$6,000,000 June 22, 2001
FOR VALUE RECEIVED, PILOT THERAPEUTICS, INC., a North Carolina
corporation ("Borrower"), hereby promises to pay to the order of PHARMABIO
DEVELOPMENT INC., a North Carolina corporation ("Lender"), in lawful money of
the United States of America in immediately available funds, the principal sum
of Six Million Dollars ($6,000,000) or, if less, the aggregate unpaid principal
amount of all Advances (as defined in the Loan Agreement referred to below) made
by Lender to Borrower pursuant to the Loan Agreement (as defined below),
together with accrued and unpaid interest thereon, on or before the Maturity
Date (as defined in the Loan Agreement). The interest shall accrue on the unpaid
principal amount of each Advance at the rates and in the manner provided in the
Loan Agreement. Payment of the principal amount of this Note and accrued
interest on this Note shall be made as provided in the Loan Agreement.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Loan Agreement.
Each Advance made by Lender to Borrower, and all payments made on
account of the principal amount hereof, shall be recorded by Lender and endorsed
on the grid attached hereto which is a part of this Note. Failure to so record
and endorse such Advances and payments, however, shall not affect Borrower's
obligations in respect of such Advances unless such failure is willful.
This Promissory Note is the Note referenced in the Loan Agreement
between Borrower and Lender dated as of the date of this Note (as same may be
amended from time to time, the "Loan Agreement"), and is entitled to the
benefits of the Loan Agreement. The Loan Agreement, among other things, (i)
provides for the making of certain Advances by Lender to Borrower from time to
time, the indebtedness of Borrower resulting from each such Advance being a
principal amount evidenced by this Note, and (ii) provides that this Note is
secured by, and Borrower has granted a security interest in, certain of its
assets as set forth in that certain Security Agreement dated as of the same date
as this Note.
In case an Event of Default shall occur and be continuing, the unpaid
principal amount of, and accrued interest on, this Note may be declared to be
due and payable in the manner and with the effect provided in the Loan
Borrower hereby waives presentment, demand, notice, protest and all
other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note.
This Note shall be governed by and construed in accordance with the law
of the State of North Carolina without regard to the conflicts of law rules of
PILOT THERAPEUTICS, INC.
By: /s/ Floyd H. Chilton
Name: Floyd H. Chilton
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount Amount of Principal Unpaid Notation
Date of Advance Paid or Prepaid Principal Balance Made By
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