Document:

Exhibit 10.29

 

SEPARATION AGREEMENT

 

SEPARATION AGREEMENT (“Agreement”) made December 14, 2010 between Five Star Quality Care, Inc. (“Company”) and Maryann Hughes (“Hughes”).

 

RECITAL

 

Hughes has been an employee of the Company and has been its Vice President of Human Resources since May 31, 2000.  Hughes’ employment with the Company and its subsidiaries terminated on November 19, 2010 (the “Separation Date”), at which time Hughes will no longer serve as the Company’s Vice President of Human Resources.  Hughes and the Company desire to set forth certain understandings in connection with this termination.

 

NOW, THEREFORE, the parties agree as follows:

 

Section 1.  Payments; Insurance and Benefits; Restricted Share Agreements

 

(a)           Through the Separation Date, the Company paid Hughes her salary plus any days of accrued, but unused, vacation time through the Separation Date.

 

(b)           If this Agreement becomes effective pursuant to Section 14, (i) the Company will pay Hughes as severance an amount equal to six months of her current base salary (the total gross amount of which is $122,500) payable as set forth below commencing on the day (the “Severance Date”) this Agreement becomes effective; and (ii) Hughes will be eligible to receive a bonus for services rendered during 2010, the amount of such bonus to be determined in the sole discretion of the Company’s Board of Directors (the “Bonus Payment”).  The Company shall pay to Hughes the Bonus Payment on the Severance Date and the severance amount shall be paid over a period of six months following the Severance Date in accordance with the Company’s normal payroll practices and minus all applicable payroll taxes and withholdings.

 

(c)           The Company has provided Hughes with separate written notification of her rights under COBRA to continue her participation in the Company’s group health plans after the Separation Date. If Hughes so elects, the Company will pay Hughes’ costs of such participation in the Company’s group health plan for a period of six (6) months after the Separation Date.  Hughes’ eligibility to participate in all other Company benefit plans and arrangements will end on the Separation Date.

 

(d)           If this Agreement becomes effective pursuant to Section 14, the Company will enter into an Accelerated Vesting Agreement in the form of Exhibit A with respect to the Restricted Share Agreements listed on Exhibit B.  Hughes agrees that so long as she owns shares of the Company, at any meeting of the shareholders of the Company, she will vote all shares then owned by her in favor of all nominees for director and all proposals recommended by the Board of Directors in the proxy statement for such meeting.

 

(e)           All payments to Hughes under Section 1(b) shall be reduced by withholdings required by law, including withholdings required as a result of the Accelerated Vesting

 

 

Agreement.  If withholding is required at a time when no payment under Section 1(b) is being made or such payment is insufficient to cover all withholding, Hughes agrees to pay to the Company by check or wire transfer of immediately available funds, an amount equal to the required withholding (as determined by the Company) or at the option of the Company, the Company may deduct such amount from any other cash payment then being made or otherwise owing to Hughes from the Company or any subsidiary.

 

Section 2.  Covenants.  Hughes acknowledges that (i) the Company and its subsidiaries are engaged in the business of operating rehabilitation hospitals and senior living communities, including independent living and congregate care communities, assisted living communities and nursing homes (the “Company’s Business”); (ii) Hughes’ work for the Company’s Business has given her, and will continue to give her, trade secrets of, and confidential and/or proprietary information concerning, the Company’s Business; (iii) the agreements and covenants contained in this Section 2 are essential to protect the Company’s Business and the goodwill associated with it.  Accordingly, Hughes covenants and agrees as follows:

 

(a)           Confidential Information.  From and after the date hereof, Hughes shall not (i) disclose to any person not employed by the Company or a subsidiary, or not engaged to render services to the Company or a subsidiary or (ii) use for the benefit of herself or others, any confidential information of the Company, any of the Company’s subsidiaries or of the Company’s Business obtained by her, including, without limitation, “know-how,” trade secrets, details of customers’ or suppliers’ contracts, pricing policies, financial data, operational methods, marketing and sales information, marketing plans or strategies, development techniques or plans, plans to enter into any contract with any person or any strategies relating thereto, technical processes, designs and design projects, and other proprietary information of the Company, the Company’s subsidiaries or of the Company’s Business or the business of any of the Company’s subsidiaries; provided, however, that this provision shall not preclude Hughes from (a) making any disclosure required by law or court order provided Hughes has given the Company notice that she is required to make such disclosure sufficiently in advance of such disclosure to permit the Company to seek protection from such requirement or (b) using or disclosing information (i) known generally to the public (other than information known generally to the public as a result of a violation of this Section 2(b) by Hughes), (ii) acquired by Hughes independently of her affiliation with the Company or any of the Company’s subsidiaries without breach of any confidentiality obligation on the part of the disclosing person, or (iii) of a general nature (that is, not related specifically to the Company, any of its subsidiaries or the Company’s Business) that ordinarily would be learned, developed or obtained by individuals similarly active and/or employed in similar capacities by other companies in the same business as the Company or any of the Company’s subsidiaries.  Hughes agrees that all confidential information of the Company or any of the Company’s subsidiaries shall remain the Company’s or the Company’s subsidiaries, as the case may be, and to promptly return any confidential information embodied in any physical or electronic medium to the owner thereof upon the termination of Hughes’ employment with the Company or at any other time on request.

 

(b)           No Solicitation.  For the period of two (2) years following the Severance Date, Hughes shall not, directly or indirectly, (a) solicit any employee to leave the employment of the Company or any of the Company’s subsidiaries or (b) hire any employee who has left the employ of the Company or any of the Company’s subsidiaries within six (6) months after

 

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termination of such employee’s employment with the Company or such subsidiary, as the case may be (unless such employee was discharged without cause), provided a general solicitation by Hughes’ then employer not directed to employees of the Company or any of the Company’s subsidiaries shall not be a breach of this provision so long as Hughes does not participate in any manner (including any vetting or interviewing of prospective employees).

 

(c)           Cooperation.  From and after the date hereof, Hughes shall reasonably cooperate with the Company and its subsidiaries with respect to all matters arising during or related to her employment, including all matters (formal or informal) in connection with any government investigation, internal investigation, litigation (potential or ongoing), regulatory or other proceeding which may have arisen or which may hereafter arise.  The Company will reimburse Hughes for all out-of -pocket expenses (not including lost time or opportunity), and will provide appropriate legal representation in a manner determined by the Company.  For a period of six (6) months after the Separation Date, Hughes shall also reasonably cooperate with the Company and its subsidiaries with respect to transitioning her services to successor human resources personnel.

 

Section 3.  Rights and Remedies upon Breach of Covenants.

 

(a)           If Hughes breaches, or threatens to commit a breach of, any of the provisions of Section 2 (the “Restrictive Covenants”), the Company shall have the right and remedy to have the Restrictive Covenants specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company, that such injury shall be presumed and need not be proven, and that money damages will not provide an adequate remedy to the Company.  Such rights and remedies shall be independent of the others and severally enforceable, and all of which rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity.

 

(b)           Hughes acknowledges and agrees that the Restrictive Covenants are reasonable and valid in duration, scope and in all other respects.  If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect to the greatest extent possible, without regard to the invalid portions.

 

(c)           If any court construes any of the Restrictive Covenants, or any part thereof, to be unenforceable because of the duration of such provision or the scope, such court shall have the power to reduce the duration or scope of such provision and, in its reduced form, such provision shall be enforceable and shall be enforced to the greatest extent possible.

 

Section 4.  Representations.  With respect to the period during which she has been employed by the Company, Hughes represents, to the best of her knowledge and belief, that (i) neither the Company nor any subsidiary is in material violation of any law and (ii) neither the Company nor any subsidiary has failed to disclose any material information required by law to be disclosed in any regulatory filings of the Company or such subsidiary.

 

Section 5.  General Release of Claims.  In exchange for the promises set forth herein, Hughes, on behalf of herself and her heirs, executors, administrators and assigns, hereby releases

 

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and forever discharges the Company and its affiliates and subsidiaries, and all of their respective directors, officers, employees, agents, successors, and assigns, in their official and individual capacities (the “Company Releasees”), from any and all suits, claims, demands, debts, sums of money, damages, interest, attorneys’ fees, expenses, actions, causes of action, judgments, accounts, promises, contracts, agreements, and any and all claims of law or in equity, whether now known or unknown, which Hughes now has or ever had against any of the Company Releasees, including, but not limited to, any claims under Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Older Worker Benefits Protection Act, the Family and Medical Leave Act, Massachusetts General Laws Chapters 149 and 151B and any other federal, state or local statute, regulation, ordinance or common law creating employment-related causes of action, all claims related to or arising out of Hughes’ employment by the Company or the termination of such employment and all rights and claims to recover any monetary benefits or damages in connection with any proceeding brought against any of the Company Releasees on Hughes’ behalf or on behalf of a class of which Hughes may be a member with respect to any of the foregoing.  This General Release of Claims shall not apply to (a) any vested interest Hughes may have in any 401(k), pension or employee welfare plan by virtue of Hughes’ employment by the Company; (b) any claim that may not be waived by law; and (c) any claim by Hughes to enforce this Agreement. The releases set forth in this Section 5 do not take effect unless this Agreement becomes effective pursuant to Section 14 below.

 

Section 6.  Non-disparagement.  Hughes shall not take any action or make any statement, written or oral, that disparages the Company, any of its subsidiaries or any of their respective officers, directors, employees or agents, or that has the intended or foreseeable effect of harming the Company’s or any subsidiary’s reputation or the personal or business reputation of any of their respective officers, directors, employees or agents.

 

Section 7.  Assignment.  In the event that the Company shall be merged with, or consolidated into, any other person or entity, or in the event that it shall sell and transfer substantially all of its assets to another person or entity, the terms of this Agreement shall inure to the benefit of, and be assumed by, the person or entity resulting from such merger or consolidation, or to which the Company’s assets shall be sold and transferred. This Agreement shall not be assignable by Hughes.

 

Section 8.  Governing Law. This Agreement will be governed by the laws of the Commonwealth of Massachusetts without regard to conflicts of laws principles that might lead to the application of the laws of another jurisdiction.

 

Section 9.  Jurisdiction; Service of Process.  Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against either of the parties in the state courts of Massachusetts or in the United States District Court in Boston, Massachusetts and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on either party anywhere in the world.

 

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Section 10.  Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement, but in proving this Agreement, it shall not be necessary to produce more than one of such counterparts.

 

Section 11.  Section Headings; Construction.  The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement unless otherwise specified. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

 

Section 12.  Notices. All notices, consents, waivers, and other communications under this Agreement shall be in writing and will be deemed to have been duly given when (a) delivered by hand, (b) sent by facsimile (with a copy sent by nationally recognized overnight delivery service) or (c) when sent by nationally recognized overnight delivery service, in each case to the appropriate addresses set forth below (or to such other addresses as a party may designate by notice to the other parties):

 

Hughes:

 

the Company:                      Five Star Quality Care, Inc.
 400 Centre Street
 Newton, MA  02458
 Attention: President
 Facsimile: 617.796.8385

 

Section 13.  Entire Agreement.  This Agreement constitutes the entire agreement between the Company and Hughes with respect to the subject matter and supersedes all prior written and oral agreements and understandings between the Company and Hughes with respect thereto. This Agreement may not be amended except by a written agreement executed by the party to be charged with the amendment.

 

Section 14.  Consultation with Counsel; Time to Sign; Revocation; etc..  Hughes has the right to and should consult an attorney with respect to this Agreement.  Hughes will have twenty-one (21) days from receipt of this Agreement to decide whether to sign this Agreement.  If this Agreement has not been returned to the Company, c/o its President, signed by Hughes within twenty-one (21) days after receipt by Hughes, this Agreement shall not be valid.  Any changes made to this Agreement after Hughes receives it, whether material or immaterial, will not start the running of a new 21-day consideration period.  Hughes shall have seven (7) days after signing this Agreement to revoke her signature, which can be accomplished by delivering a written notice of revocation to the Company, c/o its President, before the expiration of the seven (7) day revocation period.  This Agreement shall not be effective (and neither the Company nor Hughes have any obligations hereunder) until the expiration of the seven (7) day revocation period.

 

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Section 15.  Voluntary Execution; No representations.  By signing this Agreement Hughes acknowledges that she is doing so knowingly and voluntarily, and that she is receiving benefits hereunder to which she is not otherwise entitled.  Hughes also acknowledges that she is not relying on any representations or promises by the Company or by any representative of the Company concerning the meaning of any aspect of this Agreement except as stated herein.

 

EXECUTED under seal as of the date first above written.

 

 

	
 
    	
Five   Star Quality Care, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Bruce J. Mackey Jr.
    
	
 
    	
 
    	
Bruce   J. Mackey Jr., President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Maryann Hughes
    
	
 
    	
Maryann   Hughes
    

 

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EXHIBIT A

 

Form of Accelerated Vesting Agreement

 

 

EXHIBIT B

 

Restricted Share Agreement between Maryann Hughes and Five Star Quality Care, Inc. dated July 15, 2003.

 

Restricted Share Agreement between Maryann Hughes and Five Star Quality Care, Inc. dated November 17, 2004.

 

Restricted Share Agreement between Maryann Hughes and Five Star Quality Care, Inc. dated November 11, 2005.

 

Restricted Share Agreement between Maryann Hughes and Five Star Quality Care, Inc. dated November 15, 2006.

 

Restricted Share Agreement between Maryann Hughes and Five Star Quality Care, Inc. dated November 19, 2007.

 

Restricted Share Agreement between Maryann Hughes and Five Star Quality Care, Inc. dated November 24, 2008.

 

Restricted Share Agreement between Maryann Hughes and Five Star Quality Care, Inc. dated November 19, 2009.Exhibit 4.5

 

FACE OF SECURITY

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

 

CUBIST PHARMACEUTICALS, INC.

 

2.50% CONVERTIBLE SENIOR NOTES DUE 2017

 

	
No. 1
    	
Initially $450,000,000
    

 

CUSIP No.: 229678 AD9

 

Cubist Pharmaceuticals, Inc., a Delaware corporation (the “Company”, which term shall include any successor corporation under the Indenture referred to on the reverse hereof), promises to pay to Cede & Co., or registered assigns, the principal sum of FOUR HUNDRED FIFTY MILLION DOLLARS ($450,000,000) or such lesser amount as set forth in the “Schedule of Exchanges of Securities” attached hereto on November 1, 2017, and interest thereon as set forth below.

 

This Security shall bear interest at the rate of 2.50% per year from October 25, 2010, or from the most recent date to which interest had been paid or provided for to, but excluding, the next scheduled Interest Payment Date until November 1, 2017.  Interest is payable semi-annually in arrears on each May 1 and November 1, commencing on May 1, 2011, to Holders of record at the close of business on the preceding April 15 and October 15 (whether or not such day is a Business Day), respectively.  Additional Interest will be payable as set forth in Section 7.04 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Security therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to Section 7.04 and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Securities plus one percent, subject to the enforceability thereof under applicable law, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company, at its election, in accordance with Section 2.02(e) of the Indenture.

 

The Company shall pay the principal of and interest on this Security so long as such Security is a Global Security, in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Security.  As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Securities (other than Securities that are Global Securities) at the office or agency designated by the Company for that purpose.  The Company has initially designated the Trustee as Paying Agent, Primary Registrar, Securities Custodian and Conversion Agent and each of the Corporate Trust Office of the Trustee and the office or agency of the Trustee in the Borough of Manhattan, The City of New York, as an office or agency of the Company for each of the aforesaid purposes.

 

Reference is made to the further provisions of this Security set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Security the right to convert this Security into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, on the terms and subject to the limitations set forth in the

 

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Indenture.  Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

This Security shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
 
    	
 
    	
CUBIST PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Michael W. Bonney
    
	
 
    	
 
    	
 
    	
Name:
    	
Michael W. Bonney
    
	
 
    	
 
    	
 
    	
Title:
    	
President & Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Tamara L. Joseph
    	
 
    	
 
    
	
 
    	
Name:
    	
Tamara L. Joseph
    	
 
    	
 
    
	
 
    	
Title:
    	
Senior Vice President, General
   Counsel & Secretary
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Dated: October 25, 2010
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
This is one of the Securities referred   to in the within-mentioned Indenture.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
THE BANK OF NEW   YORK MELLON TRUST COMPANY, N.A., as Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Raymond K. O’Neil
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    	
 
    

 

 

REVERSE OF SECURITY

 

CUBIST PHARMACEUTICALS, INC.
 2.50% CONVERTIBLE SENIOR NOTES DUE 2017

 

This Security is one of a duly authorized issuance of Securities of the Company, designated as its 2.50% Convertible Senior Notes due 2017 (the “Securities”), limited in aggregate principal amount of up to $450,000,000, all issued or to be issued under and pursuant to an Indenture dated as of October 25, 2010 (the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities.  Additional Securities may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture.

 

In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all Securities may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of Securities then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.  In case an Event of Default occurs as a result of certain events of bankruptcy, insolvency or reorganization of the Company, the principal of all Securities then outstanding shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of the Fundamental Change Repurchase Price and the principal amount on the Maturity Date, as the case may be, to the Holder who surrenders a Security to a Paying Agent to collect such payments in respect of the Security.  The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.

 

The Indenture contains provisions permitting the Company and the Trustee in certain circumstances, without the consent of the Holders of the Securities, and in certain other circumstances, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures modifying the terms of the Indenture and the Securities as described therein.  It is also provided in the Indenture that, subject to certain exceptions, the Holders of a majority in aggregate principal amount of the Securities at the time outstanding may on behalf of the Holders of all of the Securities waive any past Default or Event of Default under the Indenture and its consequences.

 

The Securities are issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof.  At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, Securities may be exchanged for a like aggregate principal amount of Securities of other authorized denominations, without payment of any service charge but, if required by the Company or Trustee, with payment of a sum sufficient to cover any transfer or similar tax that

 

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may be imposed in connection therewith as a result of the name of the Holder of the new Securities issued upon such exchange of Securities being different from the name of the Holder of the old Securities surrendered for such exchange.

 

The Securities are not subject to redemption through the operation of any sinking fund or otherwise.

 

Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Securities or any portion thereof (in principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.

 

Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, prior to the close of business on the Business Day immediately preceding May 1, 2017 only upon the occurrence of certain conditions specified in the Indenture, and on or after May 1, 2017 until the close of business on the Business Day immediately preceding the Maturity Date regardless of the occurrence of such conditions, to convert any of its Securities or portion thereof that is $1,000 or an integral multiple thereof, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, at the Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.

 

All terms used in this Security but not specifically defined herein are defined in the Indenture and are used herein as so defined.

 

In the case of any conflict between the provisions of this Security and the Indenture, the provisions of the Indenture shall control.

 

This Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on this Security.

 

THE INDENTURE AND THIS SECURITY, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THE INDENTURE OR THIS SECURITY, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

The Company will furnish to any Holder, upon written request and without charge, a copy of the Indenture. Requests may be made to: Cubist Pharmaceuticals, Inc., 65 Hayden Avenue, Lexington, MA 02421, Attention: Investor Relations.

 

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ABBREVIATIONS AND DEFINITIONS

 

Customary abbreviations may be used in the name of the Holder or an assignee, such as:

 

TEN COM (= tenants in common)

 

TEN ENT (= tenants by the entireties)

 

JT TEN (= joint tenants with right of survivorship and not as tenants in common)

 

CUST (= Custodian)

 

UGMA (= Uniform Gifts to Minors Act).

 

Additional abbreviations may also be used though not in the above list.

 

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ASSIGNMENT FORM

 

To assign this Security, fill in the form below:

 

I or we assign and transfer this Security to:

 

	
 
    	
 
    
	
(Insert assignee’s social security or tax   I.D. number)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Print or type assignee’s name, address and   zip code)
    	
 
    
	
 
    	
 
    
	
and irrevocably appoint
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
agent to transfer this Security on the books   of the Company. The agent may substitute another to act for him or her.
    	
 
    

 

	
Date:
    	
 
    	
Your Signature:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Sign   exactly as your name appears on the other side of this Security)
    

 

* Signature guaranteed by:

 

 

	
By:
    	
 
    	
 
    

 

*                                         The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

 

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CONVERSION NOTICE

 

To convert this Security into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, check the box: o

 

To convert only part of this Security, state the principal amount to be converted (which must be $1,000 or a integral multiple of $1,000): $

 

If you want the stock certificate made out in another Person’s name, fill in the form below:

 

	
 
    	
 
    
	
(Insert   assignee’s social security or tax I.D. number)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Print   or type assignee’s name, address and zip code)
    	
 
    

 

 

	
Date:
    	
 
    	
Your Signature:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Sign exactly as your name appears on the   other side of this Security)
    

 

* Signature guaranteed by:

 

 

	
By:
    	
 
    	
 
    

 

*                                         The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

 

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REPURCHASE EXERCISE NOTICE UPON A FUNDAMENTAL CHANGE

 

To:  Cubist Pharmaceuticals, Inc.

 

The undersigned registered owner of this Security hereby irrevocably acknowledges receipt of a notice from Cubist Pharmaceuticals, Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and requests and instructs the Company to repurchase the entire principal amount of this Security, or the portion thereof (which is $1,000 or an integral multiple thereof) below designated, in accordance with the terms of the Indenture referred to in this Security at the Fundamental Change Repurchase Price, to the registered Holder hereof.

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature(s)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature(s) must   be guaranteed by a qualified guarantor institution with membership in an   approved signature guarantee program pursuant to Rule 17Ad-15 under the   Securities Exchange Act of 1934.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature Guaranty
    

 

Principal amount to be repurchased (in an integral multiple of $1,000, if less than all):

 

NOTICE: The signature to the foregoing Election must correspond to the name as written upon the face of the Security in every particular, without alteration or any change whatsoever.

 

10

 

SCHEDULE OF EXCHANGES OF SECURITIES

 

The following exchanges, repurchases or conversions of a part of this Global Security have been made:

 

	
Date of Exchange,
   Repurchase or
   Conversion
    	
 
    	
Amount of Decrease
   in Principal Amount
   of this Global
   Security
    	
 
    	
Amount of Increase
   in Principal Amount
   of this Global
   Security
    	
 
    	
Principal Amount of
   this Global Security
   Following Such
   Decrease or
   Increase
    	
 
    	
Signature of
   Authorized
   Signatory of
   Securities Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
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<C>
    	
 
    	
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