Document:

exv10w40

Exhibit 10.40

CORNERSTONE BIOPHARMA HOLDINGS, INC., a Delaware Corporation

NONSTATUTORY
EMPLOYEE STOCK OPTION AGREEMENT

	 	 	 
	Optionee:                                                                  

	 	Option Grant Date:                                              
	 
	 	 
	 

	 	Shares Subject to Option:                                    
	 
	 	 
	 

	 	Exercise Price:                                                        

     Cornerstone BioPharma Holdings, Inc., a Delaware corporation (the “Company”) hereby grants to
the optionee named above (the “Optionee”) an option to purchase the amount of shares of Common
Stock set forth above (the “Shares”) of the Company, at the Exercise Price set forth above and on
the terms set forth herein, and in all respects subject to the terms and provisions of the
Company’s 2005 Stock Option Plan (the “Plan”) applicable to nonstatutory stock options, which
terms and provisions hereby are incorporated by reference herein. Unless the context herein
otherwise requires, the terms defined in the Plan shall have the same meanings herein.

     1. Nature of the Option. This Option is intended to be an nonstatutory stock option
and is not intended to be an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”), or otherwise to qualify for any special
tax benefits to Optionee.

     2. Date of Grant; Term of Option. This Option is granted as of the Option Grant Date
set forth above, and it may not be exercised later than ten (10) years from such date.

     3. Option Exercise Price. The exercise price for this Option is the Exercise Price
per Share set forth above, which price is not less than the fair market value thereof on the date
this Option was granted (or not less than one hundred ten percent (110%) of the fair market value
thereof on the date this Option was granted, if the Optionee owns stock representing more than ten
percent (10%) of the total combined voting power of all classes of stock of the Company or its
parents or subsidiaries).

     4. Right to Exercise. This Option shall vest and be exercisable, cumulatively, during
its term as follows:

	 	 	 
	 

	 

	 

	 

	 	1

          (a) Method of Exercise. This Option shall be exercisable by executing the Common
Stock Purchase Agreement which shall serve as written notice and state the election to exercise
this Option, the number of Shares in respect to which this Option is being exercised and

 

			
	1	 	Insert appropriate time based
vesting schedule.

 

 

such other representations and agreements as to Optionee’s investment intent with respect to
such Shares as may be required by the Company hereunder or pursuant to the provisions of the Plan.
Such written notice shall be signed by Optionee and shall be delivered in person or by certified
mail to the Secretary of the Company or such other person as may be designated by the Company.
The written notice shall be accompanied by payment of the purchase price. Payment of the purchase
price shall be made by check or such other consideration and method of payment authorized by the
Board pursuant to the Plan. The certificate or certificates for the Shares as to which this
Option shall be exercised shall be registered in the name of Optionee and shall carry the legends
set forth in the Plan, the Stock Purchase Agreement or the Investment Representation Statement, as
applicable, and/or as required under applicable law.

          (b) Restrictions on Exercise. This Option may not be exercised if the issuance of
the Shares upon such exercise would constitute a violation of any applicable federal or state
securities laws or other laws or regulations. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the Company as may be
required by any applicable law or regulation.

     5. Investment Representations. In connection with the acquisition of this Option,
Optionee represents and warrants as follows:

          (a) Investment Intent. Optionee is acquiring this Option, and upon exercise of this
Option, Optionee will be acquiring the Shares for investment for Optionee’s own account, not as a
nominee or agent, and not with a view to, or for resale in connection with, any distribution
thereof.

          (b) Protection of Interests. Optionee, by reason of Optionee’s business or financial
experience, has the capacity to evaluate the merits and risks of purchasing Common Stock of the
Company and to make an informed investment decision with respect thereto and to protect Optionee’s
interests in connection with the acquisition of this Option and the Shares.

     6. Termination of Status as an Employee. If Optionee ceases to serve as an Employee
for any reason other than death or disability and thereby terminates Optionee’s Continuous Status
as an Employee, Optionee shall have the right to exercise this Option at any time within thirty
(30) days after the date of such termination to the extent that Optionee was entitled to exercise
this Option at the date of such termination. If Optionee ceases to serve as an Employee, due to
death or disability, this Option may be exercised at any time within six (6) months after the date
of death or termination of such status as an Employee due to disability, in the case of death, by
Optionee’s estate or by a person who acquired the right to exercise this Option by bequest or
inheritance, or, in the case of disability, by Optionee, but in any case only to the extent
Optionee was entitled to exercise this Option at the date of such termination. To the extent that
Optionee was not entitled to exercise this Option at the date of termination, or to the extent this
Option is not exercised within the time specified herein, this Option shall terminate.

Notwithstanding the foregoing, this Option shall not be exercisable after the expiration of
the term set forth in paragraph 2 hereof.

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     7. Withholding Tax Liability. The Company reserves the right to withhold, in
accordance with any applicable laws, from any compensation or other consideration payable to the
Optionee any taxes required to be withheld by federal, state or local law as a result of the grant
or exercise of this Option or the sale or other disposition of the Shares issued upon exercise of
this Option, and if such compensation or consideration is insufficient, the Company may require
Optionee to pay to the Company an amount sufficient to cover such withholding tax liability.

     8. Nontransferability of Option. This Option may not be sold, pledged, assigned,
hypothecated, gifted, transferred or disposed of in any manner either voluntarily or involuntarily
by operation of law or otherwise, other than by will or by the laws of descent or distribution, and
may be exercised during the lifetime of Optionee only by such Optionee. Subject to the foregoing
and the terms of the Plan, the terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of Optionee.

     9. Continuation of Status as an Employee. Neither this Option or the Plan nor any
Option granted thereunder shall confer upon any Optionee any right to continue in the status of an
Employee of the Company, its Parent, Subsidiary or a successor corporation or limit in any respect
the right of the Company or any such corporations to discharge the Optionee at any time, with or
without cause and with or without notice.

     10. Limitations on Transfer. In addition to any other limitation on transfer created
by applicable securities laws, Optionee will not sell, transfer, assign, encumber or otherwise
dispose of (including, without limitation by operation of law) any of Optionee’s right, title or
interest in and to all or any portion of the Shares except as provided in this Section:

          (a) Right of First Refusal. In the event Optionee desires (or is required) to sell or
transfer in any manner all or a portion of the Shares, the Optionee shall first offer such Shares
for sale to the Company (or its assignee) at the same price, and upon the same terms (or reasonably
similar terms) as those on which the Optionee is disposing of said Shares (“Right of First
Refusal”). Optionee shall offer such Shares to the Company by delivering a written notice (the
“Notice”) to the Company stating (i) Optionee’s bona fide intention to sell or otherwise transfer
such Shares, (ii) the number of such Shares to be sold or otherwise transferred, (iii) the price
for which Optionee proposes to sell such Shares and all additional terms and conditions, if any, of
the sale or transfer, and (iv) the name of the proposed buyer or transferee. Optionee shall attach
to the Notice a copy of the written offer, if any, of the sale or transfer. In the event of a
transfer not involving a sale of such Shares for a specific sum of money, or if, in the sole
judgment of the Company’s Board of Directors, the proposed transfer does not involve a price for
the Shares negotiated by the Optionee and Optionee’s proposed transferee in a bona fide “arm’s
length transaction,” the price of the Shares shall be determined by the Company’s Board of
Directors in the manner specified in Section 10(c) below.

     Within thirty (30) days after the Company’s receipt of the Notice (the “Acceptance Period”),
the Company (or its assignee) may elect to purchase all of the Shares (or, with the consent of the
Optionee, a portion thereof) to which the Notice refers, at the price per share (or at the fair
market value of such Shares determined pursuant to paragraph 10(c) hereof in the case of a
transfer other than a bona fide arms-length transaction) and on the same terms and conditions

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(or terms and conditions as similar as reasonably possible) as set forth in the Notice. If
the Company (or its assignee) elects to purchase such Shares hereunder, it shall notify Optionee
either orally or in writing during the Acceptance Period of its intention to purchase all of such
Shares (or, with the consent of Optionee, a portion thereof) and either (i) set a date and
location for the closing of the transaction on or prior to the last day of the Acceptance Period,
or at such later date as the parties may otherwise agree, at which time the Company (or its
assignee) shall tender payment for the Shares or (ii) include payment for the Shares with the
Company’s notice to Optionee, if in writing, or deliver it to Optionee under separate cover. At
such closing, the certificates representing the Shares so purchased shall be delivered to the
Company and canceled or, in the case of payment by the Company by mail, such certificates shall be
deemed to be canceled upon the date of such mailing of the Company’s payment and, thereafter,
shall be promptly returned by Optionee to the Company by certified or registered mail. Optionee
hereby authorizes and directs the Secretary or Transfer Agent of the Company to transfer the
Shares as to which the Right of First Refusal has been exercised from Optionee to the Company (or
its assignee). Optionee further authorizes the Company to refuse, or to cause its Transfer Agent
to refuse, to transfer or record any Shares to be transferred in violation of this Agreement. If
the Company (or its assignee) does not elect to purchase the Shares to which the Notice refers,
Optionee may sell or otherwise transfer the Shares to the third party named in the Notice at the
price and on the terms and conditions specified in the Notice or at a higher price, provided that
such sale or transfer is consummated within sixty (60) days from either (i) the lapse of the
Acceptance Period or (ii) the date of the Company’s notice, whether written or oral, advising
Optionee that it does not intend to purchase the Shares hereunder, whichever occurs first in time
and provided, further, that any such sale or transfer is in accordance with all of the terms and
conditions set forth in this Agreement. In the event the Shares are not disposed of by the
Optionee within said 60-day period, such Shares shall once again be subject to the Right of First
Refusal herein provided.

          (b) Involuntary Transfer. In the event of any transfer by operation of law or other
involuntary transfer (the “Involuntary Transfer”), of all, or a portion, of the Shares, the Company
shall have an option to purchase all of the Shares transferred (the “Involuntary Transfer Option”).
Upon such transfer, the Optionee and person acquiring the Shares shall promptly notify in writing
the Secretary of the Company of such transfer. The Company (or its assignee) shall notify Optionee
and the person acquiring the Shares as to whether the Company (or its assignee) wishes to purchase
the Shares pursuant to the Involuntary Transfer Option within thirty (30) days after receipt by the
Company of the written notice of the involuntary transfer of the Shares. If the Company (or its
assignee) elects to purchase said Shares hereunder, it shall set a date for the closing of the
transaction at a place specified by the Company (or its assignee) not later than thirty (30) days
after receipt by the Company of the written notice of the involuntary transfer of the Shares, or at
such later date as the parties may otherwise agree. At such closing, the Company (or its assignee)
shall tender payment for the Shares and the certificates representing the Shares so purchased shall
be canceled. Optionee hereby authorizes and directs the Secretary or Transfer Agent of the Company
to transfer the Shares as to which the Involuntary Transfer Option has been exercised from the
Optionee to the Company (or its assignee). Optionee further authorizes the Company to refuse, or
to cause its Transfer Agent to refuse, to transfer or record any Shares to be transferred in
violation of this Agreement.

          (c) Determination of Price. With respect to Shares to be transferred pursuant

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to the Right of First Refusal where the price is not determined as a result of a bona fide
arms-length transaction by the Optionee under Section 10(a) or the Involuntary Transfer Option,
the price per share shall be a price set by the Board of Directors of the Company that will
reflect the then current fair market value of the Shares, as determined by the Board of Directors
in good faith after giving consideration to the factors set forth in Section 260.140.50 of Title
10 of the California Code of Regulations or, upon the request of the Optionee, by an independent
appraiser acceptable to both the Company and the Optionee; provided, that the Optionee shall be
required to bear one-half of the cost of such independent appraisal.

          (d) Intra-family Transfers. Notwithstanding anything to the contrary contained
herein, Optionee shall have the right, at any time and from time to time during Optionee’s
lifetime or upon Optionee’s death, to transfer all or any portion of Optionee’s Shares (the
“Transferred Family Shares”) to Optionee’s spouse, any of Optionee’s issue, ancestors or
descendants, or a trust for the sole benefit of Optionee, Optionee’s spouse, any of Optionee’s
issue, ancestors or descendants (any such individual or trust is hereinafter referred to as an
“Intra-family Transferee”), provided that the Intra-family Transferee receiving the Transferred
Family Shares executes a consent to be bound by the terms of this Agreement with respect to the
Transferred Family Shares. The Transferred Family Shares shall be and remain subject to all of
the terms and conditions of this Agreement as were applicable to such Shares immediately prior to
their transfer pursuant to this Section 10(d); without limiting the foregoing, the obligations
hereunder arising out of the possession or ownership of such Transferred Family Shares shall be
binding upon the respective Intra-family Transferees. For purposes of exercising any rights under
this Agreement, the Company’s right to purchase the Shares of Optionee shall extend to any Shares
owned by an Intra-family Transferee.

          (e) Restriction on Alienation. Any sale, transfer, encumbrance, or other disposition
or purported sale, transfer, encumbrance or disposition of any of the Shares by Optionee, whether
voluntarily, by operation of law or otherwise, shall be null and void unless the terms, conditions
and provisions of this Agreement are strictly complied with. Optionee further authorizes the
Company to refuse, or cause its Transfer Agent to refuse, to transfer or record any Shares to be
transferred in violation of this Agreement.

          (f) Assignment by Company. The Company’s Right of First Refusal and Involuntary
Transfer Option, at the sole discretion of the Company, may be assigned in whole or in part to any
shareholder or shareholders of the Company.

          (g) Obligations Binding Upon Transferees. All transferees of Shares or any interest
therein will receive and hold such Shares or interests subject to the provisions of this Agreement,
including the Company’s Right of First Refusal and Involuntary Transfer Option. Any sale or
transfer of the Shares shall be void unless the provisions of this Agreement are met.

          (h) Termination of Rights. The Right of First Refusal and Involuntary Transfer
Option granted the Company by this Section 10 shall terminate at such time as a public market
exists for the Company’s Common Stock (or any other stock issued to purchasers in exchange for the
Shares purchased under this Agreement). For the purpose of this Agreement, a “public market”
shall be deemed to exist if the Common Stock is listed on a national securities exchange (as that
term is used in the Securities Exchange Act of 1934, as amended), or the

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Common Stock is traded on the over-the-counter market and prices are published on business
days in a recognized financial journal.

          (i) Indebtedness. Any payment by the Company for purchase of Shares from Optionee,
may be made by cancellation of any indebtedness to Company from Optionee.

          (j) Legends. All certificates representing any Shares of the Company purchased upon
exercise of the Options shall have endorsed thereon the following legends, or substantially
similar legends, in addition to any legends required by Delaware law or other applicable state or
federal securities laws, unless in the opinion of counsel such legends are no longer necessary:

	 	(1)	 	THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE, TRANSFER OR DISTRIBUTION THEREOF. NO SUCH SALE, TRANSFER
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING
THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.
	 
	 	(2)	 	THESE SECURITIES ARE SUBJECT TO CERTAIN RESTRICTIONS, INCLUDING A RIGHT OF
FIRST REFUSAL OF THE COMPANY, AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS
OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.

          (k) Market Standoff Agreement. The Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to sell or otherwise
transfer or dispose of any Common Stock (or other securities) of the Company held by Optionee
during the period not to exceed one hundred and eighty (180) days as requested by the managing
underwriter following the effective date of a registration statement of the Company filed under the
Securities Act (as hereafter defined), provided that all officers and directors of the Company are
required to enter into similar agreements. Such agreement shall be in writing in a form
satisfactory to the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the shares (or other securities) subject to the foregoing restriction
until the end of such period.

     11. The Plan. This Option is subject to, and the Company and Optionee agree to be
bound by, all of the terms and conditions of the Plan as such Plan may be amended from time to time
in accordance with the terms thereof, provided that no such amendment shall deprive Optionee,
without Optionee’s consent, of this Option or any rights hereunder. Pursuant to the Plan, the
Board of Directors of the Company is authorized to adopt rules and regulations not inconsistent
with the Plan as it shall deem appropriate and proper. A copy of the Plan in its present form is
available for inspection during business hours by Optionee or the persons entitled to exercise this
Option at the Company’s principal office.

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     12. Entire Agreement; Amendment. This Agreement and the Common Stock Purchase
Agreement contains the entire understanding between the parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous written or oral negotiations and agreements
between them regarding the subject matter hereof. This Agreement may be amended only in writing
signed by each of the parties hereto.

	 	 	 	 	 	 	 
	 	 	CORNERSTONE BIOPHARMA	 	 
	 	 	HOLDINGS, INC., a Delaware Corporation	 	 
	 
	 	 	 	 	 	 
	Dated: [Date]

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 

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OPTIONEE’S ACCEPTANCE

     Optionee acknowledges receipt of a copy of the Plan which is attached hereto, and represents
that Optionee has read and is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board of Directors or the
Committee upon any questions arising under the Plan.

	 	 	 	 	 	 	 
	 	 	OPTIONEE:	 	 
	 
	 	 	 	 	 	 
	Dated: [Date]	 	By:                                                             	 	 
	 
	 	 	 	 	 	 
	 	 	Printed Name:                                         	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Mailing Address	 	 
	 	 	(if different from above):	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

8exv10w41

Exhibit
10.41

	 	 	 	 	 

PARAGON COMMERCIAL BANK

3605 Glenwood Avenue, Suite 100, Raleigh, North Carolina 27612

COMMERCIAL NOTE

	 	 	 	 	 	 	 
	 

	 	Loan Officer
	 	BKR	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Brian K. Reid, Senior Vice President
	 
	 	 	 	 	 	 
	Date:      April 21.2005	 	Borrower:	 	Cornerstone Biopharma Holdings. Inc.

Loan Amount. $4.000.000.00       þ Revolving Line of Credit       o Non-Revolving Line
of Credit      o Term Loan

FOR VALUE RECEIVED, the undersigned, jointly and severally, promise(s) to pay to PARAGON COMMERCIAL
BANK (“Bank”), or order, the sum of Four Million and 00/100 Dollars ($4,000,000.00) or so much as
shall have been disbursed from time to time and remains unpaid, including or together with interest
at the rate and payable in the manner hereinafter stated. Principal and interest shall be payable
at Bank at the address indicated above, or such other place as the holder of this Note may
designate.

INTEREST RATE

All payments made on this Note will be applied first to accrued Interest and then to principal.
Interest will accrue on the unpaid principal balance at the rate set forth below until maturity and
will accrue on any unpaid past due interest before maturity and on any unpaid balance after
maturity as set forth on the reverse side of this Note. Interest payable on this Note will be at
the per annum rate of:

þ Wall Street Journal Prime + 0.00%

As used in
this Note “Wall Street Journal Prime”shall mean the prime rate most recently published
in the “Money Rates” section specified in the Eastern Edition of the Wall Street Journal; provided
that if more than one such “Prime Rate” is published, the higher of such rate
shall be applicable. The term “One Year Treasury Bill” shall mean the annualized interest rate for
treasury bills (one year), most recently reported by the Federal Reserve Board on a weekly-average
basis, which yield is adjusted for a constant maturity. The term Three Year Treasury Bill” shall
mean the annualized interest rate for treasury notes (three year), most recently reported by the
Federal Reserve Board on a weekly-average basis, which yield is adjusted for a constant maturity.
The term “Five Year Treasury Bill” shall mean the annualized interest rate for treasury notes (five
year), most recently reported by the Federal Reserve Board on a weekly-average basis, which yield
is adjusted for a constant maturity. The term “Libor (1 Month)” shall mean the London interbank
offered rates (“LIBOR”) for one month as most recently published in the “Money Rates” section of
the Wall Street Journal. The term “Libor (3 Months)” shall mean the London interbank offered rates
(“LIBOR”) for three months as most recently published in the “Money Rates” section of the Wall
Street Journal.

Interest will be calculated on the basis of:

þ Actual days/360 day year       o Actual days/365 day year       o Other

 

 

All rates except the “Fixed” rate will be subject to change without prior notice at the sole option
of Bank and will be effective:

þ As of the date the base rate (Prime or Treasury Bill) changes

o On the first day of the month after the rate (LIBOR) changes

Effect of Variable Rate: A change in the interest rate will have the following effect on the
payments:

þ The amount of each scheduled payment and the final payment will change.

o The amount of each scheduled payment will be fixed for the term of the loan. The final payment
will change. If a rate change results in negative amortization, the Bank reserves the right to
change the scheduled payment amount fisted herein and shall notify the Borrower at the time of any
and all payment changes.

PRINCIPAL PAYMENT TERMS

Principal (and interest if indicated under Interest Payment Terms below) shall be payable as
follows:

þ Payable in one single payment on April 10, 2006 (herein referred to as “Maturity).

o Payable in                     consecutive                     payments of $                     (this monthly payment amount may vary based on
interest rate changes), commencing on                     and on the same day of each such calendar period thereafter
and one final payment of the entire balance due on
           (herein referred to as “Maturity”).

o Other

INTEREST PAYMENT TERMS

Interest shall be payable in arrears, as follows:

þ Payable monthly beginning May 10, 2005 and consecutively on the same calendar day of
each such calendar period thereafter.

o The payment amount selected above under “PRINCIPAL PAYMENT TERMS” includes interest.

ADVANCES

o See Advance Addendum (Exhibit A) attached hereto and made a part hereof for an explanation
of the line of credit advance terms
and conditions.

LATE CHARGE

If any scheduled payment is in default 15 days or more (unless interest on this Note is payable in
advance, in which case such period shall be 30 days or more), Obligors agree to pay a late charge
equal to 4% of the amount of the payment that is in default, but not more than maximum amount
allowed by applicable law.

PREPAYMENT

o This Note may be prepaid in whole or in part any time without premium.

 

 

þ This Note may be prepaid in whole or in part from the earnings or existing net worth of the
undersigned. Any prepayment of this Note, in whole or in part, in anticipation of, or from the
proceeds of, borrowed indebtedness shall be accompanied by the payment of the following fee:
NONE

All prepayments will be applied to the most remote installment then unpaid and shall not otherwise
reduce the installment payments coming due prior thereto.

COLLATERAL

þ SECURED. This Note is secured by collateral described In the following security
instruments:

	 	 	þ Security Agreement dated April covering: A First lien UCC position on
all furnishings, equipment and other Items and items of personal property now owned or
hereafter acquired, all the Borrower’s intangible assets. Inventory and accounts receivable,
whether presently existing or arising in the future, and all proceeds and products form the
foregoing (Including Insurance proceeds) recorded by proper UCC filings in the county and
state in which the company operates (or location mutually agreed upon by borrower and
Bank).

	1)	 	At maturity of this Note, or upon default, Bank is authorized and empowered to apply to the
payment hereof, any and all money deposited in Bank in the name of or to the credit of each
party, without advance notice, and is authorized to offset any obligation of Bank to any party
to the payment hereof.

	2)	 	Collateral securing other loans of each party with Bank may also secure this loan and this
loan may also be supported by separate Guaranty Agreements).

SIGNATURES

The undersigned parties are jointly and severally liable for the payment of this Note and have
subscribed their names hereto. The provisions printed below are a part of this Note. The provisions
of this Note are binding on the heirs, executors, administrators, successors and assigns of each
and every party and shall inure to the benefit of the holder, its successors and assigns. This Note
is executed under the seal of each of the parties and of the endorsers, if any.

Cornerstone Biopharma Holdings, Inc. (SEAL)

By: /s/ Craig A. Collard             (SEAL)

  Craig A. Collard, President

Additional Terms and Provisions of Note

DEFAULT. Any of the following shall constitute an event of default: (1) the failure to make when
due any payment described herein, whether of principal, interest, or otherwise; (2) the failure of
any party hereto to perform any of the terms and conditions written into, the Loan Agreement or
security instrument(s) securing this Note or any guaranty agreement or security instrument(s)
securing such guaranty agreement which apply to this Note; (3) the death, dissolution, merger,
consolidation or termination of existence of any party; or if any party is a corporation with
thirty-five (35) or fewer shareholders, the aggregate transfer(s) of voting shares

 

 

in such party
whereby persons or entities not owning on the date hereof, singly or in the aggregate, 50% or more
of the voting shares of such party, become the owner(s), singly or in the aggregate, of 50% or more of
such voting shares, or if such party is a limited or general partnership, any change in general
partnership interest(s) in such party; (4) the application for the appointment of a receiver for
any party or the filing of a petition under any provisions of the Bankruptcy Code or Act by or
against any party or any assignment for the benefit of creditors by or against any party; (5) the
failure of any party to furnish from time to time, at Bank’s request, financial information
requested with respect to such party without undue delay; (6) a determination by Bank that it deems
itself insecure or that an adverse change in the financial condition of any party has occurred
since the date hereof; (7) the failure of any party to perform any other obligation to Bank; (B)
the termination of any guaranty agreement which applies to this Note.

LATE CHARGES, EXPENSES AND ACCELERATION. Each party agrees to pay any late charges permitted by
applicable law that Bank may, in its discretion, charge for late payments. If this Note is not paid
in full whenever it becomes due and payable, each party agrees to pay all costs and expenses of
collection, including a reasonable attorney’s fee up to the amount of fifteen (15) percent of the
then outstanding balance. Upon the occurrence of an event of default, the entire unpaid balance of
this Note shall, at the option of Bank, become immediately due and payable, without notice or
demand. Failure to exercise the option to accelerate shall not constitute a waiver of the right to
exercise same in the event of any subsequent default.

INTEREST. Upon the nonpayment of any payment of interest described herein, the Bank, at its option
and without accelerating this Note, may accrue interest on such unpaid interest at the rate(s)
applicable hereunder from time to time until maturity of this Note. After maturity of this Note,
whether by acceleration or otherwise, interest will accrue on the unpaid principal of this Note and
any accrued but unpaid interest shall bear interest at the lesser of (i) the highest contract rate,
if any, permitted by applicable law (ii) a rate per annum equal to 2% per annum above the contract
interest rate payable immediately prior to maturity. Such interest rate shall apply both before and
after any judgment hereon.

WAIVER. Each party waives presentment, demand, protest and notice of dishonor, waives any rights
which they may have to require Bank to proceed against any other person or property,
agrees that without notice to any party and without affecting any party’s liability, Bank, at any
time or times, may grant extensions of the time for payment or other indulgences to any party or
permit the renewal, amendment or modification of this Note, the Loan Agreement or any security
instruments), or permit the substitution, exchange or release of any security for this Note and may
add or release any party primarily or secondarily liable, and agrees that Bank may apply all moneys
made available to it from any part of the proceeds from the disposition of any security for this
Note either to this Note or to any other obligation of any of the parties to Bank, as Bank may
elect from time to time.

PARTIES. Each signatory of this Note is herein sometimes referred to as “Party” or collectively as
“Parties” and each agrees to be liable hereunder jointly and severally. This Note shall apply to
and bind each party’s heirs, personal representatives, successors and assigns. All references in
this Note to Bank shall include the holder hereof and this Note shall inure to the benefit of any
holder, its successors and assigns.

PARTIES’ DUE DILIGENCE. The undersigned acknowledge and represent that they have relied upon their
own due diligence in making their own independent evaluations of the purposes for which the
proceeds of this Note will be used and of the business affairs and financial

 

 

 condition of all
parties hereto, and they will continue to be responsible for making their own appraisals of such
matters. The undersigned have not relied upon and will not hereafter rely upon Bank for such
information for such appraisal or other assessment or review and, further, will not rely upon any
such information which may now or hereafter be prepared by Bank.

CREDIT INVESTIGATION. The Bank is authorized to investigate from time to time the credit of each
party and to answer questions relating to the Bank’s credit experience with each party.

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