SECURED PROMISSORY NOTE
$80,000 Boston, Massachusetts
May 19, 1997
FOR VALUE RECEIVED, the undersigned, Mark P. Carthy (the "Maker"), by
this Secured Promissory Note (this "Note"), absolutely and unconditionally
promises to pay to the order of CUBIST PHARMACEUTICALS, INC., a Delaware
corporation (the "Payee"), the aggregate principal amount of Eighty Thousand
Dollars ($80,000) on May 18, 2000 (the "Maturity Date"), and to pay interest
on the principal amount outstanding from time to time hereunder, from the
date hereof through and including the date on which such principal amount is
paid in full, at a rate of four percent (4%) per annum simple interest.
Interest hereunder shall be due and payable on the first anniversary hereof
and on the Maturity Date or any accelerated maturity hereof.
The Maker shall have the right to prepay the unpaid principal amount of
this Note in full at any time, or in part from time to time, without premium
or prepayment penalty, provided that there is paid with each such principal
prepayment all accrued and unpaid interest to the date of prepayment
(calculated on the basis of a 365-day year for the actual number of days for
which the same is due).
All payments of interest and principal hereunder shall be made at the
principal residence or business address of the holder hereof. All payments
hereunder shall be applied first to any unpaid accrued interest, second to
payment of all, if any, other amounts except principal due under or in
respect of this Note, and third to repayment of principal.
This Note is made and delivered by the Maker to the Payee pursuant to
that certain letter agreement, dated as of the date hereof, among the Payee
and the Maker, and is secured pursuant to the provisions of a certain Stock
Pledge Agreement, dated of even date herewith, between the Maker and the
Payee.
Anything implied herein to the contrary notwithstanding, in the event
that (1) the Maker shall fail to pay when due all or any portion of the
principal of or interest on this Note, (2) the Maker shall make an assignment
of the whole or a substantial part of his assets for the benefit of
creditors, or (3) there shall be commenced by or against the Maker any
proceeding under any bankruptcy, insolvency, readjustment of debt or similar
law of any jurisdiction, (each event referred to in clauses (1) through (3)
above being hereinafter referred to herein as an "Event of Default") then
without notice to or demand upon the Maker the entire unpaid principal of
this Note, and all interest accrued thereon, shall (if not already due and
payable) immediately become and be due and payable to the order of the holder
hereof.
-2-
The Maker hereby, to the fullest extent permitted by applicable law: (a)
waives presentment, demand, notice, protest, and all other demands and
notices in connection with delivery, acceptance, performance, default,
acceleration or enforcement of or under this Note; (b) assents to any
extension or postponement of the time of payment or any other indulgence, and
to any substitution, exchange or release of collateral; and (c) agrees to pay
to the holder, on demand, all costs and expenses of collection, including,
without limitation, reasonable attorneys' fees and legal expenses, incurred
by the holder in enforcing this Note, whether or not litigation is commenced.
No failure by the holder to exercise, or delay by the holder in
exercising, any right or remedy hereunder shall operate as a waiver thereof,
or of any other right or remedy, and no single or partial exercise of any
right or remedy shall preclude any other or further exercise thereof or of
any other right or remedy. Acceptance by the holder of any payment after the
maturity of this Note has been accelerated shall not constitute a waiver of
such acceleration.
This Note shall take effect as an instrument under seal and shall be
governed by and construed in accordance with the law of The Commonwealth of
Massachusetts.
/s/ Mark P. Carthy
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Mark P. Carthy
21 Stone Road
Belmont, MA 02178