Document:

exv10w44

Exhibit 10.44

MODIFICATION AGREEMENT

	 	 	 	 	 
	Loan #2340

	 	Return To:
	 	Paragon Commercial Bank
	 

	 	 	 	3535 Glenwood Avenue
	STATE OF NORTH CAROLINA

	 	 	 	Raleigh, NC 27612
	COUNTY OF Wake
	 	 	 	 

     THIS MODIFICATION AGREEMENT is made as of this 31st day of July, 2007, between PARAGON
COMMERCIAL BANK, a banking corporation organized under the laws of the State of North Carolina
(hereinafter “Bank”), Cornerstone Biopharma Holdings, Inc. (the “Borrower”, whether one or more in
number), and, if a deed of trust is modified, Charles W. Cleary of Wake County, North Carolina (the
“Trustee”).

W I T N E S S E T H:

     WHEREAS, the Borrower has made and issued its promissory note dated the 21st day of April,
2005, evidencing an original indebtedness of Four Million and
00/100 Dollars ($4,000,000.00) (the
“Note”) and the Note is

	 	x	 	secured as described in security agreement(s) dated April 21, 2005 (“Security
Agreement”).
	 
	 	x	 	secured by an incidental second lien Deed of Trust dated May 8, 2006 recorded in
Book 011959 Page 00209-00220, Wake County Registry (“Deed of Trust”) and hypothecated
by Craig A. Collard and Susan K. Collard; further modified by Modification Agreement
dated July 14, 2006 recorded in Book 012074, Page 01678-01682, Wake County Registry to
a Future Advance Deed of Trust.

The Note, Security Agreement and/or Deed of Trust are hereinafter collectively referred to as the
“Contract” and the Contract is hereby incorporated herein as a part of this Modification Agreement.

     AND, WHEREAS, Bank (as holder and owner of the Note, Secured Party under the Security
Agreement(s) and the Beneficiary under the Deed of Trust), and the Borrower mutually desire to
modify the provisions of the Contract in the manner hereinafter set out, it being specifically
understood that, except as herein modified, the terms and provisions of the Contract, and the
individual instruments thereof, shall remain unchanged and continue in full force as therein
written;

     NOW, THEREFORE, the Bank, the Borrower and the Trustee, if applicable, in consideration of the
premises and the sum of One Dollar ($1.00) to each in hand paid by the other, receipt of which is
hereby acknowledged by each, do hereby agree that the Contract shall be, and the same hereby is,
amended to provide as follows:

 

 

	 	x	 	The maturity date of the Note is changed to June 15, 2008. In addition, the stated
maturity date in any Deed of Trust and/or Security Agreement is changed to the date
stated herein.
	 
	 	x	 	CHANGE IN PRINCIPAL PAYMENT TERMS Principal balance shall be changed to be payable
as follows:

	 	x	 	Payable in one single payment on June 15, 2008 (herein referred to as
“Maturity”).

	 	x	 	CHANGE IN INTEREST PAYMENT TERMS Interest shall be changed to be payable as follows:

	 	x	 	Payable monthly beginning August 10, 2007 and consecutively on the same
calendar day of each such calendar period thereafter.

	x	 	ADDITION OF COLLATERAL

The following collateral shall be taken in addition to the above-described
Collateral:

	 	x	 	Assignment of Deposit dated July 31, 2007 for Paragon Commercial Bank
account # 0270298, hypothecated by Craig A. and Susan K. Collard

     IT IS MUTUALLY AGREED between and among the parties hereto that nothing herein contained shall
in any way impair the security now held for the indebtedness evidenced by the Contract, nor waive,
annul, vary or affect any provision, condition, covenant or agreement contained in the Contract,
except as herein amended, nor affect or impair any rights, powers or remedies under the Contract.
This Modification Agreement does not extend the expiration date(s) or enlarge the term(s) of any
property, physical damage, credit and/or any other insurance written in connection with and/or
financed by said Contract. Except as herein and hereby expressly modified, said Contract contains
the entire agreement of the parties and the undersigned do hereby ratify and confirm the terms of
said Contract, all of which shall remain in full force and effect, as modified herein.

     FURTHERMORE, Bank does hereby reserve all rights and remedies it may have against all parties
secondarily liable for repayment of the indebtedness evidenced by the Note. Borrower hereby
expressly waives, to the full extent it may lawfully do so, any rights which it may now or at any
time hereafter have by virtue of North Carolina General Statutes Sections 26-7 and 45-45.1.

     If applicable, the Trustee joins in the execution of this Modification Agreement as evidence
of his knowledge of the provisions hereof. This Modification Agreement shall be binding upon any
assignee or successor in interest of the parties hereto.

2

 

     IN WITNESS WHEREOF, this Modification Agreement is executed (i) if by individuals, by hereunto
setting their hands under seal by adoption of the word “SEAL” appearing next to the individuals’
names, (ii) if by a corporation, by the duly authorized officers of the corporation on its behalf
under seal by adoption of the facsimile seal printed hereon for such purpose or, if an impression
seal appears hereon, by affixing such impression seal, (iii) if by a partnership, by the duly
authorized partners of the partnership on its behalf under seal by adoption of the word “SEAL”
appearing next to the name of the partnership and/or the signatures of the partners, or (iv) if by
a limited liability company by the duly authorized member(s) or manager(s) of the limited liability
company on its behalf under seal by adoption of the word “SEAL” appearing next to the name of the
limited liability company and/or the signatures of the member(s) or manager(s), as of the day and
year first above written.

	 	 	 	 	 	 	 
	 	 	PARAGON COMMERCIAL BANK
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian K. Reid	 	(SEAL)
	 

	 	 	 	 	 	 
	 

	 	 	 	Brian K. Reid, Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 	 	 
	 	 	Cornerstone Biopharma Holdings, Inc. (SEAL)
	 
	 	 	 	 	 	 
	 

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

	 	 	 	 	 	 
	 

	 	 	 	Craig A. Collard, President	 	 
	 
	 	 	 	 	 	 
	 	 	CONSENTED TO:
	 
	 	 	 	 	 	 
	 

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

	 	 	 	 	 	 
	 

	 	 	 	Craig A. Collard, Guarantor	 	 
	 
	 	 	 	 	 	 
	 	 	Carolina Pharmaceutical, Inc.
	 
	 	 	 	 	 	 
	 

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

	 	 	 	 	 	 
	 

	 	 	 	Craig A. Collard, President	 	 
	 
	 	 	 	 	 	 
	 	 	Trustee
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Charles W. Cleary	 	(SEAL)
	 

	 	 	 	 	 	 
	 

	 	 	 	Charles W. Cleary	 	 

3exv10w45

Exhibit 10.45

June 23, 2008

Chenyqua Baldwin, Vice President of Finance

Cornerstone Biopharma Holdings, Inc.

2000 Regency Parkway, Suite 255

Cary, NC 27518

Dear Ms. Baldwin:

On behalf of Paragon Commercial Bank (hereinafter referred to as the “Bank”), I am pleased to offer
to you this commitment modification subject to the following terms and conditions as outlined
below. If not specifically mentioned herein, all other terms and conditions of the original
commitment and line documents shall remain unchanged. We appreciate the opportunity to continue to
work with you. The terms of the Commitment are hereby amended as follows:

	 	 	 
	BORROWER:

	 	Cornerstone Biopharma Holdings, Inc (the “Borrower”).
	 
	 	 
	PURPOSE:

	 	To renew the revolving line of credit for an additional year.
	 
	 	 
	TYPE:

	 	Revolving line of credit to be used in the normal course of
business operations.
	 
	 	 
	AMOUNT:

	 	Up to, Four Million 00/100 Dollars ($4,000,000), availability
subject to a monthly borrowing base report.
	 
	 	 
	 

	 	Up to One Million Five Hundred Thousand Dollars ($1,500,000.00) will be
segmented for standby letters of credit, subject to the above mentioned
borrowing base report.
	 
	 	 
	RATE:

	 	The Wall Street Journal (WSJ) Prime rate subject to
change from time to time. WSJ “Prime Rate” refers to
that interest rate as specified in the Eastern Edition
of the Wall Street Journal as an interest rate basis for
borrowings. The WSJ Prime Rate is one of several
interest rate bases used by the Bank. The Bank lends at
interest rates above and below the Prime Rate.
	 
	 	 
	EXPIRATION:

	 	The Maturity date of the line shall be June 15, 2009.
	 
	 	 
	REPAYMENT TERMS:

	 	Interest shall be due monthly with all outstanding
principal and accrued yet unpaid interest due upon
maturity.
	 
	 	 
	MODIFICATION FEE:

	 	A modification fee of Ten Thousand and 00/100 Dollars
($10,000) shall be due at closing.

 

 

Cornerstone Biopharma Holdings, Inc.

June 23, 2008

Page 2 of 5

	 	 	 
	ADDITION OF 

COLLATERAL:

	 	The Bank shall take as additional
collateral a Security
Agreement and UCC Financing Statements covering: A
blanket first priority lien on all furnishings,
equipment, inventory and other items and types of
personal property now owned or hereafter acquired, all
the company’s general intangibles and accounts
receivable, whether presently existing or arising in the
future, and all the proceeds and products from the
foregoing (including insurance proceeds) for Aristos
Pharmaceuticals, Inc. and Cornerstone Biopharma, Inc.
Aristos Pharmaceuticals, Inc. and Cornerstone Biopharma,
Inc. will hypothecate the security to Cornerstone
Biopharma Holdings, Inc.
	 
	 	 
	RELEASE OF
	 	 
	COLLATERAL:

	 	A partical release in the amount of $500,000.00 on the Assignment of Deposits dated
July 31, 2007 in the amount of $1,000,000.00, hypothicated by Craig and Susan Collard.
	 
	 	 
	RESTATED
COLLATERAL:

	 	The collateral for this loan will be:

	 	1.	 	First lien UCC position on all
furnishings, equipment and other items and types 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 the proceeds
and products from 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).
	 
	 	2.	 	A monthly borrowing base report will
be submitted to the Bank to monitor the collateral for this line
of credit. The following will be the advance rate for the line of
credit: 75% advance rate against Accounts Receivable 90 days or
less from invoice date.

	 	•	 	The borrowing base report will include the accounts
receivables from Cornerstone Biopharman Holding, Inc., Aristos
Pharmaceutical, Inc. and Cornerstone Biopharma, Inc.
	 
	 	•	 	The borrowing base will also include 100% on the $500,000.00
in cash being held as collateral on the Assignment of Deposits.

	 	3.	 	An existing incidental deed of trust in
the amount of $2,000,000 recorded on 107 Trellingwood Drive,
Morrisville NC 27560.
	 
	 	4.	 	An Assignment of Deposits dated July
31, 2007 on a Paragon Commercial Bank account in the amount of
$500,000.00 hypothicated to Cornerstone Biopharma Holding, Inc. by
Craig and Susan Collard.
	 
	 	5.	 	A blanket first priority lien, hypothecated by Aristos
Pharmaceuticals, Inc. and Cornerstone Biopharma, Inc. on all
furnishings, equipment, inventory and other items and types of
personal property now owned or hereafter acquired, all the company’s
general intangibles and accounts receivable, whether presently
existing or arising in the future, and all the proceeds and products
from the foregoing (including insurance proceeds)

 

 

Cornerstone Biopharma Holdings, Inc.

June 23, 2008

Page 3 of 5

	 	 	 
	GUARANTORS:

	 	As offered by you and accepted by the Bank, Craig A. Collard and Carolina
Pharmaceutical, Inc. will continue to guarantee the loan for the loan amount. In
addition, Aristos Pharmaceutical, Inc. and Cornerstone Biopharma, Inc. will be
added and sign as joint and several guarantees to the loan for the full loan amount.

	 	 	 
	FINANCIAL REPORTS:

	 	The following information will be required:
	 
	 

	 	Borrower:

	 	1.	 	Year-end CPA prepared tax returns
(due when submitted to the tax authorities) .
	 
	 	2.	 	Year-end CPA audited financial
statements (to include Balance Sheet, Income Statement,
Statement of Retained Earnings and Statement of Cash Flows
with all notes to the Financial Statements)
	 
	 	3.	 	Monthly, company prepared income
statement and balance sheet. Due no later than 20 days after
the end of a calendar month.
	 
	 	4.	 	Monthly accounts receivable aging
and borrowing base report. Due no later than 20 days after
each month end.

All financial reports including year-end financial statements will
be signed and dated by an officer of the Borrower.

Guarantors: 

Annual personal financial statements and federal tax returns
(due when submitted to the tax authorities).

Monthly, company prepared income statement and balance sheet. Due
no later than 20 days after the end of a calendar month for
Aristos Pharmaceuticals, Inc. and Cornerstone Biopharma, Inc.

Monthly accounts receivable aging and borrowing base report. Due
no later than 20 days after each month end for Aristos
Pharmaceuticals, Inc. and Cornerstone Biopharma, Inc.

PRINCIPAL COVENANTS:

	 	1)	 	The Borrower will not incur any
additional Bank debt without prior written consent from the
Bank.
	 
	 	2)	 	Craig A. Collard must maintain the
majority ownership in the company while the line of credit is in
place.
	 
	 	3)	 	Craig A. Collard must maintain
$2,000,000 in liquid assets (cash, marketable securities, cash
value in life insurance, 50% of value in retirement accounts) at
all times while the line of credit is in place.

	 	 	 
	COMMITMENT
	 	 
	MODIFICATIONS:

	 	No condition or other term of this commitment may be waived
or modified except in writing signed by both the Borrower
and the Bank.

 

 

Cornerstone Biopharma Holdings, Inc.

June 23, 2008

Page 4 of 5

	 	 	 
	 
	 	 
	DOCUMENTATION:

	 	All documentation will be executed in form and content
satisfactory to the Bank and its counsel. Should the
parties fail to agree on the terms of said documentation,
neither party shall have any further obligation to the
other and this commitment shall be null and void.
	 
	 	 
	 

	 	While we intend to conform to the customary requirements for this type
of loan, this commitment letter may not include all of the requirements
for the loan. The Bank reserves the right to require additional
information, documentation, and the satisfaction of conditions we
consider appropriate or required to consummate the transaction.
	 
	 	 
	COMMITMENT PROVISIONS
	SURVIVE CLOSING:

	 	This Commitment Letter will be an ongoing legal document
and the provisions outlined within are an ongoing
obligation of the Borrower. The actual terms within the
documents will control the transaction.
	 
	 	 
	EXPENSES:

	 	All fees and costs associated with the transaction shall
be paid by the Borrower prior to or concurrent with the
respective closing. In the event the Line of Credit does
not close, the Borrower will remain responsible for such
fees.
	 
	 	 
	DEPOSIT ACCOUNTS:

	 	As a condition of this loan, the Borrower agrees to
maintain its entire deposit relationship with the
Lender, including operating, disbursing, payroll and
other related accounts.
	 
	 	 
	OTHER:

	 	This commitment is subject to the maintenance by the
Borrower of a financial condition satisfactory to the
Bank and the execution of documents satisfactory to the
Bank.
	 
	 	 
	 

	 	In no event shall either the Borrower or the Bank be liable to the
other for indirect, special, or consequential damages, which may arise
out of the issuance of this commitment.
	 
	 	 
	 

	 	All information and representations are and will be accurate at closing.

Thank you for allowing us to provide you with this commitment. Please indicate your acceptance
below and return the original to me. Please call me with any questions at 534-7340.

This commitment will expire if not accepted in writing by June 30, 2008. After acceptance, this
commitment shall be voidable at the Bank’s option if the Line of Credit does not close prior to
July 18, 2008.

Sincerely,

Brian K. Reid

Senior Vice President

Paragon Commercial Bank

Acceptance Page Attached

 

 

Cornerstone Biopharma Holdings, Inc.

June 23, 2008

Page 5 of 5

Accepted
and acknowledged this
          day
of
           2008.

Borrower: Cornerstone Biopharma Holdings, Inc.

	 	 	 	 	 
	By:
	 	/s/ Craig A. Collard	 	 
	 

	 	 

Craig A. Collard, President
	 	 

GUARANTOR ACCEPTANCE:

	 	 	 	 	 
	Guarantor: Craig A. Collard	 	 
	 
	 	 	 	 
	By:
	 	/s/ Craig A. Collard	 	 
	 

	 	 	 	 
	 

	 	Craig A. Collard, Guarantor	 	 
	 
	 	 	 	 
	Guarantor: Aristos Pharmaceuticals, Inc.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Craig A. Collard	 	 
	 

	 	 	 	 
	 

	 	Craig A. Collard, President	 	 
	 
	 	 	 	 
	Guarantor: Cornerstone Biopharma, Inc.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Craig A. Collard	 	 
	 

	 	 	 	 
	 

	 	Craig A. Collard, President & CEO

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