - All "Obligations" described in the Security Agreement,
whether now existing or hereafter arising.

     "Ohio Premises" - As defined in ss.1.4 above.

     "PBGC" - The Pension Benefit Guaranty Corporation or any successor thereto.

     "Permitted Purchase Money Indebtedness" - Any and all of the following
types of Indebtedness hereafter incurred by any Borrower: (i) Indebtedness to
equipment vendors for pieces of equipment (other than the Collateral) purchased
by a Borrower and installed at such Borrower's Cambridge Premises or Ohio
Premises; provided that the amount of Indebtedness so financed with each such
vendor will not exceed 100% of the invoice price of the pieces of equipment
purchased from such vendor; (ii) Indebtedness to equipment lessors under
capitalized or operating equipment leases; and (iii) Indebtedness representing
the acquisition cost and/or construction cost of any real property and
improvements acquired and/or constructed by any Borrower, which Indebtedness is
owed to any seller of such property or to any bank or other institutional lender
financing such acquisition and/or construction.

     "Permitted Purchase Money Lien" - Any mortgage, security interest or other
consensual lien hereafter granted by any Borrower in order to secure any
Permitted Purchase Money Indebtedness; provided that no such Permitted Purchase
Money Lien will encumber any property of any Borrower other than the specific
item financed by the Permitted Purchase Money Indebtedness to which it relates.

     "Person" - An individual, corporation, partnership, joint venture, trust or
unincorporated organization, or a government or any agency or political
subdivision thereof.

     "Prime Rate" - That rate of interest per annum from time to time announced
by the Bank as its prime rate, it being understood that such rate is only a
reference rate, not necessarily the lowest, established from time to time which
serves as the basis upon which effective interest rates are calculated for
obligations making reference thereto.

     "Principal Office" - The principal place of business of the Bank in Boston,
MA, now located at 75 State Street, Boston, MA 02109.

     "R&D Transaction" - As defined in ss.4.7 above.

     "Subsidiary" - Any corporation or other entity of which Alkermes and/or any
of its Subsidiaries, directly or indirectly, owns, or has the right to control
or direct the voting of, more than fifty (50%) percent of the outstanding
capital stock or other ownership interest having general voting power (under
ordinary circumstances); provided, however, that neither Alkermes Clinical
Partners, L.P. nor any general or limited partnership formed to effectuate an
R&D Transaction will be deemed a Subsidiary.

                                      -24-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   25

     "Term Loan" - Any of the 1994 Term Loan, the 1995 Term Loan, the Ohio Term
Loan or any Additional Term Loan, in each case as the context may require.

     "Term Loans" - All of the following: the 1994 Term Loan, the 1995 Term Loan
and the Ohio Term Loan (and, when made, each Additional Term Loan).

     "Unencumbered Cash Balance" - At any time, the total of all cash and
Cash-Equivalents of Alkermes (and, to the extent expressly provided below,
certain Subsidiaries of Alkermes) which are not subject to any pledge, lien,
encumbrance or right of set-off (other than a right of set-off in favor of an
investment manager for its normal management fees) in favor of any other Person.
The Unencumbered Cash Balance will in no event be deemed to include the sums
from time to time pledged to the Bank pursuant to [Section]1.8 above. Further,
the Unencumbered Cash Balance will in no event be deemed to include any cash or
Cash-Equivalents of any partnership or other entity in which Alkermes now or
hereafter may have an interest, except that (A) for the purposes of satisfying
the Minimum Unencumbered Cash Balance test set forth in Section 3.6 above as at
any date, Alkermes' "Unencumbered Cash Balance" will be deemed to include both
the unencumbered cash and unencumbered Cash-Equivalents then held by a
wholly-owned Subsidiary of Alkermes which is operated pursuant to 30 Del. Code
[Section]1902(b)(8) and the unencumbered cash and unencumbered Cash-Equivalents
then held by ACT I, and (B) for the purposes of determining as at any date the
Cash Ratio required to be maintained by Section 3.7 above, Alkermes' 
"Unencumbered Cash Balance" will be deemed to include both the unencumbered cash
and unencumbered Cash-Equivalents of Alkermes and the unencumbered cash and
unencumbered Cash-Equivalents of Alkermes' wholly-owned Subsidiaries.

     Any defined term used in the plural preceded by the definite article shall
be taken to encompass all members of the relevant class. Any defined term used
in the singular preceded by "any" shall be taken to indicate any number of the
members of the relevant class.

     This letter agreement is executed, as an instrument under seal, as of the
day and year first above written.

                                        Very truly yours,

                                        ALKERMES, INC.


                                        By /s/ Michael Landine
                                           ---------------------------------
                                           Its Senior Vice President and CFO

                                        ALKERMES CONTROLLED
                                        THERAPEUTICS, INC.


                                        By /s/ Michael Landine
                                           ------------------------
                                           Its Vice President


                                      -25-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   26

                                                     ALKERMES CONTROLLED
                                                     THERAPEUTICS INC. II


                                                     By /s/ Michael Landine
                                                       ------------------------
                                                       Its Vice President


                                      -26-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   27


Accepted and agreed:

FLEET NATIONAL BANK


By /s/ Catherine Bruton
  --------------------------------
  Its Vice President


By /s/ William E Rano Jr.
  --------------------------------
  Its Senior Vice President

                                      -27-


     THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
     TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.           
<PAGE>   28


                               DISCLOSURE SCHEDULE


Item 2.1(a)(i)        Jurisdictions where each Borrower is qualified

Item 2.1(a)(ii)       Subsidiaries, partnerships, joint ventures

Item 2.1(b)           List of 5% Stockholders

Item 2.1(e)           Litigation

Item 2.1(j)           Location of Assets

Item 2.1(m)           Material contracts and long-term commitments

Item 4.1              Existing Indebtedness

Item 4.2              Existing Liens




<PAGE>   29

                                 Item 2.1(a)(i)
                                 --------------

                     Jurisdictions In Which Each Borrower Is
                       Qualified As a Foreign Corporation

Alkermes, Inc.:
- ---------------

         Massachusetts
         Ohio

Alkermes Controlled Therapeutics, Inc.:
- ---------------------------------------

         Massachusetts

Alkermes Controlled Therapeutics Inc. II:
- -----------------------------------------

         Ohio


<PAGE>   30


                                 Item 2.1(a)(ii)
                                 ---------------

                  Subsidiaries, Partnerships and Joint Ventures

                                  Subsidiaries
                                  ------------

Alkermes, Inc.
- --------------

Alkermes Controlled Therapeutics, Inc., a
         Pennsylvania corporation

Alkermes Development Corporation II, a
         Delaware corporation ("ADC II"). (1)

Alkermes Europe Ltd., a corporation incorporated
         under the laws of the United Kingdom

Alkermes Investments, Inc., a Delaware corporation ("AII")

Alkermes Controlled Therapeutics Inc. II, a
         Pennsylvania corporation

Alkermes Controlled Therapeutics, Inc.
- --------------------------------------

None

Alkermes Controlled Therapeutics Inc. II
- ----------------------------------------

None

                                  Partnerships
                                  ------------

Alkermes, Inc.
- --------------

Alkermes Clinical Partners, L.P., a Delaware limited partnership. ADC II is the
general partner of this partnership.

Alkermes Controlled Therapeutics, Inc.
- --------------------------------------

None

Alkermes Controlled Therapeutics Inc. II
- ----------------------------------------

None

                                 Joint Ventures
                                 --------------

None

- -----------

1    Although ADC II is a wholly owned subsidiary of the Borrower, PaineWebber
     Development Corporation has the right to nominate at least half of the
     members of ADC II's board of directors until certain events occur.


<PAGE>   31






                                   Item 2.1(b)
                                   -----------

<TABLE>
                           5 Percent Beneficial Owners

<CAPTION>
                                     Number of
                                      Shares           % of
                                    Beneficially    Common Stock
Name                                  Owned            Owned
- ----                                ------------    ------------

<S>                                   <C>              <C>   
Amerindo Investment Advisors Inc.     2,715,000        14.80%
  One Embarcadero, Ste. 2300
  San Francisco, CA  94111 (1)

Pioneering Management Corporation     1,174,000         6.40%
  60 State Street
  Boston, MA  02109 (2)


<FN>
- -------------
     (1) Amerindo Investment Advisors Inc. holds these shares in its capacity as
investment advisor for various fiduciary accounts.

     (2) Consists of shares held by Pioneer Capital Growth Fund, Inc. (the
"Fund"). Pioneering Management Corporation serves as investment advisor to the
Fund, and has investment discretion over these shares.

</TABLE>

<PAGE>   32






                                   Item 2.1(e)
                                   -----------

                               Pending Litigation

None


<PAGE>   33


                                   Item 2.1(j)
                                   -----------

                      Location of Books, Records and Assets

     Certain of each Borrowers' corporate books and records, including its
minute books, are located at the offices of Ballard Spahr Andrews & Ingersoll,
1735 Market Street, 51st Floor, Philadelphia, PA 19103.

     In addition, certain of Alkermes, Inc.'s corporate books, records and
assets relating to its European operations are located at the offices of
Alkermes Europe Ltd. in Cambridge, England.

     In addition, certain of Alkermes, Inc.'s corporate books, records and
assets relating to AII are located at the offices of AII in Wilmington, Delaware
19805.

     In addition, certain of Alkermes, Inc.'s stock records are located at the
offices of its transfer agent, the First National Bank of Boston.


<PAGE>   34


                                   Item 2.1(m)
                                   -----------

                  Material Contracts and Long-Term Commitments

1.   Form of 1992 Warrant to purchase 2,800 shares of Alkermes, Inc.'s Common
     Stock.

2.   Form of 1995 Warrant to purchase 300 shares of Alkermes, Inc.'s Common
     Stock.

3.   Form of Global Warrant Certificate for 1994 Class A Warrants to purchase
     1,700 shares of Alkermes, Inc.'s Common Stock.

4.   Form of Class B 1994 Warrant to purchase 3,400 shares of Alkermes, Inc.'s
     Common Stock.

5.   Form of Fund Warrant to purchase 7,293 shares of Alkermes, Inc.'s Common
     Stock.

6.   Form of Incentive Warrant to purchase 42,280 shares of Alkermes, Inc.'s
     Common Stock.

7.   Warrant Agreement, dated as of November 18, 1994, by and between Alkermes,
     Inc. and The First National Bank of Boston.

8.   Amended and Restated 1989 Non-Qualified Stock Option Plan, as amended.

9.   Amended and Restated 1990 Omnibus Stock Option Plan, as amended.

10.  1991 Restricted Common Stock Award Plan.

11.  1992 Non-Qualified Stock Option Plan.

12.  Stock Option Plan for Non-Employee Directors.

13.  Lease, dated as of September 18, 1991, between Forest City 64 Sidney
     Street, Inc. and Alkermes, Inc., as amended by a First Amendment of Lease
     dated September 1, 1992.

14.  Lease, dated as of March 16, 1990, between Forest City 64 Sidney Street,
     Inc. and Enzytech, Inc.


<PAGE>   35






15.  Product Development Agreement, dated as of March 6, 1992, between Alkermes
     Clinical Partners, L.P. and Alkermes, Inc.

16.  Purchase Agreement, dated as of March 6, 1992, by and among Alkermes, Inc.
     and each of the Limited Partners, from time to time, of Alkermes Clinical
     Partners, L.P.

17.  Alkermes Clinical Partners, L.P. Agreement of Limited Partnership, dated as
     of February 7, 1992, as amended by Amendment No. 1 to Agreement of Limited
     Partnership, dated as of September 29, 1992, as further amended by
     Amendment No. 2 to Agreement of Limited Partnership, dated as of March 30,
     1993.

18.  Class A Note of Alkermes Development Corporation II, dated April 10, 1992,
     to PaineWebber Development Corporation in the amount of $100.00.

19.  License Agreement, dated February 5, 1990, between Enzytech, Inc. and
     Massachusetts Institute of Technology.

20.  Development and License Agreement dated February 4, 1992, between Enzytech,
     Inc. and Schering Corporation, as amended by an Amendment to Development
     and License Agreement dated July 26, 1995 between Alkermes Controlled
     Therapeutics, Inc. and Schering Corporation.

21.  Prepaid Royalty Agreement dated July 26, 1995 between Alkermes Controlled
     Therapeutics, Inc. and Schering Corporation.

22.  Collaborative Development Agreement dated as of January 9, 1995 between
     Alkermes Controlled Therapeutics, Inc. and Genentech, Inc.

23.  Note Purchase Agreement, dated as of January 9, 1995, by and between
     Alkermes, Inc. and Genentech, Inc.

24.  Convertible Promissory Note of Alkermes, Inc. dated January 31, 1995.

25.  Development Agreement, dated as of December 23, 1993, between Medisorb
     Technologies International L.P. and Janssen Pharmaceutica International, as
     amended by the First Amendment to Development Agreement, dated as of
     December 23, 1993.

26.  License Agreement, dated as of February 13, 1996, between Medisorb
     Technologies International L.P. and Janssen Pharmaceutica International
     (United States).


<PAGE>   36






27.  License Agreement, dated as of February 21, 1996, between Medisorb
     Technologies International L.P. and Janssen Pharmaceutica International
     (worldwide except United States).

28.  Loan Agreement, dated November 19, 1992, between Fleet Bank of
     Massachusetts, N.A. and Alkermes, Inc., as amended by a Loan Modification
     Agreement, dated as of November 24, 1993, a Second Loan Modification
     Agreement dated as of December 23, 1994, a Third Loan Modification
     Agreement dated as of February , 1995, a letter dated August 8, 1995 and a
     Modification Agreement, dated as of December 19, 1995.

29.  Promissory Note of Alkermes, Inc., dated December 23, 1994, to Fleet Bank
     of Massachusetts, N.A.

30.  Promissory Note of Alkermes, Inc., dated December 19, 1995, to Fleet Bank
     of Massachusetts, N.A.

31.  Loan Agreement dated December 30, 1993, among The Daiwa Bank, Limited,
     Alkermes Investments, Inc. and Alkermes, Inc., as amended by Amendment No.
     1 to Loan Agreement, dated as of December 31, 1994, and as further amended
     by Amendment to Loan Agreement, dated as of December 29, 1995.

32.  Amended and Restated Note of Alkermes, Inc. and Alkermes Investments, Inc.
     dated December 29, 1995, to The Daiwa Bank, Limited.

33.  Employment Agreement, entered into as of February 7, 1991, between Richard
     F. Pops and Alkermes, Inc.

34.  Employment Agreement, entered into as of June 13, 1994, by and between
     Robert A. Breyer and Alkermes, Inc.


<PAGE>   37
                                    Item 4.1
                                    --------

                              Existing Indebtedness

Alkermes, Inc.
- --------------

1.   Indebtedness which may be incurred as the result of any transaction
     contemplated by Section 7.1.

2.   Note, dated December 30, 1993, to The Daiwa Bank, Limited.

3.   Note, dated December 29, 1995, to The Daiwa Bank, Limited.

4.   Note Purchase Agreement, dated as of January 9, 1995, by and between
     Alkermes, Inc. and Genentech, Inc.


Alkermes Controlled Therapeutics, Inc.
- --------------------------------------

None

Alkermes Controlled Therapeutics Inc. II
- ----------------------------------------

None


<PAGE>   38






                                    Item 4.2
                                    --------

                                 Existing Liens

Liens with respect to the Collateral, (as such term is defined in the Security
Agreement, dated as of November 19, 1992, by and among Alkermes, Inc., Alkermes
Controlled Therapeutics, Inc., Alkermes Controlled Therapeutics Inc. II and the
Bank), granted by Alkermes, Inc., Alkermes Controlled Therapeutics, Inc. and
Alkermes Controlled Therapeutics Inc. II in favor of the Bank, which Liens were
created by the Security Agreement.

Pursuant to a Loan Agreement, dated December 30, 1993, as amended by the
Amendment No. 1 to Loan Agreement, dated December 31, 1994, and the Amendment to
Loan Agreement, dated as of December 29, 1995, among The Daiwa Bank, Limited
("Daiwa"), Alkermes Investments, Inc. and Alkermes, Inc., Alkermes, Inc. has
established for the benefit and on behalf of Daiwa Bank Trust Company a
restricted custodial account (the "Restricted Account"). Pursuant to such Loan
Agreement, as amended, and certain other agreements executed in connection
therewith, upon the occurrence of certain specified events, Daiwa has the right
to require Morgan Stanley & Co. to deliver certain funds of Alkermes, Inc. for
which Morgan Stanley serves as custodian to Daiwa Bank Trust Company for deposit
into the Restricted Account. Alkermes, Inc. has granted Daiwa a security
interest in all of its right, title and interest in the Restricted Account and
all deposits or investments held therein.




<PAGE>   1
                                                                    Exhibit 10.4


                               SECURITY AGREEMENT

     SECURITY AGREEMENT dated as of September 27, 1996 by and among Alkermes,
Inc., a Pennsylvania corporation ("Alkermes"), Alkermes Controlled Therapeutics,
Inc., a Pennsylvania corporation and a wholly-owned subsidiary of Alkermes ("ACT
I"), Alkermes Controlled Therapeutics Inc. II, a Pennsylvania corporation and a
wholly-owned subsidiary of Alkermes ("ACT II") (Alkermes, ACT I and ACT II being
hereinafter referred to collectively as the "Debtors" and individually as a
"Debtor") and Fleet National Bank (the "Secured Party"). The Secured Party is
the successor by merger to Fleet Bank of Massachusetts, N.A. ("Fleet Mass").
This Agreement amends and restates in its entirety, and supersedes the terms of,
that certain Security Agreement dated as of November 19, 1992 between Alkermes
and Fleet Mass.

     WHEREAS, Alkermes (and, to the extent described herein, one or more of the
other Debtors) has executed and delivered: (i) that certain $3,187,496 original
principal amount promissory note dated December 23, 1994 made by Alkermes and
payable to the order of Fleet Mass, as amended by Allonge to Note of even date
herewith among Alkermes, ACT I and the Secured Party (said December 23, 1994
promissory note, as so amended, being hereinafter referred to as the "1994
Note"), (ii) that certain $1,500,000 original principal amount promissory note
dated December 19, 1995 made by Alkermes and payable to the order of Fleet Mass,
as amended by Allonge to Note of even date herewith among Alkermes, ACT I and
the Secured Party (said December 19, 1995 promissory note, as so amended, being
hereinafter referred to as the "1995 Note"), (iii) that certain $5,000,000
original principal amount promissory note of even date herewith (the "Ohio Term
Note") made by Alkermes and ACT II and payable to the Secured Party, and (iv)
that certain letter agreement (the "Letter Agreement") of even date herewith
among the Debtors and the Secured Party, as same may be amended from time to
time; and

     WHEREAS, the 1994 Note evidences a loan (the "1994 Term Loan") in the
original principal amount of $3,187,496 made by Fleet Mass to Alkermes, the
Secured Party having succeeded to the rights of Fleet Mass thereunder and ACT I
having become jointly and severally liable therefor, the 1995 Note evidences a
loan (the "1995 Term Loan") in the original principal amount of $1,500,000 made
by Fleet Mass to Alkermes, the Secured Party having succeeded to the rights of
Fleet Mass thereunder and ACT I having become jointly and severally liable
therefor, and the Ohio Term Note evidences a loan (the "Ohio Term Loan") in the
original principal amount of $5,000,000 being made by the Secured Party to
Alkermes and ACT II; and

     WHEREAS, in connection with the 1994 Term Loan, the 1995 Term Loan, the
Ohio Term Loan and any Additional Term Loan (as defined herein), the Secured
Party requires that each Debtor grant to each Secured Party a security interest
in the Collateral (as defined in Section 1);

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby act and agree
as follows:


<PAGE>   2

     1. DEFINITIONS. As used in this Security Agreement, the following terms
have the following meanings:

     "ADDITIONAL LOAN COLLATERAL" - Any equipment which is hereafter pledged to
the Bank as collateral in connection with any Additional Term Loan and which is
identified as such on a supplement to Exhibit A to this Security Agreement to be
delivered to the Bank by the Debtors in connection with any Additional Term
Loan.

     "ADDITIONAL TERM LOAN" - As defined in the Letter Agreement.

     "ADDITIONAL TERM NOTE" - As defined in the Letter Agreement.

     "CAMBRIDGE PREMISES" - Those Premises located at 64 Sidney Street,
Cambridge, MA 02139.
         
     "COLLATERAL" - All of the Equipment and all of the following:

     (a) all warranties, licenses, contract rights and other rights and
     interests pertaining to any of the Equipment and/or the use thereof, all
     whether now or hereafter existing or owned by any Debtor or in which any
     Debtor shall now or hereafter have any interest; and

     (b) all liens, guaranties, securities, rights, remedies and privileges
     pertaining to, and all proceeds (including, without limitation, insurance
     proceeds) of and all accessions to, any of the foregoing items of
     Collateral, all whether now or hereafter existing or owned by any Debtor or
     in which any Debtor shall now or hereafter have any interest.

     "EQUIPMENT" - All of the items listed on Exhibit A hereto as same may be
from time to time supplemented (including those items described under the
headings "1994 Loan Collateral", "1995 Loan Collateral" and "Ohio Loan
Collateral" and any Additional Loan Collateral which may hereafter be pledged)
and all accessions, additions, substitutions or replacements to or for any of
such items and all attachments, components, accessories, parts and supplies
relating thereto; all whether affixed or moveable and wherever located.

     "EVENT OF DEFAULT" - The occurrence of any one or more of the following:
(i) any "Event of Default" as defined in any Loan Document; (ii) any
representation or warranty by any Debtor contained in this Security Agreement
shall prove to have been inaccurate or incomplete in any material respect on the
date when made; (iii) any failure or default by any Debtor under any of
Subsections 4(a), 4(c), 4(d), 4(e) or 4(f); (iv) any failure or default by any
Debtor under Subsection 4(g) which continues uncured for ten (10) days; or (v)
any failure by any Debtor to perform or observe any of its other obligations or
agreements under this Security Agreement, which failure remains uncured for
thirty (30) days after notice thereof has been given to such Debtor.

                                      -2-
<PAGE>   3

     "LIEN" - Any lien, charge, encumbrance or security interest, whether
voluntary or involuntary.

     "LOAN DOCUMENTS" - This Security Agreement, the Letter Agreement, the 1994
Note, the 1995 Note, the Ohio Term Note, any Additional Term Note and any other
instruments or documents, letters of credit or other agreements made by any one
or more of the Debtors with or in favor of Fleet Mass or the Secured Party in
connection with the 1994 Term Loan, the 1995 Term Loan, the Ohio Term Loan
and/or any Additional Term Loan, all whether now existing or hereafter entered
into or delivered.

     "1994 LOAN COLLATERAL" - Those items of Equipment described on Exhibit A
hereto under the heading "1994 Loan Collateral".

     "1995 LOAN COLLATERAL" - Those items of Equipment described on Exhibit A
hereto under the heading "1995 Loan Collateral".

     "OBLIGATIONS" - Any and all indebtedness, liabilities or obligations of any
Debtor, joint or several, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, to or for the benefit of the
Secured Party and arising out of or provided for in the Letter Agreement, the
1994 Note, the 1995 Note, the Ohio Term Note, any Additional Term Note and/or
any of the other Loan Documents, such term to include obligations to perform
acts and refrain from taking action as well as obligations to pay money.

     "OHIO LOAN COLLATERAL" - Those items of Equipment described on Exhibit A
hereto under the heading "Ohio Loan Collateral".

     "OHIO PREMISES" - Collectively, those Premises located at 6954 Cornell
Road, Blue Ash, Ohio 45242 (the "Blue Ash Facility") and 265 Olinger Circle,
Wilmington, Ohio 45177 (the "Wilmington Facility").

     "PERSON" - As defined in the Letter Agreement.

     "PREMISES" - All locations (whether owned, leased, operated or otherwise
used by any Debtor), including the Cambridge Premises and the Ohio Premises, in
which any of the Equipment is or will be located, all of which are listed on
Exhibit B hereto together with the record owner of each such location.

     "UCC" - The Uniform Commercial Code as in effect from time to time in
Massachusetts, except that with respect to Collateral located or deemed located
in any other jurisdiction, such term shall refer to the Uniform Commercial Code
as in effect in each such other jurisdiction.

     Any defined term used in the plural preceded by the definite article shall
be taken to encompass all members of the relevant class. Any defined term used
in the singular preceded by "any" shall be taken to indicate any number of the
members of the relevant class.

                                      -3-
<PAGE>   4

     2. GRANT OF SECURITY INTEREST. As security for the full and timely
satisfaction of the Obligations, each Debtor hereby grants to the Secured Party
a continuing security interest in the Collateral, and in each item thereof, all
to the maximum extent that such Debtor has an interest therein or at any time in
the future obtains such an interest.

     3. REPRESENTATIONS AND WARRANTIES. The Debtors jointly and severally
represent and warrant to the Secured Party that:

     (a) The execution, delivery and performance by Alkermes, ACT I and ACT II
of this Security Agreement, including the security interests herein granted or
intended to be granted, has been duly authorized by all necessary corporate and
other action and does not and will not:

          (i) require any waiver, consent or approval of their respective
     shareholders, any governmental authority or any other Person;

          (ii) contravene any of their respective charters or by-laws;

          (iii) violate any provision of, or require any filing (other than the
     filing of financing statements under the UCC with respect to the security
     interests herein granted), registration, consent or approval under, any
     law, rule, regulation (including, without limitation, Regulation U), order,
     writ, judgment, injunction, decree, determination or award presently in
     effect having applicability to any Debtor;

          (iv) result in a breach of or constitute a default or require any
     waiver or consent under any indenture or loan or credit agreement or any
     other agreement, lease or instrument to which any Debtor is party or by
     which it or any of its properties may be bound or affected;

          (v) result in, or require, the creation or imposition of any Lien
     (other than as created hereunder) upon or with respect to any of the
     properties now owned or hereafter acquired by any Debtor; or

          (vi) cause any Debtor to be in default under any such law, rule,
     regulation, order, writ, judgment, injunction, decree, determination or
     award or any such indenture, agreement, lease or instrument.

     (b) This Security Agreement has been duly executed and delivered on behalf
of each of the Debtors and is a legal, valid and binding joint and several
obligation of each Debtor, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws or equitable principles from time to time in effect relating
to or affecting the rights of creditors generally.

                                      -4-
<PAGE>   5

     (c) No Obligation has been or will hereafter be incurred on account of
personal, family or household purposes.

     (d) The principal place of business and chief executive offices of each
Debtor are located at the Cambridge Premises, and all of the books and records
of each Debtor are located at the Cambridge Premises except those books and
records described in Schedule 2.1(j) to the Letter Agreement. Certain books and
records of ACT II are also located at the Ohio Premises. Except as described on
Exhibit B hereto, none of the Collateral and no other assets of any Debtor are
located at any other location. Alkermes and ACT I are tenants in the Cambridge
Premises and the record owner of the Cambridge Premises is as set forth on
Exhibit B hereto. ACT II is the owner of the Wilmington Facility and is a tenant
at the Blue Ash Facility. The owner of the Blue Ash Facility is set forth as
Exhibit B hereto. All Equipment of Alkermes and ACT I is located at the
Cambridge Premises and all Equipment of ACT II is located at the Ohio Premises.

     (e) No Debtor conducts business under any trade name or style other than
its corporate name.

     (f) The Debtors own the Collateral free and clear of all Liens except Liens
in favor of the Secured Party.

     (g) The Equipment has been accepted by the Debtors and is in good repair,
working order and condition, and no Debtor has asserted (and no Debtor knows of
any basis for) any material warranty or other claim against any seller or
manufacturer thereof.

     4. COVENANTS. (a) PAYMENT AND PERFORMANCE. The Debtors shall
unconditionally pay when due or within any applicable grace period (or on demand
if so payable) each Obligation and shall duly and punctually perform each
Obligation.

     (b) FURTHER ASSURANCES. Each Debtor will from time to time at its expense,
upon the Secured Party's request, promptly execute and deliver all such further
instruments and documents, and take all such further action, as may be necessary
or that the Secured Party may reasonably request in order to perfect and protect
the security interests granted or intended to be granted hereby or to enable the
Secured Party to enforce its rights and remedies hereunder with respect to any
Collateral.

     (c) INFORMATION. Each Debtor shall maintain complete records (accurate in
all material respects) of all of its Collateral and its dealings with respect
thereto in accordance with generally accepted accounting principles applied on a
consistent basis. Upon reasonable notice from time to time (and at any time and
without notice after the occurrence and during the continuance of an Event of
Default), each Debtor shall permit the Secured Party and its employees,
representatives and agents access to the Premises and the Secured Party shall
have the right to inspect the Collateral and make copies of such books and
records; provided, however, that certain areas of the Debtors' facilities may be
restricted for reasons of health and safety and that certain aspects of the
Debtors' business are highly confidential and the Secured Party will not be
permitted access 

                                      -5-
<PAGE>   6

to such restricted areas or such confidential information in the Debtors'
possession. Each Debtor shall from time to time furnish to the Secured Party
such information concerning the Collateral as the Secured Party may reasonably
request, and will promptly notify the Secured Party if any representation or
warranty of any Debtor in Section 3 hereof becomes inaccurate, incomplete or
misleading in any material respect.

     (d) INSURANCE. The Debtors shall at their expense maintain fire and
extended coverage insurance policies insuring the Equipment, with responsible
and reputable insurance companies or associations, in amounts sufficient to
provide for full replacement cost coverage (with agreed amount endorsement) and
in any event not less than the amount necessary to avoid co-insurance. All such
insurance shall name the Secured Party as secured party and loss payee. All
policies of such insurance shall contain a provision forbidding cancellation of
such insurance either by the carrier or by the insured without at least 15 days'
prior written notice to the Secured Party. The Debtors shall upon the Secured
Party's request deliver to the Secured Party duplicate policies of such
insurance and/or binders, certificates or other evidence thereof (with evidence
of premiums having been paid) from the insurer or a reputable insurance broker.
In case of any casualty, loss or damage to which the following sentence is not
applicable, the Debtors shall make the necessary repairs or replacements and
shall be entitled to be reimbursed therefor from and to the extent of the
proceeds of such insurance. Upon the occurrence and during the continuance of
any Event of Default, all insurance payments in respect of Equipment shall be
paid and applied as specified in Subsection 8(c) below.

     (e) TITLE; SALE OR REMOVAL OF COLLATERAL. No Debtor shall create or suffer
to exist any Lien in or on any of the Collateral. No Debtor shall, without the
Secured Party's prior written approval, sell, transfer or remove from the
Premises or otherwise dispose of any of the Collateral; provided that the
Debtors may move the Collateral to any new facility within The Commonwealth of
Massachusetts or the State of Ohio acquired, leased or constructed by the
Debtors if the Debtors give the Secured Party not less than thirty (30) days'
prior written notice of such move and provide all such financing statements and
other documentation as may be necessary to protect, perfect and/or confirm the
first priority security interests granted or intended to be granted in this
Security Agreement. Except as provided in the immediately preceding sentence, no
Collateral of any Debtor will be located at any premises other than the
respective Premises described in Subsection 3(d) above. Each Debtor (i) shall
maintain books and records relating to Collateral only at its locations
described in Subsection 3(d) above, (ii) will not move its chief executive
office or principal place of business from the location described in Subsection
3(d) above, (iii) will not change its name or identity (or use any trade name or
style except as described in Subsection 3(e) above), and (iv) will not make or
suffer to be made any change in its corporate structure until, in each case,
after receipt of a certificate from the Secured Party, signed by an officer
thereof, stating that the Secured Party has, to its satisfaction, obtained all
documentation that it deems necessary or desirable to obtain, maintain, perfect
and/or confirm the first priority security interests granted or intended to be
granted herein.

     (f) MAINTENANCE AND USE OF EQUIPMENT. The Debtors will maintain all
Equipment in good order and condition, making all necessary repairs thereto. The
Debtors will not suffer any 

                                      -6-
<PAGE>   7

waste or destruction of any Equipment, nor use any Equipment in violation of any
applicable law or any insurance thereon.

     (g) TAXES. The Debtors promptly shall pay, as they become due and payable,
all taxes, unemployment contributions and all other charges of any kind or
nature levied, assessed or claimed against any Debtor or the Collateral by any
Person whose claim could result in a Lien upon any of the Collateral, except to
the extent such taxes, contributions or other charges are being contested in
good faith and by appropriate proceedings which operate as a matter of law to
stay the enforcement of any such Lien and adequate reserves have been
established and are maintained by the Debtors.

     5. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. (a) Each Debtor hereby
irrevocably appoints the Secured Party as such Debtor's attorney-in-fact, with
full authority in the name, place and stead of such Debtor, from time to time in
the Secured Party's discretion, to take any action and to execute any instrument
which the Secured Party may deem necessary or advisable to accomplish the
purposes of this Security Agreement, including, without limitation, to obtain
and adjust any insurance required pursuant to this Security Agreement and/or the
Letter Agreement.

     (b) The power of attorney granted pursuant to this Section 5 is a power
coupled with an interest and shall be irrevocable until the Obligations are paid
indefeasibly in full.

     6. SECURED PARTY MAY PERFORM. If any Debtor fails to perform any agreement
contained herein, the Secured Party may itself perform, or cause performance of,
such agreement, and the reasonable expenses of the Secured Party incurred in
connection therewith shall be payable by the Debtors as provided under Section 9
hereof, with interest as provided in the Letter Agreement.

     7. SECURED PARTY'S DUTIES. The powers conferred on the Secured Party
hereunder are solely to protect its interests in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral actually in its possession and the accounting for monies
actually received by it hereunder, the Secured Party shall have no duty as to
any Collateral. The Secured Party shall not be liable for any acts, omissions,
errors of judgment or mistakes of fact or law including, without limitation,
acts, omissions, errors or mistakes with respect to the Collateral, except for
those arising out of or in connection with the Secured Party's gross negligence
or willful misconduct. The Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Secured Party accords its own like property, it being understood that
the Secured Party shall be under no obligation to take any necessary steps to
collect any Collateral or preserve rights against prior parties or any other
rights pertaining to any Collateral, but may do so at its option, and all
reasonable expenses incurred in connection therewith shall be for the sole
account of the Debtors and shall be added to the Obligations.

                                      -7-
<PAGE>   8

     8. REMEDIES. If any Event of Default shall have occurred and be continuing:

     (a) The Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party under the UCC and also may
without limitation:

          (i) require each Debtor to, and each Debtor hereby agrees that it will
     at its expense and upon reasonable request of the Secured Party forthwith,
     assemble all or any part of the Collateral as directed by the Secured Party
     and make it available to the Secured Party at a place or places to be
     designated by the Secured Party which is or are reasonably convenient to
     the respective parties; and

          (ii) without notice except as specified below, sell, lease, assign,
     grant an option or options to purchase or otherwise dispose of the
     Collateral or any part thereof in one or more parcels at public or private
     sale, at any exchange, broker's board or at the Secured Party's offices or
     elsewhere, for cash, on credit or for future delivery, and upon such other
     terms as are commercially reasonable.

     (b) The Secured Party may maintain possession of Collateral at the Premises
or remove the same or any part thereof to such places as the Secured Party may
elect. Each Debtor agrees that, to the extent notice of sale shall be required
by law, 10 days' prior written notice to such Debtor shall constitute reasonable
notification. Notice of any public sale shall be sufficient if it describes the
Collateral to be sold in general terms, stating the items or amounts thereof and
the location and nature thereof, and is published at least once in any newspaper
selected by the Secured Party and of general circulation in the locale of such
sale, not less than 10 days prior to the sale. The Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given and may be the purchaser at any such sale, if public, to the extent
permitted by applicable law, free from any right of redemption. The Debtors
shall be fully liable for any deficiency. The Secured Party may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.

     (c) Any cash held by the Secured Party as Collateral and all cash or other
proceeds received by the Secured Party in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral, shall be
applied by the Secured Party in the following order of priorities:

     FIRST, to the payment of the reasonable costs and expenses of any sale or
other expenses (including, without limitation, any legal fees and expenses),
liabilities and advances made or incurred by the Secured Party in connection
therewith or referred to in Section 9 or provided for by the Letter Agreement;

                                      -8-
<PAGE>   9

     NEXT, to payment of interest on and principal of the 1994 Note, the 1995
Note, the Ohio Term Note and any Additional Term Note (in such order as may be
provided for in the Letter Agreement or as otherwise determined by the Secured
Party);

     NEXT, to the payment of any other Obligations; and

     FINALLY, after payment in full of all Obligations, to the payment to the
Debtors or their successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
of any surplus then remaining of such cash.

     9. EXPENSES AND INDEMNIFICATION. Each Debtor jointly and severally agrees
to reimburse the Secured Party for and to indemnify and hold harmless the
Secured Party from and against any and all liability, loss, damage, and all
reasonable costs or expenses (including, without limitation, fees and
disbursements of counsel, experts and agents) imposed on, incurred by or
asserted against the Secured Party arising out of or in connection with:
preparation of this Security Agreement, the documents relating hereto, or
amendments, modifications or waivers hereof; taxes (excluding any corporate
excise or income taxes payable by the Secured Party by reason hereof or
otherwise) and other governmental charges in connection with this Security
Agreement and the Collateral; exercise of the Secured Party's rights with
respect to this Security Agreement and the Collateral; any enforcement,
collection or other proceedings resulting therefrom or any negotiations or other
measures to preserve the Secured Party's rights hereunder; the custody or
preservation of, or the sale of or other realization upon, any of the
Collateral; any failure by any Debtor to perform or observe any of the
provisions of this Security Agreement; any investigative, administrative or
judicial proceeding (whether or not the Secured Party is designated a party
thereto) relating to or arising out of this Security Agreement; or any
bankruptcy, insolvency or other similar proceeding relating to any Debtor,
unless the Secured Party was at fault with respect to such liability, loss,
damage, cost or expense or acted in bad faith with respect thereto. The Debtors'
obligations under the preceding sentence shall constitute Obligations and shall
survive the termination of this Security Agreement.

     10. TERMINATION. This Security Agreement shall remain in full force and
effect so long as any Obligation remains outstanding. Upon the satisfaction in
full of all of the Obligations, the Secured Party shall, at the Debtors'
expense, execute and deliver to the Debtors all instruments of assignment or
otherwise as may be necessary to establish full title of the Debtors to any of
the Collateral, subject to any prior sale or other disposition thereof pursuant
to Section 8. Until then, this Security Agreement shall itself constitute
conclusive evidence of the validity, effectiveness and continuing force hereof,
and any Person may rely hereon.

     11. WAIVER; RIGHTS CUMULATIVE. No failure to exercise and no delay in
exercising, on the part of the Secured Party, any right or remedy hereunder or
otherwise shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right or remedy. Waiver by the Secured Party of any right or remedy
on any one occasion shall not be construed as a bar to or waiver thereof or of
any other right or remedy on any future occasion. The Secured Party's rights and
remedies hereunder 

                                      -9-
<PAGE>   10

and under the Loan Documents shall be cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.

     The provisions of this Security Agreement are not in derogation or
limitation of any obligations, liabilities or duties of any Debtor under any of
the other Loan Documents or any other agreement with or for the benefit of the
Secured Party. No inconsistency in default provisions between this Agreement and
any of the other Loan Documents or any such other agreement will be deemed to
create any additional grace period or otherwise derogate from the express terms
of each such default provision. No covenant, agreement or obligation of any
Debtor contained herein, nor any right or remedy of the Secured Party contained
herein, shall in any respect be limited by or be deemed in limitation of any
inconsistent or additional provisions contained in any of the other Loan
Documents or any such other agreement.

     12. SEVERABILITY. In the event that any provision of this Agreement or the
application thereof to any Person, property or circumstance shall be held to any
extent to be invalid or unenforceable, the remainder of this Security Agreement
and the application of such provision to Persons, properties and circumstances
other than those as to which it has been held invalid or unenforceable shall not
be affected thereby, and each provision of this Security Agreement shall be
valid and enforceable to the fullest extent permitted by law.

     13. BINDING EFFECT; ASSIGNMENT. This Security Agreement shall be binding
upon the Debtors and their respective successors and assigns and shall inure to
the benefit of the Debtors and the Secured Party and their respective successors
and assigns. This Security Agreement is the joint and several obligation of the
Debtors.

     14. NOTICES. All notices and other communications under or relating to this
Security Agreement shall be given in the manner and to the addresses of the
parties provided for in [Section]6.6 of the Letter Agreement.

     15. HEADINGS. Section headings in this Security Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.

     16. GOVERNING LAW. This Security Agreement shall be governed by, and
construed and enforced in accordance with, the laws of The Commonwealth of
Massachusetts, except that the creation, perfection and enforcement of security
interests in Collateral located in jurisdictions other than Massachusetts will
be governed by the laws of the respective jurisdictions in which such Collateral
is located.

     17. PARTIAL RELEASE. The Secured Party agrees that upon the satisfaction of
the Partial Release Conditions (hereinafter defined) in relation to the 1994
Term Loan, the 1995 Term Loan or the Ohio Term Loan, the Secured Party will, at
the Debtors' request, execute and deliver to the Debtors a release of the 1994
Loan Collateral or the 1995 Loan Collateral or the Ohio Loan Collateral (as
appropriate) from the lien of this Security Agreement (including appropriate

                                      -10-
<PAGE>   11

releases on Form UCC-3) and, upon execution and delivery of such release, the
1994 Loan Collateral, the 1995 Loan Collateral or the Ohio Loan Collateral (as
the case may be) will no longer be deemed "Collateral" subject to this Security
Agreement. As used herein, the "Partial Release Conditions" will be deemed
satisfied only if all of the following shall have occurred: (i) the 1994 Term
Loan or the 1995 Term Loan or the Ohio Term Loan (as the case may be) shall have
been paid in full, (ii) the cash and/or readily-marketable Government Securities
pledged to the Secured Party under Section 1.8 of the Letter Agreement shall
have an aggregate fair market value of not less than the "Required Minimum
Value" (as defined in the Letter Agreement) and Alkermes shall agree to maintain
such pledged cash and/or readily-marketable Government Securities in such amount
so that the fair market value thereof shall never be less than such "Required
Minimum Value" and (iii) there shall then exist no Event of Default nor any
event or circumstance which, with the passage of time or the giving of notice or
both, could become an Event of Default. At the time of the making of any
Additional Term Loan, the Bank and the Debtors may, by written modification to
this Security Agreement, set forth the circumstances, if any, under which a
partial release may be obtained with respect to the Additional Loan Collateral
pledged in connection with the relevant Additional Term Loan.

                                      -11-
<PAGE>   12

     IN WITNESS WHEREOF, the Debtors and the Secured Party have caused this
Security Agreement to be executed, as an instrument under seal, by their
respective officers thereunto duly authorized, as of the date first above
written.

                                         ALKERMES, INC.

                                         By /s/ Michael Landine
                                           ------------------------------------
                                           Name: Michael Landine
                                           Title: Senior Vice President and CFO


                                         ALKERMES CONTROLLED
                                         THERAPEUTICS, INC.

                                         By /s/ Michael Landine
                                           ------------------------
                                           Name: Michael Landine
                                           Title: Vice President


                                         ALKERMES CONTROLLED
                                         THERAPEUTICS INC. II

                                         By /s/ Michael Landine
                                           ------------------------
                                           Name: Michael Landine
                                           Title: Vice President


                                         FLEET NATIONAL BANK

                                         By /s/ Catherine Bruton
                                           ------------------------
                                           Name: Catherine Bruton
                                           Title: VP

                                      -12-
<PAGE>   13



EXHIBIT A - Equipment list

EXHIBIT B - Locations in which Equipment is located, including owners of real
            estate
<PAGE>   14
                                                            Exhibit A
                                                            1994 Loan Collateral
<TABLE>
Equipment List Cumulative                                                                                           
<CAPTION>
Date of                                                                        Total                                              
Purchase      Company                    Description                         Invoice       Freight      Sales Tax          Net    
- --------------------------------------------------------------------------------------------------------------------------------
         
<S>           <C>                        <C>                                 <C>           <C>            <C>          <C> 
10/1/92       Tech Computer              Mac Classic II                      1,233.75                      58.75        1,175.00 
10/1/92       Tech Computer              Mac Mono Display                      246.75                      11.75          235.00
10/1/92       Tech Computer              Quandra 950                         9,968.70                     474.70        6,695.00
                                         20" Trinitron                                                                  2,799.00
10/9/92       Matrix Technologies        Cellroll Standard                   2,955.00        10.00                      2,945.00
10/2/92       Fisher Scientific          Balance                             1,522.61        12.61                      1,510.00
10/1/92       Tech Computer              Ethernet LC                           636.30                      30.30          606.00
10/15/92      Fisher Scientific          Centrifuge                          2,103.60         8.60                      2,095.00
10/30/92      Gilson Medical             Microfractionator                   2,808.64        18.64                      1,395.00
                                         Microfractionator                                                              1,395.00
10/19/92      Universal Imaging          Isolation System                    1,435.00       120.00                      1,315.00
10/30/92      Lexington Alarm            Temperature System                 10,181.00                                  10,181.00
10/29/92      GIBCO BRL                  Sequencing Gel                      2,130.00                                   1,570.00
                                                                                                                          280.00
                                                                                                                          280.00
10/30/92      Inspection Tech.           Thermal Printer                     8,693.00       165.00                      3,876.00
                                         Monitor, panasonic                                                               357.00
                                         Sony VHS recorder                                                                485.00
                                         RGNB Flash-sync camera                                                         3,810.00
10/23/92      Harris Manufacturing       Chart Recorders                     2,597.14         9.14                      2,588.00
10/13/92      Tech Computer              Laserwriter III                     3,076.50                     146.50        2,930.00
10/1/92       Voice Systems              Telephone Sets                      1,968.75                      93.75        1,875.00
10/22/92      American Express           Color Portables                       627.47                                     627.47
11/9/92       VWR Scientific             Catalytic Apparatus                 1,692.00                                   1,692.00
11/12/92      Tech Computer              2 MB Set                              378.00                      18.00          360.00
11/13/92      Tech Computer              Mac Classic Deskwriter              3,371.55                     160.55        3,211.00
11/20/92      Jouan, Inc.                Rotor, Buckets                      1,823.42         5.42                      1,818.00
11/19/92      American Instr. Ex.        UV Monitor                          1,459.33         9.33                      1,450.00
11/19/92      Millipore                  Auto Sampler                       35,903.60        88.60                     25,510.00
                                                                                                                       10,305.00
11/20/92      Nynex Meridien             Digital Line Card                   3,399.00                     159.00        3,240.00
11/13/92      VWR Scientific             Pb Meter                            1,525.75                                   1,525.75
                                         Balance                             1,596.00                                   1,596.00
11/30/92      VWR Scientific             Diluter Dispen.                     4,495.50                                   4,495.50
11/30/92      Jouan, Inc.                Centrifuge                          3,209.07        59.07                      3,150.00
12/29/92      Avestin Inc.               Homogenizer                         3,860.00       160.00                      3,700.00

<CAPTION>
                                               
Date of                                        
Purchase         Serial No               Model No              
- --------------------------------------------------------       
<S>              <C>                     <C>                   
10/1/92          SG2527INGD21            M1542LL/A             
10/1/92                                                        
10/1/92          F82860A                 M6710LL/A             
                                         STD9752               
10/9/92          2538                    186000                
10/2/92                                  01 911 174            
10/1/92                                  M0443LL/B M0437       
10/15/92                                 S415C                 
10/30/92         129H2182                121011                
                 129H2190                12011                 
10/19/92                                                       
10/30/92                                                       
10/29/92                                 S2 11C5SC CM5JC2      
                                         1070HH CKVJ03         
                                         1070HL CBCJ03         
10/30/92         SN117307                SV-S6600              
                 B22380425               CT-1383Y              
                 S01-0012494-4           SVO-1410              
                                                               
10/23/92                                 6171-20A              
10/13/92         CA221KEW                B0814LL/A             
10/1/92                                  M2006                 
10/22/92                                                       
11/9/92                                  19790-000             
11/12/92                                 160P&A010             
11/13/92                                 ML542LL/A             
11/20/92                                 11175338              
11/19/92                                 CHROM 1348            
11/19/92                                 WAT042465             
                                         WAT078500             
11/20/92                                 NT8D02AB              
11/13/92                                 34104-288             
                                         11275-260             
11/30/92                                 25227-629             
11/30/92         29210255                                      
12/29/92                                 10052                 
</TABLE>                                                      
                                                      
                                                      
<PAGE>   15
                                                            Exhibit A
                                                            1994 Loan Collateral
<TABLE>
Equipment List Cumulative                       
<CAPTION>
Date of                                                                        Total                                              
Purchase      Company                    Description                         Invoice       Freight      Sales Tax          Net    
- --------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                        <C>                                <C>             <C>            <C>         <C> 
12/29/92      Beckman Instr.             IV/VIS System                      10,066.84        37.00                     10,029.84
12/29/92      Binary Systems, Inc.       Printer & Hardware                  1,159.75        10.00         54.75        1,095.00
12/30/92      Puffer Hubbard             Refrigerator                        2,980.52       327.52                      2,653.0O
12/4/92       Queue Systems              Incubator                           7,244.00       662.00                      6,582.00
12/8/92       Queue Systems              Incubator                           6,704.00       122.00                      6,582.00
12/3/92       VWR                        Centrifuge                          1,676.00                                   1,676.00
12/30/92      Puffer Hubbard             Refrigerator                        2,729.00                                   2,729.0O
12/18/92      Schleicher & Schuell       Elutrap System                      1,225.45         5.50                      1,219.95
12/22/92      Millipore                  PDA Detector                        9,976.00                                   9,976.00
1/4/93        Tech Computer              Mac IIsi                            2,423.40                     115.40        2,308.00
1/4/93        Tech Computer              Mac IIci                            2,539.95                     120.95        2,194.00
                                         Mono Display                                                                     225.00
1/5/93        Polyfoam Packers           Roto Transporter                      695.19        18.54                        676.65
1/6/93        VWR Scientific             Vacuum Pump                           636.00                                     636.00
1/7/93        VWR Scientific             Vacuum Pump plus                    2,266.05                                   2,266.05
1/7/93        Dell Direct Sales          Computer                            3,510.50        75.00        165.50        3,270.00
1/11/93       Tech Computer              Mac IIci                            4,076.10                     194.10        2,998.00
                                         13" HI Res RGB                                                                   525.00
                                         StyleWriter                                                                      359.00
1/29/93       Amicon                     Cartridge Concentrator              3,301.99         6.95                      3,295.04
1/25/93       Queue Systems              Chest Freezer                       5,593.00       370.00                      5,223.00
1/25/93       Tech Computer              Mac IIci                            2,436.00                     116.00        2,095.00
                                         Mono Display                                                                     225.00
1/29/93       Forma Scientific           Lab Incubators                     28,956.00                                   7,239.00
                                                                                                                        7,239.00
                                                                                                                        7,239.00
                                                                                                                        7,239.00
1/29/93       Tech Computer              Mac Classic II                      1,081.50                      51.50        1,030.00
2/17/93       Computer Marketplace       LaserJet Printer                    2,011.95        18.00         94.95        1,899.00
2/24/93       Hewlett Packard            HPLC System & pump                 53,500.00                                  53,500.00
                                                                                                                                
                                                                                                                                
                                                                                                                                
4/6/93        CCG                        21" Computer Monitor                2,284.00                                   2,284.00
4/9/93        USA Flex                   15" Flat Screen                       496.83        20.88                        475.95
4/1/93        Dell Computer              Dell 466/ME, Base                   3,210.99        75.00        151.24        2,984.75
          
          
<CAPTION>
                                           
Date of                                    
Purchase          Serial No               Model No         
- ---------------------------------------------------------  
<S>              <C>                     <C>              
12/29/92         4314984                                   
12/29/92                                 B3-300            
12/30/92         ZO3B129576ZB                              
12/4/92          Y09B128177YB                              
12/8/92          Y09B128178YB                              
12/3/92                                  20901-051         
12/30/92         ZO9B129922ZB            FC443ABA          
12/18/92                                 46179             
12/22/92                                 WAT057002 M996    
1/4/93           SI-PC2188SHC            M0364L/B          
1/4/93           F12480US724             M5718LL/A         
                 SG2401TPC97             M0298LL/A         
1/5/93                                   301               
1/6/93                                   54950-080         
1/7/93                                   54950-080         
1/7/93                                   220-0082          
1/11/93          F124802P                M5718LL/A         
                 5296270                 MO401LL/B         
                 2E2475223               B043BLL/C         
1/29/93                                  54133             
1/25/93          N16C132405NC                              
1/25/93          F123411172              M5718LL/A         
                 SG2480W2097             M0298LL/A         
1/29/93          35822-06587             3326              
                 35822-06588                               
                 35822-06595                               
                 35822-06597                               
1/29/93          SG2481BFD22             M1543LL/A         
2/17/93                                                    
2/24/93          3247A03961              G1301A            
                 2926A03338                                
                 2623A03422                                
                 3151A01002                                
4/6/93                                                     
4/9/93           TNL105301S                                
4/1/93           2CSQN                                     
</TABLE>
          
          
<PAGE>   16
                                                            Exhibit A       
                                                            1994 Loan Collateral
<TABLE>
Equipment List Cumulative                                                                                           
<CAPTION>
Date of                                                                        Total                                              
Purchase      Company                    Description                         Invoice       Freight      Sales Tax          Net    
- --------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                        <C>                                 <C>            <C>           <C>          <C> 
4/6/93        Kramer                     Photo Tube HV                       1,613.00        16.00                      1,597.00
4/14/93       Computerland               Inkjet Printer                        764.86        21.20         36.42          707.24
4/8/93        PC Connection              Laserjet Printer                    1,817.00         5.00                      1,812.00
4/22/93       Hewlett Packard            240 MB Hard Disk                      705.60                      33.60          672.00
4/15/93       Stoelting Co.              Stereotaxic                         2,443.14        48.14                      2,395.00
3/30/93       Dell Computer              4 Dell 466/ME, Base                13,001.98       308.00        612.48       12,081.50
2/24/93       Millipore Corp.            Vendor Computer                     3,000.00                                   3,000.00
4/30/93       VWR                        Orbit Shaker                        1,045.00                                   1,045.00
3/31/93       Infotech                   Mac Centris                         1,886.10        15.00         89.10        1,782.00
4/19/93       Dell Computer              4 8MB RAM                           1,642.28                      78.20        1,564.08
4/22/93       Computerland               Mac Centris                         3,699.49        19.50        176.17        3,503.00
4/21/93       Electro-Steam              Steam Generator                     4,195.00                                   4,195.00
4/16/93       Digital Equip. Corp.       4MB 245 IDE                         4,669.27        50.32        219.95        4,399.00
4/6/93        ELI Computers, Inc.        Star Printer NX-1020                  548.00       149.00                        399.00
4/7/93        ELI Computers, Inc.        Microsoft Mouse                        89.95                                      89.95
4/15/93       ELI Computers, Inc.        386 SX 33 MHZ                       1,399.00                                   1,399.00
4/23/93       Farallon Computing         PhoneNET SC                         1,595.00                                   1,595.00
4/1/93        Fisher                     Drying Chamber                      1,050.94        10.94                      1,040.00
4/30/93       Micro Video                3-Way Trinocular Head               1,713.89         2.94                      1,710.95
4/3/93        Millipore                  20104861 MS                        78,342.98        64.98                     22,297.50
                                         100DL 600E                                                                    13,950.00
                                         M717 Autosampler                                                              22,500.00
                                         REF 470 Fluor                                                                  5,940.00
                                         486 Analytical                                                                13,590.50
4/14/93       USA Flex                   Multisync 15"                       6,117.70       177.70                        594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
4/21/93       Hewlett Packard            HP Vectra 486/33N                   1,208.59                      57.55        1,151.04
4/29/93       Fisher Scientific          Bal EL MT5                          7,652.00        34.00                      7,618.00
         
<CAPTION>
                
Date of         
Purchase        Serial No               Model No            
- --------------------------------------------------------    
<S>             <C>                     <C>                 
4/6/93                                                      
4/14/93         3307S77294                                  
4/8/93          USBC065001                                  
4/22/93                                 D1697A              
4/15/93                                                     
3/30/93                                                     
2/24/93                                                     
4/30/93                                 57018-855           
3/31/93         F2309LOACN7                                 
4/19/93                                 4310-3335           
4/22/93         SF1313DYDCA2                                
4/21/93                                 LG30-H              
4/16/93                                 FR-PCT35/PCXAG      
4/6/93                                  NX-1020             
4/7/93                                                      
4/15/93                                                     
4/23/93                                 PN597               
4/1/93                                  1D 269 12           
4/30/93                                 842147 T2           
4/3/93                                  WAT042358           
                                        WAT062710           
                                        WAT078505           
                                        WAT038480           
                                        WAT080690           
4/14/93         08119657 32NO9558H                          
                08119657 32NO9971H                          
                08119657 32NO9972H                          
                08119657 32NO9994H                          
                08119657 32NO9977H                          
                08119657 32NO9993H                          
                08119657 32NO9761H                          
                08119657 32NO9969H                          
                08119657 32N10000H                          
                08119657 32N13824A                          
4/21/93                                 D2629A              
4/29/93                                 01 913 275          
                                                            
</TABLE>                                                   
                                                   
                                                   
<PAGE>   17
                                                            Exhibit A       
                                                            1994 Loan Collateral
<TABLE>
Equipment List Cumulative                                                                                      
<CAPTION>
Date of                                                                        Total                                              
Purchase      Company                    Description                         Invoice       Freight      Sales Tax          Net    
- --------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                        <C>                                <C>           <C>             <C>          <C> 
4/1/93        FTS Systems                Lyopholizer System                 39,419.10       274.10                     23,350.00
                                                                                                                        8,975.00
                                                                                                                        3,100.00
                                                                                                                        3,720.00
5/28/93       Office Pavilion            Pedestal Files                      5,090.55                     242.41        4,848.14
6/11/93       E I Holt                   Kitchen Chairs                        480.00                                     480.00
6/11/93       E I Holt                   Desks, Files, Chairs               19,226.55       339.00        915.55       17,972.00
6/11/93       E I Holt                   Conference Chairs                  -1,745.00                                  -1,745.00
5/31/93       Fisher                     Incubator                           1,122.00                                   1,122.00
5/4/93        Inspection Technologies    VHS Recorder                          594.34        19.34                        575.00
5/18/93       Office Environments of NI  Two Drawer Files                      625.09                      29.77          595.32
5/19/93       Nynex Meridien             Telephones                         28,384.29     2,475.00      1,233.77       24,675.52
5/28/93       Infotech                   Macintosh LC III                    5,704.85        38.00        269.85        1,193.00
                                         Macintosh LC III                                                               1,193.00
                                         Macintosh LC III                                                               1,193.00
                                         Centris/keyboard                                                               1,818.00
5/28/93       Infotech                   32MG Tape Backup                   10,609.30        40.00        503.30       10,066.00
5/28/93       Infotech                   Macintosh Centris                   3,157.40        20.00        149.40        2,988.00
5/28/93       Computerland               4 Mac Centris                       7,803.48        28.25        371.59        1,690.91
                                                                                                                        1,690.91
                                                                                                                        1,690.91
                                                                                                                        1,690.91
                                         Keyboards                                                                        640.00
6/1/93        First Source International DEC pc 16MB                           663.50        14.50                        649.00
6/1/93        Comport Consulting         DEC Laptop                          5,212.25        39.00        248.25        2,325.00
                                                                                                                        2,600.00
6/2/93        PC Connection              Monitor                             1,670.00         5.00                      1,665.00
6/3/93        Millipore                  Data Interface                      7,005.82        10.82                      3,100.00
                                                                                                                          215.00
                                                                                                                        3,680.00
6/3/93        Infotech                   Mac Quadra                          3,986.70        24.00        188.70        3,774.00
6/8/93        Network Resources Corp     MultiGate Hub 2                    12,798.10        70.00        606.10        6,061.00
                                                                                                                        6,061.00
6/8/93        DSC Services               CK2 Microscope                      3,164.00                                   3,164.00
6/8/93        BlackBox Corp              CSU/DSU                             3,248.80        11.90                      1,618.45
                                                                                                                        1,618.45

<CAPTION>
              
Date of       
Purchase      Serial No               Model No     
- ---------------------------------------------------  
<S>           <C>                     <C>          
4/1/93        TS029301                             
              FD029309                             
              CR029301                             
                                                   
5/28/93                                            
6/11/93                                            
6/11/93                                            
6/11/93                                            
5/31/93                               11 639B      
5/4/93                                SVO-1410     
5/18/93                                            
5/19/93                                            
5/28/93       F5419AX5VA2                          
              F5319QU7VA2                          
              F5319AXGVA2                          
              R2814HRRON7                          
5/28/93       F33183X6687                          
5/28/93       F13197KHCA8                          
5/28/93       SF2307MSUCN7                         
              SF2303HD4CN7                         
              SF2309N3GCN7                         
              SF2309N36CN7                         
                                      APPL-D515D   
6/1/93                                DEC16-AMCE   
6/1/93                                FR-PCP34-DA  
                                      FR-PCX AR-AD 
6/2/93                                MAGIN MX17H  
6/3/93                                WAT088245    
                                      WAT087192    
                                      WAT200413    
6/3/93        F33058ZMCC7                          
6/8/93        44-13632360                          
              44-13633312                          
6/8/93                                             
6/8/93        9305997                              
              9304984                              
</TABLE>                                           
                                           
<PAGE>   18
                                                            Exhibit A       
                                                            1994 Loan Collateral

<TABLE>

Equipment List Cumulative                                                                                           
<CAPTION>
Date of                                                                        Total                                              
Purchase      Company                    Description                         Invoice       Freight      Sales Tax          Net    
- --------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                        <C>                                <C>             <C>         <C>            <C> 
6/10/93       Comtronics                 Portable Radio                      1,872.75        30.00         87.75        1,755.00
6/10/93       Comport Consulting         Color Monitor                       1,953.00                      93.00        1,860.00
6/10/93       Computerland               LaserJet 4SI                        3,716.00        82.65        176.95        3,456.40
6/16/93       CompUSA                    APC Smart                           2,995.00        25.00                      2,970.00
6/17/93       CompUSA                    NEC                                 5,032.00        25.00                      5,007.00
6/17/93       Dell Direct Sales          Dell 466/L Base                     5,029.78       150.00        236.18        4,643.60
6/21/93       USA Flex                   Multisync                           6,112.68       172.68                        594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
                                                                                                                          594.00
6/22/93       Dell Direct Sales          Dell 466/L Base                     2,514.89        75.00        118.09        2,321.80
6/22/93       Digital Equipment          MTE                                 2,679.20        50.00        125.20        2,504.00
6/22/93       Hewlett Packard            Quaternary pump                    41,417.00                   1,932.00       12,606.92
                                         Series autosampler                                                             7,445.76
                                         Wavelength detector                                                            5,518.08
                                         Fluorescence detector                                                          8,014.08
                                         ODS                                                                              178.56
                                         ChemStation software                                                           5,721.60
6/23/93       Alliance Peripheral        Hard Drive                          1,624.08        35.08                      1,589.00
6/29/93       ISCO                       Three Channel Pump                  1,187.00                                   1,187.00
7/2/93        Infotech                   CD Rom                                567.45        12.00         26.45          529.00
7/6/93        Dell Direct Sales          Dell 466/L Base                     2,299.82                     109.52        2,190.30
7/8/93        Comport Consulting                                             1,322.26        23.30         62.96        1,236.00
7/13/93       CompUSA                    APC Smart                             860.00                                     860.00
7/13/93       Digital Equipment          DADECpc                             2,853.95        20.00        134.95        2,699.00
5/28/93       Fisher                     Bal XD-2                            5,782.62        36.62                      1,460.00
                                         Balance                                                                        3,296.00
                                         Pres holder                                                                      990.00
6/7/93        Baxter                                                         4,696.66       152.66                      4,544.00
6/7/93        Baxter                                                         6,363.66       152.66                      6,211.00
          
<CAPTION>
                  
Date of           
Purchase          Serial No               Model No         
- -----------------------------------------------------      
<S>               <C>                     <C>              
6/10/93                                   P94YPC20A2A      
6/10/93                                   FR-PCXAV-EA      
6/10/93                                   HPCD-E4010/X4010 
6/16/93                                                    
6/17/93                                                    
6/17/93                                                    
6/21/93           08119657 33M15852H                       
                  08119657 33M15826H                       
                  08119657 33M15822H                       
                  08119657 33M15835H                       
                  08119657 33M15853H                       
                  08119657 33M15846H                       
                  08119657 33M15816H                       
                  08119657 33M15827H                       
                  08119657 33M15828H                       
                  08119657 33M15834H                       
6/22/93                                                    
6/22/93                                   FR-PCT73         
6/22/93           3317A02049                               
                  3315A02101                               
                  3225101728                               
                  1317G02464                               
                                                           
                  0000A00000                               
6/23/93                                                    
6/29/93                                   681610010        
7/2/93            F33183X6687                              
7/6/93                                                     
7/8/93                                    FR-PCXBV-BC      
7/13/93                                   433542           
7/13/93                                   FR-PCP34         
5/28/93                                   01 913 2E        
                                          01 913 431       
                                          09 753 25J       
6/7/93                                    R3855-10A        
6/7/93                                    R3820-20A        
                                                           
</TABLE>   
                                                 
<PAGE>   19
                                                            Exhibit A       
                                                            1994 Loan Collateral
<TABLE>
Equipment List Cumulative                                                                                           
<CAPTION>
Date of                                                                        Total                                              
Purchase      Company                    Description                         Invoice       Freight      Sales Tax          Net    
- --------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                        <C>                                 <C>            <C>           <C>          <C> 
6/7/93        Sonics & Materials                                             3,209.19        14.19                      3,195.00
6/7/93        Fisher                                                         1,418.28        33.28                      1,385.00
6/29/93       E I Holt Inc.              Desks                               1,236.70        25.00         57.70        1,154.00
7/6/93        E I Holt Inc.              Chairs                              1,722.00                      82.00        1,640.00
7/6/93        E I Holt Inc.              Files                                 312.90                      14.90          298.00
7/13/93       Monroe                     Files                               1,044.75                      49.75          995.00
6/8/93        Dell Direct Sales          486SX/25 Base                       1,545.95        75.00         71.95        1,399.00
6/23/93       Select Sales               Drive External                      1,970.63        10.63                      1,960.00
6/18/93       FTS Systems                Lyopholizer System                 38,605.00                                  22,550.00
                                                                                                                        9,650.00
                                                                                                                        2,675.00
                                                                                                                        3,730.00
6/18/93       Harris Manufacturing                                           7,045.54       140.54                      6,905.00
7/6/93        Cole Parmer                Digistatt Drive                     1,395.00                                   1,395.00
7/6/93        ISCO                       Absorbance Detector                 3,471.87        21.87                      3,450.00
7/6/93        Sonics & Materials         Ultrasonic Processor                3,207.26        12.26                      3,195.00
7/9/93        Pope Scientific            Pressure Vessel                     1,063.00        19.23                      1,043.77
6/30/93       Fisher                     Syringe Pump                        1,675.69        10.69                      1,665.00
6/18/93       Fisher                     Syringe Pump                        1,674.28         9.28                      1,665.00
6/22/93       NESLAB                     RTE-211                             2,345.00                                   2,345.00
6/23/93       McMaster Carr              Lift Table                          1,647.29                                   1,647.29
7/13/93       Sonics & Materials         Ultrasonic Processor                3,209.19        14.19                      3,195.00
7/16/93       Perkin Elmer                                                   1,512.00                                   1,512.00
7/16/93       Perkin Elmer               Thermal analyst system             35,345.41       100.41                     35,245.00
6/23/93       Plastic Structures                                             1,746.00                                   1,746.00
7/22/93       Computerland               Starconnector                         694.17         8.25         33.05          652.87
7/23/93       Millipore                  Powerline Conductivity              8,083.75         8.75                      8,075.00
7/23/93       Micro Video                Various                            15,106.59        12.04                     15,094.55
7/23/93       Sharp                      Copier System                       3,780.00                     180.00        3,600.00
7/26/93       Avnet Computer             Scanner                             1,513.50        35.50                      1,478.00
7/27/93       Fisher Scientific          Circulator                          1,709.33        21.83                      1,687.50
7/29/93       Micro Video                High Resolution Coup                  569.85         4.60                        565.25
8/5/93        Phoenix                    Sliding Microtome                   3,800.00                                   3,800.00
8/31/93       Omega #001423              Function Recorder                   1,586.90        11.90                      1,575.00
8/31/93       VWR #001511                Balance                             2,695.00                                   2,695.00
9/30/93       VWR                        Alarm System                        5,722.04       200.00                      5,522.04

<CAPTION>
                
Date of         
Purchase        Serial No               Model No            
- ----------------------------------------------------        
<S>              <C>                     <C>                 
6/7/93                                   VC-600             
6/7/93                                   04 977 13KM        
6/29/93                                                     
7/6/93                                                      
7/6/93                                                      
7/13/93                                  FR8888             
6/8/93                                                      
6/23/93                                  WT4000DE-0N        
6/18/93          TS049301                                   
                 FD049302                                   
                 VP049305                                   
                                                            
6/18/93          S25C-140156-TC                             
7/6/93                                   G-07522-00         
7/6/93                                   67094D715          
7/6/93                                   VCX-600            
7/9/93                                                      
6/30/93                                  14 831 45          
6/18/93                                  14 831 45          
6/22/93                                  D 115/60           
6/23/93                                  2847T91            
7/13/93                                     VC-680                    
7/16/93                                  NEC4FG             
7/16/93                                  OSC-7 117V         
6/23/93                                                     
7/22/93                                  FARL-202965        
7/23/93                                  WAT007727          
7/23/93                                                     
7/23/93                                  S17800/A12         
7/26/93                                  CG01000            
7/27/93                                  13 874 76X         
7/29/93                                  M21HRP100-NIK      
8/5/93                                                      
8/31/93                                  CT485RS / RD-2010  
8/31/93                                  11275-466          
9/30/93                                  55768-252          
                                                            
                                                  
</TABLE>                                                  
                                                  
<PAGE>   20
                                                            Exhibit A       
                                                            1994 Loan Collateral
<TABLE>

Equipment List Cumulative                                                                                          
<CAPTION>
Date of                                                                        Total                                              
Purchase      Company                    Description                         Invoice       Freight      Sales Tax          Net    
- --------------------------------------------------------------------------------------------------------------------------------

<S>           <C>                        <C>                             <C>              <C>          <C>          <C> 
9/30/93       Edwards                    Lyoflex 08 F/D                    167,007.00                                 167,007.00
8/26/93       Infotech                   Mac Centris 610                     1,583.15        26.00         74.15        1,483.00
8/30/93       Data Comm                  Ethernet Converter                  1,105.65                      52.65        1,053.00
8/30/93       Digital                    DEC pc                              2,637.62         8.67        129.95        2,499.00
8/30/93       Mac Warehouse              Table                                 736.95         3.00         34.95          699.00
9/3/93        Fisher                     Micro Osmette                       3,379.60        29.50                      3,350.10
9/10/93       Jouan                      Centrifuge                          5,897.48        97.48                      5,800.00


              TOTAL                                                      1,020,991.64     8,743.17     12,163.95    1,000,084.52

<CAPTION>
              
Date of       
Purchase      Serial No               Model No
- -------------------------------------------------
            
<S>           <C>                     <C>          
9/30/93                               Z186700  
8/26/93       S13233L7EO4                      
8/30/93                                        
8/30/93                               FR-PCP34 
8/30/93                               INPO272  
9/3/93                                12 827 7 
9/10/93       49308027                         
              
</TABLE>    
<PAGE>   21
                                                            Exhibit A       
                                                            1994 Loan Collateral
<TABLE>
ALKERMES/ACTI FIXED ASSET LIST                                                              
                                                                                            
<CAPTION>
Date of                                                                                                 Total
Purchase      Company                       Description                                   Ref #         Invoice  
- -----------------------------------------------------------------------------------------------------------------
ALKERMES EQUIPMENT
<S>           <C>                           <C>                                          <C>           <C>         
9/27/93       Amicon                        S10 Cartridges & headerkit                   122267         1,945.23   
10/5/93       Amicon                        DC10 pump and reservoir                      122506         8,959.36   
10/13/93      Applied Biosystems            Protein sequencer                            122510        85,725.00   
11/11/93      Avnet                         Fujitsu Scan partner 10                      123807         1,597.36   
12/17/93      Avnet                         Fujitsu scan partner 10                      124548         1,597.36   
10/8/93       Best Power Tech               Uninterruptible power system                 122866         3,067.72   
12/14/93      Boston Ship                   Refrigerator                                 124127           455.00   
10/8/94       Boston Ship Service           Refrigerator / freezer                       121971         1,376.55   
10/25/93      Boston Ship Service           Freezer                                      122364           427.00   
3/1/94        Braintree Scientific          Rodent Guillotine                            126536         1,431.18   
3/22/94       CDW Computer Centers          MAG Innovision                               127195           943.22   
3/29/94       CDW Computer Centers          Western Dig Caviar                           127206           285.28   
1/10/94       CDW Computer Centre           21" colour monitor                           125288         2,289.14   
2/1/94        CDW Computer Centres          Toshiba laptop                               125876         2,447.59   
10/6/93       Comport Consulting            DECPC Mono US                                122540         3,161.03   
9/24/93       Comport Consulting            15" Colour monitor                           122541           531.30   
1/5/94        Comtronics                    Motorola Radius Portable Hand                124794         1,316.50   
9/7/93        Costar Corp                   Cellcube oxygenator, pump, controller        122974        25,929.00   
9/30/93       Costar Corporation            Cart                                         122544         6,780.00   
10/20/93      Costar Corporation            Cellcube                                     122773         2,695.27   
10/18/93      Costar Corporation            Cellcube                                     123276           765.00   
10/25/93      Costar Corporation            CellCube module                              123232         3,084.48   
9/29/93       Coulter Tech Centre           Optical bench, micro volume system           122251        64,650.43   
3/11/94       Data Comm Warehouse           Universal Print Server                       127204           699.00   
11/8/93       Dell USA                      Dell kit performance                         123411           842.65   
10/29/93      Dell USA                      Dimension 466v/XPS medium x 2                123656         7,280.70   
1/18/94       Dell USA                      Dell 466/L base                              125620         3,332.03   
10/28/93      Diatome US                    Diatome knife                                123264         2,400.00   
9/22/93       Eger Engineering Corp         Scotsman Ice Flaker                          121551         1,825.00   
12/8/93       First Source International    16 MB memory kit                             124488           808.00   
1/31/94       First Source International    Memory for toshiba laptop                    125633           246.95   
11/17/93      Fisher Scientific             Histoslide microtome                         123789         5,535.00   
10/19/93      Fisher Scientific             Mettler Balance                              122778         2,865.00   
12/15/93      Fisher Scientific             Micro Centrifuge 13k/m                       124449         1,398.90   
2/8/94        Fisher Scientific             Rotor Horizontal                             125903         2,077.71   
2/2/94        Fisher Scientific             Circ Digital                                 125905         1,405.00   
3/24/94       Fisher Scientific             Centrifuge 10KBR                             127296         4,576.56   
10/31/93      Groen                         Quart kettle                                 123777         2,465.00   
2/22/94       Harvard Apparatus, Inc.       Homeothermic blanket system                  126168         2,589.66   
3/15/94       Hewlett Packard               Amino acid analyser unit                     126734        63,501.70   
9/10/93       Infotech                      CD300 CD ROM                                 121610           817.40   
9/9/93        Infotech                      NEC 3FGE 15" monitor x 8                     121806         5,414.60   
9/23/93       Infotech                      Mac Centris CPU x 2                          122209         3,171.20   
9/27/93       Infotech                      Enet retiming module                         122230           569.95   
        

<CAPTION>  
Date of      
Purchase     Freight   Sales Tax      Net     Serial#          
- -----------------------------------------------------------    
<S>           <C>         <C>       <C>       <C>              
9/27/93         3.23        0.00     1,942.00                  
10/5/93        39.36        0.00     8,920.00                  
10/13/93      445.00        0.00    85,280.00 9208121J         
11/11/93       26.11        0.00     1,571.25 3050070          
12/17/93       26.11        0.00     1,571.25 N/A              
10/8/93       237.97      134.75     2,695.00                  
12/14/93        0.00        0.00       455.00                  
10/8/94         0.00       65.55     1,311.00                  
10/25/93        0.00        0.00       427.00                  
3/1/94         11.18        0.00     1,420.00                  
3/22/94        21.22        0.00       922.00 MH1334009299U    
3/29/94        22.28        0.00       263.00                  
1/10/94        64.19      105.95     2,119.00 26897083         
2/1/94         33.64      114.95     2,299.00 12338401         
10/6/93        22.25      150.53     2,988.25                  
9/24/93        41.00       25.30       465.00                  
1/5/94         25.00       61.50     1,230.00                  
9/7/93          0.00        0.00    25,929.00                  
9/30/93        30.00        0.00     6,750.00                  
10/20/93       27.77        0.00     2,667.50                  
10/18/93        0.00        0.00       765.00                  
10/25/93       24.48        0.00     3,060.00                  
9/29/93       170.43        0.00    64,480.00                  
3/11/94         0.00        0.00       699.00                  
11/8/93         5.00       39.89       797.76                  
10/29/93      150.00      346.70     6,784.00                  
1/18/94        75.00      156.29     3,100.74                  
10/28/93        0.00        0.00     2,400.00 MS6966           
9/22/93         0.00        0.00     1,825.00                  
12/8/93         9.00        0.00       799.00                  
1/31/94         6.50       11.45       229.00                  
11/17/93        0.00        0.00     5,535.00                  
10/19/93        0.00        0.00     2,865.00                  
12/15/93        0.00        0.00     1,398.90                  
2/8/94          0.00        0.00     2,077.71                  
2/2/94          0.00        0.00     1,405.00                  
3/24/94         0.00        0.00     4,576.56                  
10/31/93       50.00        0.00     2,415.00                  
2/22/94         9.66        0.00     2,580.00                  
3/15/94         0.00        0.00    63,501.70                  
9/10/93        11.00       38.40       768.00                  
9/9/93         47.00      255.60     5,112.00                  
9/23/93        17.00      150.20     3,004.00 XB3375VHCN7      
9/27/93         4.00       26.95       539.00                  
                                                     
                                                     
</TABLE>                                                               
                                                     
<PAGE>   22
                                                            Exhibit A       
                                                            1994 Loan Collateral
<TABLE>
ALKERMES/ACTI FIXED ASSET LIST                                                              
                                                                                            
<CAPTION>
Date of                                                                                                 Total
Purchase      Company                       Description                                   Ref #         Invoice  
- -----------------------------------------------------------------------------------------------------------------
<S>           <C>                           <C>                                          <C>           <C>         
9/29/93       Infotech                      Powerbook 180c w/modem                       122259         4,104.45   
9/23/93       Infotech                      Mac Centris CPU  x 2                         122391         3,171.20   
9/9/93        Infotech                      Laserwriter control board  x 2               121814         1,793.40   
11/16/93      Infotech                      Mac Quadra HD  x 2                           123813         4,746.05   
11/19/93      Infotech                      Powerbook 180c w/modem                       123831         2,807.80   
11/29/93      Infotech                      Laserwriter sheet feeder                     123914           422.20   
11/15/93      Infotech                      Laserwriter envel. feeder                    123915           349.10   
11/16/93      Infotech                      MacQuadra HD  x 6                            123940        11,725.00   
11/17/93      Infotech                      Laser pro 630 w/toner ct                     124032         2,067.65   
12/27/93      Infotech                      NEC 3FGE 15" monitor  x 2                    124799         1,357.90   
1/6/94        Infotech                      HP laserjet mx printer                       125229         4,876.20   
1/11/94       Infotech                      MacQuadra HP  x 5                            125254         9,643.35   
1/11/94       Infotech                      Duplex option LJIIISI                        125317         1,716.45   
1/27/94       Infotech                      HP Laserjet printer                          125642         4,802.20   
1/27/94       Infotech                      NEC monitor  x 5                             125643         3,388.75   
2/22/94       Infotech                      Farallon transceiver  x 2                    126195         2,128.70   
3/2/94        Infotech                      Etjerware PB Adaptor                         126531         1,679.50   
3/24/94       Infotech                      Power MAC/Apple Extended Keyboard            126968         1,924.80   
9/23/93       ISCO Inc                      L C System 125                               122257         5,884.20   
1/14/94       Kopf Instruments              Micro injection unit                         125135         2,200.80   
10/15/93      Kramer Scientific Corp        Large Boomstand/Base/Ojb chair               123278         2,584.35   
10/14/93      Kramer Scientific Corp        Near coax vert illum / DB & acces.           123277         2,058.05   
2/11/94       Lab Craft Corporation         HPLC cart, modified                          125751         1,580.15   
12/3/93       MacWarehouse                  4 meg simms poweruser                        124202           541.40   
11/15/93      MacWarehouse                  CD-Rom Upgrade                               123893           208.95   
2/2/94        MacWarehouse                  Diskdrive, transl, & recharging system       125816         1,450.85   
3/1/94        Mac Warehouse                 Supra Fax Modem                              126528           568.90   
2/16/94       Millipore Corporation         Lamp for 470 fluorescence detector           126199         1,318.00   
12/22/93      Millipore Corporation         Lamp for 470 fluorescence detector           124587         1,318.00   
12/29/93      Millipore Corporation         2020 server A/O, VMS/PW & acces.             124775        71,226.08   
3/2/94        Millipore Corporation         Custom 2020 vms/pv server                    127523        32,900.00   
3/21/94       Millipore Corporation         470 Lamp ASSY Ref                            127424         1,384.00   
9/13/93       Network Resource Corp         Hub1 + 24-port w/BNC                         121800         3,449.60   
12/31/93      P C Connection                HP Laserjet printer                          124613         2,182.54   
2/2/94        P C Connection                Farallon etherware PC                        125807           203.95   
9/30/93       Perspective Biosystems        Biocad work Station/HP Deskjet               123127        69,500.00   
3/6/94        San Jose National Bank        HUB 10-Base/Localtalk/Patch Panel            126881         4,490.35   
3/10/94       Security Photo Corp           Single Punch Die Cutter/Laminator...         126905         2,060.10   
11/11/93      Select Sales                  AST Bravo / WYSE monitor                     123836           547.88   
3/2/94        Shiva Corporation             Landrover for Apple Remote                   126703         2,632.95   
3/7/94        Staples                       IBM Wheelwriter                              126642           524.99   
9/21/93       Stoelting Co                  Stereotaxic instrument                       122042         2,426.76   
1/20/94       Stoelting Co                  MacLab/8 system                              125634         8,931.00   
1/27/94       Stoelting Co                  Pressure transducer                          125635         2,261.54   
11/19/93      Technology Works              SIMM, 1Mx32 & 2Mx32                          123862         2,919.00   

<CAPTION>
Date of      
Purchase     Freight   Sales Tax        Net   Serial#       
- ----------------------------------------------------------- 
<S>             <C>         <C>     <C>       <C>                                                        
9/29/93          50.00      195.45   3,859.00 FC321NFN797    
9/23/93          17.00      150.20   3,004.00 XB337SWCKCN7   
9/9/93          190.00       85.40   1,518.00                
11/16/93         20.00      225.05   4,501.00 FC#450J51CH    
11/19/93         69.00      132.80   2,606.00 FC320P75797    
11/29/93         19.00       19.20     384.00 FC320P75797    
11/15/93         11.00       16.10     322.00 FC320P75797    
11/16/93         70.00      555.00  11,100.00 FC3450H01CH    
11/17/93         17.00       97.65   1,953.00 F132711L108    
12/27/93         16.00       63.90   1,278.00                
1/6/94           84.00      228.20   4,564.00                
1/11/94          60.00      456.35   9,127.00 FC3501PN1CH    
1/11/94          27.00       80.45   1,609.00                
1/27/94          10.00      228.20   4,564.00                
1/27/94          34.00      159.75   3,195.00                
2/22/94          14.00      100.70   2,014.00                
3/2/94           10.00       79.50   1,590.00                
3/24/94          18.00       90.80   1,816.00 M2196LL/AA     
9/23/93           0.00      280.20   5,604.00                
1/14/94          12.80        0.00   2,188.00                
10/15/93         26.00        0.00   2,558.35                
10/14/93         26.00        0.00   2,032.05                
2/11/94          87.50        0.00   1,492.65                
12/3/93           3.00       29.40     509.00                
11/15/93          0.00        9.95     199.00                
2/2/94            3.00       68.95   1,378.90                
3/1/94            0.00        0.00     568.90                
2/16/94           5.00        0.00   1,313.00                
12/22/93          5.00        0.00   1,313.00                
12/29/93         46.08        0.00  71,180.00                
3/2/94            0.00        0.00  32,900.00                
3/21/94           5.00        0.00   1,379.00                
9/13/93          35.00      162.60   3,252.00 44-05247290    
12/31/93          5.00      103.69   2,073.85                
2/2/94            5.00        0.00     198.95                
9/30/93           0.00        0.00  69,500.00                
3/6/94           31.00      212.35   4,247.00                
3/10/94          87.00       98.10   1,875.00                
11/11/93         12.38       25.50     510.00                
3/2/94            9.00      124.95   2,499.00 LE110561       
3/7/94            0.00       25.00     499.99                
9/21/93          31.76        0.00   2,395.00                
1/20/94          51.00        0.00   8,880.00                
1/27/94          11.54        0.00   2,250.00                
11/19/93          0.00      139.00   2,780.00                
                                                             
</TABLE>                
                                                  
<PAGE>   23
                                                            Exhibit A       
                                                            1994 Loan Collateral
<TABLE>
ALKERMES/ACTI FIXED ASSET LIST                                                              
                                                                                            
<CAPTION>
Date of                                                                                                 Total
Purchase      Company                       Description                                   Ref #         Invoice  
- -----------------------------------------------------------------------------------------------------------------
ALKERMES EQUIPMENT
<S>           <C>                           <C>                                          <C>           <C>         
9/30/93       USA Flex                      CD-ROM Bare Drive                            122207           593.95   
9/20/93       VWR                           Electronic Microbalance                      122016         6,950.00   
2/17/94       VWR Scientific                Filtration unit - hazard waste               126254         1,274.72   
2/24/94       VWR Scientific                Gravity feed - liquid nitro. vacuum pump     126398         1,108.82   
FY 1995:  
6/22/94       AJ Buck                       Inlet/Outlet Adapter                         131877           180.62   
6/10/94       AJ Buck                       Fluotec Mark III Vaporizer                   131878         4,135.14   
8/26/94       Beckman                       Ultracentrifuge 60HZ                         131956        38,476.50   
8/10/94       Business Interiors            Lateral File 4 Shelf                         131027           791.62   
5/17/94       CDW Computer Centers          Mag Innovision                               128916           943.22   
6/3/94        Comport Consulting Gp         Seagate disk drive w/bkts                    129620         1,653.75   
4/12/94       CompUSA                       Compact lte lite/25                          127562         2,003.50   
4/21/94       Computerland                  HP Jet store 5000                            128232         1,636.36   
7/15/94       Dell Computer                 16MB.  RAM                                   130577           799.00   
7/19/94       Dell Computer                 SIMM,8MB. RAM                                130614         1,206.00   
7/26/94       Dell Computer                 16MB. RAM                                    130616           807.00   
10/12/94      Dell Direct Sales             Dell 590/XL Base w/256K                      133272         2,793.70   
3/29/94       Dell USA                      Dell 466/L Base                              129190         2,124.30   
11/28/94      Digital Equipment             Celebris FP 590 System                       134359         3,924.55   
4/13/94       Digitial                      Dec PC plus acces                            129192         1,717.40   
4/25/94       E I Dupont                    Sorvall Centrifuge                           128022        15,000.00   
5/16/94       F&P Engineering Corp          Air system equipment                         128652         5,828.00   
8/9/94        Fisher Scientific             Mettler Analytical Balance AE100             131349         1,822.84   
8/29/94       Fisher Scientific             Leica BA 120 Microscope                      131834         1,040.00   
10/21/94      Fisher Scientific             AE 100 Balance                               133461         1,820.00   
11/11/94      Fisher Scientific             115V EL Balance                              134034         4,265.00   
4/29/94       Geneva                        Solomon computer purchase                    127675           767.55   
5/3/94        Geneva                        Solomon computer purchase                    127675         3,070.20   
5/20/94       Geneva                        Solomon computer purchase                    127675         5,433.75   
4/26/94       Geneva                        Solomon computer purchase                    127675        11,733.75   
5/13/94       Geneva                        Solomon computer purchase                    127675        18,945.15   
5/24/94       Geneva                        Solomon computer credit                      127675        -5,250.00   
5/23/94       Geneva                        Solomon computer credit                      128785        -5,250.00   
4/15/94       Hewlett Packard               Single instrumt 2D chemstation + acces       129193        11,014.00   
11/15/94      Hewlett Packard               1090 HPLC Sys.                               134173         3,833.00   
9/26/94       IKA-Works, Inc.               Flow Chamber                                 132711         2,284.36   
10/21/94      Imaging Research              MCID Turnkey System                          133637        21,825.00   
6/10/94       Infotech                      Multiscan 17" display                        129343         1,015.55   
6/9/94        Infotech                      Powerbook 540 etc.                           129344         7,265.00   
6/10/94       Infotech                      pwrbk w/modem etc                            129626         1,011.50   
6/15/94       Infotech                      pwrbk w/modem etc                            129381         2,977.00   
6/13/94       Infotech                      Laser jet M Plus                             129559         2,172.25   
6/21/94       Infotech                      HP Paper Tray Sheet                          129839           269.05   
7/12/94       Infotech                      Powerbook Duo DOC II                         130332         3,596.80   
7/31/94       Infotech                      MAC Color Classic 4/80                       129889           701.80   
          
<CAPTION>
Date of    
Purchase   Freight   Sales Tax       Net    Serial#      
- ---------------------------------------------------------
<S>          <C>        <C>       <C>       <C>                 
9/30/93       14.95        0.00       579.00 3660C17599  
9/20/93        0.00        0.00     6,950.00 30          
2/17/94        0.00        0.00     1,274.72             
2/24/94        0.00        0.00     1,108.82             
FY 1995:                                                 
6/22/94                                                  
6/10/94                    8.60       172.02             
8/26/94        0.00      207.19     3,927.95             
8/10/94        0.00                38,476.50 L7Y94K08    
5/17/94        0.00       37.70       753.92             
6/3/94        21.22                   922.00 14382       
4/12/94                   78.75     1,575.00 ST12400N    
4/21/94       17.00      126.50     1,860.00             
7/15/94       30.62       77.92     1,527.82             
7/19/94                               799.00             
7/26/94        8.00                 1,198.00             
10/12/94       8.00                   799.00             
3/29/94                             2,793.70             
11/28/94                            2,124.30             
4/13/94       70.00      183.55     3,671.00             
4/25/94       50.00       79.40     1,588.00 94049933B-A 
5/16/94                            15,000.00 9301487     
8/9/94                              5,828.00             
8/29/94                             1,822.84             
10/21/94                            1,040.00             
11/11/94                            1,820.00             
4/29/94                             4,265.00             
5/3/94         0.00       36.55       731.00             
5/20/94        0.00      146.20     2,924.00             
4/26/94        0.00      258.75     5,175.00             
5/13/94        0.00      558.75    11,175.00             
5/24/94        0.00      902.15    18,043.00             
5/23/94                 -250.00    -5,000.00             
4/15/94                 -250.00    -5,000.00             
11/15/94                           11,014.00 49120       
9/26/94      800.00                 3,033.00             
10/21/94      10.36                 2,274.00             
6/10/94      162.00                21,663.00 AOO165272   
6/9/94        17.00       47.55       951.00 S14181CP1XX 
6/10/94       33.00                 7,232.00 M3120LL/A   
6/15/94       14.00       47.50       950.00 M312OLL/A   
6/13/94       17.00                 2,960.00 M27098LL/A  
6/21/94       25.00      102.25     2,045.00 JPFG004483  
7/12/94       16.00       12.05       241.00             
7/31/94       31.00      169.80     3,396.00             
              13.00       32.80       656.00 M1602LL/A   
                                                         
            
</TABLE>                                               
                                               
<PAGE>   24
                                                            Exhibit A       
                                                            1994 Loan Collateral
<TABLE>
ALKERMES/ACTI FIXED ASSET LIST                                                             

<CAPTION>
Date of                                                                                                 Total
Purchase      Company                       Description                                   Ref #         Invoice  
- -----------------------------------------------------------------------------------------------------------------
ALKERMES EQUIPMENT
<S>           <C>                           <C>                                          <C>          <C>         
7/28/94       Infotech                      Multi Scan 17" Display                       131376         1,014.55   
9/2/94        Infotech                      Powerbook 540 12/240 w/modem                 132531         3,510.00   
10/18/94      Infotech                      Seagate 4.2GB SCSI  2 HD DR.                 133232         2,824.25   
11/11/94      InfoTech                      MAC IISI NU BUS Adapter                      134044           153.65   
11/17/94      Infotech                      Multiscan 17"                                134169         1,019.55   
7/20/94       IKA Works                     Revolution Counter,115V                      130336         2,698.06   
11/7/94       Johnson & Johnson             Dinamap Portable Monitor                     134339         3,151.00   
9/20/94       Kramer Scientific             Cryocut 3000                                 132689        30,170.00   
9/28/94       Lechmere                      Lab Refrigerator                             132970           955.48   
6/23/94       McMaster-Carr                 Portable dehumidifier                        129966         2,034.62   
8/10/94       Millipore Corporation         Lamp                                         131107         1,379.00   
8/4/94        Millipore Corporation         470 Lamp                                     131643         1,384.00   
7/27/94       Millipore Corporation         Trade in Credit                              131723          -500.00   
5/5/94        Millipore Corporation         Trade in Credit                              129120          -500.00   
6/17/94       Millipore Corporation         Fluorometer 16ul cell                        129471         9,007.16   
6/30/94       Millipore Corporation         Credit for traded-in equipment               130160       -21,000.00   
5/23/94       Millipore Corporation         Lamp Assy                                    128448         1,384.00   
8/17/94       Milton Roy                    PS Bucket                                    131590         2,477.48   
11/11/94      NESLAB Instruments, Inc.      Cryotrol, 115V.                              134033         1,427.00   
10/4/94       New England Systems           Gandalf Lanline                              133101         2,483.50   
6/17/94       New Wave Technologies         M/F Ext 4MB                                  129486         3,163.03   
4/21/94       Patterson-Kelley              16 QT x-flow blendmaster                     127974         8,894.13   
6/30/94       Perseptive                    RPM Upgrade kit                              130145         6,550.00   
3/31/94       Perseptive                    POROS 50 A 300ml bulk pack                   128002         7,505.00   
11/28/94      Precision Systems, Inc.       Extraction Tank,Cooling Tank                 134457         2,452.60   
5/24/94       Select Sales                  Card image accel for HP printer              129005         2,145.68   
7/31/94       Vanstar Corporation           Prolinea MT 4/66 8MB RAM                     130561         4,016.57   
5/11/94       VWR Scientific                Titrator Electrode                           128491         1,013.46   
10/24/94      Waters Corp                   717 Heater/Cooler Option                     133539         3,575.00   
11/8/94       Waters Corporation            474 Scan Fluorometer                         133961         9,507.16   
                                                                                                      ----------
                SUBTOTAL ALKERMES EQUIPMENT                                                           909,548.73   
                                                                                                      ----------
ACTI EQUIPMENT
          
FY 1994:  
3/25/94       Bio-Rad Laboratories          Plate Washer                                   2686         5,260.00   
1/10/94       Cole Parmer Instr Co          Rotatest shaker                                2301         2,013.17   
3/25/94       Eastern Bakers Supply Co      Dough mixer w/ss bowl                          2693         2,715.00   
9/13/93       Millipore Corp                Tunable detector W/IEEE                        1648         7,556.27   
3/24/93       Omni International            Homogenizer                                     760         2,575.00   
10/21/93      Silverson Machines            Mixer with digital tacometer                   1826         2,398.98   
FY 1995:  
3/28/94       Cole Parmer                                                                  2654         1,017.67   
8/11/94       Fisher                        Interchangeable Drum 16MM                      3135           285.00   
8/9/94        Fisher                        Tissue Culture Roller Drum                     3136         1,055.00   
11/8/94       Pacific Venture               Equipment Lease 8142                         133989        13,206.00   
                                                                                                      ----------
                SUBTOTAL ACTI EQUIPMENT                                                                38,082.09   
                                                                                                      ----------
              TOTAL EQUIPMENT                                                                         947,630.82   
                                                                                                      ==========

<CAPTION>

Date of   
Purchase       Freight   Sales Tax         Net       Serial#         
- ----------------------------------------------------------------    
<S>           <C>         <C>           <C>        <C>              
7/28/94          16.00       47.55          951.00 S14270231XX      
9/2/94           19.00                    3,491.00 FC4348T72S7      
10/18/94         26.00      133.25        2,665.00                  
11/11/94         14.00        6.65          133.00                  
11/17/94         21.00       47.55          951.00 S14390UKIXX      
7/20/94          12.06                    2,686.00                  
11/7/94          26.00                    3,125.00                  
9/20/94         220.00                   29,950.00                  
9/28/94                      45.50          909.98                  
6/23/94          39.00                    1,995.62                  
8/10/94                                   1,379.00                  
8/4/94            5.00                    1,379.00                  
7/27/94                                    -500.00                  
5/5/94                                     -500.00                  
6/17/94           7.16                    9,000.00                  
6/30/94                                 -21,000.00 MX3MM3822M       
5/23/94           5.00                    1,379.00                  
8/17/94                     117.98        2,359.50                  
11/11/94         47.00                    1,380.00                  
10/4/94          19.50                    2,464.00                  
6/17/94          11.03                    3,152.00                  
4/21/94                     423.53        8,470.60                  
6/30/94           0.00        0.00        6,550.00                  
3/31/94           5.00                    7,500.00                  
11/28/94                                  2,452.60                  
5/24/94          11.68                    2,134.00                  
7/31/94          35.78      192.46        3,788.33                  
5/11/94                                   1,013.46                  
10/24/94          5.00                    3,570.00                  
11/8/94           7.16                    9,500.00                  
              ------------------------------------                  
              4,799.96    9,556.83      895,191.94                  
              ------------------------------------                  
ACTI EQUIPMENT                                                     
FY 1994:         
3/25/94          17.00        0.00        5,243.00                  
1/10/94          18.17        0.00        1,995.00                   
3/25/94           0.00        0.00        2,715.00                  
9/13/93           6.27        0.00        7,550.00                  
3/24/93           0.00        0.00        2,575.00                  
10/21/93         13.98        0.00        2,385.00 10649/L4R-T      
FY 1995:          
3/28/94           8.67        0.00        1,009.00                  
8/11/94           0.00        0.00          285.00                  
8/9/94            0.00        0.00        1,055.00                  
11/8/94           0.00        0.00       13,206.00                  
              ------------------------------------                  
                 64.09        0.00       38,018.00                  
              ------------------------------------                  
              4,864.05    9,556.83      933,209.94                  
              ====================================                  
</TABLE>                                                                    
<PAGE>   25

<TABLE>
ALKERMES/ACTI FIXED ASSET LIST                                                              Exhibit A
                                                                                            1994 Loan Collateral
<CAPTION>
Date of                                                                                                 Total
Purchase      Company                       Description                                   Ref #         Invoice  
- -----------------------------------------------------------------------------------------------------------------
ALKERMES EQUIPMENT
<S>           <C>                           <C>                                          <C>          <C>         
ALKERMES F&F
FY 1994:
12/30/93      Business Interiors            Guest chairs  x 4                            124812           863.94 
12/17/93      Business Interiors            Office furniture - various                   124813         5,255.26 
1/5/94        Business Interiors            Keyboard trays/Lateral Files                 125168           788.72 
1/31/94       Business Interiors            Keyboard tray                                125366            71.25 
1/31/94       Business Interiors            File cabinet                                 125659           323.11 
1/12/94       Business Interiors            Hon Desk Chair                               125676           321.42 
2/23/94       Business Interiors            Table/Desk/File Cabinet                      126205           878.34 
2/14/94       Business Interiors            Hon Guest Chair                              126455           215.99 
3/3/94        Business Interiors            Desk, table                                  126987         1,573.85 
FY 1995:
4/15/94       Corp Furnish & Design         5 drawer lateral file                        127911           686.89 
5/31/94       Corp Furnish & Design         Triton Stool/Task Chair                      129392         2,083.20 
7/31/94       Corp Furnish & Design         Double Door Veneer Cabinet                   130871           922.95 
9/30/94       Corp Furnish & Design         Anthro 2 Posture Task Chair                  132415           507.15 
9/30/94       Corp Furnish & Design         Letter File w/lock                           132816           215.88 
9/30/94       Corp Furnish & Design         Ergonomic Task Chair                         132817           689.85 
10/7/94       Corp Furnish & Design         30" Wide Lateral File                        133261         1,688.40 
                                                                                                      ----------
                SUBTOTAL ALKERMES F&F                                                                  17,086.20 
                                                                                                      ----------

              GRAND TOTAL F/A                                                                         964,717.02 
                                                                                                      ==========

<CAPTION>
Date of                                                                            
Purchase        Freight     Sales Tax       Net       Serial#
- -------------------------------------------------------------
ALKERMES EQUIPMENT
<S>             <C>        <C>            <C>         <C> 
ALKERMES F&F  
FY 1994:      
12/30/93            0.00       41.14          822.80 
12/17/93            0.00      250.25        5,005.01 
1/5/94              0.00       37.56          751.16 
1/31/94             0.00        3.39           67.86 
1/31/94             0.00       15.39          307.72 
1/12/94             0.00       15.31          306.11 
2/23/94             0.00       41.83          836.51 
2/14/94             0.00       10.29          205.70 
3/3/94              0.00       74.95        1,498.90 
FY 1995:                                             
4/15/94             0.00       32.71          654.18 
5/31/94             0.00       99.20        1,984.00 
7/31/94             0.00       43.95          879.00 
9/30/94             0.00       24.15          483.00 
9/30/94             0.00       10.28          205.60 
9/30/94             0.00       32.85          657.00 
10/7/94             0.00       80.40        1,608.00 
                ------------------------------------   
                    0.00      813.65       16,272.55 
                ------------------------------------   
                                                     
                4,864.05   10,370.48      949,482.49 
                ====================================   
                  
</TABLE>    
<PAGE>   26
                                                                      Exhibit A
<TABLE>
                                       SUPPLEMENTAL EQUIPMENT LIST                                  1994 Loan Collateral



<CAPTION>
ALKERMES/ACTI FIXED ASSET LIST

Date of                                                                       Total
Purchase    Company                   Description                    Ref #   Invoice  Freight  Sales Tax  Net
- -----------------------------------------------------------------------------------------------------------------------
Alkermes F&F


<S>         <C>                       <C>                                  <C>        <C>      <C>        <C>       
12/20/94    CIBA Corning              S/A M238 B/G W/Cal Gas                9,536.20   86.20   450.00      9,000.00
12/27/94    Crimson Tech              Polaroid Slidemaker                   1,595.00    0.00     0.00      1,595.00
1/13/95     Fisher Scientific         Maxima vacuum pump model D8C          1,480.00    0.00     0.00      1,480.00
12/22/94    Harvard Apparatus         SS Cage Rack                          2,068.60   43.60     0.00      2,025.00
12/12/94    Infotech                  Powerbook                             6,082.70   41.00   287.70      5,754.00
12/30/94    Kaye Instruments, Inc.    Validator Mainframe                  24,343.00    0.00     0.00     24,343.00
1/17/95     Martell Associates        Rannie 8.30 H Mini-Lab                4,816.66    0.00     0.00      4,816.66
12/8/94     Terra Universal, Inc.     Work Station                          1,562.00    0.00     0.00      1,562.00
                                                                           --------------------------------------------
                                                                           51,484.16  170.80   737.70     50,575.66
                                                                           --------------------------------------------
                                                                                                       
</TABLE>

<PAGE>   27
<TABLE>

<CAPTION>

EQUIPMENT LIST                                                                 EXHIBIT A
DATE OF                                                                        1994 LOAN COLLATERAL
PURCHASE    COMPANY               DESCRIPTION                  AMOUNT      SERIAL #         MODEL #
- -------------------------------------------------------------------------------------------------------------

<S>         <C>                   <C>                         <C>          <C>              <C>
2/25/88     Atlantic Nuclear      Geiger Counter               1,190.00
4/12/88     Walker Power          Computer                     2,312.30
4/29/88     Phil Friden                                        2,283.00
                                  Frig. Freezer                            70BL3481         UF21D
                                  Frig. Freezer                            915B             CSX22G
                                  Microwave                                8708054650       RS458P
                                  Microwave                                FG72224092       MW1500XS-O
                                  Frig.                                    87300424         2001AOU
5/3/88      N.E. Scientific       Elec. Pwr. Sply              2,696.00    585-587-589      102
5/19/88     Fisher                                             5,235.00
                                  CO2 Incubator                            887229536AR      5300
                                  Oven                                                      526G
5/24/88     ISCO                  Cygnet                         895.00    15870            Cygnet
5/24/88     DuPont                Microspin                    1,116.00    20093            24
5/25/88     NECS                  Mita Copier                  4,277.70    36040891         DC-2055
6/14/88     Puffer Hubbard        Freezer                     11,322.50    RX6224-1E        IUF8520002
6/14/88     Rainin                Pipettes                     3,313.01    E14782A          P-1000, 200, 20
6/14/88     Baker                 Hood                         4,314.32    SL32365          SG400
6/16/88     Wesco                 Regulator                      700.00    885001           402-1331
6/17/88     Beckman                                           26,745.00
                                  Scin. Counter                            701375           LS1701
                                  Spectrophoto.                            4291534          DU65
6/21/88     New Brunswick         Incubator                   14,042.78    781105730        G-25
6/24/88     PSI                   Furniture                   27,837.39
6/24/88     Fisher                Hot Plates                  17,943.71                     O103
                                  Centrifuge                               200157
                                  Microcentrifuge                          12195            54122-362801
                                  Incubator                                181              626
                                  Freezer Dryer                            178728           77510
                                  Vortex Genies                            2-151680         G-560
                                  Orion pH Met.                            64992            611
                                  H20 Baths                                27AW-1           182
                                  Vac. Pumps                               122298           1402B-01
                                  Mettler Bal.                             675627,G37728    PM2000, AE100
                                  Ohaus Balance                            25722            HTB
                                  H20 Bath                                 27AW-12          185
6/24/88     JMI                   N2 Container                 1,050.75    ATA88D182        XC47/11
7/13/88     AMSCO                 Installation                 1,410.00
7/13/88     Applied Biosys.       DNA Synthesiz.              26,442.25    803546           381A
7/13/88     Beckman               Centrifuge                  26,881.00    5266, 65         J2-21
7/13/88     Beckman               Ultracen. Rotor              7,250.00    4241             SW28
7/13/88     DuPont                Microspin                    1,348.00    20071            24S
7/13/88     Pharmacia             FPLC                        19,969.95
7/13/88     Beckman               Ultracentrifuge             29,112.97    55D836           L755
7/28/88     Beckman               Gamma Counter               37,560.90    8012027          5500B
7/28/88     Fisher                CO2 Incubator                4,803.00    288M068228A      5300
7/28/88     JMI                   N2 Container                 4,665.00    DGA88D108        XLC440
7/28/88     NECS                  Fax Machine                  2,105.00    1040439          F-30
7/28/88     NE Cryogenics         CO2                          1,382.00                     231N122258
8/12/88     Baker                 Hood                         4,314.32    SL32914V         SG400

</TABLE>

<PAGE>   28

<TABLE>

<CAPTION>

EQUIPMENT LIST                                                                  EXHIBIT A
DATE OF                                                                        1994 LOAN COLLATERAL
PURCHASE    COMPANY               DESCRIPTION                  AMOUNT      SERIAL #         MODEL #
- -------------------------------------------------------------------------------------------------------------

<S>         <C>                   <C>                         <C>          <C>              <C>
8/12/88     PSI                   Furniture                    2,074.40
9/8/88      Beckman               Bucket Set                   4,190.00
9/8/88      Compuadd              Computer                     3,248.00    88063199
9/8/88      Donsanto              Microscope                  11,192.22
9/8/88      DuPont                Centrifuge                   6,871.46    8802000
9/22/88     Pharmacia             P3 Pump                      1,347.30
9/22/88     PSI                   Furniture                    1,377.79
10/18/88    Fisher                Mino. Cryostat               7,633.48    24880062
10/18/88    Flow Labs             Multiskan                   10,000.00
10/18/88    Gilson                Micro. Collect.              1,295.00    128H8348
10/25/88    Boston Ship           Frig. Freezer                  455.00                     UF2D
11/1/88     PSI                   Furniture                    1,415.93
11/1/88     Donsanto              Microscope                  15,494.24
11/1/88     Baker                 Hood                         4,471.00    SL-33600V        SG-400
11/21/88    Baker                 Hood                         4,471.02    SL-33593V        SG-400
11/21/88    Fisher                Circular Bath                1,155.60    882370           900
12/8/88     Dictronics            Dictaphone                     450.00    83103509         TRC5200
12/8/88     PSI                   Chairs                         226.65
12/8/88     Pharmacia             Mul. Elec. Unit              3,301.50
1/6/89      Isco, Inc.            UA-5 Recorder                3,690.00    660940760
1/10/89     Tech Computer         Mac Computers               10,006.00    F851D6W          SE HD20
1/25/89     Pharmacia             P-3 Pump                     1,347.71    116990
2/14/89     Beckman               Rack System                  2,643.27    7031375          LS1701
2/14/89     Emdie                 Tail Flick Apparatus         2,095.00                     TF-6
3/3/89      Donsanto              Diaphot Attachments          3,143.64
3/14/89     Forest City           Conference Table             1,150.00
3/23/89     Tech Computers        Mac Computer                 5,784.45    F909R3           SE 30/80
3/27/89     Am. Instrument        Centrifuge                   2,500.00                     TJ6R
3/27/89     Bellco Glass          Rocker Platform                537.15    SBRB5720
3/27/89     Hewlett Packard       HP Autosampler               7,332.00    2813G00292       HP 1050
3/28/89     PSI                   Chairs                       1,533.00
3/29/89     Hoeffer               Cell Unit                      910.00
4/25/89     Am. Instrument        Microscope                   1,700.00                     CK1
4/25/89     AT&T                  Phones                       1,420.00
4/25/89     AT&T                  Phones                         347.30
4/25/89     Baker Company         Cageguard                    5,995.00    CG-125
4/25/89     Fisher Scientific     Vacuum Pump                    784.00
4/25/89     Gilson Medical        Microfractionator            1,295.00    128A9047         FC80K
4/26/89     NECS                  Sorter & Cabinet             1,295.00    36040891         MT10232544
4/26/89     NE Cryogenics         CO2 Tank                       620.00
4/26/89     Stoelting             Halothane Scavenger          1,281.52                     1825TC
4/26/89     Tech Computer         Mac SE HD20                  3,910.50    F911AF8
4/26/89     University Stationery Overhead Projector             414.92
4/26/89     Equitech Leasing                                     640.00
5/4/89      Bernard Malfroy       Fax Machine                  1,298.00
5/11/89     Fisher Scientific     Water Bath                     706.58
5/18/89     Tech Computers        Mac SE                       3,603.00
5/30/89     PSI Corporate         Chairs                       3,103.00
6/12/89     Tech Computers        Mac SE                       3,240.00
6/16/89     VWR Scientific        Mechanical Installation      7,200.00
6/16/89     PSI Corporate         Chairs                         452.00
7/21/89     Omni Int'l            Omni Mixer                   2,633.00
8/10/89     Katz Wheeler          Mac SE                       1,850.00
8/10/89     Wheeler               Mac SE                       1,850.00

</TABLE>

<PAGE>   29

<TABLE>

<CAPTION>

EQUIPMENT LIST                                             EXHIBIT A
DATE OF                                                    1994 LOAN COLLATERAL
<S>         <C>                   <C>                        <C>          
8/22/89     Hewlett Packard       HPLC System                  3,850.00
8/28/90     Margolis & Fishman    Sofa, Chairs                 1,719.67
8/29/89     PSI Corporate         File Cabinets                  668.20
8/29/89     Fisher Scientific     Vacuum Pumps                   977.29
9/15/89     Cryomed               CMR-3500                     1,790.00
9/18/89     Boston Ship           Refrigerator                   565.95
9/20/89     Hewlett Packard       HPLC System                 34,430.00
10/2/89     Hewlett Packard       HPLC System                 11,232.00
10/2/89     VWR Scientific        Pump, Cabinet                1,864.12
10/4/89     Harvard               NMR Spectrometer            12,000.00
10/10/89    J&S Medical           Semi-Auto Analyzer           1,250.00
10/13/89    Fisher Scientific     Vacuum Pumps                 1,279.20
11/2/89     J&S Medical           Semi-Auto Analyzer           1,250.00
11/3/89     PSI Corporate         Chairs, File Cabinets        1,888.00
11/9/89     Tech Computer         Ultradrive                     699.00
11/16/89    Goldstein Office      Office Furniture               250.00
11/22/89    Goldstein Office      Office Furniture               686.70
11/27/89    PSI Corporate         File Cabinets                1,130.20
12/18/89    Kupf Instruments      Microinjection Unit          3,685.00
12/18/89    Fisher Scientific     Rotary Evaporator            1,863.00
12/18/89    Tech Computer         Mac SE                       2,807.60
12/18/89    PSI Corporate         File Cabinets                1,556.50
1/8/90      Beckman Instruments   LS500T                       3,142.00
1/8/90      AIE                   Incubator                    1,655.91
1/9/90      GBC                   Binding Machine              1,303.00
1/9/90      PSI Corporate         File Cabinets                1,040.65
2/21/90     Tech Computer         Mac SE                       2,943.00
3/16/90     PSI Corporate         File Cabinets                  659.10
3/27/90     GBC                   Upgrade Bndg Mach.             575.50
4/6/90      Hewlett Packard       Upgrade HPLC System          1,685.90
4/6/90      IITC                  Model 45 Chart Recorder      2,664.10
4/13/90     Varian Instrument     NMR                          9,721.50
4/25/90     IITC                  Blood Pressure System        3,370.00



5/14/90     Beckman               Scintillation Counter       14,781.58
            Beckman               Credit For Rack             -4,508.92
8/21/90     Tech Computer         Imagewriter                  2,925.00
8/21/90     Tech Computer         Mac SE                       2,239.00
8/21/90     Tech Computer         Mac SE Upgrade                 440.00
9/7/90      Tech Computer         GCC Ultra Drive              1,298.00
12/12/90    GF Office Furniture   File Cabinets                  993.20
12/12/90    Tech Computer         Mac Classic                  1,390.00
12/12/90    Tech Computer         GCC Ultra Drive                599.00
12/27/90    Hewlett Packard       HP1050                       7,227.00
1/2/91      Laser                 Desk/Partitions                250.00
1/15/91     Applied Bio           HPLC                        20,006.75
1/15/91     Applied Bio           HPLC                           572.00
1/15/91     Rainin                HPLC                         2,815.00
1/15/91     GF Office Furniture   File Cabinets                  334.10

3/31/91     TOTAL
</TABLE>

<PAGE>   30

<TABLE>

<CAPTION>

EQUIPMENT LIST                                             EXHIBIT A
DATE OF                                                    1994 LOAN COLLATERAL
<S>         <C>                   <C>                         <C>          
5/30/91     Tech Computer         Mac Classic                  7,665.00
5/30/91     Tech Computer         Memory Upgrade                 280.00
5/30/91     AT&T Credit           Phone                          330.70
6/4/91      AT&T                  Merlin (Phone)                 372.75
6/5/91      Union Office          Table & Chairs                 850.00
6/17/91     Tech Computer         Mac Classic & Printer        7,307.00
6/18/91     Union Office          Table & Chairs                 795.00
6/20/91     Fisher                Balance                      6,887.09
6/20/91     Office Pavilion       Office Set-up                9,259.97
6/24/91     American Express      Microwave/Refrig               325.46
6/25/91     D. Walsh              Table                           99.99
6/27/91     Office Pavilion       Panels/Table                 2,108.62
6/28/91     Tech Computer         Memory Upgrade                 390.00
7/11/91     Tech Computer         Mac Classic                  2,720.00
7/17/91     Office Pavilion       Chair/File                   1,074.50
7/22/91     Forma Scientific      Incubator                    4,890.00
7/23/91     Tech Computer         Mac LC                       3,206.00
7/25/91     Savant                SpeedVac                     3,024.00
7/25/91     Dictronics            FAX Machine                  2,600.00
7/29/91     D. Walsh              Typewriter                     226.56
7/31/91     Dynatech              Luminometer                 29,949.80
7/31/91     JLS-Tech HD           Hard Disk                     -140.00
8/2/91      Office Pavilion       Chair/File Cabinet           1,128.23
8/8/91      Beckman               Radio. Detector             14,365.00
8/9/91      Savant                SpeedVac                     1,767.80
8/14/91     IET, Ltd.             Centrifuge                   3,322.20
8/16/91     IET, Ltd.             Peptide Synthesizer         19,500.00
8/16/91     IET, Ltd.             Peptide Synthesizer         19,500.00
8/24/91     Gill Fishman          Office Sign                      0.00
8/29/91     Tech Computer         Modem                          290.00
8/29/91     Tech Computer         Mac Classic                  1,486.50
9/5/91      Dynatech              Luminometer                  2,000.00
9/10/91     Savant                SpeedVac/Pump                6,352.00
9/20/91     Tech Computer         Mac II                       6,918.00
10/11/91    Office Pavilion       File & Keys                    218.74
10/22/91    Tech Computer         Mac LC                       2,720.00
10/28/91    Fisher                Vacuum Oven                  1,375.00
11/12/91    Perkin-Elmer          Geneamp                     11,579.25
11/14/91    Boston Ship           Refrigerator                   844.00
11/14/91    Lab Products          Cages                        5,868.00
11/14/91    Office Pavilion       Bookcase                       236.97
11/14/91    Tech Computer         Mac Classic                  2,308.00
11/14/91    Perkin-Elmer          Geneamp Kit                  1,075.11
11/19/91    Orion Research        Coulomet                     6,000.00
11/19/91    Fisher                Centrifuge                   2,947.78
11/30/91    Plas-Labs             Balance                      4,035.00
12/12/91    VerTex                Blinds                         364.40
12/13/91    Omni                  Mixer/Generator              4,075.00
12/18/91    Office Pavilion       File                           318.00
12/18/91    Office Pavilion       File                           148.00
12/18/91    Harris Manufacturing  Freezer                      4,909.00
12/20/91    Bio-Rad               Gene Pulser                  4,370.00
12/30/91    Donsanto              Microscope                  27,144.90
1/1/92      Nynex Phone System    Phone System Deposit        16,391.00

</TABLE>

<PAGE>   31
<TABLE>

<CAPTION>

EQUIPMENT LIST                                                       EXHIBIT A
DATE OF                                                              1994 LOAN COLLATERAL
<S>         <C>                   <C>                         <C>                     <C> 
1/1/92      Applied Bio           Reaction Vessel              4,496.00
1/1/92      Strategene            Stratalinker                 2,351.44
1/3/92      Bio-Rad               Gel Dryer                    1,055.01
1/8/92      VWR                   Incubator                    2,841.00
1/8/92      Universal Imaging     Image Processor             31,125.00
1/13/92     Tech Computer         Laserwriter                  3,615.00
1/16/92     Donsanto              Microscope                  10,725.00
1/16/92     Office Pavilion       Table/Chair                    775.00
1/20/92     Office Pavilion       File                           366.00
1/31/92     Tech Computer         Mac Classic                 11,856.00
2/11/92     Consolidated Bailing  Radioactive Compactor        4,496.25
2/11/92     Kramer Scientific     Microscope                   4,347.00
2/13/92     Tech Computer         Service Repair                   0.00
2/13/92     Office Pavilion       Table                          180.45
2/14/92     Business Furniture    Table                           90.00
2/19/92     Universal Imaging     Lens/Filter Wheel            6,308.00
2/19/92     Tech Computer         Mac Classic                  1,344.00
2/21/92     Office Pavilion       Panels/Tables/Files          5,468.20
2/26/92     Office Pavilion       Chairs                         472.00
2/29/92     Donsanto              Microscope                   3,590.30
3/3/92      Hewlett Packard       HPLC System                 24,737.60
3/7/92      Hewlett Packard       HPLC System                  5,794.00
3/10/92     Zymark                Evaporator                   5,450.00
3/12/92     Office Pavilion       2 Draw Files (3)               502.55
3/13/92     Office Pavilion       Furniture                    1,636.78
3/19/92     VWR Scientific                                     2,841.00
3/19/92     VWR Scientific        PH Meter                     1,445.00
3/19/92     Hewlett Packard       HPLC System                  4,000.00
3/23/92     Donsanto              Microscope                   2,800.80
3/25/92     Hewlett Packard       HPLC System                 25,633.20
3/26/92     Tech Computer         Mac LC                       3,294.00
3/30/92     Fisher                Balance                      2,462.00
3/31/92     Donsanto              Microscope                   8,606.25
3/31/92     Baker Company         (13)Fumehoods/Cabinets      96,419.22

3/31/92     TOTAL

4/1/92      Donsanto              Microscope                   2,818.80               78816
4/8/92      Tech Computer         2 MB Set                       910.00               160P&A010
4/8/92      Baxter                Balance Table                  746.17               B1350-1
4/8/92      Millipore             Deltapak                     4,735.00               WAT037700
4/10/92     Industrial Filters    Water System                49,413.00
4/14/92     Consolidated Bailing  Consolidated Baler          13,488.75               0791-199
4/16/92     Fluid Metering        Lab Pump                     1,495.00               QSYX1CSC
4/17/92     Perseptive Biosystems HPLC Columns                 4,405.50               P001H526
4/20/92     Donsanto              Camera                         461.70               N6000
4/21/92     Tech Computer         2 Mac Classics               6,875.05               M1543LL/A,M1560LL/B
4/22/92     Lexington Alarm       Card Access Equipment       15,000.00
4/22/92     Office Pavilion       Chairs                         312.00               B25-Product
4/22/92     The Baker Company     Fume Hoods                  40,370.75               SP-43007V
4/22/92     Office Pavilion       Panel & Table                  380.80               XXX-A0256LTLT
4/24/92     Nynex Meridian        Hardware for Phone System   39,337.00               NX073598
4/27/92     Forma Scientific      Lab Washer&Dryer            45,603.40               8890&6097
4/27/92     Hank Finkel           Shelf Units                  9,371.10               246063

</TABLE>

<PAGE>   32

<TABLE>

<CAPTION>
EQUIPMENT LIST                                                                 EXHIBIT A
DATE OF                                                                        1994 LOAN COLLATERAL
<S>         <C>                   <C>                         <C>                     <C>   
4/28/92     Donsanto              Microscope                     928.20               78924&85040
4/28/92     Precision Fitness     Gym Equipment                7,722.25
4/28/92     Tech Computer         Star Controller&Punchdown    4,902.00               900STA011&2
4/29/92     MacConnection         Starcontroller               2,598.00               PN377
4/29/92     Shimadzu              Purification Equipment      31,114.80               281640281643
4/29/92     Scientek              Cage & Bottle Washer        39,674.00               SW5500
4/30/92     Lexington Alarm       Drug Storage Cabinet         2,135.00
4/30/92     Harris Manufacturing  Freezer                     20,082.00               EU8617
4/30/92     Nynex Meridian        Phone System                 9,834.00               NX074326
5/1/92      Walcott Sales         Dishwasher                     418.00               DU8700
5/5/92      Universal Imaging     Thermal Stage                3,440.00
5/7/92      Nynex Meridian        Phone System                 3,185.00               JCO #J2900811
5/8/92      Beckman               Scintallation               25,849.85               7065609
5/8/92      Forma Scientific      Incubator                   28,956.00               91155-257240-0
5/12/92     Office Environments   Chairs                      61,638.65
5/12/92     Lab Craft Corp.       4 Sanitation Carts           3,482.75
5/12/92     Boston Ship Service                                    0.00
5/13/92     Donsanto              Omega Filter                 1,869.80               OM400
5/13/92     Fisher                Balances                     4,017.01
5/13/92     Fisher                Ph Meter                     1,436.00
5/13/92     Fisher                Balance                       -247.00
5/14/92     VWR                   Water Bath, Orbit Shaker     3,370.86               13470-073
5/15/92     Eagle Manufacturing   Storage Cabinet                 93.00               NM39270S6
5/15/92     Kopf                  Stereotaxic                  2,750.10               900-A
5/19/92     VWR                   Glass Still                  3,135.00               26291-122
5/20/92     E.I. Dupont           Centrifuge                  29,142.75               9201370
5/20/92     E.M. Parker           Kodak Processor              7,595.00               KOD1666502
5/21/92     Dell Computer         Computer System              4,740.00               486P/50
5/21/92     Manchester Equip.     Laser Printer                1,691.69
5/21/92     Fisher                Safety Cabinet                 600.00               17156B
5/21/92     Gateway 2000          Computer System              2,260.00               486-50 ISA
5/21/96     Fisher Scientific     Safety Cabinets                600.00               17156B
5/26/92     Dell Computer         Microlaser                   1,649.00               TI PS35
5/26/92     Universal Imaging     Filter Set                   3,900.00
5/27/92     Office Pavilion       Chairs                      23,911.33               K08-15/WAL/BL
5/27/92     Perseptive Biosystems Chromotography Workstation  69,200.00
5/27/92     Office Pavilion       Lateral Files               53,295.99               F12-SLF36220
5/27/92     Fisher                Adapter                         14.23               KH350310000
5/27/92     Office Pavilion       Desks                       27,282.80               D05-Special
5/28/92     Fisher                Receiver                        32.08               0974042B
5/29/92     Dell Computer         Memory                          75.00               486P
5/29/92     Fisher                Weight Boats                   212.70               02 202A
5/29/92     Tech Computer         Mac IIsi                     7,374.00               MO364LL/A
5/29/92     Millipore             Steel Column Heater            676.65               WAT062079
5/30/92     Millipore             Fluorometer                 23,104.10               WAT031300
5/31/92     Shimadzu              Moisture Balance             3,675.00               321-43639-00
6/3/92      Dell Computer         Computer System              1,537.00               220-7675
6/3/92      Office Environments   Tables                       6,180.60               ITR-42-G-1-R-G
6/4/92      E.I. Dupont           Rotor & Adapter             19,691.10               9202305
6/4/92      Hank Finkel           Wall Mount & Shelves         1,467.20               SW23C
6/5/92      Tech Computer         Mono Display                   250.00               M0298LL/A
6/8/92      Tech Computer         4 Macs & Laserwriter        26,971.00               100APP011
6/10/92     Harvard Aprtus.       Pump                         3,190.00               552222
6/11/92     Fisher                Plastics&Glass               2,850.00               24/40RE-111C


</TABLE>


<PAGE>   33

<TABLE>

<CAPTION>
EQUIPMENT LIST                                                                 EXHIBIT A
DATE OF                                                                        1994 LOAN COLLATERAL
<S>         <C>                   <C>                         <C>                      <C>   
6/11/92     Fisher                Circulator                   1,228.00                13 874 412
6/11/92     Sedia, Inc.           Sofa & Chairs                 5,427.00               231L1
6/11/92     Shimadzu              Sample Loop                     144.90               220-90340-00
6/11/92     Shimadzu              Data Processor               -2,074.28               223-02458-91
6/11/92     Shimadzu              Data Processor                4,248.00               223-02053.92
6/12/96     Harris Manufacturing                               16,760.70
6/15/92     Tech Computer         Ultradrive                      961.00               110GEN020
6/15/92     VWR                   Ultrasonic Clnr w/Timer         332.00
6/15/92     Baxter                Balance Table                  -102.11               B1350-1
6/16/92     Computerland          Laserjet & Computer           7,100.92               CPAQ-A986D
6/16/92     Computerland          Tax on Equipment                  0.00
6/16/92     Lab Products          Micro Isolator System         8,222.00               10209
6/17/92     Lexington Alarm       Installation/Alarm Sys.      10,265.00
6/17/92     Lexington Alarm       Keypad                          491.00
6/17/92     Lab Safety            Utility Cart                    157.50               RA11488BE
6/19/92     Nynex                 Key Expansion Module          1,425.00               NT2K22WA03
6/20/92     Hewlett Packard       ChemStation                     740.00               3213S03297
6/22/92     Nynex                                               1,680.00               J2900817
6/22/92     VWR                   Shaking Bath                  5,040.00               13303-005
6/22/92     Nynex                 Labor                             0.00
6/23/92     Office Pavilion       Chairs                        8,189.77               Uo1-D-44-H
6/23/92     Millipore             Refrigerator                 12,900.00               WAT038483
6/24/92     VWR                   Water Bath                   -1,560.00               13470-073
6/26/92     ISCO                  Optical Unit                  3,467.50               670940715
6/26/92     VWR                   Balance Mettler               2,979.00               ZZMFG
6/29/92     Perseptive Biosystems ACTO Samples                 13,465.00
6/30/92     NE Cryogenics         Manifold                      5,007.00               B1-3-4
6/30/92     Hitachi               Cell Holder                  29,720.00               250-0330
6/30/92     Hewlett Packard       Robotic Tray                  3,450.00               3224A28875
7/1/92      Gilson Medical        Code Rack                     3,188.50               171041
7/3/92      Hewlett Packard       Micro Vial                       84.00               5021-1859
7/7/92      Kramer Scientific     Microscope                    4,036.00               411585
7/8/92      The Virtis Co.        Vacuum Pump                  16,769.92               284026
7/8/92      Office Environments   Chair                         2,329.60               7A8-1-A5G-T
7/10/92     Office Pavilion       Fireproof File                1,141.35               B25-Product
7/14/92     Hoefer Scientific     Power Supply                  1,700.00               PS1500-1150
7/14/92     Lab Products          Micro Isolator                5,104.88               10409
7/15/92     Hank Finkel           Caster Brake                    300.20               5MBX
7/16/92     The Virtis Co.        Flask Filterseal                749.86               118273
7/22/92     Office Environments   Tables                        2,967.60               6472-G-BL-GL
7/22/92     Office Pavilion       Desk & Box/File               6,329.40               D05-Special
7/23/92     Office Environments   Tables                        9,669.60               6496-BL-BL-GL
7/27/92     Shimadzu              Paper                             0.00               223-02000-12
7/27/92     Polyfoam Packers      Entry Reversed in Nov           676.65
7/28/92     Razel Scientific      Infusion pump                 3,159.06               A-99..EHM
7/29/92     Nynex Meridian        Printer                         740.00               A0345125
7/30/92     Henry Schein          Vaporizer                       995.00               S775
7/30/92     Hotpack               Humidity Chamber              7,265.00               73927
7/31/92     Lab Craft             Workstation                   1,961.75               WS20/36
8/3/92      Beckman               Rotor Package                 8,617.00               1341-0004-0000
8/11/92     Tech Computer         Mac Classic                   1,215.00               M1560LL/B
8/1/92      Geneva Group                                       19,368.75
8/13/92     Hank Finkel           Carts                           681.00               1842GX
8/14/92     Tech Computer         3 Mac Classics                3,645.00               M1560LL/B
</TABLE>

<PAGE>   34

<TABLE>

<CAPTION>
EQUIPMENT LIST                                                                 EXHIBIT A
DATE OF                                                                        1994 LOAN COLLATERAL
<S>         <C>                   <C>                       <C>                        <C>   
8/17/92     Baxter                Flatbed Recorder              1,182.35               R2990-111
8/17/92     Fisher                Vacuum Pump                   1,848.00               010961A
8/17/92     Fisher                Centrifuge                    4,275.00               5415C
8/18/92     Staples               Typewriter Car                   35.98               OP529
8/18/92     Staples               Typewriter                      499.99               1181304
8/19/92     VWR                   Balance                       5,995.00               11274-975
8/20/92     Tech Computer         Mac IIsi                      3,313.00               M0364LL/B
8/21/92     Applied Biosystems    Chemicals                       488.40
8/21/92     Tech Computer                                       1,745.00
8/24/92     Hotpack               Incubator                     4,230.00               73927
8/27/92     VWR                   Centrifuge                    2,640.40               BK342350
9/1/92      Tech                  Ethernet LC                     776.00               M0443LL/B
9/1/92      Industrial Filters    Sanitize Water System         2,514.50
9/10/92     Applied Biosystems    DNA Syn.                     24,775.00               92081066J
9/11/92     Consolidated Stills   Sterilizer                   46,225.00               52792
9/11/92     Consolidated Stills   Sterilizer                   46,225.00               52892
9/11/92     Pierce                Reacti-Vap                    1,258.00               920402006
9/11/92     Consolidated Stills   Freight for Sterilizer            0.00               52892
9/11/92     Consolidated Stills   Sterilizer                   23,550.00               51292
9/11/92     Consolidated Stills   See Attached Letter         -11,974.60
9/14/92     Baker                                              15,637.55               2920053
9/24/92     Mas-Vac               Open Invoice                  2,766.00
9/29/92     Tech Computer         2 Mac Classics                2,848.00               M1542LL/A
9/30/92     Fisher                Base Unit                       485.00
9/30/92     Consolidated Stills   See Attached Letter           5,987.30
10/23/92    Tech                  computer                      4,712.00
10/15/92    Baker                 fi,e jppds                   18,448.2
10/15/92    Hewlett Packard       HPLC                         46,300.00
10/20/92    Millipore             PDA Detector                  9,976.00


            TOTAL                                           2,500,370.75

</TABLE>

<PAGE>   35
<TABLE>
<CAPTION>
ALKERMES/ACTI FIXED ASSET LIST                                                           Exhibit A
                                                                                         1995 Loan Collateral
Date of                                                                             Total        Less       Less        Net
Purchase     Company                    Description                  Ref #        Invoice     Freight  Sales Tax    Invoice
- ---------------------------------------------------------------------------------------------------------------------------
ALKERMES EQUIPMENT:
<S>          <C>                        <C>                         <C>         <C>           <C>        <C>      <C>
11/15/94     Micro Video                Computer                    134046       1,723.87       -2.47       0.00   1,721.40
12/8/94      Terra Universal            Work station                134882       1,718.20        0.00       0.00   1,718.20
12/12/94     VWR                        Balance                     134736       1,152.00        0.00       0.00   1,152.00
12/20/94     Ciba Corning               Blood Gas System            134977       9,086.20      -86.20       0.00   9,000.00
12/20/94     Stoelting                  Fluovac Unit, vapor, etc.   135270       6,633.46      -43.46       0.00   6,590.00
12/29/94     Microtech                  MIA16000 Memory             135264       5,037.32      -28.82    -238.50   4,770.00
12/30/94     Waters                     717 Plus                    135271      22,930.00      -30.00       0.00  22,900.00
1/3/95       Digital                    Memory expansion card       135298         367.50        0.00     -17.50     350.00
12/30/94     InfoTech                   Powerbook 4MB               135354       5,880.45      -20.00    -281.45   5,579.00
1/11/95      Climet Instruments         Laser Airborne Particle     135486       5,000.00        0.00       0.00   5,000.00
                                          Counter               
1/13/95      VWR                        Ghaus electrical scale      135575       1,594.00        0.00       0.00   1,594.00
1/25/95      Kaye Instruments           Valid workstation           135748       3,503.58       -3.58       0.00   3,500.00
1/26/95      VWR                        Refrigerated circulators    135798       1,646.25        0.00       0.00   1,646.25
1/27/95      E.C. Hilliard              Spray chamber               135808       3,800.00        0.00       0.00   3,800.00
1/5/95       Chemineer                  Static mixer                135836       1,225.07       -7.07     -58.00   1,160.00
1/19/95      Fisher                     Freezer/chart recorder      135845       8,142.00        0.00       0.00   8,142.00
1/25/95      American Instrument        DK43 oven                   136002         963.40      -38.40       0.00     925.00
               Exchange                 
1/31/95      Fluid Energy Alert         Jet-o-mixer Model 00        136024       6,314.63      -14.63       0.00   6,300.00
1/31/95      Stoelting Company          Refund on regulator         136024        -335.00        0.00       0.00    -335.00
1/24/95      Fisher                     Freezer/chart recorder      136106       7,765.00        0.00       0.00   7,765.00
1/17/95      Milton Roy                 CPU Board                   136273       1,953.00        0.00       0.00   1,953.00
2/7/95       Stoelting Company          Amplifier/pressure transd   136375       1,409.47       -9.47       0.00   1,400.00
1/12/95      Digital Equipment          Return etherlink            136439        -148.49        2.54       6.95    -139.00
2/13/95      Microtech Internatinoal    Memory boards               136467       2,846.28      -22.28       0.00   2,824.00
2/15/95      Fisher                     Refractometer               136554       2,230.00        0.00       0.00   2,230.00
2/14/95      IKA Works                  Flow chamber                136602       3,637.76      -14.76       0.00   3,623.00
2/14/95      Infotech                   Laserwriter printer         136609       2,424.20      -26.00    -114.20   2,284.00
2/14/95      Infotech                   Powerbook 500               136610       3,021.15      -36.00    -142.15   2,843.00
2/22/95      Infotech                   Monitor                     136719         503.10      -18.00     -23.10     462.00
2/27/95      Shimadzu Scientific        External printer, etc       136864      25,208.99      -63.99       0.00  25,145.00
               Instrument               
2/28/95      Infotech                   Multiscan display           136992       5,878.60      -70.00    -276.60   5,532.00
2/28/95      Infotech                   Multiscan dislay            136993      11,727.20     -110.00    -553.20  11,064.00
2/28/95      Infotech                   PTR 110 VLW                 136994       2,310.15      -18.00    -109.15   2,183.00
3/2/95       Infotech                   Powerbook                   136995       3,231.70      -25.00    -152.70   3,054.00
3/3/95       IKA                        Revolution counter          137034       1,740.46       -9.46       0.00   1,731.00
3/7/95       Infotech                   Apple DOS card              137109       2,842.00     -134.00     -28.00   2,680.00
3/3/95       Precision Stainless        Liter extraction tank       137150      13,115.80        0.00       0.00  13,115.80
3/7/95       Infotech                   Powerbook                   137158       3,438.40      -49.00    -161.40   3,228.00
3/6/95       Fisher                     Sonic dismembrator          137176       1,300.00        0.00       0.00   1,300.00
3/9/95       Electric Steam Generator   Electric steam generator    137196       4,432.00        0.00       0.00   4,432.00
               Co.                    
3/9/95       Cole Parmer                Gauge/impellter/vac pump    137213       3,747.67      -54.67       0.00   3,693.00
</TABLE>


<PAGE>   36

<TABLE>
<CAPTION>
ALKERMES/ACTI FIXED ASSET LIST                                                           Exhibit A
                                                                                         1995 Loan Collateral
Date of                                                                             Total        Less       Less        Net
Purchase     Company                    Description                  Ref #        Invoice     Freight  Sales Tax    Invoice
- ---------------------------------------------------------------------------------------------------------------------------
<S>          <C>                        <C>                         <C>         <C>           <C>        <C>      <C>
3/7/95       Stoelting                  MacLab System               137237       5,021.60      -26.60       0.00   4,995.00
3/13/95      PCs Compleat               Ethermodem                  137263       8,559.01     -109.88    -406.15   8,042.98
3/15/95      Infotech                   Laserwriter                 137285       1,028.90      -23.00     -47.90     958.00
3/16/95      Fisher                     Balance                     137291       1,625.00        0.00       0.00   1,625.00
3/13/95      Filtron Technology         Miniset stainless           137295       8,685.33       -7.08       0.00   8,678.25
                                          hardware         
3/15/95      Comport Consulting Group   Clebris System              137313       6,346.20      -14.00    -302.20   6,030.00
3/16/95      Baxter Healthcare          Infusion pump               137332      16,400.00        0.00       0.00  16,400.00
3/17/95      Microtech                  True simm                   137335         912.24      -14.24       0.00     898.00
3/24/95      Watson-Marlow              Pumps                       137554       5,677.95      -12.95       0.00   5,665.00
3/16/95      Shimadzu Scientific        Refund PCB set              137618        -450.00        0.00       0.00    -450.00
3/24/95      Kramer Scientific          Cryocut disposable system   137673      14,950.00        0.00       0.00  14,950.00
3/31/95      Harvard Apparatus          Shelf style rack            137768       2,288.60      -43.60       0.00   2,245.00
3/31/95      Infotech                   HP Jetstore 600I            137888       1,446.05      -38.00     -67.05   1,341.00
3/31/95      Perseptive Biosystems      BioCad System               137805      70,350.00     -350.00       0.00  70,000.00
3/31/95      Infotech                   Apple Powerbook             137811       2,842.95      -30.00    -133.95   2,679.00
4/4/95       Filtron                    Minisette                   137817       8,264.45       -6.45       0.00   8,258.00
4/6/95       Infotech                   Sheet Feeder                137827         297.40      -16.00     -13.40     268.00
4/11/95      Amicon                     Column stand                137993       5,099.41       -9.41       0.00   5,090.00
4/7/95       BioWhittaker               Plate reader                138010      13,954.00        0.00       0.00  13,954.00
4/20/95      New Wave Technologies      Optical Drive               138158       3,250.00      -43.00       0.00   3,207.00
4/27/95      U.S. Telecenters           Polycom soundstation        138380         647.50        0.00       0.00     647.50
4/24/95      Dell                       Viewsonic                   138386       1,666.45      -40.00     -77.45   1,549.00
4/21/95      Vamstar                    Print server                138401         399.00      -10.00     -19.00     370.00
4/21/95      Vanstar                    Color monitor               138402       1,148.70      -88.00     -54.70   1,006.00
5/9/95       Infotech                   Sheet feeder                138718         301.40      -20.00     -13.40     268.00
5/12/95      Infotech                   Apple Powerbook             138832       5,414.55      -48.00    -255.55   5,111.00
5/2/95       Infotech                   Printer & keyboard          138836       5,019.00        0.00       0.00   5,019.00
5/22/95      Waters Corporation         Flow Cell                   138936       1,475.00       -5.00       0.00   1,470.00
5/23/95      Infotech                   Toshiba                     138988       4,743.00        0.00       0.00   4,743.00
5/25/95      Stoelting                  Preamplifier                139065       1,050.00        0.00       0.00   1,050.00
5/25/95      Waters Corporation         Hard drive 590 computer     139103       4,313.30        0.00    -205.40   4,107.90
5/30/95      Microtech                  Memory boards               139173       2,312.18      -20.18       0.00   2,292.00
4/13/95      Data Comm Warehouse        Linkbuilder                 138007         998.00       -3.00       0.00     995.00
4/28/95      Microtech International    Memory boards               138461         587.99       -9.99       0.00     578.00
5/10/95      PC & Mac Connection        Sonics Systems              138670         269.00       -3.00       0.00     266.00
5/22/95      Data Comm Warehouse        Linkbuilder                 138979         947.90       -3.00       0.00     944.90
5/31/95      Infotech                   Powerbook                   139245      10,700.70     -102.00    -504.70  10,094.00
6/9/95       US Telecenters             Polycom soundstation        139373         712.25        0.00     -64.75     647.50
6/9/95       Biotest Diagnostics        Air sampler                 139488       6,017.07      -27.07       0.00   5,990.00
6/14/95      Infotech                   Sheet feeder                139494         297.40      -16.00     -13.40     268.00
6/20/95      Baxter Healthcare          Infusion pump               139685       4,115.82      -15.82       0.00   4,100.00
6/26/95      Millipore                  Steritest compact/pump-     139714       5,640.00        0.00       0.00   5,640.00
                                          foot petal           
</TABLE>

<PAGE>   37

<TABLE>
<CAPTION>
ALKERMES/ACTI FIXED ASSET LIST                                                           Exhibit A
                                                                                         1995 Loan Collateral
Date of                                                                             Total        Less       Less        Net
Purchase     Company                    Description                  Ref #        Invoice     Freight  Sales Tax    Invoice
- ---------------------------------------------------------------------------------------------------------------------------
<S>          <C>                        <C>                         <C>         <C>           <C>        <C>      <C>
6/26/95      Coulter                    Sampling stand and switch   139821       4,991.00      -50.00       0.00   4,941.00
6/28/95      Infotech                   Powerbook                   139875       3,328.75      -37.00    -156.75   3,135.00
6/30/95      Microtech International    16 mb and 8mb simms         139939       3,590.73      -24.73       0.00   3,566.00
6/28/95      Dell Direct                Microsoft system            139918       2,161.20     -190.00       0.00   1,971.20
6/30/95      Infotech                   Farallon 10 base trancei    139960       2,584.40      -35.00    -121.40   2,428.00
7/18/95      Infotech                   NEC 15" monitor, etc.       140222       1,057.00      -28.00     -49.00     980.00
7/17/95      Infotech                   DOS compatibility card      140223       2,832.00      -18.00    -134.00   2,680.00
7/17/95      Infotech                   APC Smart                   140224         838.40      -32.00     -38.40     768.00
7/24/95      Baxter Healthcare          Syringe infusion pump       140451       2,057.91       -7.91       0.00   2,050.00
7/24/95      Biotest Diagnostics        Anemometer                  140458       1,135.00        0.00       0.00   1,135.00
8/2/95       Microtech International    Simms 72 Pin (memory        140638       2,088.48      -19.48       0.00   2,069.00
                                          boards)            
8/8/95       Cargocaire Engineering     Part #30565-01              140655       2,380.00        0.00       0.00   2,380.00
8/4/95       Waters Corporation         Bus Sat/in Module           140657       1,955.00       -5.00       0.00   1,950.00
8/4/95       Harvard Apparatus          Pump 22 Multi Syr           140662       4,000.60      -10.60       0.00   3,990.00
8/3/95       Infotech                   HP Laserjet                 140667       1,468.55      -29.00     -68.55   1,371.00
8/9/95       CompUSA Inc.               17" Noki Monitor/Computer   140737       3,450.28      -86.00    -164.30   3,199.98
8/16/95      ADInstruments              4 Channel Tranducer         140868         962.00      -12.00       0.00     950.00
8/21/95      William Graney/Staples     Fax Machine                 140913         699.99        0.00       0.00     699.99
8/15/95      Infotech                   Apple 15" Monitor           140960       7,099.65      -72.00    -334.65   6,693.00
8/24/95      PCs Compleat, Inc.         toshiba & Modem             141057       4,708.99        0.00       0.00   4,708.99
8/23/95      Baxter Healthcare          Syringe Infusion Pump       141171      12,338.40      -38.40       0.00  12,300.00
8/29/95      Infotech                   Multiscan Display           141203       1,495.70      -32.00     -69.70   1,394.00
8/28/95      Infotech                   HP Laserjet                 141204       1,095.15        0.00     -52.15   1,043.00
8/31/95      Microtech International    8mb Simms (memory boards)   141276       2,252.16      -20.16       0.00   2,232.00
8/26/95      Waters Corporation         Refridge Autosampler        141281      38,817.37     -117.37       0.00  38,700.00
8/30/95      TerraNet Internet Services Cisco Router & Modem        141107       1,831.20        0.00       0.00   1,831.20
8/17/95      Lechmere                   Refrigerator                141391         607.45      -29.97     -27.50     549.98
8/31/95      PCs Compleat, Inc.         8MB Memory                  141236         402.90       -4.95     -18.95     379.00
9/5/95       Baxter Healthcare Corp.    Syringe Infusion Pump       141351       2,057.91       -7.91       0.00   2,050.00
9/5/95       First Source International 16md Module                 141354         606.00       -9.00       0.00     597.00
9/11/95      Waters Corporation         TI Credit Special           141512      -3,500.00        0.00       0.00  -3,500.00
9/14/95      Infotech                   Monitor, Pwr Mac, Server    141519      15,910.90     -184.00    -748.90  14,978.00
9/15/95      MacWarehouse               Hard Drive, Notebook        141606         663.10       -6.10       0.00     657.00
                                          Traveler           
9/19/95      Waters Corporation         Refractometer               141614      15,937.50        0.00       0.00  15,937.50
9/21/95      Microtech International    Mia8000/72-06 /72-07-8C     141643       1,088.96      -15.96       0.00   1,073.00
10/2/95      MacWarehouse               Lc475 w/o keyboard          141992       1,006.30       -8.30       0.00     998.00
9/26/95      Infotech                   Keyboard, monitor           142006         757.85      -34.85     -26.00     697.00
9/29/95      Infotech                   Apple keyboard, display     142029       1,202.85      -30.00     -55.85   1,117.00
10/3/95      Brinkman Instruments       Pump/kf coulometer          142069       7,068.77      -20.77       0.00   7,048.00
10/4/95      VWR                        Water Bath                  142096       1,293.75        0.00       0.00   1,293.75
10/3/95      Infotech                   Powermac 6100 w/cd          142114       1,694.95      -16.00     -79.95   1,599.00
10/4/95      Microtech International    16mb simms (memory boards)  142143       1,005.51      -15.51       0.00     990.00
</TABLE>

<PAGE>   38

<TABLE>
<CAPTION>
ALKERMES/ACTI FIXED ASSET LIST                                                           Exhibit A
                                                                                         1995 Loan Collateral
Date of                                                                             Total        Less       Less        Net
Purchase     Company                    Description                  Ref #        Invoice     Freight  Sales Tax    Invoice
- ---------------------------------------------------------------------------------------------------------------------------
<S>          <C>                        <C>                         <C>         <C>           <C>        <C>      <C>
10/9/95      Microtech International    8mb simms (memory boards)   142145         587.99       -9.99       0.00     578.00
10/9/95      Microtech International    16mb simms (memory boards)  142146       1,005.51      -15.51       0.00     990.00
10/21/95     CDW Computer Centers       Seagate 9ms fast 2 scsi     142266       1,071.00      -15.00       0.00   1,056.00
10/13/95     Microtech International    MIA8000/72-06               142293       1,172.31      -16.31       0.00   1,156.00
10/19/95     Infotech                   Pwr mac/display/keyboard    142459       5,106.00      -66.00    -240.00   4,800.00
10/19/95     Infotech                   Monitor/display/keyboard    142460       3,756.90      -63.00    -175.90   3,518.00
10/20/95     Forma Scientific           Monitor/alarm system        142484       1,956.22        0.00       0.00   1,956.22
10/19/95     Infotech                   HP laser jet/pwr mac, etc.  142488       4,587.35      -44.00    -216.35   4,327.00
10/29/95     CDW Computer Centers       Color Printer               142510         448.87      -15.87       0.00     433.00
11/7/95      Boston Ship Service        Refrigerator                142809         153.90      -30.00      -5.90     118.00
11/2/95      Molecular Dynamics         Pers Dens SI & IQNT         142889      18,150.00     -150.00       0.00  18,000.00
11/3/95      Infotech                   Mac Quadra                  142837       2,158.50      -27.00    -101.50   2,030.00
11/8/95      Infotech                   HP Jet Ethernet             142900         344.40        0.00     -16.40     328.00
11/16/95     Digital & PCs Compleat     P120, Computer              143092       3,508.02      -17.82    -166.20   3,324.00
ALKERMES F&F:                                                                                                  
5/5/95       Business Equipment, Ltd.   Lateral files               138520       1,390.00        0.00       0.00   1,390.00
5/26/95      McMaster-Carr              Storage cabinet             139147         737.43      -39.00       0.00     698.43
6/8/95       VWR                        Lab table                   139393       1,579.20        0.00       0.00   1,579.20
7/9/95       First Office Concepts      5Drawer lateral file        140410         853.45      -25.00     -39.45     789.00
                                          cabinets           
10/4/95      First Office Concepts      Locking Den Master          142254         594.90      -29.00     -26.95     538.95
                                          Bookcase         
10/4/95      First Office Concepts      5 Drawer Lateral File       142255       4,218.50      -29.00    -199.50   3,990.00
                                          Cabinet             
ACTI EQUIPMENT:
11/21/94     Pacific Venture Finance    Lease Buyout (misc equip)     3253      23,748.00        0.00       0.00  23,748.00
1/13/95      Pacific Venture Finance    Lease Buyout (misc equip)     3307       7,208.00        0.00       0.00   7,208.00
2/17/95      Pacific Venture Finance    Lease Buyout (misc equip)     3367       1,861.83        0.00      -1.83   1,860.00
3/24/95      E.C. Hilliard              Spray Chamber                 3438       4,750.00        0.00       0.00   4,750.00
3/29/95      Precision Stainless, Inc.  Spray Chamber                 3484       3,393.60        0.00       0.00   3,393.60
1/17/95      Martel                     Rannie 8.30 Mini-Lab        135704       9,710.59      -77.25       0.00   9,633.34
April        Martel                     Rannie 8.30 Mini-Lab                    -4,538.52        0.00       0.00  -4,538.52
                                          (credit)           
4/11/95      VWR                        Freezer                       3492       6,243.38        0.00       0.00   6,243.38
4/4/95       Terra Universal            Clean room table              3519         786.93     -114.23       0.00     672.70
4/3/95       FTS                        Control workstation           3527      29,721.63        0.00       0.00  29,721.63
4/14/95      FTS                        Recirculating cooler          3531      11,995.00        0.00       0.00  11,995.00
4/24/95      ITT                        Polymer/powder trans cont     3568       3,697.05      -12.05       0.00   3,685.00
4/26/95      ITT                        Tank bottom valve             3601       3,542.97       -5.97       0.00   3,537.00
4/13/95      Lightnin                   Shaft/bore                    3606         827.77       -6.64       0.00     821.13
4/28/95      Superior                   Prolease 50 system            3626      14,252.00        0.00       0.00  14,252.00
4/20/95      Alloy Products             Model 75-14 Vessel            3565       1,498.34      -11.34       0.00   1,487.00
5/1/95       Pacific Venture Buyout     Lease Buyout (misc equip)     3564       5,778.00        0.00       0.00   5,778.00
5/1/95       PerSeptive Biosystems      Porous 50HQ                   3582       1,950.00        0.00       0.00   1,950.00
4/27/95      Lightnin                   Mixer                         3591      15,640.56      -86.00       0.00  15,554.56
4/28/95      Lightnin                   Lower shaft/impeller          3608         969.28       -4.07       0.00     965.21
</TABLE>

<PAGE>   39

<TABLE>
<CAPTION>
ALKERMES/ACTI FIXED ASSET LIST                                                           Exhibit A
                                                                                         1995 Loan Collateral
Date of                                                                             Total        Less       Less        Net
Purchase     Company                    Description                 Ref #         Invoice     Freight  Sales Tax    Invoice
- ---------------------------------------------------------------------------------------------------------------------------
<S>          <C>                        <C>                          <C>      <C>             <C>           <C>  <C>
4/28/95      Lightnin                   Mixer                        3609       15,496.47      -86.00       0.00  15,410.47
4/28/95      ITT Sherotec               Dispersion tank system       3613        8,259.54      -19.54       0.00   8,240.00
5/4/95       Superior Controls          Data Acquisition System      3634       10,689.00        0.00       0.00  10,689.00
5/5/95       Amicon                     A855471                      3635          452.59       -2.59       0.00     450.00
4/28/95      AMSCO                      Fan/Monitor/Adaptor          3648        7,600.10      -17.10       0.00   7,583.00
5/9/95       PerSeptive Biosystems      Porous 50 HQ                 3654        7,800.00        0.00       0.00   7,800.00
5/11/95      VWR                        Pump                         3684        1,548.30        0.00       0.00   1,548.30
5/10/95      Fisher                     Analytical Balance           3692        1,658.00        0.00       0.00   1,658.00
5/16/95      AMSCO                      Spinning Disc                3693        1,415.40       -8.40       0.00   1,407.00
3/21/95      VWR                        Recorder                     3702          677.10        0.00       0.00     677.10
5/15/95      VWR                        Revco Freezer                3704        3,984.00        0.00       0.00   3,984.00
5/17/95      Sartorius                  Mini Housing                 3707        8,503.66       -3.66       0.00   8,500.00
5/15/95      ITT Sherotec               Homogenizer                  3710        1,528.20        0.00       0.00   1,528.20
5/15/95      ITT Sherotec               Filter/Dryer                 3711        7,870.00        0.00       0.00   7,870.00
5/15/95      ITT Sherotec               Filter/Dryer                 3712        1,175.00        0.00       0.00   1,175.00
5/9/95       Cozzoli                    Cozzoli machine F400X        3718        1,090.66        0.00       0.00   1,090.66
5/5/95       Waters                     HPLC System                  3738       48,161.71     -141.71       0.00  48,020.00
5/23/95      Millipore                  Ster Filhldr                 3779        1,633.00        0.00       0.00   1,633.00
5/19/95      Sonics & Material          Ultrasonic Processor         3783        6,767.15      -27.15       0.00   6,740.00
5/15/95      Terra Universal            Gowning Bench                3812        1,358.74     -219.74       0.00   1,139.00
5/23/95      AMSCO                      VHP 1000 System              3854       63,602.75     -142.75       0.00  63,460.00
5/16/95      Virtis                     Homogenizer                  3705         3630.6       -21.60       0.00   3,609.00
5/31/95      Fisher                     Top loader balance           3838        2,540.00        0.00       0.00   2,540.00
5/31/95      Cozzoli                    Talbe top filler             3839        2,199.00      -17.66       0.00   2,181.34
6/1/95       Fisher                     Freezer                      3842        5,550.00        0.00       0.00   5,550.00
6/5/95       Sonics & Materials         Footswitch w/cable           3875          122.48       -2.48       0.00     120.00
6/2/95       Waters                     Colum temp control           3905        1,424.00        0.00       0.00   1,424.00
6/13/95      FTS Systems                Tray dryer oil eliminator    3938       56,397.00        0.00       0.00  56,397.00
6/16/95      MKS Instruments            Pressure transducer          3946        2,536.72      -11.72       0.00   2,525.00
6/14/95      Superior Controls          Prolease 50 data acq system  3947        7,436.00        0.00       0.00   7,436.00
6/2/95       Precision Stainless        Extraction & waste tanks     3999       31,190.00        0.00       0.00  31,190.00
6/21/95      Precision Stainless        PMB valves returned          4018       -3,825.00        0.00       0.00  -3,825.00
6/27/95      FTS Systems                Freeze dryer                 4047       69,776.77     -426.30       0.00  69,350.47
6/22/95      VWR                        Recorder                     4058          750.30        0.00       0.00     750.30
6/23/95      VWR                        Stir reactor vessel          4062        7,112.95     -525.00       0.00   6,587.95
6/26/95      VWR                        Stir reactor vessel          4063          942.18        0.00       0.00     942.18
6/15/95      La Calhene                 Isolator                     4117      157,614.00        0.00       0.00 157,614.00
6/16/95      Pacific Venture            Lease Buyout (misc equip)    3974        2,200.00        0.00       0.00   2,200.00
7/5/95       Cotter Corp                Sanitary vessel              4112        7,953.66        0.00       0.00   7,953.66
7/11/95      Brookfield Eng.            Temp control bath            4114        5,619.84      -14.84       0.00   5,605.00
7/12/95      Cole Palmer                Humidity data processor      4125        1,995.00        0.00       0.00   1,995.00
7/28/95      Sigmil                     Housing & filter             4243        1,702.00      -82.00       0.00   1,620.00
</TABLE>

<PAGE>   40

<TABLE>
<CAPTION>
ALKERMES/ACTI FIXED ASSET LIST                                                           Exhibit A
                                                                                         1995 Loan Collateral
Date of                                                                             Total        Less       Less            Net
Purchase     Company                    Description                 Ref #         Invoice     Freight  Sales Tax        Invoice
- -------------------------------------------------------------------------------------------------------------------------------
<S>          <C>                        <C>                          <C>     <C>              <C>        <C>       <C>
7/17/95      Superior Controls          Prolease 50 data acq system  4289        3,563.00        0.00       0.00       3,563.00
8/7/95       ITT Sherotec               Spray Chamber Cover          4302        1,580.00        0.00       0.00       1,580.00
8/14/95      Fisher Scientific          Freezer                      4358       -3,984.00        0.00       0.00      -3,984.00
8/23/95      FTS Systems                Microprocessor               4391        1,120.27      -21.75       0.00       1,098.52
8/24/95      Pall Filtron               Centramate ss Cassette etc.  4438         4355.63       -5.63       0.00       4,350.00
7/14/95      Pacific Venture            Lease Buyout (misc equip)    4192        7,111.00        0.00       0.00       7,111.00
8/29/95      AMSCO-PA                   Biodecontamination Unit      4440        1,115.17       -7.17       0.00       1,108.00
8/15/95      Pacific Venture            Lease Buyout (misc equip)    4368        7,323.00        0.00       0.00       7,323.00
9/5/95       Cole-Parmer                Ultrasonic Cleaner           4457        2,212.54      -18.54       0.00       2,194.00
9/18/95      Amsco (PA)                 Biodecontamination Unit      4523       65,084.60     -288.60       0.00      64,796.00
9/13/95      La Calhene                 Flexible Wall Isolators, etc 4577       68,472.90        0.00       0.00      68,472.90
10/6/95      AMSCO-PA                   Scientific Calibration       4628        1,895.00        0.00       0.00       1,895.00
10/9/95      ComTronics                 Motorola Radius/Headset      4687        2,308.50      -30.00    -108.50       2,170.00
10/16/95     Pacific Venture Finance    Lease Buyout (misc equip)    4726        4,111.00        0.00       0.00       4,111.00

                                                                             --------------------------------------------------
  TOTAL EQUIPMENT & F&F                                                      1,514,171.62   -6,387.94  -7,772.53   1,500,011.15
                                                                             ==================================================
</TABLE>



<PAGE>   41
                                    Exhibit A
                                    Ohio Loan Collateral


<TABLE>
                                            STOLLE WILMINGTON PLANT SALE (IMPROVEMENTS)
<CAPTION>

          PROJECT                                                                                  ACQ
             #              DESCRIPTION             AMOUNT            VENDOR                PO#   YEAR           OTHER

<S>   <C>  <C>      <C>                            <C>           <C>                        <C>    <C>      <C>
432   WS   MTI 27   MIXER ASSEMBLY (SANDOZ)        $ 4,858.00    RODEM                       735   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
433   WS   MTI 27   4 GAL CHARGE POT               $ 1,793.00    BUCKEYE FABRICAT            747   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
434   WS   MTI 27   CONCRETE APRON                 $37,000.00    MOSACO                      820   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
435   WS   MTI 27   3 YAMADA AIR PUMPS             $ 3,364.24    HOFFMAN EQUIP               933   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
436   WS   MTI 27   PLATFORM SCALE                 $ 4,330.78    CINTRON SCALE               923   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
437   WS   MTI 27   LAB FREEZER (2)                $ 4,212.25    FISHER SCIENTIFIC           713   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
438   WS   MTI 27   BIOLOGIC CONTAINMT HOOD        $ 9,735.00    MICROZONE                   998   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
439   WS   MTI 27   FREIGHT                        $   309.69    MICROZONE                   998   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
440   WS   MTI 27   TRANSFER BOTTLES               $12,224.46    EAGLE STAINLESS            1059   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
441   WS   MTI 27   CONSTRUCTION STEEL SHELVING    $   952.67    R&J FIRST CO               1221   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
442   WS   MTI 27   MODULAR CLEAN ROOM             $15,340.43    CLEAN ROOM PROD            1076   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
443   WS   MTI 27   MODULAR CLEAN ROOM             $ 3,182.00    CLEAN ROOM PROD            1075   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
444   WS   MTI 27   SS PRESSURE VESSELS            $ 1,063.50    ALLOY PRODUCTS              641   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
445   WS   MTI 27   COMPUTER EQUIP                 $ 7,911.43    COMP USA                   1162   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
446   WS   MTI 27   REWORK DRAIN 10 GAL TANK       $   621.00    BUCKEYE MFG                 793   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
447   WS   MTI 27   CONE FILTER SCREEN             $ 1,227.72    IRC                        1370   93-94    WILMINGTON SM PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
448   WS   MTI 37   PARABOLIC HOPPER               $11,142.00    HAYSSEN                    1706   93-94    WILMINGTON SM PROJECTS
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
449   WS   MTI 37   HVAC COMPRESSOR                $ 2,658.52    ENVIRON ENGR               2355   93-94    WILMINGTON SM PROJECTS
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
450   WS   MTI 37   486 PC FOR HONEYWELL 9000      $ 1,694.00    GATEWAY 2000               2432   93-94    WILMINGTON SM PROJECTS
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
451   WS   MTI 37   METTLER TOLEDO SCALE           $ 3,540.57    CINTRON SCALE              2441   93-94    WILMINGTON SM PROJECTS
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
452   WS   MTI 37   SOLVENT STORAGE BLDG           $30,350.00    MOSACO                     2513   93-94    WILMINGTON SM PROJECTS
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
453   WS   MTI 37   PUMP FOR DI SYSTEM             $ 2,121.00    RODEM                      2809   93-94    WILMINGTON SM PROJECTS
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
454   WS   MTI 37   INSTALL TRANSFORMER            $ 2,990.00    KINGS ELECTRIC             2494   93-94    WILMINGTON SM PROJECTS
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
455   WS   MTI 37   SCRUBBER                       $ 2,544.00    TRIDURO                    2746   93-94    WILMINGTON SM PROJECTS
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
456   WS   MTI 37   2 IN-LINE MIXERS               $ 4,730.52    KOFLO                      3003   93-94    WILMINGTON SM PROJECTS
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
457   WS   MTI 45   SIP MONITORING SYSTEM          $ 1,809.33    HARD WAREHOUSE             3829   93-94    WILMINGTON PLANT
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
458   WS   MTI 45   15 GAL HEPA VAC                $ 3,980.30    TRIDURO                    3714   93-94    WILMINGTON PLANT
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
459   WS   MTI 45   INSTALL 750 KW GENERATOR SET   $59,215.00    KING'S ELECTRIC SERV       3705    1995    WILMINGTON PLANT
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
460   WS   MTI 49   LABEL MACHINE                  $ 2,795.00    THOMAS PACKAGING           3946   93-94    WILMINGTON SMALL PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
461   WS   MTI 49   DOCKING STATION                $ 4,063.86    HARD WAREHOUSE             4018   93-94    WILMINGTON SMALL PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
462   WS   MTI 49   DESK STATION                   $   684.70    HARD WAREHOUSE             4018   93-94    WILMINGTON SMALL PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
463   WS   MTI 49   WALL MOUNT CYLINDERS           $ 1,592.20    BOC GASES                  4506   93-94    WILMINGTON SMALL PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
464   WS   MTI 49   PARTICULATE SAMPLERS           $ 5,058.02    BARRAMUNDI                 4508   93-94    WILMINGTON SMALL PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
465   WS   MTI 49   PROCESS PIPING-SLURRY          $ 4,357.00    RODEM                      4656   93-94    WILMINGTON SMALL PROJ
           ------   ----------------------------   ----------    --------------------       ----   -----    ----------------------
</TABLE>

<PAGE>   42

                                    Exhibit A
                                    Ohio Loan Collateral


<TABLE>
                                            STOLLE WILMINGTON PLANT SALE (IMPROVEMENTS)
<CAPTION>

          PROJECT                                                                                 ACQ
             #              DESCRIPTION            AMOUNT           VENDOR                PO#    YEAR           OTHER

<S>   <C>  <C>      <C>                          <C>            <C>                        <C>    <C>      <C>

466   WS   MTI 49   VISCOMETER                   $  2,687.43    OKM IND SALES              4348   93-94    WILMINGTON SMALL PROJ
           ------   --------------------------   -----------    -----------------          ----   -----    ---------------------
467   WS   MTI 49   THERMAL TRANSFER PRINTER     $  2,804.72    THOMAS PACK CORP           3946   93-94    WILMINGTON SMALL PROJ
           ------   --------------------------   -----------    -----------------          ----   -----    ---------------------
468   WS   MTI 49   COMPUTER NOTEBOOK            $  2,152.20    HARD WAREHOUSE                    93-94    WILMINGTON SMALL PROJ
           ------   --------------------------   -----------    -----------------          ----   -----    ---------------------
469   WS   MTI 49   PARTS WASHER                 $  3,722.40    HERITAGE EQUIP             4069   93-94    WILMINGTON SMALL PROJ
           ------   --------------------------   -----------    -----------------          ----   -----    ---------------------
470   WS   MTI 49   MATLS & INSTALL DEA CAGE     $  2,296.74    STORAGE SYSTMS CO          4848    1995    WILMINGTON SMALL PROJ
           ------   --------------------------   -----------    -----------------          ----   -----    ---------------------
471   WS   MTI 67   SLURRY BLDG APPLICATION #4   $ 47,410.00    MOSACO                     3816    1995    WILMINGTON PLANT
           ------   --------------------------   -----------    -----------------          ----   -----    ---------------------
                                                 $314,525.68
</TABLE>

<PAGE>   43

                              Exhibit A
                              Ohio Loan Collateral
<TABLE>
DUPONT ASSETS AT MEDISORB VENTURE: POLYMER EQUIPMENT AT BLUE ASH SITE (TO BE SOLD TO ALKERMES)

Current as of:  March 4, 1996
<CAPTION>

MTI PROJ PARTNER                                                                           ACQ           DD
NUMBER   REF     DESCRIPTION     AMOUNT    VENDOR             ITEM                PO #     YR   CK #    TAG #   LOCATION
- -------- ------- -----------     ------    ------             ----                ----     --   ----    -----   --------
<S>      <C>     <C>           <C>         <C>                <C>                 <C>      <C>  <C>     <C>     <C>
MTI-02   P-8871  Polymr Mfg    19,042.50   American Reactor   Reactor system      3903     90   N/A     1751    0006 + 0002  BA
                                             (Hoopes)       
MTI-02   P-8871  Polymr Mfg    31,737.50   American Reactor   Reactor system      3903     90   N/A     1751    0006 + 0002  BA
                                             (Hoopes)       
MTI-02   P-8871  Polymr Mfg    12,695.00   American Reactor   Reactor system      3903     90   N/A     1751    0006 + 0002  BA
                                             (Hoopes)       
MTI-02   P-8871  Polymr Mfg    63,475.00   American Reactor   Reactor system      3903     90   N/A     1751    0006 + 0002  BA
                                             (Hoopes)       
MTI-02   P-8871  Polymr Mfg     1,370.78   Baxter             Vacuum pump         12436    92   N/A
MTI-02   P-8871  Polymr Mfg     7,600.22   Baxter             Refrigerators &     CC       90   N/A
                                                                recorders     
MTI-02   P-8871  Polymr Mfg     1,516.67   Baxter             Vacuum oven         CC       90   N/A
MTI-02   P-8871  Polymr Mfg       673.88   Baxter             MDL DI Circulator   CC       90   N/A
MTI-02   P-8871  Polymr Mfg     2,802.38   Baxter             Vacuum oven N8255-3 11482    92   N/A
MTI-02   P-8871  Polymr Mfg       485.16   Baxter             Drierite gas        11643    92   N/A
                                                                purifier   
MTI-02   P-8871  Polymr Mfg     3,764.70   Baxter             N8700-2 w/flex      12442    92   N/A
                                                                thermocouple 
MTI-02   P-8871  Polymr Mfg    11,309.00   Berlyn Corp        Pell-4 Processor    CC       90   N/A     1752    0007  BA
MTI-02   P-8871  Polymr Mfg     2,339.00   Berlyn Corp        Water cooling tank  CC       90   N/A
MTI-02   P-8871  Polymr Mfg       569.30   Birmingham Valve   10 SS valves; 1     CC       90   N/A
                                                                brass valve   
MTI-02   P-8871  Polymr Mfg       565.00   Bremer Electric    Control box         CC       90   N/A
MTI-02   P-8871  Polymr Mfg     7,433.59   Chromalox          Oil control system  CC       90   N/A     1753    0004  BA
MTI-02   P-8871  Polymr Mfg    19,749.60   Chromalox          Oil heater and tank CC       90   N/A     1753    0004  BA
MTI-02   P-8871  Polymr Mfg     8,756.50   Chromalox          Oil heater          CC       90   N/A     1753    0004  BA
MTI-02   P-8871  Polymr Mfg        35.59   Cin Belting &      Overload heaters    CC       90   N/A
                                             Trans       
MTI-02   P-8871  Polymr Mfg        30.56   Cincinnati Piping  Reducing plugs      CC       90   N/A
MTI-02   P-8871  Polymr Mfg       191.11   Cincinnati Piping  Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg       193.56   Cincinnati Piping  Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg       145.23   Cincinnati Piping  Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg       361.16   Cincinnati Piping  Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg     1,028.00   Cincinnati Piping  SS Braided hose     CC       90   N/A
MTI-02   P-8871  Polymr Mfg       430.85   Cincinnati Piping  Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg       661.60   Cincinnati Piping  Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg        80.57   Colesco            MP Regulator        CC       90   N/A
MTI-02   P-8871  Polymr Mfg       233.04   Colesco            Gauges              CC       90   N/A
MTI-02   P-8871  Polymr Mfg        65.96   Colesco            Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg    48,693.50   Control Solutions  Dehumidifier        CC       90   N/A     1754    0012  BA
MTI-02   P-8871  Polymr Mfg     1,085.00   Cyber Research     DAS 2805 nLOF       CC       90   N/A
                                                                SIFIRL xonc 
MTI-02   P-8871  Polymr Mfg       460.00   Cyber Research     DAS 756             CC       90   N/A
                                                                Thermocouple      
MTI-02   P-8871  Polymr Mfg       194.00   Cyber Research     Signal cond. board  CC       90   N/A
MTI-02   P-8871  Polymr Mfg       928.00   Distallation Engg  Product receiver    CC       90   N/A
MTI-02   P-8871  Polymr Mfg        66.47   FD Lawrence Elec   Control station     CC       90   N/A
MTI-02   P-8871  Polymr Mfg       693.50   Fischer America    Rotor w/TeflonR     CC       90   N/A
                                                                blades            
         P-8871  Polymr Mfg     1,308.40   Fischer America    Rotary shaft seals  CC       90   N/A
MTI-02   P-8871  Polymr Mfg     1,039.50   Fischer America    Condensor           CC       90   N/A
</TABLE>


<PAGE>   44

                              Exhibit A
                              Ohio Loan Collateral
<TABLE>
DUPONT ASSETS AT MEDISORB VENTURE: POLYMER EQUIPMENT AT BLUE ASH SITE (TO BE SOLD TO ALKERMES)

Current as of:  March 4, 1996
<CAPTION>

MTI PROJ PARTNER                                                                                ACQ           DD
NUMBER   REF     DESCRIPTION        AMOUNT    VENDOR               ITEM                PO #     YR   CK #    TAG #   LOCATION
- -------- ------- -----------        ------    ------               ----                ----     --   ----    -----   --------
<S>      <C>     <C>              <C>         <C>                  <C>                 <C>      <C>   <C>    <C>     <C>
MTI-02   P-8871  Polymr Mfg        2,133.50   Fischer America      Evaporator          CC       90   N/A
MTI-02   P-8871  Polymr Mfg          853.25   Forbes Distributing  Conrol cabinet      CC       90   N/A
MTI-02   P-8871  Polymr Mfg          369.00   Gateway Supply       B23 Parker coupling CC       90   N/A
MTI-02   P-8871  Polymr Mfg          957.94   Hard Warehouse       XT Computer         CC       90   N/A
MTI-02   P-8871  Polymr Mfg        2,232.00   International        Dump can            9605     92   N/A     1755    0023 BA
                                                Reactor            
MTI-02   P-8871  Polymr Mfg       21,819.18   International        10 gal custom plymr 9605     92   N/A     1755    0023 BA
                                                Reactor              Reactor
MTI-02   P-8871  Polymr Mfg          262.95   Johnson Nash         Tank stand          CC       90   N/A
MTI-02   P-8871  Polymr Mfg          850.00   Killion Extruders    Prepayt - vent      11257    92   N/A
                                                                     diverter     
MTI-02   P-8871  Polymr Mfg        3,500.00   Killion Extruders    Tube Die            6465     91   N/A
MTI-02   P-8871  Polymr Mfg        1,995.00   King's Electric      Reactor support     CC       90   N/A
                                                                     circitry      
MTI-02   P-8871  Polymr Mfg       15,192.23   Lasermike            Laser scanner       7270     91   N/A     1756    0037 BA
MTI-02   P-8871  Polymr Mfg        6,079.48   M&W Controls         Data Logger         CC       90   N/A
MTI-02   P-8871  Polymr Mfg        4,063.08   M&W Products         Temperature         CC       90   N/A
                                                                     controls  
MTI-02   P-8871  Polymr Mfg        3,630.00   Machine Drice Co     Parajust            CC       90   N/A
MTI-02   P-8871  Polymr Mfg          338.89   Matheson, Inc        Vacuum regulator    CC       90   N/A
MTI-02   P-8871  Polymr Mfg          154.93   Mayer Electric       Hoffman Boxes & 
                                                                     Mounting Plate    CC       90   N/A
MTI-02   P-8871  Polymr Mfg           36.99   McMaster Carr        SS Hdwre            CC       90   N/A
MTI-02   P-8871  Polymr Mfg          113.10   McMaster Carr        Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg          709.23   McMaster Carr        Various valves &    CC       90   N/A
                                                                     gauges         
MTI-02   P-8871  Polymr Mfg           27.23   McMaster Carr        Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg           59.00   McMaster Carr        Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg          448.69   McMaster Carr        Piping Hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg          344.47   McMaster Carr        Piping Hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg           57.70   McMaster Carr        Piping Hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg          119.75   McMaster Carr        Piping Hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg        5,123.48   Mettler Instrument   D0337 drying oven   11754    92   N/A     1806    QC LAB BA
                                                                     for DL37        
MTI-02   P-8871  Polymr Mfg          298.67   Mettler Instrument   110146 cable        11754    92   N/A     1806    QC LAB BA
                                                                     connector  
MTI-02   P-8871  Polymr Mfg        7,371.54   Mettler Instrument   DL37 Coulometric    11754    92   N/A
                                                                     Titrator       
MTI-02   P-8871  Polymr Mfg        5,884.87   Mixing Equip Co      Model XJC-30 AM     CC       90   N/A
                                                                     unit          
MTI-02   P-8871  Polymr Mfg          727.02   Monsanto             20 gal T-66 Heat    CC       90   N/A
                                                                     trf fluit      
MTI-02   P-8871  Polymr Mfg          833.45   Mosier               Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg          364.60   Mosier               Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg        1,468.01   Mosier               Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg          360.30   Mosier               Piping hdwre        CC       90   N/A
MTI-02   P-8871  Polymr Mfg          547.09   Multitherm           Heat trf fluid      CC       90   N/A
MTI-02   P-8871  Polymr Mfg        7,625.00   MWS                  Piping, instltn,    CC       90   N/A
                                                                     insulation     
MTI-02   P-8871  Polymr Mfg          187.48   Newark Electronics   500ft conductor     CC       90   N/A
                                                                     cable         
MTI-02   P-8871  Polymr Mfg           83.35   Newark Electronics   15 terminal strops  CC       90   N/A
MTI-02   P-8871  Polymr Mfg          990.72   Omega Engg           21 thermocouples    CC       90   N/A
</TABLE>


<PAGE>   45

                              Exhibit A
                              Ohio Loan Collateral
<TABLE>
DUPONT ASSETS AT MEDISORB VENTURE: POLYMER EQUIPMENT AT BLUE ASH SITE (TO BE SOLD TO ALKERMES)

Current as of:  March 4, 1996
<CAPTION>

MTI PROJ PARTNER                                                                             ACQ           DD
NUMBER   REF     DESCRIPTION      AMOUNT     VENDOR             ITEM                PO #     YR   CK #    TAG #   LOCATION
- -------- ------- -----------      ------     ------             ----                ----     --   ----    -----   --------

<S>      <C>     <C>             <C>         <C>                <C>                 <C>      <C>  <C>     <C>     <C>
MTI-02   P-8871  Polymr Mfg       1,717.20   Omega Engg         Transmitter &       CC       90   N/A
                                                                  interface   
MTI-02   P-8871  Polymr Mfg       5,050.00   Pacific Scientific Air particle        CC       90   N/A     1807
                                                                  counter    
MTI-02   P-8871  Polymr Mfg      21,105.00   Paul O. Abbe, Inc  24" Rota Cone Vac   CC       90   N/A     1757    0010 BA
                                                                  Dryer           
MTI-02   P-8871  Polymr Mfg       1,188.65   Price Supply       Misc elbows,        CC       90   N/A
                                                                  nipples couplings 
MTI-02   P-8871  Polymr Mfg          96.85   Queensgate Supply  Misc hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg       1,750.75   Reconciling item   Detail missing               90   N/A
MTI-02   P-8871  Polymr Mfg         132.76   Rodem Proc Equip   Piping hanger       CC       90   N/A
                                                                  assmby      
MTI-02   P-8871  Polymr Mfg       1,204.05   Rodem Proc Equip                       CC       90   N/A
MTI-02   P-8871  Polymr Mfg         605.41   Rodem Proc Equip   Piping hanger       CC       90   N/A
                                                                  assmby      
MTI-02   P-8871  Polymr Mfg       4,766.30   Rodem Proc Equip   Clean table/caster  CC       90   N/A
MTI-02   P-8871  Polymr Mfg         243.75   Sargent Welch      Pump kit            CC       90   N/A
MTI-02   P-8871  Polymr Mfg         746.56   Sargent Welch      2 freeze drying     CC       90   N/A
                                                                  trap          
MTI-02   P-8871  Polymr Mfg       1,487.88   Sargent Welch      Pump                CC       90   N/A
MTI-02   P-8871  Polymr Mfg          17.22   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg          80.35   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg         405.75   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg         250.11   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg          62.77   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg         148.88   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg          59.08   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg         188.96   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg         994.49   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg         174.86   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg         289.83   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg          17.44   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg         -79.92   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg          72.50   Sharonville Elec   Elec Hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg         214.06   Sharonville Elec   Elec hdwre          CC       90   N/A
MTI-02   P-8871  Polymr Mfg       7,125.00   Sthrn Res          Melt-Metering pump  CC       90   N/A
MTI-02   P-8871  Polymr Mfg      19,150.00   Sthrn Res          Coplymr processng   CC       90   N/A     1758    0006 BA
                                                                  sys             
MTI-02   P-8871  Polymr Mfg      16,000.00   Stolle Precision   Polymerizer         CC       90   N/A     1759    0006 BA
MTI-02   P-8871  Polymr Mfg      16,000.00   Stolle Precision   Polymerizer         CC       90   N/A     1761    0006 BA
MTI-02   P-8871  Polymr Mfg      15,250.00   Stolle Precision   Vessel              CC       90   N/A   
MTI-02   P-8871  Polymr Mfg         945.00   Stolle Precision   SS pans & beauty    CC       90   N/A
                                                                  plates         
MTI-02   P-8871  Polymr Mfg       1,661.10   Sullivan Elec      Assmbl temp         CC       90   N/A
                                                                  contrllr  
MTI-02   P-8871  Polymr Mfg         101.12   Tapco              Thermocouple probe  CC       90   N/A
MTI-02   P-8871  Polymr Mfg         201.97   Terriss Industries Pipes & tri clamps  CC       90   N/A
MTI-02   P-8871  Polymr Mfg      13,278.44   Utensco            Pressure tank       CC       90   N/A
MTI-02   P-8871  Polymr Mfg         910.65   Valcor Engg        Solenoid valve      CC       90   N/A


</TABLE>

<PAGE>   46

                              Exhibit A
                              Ohio Loan Collateral
<TABLE>
DUPONT ASSETS AT MEDISORB VENTURE: POLYMER EQUIPMENT AT BLUE ASH SITE (TO BE SOLD TO ALKERMES)

Current as of:  March 4, 1996
<CAPTION>

MTI PROJ PARTNER                                                                              ACQ             DD
NUMBER   REF     DESCRIPTION          AMOUNT    VENDOR             ITEM                PO #   YR    CK #     TAG #   LOCATION
- -------- ------- -----------          ------    ------             ----                ----   --    ----     -----   --------

<S>      <C>     <C>                <C>         <C>                <C>                 <C>    <C>   <C>  <C>         <C>
MTI-02   P-8871  Polymr Mfg           3,322.67  VWR Scientific     PM4800 Balances     6310    91   N/A  1837 + 1838 BA
                                                                     (2 ea)        
MTI-02   P-8871  Polymr Mfg           1,128.01  VWR Scientific     Vac pump w/guard    CC      90   N/A
MTI-02   P-8871  Polymr Mfg             155.63  WW Grainger        Elec hdwre          CC      90   N/A
MTI-02   P-8871  Polymr Mfg             121.54  WW Grainger        Misc hdwre          CC      90   N/A
MTI-02   P-8871  Polymr Mfg             114.02  WW Grangeer        Workbench/tool      CC      90   N/A
                                                                     cabinet      
MTI-02   P-8871  Polymr Mfg             623.78  WW Granger         2 ton floor crane   CC      90   N/A
MTI-02   P-8871  Polymr Mfg             523.54  WW Granger         Vacuum pump         CC      90   N/A
MTI-02   P-8871  Polymr Mfg             152.01  Yellow Freight     Freight                     90   N/A
MTI-02   P-8871  Polymr Mfg              19.00  Zenith/Parker      Freight             CC      90   N/A
MTI-02   P-8871  Polymr Mfg           1,151.00  Zenith/Parker      Heat Jacket         CC      90   N/A
MTI-08   MT-01   Device-Extrusion     7,058.94  Blue M             Lab oven            9191    91   N/A
MTI-16   MT-07   Molding/Extrusion   13,206.41  VWR Scientific     Welch vacuum pump   1400    93   224  1798 + 1799 0027 + 0037  BA
MTI-16   MT-07   Molding/Extrusion              VWR Scientific     Welch vacuum pump   1400    93   227  1798 + 1799 0027 + 0037  BA
MTI-16   MT-07   Molding/Extrusion              VWR Scientific     Welch vacuum pump   1400    93   237  1798 + 1799 0027 + 0037  BA
MTI-22   MT-07   Polymr Mfg           1,186.00  Berlyn             Var speed drive     535     93   117     1825     0006  BA
MTI-22   MT-07   Polymr Mfg           9,973.00  International      Helical agitator    409     93   106     1826     0006  BA
                                                  Reactor     
MTI-23           Polymr Mfg             275.93  Comp USA           Injet Printer       867    93-94
MTI-23           Polymr Mfg           1,686.95  Comp USA           486 DX 2-50(Cust    1355   93-94
                                                                     Serv)          
MTI-23           Polymr Mfg           7,872.00  LCI                Melt Pump                  93-94
MTI-23           Polymr Mfg           8,373.00  LCI                Ball Valve                 93-94
MTI-33           Polymr Mfg           7,518.33  Panametrics        Hygrometer          3211   93-94
MTI-33           Polymr Mfg           4,352.93  Fisher Scientific  Freezer             3355   93-94
MTI-55           Polymr Mfg           8,063.13  Barramundi         Air Samples         3987   93-94
MTI-50           BSL: Polymer Mfg     7,533.16  LCI Fluid Sys      Polymer gear pump   4000    95   434     1771     0006  BA
MTI-52           BSL: Med Devices    22,260.00  Pananetrics        Hygometer           3187    95   378     1776     0006  BA
MTI-71           Polymr Mfg           7,400.00  Pak Teem, Inc.     Fab. Melt Pump Lft  9700   1995
                                                                     Table           
           040                       18,186.09  M-Tek Inc.         Corr Vac M                 Aug-87
           051                          509.43  M-Tek Inc.         Corr Vac M                 Nov-87
           060                       15,608.50  Paul O Abb         Rotacone V                 May-89
                                          0.00  Mettler            Balance AE163
                                          0.00  Am Sci             Balance S-P40
                                      4,118.96  VWR Sci            Balance AT-261-T           Dec-90
                                      1,046.93  VWR Sci            Shaker Wrist               Dec-90
                                                                     Action 8FLSK             

GRAND TOTAL DUPONT: Polymer Mfg     639,180.26
                                    ==========
</TABLE>


<PAGE>   47
                                  Exhibit B


                   Locations in Which Equipment is Located,
                       Including Owners of Real Estate


Cambridge Premises
- ------------------

All Equipment owned by Alkermes, Inc. and Alkermes Controlled Therapeutics,
Inc. is located at the Cambridge Premises.

The Cambridge Premises are leased by Alkermes, Inc. and are owned by Forest
City 64 Sidney Street, Inc.

Ohio Premises
- -------------

All Equipment owned by Alkermes Controlled Therapeutics Inc. II is located at
the Ohio Premises.

The Blue Ash Facility is owned by the Ralph J. Stolle Company.






                                     -1-














<PAGE>   1

                                                                    Exhibit 10.5


                                PLEDGE AGREEMENT

     PLEDGE AGREEMENT dated as of September 27, 1996 between Alkermes, Inc., a
Pennsylvania corporation (the "Pledgor") and Fleet National Bank (the
"Pledgee"). The Pledgee is the successor by merger to Fleet Bank of
Massachusetts, N.A. ("Fleet Mass"). This Agreement amends and restates in its
entirety, and supersedes the terms of, that certain Pledge Agreement dated as of
November 19, 1992 between the Pledgor and Fleet Mass.

     1. PLEDGE. The Pledgor hereby pledges, transfers and assigns to the
Pledgee, and hereby grants a security interest to the Pledgee in, all of the
Collateral (as hereinafter defined) and all proceeds thereof.

     2. SECURITY. This Agreement is made with the Pledgee to secure all of the
Secured Obligations of the Pledgor to the Pledgee. As used herein, the term
"Secured Obligations" means each of the following: (i) the full and punctual
payment when due of all liabilities of the Pledgor and/or Alkermes Controlled
Therapeutics, Inc. ("ACT I") to the Pledgee under that certain $3,187,496
original principal amount promissory note dated December 23, 1994 made by the
Pledgor and payable to the order of Fleet Mass (the Pledgee having succeeded to
the rights of Fleet Mass thereunder), as amended by Allonge to Note of even date
herewith among the Pledgor, ACT I and the Pledgee (said December 23, 1994
promissory note, as so amended, being hereinafter referred to as the "1994
Note"), (ii) the full and punctual payment when due of all liabilities of the
Pledgor and/or ACT I to the Pledgee under that certain $1,500,000 original
principal amount promissory note dated December 19, 1995 made by the Pledgor and
payable to the order of Fleet Mass (the Pledgee having succeeded to the rights
of Fleet Mass thereunder), as amended by Allonge to Note of even date herewith
among the Pledgor, ACT I and the Pledgee (said December 19, 1995 Promissory
Note, as so amended, being hereinafter referred to as the "1995 Note"), (iii)
the full and punctual payment when due of all liabilities of the Pledgor and/or
Alkermes Controlled Therapeutics Inc. II ("ACT II") to the Pledgee under that
certain $5,000,000 original principal amount promissory note of even date
herewith (the "Ohio Term Note") made by the Pledgor and ACT II and payable to
the Pledgee, (iv) the full and punctual payment when due of all liabilities of
the Pledgor, ACT I and/or ACT II to the Pledgee under any Additional Term Note
(as defined in the below-described Letter Agreement) which may hereafter be
issued pursuant to Section 1.5 of said Letter Agreement, (v) the full and
punctual payment, performance and observance by the Pledgor, ACT I and ACT II of
all liabilities, agreements, warranties and covenants under or contained in that
certain letter agreement of even date herewith (the "Letter Agreement") among
the Pledgor, ACT I, ACT II and the Pledgee and/or any other instruments or
agreements securing, guaranteeing or relating in any way to the indebtedness
represented by the 1994 Note, the 1995 Note, the Ohio Term Note or any
Additional Term Note (the Letter Agreement, the 1994 Note, the 1995 Note, the
Ohio Term Note, any Additional Term Note and such other instruments and
agreements being hereinafter referred to, collectively, as the "Loan
Documents"), and (vi) the payment and performance as and when due of all
indebtedness, obligations, agreements and liabilities, direct and indirect,
matured or unmatured, primary or secondary, certain or contingent, whether or
not 



<PAGE>   2

otherwise secured or guaranteed, of the Pledgor, ACT I and/or ACT II to the
Pledgee, whether now owed or existing or hereafter owing or incurred, to the
extent that the foregoing arise out of or in connection with the Loan Documents
or any of same, including, without limitation, costs and expenses incurred by
the Pledgee in collecting or enforcing or attempting to collect or enforce any
of the foregoing.

     The Pledgor will at all times maintain Collateral with respect to which the
Pledgee has been transferred or otherwise has a first security interest with an
aggregate Collateral Value of not less than the Required Minimum Value (as
defined in the Letter Agreement), as in effect from time to time. "Collateral
Value" of any of the Collateral shall mean the fair market value thereof. At any
time when no Event of Default or Default (each as hereinafter defined) has
occurred and is continuing, the Pledgor (i) may request the release of, and the
Pledgee will release, a portion of the Collateral, and (ii) may substitute items
of Collateral (which substitute items of Collateral will consist of Government
Securities (as defined in the Letter Agreement) or deposit accounts with the
Pledgee); provided that in each such case, after giving effect to such release
or substitution, as the case may be, there will remain Collateral subject to
this Agreement with respect to which the Pledgee has been transferred or
otherwise has a first security interest with an aggregate Collateral Value of
not less than the then Required Minimum Value. Subject to the right of the
Pledgor to obtain a partial release or substitution pursuant to the immediately
preceding sentence, interest and dividends on the Pledgor's investment in the
Collateral shall become part of the Collateral and shall be held by the Pledgee
hereunder. Except as expressly provided in this paragraph, no securities, cash,
accounts, rights, interests or other property now or hereafter included within
the Collateral may be withdrawn from the Collateral.

     Collateral which consists of certificated securities, instruments,
deposits, money, accounts or any similar items ("Possessory Collateral") will be
physically delivered to the Pledgee accompanied by an assignment thereof
endorsed in blank with stock or bond powers attached, or endorsed to the order
of the Pledgee, as the case may be. The Pledgor will give all such notices and
make all such filings with respect to such other certificated securities or
uncertificated securities, and will take all other actions requested by the
Pledgee, as may be required in order to maintain the transfer, perfection and
priority of the security interests of the Pledgee in all of the Collateral.

     Unless the Pledgee otherwise consents, all Collateral will either be in the
form of one or more deposit accounts with the Pledgee or in the form of
Government Securities (as defined in the Letter Agreement). Except for treasury
notes not represented by a physical certificate ("Federal Book-Entry
Collateral"), all of the Collateral will be Possessory Collateral, and the
interest of the Pledgee in Possessory Collateral will be perfected by
possession. As to Federal Book-Entry Collateral, the Pledgor will execute and
deliver all such instructions and instruments of transfer as shall be necessary
or desirable in order to accomplish a book-entry transfer of all Federal
Book-Entry Collateral to a general account maintained at the Federal Reserve
Bank of Boston by the Pledgee. The name of the Pledgee shall appear as the owner
of all Federal Book-Entry Collateral on the books and records of the Federal
Reserve Bank of Boston.

                                       -2-
<PAGE>   3

     3. COLLATERAL. A list of the initial Collateral pledged hereunder is
attached hereto as Schedule A and incorporated herein by this reference, as same
may be amended from time to time. For purposes of this Agreement, "Collateral"
means and includes (i) all of the cash, securities and property listed on
Schedule A hereto, (ii) all cash, securities and other property hereafter
deposited with the Pledgee by the Pledgor pursuant to Section 11 below and (iii)
all replacements, substitutions, dividends and distributions in respect of any
of the foregoing. The Collateral shall also include all of the Pledgor's cash,
bank deposits and certificates of deposit which represent proceeds of any of the
items of Collateral described in the immediately preceding two sentences. If any
item of Collateral is added pursuant to Section 2 or Section 11, at the time of
such addition the Pledgor shall deliver to the Pledgee a listing of all
Collateral, which listing shall be substituted for the Schedule A theretofore in
effect and shall serve as an amendment to this Agreement. The Pledgor
represents, warrants and agrees that Schedule A and each successive Schedule A
shall be deemed to set forth a description of any security listed therein which
shall be sufficient for purposes of transfer to the Pledgee of a security
interest therein.

     4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents, warrants and
agrees that: (a) the Pledgor has good and valid title to the Collateral, free
and clear of any liens, charges or encumbrances thereon or affecting the title
thereto (except for the security interest created hereby), and there is no
Possessory Collateral which has not been delivered to the Pledgee; (b) the
Pledgor has good right and lawful authority to pledge, mortgage, assign,
transfer, deliver, deposit, set over and confirm unto the Pledgee the Collateral
as provided herein and will warrant and defend the title thereto and the
security interest therein conveyed to the Pledgee by this Agreement against all
claims of all persons and will maintain and preserve such security interest; (c)
the execution, delivery and performance of this Agreement and the pledge and/or
delivery of the Collateral to the Pledgee do not and will not contravene the
charter or by-laws of the Pledgor or any agreement, commitment, indenture,
contract or other obligation or restriction affecting the Pledgor; and (d) this
Agreement is the legal, valid and binding obligation of the Pledgor, enforceable
in accordance with its terms, except as enforceability may be subject to or
affected by applicable bankruptcy, reorganization, insolvency or other similar
laws affecting the enforcement of creditors' rights generally. The Pledgor
covenants that it will have the like title to and right to pledge any other
property of the Pledgor at any time hereafter purported to be pledged to the
Pledgee hereunder.

     5. EVENTS OF DEFAULT. As used herein, an Event of Default shall be deemed
to have occurred upon the occurrence of any one or more of the following: (a)
the failure by the Pledgor and ACT I or ACT II to pay to the Pledgee any sum
when due (subject to any applicable notice and/or grace period) under the 1994
Note, the 1995 Note, the Ohio Term Note, any Additional Term Note and/or any of
the other Loan Documents; (b) any failure by the Pledgor to fulfill any of its
obligations under Section 11 hereof; (c) any representation or warranty of the
Pledgor made herein shall at any time prove to have been false in any material
respect when made; (d) the Pledgor shall default in the performance of any other
term, covenant or agreement contained in this Agreement and such default shall
continue unremedied for fifteen (15) days after notice thereof shall have been
given to the Pledgor; or (e) any other "Event of Default" defined in any of the
Loan Documents shall exist and shall remain unwaived or uncured beyond 

                                      -3-
<PAGE>   4

the expiration of any applicable notice and/or grace period. As used herein,
"Default" means any event or circumstance which, with the passage of time or the
giving of notice or both, could become an Event of Default.

     6. DIVIDENDS; VOTING RIGHTS. All interest earned on the Collateral and any
cash dividends paid in respect of the Collateral shall be received by or paid
over to the Pledgee and shall be held by the Pledgee as part of the Collateral.

     Unless and until an Event of Default shall have occurred, the Pledgor shall
retain and may exercise all voting rights with respect to Collateral, and all
rights with respect to conversion, exchange, subscription, option, warrant and
other similar rights and privileges pertaining to Collateral ("Rights");
PROVIDED that if an Event of Default occurs and is continuing all Rights shall
be exercisable only by or with the prior written consent of the Pledgee;
PROVIDED FURTHER that the Pledgee shall not have any voting Rights unless and
until it shall have given the Pledgor written notice that such Event of Default
has occurred and is continuing and that the Pledgee may exercise, or intends to
exercise, any such voting Right, and the Pledgee shall have no duty at any time
whatsoever to exercise any Right and shall not be responsible for any failure to
do so or delay in so doing.

     7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. If an Event of Default has
occurred and is continuing, the Pledgee shall have the right to exercise in
respect of the Collateral all the rights and remedies available to a secured
party under the Uniform Commercial Code in effect at the time in The
Commonwealth of Massachusetts. To the maximum extent permitted by applicable
law, the Pledgee may (after only such notice to the Pledgor as may be required
by applicable law) sell, assign and deliver the whole or, from time to time, any
part of the Collateral, or any interest in any part thereof, at any private sale
or at public auction, with or without demand, advertisement or notice of the
time or place of sale or adjournment thereof or otherwise, for cash, on credit
or for other property, for immediate or future delivery, the Pledgor hereby
waiving and releasing (to the maximum extent permitted by applicable law) any
and all right or equity of redemption whether before or after sale hereunder; at
any such sale the Pledgee may bid for and purchase the whole or any portion of
the Collateral and may make payment therefor by any means. The Pledgee shall
apply the cash proceeds actually received by it from any sale or other
disposition, together with any other moneys at the time held by it hereunder, to
the reasonable expenses of retaking, holding, preparing for sale, selling and
the like, to reasonable attorneys' fees, brokers' fees and all other reasonable
expenses which may be incurred by the Pledgee in collecting sums due under the
1994 Note, the 1995 Note, the Ohio Term Note, any Additional Term Note and/or
any of the other Loan Documents or in enforcing this Agreement; and then to the
Secured Obligations; and any amount remaining in excess of the sum of (i) such
expenses and (ii) the Secured Obligations shall be paid to the Pledgor. The
Pledgee shall not be required to resort to or marshall any present or future
security for, or guaranties of, the obligations secured hereby, or to resort to
any such security or guaranties in any particular order. The Pledgee's remedies
shall be cumulative with all other rights, however existing or arising, and may
be exercised concurrently or separately. Neither failure nor delay on the
Pledgee's part to exercise any right, remedy, power or privilege provided for
herein or by statute or at law or in equity shall operate as a waiver thereof,
nor shall any single or partial exercise of 

                                      -4-
<PAGE>   5

any such right, remedy, power or privilege preclude any other further exercise
thereof or the exercise of any other right, remedy, power or privilege.

     The Pledgor recognizes that the Pledgee may be unable to effect a public
sale of the Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, but may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such securities for their own
account, for investment, and not with a view to the distribution or resale
thereof. The Pledgor agrees that any such private sales may be at prices and on
other terms less favorable to the seller than if sold at public sales and that
such private sales shall not be deemed to have been made in a commercially
unreasonable manner on account of their private character.

     The Pledgee shall have no duty or liability to preserve rights pertaining
to any Collateral, except the exercise of reasonable care to (i) assure the
safekeeping of Possessory Collateral, (ii) segregate the Possessory Collateral
from the assets of the Pledgee, (iii) cause the security interest of the Pledgee
in the Collateral to be noted in accordance with customary securities industry
standards and practices, and (iv) maintain accurate books and accounts with
respect to the Collateral, including identification of such Collateral as being
owned by the Pledgor.

     8. PLEDGOR'S OBLIGATIONS NOT AFFECTED. The obligations of the Pledgor under
this Agreement shall remain in full force and effect without regard to, and
shall not be impaired or affected by any amendment or modification of or
addition or supplement to the 1994 Note, the 1995 Note, the Ohio Term Note, any
Additional Term Note and/or any of the other Loan Documents or any waiver,
consent, extension, indulgence or other action or inaction in respect of this
Agreement, the 1994 Note, the 1995 Note, the Ohio Term Note, any Additional Term
Note and/or any of the other Loan Documents. This Agreement and the pledge and
security interest granted hereby shall be of no further force or effect upon the
full payment and satisfaction of all of the Secured Obligations and immediately
thereafter the Pledgee will release to the Pledgor all Collateral held
hereunder, together with appropriate releases and discharges of such pledge and
security interest.

     9. NOTICE. All notices and other communications hereunder shall be in
writing and shall be given in accordance with the provisions of the Letter
Agreement.

     10. FURTHER ASSURANCES. The Pledgor will do all such acts, and will furnish
to the Pledgee all such financing statements, certificates, opinions and other
documents, and will do or cause to be done all such other things, as the Pledgee
may reasonably request from time to time in order to give full effect to this
Agreement and to secure the rights of the Pledgee hereunder.

     11. MAINTENANCE OF VALUES. If, at any date, the Collateral shall have an
aggregate Collateral Value which is less than the then Required Minimum Value
for any reason (including, without limitation, due to any decline in value of
any Collateral and/or due to increase in the Required Minimum Value pursuant to
the PROVISO contained in the second sentence of Section 1.8 of the Letter
Agreement), then the Pledgee shall immediately notify the 


                                      -5-
<PAGE>   6

Pledgor by telephone or facsimile of such Collateral Value and the Pledgor shall
deposit with the Pledgee, within two (2) business days following such
notification, additional cash or securities to be held as Collateral hereunder,
so that the aggregate Collateral Value of all Collateral then so held will not
be less than the then effective Required Minimum Value.

     12. COSTS AND INDEMNIFICATION. The Pledgor agrees to pay to the Pledgee on
demand any and all reasonable costs and expenses, and to indemnify and hold
harmless the Pledgee from and against any and all claims, demands, damages and
liabilities that may be incurred or paid by the Pledgee in connection with the
Collateral, this Agreement or the preparation, amendment, modification,
interpretation, administration or enforcement of this Agreement; provided that
the Pledgor will not be required hereby to indemnify the Pledgee against any
claims, demands, damages or liabilities arising out of the Pledgee's gross
negligence or willful misconduct.

     13. MISCELLANEOUS. Neither this Agreement nor any provisions hereof may be
amended, modified, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
amendment, modification, waiver, discharge or termination is sought. The
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the Pledgor and the Pledgee. The
captions in this Agreement are for convenience of reference only and shall not
define or limit the provisions hereof. This Agreement shall be construed and
enforced in accordance with the laws of The Commonwealth of Massachusetts. This
Agreement may be executed simultaneously in several counterparts, each of which
will be deemed an original, but all of which together shall constitute one
instrument. If any term or provision of this Agreement or the application
thereof to any person, property or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Agreement and the application of such
term or provision to persons, properties and circumstances other than those as
to which it is invalid or unenforceable shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.

     IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this Agreement
to be duly executed, as an instrument under seal, as of the day and year first
above written.

                                            ALKERMES, INC.


                                            By /s/ Michael Landine
                                              ---------------------------------
                                              Its Senior Vice President and CFO

                                            FLEET NATIONAL BANK


                                            By /s/ Catherine Bruton
                                              ---------------------------------
                                              Its VP

                                      -6-
<PAGE>   7

                         SCHEDULE A TO PLEDGE AGREEMENT


     An interest equal to $1,000,000 face amount (the "Pledged Interest") of a
certain United States Treasury Bill due October 17, 1996 (CUSIP No. 99RM51A0)
standing in the name of the Pledgee or its nominee on the books of the Federal
Reserve Bank of Boston. The Pledged Interest has been credited to the "Alkermes,
Inc. Collateral Account" maintained on the books of the Pledgee and the
Collateral includes all right, title and interest of the Pledgor in and to said
Account.

<PAGE>   1
                                                                    Exhibit 10.6


                         MORTGAGE AND SECURITY AGREEMENT

     THIS MORTGAGE AND SECURITY AGREEMENT (this "Mortgage") made as of September
27, 1996 between Alkermes Controlled Therapeutics Inc. II, a Pennsylvania
corporation, with its principal place of business at 265 Olinger Circle,
Wilmington, OH and its chief executive offices at 64 Sidney Street, Cambridge,
MA 02139 (the "Mortgagor") and Fleet National Bank, with an office at 75 State
Street, Boston, MA 02109 (the "Mortgagee").

     WITNESSETH, that for consideration paid, in order to secure (a) the payment
of an indebtedness in the sum of Five Million and 00/100 ($5,000,000.00)
Dollars, lawful money of the United States and the interest thereon, to be paid
in accordance with that certain promissory note in said principal amount of even
date herewith (the "Ohio Term Note") issued by Alkermes, Inc., a Pennsylvania
corporation ("Alkermes") and the Mortgagor and payable to the order of the
Mortgagee, (b) the payment of the principal of, and interest on, all other
promissory notes of the Mortgagor, Alkermes and/or Alkermes Controlled
Therapeutics, Inc. ("ACT I") (the "Other Term Notes") which (i) may have
heretofore been issued by Alkermes under that certain letter agreement dated
November 19, 1992, as amended, between Alkermes and Fleet Bank of Massachusetts,
N.A. (the Mortgagee being the successor by merger to said Fleet Bank of
Massachusetts, N.A.) (said November 19, 1992 letter agreement having been
restated and superseded by the letter agreement of even date herewith (the "Loan
Agreement") among Alkermes, ACT I, the Mortgagor and the Mortgagee), as such
promissory notes have heretofore been amended or may hereafter be amended or
(ii) may now or hereafter be issued by the Mortgagor, Alkermes and/or ACT I
under the Loan Agreement, (c) the payment of all other charges provided for in
the Ohio Term Note and/or in any of the Other Term Notes (said Ohio Term Note
and said Other Term Notes being hereinafter collectively referred to as the
"Notes") and the payment of all other money secured hereby, (d) the performance
of all covenants and agreements of the Mortgagor hereinafter contained, and (e)
the payment and performance of any and all other liabilities, obligations,
covenants and agreements (direct or indirect, absolute or contingent, sole,
joint or several, now existing or hereafter arising) of the Mortgagor, Alkermes
and/or ACT I to the Mortgagee, including, without limitation, those now or
hereafter arising under the Loan Agreement; and all amendments, restatements,
renewals, extensions and substitutions of, for or to any of the foregoing, the
Mortgagor does hereby grant, bargain, sell, convey, assign, transfer, grant a
security interest in and mortgage to the Mortgagee and to its successors and
assigns, WITH MORTGAGE COVENANTS,

     ALL that certain lot, piece or parcel of land with the buildings and
improvements now or hereafter located thereon, situate, lying and being in Union
Township, County of Clinton, State of Ohio, which lot, piece or parcel of land
is more particularly bounded and described as set forth on Exhibit A attached
hereto and made a part hereof.

     TOGETHER with all and singular the tenements, hereditaments and
appurtenances thereunto belonging or in anywise appertaining, and the reversion
or reversions, remainder and remainders, rents, issues and profits thereof; and
also all the estate, right, title, interest, property, claim and demand
whatsoever of the Mortgagor of, in and to the same and of, in and to every part
and parcel thereof.


<PAGE>   2

     TOGETHER with all right, title and interest of the Mortgagor, if any, in
and to the land lying in the bed of any street, road or avenue, opened or
proposed, in front of or adjoining the above-described real estate to the
centerline thereof.

     TOGETHER with all fixtures now or hereafter located at above-described real
estate and such machinery, equipment and appliances as are owned by the
Mortgagor, now or hereafter located at said real estate and used in the
operation and maintenance of the buildings or improvements now or hereafter
located thereon (excluding, in any event, all such machinery, equipment and
appliances used in connection with the Mortgagor's business and operations), all
whether now owned or hereafter acquired, whether affixed or moveable, and all
replacements of, substitutions for and accessions to any of same and all
proceeds (including, without limitation, insurance proceeds) of any of foregoing
(all of the foregoing being collectively referred to herein as the "Equipment").

     TOGETHER with any and all awards or payments, including interest thereon,
and the right to receive the same, which may be made with respect to the
above-described property as a result of (a) the exercise of the right of eminent
domain, (b) the alteration of the grade of any street, or (c) any other injury
to or decrease in the value of said property, to the extent of all amounts which
may be secured by this Mortgage at the date of receipt of any such award or
payment by the Mortgagee, and of the reasonable counsel fees, costs and
disbursements incurred by the Mortgagee in connection with the collection of
such award or payment. The Mortgagor agrees to execute and deliver, from time to
time, such further instruments as may be requested by the Mortgagee to confirm
such assignment to the Mortgagee of any such award or payment.

     TOGETHER with all rights of the Mortgagor under all leases, tenancies,
occupancy agreements, construction contracts, architect's contracts, management
agreements and other agreements now or hereafter entered into by the Mortgagor
with respect to the construction of any improvements on the above-described
property and/or the occupancy or operation of any such improvements.

     TOGETHER with all proceeds (including, without limitation, insurance
proceeds) of any of the foregoing.

     TO HAVE AND TO HOLD all of the above granted and described real estate,
Equipment, property, rights and interests (collectively, the "Mortgaged
Premises") unto the Mortgagee, its successors and assigns, forever.

     PROVIDED ALWAYS, and these presents are upon this express condition, that
if (A) the Mortgagor shall well and truly pay unto the Mortgagee, its successors
or assigns, the principal sum of each of the Notes and the interest thereon at
the times and in the manner provided for in the Notes and shall pay all other
sums secured hereby and shall well and truly abide by and comply with each and
every covenant and condition secured hereby or set forth herein and (B) all
other moneys now owing or hereafter coming due under the Loan Agreement and/or
any of the other Loan Documents (as defined in the Loan Agreement) or now or
hereafter owed to the 


                                      -2-
<PAGE>   3

Mortgagee or to any affiliate of the Mortgagee shall have been duly paid in full
and discharged and all commitments and/or loan facilities now or hereafter made
available to Alkermes, ACT I and/or the Mortgagor by the Mortgagee and/or any
affiliate of the Mortgagee shall have been terminated, then these presents and
the estate hereby granted shall cease and determine. Notwithstanding the
foregoing, the Mortgagee agrees that if all of the principal of and interest on
that term loan (the "Ohio Term Loan") evidenced by the Ohio Term Note and all
other charges now or hereafter owed by the Mortgagor in respect of the Ohio Term
Loan shall have been paid in full and no "Event of Default" (as defined in the
Loan Agreement) then exists under the Loan Agreement, then the Mortgagee will,
at the Mortgagor's request, execute and deliver a release of this Mortgage.

     AND the Mortgagor covenants with the Mortgagee as follows:

     1. The Mortgagor will pay all sums of money required to be paid pursuant to
the Notes and all interest thereon, at the times and in the manner provided for
in the Notes.

     2. The Mortgagor will keep the buildings on the Mortgaged Premises and the
Equipment insured for the benefit of the Mortgagee against loss or damage by
fire, lightning, windstorm, hail, explosion, vandalism, malicious mischief and
all extended coverage and special extended coverage perils, all in amounts
approved by the Mortgagee not less than 100% of full replacement value of the
Mortgaged Premises, with agreed amount endorsement, and, when and to the extent
reasonably required by the Mortgagee, against any other risk typically insured
against by persons operating like properties in the locality of the Mortgaged
Premises. The Mortgagor shall also obtain and maintain (to the extent available
at commercially reasonable rates) boiler and machinery coverage (direct damage
and use and occupancy) on a replacement cost basis where deemed reasonably
advisable by the Mortgagee. At the request of the Mortgagee, the Mortgagor shall
also obtain, to the extent available at commercially reasonable rates, insurance
with respect to loss from flood and earthquake. In addition, the Mortgagor shall
obtain and maintain public liability insurance protecting the Mortgagor and the
Mortgaged Premises against liability for injuries to persons in the minimum
amount of $1,000,000 per person and $5,000,000 for each occurrence in the
aggregate. During any construction, the Mortgagor will also carry or cause to be
carried builders' risk-all risk insurance satisfactory to the Mortgagee. All
insurance herein provided for shall be in such form and written by such
companies as may be reasonably approved by the Mortgagee. All policies of
insurance which insure against any loss or damage to the Mortgaged Premises
shall provide for loss to be payable to the Mortgagee pursuant to the standard
mortgagee clause. A duplicate original copy or certificate of each policy of
insurance shall be furnished to the Mortgagee. All policies of insurance shall
contain a provision forbidding cancellation of such insurance either by the
carrier or by the insured until at least 30 days after written notice of the
proposed cancellation is given by registered mail, return receipt requested, to
the Mortgagee; and whenever any insurance is to expire for any reason, the
Mortgagor will deliver to the Mortgagee, at least 30 days prior to such
expiration, a renewal or replacement policy or certificate thereof, complying
with all of the conditions of this Section, marked "premium paid" or accompanied
by other evidence of payment satisfactory to the Mortgagee. If the Mortgagor
defaults in so insuring the Mortgaged Premises or in so delivering the policies,
the Mortgagee may, at its option, effect such insurance 


                                      -3-
<PAGE>   4

and pay the premiums therefor, and the Mortgagor will reimburse the Mortgagee on
demand for any premiums so paid, with interest from the time of payment by the
Mortgagee, all as provided in Section 4 below, and the same shall be secured by
this Mortgage. In the event of damage to or destruction of all or any part of
the Mortgaged Premises, the Mortgagor shall proceed forthwith to repair, restore
and replace the Mortgaged Premises to substantially their condition immediately
prior to such event or to a condition of at least equivalent value (and in any
event to such condition and within such time period as shall be required in
order to avoid any default under any leases, agreements or other restrictions
affecting the Mortgaged Premises), regardless of whether or not the proceeds of
any or all policies of insurance covering such damage or destruction are
sufficient to pay the entire cost thereof; provided that the Mortgagor will be
relieved of the obligation to repair, restore and replace the Mortgaged Premises
if, within the 30-day period described in the fifth sentence of the next
following paragraph, the Mortgagor pays in full the principal of and interest on
the Ohio Term Loan and all other charges now or hereafter owed by the Mortgagor
in respect of the Ohio Term Loan. Provided that no Event of Default (as defined
in the Loan Agreement) then exists under the Loan Agreement, the Mortgagee will
make available to the Mortgagor the Net Proceeds (defined below) for the purpose
of paying the Ohio Term Loan.

     Following any damage to or destruction of the Mortgaged Premises, the
parties shall cooperate in order to recover any applicable proceeds of insurance
under this Section 2, with the Mortgagor to have primary responsibility to
recover the proceeds. Such proceeds shall be paid to the Mortgagee. From such
proceeds, if any, as are actually received by the Mortgagee, the Mortgagee shall
provide for the payment or reimbursement of its reasonable expenses of obtaining
the recovery as reasonably determined by the Mortgagee. The Mortgagee shall then
give notice to the Mortgagor of such expenses and of the amount of the remaining
proceeds actually held by the Mortgagee (the "Net Proceeds"). If the Mortgagor
desires to use any or all of the Net Proceeds for repair, restoration or
replacement of the Mortgaged Premises, the Mortgagor shall request same from the
Mortgagee within 30 days after receipt of the aforesaid notice of the amount of
the Net Proceeds. Provided that all of the below-described Readvancement
Conditions shall have been satisfied as at the time of each release of all or
any portion of the Net Proceeds, the Mortgagee, subject to the other
requirements described below, will permit the use of the Net Proceeds, to the
extent required, for such repair, restoration and replacement. As used herein,
the term "Readvancement Conditions" means each of the following: (1) no Event of
Default, nor any event or circumstance which with the passage of time or giving
of notice or both could become an Event of Default, shall have occurred and be
then continuing, and (2) the Net Proceeds, in the reasonable opinion of the
Mortgagee, shall be sufficient for the purpose of the required repair,
restoration and replacement (or, if insufficient, the Mortgagor shall have
deposited with the Mortgagee, for application as provided in this Section,
additional funds in the amount of such insufficiency). Any disbursement of such
Net Proceeds and such additional funds, if any, will be made subject to the
reasonable requirements of the Mortgagee, including, without limitation,
requirements as to certification by an architect, approval of plans, obtaining
waivers of liens, and the receipt of requisitions, title endorsements,
affidavits and opinions in form and substance satisfactory to the Mortgagee. If
(i) for any reason the Mortgaged Premises are not so repaired, restored and
replaced promptly (subject to such reasonable extensions of the time to complete
such repair, restoration and replacement as the


                                      -4-
<PAGE>   5

Mortgagor may reasonably request as a result of FORCE MAJEURE events) or (ii) if
there shall be any of such Net Proceeds or additional funds remaining after such
repair, restoration and replacement have been fully completed, then, in either
such case, the Net Proceeds and additional funds, if any (or the balance thereof
so remaining) are to be applied against payment of the Ohio Term Note and the
obligations arising under the Ohio Term Loan secured hereby or outstanding under
the Loan Agreement as it relates to the Ohio Term Loan or (at the option of the
Mortgagee) held as further security for such debt and obligations. If the Ohio
Term Loan is paid in full and no Event of Default exists under the Loan
Agreement, such amounts will be released to the Mortgagor. If any of the
Readvancement Conditions shall not have been satisfied at any time when any Net
Proceeds remain in the control of the Mortgagee, the Mortgagee may, in its sole
discretion, either apply the Net Proceeds and additional funds, if any, within
its control to the outstanding debt and obligations secured hereby or
outstanding under the Loan Agreement and/or hold same as further security for
such debt and obligations and/or use any or all of such Net Proceeds and
additional funds, if any, for the repair, restoration or replacement of the
Mortgaged Premises.

     The Mortgagor hereby grants to the Mortgagee full power and authority, as
attorney-in-fact irrevocable of the Mortgagor, to act after the occurrence of an
Event of Default in order to cancel or transfer the insurance described in this
Section 2, to collect and endorse any checks issued in the name of the Mortgagor
and to retain any premium or proceeds and to apply the same to the debt secured
hereby. Upon default by the Mortgagor hereunder and exercise by the Mortgagee of
any of its rights or remedies hereunder, each such insurance policy, including
the right to unearned premiums, shall become property of the Mortgagee.

     3. No building or other property now or hereafter covered by the lien of
this Mortgage shall be removed, demolished or materially altered or enlarged,
nor shall any new building be constructed without the prior written consent of
the Mortgagee (such consent not to be unreasonably withheld), except that the
Mortgagor shall have the right, without such consent, to remove and dispose of,
free from the lien of this Mortgage, such Equipment as from time to time may
become worn out or obsolete, provided that simultaneously with or prior to such
removal any such Equipment shall be replaced with other Equipment of a value at
least equal to that of the replaced Equipment, with such replacement Equipment
to be subject to the lien of this Mortgage.

     4. In the event of any default in the performance of any of the Mortgagor's
covenants or agreements herein, whether or not an Event of Default shall have
occurred, the Mortgagee may, at the option of the Mortgagee, upon reasonable
advance notice to the Mortgagor, perform the same, and the Mortgagee may also
take all such actions as it deems desirable to prevent or cure any situation or
circumstance which might, with the passage of time or giving of notice or both,
become an Event of Default. The costs of any and all performance and actions
taken under this Section 4 shall be paid by the Mortgagor to the Mortgagee on
demand, with interest at a rate per annum equal to 2% plus the Prime Rate, as
from time to time in effect, such interest to accrue from the date such cost is
incurred by the Mortgagee through the date of payment by the Mortgagor, and all
such costs and such interest shall be secured by this Mortgage. As used herein,
"Prime Rate" shall mean that rate of interest per annum from time to time
announced by 

                                      -5-
<PAGE>   6

Fleet National Bank or any successor thereto as being its prime rate, it being
understood that such rate is merely a reference rate, not necessarily the
lowest, which serves as the basis upon which effective rates of interest are
calculated for obligations making reference thereto.

     5. The Mortgagor will pay, not later than the date when due without
interest or penalty, all taxes, excises, assessments, water rates, sewer rents
and other charges and any lien now or hereafter assessed or levied against the
Mortgaged Premises or any part thereof, or with respect to or relating in any
way to the Mortgagor's interest therein or use and occupancy thereof, or the
debt, obligations or performance secured by this Mortgage; provided that the
Mortgagor shall not be required to pay any such tax, excise, assessment, water
rate, sewer rent or other charge or lien which is being contested in good faith
and by proper proceedings which serve as a matter of law to stay the enforcement
of any remedy of the taxing authority or claimant and as to which the Mortgagor
shall have set aside on its books adequate reserves. The Mortgagor shall pay in
a timely manner all of the costs and expenses of operation, maintenance and
upkeep of the Mortgaged Premises, including all charges for electricity, water,
gas, sewer rents and charges, telephone, heat, air conditioning, if any, and all
other utility services used or consumed in or upon the Mortgaged Premises;
provided that the Mortgagor shall not be required to pay any such cost, expense
or charge which is being contested in good faith and by proper proceedings, as
to which no lien has been asserted and as to which the Mortgagor shall have set
aside on its books adequate reserves. Upon request of the Mortgagee, the
Mortgagor will exhibit to the Mortgagee receipts for the payment of all items
specified in this Section on or prior to the date when payment of same shall be
required hereunder.

     6. The Mortgagor warrants the title to the Mortgaged Premises, subject only
to the exceptions (if any) contained in the lender's title policy delivered to
the Mortgagee and accepted by the Mortgagee in connection with this Mortgage.

     7. In case of any sale under this Mortgage, by virtue of judicial
proceedings or otherwise, the Mortgaged Premises may be sold in one parcel and
as an entirety or in such parcels, manner or order as the Mortgagee in its sole
discretion may elect. To the extent that any of the Mortgaged Premises shall be
deemed collateral subject to Article 9 of the Ohio Uniform Commercial Code (the
"UCC"), this Mortgage shall also be deemed the grant of a security interest in
such collateral, which may be foreclosed in accordance with applicable law.

     This instrument is a security agreement filed as a financing statement in
order to perfect a fixture filing pursuant to the UCC. The secured party is the
Mortgagee, having an address as set forth in the first paragraph of this
Mortgage and the debtor is the Mortgagor, having its principal place of business
at 265 Olinger Circle, Wilmington, OH and its chief executive offices at 64
Sidney Street, Cambridge, MA. The principal place of business and chief
executive offices of the Mortgagor are (and at all times while this Mortgage is
in effect will remain) located at the address set forth in the immediately
preceding sentence. As to any of the Mortgaged Premises which may now or
hereafter constitute fixtures, the real estate concerned is that described in
Exhibit A hereto. The Mortgagor is the record owner of such real estate.

                                      -6-
<PAGE>   7

     8. In the event of the passage after the date of this Mortgage of any law
of the State of Ohio deducting from the value of real property for the purposes
of taxation any lien thereon or changing in any way the laws for the taxation of
mortgages or debts secured by a mortgage for state or local purposes or the
manner of the collection of any such taxes, and imposing a tax, either directly
or indirectly, on this Mortgage or any of the obligations secured hereby, the
Mortgagee shall have the right to declare an Event of Default to exist under
this Mortgage as of a date to be specified by not less than 90 days' written
notice to be given to the Mortgagor by the Mortgagee; provided, however, that
such declaration shall be ineffective if the Mortgagor is permitted by law to
pay the whole of such tax in addition to all other payments required hereunder
and if the Mortgagor, prior to such specified date, does pay such tax and agrees
to pay any such tax when thereafter levied or assessed against the Mortgaged
Premises, and such agreement shall constitute a modification of this Mortgage.
If at any time any law or court decree prohibits the performance of any
obligation undertaken in this Mortgage by the Mortgagor, or provides that any
amount to be paid hereunder by the Mortgagor (other than under Section 1 of this
Mortgage) must be credited against the Mortgagor's obligations under the Notes
or the Loan Agreement, the Mortgagee shall have the right, upon not less than 90
days' prior written notice to the Mortgagor, to declare an Event of Default to
exist under this Mortgage.

     9. If the Mortgagee shall incur or expend any sums, including reasonable
attorneys' fees, whether in connection with any action or proceeding or not, to
sustain the lien of this Mortgage or its priority, or to protect or enforce any
of its rights hereunder, or to recover any indebtedness hereby secured, all such
sums shall on notice and demand be paid by the Mortgagor, together with interest
thereon at a rate equal to 2% plus the Prime Rate, as from time to time in
effect, from the date incurred by the Mortgagee through the date of payment by
the Mortgagor, and all such sums and such interest shall be a lien on the
Mortgaged Premises prior to any right or title to, interest in, or claim upon,
the Mortgaged Premises subordinate to the lien of this Mortgage, and shall be
deemed to be secured by this Mortgage.

     10. The Mortgagor will maintain the Mortgaged Premises and the Equipment in
good and serviceable condition and in at least as good condition and repair as
same were on the date hereof or in such better condition as same may thereafter
be put (ordinary wear and tear excepted but damage from casualty expressly not
excepted), and will not commit or suffer any waste of the Mortgaged Premises.
The Mortgagor will comply with and cause to be complied with in all material
respects all subdivision, building, zoning and land use, environmental
protection, sanitary and safety laws, rules and regulations applicable to the
Mortgaged Premises, as well as all laws, rules, regulations and other
requirements of any governmental authority affecting the Mortgaged Premises or
the use thereof and the requirements of any fire insurance rating association or
similar body having jurisdiction. In the event of any damage or destruction to
the Mortgaged Premises or any portion thereof, by casualty or other cause,
including, without limitation, as the result of any proceeding of the character
referred to in Section 12, the Mortgagor shall (subject to its ability described
in Sections 2 and 12 to be relieved of this obligation if it repays the
principal of and interest on the Ohio Term Loan and all charges now or hereafter
owed by the Mortgagor in respect of the Ohio Term Loan) proceed forthwith to
repair, restore and replace the Mortgaged Premises to substantially its
condition immediately prior to such event or to a condition of at least
equivalent value (and in any event to such condition and 


                                      -7-
<PAGE>   8

within such time period as shall be required in order to avoid any default under
any leases, agreements or other restrictions affecting the Mortgaged Premises),
regardless of the availability or sufficiency of insurance proceeds. The
Mortgagor will not initiate, join in or consent to any change in any private
restrictive covenant, zoning ordinance or other public or private restrictions
limiting or defining the uses which may be made of the Mortgaged Premises or any
part thereof without the prior written consent of the Mortgagee, such consent
not to be unreasonably withheld.

     11. This Mortgage shall secure, inter alia, the payment of the Notes,
including any and all advances made by the Mortgagee thereunder, and any and all
additional indebtedness of the Mortgagor to the Mortgagee, incurred or becoming
payable under the provisions hereof or otherwise, and whether as future
advancements or otherwise, together with any renewals or extensions of any of
the Notes.

     12. Notwithstanding any taking by eminent domain, alteration of the grade
of any street or other injury to or decrease in value of the Mortgaged Premises
by any public or quasi-public authority or corporation, the Mortgagor shall
continue to pay interest on the entire principal sum secured until the award or
payment for any such taking, injury or decrease in value shall have been
actually received by the Mortgagee and applied to the debt secured hereby and
any reduction in the principal sum resulting from the application by the
Mortgagee of such award or payment as hereinafter set forth shall be deemed to
take effect only on the date of such receipt. In the event of any such taking,
injury or decrease in value, the parties shall cooperate as in Section 2 in
order to recover any applicable proceeds. Such proceeds shall be paid to the
Mortgagee. The Mortgagee shall make appropriate deductions from such proceeds,
if any, as are actually received by it as in the case of insurance proceeds and
shall give notice to the Mortgagor of such deductions and of the amount of the
net proceeds remaining and actually held by the Mortgagee (the "Eminent Domain
Net Proceeds"). Following any such taking, injury or decrease in value, the
Mortgagor shall proceed forthwith to repair, restore and replace the Mortgaged
Premises to as nearly as possible its condition immediately prior to such event
or to a condition of at least equivalent value (and in any event to such
condition and within such time period as shall be required in order to avoid any
default under any leases, agreements or other restrictions affecting the
Mortgaged Premises), regardless of whether or not the Eminent Domain Net
Proceeds resulting from such taking, injury or decrease in value are sufficient
to pay the cost thereof; provided that the Mortgagor will be relieved of the
obligation to repair, restore and replace the Mortgaged Premises if, within the
30-day period described in the first sentence of the next following paragraph,
the Mortgagor pays in full the principal of and interest on the Ohio Term Loan
and all other charges now or hereafter owed by the Mortgagor in respect of the
Ohio Term Loan. Provided that no Event of Default (as defined in the Loan
Agreement) then exists under the Loan Agreement, the Mortgagee will make
available to the Mortgagor the Eminent Domain Net Proceeds (defined below) for
the purpose of paying the Ohio Term Loan.

     If the Mortgagor desires to use any or all of the Eminent Domain Net
Proceeds for repair, restoration or replacement of the Mortgaged Premises, it
shall request same from the Mortgagee within 30 days after receipt of the
aforesaid notice of the amount of the Eminent Domain Net Proceeds. Provided that
all of the Readvancement Conditions (as defined in Section 2) shall 

                                      -8-
<PAGE>   9

have been satisfied as at the time of each release of all or any portion of the
Eminent Domain Net Proceeds, the Mortgagee, subject to the other requirements
described below, will permit the use of the Eminent Domain Net Proceeds to the
extent required for such repair, restoration and/or replacement. Any
disbursement of such Eminent Domain Net Proceeds and additional funds, if any,
deposited with the Mortgagee will be made subject to the reasonable requirements
of the Mortgagee, including, without limitation, requirements as to
certification by an architect, approval of plans, obtaining waivers of liens,
and the receipt of requisitions, title endorsements, affidavits and opinions in
form and substance satisfactory to the Mortgagee. If (i) for any reason the
Mortgaged Premises are not so repaired, restored and replaced promptly (subject
to such reasonable extensions of the time to complete such repair, restoration
and replacement as the Mortgagor may reasonably request as the result of FORCE
MAJEURE events), or (ii) if there shall be any of such Eminent Domain Net
Proceeds or additional funds remaining after such repair, restoration and
replacement have been fully completed then, in either such case, the Eminent
Domain Net Proceeds and additional funds, if any (or the balance thereof so
remaining) are to be applied against payment of the Ohio Term Note and the
obligations secured hereby arising under the Ohio Term Loan or outstanding under
the Loan Agreement as it relates to the Ohio Term Loan or (at the option of the
Mortgagee) held as further security for such debt and obligations. If the Ohio
Term Loan is paid in full and no Event of Default exists under the Loan
Agreement, such amounts will be released to the Mortgagor. If any of the
Readvancement Conditions shall not have been satisfied at any time when any
Eminent Domain Net Proceeds remain in the control of the Mortgagee, the
Mortgagee may, in its sole discretion, either apply the Eminent Domain Net
Proceeds and additional funds, if any, within its control to the outstanding
debt and obligations secured hereby or outstanding under the Loan Agreement
and/or hold same as further security for such debt and obligations and/or use
any or all of such Eminent Domain Net Proceeds and additional funds, if any, for
the repair, replacement, restoration or reconstruction of the Mortgaged
Premises. If, prior to the receipt by the Mortgagee of any award or payment as
hereinabove in this Section 12 provided, the Mortgaged Premises shall have been
sold on foreclosure of this Mortgage, the Mortgagee shall have the right to
receive said award or payment to the extent of any deficiency found to be due
upon such sale, with interest thereon at a rate equal to 2% plus the Prime Rate,
as from time to time in effect, whether or not a deficiency judgment on this
Mortgage shall have been sought or recovered or denied, and of the reasonable
counsel fees, costs and disbursements incurred by the Mortgagee in connection
with the collection of such award or payment.

     13. The Mortgagee and any persons authorized by the Mortgagee shall have
the right to enter the Mortgaged Premises at all reasonable times upon
reasonable notice to inspect same and/or to exercise any of Mortgagee's rights
under this Mortgage.

     14. Any rents arising from or relating to the Mortgaged Premises or any of
same are hereby assigned to the Mortgagee as further security for the debt and
obligations now or from time to time secured hereby. Except as expressly
provided in the immediately preceding sentence, the Mortgagor will not assign
the whole or any part of the rents arising from or relating to the Mortgaged
Premises, and any purported assignment thereof shall be null and void. Further,
upon demand, the Mortgagor will transfer and assign to the Mortgagee, in form
and substance satisfactory to the Mortgagee, the lessor's interest in any lease
now or hereafter 

                                      -9-
<PAGE>   10

affecting the whole or any part of the Mortgaged Premises. The Mortgagor shall
not, without the prior written consent of the Mortgagee, sell, convey, alienate,
mortgage, transfer or suffer the transfer (whether voluntary or involuntary) of,
or the imposition of any lien or encumbrance with respect to, legal title to or
any beneficial interest in the Mortgaged Premises or any portion thereof, and
will not without the prior written consent of the Mortgagee (such consent not to
be unreasonably withheld) lease, license or permit any other person to use or
occupy the whole or any part of the Mortgaged Premises, but no such consent by
the Mortgagee shall in any event be deemed a waiver or release of any of the
provisions of this Section nor a consent to any such sale, conveyance,
alienation, mortgage, transfer, leasing, licensing or permission to use or
occupy any of the Mortgaged Premises on any future occasion, and no such consent
nor any such sale, alienation, mortgage, conveyance, transfer, leasing,
licensing or permission shall release or discharge the Mortgagor from any
obligations or liabilities hereunder, all of which shall continue to be direct
and primary in any event.

     15. The Mortgagee shall have the right from time to time to enforce any
legal or equitable remedy against the Mortgagor and to sue for any sums, whether
interest, principal or any installment thereof, taxes, or any other sums
required to be paid under the terms of this Mortgage, as the same become due,
without regard to whether or not the principal sum secured by this Mortgage
shall be due and without prejudice to the right of the Mortgagee thereafter to
enforce any appropriate remedy against the Mortgagor, including an action of
foreclosure, or any other action for a default or defaults by the Mortgagor
existing at the time such earlier action was commenced.

     16. An Event of Default shall be deemed to exist hereunder if one or more
of the following events shall have occurred:

     (a) The Mortgagor shall fail to make any payment required under any Note
and/or this Mortgage on the date when due (after the expiration of any
applicable grace or cure period); or

     (b) Any representation or warranty made herein, in the Loan Agreement or in
any report, certificate, financial statement or other instrument now or
hereafter furnished to the Mortgagee by or on behalf of the Mortgagor shall
prove to have been false or misleading in any material respect on the date when
made; or

     (c) The Mortgagor shall fail to observe or perform, or there shall occur a
breach of, any of the covenants, conditions or obligations set forth in Sections
2, 5 (first sentence only) and/or 14 of this Mortgage; or

     (d) The Mortgagor shall fail to observe or perform, or there shall occur a
breach of, any of the covenants, conditions or obligations set forth in the
second sentence of Section 10 and such failure or breach shall continue uncured
for 30 days after the Mortgagor first knows of (or reasonably should know of)
the circumstances constituting such failure or breach; provided that if such
failure or breach is of such a nature that it cannot reasonably be remedied
within such 30-day period, no Event of Default will be deemed to have occurred
under this clause (d) if the 

                                      -10-
<PAGE>   11

Mortgagor (i) commences within such 30-day period the steps necessary to effect
such remedy, (ii) diligently thereafter prosecutes such steps to completion of
the remedy and at all times takes all such steps as may be required to avoid any
jeopardy to the Mortgagor's right to use any material portion of the Mortgaged
Premises or to engage in any activity material to the Mortgagor's business, and
(iii) in any event remedies each such failure and breach within 180 days after
the date when the Mortgagor first knows of (or reasonably should know of) the
circumstances constituting same or within such shorter time period as may be
required in order to avoid any such jeopardy to the Mortgagor's right to use any
material portion of the Mortgaged Premises or to engage in any activity material
to the Mortgagor's business; or

     (e) The Mortgagor shall fail to observe or perform, or there shall occur a
breach of, any covenant, condition or obligation contained in this Mortgage
other than as described in clauses (a), (b), (c) or (d) above and such failure
or breach is not remedied within 30 days after written notice to the Mortgagor;
or

     (f) Any "Event of Default" shall occur under the Loan Agreement or any
failure, default or Event of Default shall exist, and shall continue beyond the
expiration of any applicable notice and/or grace period, under any note, loan
agreement, contract, understanding or other agreement now existing or hereafter
arising to which Alkermes and/or the Mortgagor solely, jointly or severally, is
a party and which is made with or for the benefit of the Mortgagee and/or any
affiliate of the Mortgagee, in any capacity; or

     (g) The Mortgagor shall (except as hereinabove expressly provided or except
as the Mortgagee may otherwise expressly approve in writing) lease, sell,
convey, alienate, mortgage, transfer, or suffer the transfer (whether voluntary
or involuntary) of, or imposition of any lien or encumbrance (other than any
mechanics' lien or other similar lien for work performed at the Mortgaged
Premises which is bonded off or discharged within 30 days of the attachment
thereof) with respect to, legal title to or any beneficial interest in the
Mortgaged Premises or any portion thereof; or

     (h) At any time this Mortgage shall not constitute a good and valid, fully
perfected lien on all of the Mortgaged Premises; or

     (i) The Mortgagee shall have declared an Event of Default to exist under
Section 8 of this Mortgage and such declaration shall not have become
ineffective due to the Mortgagor's payment and agreement to pay as provided in
said Section 8 or the Mortgagee shall have declared an Event of Default to exist
pursuant to Section 23.

     17. Upon the occurrence of any Event of Default hereunder, the Mortgagee
may exercise any or all of the following remedies, in addition and without
prejudice to, and without limiting or otherwise impairing, any other rights and
remedies provided by law or this Mortgage or any other agreement between the
Mortgagor and the Mortgagee (including, without limitation, rights and remedies
under the Loan Agreement):


                                      -11-
<PAGE>   12

     (a) The Mortgagee may by written notice to the Mortgagor declare
immediately due and payable the principal amount of each of the Notes and all
interest accrued thereon or thereafter to accrue to the date of payment, as well
as all other amounts secured hereby, whereupon such principal, interest and
other amounts shall become immediately due and payable without any further
action or notice.

     (b) The Mortgagee may by written notice to the Mortgagor declare an Event
of Default to exist under the Loan Agreement, whereupon the Mortgagee may
exercise any or all of the rights contained therein.

     (c) The Mortgagee may at any time enter the Mortgaged Premises without
being liable for any prosecution or damages therefor, may take complete and
peaceful possession of the Mortgaged Premises, may receive the rents, if any,
therefor, including those past due as well as those accruing thereafter and may
remove all persons therefrom; and the Mortgagor covenants that in any such event
it will peacefully and quietly yield up and surrender the Mortgaged Premises.
Entry under this Section shall not operate to release the Mortgagor from any
sums to be paid or covenants or agreements to be performed under this Mortgage.
The Mortgagee may make such repairs or alterations to the Mortgaged Premises as
it may deem necessary or desirable. The Mortgagor shall be liable to the
Mortgagee for the reasonable cost of such repairs or alterations and all
expenses of sale shall be added to the debt secured by this Mortgage. Further,
upon entry as aforesaid, the Mortgagee may take over and assume the management,
operation and maintenance of the Mortgaged Premises and expend such sums out of
the rents or other income of the Mortgaged Premises as the Mortgagee in its sole
discretion may deem reasonably advisable, all to the maximum extent which the
Mortgagor might have done had no such entry occurred, including, without
limitation, the right to enter into new leases, to cancel or surrender existing
leases, to alter or amend the terms of existing leases, to renew existing
leases, or to make concessions to or deal in any way with tenants or occupants
of all or any of the Mortgaged Premises. Upon such entry, the Mortgagor will pay
over to the Mortgagee all security deposits and will cooperate in all reasonable
ways in the Mortgagee's collection of rents, including, without limitation,
execution of a written notice to each lessee or occupant directing that rent be
paid directly to the Mortgagee. The Mortgagee shall not be accountable for more
moneys than it actually receives from the Mortgaged Premises; nor shall it be
liable for failure to collect rents or enforce other obligations. The Mortgagee
reserves within its own discretion the right to determine the method of
collection and the extent to which enforcement of collection of delinquent rents
or the eviction of delinquent tenants shall be prosecuted.

     (d) The Mortgagee shall have the right, with or without an entry as
aforesaid, to bring an action under the applicable statutes of Ohio relating to
foreclosure and, pursuant to such statutes may cause the sale of the Mortgaged
Premises or any part or parts of the same, either as a whole or in parts or
parcels, together with any improvements that may be thereon, by public auction
in accordance with the statutes of the State of Ohio relating to the foreclosure
of a mortgage, and may convey the same by proper deed or deeds or bill or bills
of sale to the purchaser or purchasers absolutely and in fee simple; and such
sale shall forever bar the Mortgagor and all persons claiming under it from all
right and interest in the Mortgaged Premises, whether at law or in equity. The
Mortgagor covenants with the Mortgagee that the 

                                      -12-
<PAGE>   13

Mortgagor, in case a sale shall be made upon foreclosure, will upon request
execute, acknowledge and deliver to the purchaser or purchasers a deed or deeds
of release confirming such sale, and the Mortgagee is irrevocably appointed the
Mortgagor's attorney to execute and deliver to said purchaser such a deed or
deeds and a full transfer of all policies of insurance on the Mortgaged Premises
at the time of such sale. In the event that the Mortgagee in the exercise of its
powers herein given elects to sell in parcels, such sales may be held from time
to time and such powers shall not be exhausted until all of the Mortgaged
Premises shall have been sold.

     (e) The Mortgagee may exercise all of the rights and remedies of a secured
party under the UCC with respect to that portion of the Mortgaged Premises which
is or may be treated as collateral under the UCC, including, without limitation,
the Equipment, and the Mortgagee may deal with same as collateral under the UCC
or as real property as provided in this Section, or in part one and in part the
other, to the extent permitted by law. Such rights shall include the following:

          (i) The Mortgagee may enter upon the Mortgaged Premises and may take
possession of such collateral or render such collateral unusable by process of
law or peaceably without process of law. In such event the Mortgagor shall
peacefully and quietly yield up and surrender such collateral and shall upon
request from the Mortgagee assemble it and make it available to the Mortgagee at
a place designated by the Mortgagee which is reasonably convenient to the
Mortgagor and the Mortgagee.

          (ii) The Mortgagee may dispose of all or any part of such collateral
on the Mortgagor's premises or elsewhere without any liability to the Mortgagor
for any damage whatsoever; provided, however, that every aspect of any such
disposition by the Mortgagee, including the method, manner, time, place and
terms, must be commercially reasonable. Notice given to the Mortgagor at least 7
days before an event shall constitute reasonable notification of such event
under UCC ss.9-504(3). Any proceeds of any disposition of any of such collateral
may be applied by the Mortgagee to the payment of expenses in connection with
the disposition of the collateral, including reasonable attorneys' fees, and
then to the other obligations secured hereby.

     (f) The Mortgagee, with or without entry under this Section, may collect
and receive all rents accruing under any lease of the Mortgaged Premises or any
portion thereof, including amounts past due, as well as those accruing
thereafter. In the event of a foreclosure sale, neither the Mortgagee nor any
person claiming under it shall have any obligation to account to the Mortgagor
for any rents accruing from the Mortgaged Premises or any part thereof after
such sale.

     (g) The Mortgagee may have a receiver appointed to enter and take
possession of the Mortgaged Premises, collect the rents therefrom, and apply the
same as the court may direct, and the Mortgagee shall be entitled to the
appointment of such a receiver as a matter of right, without consideration of
the value of the Mortgaged Premises as security for the amounts due hereunder,
or the availability of other collateral, or the solvency of any person or other
entity liable for the payment of such amounts. Such receiver may also take
possession of, and for these purposes use, any and all Equipment and other
personal property of the Mortgagor contained in or on the 

                                      -13-
<PAGE>   14

Mortgaged Premises. The expense (including receiver's fees, counsel fees, costs
and agents' compensation) incurred pursuant to the powers herein contained shall
be secured hereby. The right to enter and take possession of the Mortgaged
Premises, to manage and operate the same, and to collect the rents thereof,
whether by a receiver or otherwise, shall be cumulative with any other right or
remedy hereunder or afforded by law, and may be exercised concurrently therewith
or independently thereof. The Mortgagee or any such receiver shall be liable to
account only for such rents actually received by it, less the Mortgagee's or
such receiver's costs and expenses, as aforesaid, and neither the Mortgagee nor
such receiver shall be under any obligation to collect any such rents, nor will
the Mortgagee or such receiver be liable to the Mortgagor for any other act or
omission upon such entry and taking possession of the Mortgaged Premises.

     18. Any failure by the Mortgagee to insist upon the strict performance by
the Mortgagor of any of the terms and provisions hereof shall not be deemed to
be a waiver of any of the terms and provisions hereof, and the Mortgagee,
notwithstanding any such failure, shall have the right thereafter to insist upon
the strict performance by the Mortgagor of any and all of the terms and
provisions of this Mortgage to be performed by the Mortgagor. Neither the
Mortgagor nor any other person now or hereafter obligated for the payment of the
whole or any part of the sums now or hereafter secured by this Mortgage shall be
relieved of such obligation by reason of the failure of the Mortgagee to comply
with any request of the Mortgagor or by reason of the failure of the Mortgagee
to take action to foreclose this Mortgage or otherwise enforce any of the
provisions of this Mortgage or of any obligations secured by this Mortgage, or
by reason of the release, regardless of consideration, of the whole or any part
of the security held for the indebtedness secured by this Mortgage, or by reason
of any agreement or stipulation between any subsequent owner or owners of the
Mortgaged Premises and the Mortgagee extending the time of payment or modifying
the terms of any of the Notes or the terms of this Mortgage without first having
obtained the consent of the Mortgagor or such other person obligated as to the
sums secured hereby, and, in the latter event, the Mortgagor and all such other
persons shall continue liable to make such payments according to the terms of
any such agreement of extension or modification unless expressly released and
discharged in writing by the Mortgagee. Regardless of consideration, and without
the necessity for any notice to or consent by the holder of any subordinate lien
on the Mortgaged Premises, the Mortgagee may release the obligation of anyone at
any time liable for any of the indebtedness secured by this Mortgage or any part
of the security held for such indebtedness and may extend the time of payment or
otherwise modify the terms of any of the Notes and/or this Mortgage without
impairing or affecting the lien of this Mortgage or the priority of such lien,
as security for the payment of such indebtedness, as it may be so extended or
modified, over any subordinate lien. The Mortgagee may resort for the payment of
the indebtedness secured hereby to any other security therefor held by the
Mortgagee in such order and manner as the Mortgagee may elect.

     19. The Mortgagor, upon request from the Mortgagee after the occurrence of
any Event of Default, will pay to the Mortgagee, on the first day of each and
every month thereafter ensuing, in addition to any other payments required
hereunder and/or the Notes, an amount equal to 1/12th of all insurance premiums
required hereunder and all taxes and assessments on or against the Mortgaged
Premises to become payable during the ensuing 12 months, as estimated from time
to time by the Mortgagee (but with the first such payment to be in such amount
as 

                                      -14-
<PAGE>   15

shall, with the succeeding payments, be sufficient to pay all such amounts at
least 30 days before they become due and payable), such sums to be held by the
Mortgagee (but without any obligation to pay interest thereon, except to the
extent required by law) and applied to the payment of such premiums, taxes and
assessments. If the sums collected under this Section are insufficient to pay
the amounts of such premiums, taxes and assessments as they become due and
payable, then the Mortgagor shall pay to the Mortgagee promptly upon demand any
amount necessary to make up the deficiency on or before the date when such
amounts shall be due. Any amount collected hereunder from time to time, until
the same shall be applied as above provided, shall constitute additional
collateral security for the indebtedness secured by this Mortgage; and in the
event of any Event of Default, any part or all of such amounts may be applied by
the Mortgagee, at its option, to any part of the indebtedness secured by this
Mortgage.

     20. The rights of the Mortgagee arising under the clauses and covenants
contained in this Mortgage shall be separate, distinct and cumulative and none
of them shall be in exclusion of the others; and no act of the Mortgagee shall
be construed as an election to proceed under any one provision herein to the
exclusion of any other provision, anything herein or otherwise to the contrary
notwithstanding.

     21. Wherever used in this Mortgage, unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, the word
"Mortgagor" shall mean "Mortgagor and/or any subsequent owner or owners of the
Mortgaged Premises, jointly and severally", the word "Mortgagee" shall mean
"Mortgagee or any subsequent holder or holders of this Mortgage", the word
"person" shall mean "an individual, corporation, partnership or unincorporated
association", the word "Mortgaged Premises" shall include the real estate
hereinbefore described, together with all Equipment, condemnation awards and any
other rights or property interest at any time made subject to the lien of this
Mortgage by the terms hereof, pronouns of any gender shall include the other
genders, and either the singular or plural shall include the other.

     22. (a) In any circumstance in which the Mortgagee is requested to give its
consent for any purpose hereunder, the Mortgagor agrees that such consent may be
conditioned upon the payment by the Mortgagor of all reasonable costs and
expenses of the Mortgagee (including, without limitation, reasonable attorneys'
fees and disbursements) incurred in connection therewith.

     (b) The Mortgagor agrees that, at the request of the Mortgagee, the
Mortgagor will execute and deliver all such financing statements, continuation
statements and other instruments in form and substance satisfactory to the
Mortgagee, and take any and all other action which the Mortgagee may at any time
or from time to time deem necessary or desirable to assure it of all rights and
remedies intended to be conferred hereby and/or to carry out the purposes of
this Mortgage.

     (c) The Mortgagor shall be obligated to pay on demand all reasonable fees
and expenses of counsel to the Mortgagee relating to the preparation, execution
and delivery of this Mortgage, the Notes and any other documents delivered in
connection herewith or the 


                                      -15-
<PAGE>   16

consummation of the transactions contemplated hereby, as well as all costs, fees
and expenses of the Mortgagee (including, without limitation, reasonable counsel
fees) relating to the administration, interpretation, enforcement or attempted
enforcement of all or any of the foregoing instruments, whether or not suit is
instituted.

     (d) This Mortgage sets forth the entire agreement of the parties, and no
custom, act, forbearance or words or silence at any time, gratuitous or
otherwise, shall impose any additional obligation or liability upon any party or
waive or release any party from any default or the performance or fulfillment of
any obligation or liability or operate as against any party as a supplement,
alteration, amendment or change of any term or provision set forth herein,
including this Section, unless set forth in a written instrument duly executed
by such party expressly stating that it is intended to impose such an additional
obligation or liability or to constitute such a waiver or release, or that it is
intended to operate as such a supplement, alteration, amendment or change. No
waiver or release in any one instance shall operate as a waiver or release or
agreement to give such waiver or release thereafter or in any other instance.

     (e) The provisions of this Mortgage are not in derogation or limitation of
any obligations, liabilities or duties of the Mortgagor under the Loan Agreement
and/or under any other agreement made by the Mortgagor with or for the benefit
of the Mortgagee. No inconsistency in default provisions between this Mortgage
and the Loan Agreement or any such other agreement will be deemed to create any
additional grace period or otherwise derogate from the express terms of each
such default provision. No covenant, agreement or obligation of the Mortgagor
contained herein, nor any right or remedy of the Mortgagee contained herein,
shall in any respect be limited by or be deemed in limitation of any
inconsistent or additional provisions contained in the Loan Agreement or any
such other agreement.

     23. As used herein, the following terms shall have the following respective
meanings:

     "CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 ET SEQ., as amended by the
Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, 100
Stat. 1613.

     "Environmental Event" means (i) the generation, storage, disposal, removal,
transportation or treatment of any Hazardous Substances on any of the Mortgaged
Premises; (ii) the receipt by the Mortgagor of any notice or claim of any
violation of any Environmental Law or of any action based upon nuisance,
negligence or other tort theory alleging liability on the basis of improper
generation, storage, disposal, removal, transportation or treatment of Hazardous
Substances on any of the Mortgaged Premises; or (iii) the presence or release or
threat of release of any Hazardous Substances at or upon any of the Mortgaged
Premises that has resulted in contamination or deterioration of any portion of
such Mortgaged Premises resulting in a level of contamination greater than the
levels permitted or established by any governmental agency having jurisdiction
over the Mortgagor or any of the Mortgaged Premises.

     "Environmental Laws" means any and all federal, state and local statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, 

                                      -16-
<PAGE>   17

franchises, licenses, agreements or other governmental restrictions relating to
the environment or the release or threat of release of any materials into the
environment, including, without limitation, Chapters 3734, 3737, 3746 and 3751
of the Ohio Revised Code, CERCLA and the Resource Conservation and Recovery Act
of 1976, 42 U.S.C. [Sections]6901-6987.

     "Hazardous Substances" includes "hazardous waste", "hazardous materials",
"hazardous substances" and "toxic chemicals" within the meaning of Chapters
3734, 3737, 3746 and/or 3751 of the Ohio Revised Code, "hazardous substances" or
"hazardous waste" as defined in CERCLA or in any Environmental Laws, as well as
asbestos and materials containing asbestos.

     The Mortgagor represents and warrants that, to the best knowledge of the
Mortgagor, there has been no Environmental Event in violation of applicable law,
except as otherwise heretofore disclosed in writing to the Mortgagee. The
Mortgagor covenants to comply strictly with (and to cause each tenant or
occupant of any of the Mortgaged Premises to comply strictly with) the
requirements of all Environmental Laws and to notify the Mortgagee promptly of
the occurrence of any Environmental Event in violation of applicable law. The
Mortgagor hereby covenants to protect, indemnify and hold the Mortgagee harmless
from and against all loss, liability, damage and expense, including attorneys'
fees, suffered or incurred by the Mortgagee under or on account of any
Environmental Laws and relating to the Mortgaged Premises or any portion
thereof, including, without limitation, the filing of a lien or claim for
recovery of costs against the Mortgaged Premises or the Mortgagor by or in favor
of the State of Ohio; but excluding any loss, liability, damage or expense
resulting from a release of Hazardous Substances which (i) occurs after
foreclosure of this Mortgage or following and during the continuance of entry by
the Mortgagee as a mortgagee-in-possession and (ii) does not result from actions
taken or circumstances existing prior to such foreclosure or entry, except
actions taken or circumstances caused by the Mortgagee.

     In the event that the Mortgagor or any tenant of the Mortgagor shall fail
to comply strictly with the requirements of any Environmental Laws and, in the
reasonable opinion of the Mortgagee, the effect of such failure (singly or
together with all other then existing failures to comply with any Environmental
Laws) could have a material adverse effect on the use, salability or value of
the Mortgaged Premises, the Mortgagee may declare an Event of Default to exist
under this Mortgage, whereupon the whole sum of principal of and interest on
each Note then remaining unpaid shall become immediately due and payable, at the
option of the Mortgagee; provided, however, that such declaration of an Event of
Default will not be deemed effective if (i) the relevant violations of
Environmental Laws are reasonably susceptible of cure within 120 days, (ii) the
Mortgagor promptly commences its remedy of each such violation (such remedy
being reasonably satisfactory to the Mortgagee), (iii) the Mortgagor diligently
prosecutes such remedy to completion and (iv) all such violations are fully
remedied within 120 days after such declaration. The Mortgagee, at its election
and in its sole discretion, may (but is not obligated to) cure any failure on
the part of the Mortgagor or any such tenant to comply with any of the
Environmental Laws and, without limitation, may take any the following actions:

     (a) arrange for the prevention and/or clean-up of any Hazardous Substances
in or on the Mortgaged Premises, and pay for such prevention and/or clean-up
costs and associated costs;

                                      -17-
<PAGE>   18

     (b) pay, on behalf of the Mortgagor, any fines or penalties imposed on the
Mortgagor by any governmental agency or authority (federal, state or local) in
connection with such failure to comply with any of the Environmental Laws;
provided that so long as no other Event of Default then exists hereunder, the
Mortgagee will not pay on behalf of Mortgagor any such fine or penalty which is
being challenged in good faith by the Mortgagor by appropriate legal or
administrative proceedings which serve as a matter of law to stay any
foreclosure or other enforcement (which proceedings shall be promptly commenced
and diligently prosecuted by the Mortgagor) and as to which the Mortgagor has
established adequate reserves; and

     (c) make any other payment or perform any other act which will prevent or
discharge a lien or claim by or in favor of the State of Ohio or any other
federal, state or local governmental agency or authority from attaching to or
being asserted against the Mortgaged Premises as a result of an Environmental
Event in violation of applicable law.

     The Mortgagee will give the Mortgagor not less than 10 days' prior written
notice before acting under any of clauses (a)-(c) above, except that the
Mortgagee may act after such shorter notice period as is reasonably practicable
or upon no prior notice at all (but with notice immediately following the
commencement of such action) in the case of emergency (as reasonably determined
by the Mortgagee), including, without limitation, imminent risk of damage to, or
forfeiture of, the Mortgaged Premises or any material portion thereof or
imminent threat of harm to any person in, on or in the vicinity of the real
estate constituting the Mortgaged Premises. Any partial exercise by the
Mortgagee of the remedies herein set forth, or any partial undertaking on the
part of the Mortgagee to cure the Mortgagor's failure to comply with any of the
Environmental Laws, shall not obligate the Mortgagee to complete the actions
taken or require the Mortgagee to expend further sums to cure the Mortgagor's
noncompliance; neither shall the exercise of any such remedies operate to place
upon the Mortgagee any responsibility for the operation, control, care,
management or repair of the Mortgaged Premises or make the Mortgagee the
"operator" of the Mortgaged Premises within the meaning of any Environmental
Laws or a so-called lender in possession. Any amount paid or costs incurred by
the Mortgagee as a result of the exercise by the Mortgagee of any of the rights
hereinabove set forth shall be paid by the Mortgagor to the Mortgagee on demand,
together with interest thereon at the rate equal to 2% plus the Prime Rate, as
from time to time in effect, such interest to accrue from the date such amount
was paid or cost incurred through the date of payment by the Mortgagor. All such
amounts and costs and the interest thereon, until paid, shall be added to and
become a part of the obligations secured hereby; and the Mortgagee, by making
any such payment or incurring any such costs, shall be subrogated to any rights
of the Mortgagor to seek reimbursement from any third parties, including,
without limitation, a predecessor-in-interest to the Mortgagor's title who may
be a "responsible party" under any Environmental Laws in connection with any
Environmental Event.

     The provisions of this Section 23 shall survive payment of the Notes and
the discharge of this Mortgage.

                                      -18-
<PAGE>   19

     24. All notices hereunder shall be in writing and shall be deemed
sufficiently given if sent by registered or certified mail or delivered during
business hours as follows: (i) if to the Mortgagor, at 64 Sidney Street,
Cambridge, MA 02139, attention: Michael J. Landine, Senior Vice President, (ii)
if to the Mortgagee, at 75 State Street, 4th Floor, Boston, MA 02109, attention:
Catherine M. Bruton, Vice President; or in either case to such other address as
the party receiving such notice shall have previously designated in writing.

     25. In the event that any provision of this Mortgage or the application
thereof to any person, property or circumstance shall be held to any extent to
be invalid or unenforceable, the remainder of this Mortgage, and the application
of such provision to persons, properties or circumstances other than those as to
which it has been held invalid or unenforceable, shall not be affected thereby,
and each provision of this Mortgage shall be valid and enforceable to the
fullest extent permitted by law.

     26. This Mortgage will be governed by and enforced in accordance with the
laws of the State of Ohio.

     This Mortgage is also upon the STATUTORY CONDITION, for any breach of
which, or for any breach of any other of the covenants, conditions, agreements
and obligations of the Mortgagor herein contained, or upon the occurrence of any
of the events specified as an Event of Default in this Mortgage or if the whole
of the principal sum of and the interest on any of the Notes shall become due,
the Mortgagee shall have the right to foreclose this Mortgage in accordance with
the applicable statutes of the State of Ohio. The Mortgagor covenants and agrees
with the Mortgagee that the Mortgagee is authorized and empowered to do all
things permitted to be done by mortgagees under Ohio Revised Code Section
1311.14 and all laws amending or supplementing same that may hereafter be
enacted.

                                      -19-
<PAGE>   20



     IN WITNESS WHEREOF, this Mortgage has been duly executed, as an instrument
under seal, by the Mortgagor and the Mortgagee on the day and year first above
written.


CORPORATE SEAL                              ALKERMES CONTROLLED
                                              THERAPEUTICS INC. II

ATTEST:

                                            By: /s/ Michael Landine
/s/ Patricia Allen                             ----------------------------
- -----------------------------                  Its Vice President
Assistant Secretary



Signed and acknowledged in
the presence of:

/s/ Diane M. Fucci
- ----------------------------
Name: Diane M. Fucci


/s/ Debra J. Koufos
- -----------------------------
Name: Debra J. Koufos

                                      -20-
<PAGE>   21




                                            FLEET NATIONAL BANK


                                            By: /s/ Catherine Bruton
                                               ----------------------------
                                               Its Vice President



                                      -21-
<PAGE>   22


                                 ACKNOWLEDGMENTS

Commonwealth of Massachusetts)
County of Middlesex          ) ss.

     Before me, a notary public in and for said County, personally appeared
Michael J. Landine, Senior Vice President, and Patricia Allen, Assistant
Secretary, known to me to be the persons who, respectively, as Senior Vice
President and Assistant Secretary of Alkermes Controlled Therapeutics Inc. II,
the corporation which executed the foregoing instrument, signed the same, and
they acknowledged to me that they did so sign said instrument in the name and
upon behalf of said corporation as such officers, respectively; that the same is
their free act and deed as such officers, respectively, and the free and
corporate act and deed of said corporation; that they were duly authorized
thereunto by its board of directors; and that the seal affixed to said
instrument is the corporate seal of said corporation. In testimony whereof, I
have hereunto subscribed my name and affixed my official seal, at
Cambridge, Massachusetts, this 27 day of September, 1996.


                                      /s/ Debra J. Burke
NOTARIAL SEAL                         -------------------------------
                                      Notary Public
                                      My commission expires: 2/28/97



Commonwealth of Massachusetts)
County of Suffolk            ) ss.

     Before me, a notary public in and for said County, personally appeared
Catherine Bruton, known to me to be the person who, as  Vice President of Fleet
National Bank., the bank which executed the foregoing instrument, signed the
same, and he/she acknowledged to me that he/she did so sign said instrument in
the name and upon behalf of said bank as such officer; that the same is his/her
free act and deed as such officer and the free and corporate act and deed of
said bank and that he/she was duly authorized thereunto by its board of
directors to do so. In testimony whereof, I have hereunto subscribed my name
and affixed my official seal, at Boston, Massachusetts, this 26 day of 
September, 1996.


                                      /s/ Tammie A. Belt
NOTARIAL SEAL                         ---------------------------------------
                                      Notary Public
                                      My commission expires: January 20, 2000



                                      -22-
<PAGE>   23


                                    EXHIBIT A

                                LAND DESCRIPTION
                                ----------------

     The land, with the buildings now or hereafter located thereon situated in
Union Township, Clinton County, Ohio, and being part of Military Survey No. 2693
and bounded and described as follows:

     Beginning at a nail (found) in the center of an abandoned runway at the
southerly corner of the 23.179 acre tract as recorded in Volume 16, Plat No.
143 of the Clinton County Engineers Record of Land Division; running thence,
from said point of beginning, with a line of said 23.179 acre tract, North
41(degree) 41' 25" West 871.86 feet to a 1/2 inch iron pin (set); thence, by a
new division line, North 48(degree) 16' 54" East, 754.30 feet to a 1/2 inch
iron pin (set); thence, with the lines of the aforesaid 23.179 acre tract, on
the following courses: (1) South 41(degree) 43' 06" East 771.86 feet to a 1/2
inch iron pin (found); (2) with the right-of-way line of Olinger Circle, South
48(degree) 16' 54" West 44.00 feet to a 1/2 inch iron pin (found); (3) with the
right-of-way line of Olinger Circle, South 41(degree) 43' 06" East 100.00 feet
to a 1/2 inch iron pin (found); (4) South 48(degree) 16' 54" West 710.72 feet
to the point of beginning. Containing 15.001 acres, more or less.

     This description is the result of a new survey made under the direction of
Steven D. Webb, Registered Surveyor No. 7250, by CLINCO Surveyors, Wilmington,
Ohio, in February, 1996 as recorded in Volume 26 Plat No. 233, of the Clinton
Country Engineers Record of Land Division. The bearings in this description were
derived from the survey of the aforesaid 23.179 acre tract.

<PAGE>   1
                                                                   Exhibit 10.7


                        ENVIRONMENTAL INDEMNITY AGREEMENT
                        ---------------------------------

     THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this "AGREEMENT") is made as of
September 27, 1996 by Alkermes, Inc. ("ALKERMES") and Alkermes Controlled
Therapeutics Inc. II ("MORTGAGOR") (Alkermes and Mortgagor being hereinafter
referred to collectively as "INDEMNITORS" and individually as an "INDEMNITOR")
for the benefit of FLEET NATIONAL BANK ("BANK").

                              W I T N E S S E T H:
                              --------------------

     WHEREAS, Mortgagor is the owner of certain real property located in Clinton
County, Ohio, more particularly described in EXHIBIT A attached hereto and
incorporated herein by this reference (the "LAND") (the Land, together with all
improvements now or hereafter located in, on or under the Land, collectively,
the "PROPERTY");

     WHEREAS, Bank has agreed to make a $5,000,000 term loan (the "Ohio Term
Loan") to Indemnitors pursuant to a letter agreement of even date (as amended
from time to time, the "LOAN AGREEMENT");

     WHEREAS, Mortgagor's obligations under the Loan Agreement and the related
$5,000,000 promissory note (the "Ohio Term Note") are secured by, among other
things, that certain Mortgage and Security Agreement of even date from Mortgagor
to Bank conveying the Property (together with all amendments, modifications,
consolidations, increases, supplements and extensions thereof, the "MORTGAGE");

     WHEREAS, as a condition to making the Ohio Term Loan, Bank requires
Indemnitors to provide certain indemnities concerning Hazardous Materials (as
hereinafter defined) presently upon, in or under the Property, or hereafter
placed or otherwise located thereon or therein; and

     WHEREAS, Indemnitors have agreed to provide this Agreement for Bank's
benefit.

     NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
($10.00) Dollars and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank, by its acceptance of
delivery hereof, and Indemnitors hereby jointly and severally agree as follows:

     1. DEFINITIONS. The following definitions shall apply for purposes of this
Agreement:

          (a) "ENVIRONMENTAL EVENT" shall have the meaning ascribed to such term
in the Mortgage.

          (b) "ENVIRONMENTAL LAW" shall mean any federal, state or local
statute, regulation or ordinance, whether now existing or hereafter enacted,
promulgated or issued, with respect to any Hazardous Materials, drinking water,
groundwater, wetlands, landfills, open dumps, storage tanks, underground storage
tanks, solid waste, waste water, storm water run-off, waste emissions or wells.
Without limiting the generality of the foregoing, the term shall encompass each
of the following statutes, and regulations promulgated thereunder, and
amendments and successors to such statutes and regulations, as may be enacted
and promulgated from time to time: (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (codified in scattered sections of 26
U.S.C.; 33 U.S.C.; 42 U.S.C. and 42 U.S.C. [Section] 9601 ET SEQ.); (ii) the 
Resource Conservation and Recovery



<PAGE>   1
                                                                   Exhibit 10.8


                                 PROMISSORY NOTE

$5,000,000.00                                             Boston, Massachusetts
                                                             September 27, 1996

     FOR VALUE RECEIVED, the undersigned Alkermes, Inc., a Pennsylvania
corporation ("Alkermes") and Alkermes Controlled Therapeutics Inc. II, a
Pennsylvania corporation and a wholly-owned subsidiary of Alkermes ("ACT II")
(Alkermes and ACT II being hereinafter referred to collectively as the
"Borrowers" and individually as a "Borrower") hereby jointly and severally
promise to pay to the order of FLEET NATIONAL BANK (the "Bank") the principal
amount of Five Million and 00/100 ($5,000,000.00) Dollars ("Principal"), with
interest, at the rate hereinafter set forth, on the daily balance of all unpaid
Principal, from the date hereof until payment in full of all Principal and
interest hereunder.

     Interest on all unpaid Principal shall be due and payable monthly in
arrears, on the first day of each month commencing on the first such date after
the date of this note and continuing on the first day of each month thereafter
and on the date of payment of this note in full, at the rate of 8.54% per annum
(computed on the basis of a year of three hundred sixty (360) days for the
actual number of days elapsed). Overdue Principal shall bear interest at a rate
per annum which at all times shall be equal to the sum of (i) two (2%) percent
per annum plus (ii) the per annum rate otherwise payable under this note (but in
no event in excess of the maximum rate permitted by then applicable law),
compounded monthly and payable on demand. If the entire amount of any required
Principal and/or interest is not paid within ten (10) days after the same is
due, the Borrowers shall pay (and shall be jointly and severally obligated to
pay) to the Bank a late fee equal to five percent (5%) of the required payment,
provided that such late fee shall be reduced to three percent (3%) of any
required Principal and interest that is not paid within fifteen (15) days of the
date it is due if this note is secured by a mortgage on an owner-occupied
residence of 1-4 units.

     Principal shall be repaid in fifty-nine (59) equal consecutive monthly
installments (each in an amount equal to $83,333.33) commencing on November 1,
1996 and continuing on the first day of each month thereafter through and
including September 1, 2001, plus a sixtieth (60th) and final payment due on
October 1, 2001 in an amount equal to all then remaining Principal and all
interest accrued but unpaid thereon. The Borrowers may at any time and from time
to time prepay all or any portion of said Principal; provided that each such
prepayment of Principal shall be accompanied by (i) payment of all interest
under this note accrued but unpaid to the date of prepayment and (ii) the
"Make-Whole Amount", if any, required by the provisions of Section 1.6 of that
certain letter agreement of even date herewith (the "Letter Agreement") among
the Bank, the Borrowers and Alkermes Controlled Therapeutics, Inc., a
wholly-owned subsidiary of Alkermes. Any partial prepayment of Principal shall
be applied against Principal installments (including the final installment of
Principal) thereafter coming due, in inverse order of normal maturity.


<PAGE>   2

     Payments of both Principal and interest shall be made, in immediately
available funds, at the office of the Bank located at 75 State Street, Boston,
Massachusetts 02109, or at such other address as the Bank may from time to time
designate.

     Each of the undersigned Borrowers irrevocably authorizes the Bank to make
or cause to be made, on a schedule attached to this note or on the books of the
Bank, at or following the time of receiving any payment of Principal, an
appropriate notation reflecting such transaction and the then aggregate unpaid
balance of Principal. Failure of the Bank to make any such notation shall not,
however, affect any obligation of any Borrower hereunder or under the Letter
Agreement. The Principal balance of this note, as recorded by the Bank from time
to time on such schedule or on such books, shall constitute presumptive evidence
of the unpaid principal amount of the term loan represented hereby.

     Each Borrower hereby (a) waives notice of and consents to any and all
advances, settlements, compromises, favors and indulgences (including, without
limitation, any extension or postponement of the time for payment), any and all
receipts, substitutions, additions, exchanges and releases of collateral, and
any and all additions, substitutions and releases of any person primarily or
secondarily liable, (b) waives presentment, demand, notice, protest and all
other demands and notices generally in connection with the delivery, acceptance,
performance, default or enforcement of or under this note, and (c) agrees to
pay, to the extent permitted by law, all reasonable costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred or paid by
the Bank in enforcing this note and any collateral or security therefor, all
whether or not litigation is commenced.

     This note is secured, inter alia, by a Mortgage and Security Agreement of
even date herewith (the "Mortgage") given by ACT II to the Bank and encumbering
real estate in Wilmington, Clinton County, Ohio. This note is the "Ohio Term
Note" referred to in the Mortgage and in the Letter Agreement and is entitled to
benefits thereof. This note is subject to prepayment under the conditions set
forth in the Letter Agreement, with the Make-Whole Amount, if any, required by
the Letter Agreement consequent upon such prepayment. The maturity of this note
may be accelerated upon the occurrence of an Event of Default, as provided in
the Letter Agreement and/or in the Mortgage. This note is the joint and several
obligation of each of the Borrowers.

     Executed, as an instrument under seal, as of the day and year first above
written.


CORPORATE SEAL                                  ALKERMES, INC.

ATTEST:

                                                By /s/ Michael Landine
/s/ Patricia L. Allen                             -----------------------------
- ---------------------------                     Name: Michael Landine
Assistant Secretary                             Title: Senior VP and CFO


                                      -2-
<PAGE>   3

CORPORATE SEAL                                  ALKERMES CONTROLLED
                                                 THERAPEUTICS INC. II

ATTEST:

                                                By /s/ Michael Landine
/s/ Patricia L. Allen                             -----------------------------
- ---------------------------                     Name: Michael Landine
Assistant Secretary                             Title: Vice President




                                      -3-

<PAGE>   1

                                  EXHIBIT 11


<TABLE>
                                        STATEMENT REGARDING COMPUTATION OF PER SHARE LOSS
<CAPTION>

                                              Three Months        Three Months            Six Months            Six Months
                                                  Ended               Ended                  Ended                Ended
                                           September 30, 1996   September 30, 1995     September 30, 1996   September 30, 1995
                                           ------------------   ------------------     ------------------   ------------------

<S>                                           <C>                   <C>                   <C>                 <C>
Net loss                                      $(4,789,384)          $(2,960,194)          $(9,733,375)        $(5,429,334)
                                              ===========           ===========           ===========         ===========

Calculation of shares outstanding:

   Weighted average common shares
     outstanding used in calculating net
     loss per share in accordance with
     generally accepted accounting
     principles                                18,416,041            13,726,702            17,873,780          13,650,851
                                              -----------           -----------           -----------         -----------
 
     Total                                     18,416,041            13,726,702            17,873,780          13,650,851
                                              ===========           ===========           ===========         ===========

Net loss per share                                 $(0.26)               $(0.22)               $(0.54)             $(0.40)
                                                   ======                ======                ======              ======
</TABLE>



<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-Q FOR
THE SIX MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          MAR-31-1997
<PERIOD-START>                             APR-01-1996
<PERIOD-END>                               SEP-30-1996
<CASH>                                           4,666
<SECURITIES>                                    43,528
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                51,499
<PP&E>                                          14,349
<DEPRECIATION>                                 (6,150)
<TOTAL-ASSETS>                                  62,187
<CURRENT-LIABILITIES>                            6,371
<BONDS>                                         12,415
<COMMON>                                           184
                                0
                                          0
<OTHER-SE>                                      37,042
<TOTAL-LIABILITY-AND-EQUITY>                    62,187
<SALES>                                              0
<TOTAL-REVENUES>                                 8,502
<CGS>                                                0
<TOTAL-COSTS>                                   13,556
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                 610
<INCOME-PRETAX>                                (9,733)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                            (9,733)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   (9,733)
<EPS-PRIMARY>                                   (0.54)
<EPS-DILUTED>                                   (0.54)
        

</TABLE>


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