Exhibit 10.5

DISCRETIONARY ADVANCE SECURED PROMISSORY NOTE

$__________ or such greater or lesser amount
as may be advanced hereunder in the sole
and absolute discretion of the Lender ________________, 2010

FOR VALUE RECEIVED, Znomics, Inc., a Nevada corporation (the “Borrower”),
promises to pay to the order of ­ , and his, her or its successors and assigns,
as lender (the “Lender”), at such place as may be designated from time to time
by the holder hereof, in lawful money of the United States of America, $_______
or such greater or lesser amounts that have been advanced from time to time by
the Lender to or for the benefit of Borrower, together with interest on the
unpaid principal balance hereof from the date hereof until this Note is fully
paid, at an annual rate of interest, calculated on the basis of actual number of
days elapsed in a 360 day year, that shall at all times be equal to 5%.

Advances.  The Lender may in his, her or its sole and absolute discretion make
advances to the Borrower hereunder from time to time.  The Lender has not
committed to providing any such advances and may, in his, her or its sole and
absolute discretion, decide not to make any such advance at any time and for any
reason or no reason.  The Borrower acknowledges and agrees that the Lender is
not obligated to make any advances hereunder.  The Lender shall enter in his,
her or its records the amount of each advance hereunder, and the payments made
hereon, and such records shall be deemed conclusive evidence of the subject
matter thereof, absent manifest error.
 
Due Date.  All sums due under this Note are due on the earliest to occur of: (a)
a Business Combination, (b) the third anniversary of the date hereof, (c)
Borrower becoming insolvent, and (d) a material breach of the Stock Purchase
Agreement of even date herewith. “Business Combination” shall mean an
acquisition by or of the Borrower by merger, capital stock exchange, asset or
stock acquisition, reorganization or otherwise, of or with an operating
business.
 
Security.   To secure the payment and performance of Borrower’s obligations
under this Note (collectively, “Obligations”), Borrower hereby grants Cherry
Tree Companies, LLC, a Minnesota limited liability company, as collateral agent
for the Lender (“Agent”), a security interest (“Security Interest”) in all
assets, including without limitation all goods, inventory, equipment, fixtures,
money, accounts, instruments, contract rights, chattel paper, general
intangibles, letter of credit rights, documents, deposit accounts and investment
property of the Borrower, whether now owned or hereafter acquired and whether
now existing or hereafter arising, and all substitutions, replacements, products
and proceeds thereof (the “Collateral”).  Borrower will not sell, lease or
otherwise transfer or dispose of all or any portion of the Collateral other than
in the ordinary course of business without the prior written consent of the
Agent, and unless this provision is specifically waived in writing before or
after such sale, lease, transfer or disposal, doing so shall be an event of
default that shall cause all sums due under this Note to become immediately due
and payable.  Borrower hereby authorizes Agent to file from time to time such
financing statements against Borrower, containing a description of the
Collateral, in such form as Agent deems necessary or useful to perfect the
Security Interest.

 
 

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Costs.  Borrower will pay when due or reimburse Agent and Lender on demand for
all costs of collection of any of the Obligations and all other expenses
(including in each case all attorneys’ fees) incurred in connection with
enforcement of the Obligations and the Security Interest.
 
General.  This Note is being delivered in, and shall be governed by, the laws of
the State of Minnesota.  This Note shall be enforced in any federal court or
Minnesota state court sitting in Hennepin County, Minnesota; and the Borrower
and Agent and the Lender by its acceptance hereof each hereby consents to the
exclusive jurisdiction and venue of any such court and waives any argument that
venue in such forums is not convenient. Presentment or other demand for payment,
notice of dishonor and protest are expressly waived.
 
[Signature page follows.]
 

 
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IN WITNESS WHEREOF, the undersigned has caused this Secured Purchase Note to be
executed as of the date first above written.
 

ZNOMICS, INC.

 
__________________________
Dwight Sangrey
Chief Executive Officer and Chairman