Secured Promissory Note - Cubist Pharmaceuticals Inc. and Alan D. Watson
SECURED PROMISSORY NOTE
$515,625 September 25, 1999
FOR VALUE RECEIVED, the undersigned, ALAN D. WATSON, PH.D., MBA (the
"MAKER"), by this Secured Demand Promissory Note (this "NOTE"), absolutely
and unconditionally promises to pay to the order of CUBIST PHARMACEUTICALS,
INC., a Delaware corporation (the "COMPANY") or its successors or assigns or
any such successor or assign, as the case may be, being hereinafter referred
to as (the "PAYEE"), the aggregate principal amount of Five Hundred Fifteen
Thousand Six Hundred Twenty Five Dollars ($515,625) on September 25, 2002
(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
payable annually on the first anniversary hereof, the second anniversary
hereof and on the Maturity Date.
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
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.
The obligations of the Maker under this Note are secured by a pledge of
among other things, 50,000 shares (the "SHARES") of the Common Stock, par value
$.001 per share of the Company pursuant to the provisions of a certain Stock
Pledge Agreement, dated of even date herewith, between the Maker and the Payee
(the "PLEDGE AGREEMENT").
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 breach any provision of the Pledge
Agreement, (3) the Maker shall make an assignment of the whole or a substantial
part of his assets for the benefit of creditors, or (4) 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 (4) 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.
<PAGE>
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/ Alan D. Watson
--------------------------
Alan D. Watson, Ph.D., MBA