Name and
Address of Debtor:
Cornerstone
Biopharma Holdings, Inc.
2000 Regency Parkway, Ste 255, Cary, NC 27511
Name and
Address of Secured Party:
Paragon
Commercial Bank
3605 Glenwood Avenue
Suite 100
Raleigh, NC 27612
Attn: Brian K. Reid, Senior Vice President
Cornerstone
Biopharma Holdings, Inc. , referred to herein as the “Debtor, the
Debtor who is or who expects to be either directly or indirectly
obligated to Paragon Commercial Bank , referred to herein as
the “Bank” or the “Secured Party,” agrees
as follows:
(1) CREATION OF SECURITY INTEREST: Debtor
grants to Secured Party a security interest in the Collateral
described or referred to herein to secure the performance of all
direct, contingent, present and future obligations of Debtor to
Secured Party (the “Obligations”).
(2) COLLATERAL The Collateral is classified
generally as:
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Accounts. Any and all
accounts, accounts receivable, receivables, contract rights, book
debts, checks, notes, drafts, instruments, chattel paper,
acceptances, chooses in action, any and all amounts due to Debtor
from a factor or other forms of obligations and receivables now
existing or hereafter arising out of the business of the Debtor, as
well as any and all returned, refused and repossessed goods, and
the cash or non-cash proceeds resulting therefrom.
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Inventory. Any and all
of Debtor’s inventory, including without limitation any and
all goods held for sale or lease or being processed for sale or
lease in Debtor’s business as now or hereafter conducted,
whether now owned or hereinafter acquired, including all materials,
goods and work in process, finished goods, and other tangible
property held for sale or lease or furnished or to be furnished
under contracts of service or used or consumed in Debtor’s
business, along with all documents (including documents of title)
covering inventory and all cash and non-cash proceeds from the sale
of inventory, including proceeds from insurance.
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Equipment and
Furnishings. Any and all of Debtor’s furnishings and
equipment, wherever located, whether now owned or hereafter
acquired, together with all increases, parts, fittings,
accessories, equipment, and special tools now or hereafter affixed
to any part thereof or used in connection therewith, and all
products, additions, substitutions, accessions, and all cash and
non-cash proceeds, including proceeds from insurance thereof and
thereto.
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Fixtures. All of
Debtor’s fixtures now existing or hereafter acquired,
together with all substitutes and replacements therefor, all
accessions and attachments thereto, and all tools, parts and
equipment now or hereafter added to or used in connection
therewith. These goods are or will become fixtures on the following
described real estate in County, (State), owned by (name of owner)
more particularly described as follows:
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Instruments and/or
Investment Documents. The following described instruments and
documents including, without limitation, negotiable instruments,
promissory notes, and documents of title owned or to be owned by
Debtor, certificates of deposit, and all liens, security
agreements, leases and other contracts
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securing or otherwise relating to
any of such instruments or documents, and all cash and non-cash
proceeds and products thereof and such additional property
receivable or distributed in respect of or in exchange for all or
any of such instruments or documents.
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General Intangibles. All
patents, trademarks, service marks, trade secrets, copyrights and
exclusive licenses (whether issued or pending) and all documents,
applications, materials and other matters related thereto, all
inventions, and all manufacturing, engineering and production
plans, drawings, specifications, processes and systems, all trade
names, computer programs, databases, systems and software
(including source and object codes), goodwill, chooses in action
and all other general intangibles of Debtor whether now owned or
hereafter acquired and all cash and non-cash proceeds
thereof.
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Timber. All of
Debtor’s uncut timber growing or to be grown on the following
described property, and all cash and non-cash proceeds including
proceeds from insurance, and all products thereof (property
description):
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Other —
Description of Collateral listed in box below:
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Description of
Collateral
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Check here o
if Debtor has no place
of business in North Carolina but resides in North Carolina. Check
here o
if Debtor has more than
one place of business in North Carolina. Check here
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if Debtor has only
one place of business in North Carolina, give county of business
here: Wake .
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If checked
here o the Collateral described above includes all
after-acquired Consumer Goods acquired by the Debtor within ten
(10) days after the Secured Party has given value pursuant to
this Agreement.
If checked here
o
this is a purchase money security
agreement.
Any
additional Collateral acquired hereafter by the Debtor shall be
Collateral subject to this Agreement. All Collateral now or
hereafter subject to this Agreement includes the proceeds thereof
and any additions and accessions thereto. Nothing contained herein
shall be deemed consent to the sale of any Collateral.
(3) DEBTOR’S
UNDERTAKINGS: The Debtor agrees:
(A) that time
is of the essence of this Agreement, and Debtor shall promptly
perform all Obligations of Debtor including the payment, when due,
of all amounts owed to Secured Party secured by this
Agreement;
(B) that
Debtor will protect and properly care for the Collateral and no
Collateral will be misused, wasted or allowed to deteriorate except
for normal wear and tear;
(C) to use
the Collateral principally within the State of North Carolina and
not to affix the Collateral to other personal property (unless
other provision regarding the location or affixation of the
Collateral is noted herein) and not to affix the Collateral to real
property unless it is classified as a fixture hereinabove and the
requisite information is supplied;
(D) that
Secured Party may act as attorney for Debtor in adjusting and
canceling any such insurance coverage and in endorsing any
insurance draft and may retain for the satisfaction of the
Debtor’s Obligations any insurance proceeds and/or unearned
premium on such insurance;
(E) that upon
the request of Secured Party, Debtor will (i) provide an
updated appraisal of the Collateral and (ii) give to or
deposit with Secured Party additional Collateral to Secured
Party’s satisfaction;
(F) that
Collateral will not be changed, transferred, or otherwise disposed
of (except for sale of inventory in the ordinary course of
Debtor’s business) or be subjected to any unpaid charge,
unless the Secured Party consents in advance in writing to such
change, transfer or charge;
(G) to
procure or execute any Financing Statement or other document and do
any act or pay any costs which Secured Party deems necessary to
protect or perfect its security interest under this
Agreement;
(H) that the
Collateral will not be used for illegal purposes; and
(I) that
Secured Party shall have the light to examine and inspect the
Collateral and the books and records relating thereto, if any, at
any reasonable tame and, upon demand. Debtor shall assemble the
Collateral at such place or places as Secured Party may designate
for the purpose of allowing Bank to examine same.
(4) DEFAULT AND REMEDIES:
(A) The
happening of any of the following events shall constitute a default
under this Agreement: (i) the occurrence of a default under
any note or other agreement secured hereby, (ii) the failure of
Debtor to perform any of the terms, stipulations and conditions
written into this Agreement; (iii) the insolvency of Debtor,
or the application for the appointment of a receiver for Debtor,
the filing of a petition under any provision of the Bankruptcy Code
by or against Debtor or an assignment for the benefit of creditors
by or against Debtor; (iv) the entry of a judgment against
Debtor or the issuance or service of any attachment, levy or
garnishment against Debtor or the Collateral; (v) the failure
of Debtor to furnish from time to time at Bank’s request
financial information with respect to Debtor, (vi) a
determination by Bank that the Obligations are insecure or that a
material adverse change in the financial condition of Debtor has
occurred since the date hereof; (vii) failure of Debtor to
perform any other agreement with Bank; (viii) any
representation or affirmation by the Debtor to Bank herein or by
separate writing is incorrect or false.
(B) Upon the
occurrence of a default as set forth in (A) above, at the
option of Bank, all or any one of the Obligations secured hereby
shall become immediately due and payable without demand or notice,
and Bank shall have at any time after default the rights and
remedies provided in the Uniform Commercial Code as enacted in the
State of North Carolina or other applicable law, or by any note or
other agreement secured hereby, and may, without limiting or
waiving in any way the aforesaid rights:
1.
Enter upon Debtor’s premises to take possession of the
Collateral or render it unusable, or require Debtor to assemble the
Collateral at any place designated by the Bank reasonably
convenient to both parties;
2.
Give any notice or notification to the Debtor required by the
Uniform Commercial Code by mailing such notice, at least five
(5) days before the event, if any, which is the subject of the
notice to the Debtor’s address shown herein. Five
(5) days’ notice to Debtor of any proposed action by
Bank shall be deemed reasonable and sufficient notice for all
purposes, provided, this provision shall not require a longer
period of notice than shall be reasonable under the circumstances
then existing;
3.
Use the proceeds of the disposition of any Collateral to pay and
discharge all or any of the Obligations of Debtor set forth
herein;
4.
Cure the default and the expense of curing such default shall
thereupon become part of the Obligations secured hereby and shall
be payable by Debtor to Bank upon demand of Bank, together with
interest thereon at the highest rate allowed by law.
5.
Obtain the appointment of a receiver for all or any part of the
Collateral, without notice to Debtor.
(5) ADDITIONAL AGREEMENTS AND AFFIRMATIONS:
The Debtor agrees and affirms:
(A) that all
information supplied and statements made by him in any application
for credit, or for the renewal of credit, or in any application for
life or disability insurance in connection with
any Obligation
of Debtor, are true and correct;
(B) that any
loss or destruction of the
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