Document:

Security Agreement

 EXHIBIT 10.5 
  
 SECURITY AGREEMENT 
  
 THIS SECURITY AGREEMENT dated as of February 12, 2002 (“Security
Agreement”), is made by SALMEDIX, INC., a Delaware corporation (“Grantor”), in favor of ALEXANDRIA FINANCE, LLC, a Delaware limited
liability company (“Secured Party”). 
  
 RECITALS 
  
 A. Secured
Party has made and has agreed to make certain advances of money and to extend certain financial accommodation to Grantor as evidenced by that certain Secured Promissory Note (the “Note”) dated as of even date herewith,
executed by Grantor in favor of Secured Party (collectively, the “Loans”). 
  
 B. Secured Party is willing to make the Loans to Grantor, but only upon the condition, among others, that Grantor shall have executed and delivered
to Secured Party this Security Agreement. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in order to induce Secured Party to make the Loans and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally
bound, Grantor hereby represents, warrants, covenants and agrees as follows: 
  
 1. DEFINED TERMS. When used in this Security Agreement the following terms shall have the following meanings (such meanings being equally applicable to both the
singular and plural forms of the terms defined): 
  
 “Collateral” shall have the meaning assigned to such term in Section 2 of this Security Agreement. 
  
 “Equipment” means and includes any “equipment,” as such term is defined in Article 9 of the UCC, now or hereafter
owned or acquired or received by Grantor or in which Grantor now holds or hereafter acquires or receives any right or interest, and shall include, in any event, any machinery, equipment, furnishing, truck or other vehicle, boat, tractor, trailer,
railcar or other rolling stock, aircraft, aircraft engine, avionic, tank, pump, filter, generator, computer or other electronic data-processing equipment, terminal, printer or related component or accessory, photocopier, telephonic, video or other
office equipment of any nature whatsoever, laboratory equipment, printing, sorting, inserting, packaging, mailing or shipping, and other office, production, and warehouse equipment of any nature or kind whatsoever, and any and all additions,
substitutions and replacements of any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessions installed thereon or affixed thereto. 
  
 “Event of Default” means (i) any failure by Grantor forthwith to pay or perform any of the Secured
Obligations, (ii) Secured Party’s security interest fails to be prior to all other security interests or other interests in the Collateral, (iii) any breach by Grantor of any warranty, representation, or covenant set forth herein which is not
cured within ten (10) days, and (iv) any “Event of Default” as defined in the Note. 
  
 “Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance. 
  

 1. 

 “Proceeds” means and includes any “proceeds,” as such term is
defined in Article 9 of the UCC, now or hereafter owned or acquired or received by Grantor or in which Grantor now holds or hereafter acquires or receives any right or interest, and shall include, in any event, any and all (a) Accounts, Chattel
Paper, Instruments, Investment Property, cash or other forms of money, currency or funds or other property of any nature, type or land whatsoever payable to or renewable by Grantor from time to time in respect of the Collateral, including upon the
sale, lease, license, exchange or other disposition of any Collateral, (b) proceeds of any insurance, indemnity, warranty or guaranty payable to Grantor from time to time with respect to any of the Collateral, including by reason of the loss,
nonconformity or interference with the use of, defects or infringement of rights in, or damage to, any of the Collateral, (c) payments (in any form whatsoever) made or due and payable to Grantor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority), (d) claims of Grantor against third parties arising out of the loss,
nonconformity, interference with the use of, defects or infringements of rights in, or damage to, any of the Collateral, including any claim (i) for past, present or future infringement of any Patent or Patent License, Copyright or Copyright License
or (ii) for past, present or future infringement or dilution of any Trademark or Trademark License or for injury to the goodwill associated with any Trademark, Trademark registration or Trademark licensed under any Trademark License, (e) cash or
other forms of money, currency or funds and other proceeds received under and in respect of any letter of credit or other support obligation, (f) rights arising out of any of the Collateral, and (g) other property of any nature, type or kind
whatsoever from time to time paid or payable under or in connection with, collected on, or distributed on account of, any of the Collateral. 
  
 “Secured Obligations” means (a) the obligation of Grantor to repay Secured Party all of the unpaid principal amount of, and
accrued interest on (including any interest that accrues after the commencement of bankruptcy), the Loans and (b) the obligation of Grantor to pay any fees, costs and expenses of Secured Party under the Note or under Section 7(d) hereof. 

 
 “Security Agreement” means this Security Agreement
and all Schedules hereto, as the same may from time to time be amended, modified, supplemented or restated. 
  
 “UCC” means the Uniform Commercial Code as the same may from time to time be in effect in the State of California (and each
reference in this Security Agreement to an Article thereof (denoted as a Division of the UCC as adopted and in effect in the State of California) shall refer to that Article (or Division, as applicable) as from time to time in effect;
provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of Secured Party’s security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of California, the term “UCC” shall mean the Uniform Commercial Code (including the Articles thereof) as in effect at such time in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. 
  
 In addition, the following terms shall be defined terms having the meaning set forth for such terms in the UCC: “Account”, “Chattel
Paper” (including tangible and electronic chattel paper), and “Instrument.” Each of the foregoing defined terms shall include all of such items now owned, or hereafter acquired, by Grantor. 
  

 2. 

 2. GRANT OF SECURITY
INTEREST. As collateral security for the full, prompt, complete and final payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all the Secured Obligations and in order to
induce Secured Party to cause the Loans to be made, Grantor hereby assigns, conveys, mortgages, pledges, hypothecates and transfers to Secured Party, and hereby grants to Secured Party, a security interest in all of Grantor’s right, title and
interest in, to and under each item of Equipment and other property listed on Exhibit A hereto, as Exhibit A may be amended from time to time as provided herein (all of which being collectively referred to herein as the
“Collateral”). Each time an Advance (as defined in the Note) is made under the Note, Secured Party shall update Exhibit A to include that Equipment and other property acquired with the proceeds of such Advance; provided,
however, the failure of Secured Party to so update Schedule A shall not affect Secured Party’s security interest in the Collateral. 
  
 And, all Proceeds of the foregoing and all accessions to, substitutions and replacements for and rents, profits and products of the foregoing. 

 
 3. REPRESENTATIONS AND
WARRANTIES. Grantor hereby represents and warrants to Secured Party that: 
  
 (a) Except for the security interest granted to Secured Party under this Security Agreement, Grantor is the sole legal and
equitable owner or, has the power to transfer each item of the Collateral in which it purports to grant a security interest hereunder, having good and marketable title thereto or the power to transfer, free and clear of any and all Liens.

  
 (b) No effective security agreement,
financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Collateral exists, except such as may have been filed by Grantor in favor of Secured Party pursuant to this Security Agreement.

  
 (c) This Security Agreement creates a
legal and valid security interest on and in all of the Collateral in which Grantor now has rights and all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken. Accordingly, Secured Party
has a fully perfected first priority security interest in all of the Collateral in which Grantor now has rights. This Security Agreement will create a legal and valid and fully perfected first priority security interest in the Collateral in which
Grantor later acquires rights, when Grantor acquires those rights. 
  
 (d) Grantor’s taxpayer identification number is, and chief executive office, principal place of business, and the place where Grantor maintains its records concerning the Collateral are presently located
at the address set forth on the signature page hereof. The State (or if not a state, the other jurisdiction) under whose law Grantor was organized is set forth on the signature page hereof. The Collateral is presently located at such address.
Grantor shall not change its taxpayer identification number, jurisdiction of organization or such chief executive office, or principal place of business or remove or cause to be removed, the records concerning the Collateral from those premises
without prior written notice Secured Party as provided herein. 
  
 4. COVENANTS. Grantor covenants and agrees with Secured Party that from and after the date of this Security Agreement and until the Secured Obligations have been performed and paid in full: 

 
 4.1 Disposition of Collateral. Grantor shall not
sell, lease, transfer or otherwise dispose of any of the Collateral, or attempt or contract to do so. 
  
 4.2 Change of Jurisdiction of Organization, Relocation of Business or Collateral. Grantor shall not change its jurisdiction of
organization, relocate its chief executive office, 

  

 3. 

 
principal place of business or its records, or allow the relocation of any Collateral from such address(es) provided to Secured Party pursuant to Section
3(d) above without thirty (30) days prior written notice to Secured Party. 
  
 4.3 Limitation on Liens on Collateral. Grantor shall not, directly or indirectly, create, permit or suffer to exist, and shall
defend the Collateral against and take such other action as is necessary to remove, any Lien on the Collateral, except the Lien granted to Secured Party under this Security Agreement. Grantor shall further defend the right, title and interest of
Secured Party in and to any of Grantor’s rights under the Collateral against the claims and demands of all persons whomsoever. 
  
 4.4 Insurance. Maintain insurance policies insuring the Collateral against loss or damage from such risks and in such amounts and
forms and with such companies as are customarily maintained by businesses similar to Grantor. 
  
 4.5 Taxes, Assessments, Etc. Grantor shall pay promptly when due all property and other taxes, assessments and government charges
or levies imposed upon, and all claims (including claims for labor, materials and supplies) against the Collateral, except to the extent the validity thereof is being contested in good faith and adequate reserves are being maintained in connection
therewith. 
  
 4.6 Maintenance of Records.
Grantor shall keep and maintain at its own cost and expense satisfactory and complete records of the Collateral. 
  
 4.7 Further Assurances; Pledge of Instruments. At any time and from time to time, upon the written request of Secured Party,
and at the sole expense of Grantor, Grantor shall promptly and duly execute and deliver any and all such further instruments and documents and take such further action as Secured Party may reasonably deem necessary or desirable to obtain the full
benefits of this Security Agreement, including, without limitation, (a) executing, delivering and causing to be filed any financing or continuation statements (including “in lieu” continuation statements) under the UCC with respect to the
security interests granted hereby. Grantor agrees that a financing statement will be filed by Secured Party each time an Advance is made under the Note, covering the Equipment or other property financed with the proceeds of such Advance; (b) at
Secured Party’s reasonable request, executing and delivering or causing to be delivered written notice to insurers of Secured Party’s security interest in, or claim in or under, any policy of insurance insuring the Collateral (including
unearned premiums) and (c) at Secured Party’s reasonable request, using its best efforts to obtain acknowledgments from bailees having possession of any Collateral and waivers of liens from landlords and mortgagees of any location where any of
the Collateral may from time to time be stored or located. Grantor also hereby authorizes Secured Party to file any such financing or continuation statement (including “in lieu” continuation statements) without the signature of Grantor. If
any amount payable under or in connection with any of the Collateral is or shall become evidenced by any Instrument, such Instrument, shall be duly endorsed in a manner reasonably satisfactory to Secured Party and delivered to Secured Party promptly
and in any event within five (5) business days of Grantor’s receipt thereof. 
  
 5. RIGHTS AND REMEDIES UPON DEFAULT. 
  
 (a) After any Event of Default shall have occurred and while such Event of Default is continuing, Secured Party may exercise, in addition to all other rights and remedies granted to it under this Security
Agreement, the Note, that certain Warrant executed by Grantor in favor of Secured Party and under any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the
UCC. Without limiting the generality of the foregoing, Grantor expressly agrees that in any such event Secured Party, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and
place of 
  

 4. 

 
public or private sale) to or upon Grantor or any other person (all and each of which demands, advertisements and notices are hereby expressly waived to the
maximum extent permitted by the UCC and other applicable law), may (i) reclaim, take possession, recover, store, maintain, finish, repair, prepare for sale or lease, shop, advertise for sale or lease and sell or lease (in the manner provided herein)
the Collateral, and (ii) forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and may forthwith sell, lease, assign, give an option or options to purchase or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels at public or private sale or sales, at any exchange or broker’s board or at any of Secured Party’s offices or elsewhere at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk. To the extent Grantor has the right to do so, Grantor authorizes Secured Party, on the terms set forth in this Section 5 to enter the premises where the
Collateral is located, to take possession of the Collateral, or any part of it, and to pay, purchase, contact, or compromise any encumbrance, charge, or lien which, in the opinion of Secured Party, appears to be prior or superior to its security
interest. Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of said Collateral so sold, free of any right or equity of
redemption, which equity of redemption Grantor hereby releases. Grantor further agrees, at Secured Party’s request, to assemble its Collateral and make it available to the Secured Party at places which Secured Party shall reasonably select,
whether at Grantor’s premises or elsewhere. Secured Party shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale as provided in Section 5(e), below, with Grantor remaining liable for
any deficiency remaining unpaid after such application, and only after so paying over such net proceeds and after the payment by Secured Party of any other amount required by any provision of law, need Secured Party account for the surplus, if any,
to Grantor. To the maximum extent permitted by applicable law, Grantor waives all claims, damages, and demands against Secured Party arising out of the repossession, retention or sale of the Collateral. Grantor agrees that Secured Party need not
give more than ten (10) days’ notice of the time and place of any public sale or of the time after which a private sale may take place and that such notice is reasonable notification of such matters. Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of its Collateral are insufficient to pay all amounts to which Secured Party is entitled from Grantor, Grantor also being liable for the attorney costs of any attorneys employed by Secured Party
to collect such deficiency. 
  
 (b)
Grantor agrees that in any sale of any of such Collateral, whether at a foreclosure sale or otherwise, Secured Party is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers), or in order to obtain any required approval of the sale or of the purchase by
any governmental authority, and Grantor further agrees that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall Secured Party be liable nor accountable to
Grantor for any discount allowed by the reason of the fact that such Collateral is sold in compliance with any such limitation or restriction. 
  
 (c) Grantor also agrees to pay all fees, costs and expenses of Secured Party, including, without limitation, reasonable
attorneys’ fees, incurred in connection with the enforcement of any of its rights and remedies hereunder. 
  
 (d) Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any
kind in connection with this Security Agreement or any Collateral. 
  
 (e) The Proceeds of any sale, disposition or other realization upon all or any part of the Collateral shall be distributed by Secured Party in the following order of priorities: 
  
 FIRST, to Secured Party
in an amount sufficient to pay in full the reasonable costs of Secured Party in connection with such sale, disposition or other realization, including all fees, costs, expenses, liabilities and advances incurred or made by Secured Party in
connection therewith, including, without limitation, reasonable attorneys’ fees; 
  
  

 5. 

 SECOND, to Secured Party in an amount equal
to the then unpaid Secured Obligations; and 
  
 FINALLY, upon payment in full of the Secured Obligations, to Grantor or its representatives, in accordance with the UCC or as a court of competent jurisdiction may direct. 
  
 6. INDEMNITY. Grantor agrees to defend,
indemnify and hold harmless Secured Party and its officers, employees, and agents against (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Security
Agreement and (b) all losses or expenses in any way suffered, incurred, or paid by Secured Party as a result of or in any way arising out of, following or consequential to transactions between Secured Party and Grantor, whether under this Security
Agreement or otherwise (including without limitation, reasonable attorneys’ fees and expenses), except for losses arising from or out of Secured Party’s gross negligence or willful misconduct. 
  
 7. LIMITATION ON SECURED
PARTY’S DUTY IN RESPECT OF COLLATERAL. Secured Party shall be deemed to have acted reasonably in the custody,
preservation and disposition of any of the Collateral if it takes such action as Grantor requests in writing, but failure of Secured Party to comply with any such request shall not in itself be deemed a failure to act reasonably, and no failure of
Secured Party to do any act not so requested shall be deemed a failure to act reasonably. 
  
 8. REINSTATEMENT. This Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against Grantor for liquidation or
reorganization, should Grantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Grantor’s property and assets, and shall continue to be effective
or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of
the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. 
  
 9. MISCELLANEOUS. 
  
 9.1 NO WAIVER; CUMULATIVE REMEDIES.

  
 (a) Secured Party shall not by any
act, delay, omission or otherwise be deemed to have waived any of its respective rights or remedies hereunder, nor shall any single or partial exercise of any right or remedy hereunder on any one occasion preclude the further exercise thereof or the
exercise of any other right or remedy. 
  
 (b) The rights and remedies hereunder provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights and remedies provided by law. 
  
 (c) None of the terms or provisions of this Security
Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by Grantor and Secured Party. 
  

 6. 

 9.2 Termination of this Security Agreement. Subject to Section 8 hereof,
this Security Agreement shall terminate upon the payment and performance in full of the Secured Obligations. 
  
 9.3 Successor and Assigns. This Security Agreement and all obligations of Grantor hereunder shall be binding upon the successors
and assigns of Grantor, and shall, together with the rights and remedies of Secured Party hereunder, inure to the benefit of Secured Party, any future holder of any of the indebtedness and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of any agreement governing or instrument evidencing the Secured Obligations or any portion thereof or interest therein shall in any manner affect the lien granted to Secured
Party hereunder. 
  
 9.4
GOVERNING LAW. In all respects, including all matters of construction, validity and performance, this Security Agreement and the Secured Obligations arising hereunder shall be governed by, and
construed and enforced in accordance with, the laws of the State of California applicable to contracts made and performed in such state, without regard to the principles thereof regarding conflict of laws, except to the extent that the UCC provides
for the application of the law of Grantor’s State. 
  
 [Remainder of page intentionally left blank] 
  

 7. 

 IN WITNESS WHEREOF, each of the
parties hereto has caused this Security Agreement to be executed and delivered by its duly authorized officer on the date first set forth above. 
  

									
	ADDRESS OF GRANTOR	 	 	 	SALMEDIX, INC.,
a Delaware corporation
				
	4330 La Jolla Village Drive	 	 	 	By:	 	/s/    ANITA I. BUSQUETS        
	 	 	 	 	 	 	 	

	 Suite 250
	 	 	 	 Printed Name:
	 	Anita I. Busquets
	 	 	 	 	 	 	 	

	 San Diego, CA 92122
	 	 	 	 Title:
	 	Chief Financial & Admin. Officer
	 	 	 	 	 	 	 	

	 TAXPAYER IDENTIFICATION NUMBER
 OF GRANTOR
	 	 	 	 	 	JURISDICTION OF ORGANIZATION OF GRANTOR
	  

	 	 	 	 	 	DELAWARE

  

			
	
	ACCEPTED AND ACKNOWLEDGED BY:
	
	 ALEXANDRIA FINANCE, LLC,
 a Delaware limited liability company

		
	By:	 	ARE – QRS Corp., a Maryland corporation,
Its Managing Member
		
	By:	 	/s/    LAURIE A. ALLEN        
	 	 	

	 	 	 Laurie A. Allen
 Senior Vice President, Business Development & Legal Affairs

  

 8.Secured Promissory Note

 EXHIBIT 10.6 
  
 SECURED PROMISSORY NOTE 
  

			
	 $500,000.00
	 	 February 12, 2002      
 San Diego, California

  
 FOR VALUE RECEIVED,
Salmedix, Inc., a Delaware corporation (“Borrower”), hereby unconditionally promises to pay to the order of Alexandria Finance, LLC, a Delaware limited liability company (“Lender”), in lawful money of the
United States of America and in immediately available funds, the principal sum of Five Hundred Thousand Dollars ($500,000.00), or such lesser principal amount as has been advanced to Borrower under the terms hereof (the “Loan”),
together with accrued and unpaid interest thereon, each due and payable on the dates and in the manner set forth below. 
  
 This Note is referred to in and is executed and delivered in connection with that certain Security Agreement dated as of even date herewith and executed
by Borrower in favor of Lender (as the same may from time to time be amended, modified, supplemented or restated, the “Security Agreement”). Additional rights of the Lender are set forth in the Security Agreement. Capitalized terms
used herein and not otherwise defined herein shall have the respective meanings given to them in the Security Agreement. 
  
 1. Principal Repayment. The outstanding principal amount of the Loan shall be due and payable on February 12, 2005 (the “Maturity
Date”). 
  
 2. Interest Rate. Borrower further
promises to pay interest on the outstanding principal amount hereof from the date hereof until payment in full, which interest shall be payable at the rate of ten percent (10%) per annum or the maximum rate permissible by law (which under the laws
of the State of California shall be deemed to be the laws relating to permissible rates of interest on commercial loans), whichever is less. Interest shall be due and payable monthly in arrears beginning on the first calendar day of the first
calendar month following the first Advance (as hereinafter defined), and continuing on the first calendar day of each calendar month thereafter for the preceding calendar month, and shall be calculated on the basis of a 360-day year for the actual
number of days elapsed. 
  
 Any principal repayment on the Loan
hereunder not paid when due, whether at stated maturity, by acceleration or otherwise, shall bear interest at the rate of thirteen percent (13%) per annum. 
  
 3. Place of Payment. All amounts payable hereunder shall be payable at the office of Lender, 135 North Los Robles Avenue, Suite 250, Pasadena,
California 91101, Attn: Chief Financial Officer unless another place of payment shall be specified in writing by Lender. 
  
 4. Application of Payments. Payment on this Note shall be applied first to accrued interest, and thereafter to the outstanding principal balance
hereof. 
  
 5. Advances. Lender shall make available to
Borrower, through one or more advances (the “Advances”), the principal amount indicated on the face of this Note for borrowings by Borrower from time to time as provided herein. The proceeds of the Advances will be used solely to
reimburse Borrower for the purchase of Equipment and other property approved by Lender prior to the funding of each Advance. Each Advance shall not be less than Twenty-Five Thousand Dollars ($25,000.00). When repaid, Advances may not be reborrowed.
Borrower shall notify Lender in writing at the address specified in Section 3 of this Note, Attn: Chief Financial Officer, by facsimile transmission to (626) 578-0770 no later than 3:00 p.m. Pacific time, five (5) business days prior to the
date on which an Advance is requested to be made, and shall provide to Lender invoices for the Equipment sought to be financed and such additional information as Lender may request. 
  

 1 

 At the time of any borrowing under this Note (or at the time of receipt of any payment of principal),
Lender shall make or cause to be made, an appropriate notation on Exhibit A attached hereto reflecting the amount of such borrowing (or the amount of such payment). The outstanding amount of this Note set forth on such Exhibit A shall be
prima facie evidence of the principal amount thereof outstanding, but the failure to record, or any error in so recording, shall not limit or otherwise affect the obligations of Borrower to make payments of principal or interest on
this Note when due. 
  
 6. Secured Note. The full amount of
this Note is secured by the Collateral identified and described as security therefore in the Security Agreement. 
  
 7. Conditions Precedent to Advances. 
  
 (a) Conditions to First Advance. The obligations of Lender under this Note are subject to the occurrence, prior to or
simultaneously with the date hereof, of each of the following conditions: 
  
 (i) Documents Executed and Filed. 
  

	 	(a)	This Note; 

  

	 	(b)	The Security Agreement; 

  

	 	(c)	That certain Warrant executed by Borrower in favor of Lender, dated as of even date herewith; 

  

	 	(d)	UCC-1 Financing Statement covering that Equipment and other property acquired with the proceeds of the first Advance. 

  
 (ii) Resolutions. Lender shall have received
in form and substance satisfactory to Lender, a certified copy of the records of all actions (including all resolutions or unanimous consents) taken by Borrower, authorizing or relating to the execution and delivery or this Note, the Security
Agreement, the Warrant or any other document executed in connection herewith or therewith, and the consummation of the transactions contemplated hereby and thereby. 
  
 (iii) Notice of Borrowing. Lender shall have received a notice of borrowing in accordance with
Section 5 hereof, together with such information required in Section 5 hereof. 
  
 (b) Conditions to All Advances. The obligation of Lender to make any Advance is subject to the occurrence, prior to or on
the disbursement date for such Advance, of each of the following conditions: 
  
 (i) Documents Executed and Filed. 
  

	 	(a)	UCC-1 Financing Statement covering that Equipment and other property acquired with the proceeds of such Advance. 

  
 (ii) Notice of Borrowing. Lender shall have
received a notice of borrowing in accordance with Section 5 hereof, together with such information required in Section 5 hereof. 
  

 2 

 (iii) Certificate. Lender shall have received a certificate, executed by
the chief executive or chief financial officer of Borrower, certified as of such disbursement date, that no Event of Default has occurred and is continuing. 
  
 (iv) Exhibit A to Security Agreement. Lender shall have amended Exhibit A to the Security Agreement to include the Equipment
and other property acquired with the proceeds of such Advance. 
  
 8. Prepayment. This Note may be prepaid in whole or in part without penalty or premium. 
  
 9. Default. Each of the following events shall be an “Event of Default” hereunder: 
  
 (a) Borrower fails to pay timely any of the principal
amount due under this Note within five (5) days of the date the same becomes due and payable or any accrued interest or other amounts due under this Note within five (5) days of the date the same becomes due and payable; 
  
 (b) Borrower defaults in the performance of any other
material term, obligation, covenant or condition hereunder and such default is not cured within ten (10) days after the occurrence thereof; 
  
 (c) Any representation or warranty made herein shall prove to have been false or misleading in any material respect when made or
deemed made; 
  
 (d) Borrower files any
petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes
any corporate action in furtherance of any of the foregoing; 
  
 (e) An involuntary petition is filed against Borrower (unless such petition is dismissed or discharged within sixty (60) days) under any bankruptcy statute now or hereafter in effect, or a custodian, receiver,
trustee, assignee for the benefit of creditors (or other or similar official) is appointed to take possession, custody or control of any property of Borrower; or 
  
 (f) An Event of Default occurs under the Security Agreement. 
  
 10. Remedies. Upon the occurrence of an Event of Default hereunder,
Lender may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrower: 
  

(a) declare all unpaid principal, accrued interest and other amounts owing hereunder immediately due and payable (provided, that
upon the occurrence of an Event of Default described in Section 9 (d) or (e), all such amounts shall become immediately due and payable without any action by Lender); and 
  
 (b) cease making Advances to or for the benefit of Borrower. 
  
 11. Representations and Warranties. The Borrower represents and
warrants to Lender that as of the date hereof, and as of the date of each Advance hereunder: 
  
 (a) Corporate Existence and Power. (a) Borrower is a corporation, duly organized, validly existing and in good standing under the
laws of the state of Delaware; (b) Borrower has the power 

  

 3 

 
and authority to conduct its business in the manner in which it is currently being conducted and is currently proposed to be conducted; and (c) Borrower has
the power and authority to execute, deliver and perform this Note and to borrow money in accordance with its terms. 
  
 (b) Valid and Binding Agreement. The execution, delivery and performance of this Note, and the borrowings hereunder have been duly
authorized by all requisite action of the Borrower, and this Note constitutes a valid and binding obligation of the Borrower, enforceable against Borrower in accordance with its terms. 
  
 (c) Financial Statements. All of the financial statements of the Borrower delivered or to be
delivered to Lender pursuant to the terms hereof are true and correct in all material respects, have been prepared in accordance with Generally Accepted Accounting Principals (“GAAP”) and fairly present the financial condition of
Borrower as of the dates, and the results of operation for the fiscal period for which the same are furnished to Lender. Borrower has no material contingent obligations, liabilities for taxes, long-term leases on unusual forward or long-term
commitments not disclosed by, or reserved against in the financial statements. 
  
 (d) Financial Condition. Borrower is solvent, able to pay its debts as they mature, has capital sufficient to carry on its business
and has assets the fair market value of which exceed its liabilities, and Borrower will not be rendered insolvent, under-capitalized or unable to pay maturing debts by the execution or performance of this Note, the Warrant or the Security Agreement.
There has been no material adverse change in the business, properties or condition (financial or otherwise) of the Borrower since the date of the latest of the financial statements. 
  
 12. Covenants. On a continuing basis from the date of this Note until all indebtedness hereunder is paid in full,
Borrower covenants and agrees as follows: 
  
 (a) Use of Proceeds. Borrower shall use the proceeds of each Advance to purchase Equipment pursuant to the terms hereof and the terms of the Security Agreement. 
  
 (b) Annual Financial Reports. Furnish to Lender, in form and reporting basis satisfactory to
Lender, not later than one hundred eighty (180) days after the close of each fiscal year of Borrower beginning with the fiscal year ending December 31, 2001, audited financial statements of Borrower on a consolidated and consolidating basis
containing the balance sheet of Borrower as of the close of each such fiscal year, statements of income and retained earnings and a statement of cash flows for each such fiscal year and such other comments and financial details as are usually
included in similar financial statements; such financial statements shall be prepared according to GAAP and audited by independent certified public accountants of recognized standing selected by Borrower and acceptable to Lender and shall contain an
unqualified opinion on such financial statements. 
  
 (c) Quarterly Unaudited Financial Statements. Furnish to Lender, in form and reporting basis satisfactory to Lender, not later than thirty (30) days after the end of each fiscal quarter of Borrower, financial statements on a
consolidated and consolidating basis containing the balance sheet of Borrower as of the end of each such period, a statement of profit and loss and a statement of cash flow for such quarter then ended, and such other comments and financial details
as are usually included in similar reports. These statements shall be prepared on the same accounting basis as the statements required in Section 12(b) above and shall be in such detail as Lender may reasonably require, and the accuracy of
the statements shall be certified by the chief executive or chief financial officer of Borrower. 
  

 4 

 (d) Collateral. Borrower shall not, directly or indirectly, permit or
suffer to exist, and shall defend the Collateral against and take such other action as is necessary to remove, any Lien on or in the Collateral, or any portion thereof, except as permitted pursuant to the Security Agreement. 
  
 13. Waiver. Borrower waives presentment and demand for payment, notice
of dishonor, notice of nonpayment, protest and notice of protest, and all other notices and demands in connection with or relating to this Note. Borrower promises to pay all costs of collection when incurred, including, without limitation,
reasonable attorneys’ fees, costs and other expenses. 
  
 The
right to plead any and all statutes of limitations as a defense to any demands hereunder is hereby waived to the full extent permitted by law. 
  
 14. No Waiver by Lender. The waiver by Lender, or any holder hereof, of any of the terms of this Note will not be deemed to be, nor does the same
constitute, a waiver of a future breach or default on the part of Lender. No failure on the part of Lender to exercise, and no delay in exercising, any right, power or privilege hereunder operates as a waiver thereof; nor does any single or partial
exercise of any right, power or privilege hereunder by Lender preclude any other or further exercise thereof, or the exercise of any other right, power or privilege by Lender. Any waiver by Lender or the holder hereof of any provision of this Note
and any consent by Lender or the holder hereof to the departure from the terms of any provision of this Note is effective only in the specific instance and for the specific purpose for which given. No notice or demand on Borrower in any case
entitles Borrower to any other or further notice or demand in similar or other circumstances. 
  
 15. Waiver of Jury Trial. The parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Note or the transactions contemplated hereby.

  
 16. Notices. Any notice, request, or other
communication shall in writing and shall be given by personal delivery, national overnight courier, or by certified or registered United States mail, postage prepaid to the addresses set forth on the signature page hereof. Notices shall be effective
upon receipt or when proper delivery is refused. In case of service by mail, notices shall be deemed complete at the expiration of the second (2nd) business day after mailing. Either party may change its address for purposes of notice by giving notice of such change of address to the other party in accordance with the provisions of this
Section 16. 
  
 17. Governing Law. This Note shall
be governed by, and construed and enforced in accordance with, the laws of the State of California, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction. 
  
 18. Successors and Assigns. The provisions of this Note shall inure to
the benefit of and be binding on any successor to Borrower and shall extend to any holder hereof. Neither this Note not any rights hereunder may be assigned by Borrower without the Lender’s prior written consent. 
  
 [Remainder of page intentionally left blank] 
  

 5 

									
	BORROWER	 	 	 	 SALMEDIX, INC.,
 a Delaware corporation

					
	 	 	 	 	 	 	By:	 	/s/    ANITA I. BUSQUETS        
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Printed Name:
	 	Anita I. Busquets
	 	 	 	 	 	 	 Title:
	 	Chief Financial & Admin Officer
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 Notice Address:

				
	 	 	 	 	 	 	 4330 La Jolla Village Drive
 Suite 250
 San Diego, California 92122
 Attn: Chief Financial Officer

				
	 	 	 	 	 	 	 Notice Address for Lender:

				
	 	 	 	 	 	 	 135 North Los Robles Avenue
 Suite 250
 Pasadena, California 91101
 Attn: Chief Financial Officer

  

 6 

 EXHIBIT A 
  

PRINCIPAL BORROWINGS SCHEDULE 
  

									
	 DATE

	  	 BORROWING

	  	 REPAYMENT

	  	 PRINCIPAL BALANCE

	  	 ASSETS PURCHASED

	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	 	  	 

  

 7

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