Document:

exv10w2

Exhibit 10.2

AMENDMENT NO. 2

TO

TERM NOTE

     This AMENDMENT NO. 2 (this “Amendment”) to the Term Note dated October 27, 2008, as amended on
January 12, 2009, in the original principal amount of Three Million Dollars ($3,000,000) payable to
the order of Clinical Data, Inc. (“CLDA,” and such Term Note, as amended, referred to as the “Term
Note”) is made as of this 30th day of March, 2009 by and between Avalon Pharmaceuticals, Inc.
(“Avalon”) and CLDA.

     WHEREAS, Avalon and CLDA desire to amend the Term Note to extend the Maturity Date, as that
term is defined in Section 4 of the Term Note, from April 30, 2009 to May 31, 2009.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, in
the Term Note and in the Note Purchase Agreement, as that term is defined in Section 1 of the Term
Note, and for other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:

     SECTION 1. Amendment to the Term Note.

     Section 4 of the Term Note is hereby amended by deleting it in its entirety and replacing it
with the following:

Maturity Date. All of the amounts due hereunder shall be due and payable on the
earlier to occur of May 31, 2009, or such earlier date as such maturity may be
accelerated pursuant to the terms hereof (the “Maturity Date”).

     SECTION 2. Full Force and Effect. The Term Note shall remain in full force and
effect, except as modified hereby.

     SECTION 3. Counterparts. This Amendment may be executed by one or more of the parties
hereto on any number of separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

     SECTION 4. Governing Law. This Amendment shall be construed in accordance with and
governed by the laws of the State of New York, without regard to its principles of conflicts of
laws.

     SECTION 5. Effectiveness. This Amendment shall become effective upon the execution
and delivery hereof by Avalon and CLDA.

[SIGNATURES APPEAR ON NEXT PAGE]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
as of the date first above written.

	 	 	 	 	 
	 	Clinical Data, Inc.

 	 
	 	By:  	/s/ Caesar J. Belbel
 	 
	 	 	Name:  	Caesar J. Belbel 	 
	 	 	Title:  	Executive Vice President, Chief Legal Officer & Secretary 	 
	 
	 	Avalon Pharmaceuticals, Inc.

 	 
	 	By:  	/s/ Kenneth C. Carter, Ph.D.
 	 
	 	 	Name:  	Kenneth C. Carter, Ph.D. 	 
	 	 	Title:  	President & Chief Executive Officerexv10w3

Exhibit 10.3

TERM NOTE

			
	 	 	 
	$1,000,000
	 	March 30, 2009

     For Value Received, the undersigned Avalon Pharmaceuticals, Inc., a Delaware
corporation (the “Seller”) promises to pay to the order of Clinical Data, Inc.
(the “Buyer”), or its assigns, in lawful money of the United States of America and in immediately
available funds, the principal sum of One Million Dollars ($1,000,000), together with interest
thereon as set out herein, at its offices or such other place as Buyer may designate in writing or
wire transfer as set forth in Section 3.2 below.

     1. Note Purchase Agreement. This Term Note (this “Note”) is subject to the terms of that
certain Note Purchase Agreement, dated October 27, 2008, as amended, by and between the Seller and
the Buyer (as the same may be amended, the “Note Purchase Agreement”). The Buyer is entitled to
the benefits of the Note Purchase Agreement and all of the exhibits thereto, and reference is made
thereto for a description of all rights and remedies thereunder. Neither reference to the Note
Purchase Agreement, nor any provision thereof or security for the other obligations evidenced
hereby, shall affect or impair the absolute and unconditional obligation of the Seller to pay the
principal amount hereof, together with all interest accrued thereon and expenses, when due.
Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the
Note Purchase Agreement.

     2. Interest Rate. From the date hereof until such time as all principal, interest and other
amounts outstanding hereunder are unconditionally and irrevocably paid and performed in full,
interest shall accrue on the unpaid principal amount (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as applicable) equal to a fixed rate of seven percent
(7.0%) per annum.

     3. Payments.

          3.1 Payment of Principal and Interest. All outstanding principal and accrued interest under
this Note shall be immediately due and payable on the Maturity Date (as defined below).

          3.2 Other Payment Provisions. The Seller shall make each payment hereunder not later than
2:00 P.M. (Eastern standard time) on the day when due, without offset, in lawful money of the
United States of America to the Buyer in same day funds at the Buyer’s offices or pursuant to a
wire transfer to the Buyer’s designated bank account, which shall initially be:

	 	 	 	 	 
	 

	 	Routing Number:
	 	011075150
	 

	 	Account Number:
	 	84992021828
	 

	 	Name on Account:
	 	Clinical Data, Inc.
	 

	 	Address:
	 	1130 Berkshire Blvd.
	 

	 	 	 	Wyomissing, PA 19610

 

 

	 	 	 	 	 
	 

	 	 	 	Mail Code 10-411-WT1

All payments will be applied in the manner set forth in the Note Purchase Agreement. If the date
for any payment or prepayment hereunder falls on a day which is not a business day, then for all
purposes of this Note the same shall be deemed to have fallen on the next following business day,
and such extension of time shall in such case be included in the computation of payments of
interest.

     4. Maturity Date. All of the amounts due hereunder shall be due and payable on the earlier to
occur of May 31, 2009, or such earlier date as such maturity may be accelerated pursuant to the
terms hereof (the “Maturity Date”).

     5. Prepayment. The obligations under this Note may be prepaid without penalty.

     6. Collateral. This Note is secured by the Collateral under the terms of the Note Purchase
Agreement and the Intellectual Property Security Agreement.

     7. Assignment. No assignment or transfer of this Note or Seller’s obligations hereunder is
permitted without the prior written consent of the Buyer, and any purported assignment or transfer
without the Buyer’s prior written consent shall be invalid. The Buyer may assign its rights
hereunder in accordance with Section 9.16 of the Note Purchase Agreement.

     8. Default and Remedies. The occurrence of an Event of Default under the Note Purchase
Agreement shall constitute a default hereunder and shall entitle the Buyer to exercise the rights
and remedies specified in the Note Purchase Agreement and the various other Investment Documents,
as well as those available at law or in equity. These rights and remedies include, but are not
limited to, the right of the Buyer to charge interest at the Default Rate, cease making any
advances hereunder, accelerate the maturity of this Note and to sell or otherwise dispose of any or
all of the Collateral by public or private sale; in each case, subject to and in accordance with
the Note Purchase Agreement and the other Investment Documents.

     9. Miscellaneous.

          9.1 Business Purpose of Investment. The Seller represents and warrants that this Note
evidences an investment made in the Seller for the purpose of carrying on a business or commercial
enterprise.

          9.2 No Usury. This Note is subject to the express condition that at no time shall Seller be
obligated or required to pay interest hereunder at a rate which could subject the Buyer to either
civil or criminal liability as a result of being in excess of the maximum rate which Seller is
permitted by law to contract or agree to pay. If, by the terms of this Note or because the
maturity of the indebtedness evidenced by this Note is accelerated for any reason, or in the event
of any required or permitted prepayment, Seller is at any time required or obligated to pay
interest at a rate in excess of such maximum rate, the rate of interest hereunder shall be deemed
to be immediately reduced to such maximum rate and interest payable hereunder shall be computed at
such maximum rate and the portion of all prior interest payments in excess of such maximum rate
shall be applied and shall be deemed to have been payments in reduction of the principal balance of
this Note. Without limiting the foregoing, all calculations of the rate of interest hereunder
which are made for the purpose of

2.

 

determining whether the interest rate exceeds such maximum rate shall be made, to the extent
allowed by law, by amortizing, prorating, allocating and spreading in equal parts during the period
of the full stated term of the loan evidenced hereby, all interest provided for hereunder.

          9.3 Controlling Law. This Note shall be construed in accordance with and governed by the laws
of the State of New York, without regard to its principles of conflicts of law. Venue for the
adjudication of any claim or dispute arising out of this Note shall be proper only in the state or
federal courts resident in Boston, Massachusetts, and Seller hereby consents to such venue and
agrees that it shall not be inconvenient and not subject to review by any court other than such
courts in Massachusetts. Seller intends that the courts of the jurisdiction in which Seller is
incorporated and conducts business should afford full faith and credit to any judgment rendered by
a court of the Commonwealth of Massachusetts against Seller hereunder, and should hold that the
Massachusetts courts have jurisdiction to enter a valid, in personam judgment against Seller
hereunder. Seller agrees that service of any summons or complaint, and other process which may be
served in any action, may be made by mailing via registered mail, U.S. certified mail or delivering
a copy of such process to Seller, and Seller hereby agrees that this submission to jurisdiction and
consent to service of process are reasonable and made for the express benefit of the Buyer.

          9.4 Waiver of Notice and Presentment. Seller hereby waives presentment, demand, notice,
protest, stay of execution, and all other defenses to payment generally, assents to the terms
hereof, and agrees that any renewal, extension, or postponement of the time for payment or any
other indulgence or any substitution, exchange, or release of Collateral may be affected without
notice to and without releasing Seller from any liability hereunder.

          9.5 No Rescission Right or Set-Off. This Note is not subject to any valid right of
rescission, set-off, abatement, diminution, counterclaim or defense as against the Buyer, including
the defense of usury, and the operation of any of the terms of the loan, or the exercise of any
right thereunder, will not render the Note unenforceable, in whole or in part, or subject to any
right of rescission, set-off, abatement, diminution, counterclaim or defense, including the defense
of usury, and the Buyer has not taken any action which would give rise to the assertion of any of
the foregoing and no such right of rescission, set-off, abatement, diminution, counterclaim or
defense, including the defense of usury, has been asserted with respect thereto.

          9.6 Severability. In the event any one or more of the provisions contained in this Note shall
for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this Note, but this Note
shall be construed as if such invalid, illegal or unenforceable provision had never been contained
herein or therein.

*****

3.

 

     In Witness Whereof, the undersigned have duly caused this Note to be executed and
their respective seals, if any, affixed as of the date first appearing above.

	 	 	 	 	 
	 	Avalon Pharmaceuticals, Inc.

 	 
	 	By:  	/s/ Kenneth C. Carter, Ph.D.
 	 
	 	 	Name:  	Kenneth C. Carter, Ph.D. 	 
	 	 	Title:  	President & Chief Executive Officer

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