Exhibit 10.73

NEITHER THIS NOTE NOR ANY SECURITIES THAT MAY BE ISSUED UPON CONVERSION HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED
OR QUALIFIED UNDER ANY STATE SECURITIES LAWS.  THIS NOTE AND ANY SUCH SECURITIES
MAY NOT BE TRANSFERRED UNLESS SO REGISTERED AND QUALIFIED UNDER ALL APPLICABLE
SECURITIES LAWS, OR UNLESS SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
 
AMENDED AND RESTATED CONVERTIBLE SECURED PROMISSORY NOTE
 
$__________
March 6, 2009

 
FOR VALUE RECEIVED, the undersigned, SARcode Corporation, a Delaware corporation
(the “Company”), hereby promises to pay to Sunesis Pharmaceuticals, Inc., a
Delaware corporation, or its assigns (“Sunesis” and, together with the Company,
each a “Party”), prior to or on the Maturity Date (defined below), subject to
acceleration or conversion as set forth herein, the aggregate principal amount
of [PRINCIPAL AMOUNT OF ORIGINAL NOTE] DOLLARS ($[PRINCIPAL AMOUNT OF ORIGINAL
NOTE]) (the “Principal Amount”), together with interest on the Principal Amount
from [DATE OF ORIGINAL NOTE] (the “Loan Date”) through and including the date on
which such Principal Amount is paid in full at an annual rate equal to Five
Percent (5.0%), compounded annually.
 
This Amended and Restated Convertible Secured Promissory Note (the “Note”)
supersedes and replaces in its entirety that certain Convertible Secured
Promissory Note in the principal amount of [PRINCIPAL AMOUNT OF ORIGINAL NOTE]
dated as of the Loan Date by and between the Company and Sunesis (the “Original
Note”).  This Note is one of three Amended and Restated Convertible Secured
Promissory Notes (collectively, the “Notes”) that supersede and replace three
Convertible Secured Promissory Notes (including the Original Note) originally
issued to Sunesis by the Company pursuant to that certain License Agreement
dated March 30, 2006, by and between the Company and Sunesis.
 
1.           Defined Terms.  For purposes of this Note, the terms listed below
shall have the respective meanings set forth below:
 
1.1           “Affiliate” of a party shall mean any person, corporation, joint
venture or other business entity which, directly or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with
such party, as the case may be.  As used in this Section 1.1, "control" shall
mean: (a) to possess, directly or indirectly, the power to affirmatively direct
the management and policies of such person, corporation, joint venture or other
business entity, whether through ownership of voting securities or by contract
relating to voting rights or corporate governance; or (b) direct or indirect
beneficial ownership of fifty percent (50%) or more of the voting share capital
in such person, corporation, joint venture or other business entity.
 
1.2           “Assignment Agreement” means the Intellectual Property Assignment
and License Termination Agreement, dated March 6, 2009, by and between the
Company and Sunesis.
 
1.3           “business day” means any day other than Saturday, Sunday or a
legal holiday that banks located in San Francisco, California are not open for
business.

 
 

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1.4           “Disposition of the Collateral” means a sale of, exclusive license
under, or other disposition of all or substantially all of the Company’s assets
comprising the Collateral in a single or related series of transactions.
 
1.5           “LFA-1 Compound” shall have the meaning set forth in the
Assignment Agreement.
 
1.6           “Liquidity Event” shall have the meaning specified in Section
3.1(c) hereof.
 
1.7           “Material Adverse Effect” means any change or effect that, when
taken individually or together with all other changes or effects, materially
adversely affects the business, results of operations, condition (financial or
otherwise) or prospects of the Company and its subsidiaries, taken as a whole.
 
1.8           “Maturity Date” means the five (5)-year anniversary of the Loan
Date.
 
1.9           “Patent” shall have the meaning set forth in the Assignment
Agreement.
 
1.10           “Private Placement” means a venture capital, institutional or
other non-insider led equity financing primarily for the purpose of raising
capital for the account of the Company in which shares of the Company’s
preferred stock are issued and in which either (i) at least one investor who was
not a stockholder of the Company prior to such issuance invests at least One
Million Dollars ($1,000,000) or (ii) the participating investors invest at least
an aggregate of Three Million Dollars ($3,000,000).
 
1.11           “Private Placement Stock” means (i) in connection with a
conversion under Section 3.1(a)(y)(i) hereof, the Company’s Series A Preferred
Stock, or (ii) in connection with a conversion under 3.1(a)(y)(ii) hereof, the
preferred stock of the Company issued in connection with its most recent Private
Placement.
 
1.12           “Product” means any pharmaceutical preparation which incorporates
an LFA-1 Compound as an active ingredient.
 
1.13           “Public Offering” means the initial firm commitment underwritten
public offering of the Company’s common stock pursuant to a registration
statement filed by the Company under the Securities Act.
 
1.14           “Sale of the Company” means a sale of the Company in a single or
related series of transactions, whether (i) by merger, consolidation, sale of
stock, sale of assets or other transaction (not including a Private Placement or
Public Offering) in which, in each case, the holders of the Company’s voting
securities outstanding immediately prior to the consummation of the transaction
or transactions own securities with less than a majority of the voting power of
the Company or a successor immediately after the transaction, or (ii) by sale or
exclusive license of all or substantially all of the Company’s assets, or
otherwise.
 
1.15           “Securities Act” means the United States Securities Act of 1933,
as amended.
 
1.16           “Sunesis LFA-1 Know-How” shall have the meaning set forth in the
Assignment Agreement.
 
1.17           “Sunesis LFA-1 Patents” means the Patents identified on Schedule
A attached hereto, together with all additions, divisions, continuations,
continuations-in-part, substitutions, reissues, re-examinations, extensions,
registrations, patent term extensions, supplemental protection certificates,
renewals, and the like with respect to any of the foregoing.

 
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2.           Payment.  Payment of interest and principal hereunder shall be made
at the business address of the holder hereof.  If the payments to be made by the
Company shall be stated to be due on a date which is not a business day, such
payment may be made on the next succeeding business day, and the interest
payment on each such date shall include the amount thereof which shall accrue
during the period of such extension of time.  All computations of interest
payable under this Note shall be made on the basis of the actual number of
calendar days elapsed.  All payments hereunder shall be applied first to any
unpaid accrued interest, second to payment of all, if any, other amounts except
principal due under or in respect of this Note, and third to repayment of the
unpaid Principal Amount.
 
3.           Conversion.  This Note shall be convertible as follows:
 
3.1           Conversion into Stock.
 
(a)           At the election of Sunesis by written notice (the “Conversion
Notice”) given to the Company (the “Conversion Notice”), this Note shall be
converted into that number of shares of Private Placement Stock (the “Conversion
Shares”) as shall be equal to the quotient of (x) the sum of the
then-outstanding Principal Amount, plus interest accrued up to September 3, 2008
and (y) at the option of Sunesis, either (i) $0.6105 or (ii) the lowest price
per share paid by investors for a share of Private Placement Stock in the most
recent Private Placement completed prior to such conversion (the “Conversion
Price”).  In the Conversion Notice, Sunesis shall specify the class and series
of authorized stock that shall be issued pursuant to the preceding sentence in
connection with the conversion of this Note.  In connection with a conversion of
this Note pursuant to this Section 3.1, Sunesis will be treated for all purposes
(including, without limitation, warrant coverage and rights and obligations of
third party investors under any investor rights agreement, registration rights
agreement, right of first refusal agreement and/or voting agreement) on the same
terms as third party investors participating, or that participated, in the most
recent Private Placement completed prior to, or in connection with, as
applicable, such conversion.  The Company shall provide Sunesis with no less
than 30 days’ prior written notice of any Private Placement (the “Private
Placement Notice”), which Private Placement Notice shall be accompanied by
drafts (as they then exist) of all documents intended to be executed in
connection therewith.  If Sunesis does not within twenty (20) days of its
receipt of the Private Placement Notice deliver to the Company a Conversion
Notice indicating its intention to convert this Note prior to the Private
Placement, this Note will cease to be convertible until thirty (30) days
following closing of the Private Placement or sixty (60) days after the date of
the Private Placement Notice, whichever is earlier, provided that the Company
shall not be entitled to make any prepayment of principal or interest pursuant
to Section 4 hereunder during any period where Sunesis is not entitled to
convert this Note.
 
(b)           No fractional shares shall be issued upon conversion of this
Note.  In lieu of Company issuing any fractional shares to Sunesis upon the
conversion of this Note, Company shall pay to Sunesis an amount equal to the
product obtained by multiplying the Conversion Price by the fraction of a share
not issued pursuant to the previous sentence.
 
(c)           Company shall give Sunesis not less than thirty (30) days’ prior
written notice of the closing of (i) a Liquidity Event or (ii) a Disposition of
the Collateral.  A “Liquidity Event” shall be (a) any Sale of the Company, or
(b) the closing of a firmly underwritten public offering pursuant to a
registration statement filed by Company under the Securities Act.
 

 
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3.2           Manner of Conversion.  Upon delivery of the Conversion Notice,
whether or not Sunesis has previously surrendered this Note in accordance with
the following sentence, Sunesis shall cease to have any rights pursuant to this
Note, but shall have all of the rights granted to it as a holder of the
Conversion Shares into which this Note is converted, including, without
limitation, any such rights holders of Conversion Shares may have upon
liquidation, dissolution, change of control or initial public offering of the
Company or a Sale of the Company.  To receive a certificate representing the
Conversion Shares into which this Note converts, Sunesis shall surrender this
Note to the Company.  As soon as practicable after the surrender of this Note,
the Company shall issue and deliver to Sunesis a certificate for the number of
whole shares issuable upon conversion of this Note.  Upon conversion of the
Principal Amount (and accrued but unpaid interest, to the extent described in
Section 3.1(a)(x) above) into Conversion Shares as provided herein, the
provisions of this Note relating to the obligation of the Company to pay
principal and interest to Sunesis, set forth above, shall be null and void and
no payment of principal and interest shall be owed or paid by the Company to
Sunesis pursuant to this Note.
 
3.3           Conversion Price Adjustments.  Upon any conversion of this Note,
the following adjustments shall be made:
 
(a)           Adjustments for Stock Splits and Subdivisions.  In the event
Company should at any time or from time to time after the date of issuance
hereof fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Private Placement Stock or the determination of holders of
Private Placement Stock entitled to receive a dividend or other distribution
payable in additional shares of Private Placement Stock or other securities or
rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Private Placement Stock (hereinafter referred
to as “Private Placement Stock Equivalents”) without payment of any
consideration by such holder for the additional shares of Private Placement
Stock or the Private Placement Stock Equivalents (including the additional
shares of Private Placement Stock issuable upon conversion or exercise thereof),
then the Conversion Price of this Note shall be appropriately decreased so that
the number of shares of Private Placement Stock issuable upon conversion of this
Note shall be increased in proportion to such increase of outstanding shares,
provided that no adjustment shall be required pursuant to this Section 3.3(a) if
the split, subdivision, stock dividend, or stock distribution triggering such
adjustment was rescinded or terminated after the fixing of a record date or the
determination of holders entitled to receipt thereof and prior to any conversion
of this Note.
 
(b)           Adjustments for Reverse Stock Splits.  If the number of shares of
Private Placement Stock outstanding at any time after the date hereof is
decreased by a combination of the outstanding shares of Private Placement Stock,
then the Conversion Price for this Note shall be appropriately increased so that
the number of shares of Private Placement Stock issuable on conversion hereof
shall be decreased in proportion to such decrease in outstanding shares.
 
(c)           Conversion or Redemption of Private Placement Stock.  Should all
of Company’s outstanding preferred stock representing Private Placement Stock be
at any time prior to conversion of this Note, redeemed or converted into shares
of Company’s common stock in accordance with the Company’s certificate of
incorporation then in effect, then this Note shall be convertible into that
number of shares of Company’s common stock equal to the number of shares of the
common stock that would have been received if this Note had been converted in
full and the Private Placement Stock received thereupon had been simultaneously
converted immediately prior to such event; provided, however, that if the
Company subsequently completes a Private Placement this Note shall be
convertible, at the option of Sunesis, into shares of common stock or Private
Placement Stock in accordance with the provisions of Section 3.
 
 
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(d)           Notices of Record Date, etc.  In the event of:
 
(i)           Any taking by Company of a record of the holders of any class of
securities of Company for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or
 
(ii)           Any capital reorganization of Company, any reclassification or
recapitalization of the capital stock of Company or any transfer of all or
substantially all of the assets of Company to any other Person or any
consolidation or merger involving Company; or
 
(iii)           Any voluntary or involuntary dissolution, liquidation or
winding-up of Company;
 
Company will mail to Sunesis at least thirty (30) days prior to the earliest
date specified therein, a notice specifying (A) the date on which any such
record is to be taken for the purpose of such dividend, distribution or right
and the amount and character of such dividend, distribution or right; and
(B) the date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding-up is expected to
become effective and the record date for determining stockholders entitled to
vote thereon and providing a copy of all related documentation.
 
4.           Prepayments of Principal or Interest.  Upon ten (10) business days’
prior written notice to Sunesis and except as set forth in the last sentence of
Section 3.1(a), the Company may prepay or accelerate the maturity of the
interest or Principal Amount of this Note voluntarily at any time prior to the
earlier of (x) the Maturity Date and (y) the date, if any, on which this Note is
converted into Conversion Shares.
 
5.           Acceleration.  At the election of Sunesis, the entire unpaid
portion of the Principal Amount and accrued interest represented by this Note
will become due and payable upon written notice of acceleration given by Sunesis
to the Company immediately prior to or following any of the following (each, an
“Event of Default”):  (a) a liquidation or dissolution of the Company, or any
other termination or winding-up of its existence or business, (b) a Sale of the
Company, (c) a Disposition of the Collateral, (d) appointment of any receiver
for the Company or its assets, (e) assignment by the Company for the benefit of
its creditors, (f) institution by the Company of insolvency, receivership or
bankruptcy proceedings or if any such proceeding shall be filed or shall be
commenced against the Company by a third party and the Company shall indicate
its approval thereof, consent thereto or acquiescence therein or such proceeding
shall not have been dismissed within sixty (60) days following the filing
thereof, or (g) material breach by the Company of this Note that is not cured
within ten (10) business days’ written notice thereof from Sunesis.
 
6.           Representations and Warranties of the Company.  The Company hereby
represents and warrants to Sunesis as follows:
 
6.1           Organization, Good Standing and Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted.  Each of the Company’s subsidiaries, if
any, is duly organized and validly existing and in good standing under the laws
of its state of incorporation.  The Company and each of its subsidiaries, if
any, is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a Material Adverse
Effect on the Company and its subsidiaries, if any, taken as a whole.  The
Company and its subsidiaries, if any, have all requisite corporate power and
authority to own and operate their respective properties and assets, the Company
has all requisite corporate power and authority to issue this Note and the
Conversion Shares, and to perform its obligations under, and carry out the
provisions of, this Note.

 
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6.2           Authorization; Binding Obligations; Governmental Consents.
 
(a)           All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution and
issuance of this Note, and the performance of all obligations of the Company
hereunder, have been taken prior to the date hereof.  This Note is a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights, and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.
 
(b)           No consent, approval, permit, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the execution and issuance of this Note.
 
6.3           Compliance with Other Instruments.  The Company is not in
violation or default of any provision of its certificate of incorporation or
bylaws, or of any mortgage, indenture, contract, agreement, instrument,
judgment, order, writ, decree or contract to which it is a party or by which it
is bound or, to the best of Company’s knowledge, of any provision of any federal
or state statute, rule or regulation applicable to the  Company, which violation
or default could reasonably have a Material Adverse Effect.  The issuance of
this Note and the Conversion Shares will not result in any such violation or be
in conflict with or constitute, with or without the passage of time or giving of
notice, either a default under any such provision, instrument, judgment, order,
writ, decree or material contract, or result in the creation of any mortgage,
pledge, lien, charge or encumbrance upon any of the properties or assets of the
Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of
any permit, license, authorization, or approval applicable to the business, or
operations or any of the assets or properties the Company.
 
6.4           Valid Issuance.  The Conversion Shares to be issued, sold and
delivered upon conversion of this Note, in accordance with the terms hereof and
for the consideration expressed herein, will be duly and validly issued, fully
paid and nonassessable.  Any shares of common stock issuable upon conversion of
such Conversion Shares, in accordance with the terms of thereof, will be duly
and validly issued, fully paid and nonassessable.
 
7.           Representations and Warranties of Sunesis.  Sunesis hereby
represents and warrants to the Company as follows:
 
7.1           Organization.  Sunesis is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to carry on its business as now
conducted.  Sunesis has all requisite corporate power and authority to perform
its obligations under, and carry out the provisions of, this Note.
 
7.2           Authorization; Binding Obligations; Governmental Consents.
 
(a)           All corporate action on the part of Sunesis, its officers,
directors and stockholders necessary for the performance of all obligations of
Sunesis hereunder, have been taken prior to the date hereof.  This Note is a
valid and legally binding obligation of Sunesis, enforceable in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights, and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.

 
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(b)           No consent, approval, permit, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of Sunesis is
required in connection with the execution and issuance of this Note.
 
7.3           Investment Representations.  Sunesis has been advised that the
Note and the underlying securities have not been registered under the Securities
Act, or any state securities laws and, therefore, cannot be resold unless they
are registered under the Securities Act and applicable state securities laws or
unless an exemption from such registration requirements is available.  Sunesis
is aware that the Company is under no obligation to effect any such registration
with respect to the Note or the underlying securities or to file for or comply
with any exemption from registration.  Sunesis has not been formed solely for
the purpose of making this investment.  Sunesis has such knowledge and
experience in financial and business matters that Sunesis is capable of
evaluating the merits and risks of such investment, is able to incur a complete
loss of such investment and is able to bear the economic risk of such investment
for an indefinite period of time.  Sunesis hereby represents and warrants as
follows:
 
(a)           Acquisition for Own Account.  Sunesis is acquiring this Note and
the Conversion Shares for its own account for investment only, and not with a
view toward their distribution.
 
(b)           Accredited Investor.  Sunesis represents that it is an “accredited
investor” within the meaning of Regulation D under the Securities Act.
 
(c)           Residence.  The office of Sunesis in which its investment decision
was made is located at the address of Sunesis set forth in Section 15.
 
8.           Affirmative Covenants.  Unless Sunesis shall otherwise agree in
writing, the Company covenants and agrees that, so long as this Note is
outstanding:
 
8.1           Notices.  
 
(a)           Defaults.  The Company will, promptly upon becoming aware thereof,
notify Sunesis in writing of any Event of Default, together with a reasonably
detailed description thereof, and the actions the Company proposes to take with
respect thereto.
 
(b)           Notice of Litigation.  The Company will give notice to Sunesis in
writing within ten (10) business days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting the Company or to which the Company is or becomes a party that could
reasonably have a Material Adverse Effect.
 
8.2           Legal Existence and Good Standing.  The Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its legal existence and good standing in the State of Delaware and its good
standing and qualification to transact or do business in each jurisdiction in
which the failure to so qualify or be in good standing would have a Material
Adverse Effect.
 
8.3           Taxes.  The Company will duly pay and discharge, or cause to be
paid and discharged, before the same shall become overdue, all taxes, as well as
all claims for labor, materials, or supplies that if unpaid might by law become
a lien or charge upon any of its property or assets.

 
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8.4           Covenant of the Company to Reserve Stock.  At all times prior to
the earlier of (a) the conversion of this Note into Conversion Shares in
accordance with the terms hereof or (b) the Maturity Date, the Company shall
reserve, out of its authorized and unissued capital stock, an adequate number of
Conversion Shares, and shares of common stock into which the Conversion Shares
are convertible or exchangeable, such that the Conversion Shares and shares of
common stock are immediately issuable upon conversion of this Note.  If at any
time the number of authorized but unissued shares of capital stock shall not be
sufficient to enable the conversion of this Note into Conversion Shares, and the
shares of common stock into which the Conversion Shares are convertible or
exchangeable, in accordance with the terms hereof, the Company will take such
corporate action as may be necessary to increase its authorized but unissued
shares of capital stock to such number of shares of capital stock as shall be
sufficient for such purpose.
 
9.           Negative Covenants.  Without limiting the foregoing, the Company
covenants and agrees that, subject to Section 9.9 below, it shall not, so long
as this Note is outstanding, directly or indirectly do or cause, or propose to
do or cause, any of the following without the prior written consent of Sunesis:
 
9.1           Charter Documents.  Cause or permit any amendment to its
certificate of incorporation or bylaws, each as in effect on the date hereof, to
the extent it could reasonably be expected to cause a material impairment of any
rights of Sunesis under this Note;
 
9.2           Dividends; Changes in Capital Stock.  Declare or pay any cash
dividends or dividends of property on, or make any other contributions (in cash
or property) in respect of, any of its capital stock or repurchase or otherwise
acquire, directly or indirectly, any shares of its capital stock (other than
pursuant to repurchase rights of the Company that permit the Company to
repurchase securities from the holders thereof at the original purchase price
therefor in connection with the termination of services as an employee of or
consultant to the Company);
 
9.3           Related Party Transactions.  Enter into or be a party to any
transaction with any director, officer, employee, significant stockholder or
family member of or consultant to any such person, corporation or other entity
of which any such person beneficially owns 10% or more of the equity interest or
has 10% or more of the voting power, or subsidiary or affiliate of the Company
(a “Related Party Transaction”) except as previously approved by a majority of
the independent members of the Company’s Board of Directors or if the Board of
Directors has no independent members unanimously approved by all members.  Any
Related Party Transaction shall be fair and reasonable to the Company and on
terms no less favorable to the Company than those that could be obtained from
unaffiliated third parties;
 
9.4           Subsidiaries.  Permit any subsidiary of the Company to take any
action from which the Company would be prohibited pursuant to this Section,
except in the case of Section 9.2 for intracompany transactions between the
Company and its subsidiaries in the ordinary course of business;
 
9.5           Breach or Violate Note.  Take any action that could reasonably be
expected to materially violate or breach, or result in a material violation or
breach, of the Company’s obligations under this Note;
 
9.6           No Impairment.  Take any action that could reasonable be expected
to deny Sunesis the anticipated benefits of the conversion rights provided in
this Note in any material respect, or, if this Note is not so converted, the
payment of any Principal Amount or accrued interest pursuant to the terms of
this Note; or
 
9.7           General.  Authorize, commit to, agree to take, or permit to occur
any of the foregoing actions.

 
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9.8           Security Interest.  As security for the prompt and complete
payment in full of the Principal Amount and interest due hereunder, the Company
hereby grants to Sunesis a first priority security interest in the Sunesis LFA-1
Patents, the Sunesis LFA-1 Know-How, and any Products, and all proceeds and
products thereof (collectively, the “Collateral”).  The Company represents,
warrants and agrees that except for (a) the security interest granted hereunder
or under any other Note issued by the Company to Sunesis, (b) the grant of
licenses under the Collateral (or any portion thereof) to the Company’s
Affiliates and third parties (including the grant of any option to acquire any
such license) and the grant by the Company’s Affiliates and third parties of
sublicenses under such licenses, (c) transfers of the Collateral to the
Company's Affiliates, and (d) the grant by the Company to Sunesis of any rights
or license under the Collateral (or any portion thereof) pursuant to the
Assignment Agreement, the Company holds, and will continue to hold, the
Collateral free and clear of all liens and encumbrances, and will not, while any
Principal Amount or interest remain outstanding hereunder, create any lien or
encumbrance of any kind whatsoever on the Collateral.  The Company agrees that
it will assist Sunesis, at the request of Sunesis, in making such filings or
taking such other actions (including, without limitation, the execution of such
documents) as may be necessary or advisable for Sunesis to perfect its security
interest hereunder (including, without limitation, executing such UCC financing
statements as Sunesis requests).  In addition, Sunesis agrees that it will
terminate or amend as appropriate the UCC financing statement filed in
connection with the issuance of the Original Note to reflect necessary or
advisable changes as a result of the amendment and restatement of the Original
Note.  If the Company shall be in default of the terms of this Note, Sunesis
shall have the rights and remedies of a secured party under the Uniform
Commercial Code of California and any other applicable laws now or hereafter
existing, all such rights and remedies being cumulative, not exclusive, and
enforceable alternatively, successively or concurrently, at such time or times
as Sunesis deems expedient.
 
9.9           Exclusions from Negative Covenants.  Notwithstanding the
foregoing, the provisions of this Section 9 shall not prohibit (or require any
consent from Sunesis with respect to) (i) an amendment of the Company's
Certificate of Incorporation that is approved by the Company’s Board of
Directors and stockholders in accordance with applicable law, (ii) the
authorization, sale, or issuance of any equity or debt securities of the
Company, including the entering into of any agreement relating to the borrowing
of money or the leasing of equipment or any real or personal property, or (iii)
a merger, acquisition, reorganization, sale of all or substantially all of the
Company’s assets, grant of any exclusive or non-exclusive license (including the
grant of any option to acquire any such license) or similar transaction
involving the Company that is approved by the Company’s Board of Directors and
stockholders in accordance with applicable law, provided that in no event shall
the Company take any action that would directly and adversely affect or impair
the legal obligation of the Company to repay the Principal Amount and accrued
interest under this Note.
 
10.           Limitation on Actions by Sunesis;  Preservation of Licenses and
Sublicenses.  Notwithstanding any provision of this Note, Sunesis covenants and
warrants for the benefit of Company and any permitted assignee or licensee of
any of the Collateral that, in conjunction with or after exercising its rights
and remedies under this Note, Sunesis shall take the Collateral subject to any
licenses and sublicenses granted or authorized by the Company and any options to
acquire any such (sub)license, and that in no event shall any exercise of rights
or remedies under this Note with respect to the Collateral terminate or
otherwise interfere with the exercise by a licensee of any such license.
 
11.           Termination.  This Note shall terminate upon the earlier of (i)
the payment in full of the Principal Amount and all accrued but unpaid interest
or (ii) the conversion of the Note into Private Placement Stock in accordance
with Article 3 hereof.
 
11.1           Termination of Security Interest in connection with Termination
of Note.  On such termination of this Note, Sunesis agrees that its security
interest in all of the Collateral shall automatically terminate and Sunesis
hereby authorizes the Company and its counsel to execute and deliver lien
releases, including the filing of a Uniform Commercial Code financing statement
amendment, to evidence the termination of such security interest.
 
 
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11.2           Termination of Security Interest in connection with certain
Transactions.  On the Sale of the Company or Disposition of the Collateral that
results in proceeds to the Company in the amount of at least the
then-outstanding principal amount and accrued interest under the Notes, Sunesis
agrees that its security interest in the Collateral shall automatically
terminate and Sunesis hereby authorizes the Company and its counsel to execute
and deliver lien releases, including the filing of a Uniform Commercial Code
financing statement amendment, to evidence the termination of such security
interest; provided, however, that notwithstanding the foregoing in this Section
11.2, Sunesis shall retain a security interest in the Company’s proceeds from a
Sale of the Company or Disposition of the Collateral that are equal to the then
outstanding principal amount and accrued interest under the Notes (including any
interest that may accrue after the date of such event).
 
12.           Independent Obligations.  The Company agrees and acknowledges that
each covenant contained in Sections 8, 9 and 10 constitutes an independent
obligation of the Company, not qualified by any other clause, and shall be
deemed to be cumulative.
 
13.           Waiver of Presentment, Etc.  The Company hereby, to the fullest
extent permitted by applicable law, waives presentment, demand, notice, protest,
and all other demands and notices in connection with delivery, acceptance,
performance, default, acceleration or enforcement of or under this Note.
 
14.           Assignment.  This Note may not be assigned or otherwise
transferred, nor may any right or obligations under this Note be assigned or
transferred by either Party without the consent of the other Party; provided,
however, that either Sunesis or the Company may, without such consent, assign
this Note and its rights and obligations hereunder to an Affiliate or in
connection with the transfer or sale of all or substantially all of its assets
or business, or in the event of its merger or consolidation or change in control
or similar transaction.  Any permitted assignee shall assume all obligations of
its assignor under this Note.  Any purported assignment by a Party in violation
of this Note shall be void.
 
15.           Notices.  Any notice, consent or report required or permitted to
be given or made under this Note by one Party to the other Party shall be in
English and in writing, delivered personally or by facsimile (receipt verified
and a copy promptly sent by personal delivery, U.S. first class mail or express
courier providing evidence of receipt, postage prepaid (where applicable)), or
by U.S. first class mail or express courier providing evidence of receipt,
postage prepaid (where applicable), at the following address for a Party (or
such other address for a Party as may be specified by like notice):
 
To Sunesis:
 
Sunesis Pharmaceuticals, Inc.
395 Oyster Point Boulevard, Suite 400
South San Francisco CA 94080
Attention: Erik Bjerkholt
Facsimile: 650-266-3506
Phone: 650-266-3700

To SARcode:

SARcode Corporation
343 Sansome Street
Suite 505
San Francisco, CA 94104
Attention: CEO
Facsimile: 415-217-8887
Phone: 510-914-1896

 
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All such notices, consents or reports shall be effective upon receipt.
 
16.           Applicable Law.  This Note shall be governed by and construed in
accordance with the laws of State of California, without regard to the conflicts
of law principles thereof.
 
17.           Dispute Resolution.
 
(a)           Referral to Senior Management.  The Parties agree to attempt
initially to solve any dispute, claim or controversy arising under, out of, or
in connection with this Note (a “Dispute”) by conducting good faith
negotiations.  Any Dispute which cannot be resolved by good faith negotiation
within twenty (20) business days (or as otherwise specified in this Note), shall
be referred, by written notice from either Party to the other, to the Chief
Executive Officer, or authorized representative designated by the Chief
Executive Officer, of each Party.  Such Chief Executive Officers (or their
respective designees) shall negotiate in good faith to resolve such Dispute
through discussions promptly following such written notice, and in any event
within fifteen (15) business days thereafter.  If the Chief Executive Officers
of the Parties (or their respective designees) are unable to resolve the Dispute
within thirty (30) business days, either Party may, by written notice to the
other Party, invoke the provisions of Section 17(b).
 
(b)           Arbitration.  Except as otherwise expressly provided in this
Section 17, the Parties agree that if they are unable to resolve any Dispute
after referral to senior management as set forth in Section 17(a) above, such
Dispute may, upon written notice of either Party to the other, be referred for
resolution by final, binding arbitration in accordance with the provisions of
this Section 17.  The arbitration shall be conducted by the Judicial Arbitration
and Mediation Services, Inc. (or any successor entity thereto) (“JAMS”) under
its rules of arbitration then in effect, except as modified in this Note.  The
arbitration shall be conducted in the English language, by a single
arbitrator.  The arbitrator shall engage an independent expert with experience
in the subject matter of the Dispute to advise the arbitrator.  The Parties and
the arbitrator shall use all reasonable efforts to complete any such arbitration
within six (6) months from the issuance of notice of a referral of the Dispute
to arbitration, unless a Party can demonstrate to the arbitrator that the
complexity of the issues or other reasons warrant the extension of such six (6)
month period.  Unless otherwise mutually agreed upon by the Parties, the
arbitration proceedings shall be conducted in San Francisco, California.  The
arbitrator shall determine what discovery will be permitted, consistent with the
goal of limiting the cost and time which the Parties must expend for discovery;
provided that the arbitrator shall permit such discovery as he or she deems
necessary to permit an equitable resolution of the Dispute.  The Parties agree
that they shall share equally the cost of the arbitration filing and hearing
fees, the cost of the independent expert retained by the arbitrator, and the
cost of the arbitrator and administrative fees of JAMS.  Each Party shall bear
its own costs and attorneys’ and witnesses' fees and associated costs and
expenses.  Notwithstanding the foregoing, the Company will pay on demand all
costs of collection, including all court costs and reasonable attorneys’ fees,
paid or incurred by Sunesis in enforcing this Note after default.
 
(c)           Decisions of Arbitrator.  Within three (3) months of the
conclusion of the arbitration, the arbitration decision shall be rendered in
writing and must specifically state the arbitrator’s findings of facts as well
as the reasons upon which the arbitrator’s decision is based.  The Parties agree
that the decision of the arbitrator shall be the sole, exclusive and binding
remedy between them regarding the Dispute presented to the arbitrator.  Any
decision of the arbitrator may be entered in a court of competent jurisdiction
for judicial recognition of the decision and an order of enforcement.  The
arbitration proceedings and the decision of the arbitrator shall not be made
public without the joint consent of the Parties and each Party shall maintain
the confidentiality of such proceedings and decision unless each Party otherwise
agrees in writing; provided that either Party may make such disclosures as are
required to comply with applicable law (including disclosure to actual or
potential investors).  Pending the establishment of the arbitral tribunal or
pending the arbitral tribunal’s determination of the merits of any Dispute,
either Party may seek appropriate interim or provisional relief from any court
of competent jurisdiction as necessary to protect the rights or property of that
Party.

 
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18.           LIMITATION OF LIABILITY.  NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR ANY PUNITIVE, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES
ARISING OUT OF THIS NOTE, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.
 
19.           Interpretation.  The captions to the several Sections of this Note
are not a part of this Note, but are included for convenience of reference and
shall not affect its meaning or interpretation.  In this Note: (a) the word
“including” shall be deemed to be followed by the phrase “without limitation” or
like expression; (b) the singular shall include the plural and vice versa; and
(c) masculine, feminine and neuter pronouns and expressions shall be
interchangeable.
 
20.           Waiver; Amendment.  Except as otherwise expressly provided in this
Note, any term of this Note may be waived only by a written instrument executed
by a duly authorized representative of the Party waiving compliance.  The delay
or failure of any Party at any time to require performance of any provision of
this Note shall in no manner affect such Party’s rights at a later time to
enforce the same.  This Note may be amended, and any term of this Note may be
modified, only by a written instrument executed by a duly authorized
representative of each Party.
 
21.           Counterparts.  This Note may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
22.           Binding Effect.  This Note shall be binding upon and inure to the
benefit of the Parties and their respective legal representatives, successors
and permitted assigns.
 
[The remainder of this page is intentionally left blank]

 
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In Witness Whereof, the Company has executed and delivered this Amended and
Restated Convertible Secured Promissory Note as an instrument under seal as of
the date first above written.

SARCODE CORPORATION.
   
By:
     
Name:
     
Title:
 

Acknowledged and Agreed:
 
SUNESIS PHARMACEUTICALS, INC.
   
By:
     
Name:
     
Title:
 

[Signature Page to Amended and Restated Convertible Secured Promissory Note]

 
 

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Schedule A

List of Sunesis LFA-1 Patents

Country
 
Appln No.
 
Filed
 
Publn No.
 
Published
 
Patent No.
 
Granted
 
Status
US
   
60/372,672
 
15-Apr-02
                 
Expired
US
   
60/390,527
 
21-Jun-02
                 
Expired
US
   
60/462,640
 
14-Apr-03
                 
Expired
US
   
60/517,535
 
5-Nov-03
                 
Expired
US
   
60/560,517
 
8-Apr-04
                 
Expired
US
   
10/982,463
 
5-Nov-04
    2005-0267098  
1-Dec-05
    7,314,938  
1-Jan-08
 
Granted
US
   
11/978,388
 
29-Oct-07
    2008-0176896  
24-Jul-08
           
Pending
US
   
11/934,049
 
1-Nov-07
    2008-0182839  
31-Jul-08
           
Pending
PCT
 
PCT/US04/36942
 
5-Nov-04
 
WO 2005/044817
 
19-May-05
           
Nat'l Phase
Australia
   
2004287875
 
5-Nov-04
                     
Pending
Canada
   
2,544,678
 
5-Nov-04
                     
Pending
China
   
0480039802.8
 
5-Nov-04
    1902195 A
24-Jan-07
           
Pending
EPO
   
04810406.1
 
5-Nov-04
    1682537  
26-Jul-06
           
Pending
Hong Kong
   
07102904.4
 
19-Mar-07
    1095815  
18-May-07
           
Pending
India
 
1233/KOLNP
 
5-Nov-04
                     
Pending
Japan
   
06-539668
 
5-Nov-04
    2007-513081  
24-May-07
           
Pending

 
 

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