Exhibit 10.5 

 

MARIEL THERAPEUTICS, INC.

 

Second Amended and Restated Secured Promissory Note

 

$1,013,216.44 August 3, 2015

 

Subject to the terms and conditions of this Second Amended and Restated Secured
Promissory Note (this “Note”), for value received, Mariel Therapeutics, Inc., a
Delaware corporation (the “Company”) and Ember Therapeutics, Inc. (“Ember”),
jointly and severally, promise to pay to the order of Stryker Biotech L.L.C., a
Michigan limited liability company, for itself and as agent for Stryker
Corporation (the “Holder”), the principal amount of One Million Thirteen
Thousand Two Hundred Sixteen Dollars and Forty Four Cents ($1,013,216.44),
together with interest accrued from the date of issuance of this Note on the
unpaid principal balance at the rate of eight percent (8%) per annum computed on
the basis of the actual number of days elapsed and a year of 365 days. This Note
shall be due and payable on the earlier of (i) the Maturity Date (as defined in
Section 2, below) and (ii) following an Event of Default (as defined in Section
6, below), on any accelerated maturity date as provided in Section 7 below. This
Note is issued in connection with that Second Personal Guaranty Agreement by and
among Yosbani Joseph Hernandez (“Guarantor”), Holder and Stryker Corp. and that
Security Agreement by and among Guarantor, Holder and Stryker Corp., each dated
as of the date hereof.

 

1.  Amendment and Restatement. This Note (i) amends and restates the Amended and
Restated Secured Promissory Note of the Company dated June 30, 2014 (the “Prior
Note”), which is cancelled by renewal, and (ii) incorporates (x) amounts due
under Section 2.04(a)(iii) of that certain Asset Purchase Agreement dated June
30, 2014 (the “Asset Purchase Agreement”) by and among the Company, the Holder
and Stryker Corporation (“Stryker Corp.”) and (y) interest accrued through the
date hereof in respect of amounts due under the Prior Note and Section
2.05(e)(vii) of the Asset Purchase Agreement.

 

2.  Maturity Date. The outstanding principal amount of the Note and any accrued
but unpaid interest thereon shall be due and payable by 11:59PM Eastern Standard
Time on August 3, 2016 (the “Maturity Date”).

 

3.  Interest. Interest will accrue and be payable in full on the Maturity Date.

 

4.  Payment. All payments must be made in lawful money of the United States of
America at such place as the Holder may from time to time designate in writing
to the Company. Payment will be credited first to any accrued and unpaid
interest then due and payable, and the remainder will be applied to the
principal. Prepayment of the principal, together with accrued and unpaid
interest thereon, may be made prior to the Maturity Date at any time without
penalty. In the event any interest is paid on this Note that is deemed to be in
excess of the then legal maximum rate, then that portion of the interest payment
representing an amount in excess of the then legal maximum rate shall be deemed
a payment of the principal and applied against the principal of this Note.

 

5. Security Interest.

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(a) Company hereby pledges, assigns and delivers to the Holder, and grants to
the Holder, a lien upon and security interest in all of the Company’s right,
title and interest in and to all of the following property and assets of the
Company, in each case whether now owned or hereafter acquired or arising and
wherever located (the “Company Collateral”): (i) all accounts, deposit accounts,
cash, cash equivalents, instruments, chattel paper, instruments, and money of
the Company; (ii) all contracts, copyrights, documents, equipment, fixtures,
general intangibles, goods, inventory, patents, software, books and records and
other property included within the Purchased Assets as defined in the Asset
Purchase Agreement; (iii) all accessions, additions, attachments, improvements,
modifications and upgrades to, replacements of and substitutions for any of the
foregoing; and (iv) any and all proceeds as defined in the Uniform Commercial
Code. All terms in this Section that are not capitalized shall, unless the
context otherwise requires, have the meanings provided by the Uniform Commercial
Code to the extent the same are used or defined therein.

 

(b) Ember hereby pledges, assigns and delivers to the Holder, and grants to the
Holder, a lien upon and security interest in all of the Ember’s right, title and
interest in and to all of the following property and assets of the Ember, in
each case whether now owned or hereafter acquired or arising and wherever
located (the “Ember Collateral,” and together with the Company Collateral, the
“Collateral”): (i) all accounts, deposit accounts, cash, cash equivalents,
instruments, chattel paper, instruments, and money of the Ember; (ii) all
contracts, copyrights, documents, equipment, fixtures, general intangibles,
goods, inventory, patents, software, books and records and other property
included within the Purchased Assets as defined in the Asset Purchase Agreement;
(iii) all accessions, additions, attachments, improvements, modifications and
upgrades to, replacements of and substitutions for any of the foregoing; and
(iv) any and all proceeds as defined in the Uniform Commercial Code. All terms
in this Section that are not capitalized shall, unless the context otherwise
requires, have the meanings provided by the Uniform Commercial Code to the
extent the same are used or defined therein.

 

(c) This Note and the Collateral shall secure the full and prompt payment, at
any time and from time to time as and when due (whether at the stated Maturity
Date, by acceleration or otherwise), of all payment obligations of the Company
or Ember under this Note, including, without limitation, all principal of and
interest on this Note, all fees, expenses, indemnities and other amounts payable
by the Company or Ember (including interest accruing after the filing of a
petition or commencement of a case by or with respect to the Company or Ember
seeking relief under any applicable federal and state laws pertaining to
bankruptcy, reorganization, arrangement, moratorium, readjustment of debts,
dissolution, liquidation or other debtor relief, specifically including, without
limitation, the Bankruptcy Code and any fraudulent transfer and fraudulent
conveyance laws, whether or not the claim for such interest is allowed in such
proceeding), (collectively, the “Secured Obligations”).

 

(d) If an Event of Default shall have occurred and be continuing, the Holder
shall be entitled to exercise in respect of the Collateral all of the rights,
powers and remedies provided for herein or otherwise available under any law, in
equity or otherwise, including all rights and remedies of a secured party under
the Uniform Commercial Code. Each of the Company and Ember, to the greatest
extent not prohibited by applicable law, hereby (i) agrees that it will not
invoke, claim or assert the benefit of any rule of law or statute now or
hereafter in effect (including, without limitation, any right to prior notice or
judicial hearing in connection with the Holder’s possession, custody or
disposition of any Collateral or any appraisal, valuation, stay, extension,

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moratorium or redemption law), or take or omit to take any other action, that
would or could reasonably be expected to have the effect of delaying, impeding
or preventing the exercise of any rights and remedies in respect of the
Collateral, the absolute sale of any of the Collateral or the possession thereof
by any purchaser at any sale thereof, and waives the benefit of all such laws
and further agrees that it will not hinder, delay or impede the execution of any
power granted hereunder to the Holder, but that it will permit the execution of
every such power as though no such laws were in effect, (ii) waives all rights
that it has or may have under any rule of law or statute now existing or
hereafter adopted to require the Holder to marshal any Collateral or other
assets in favor of the Company or Ember or any other party or against or in
payment of any or all of the Secured Obligations, (iii) waives all rights that
it has or may have under any rule of law or statute now existing or hereafter
adopted to demand, presentment, protest, advertisement or notice of any kind
(except notices expressly provided for herein), and (iv) waives all rights of
set-off, counterclaims or other defenses to the payment of this Note based upon
or arising out of any actual or alleged breach by the Holder or Stryker of any
of their representations, warranties or covenants under the Asset Purchase
Agreement or any Ancillary Agreements (as defined therein) or any Losses (as
defined therein) indemnifiable by Holder or Stryker under Section 7.02 of the
Asset Purchase Agreement.

In addition, each of the Company and Ember waives any and all rights of
contribution or subrogation upon the sale or disposition of all or any portion
of the Collateral by the Holder.

 

6.  Events of Default. The occurrence of any one or more of the following
conditions or events will constitute an “Event of Default”:

 

(a)  Failure to Pay. The Company or Ember fails to pay the principal or accrued
and unpaid interest due and payable under this Note when due and payable
pursuant to Section 2.

 

(b)  Breach of Other Provisions. The Company or Ember breaches in any material
respect any other provision of this Note, and such breach continues uncured for
a period of thirty (30) days after written notice of the breach has been
delivered to the Company or Ember by the Holder.

 

(c)  Bankruptcy. (i) The Company or Ember commences proceedings seeking either
its own bankruptcy or to be granted a suspension of payments or any other
proceeding under any bankruptcy, reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or liquidation or similar law
of any jurisdiction, whether now or hereafter in effect; (ii) any proceeding
described in clause (i) of this Section 6(c) is commenced or applied to be
commenced against the Company or Ember, which proceeding remains undismissed for
a period of sixty (60) days; (iii) a custodian, trustee, administrator or
similar official is appointed under any applicable law described in clause (i)
of this Section 6(c) with respect to the Company or Ember, or such custodian,
trustee, administrator or similar official takes charge of all or any
substantial part of the property of the Company or Ember; (iv) an adjudication
is made that the Company or Ember is insolvent or bankrupt; (v) the Company or
Ember makes a general assignment for the benefit of its creditors; (vi) an
attachment is made or taken with respect to a substantial part of the assets of
the Company or Ember, and such attachment is not removed or discharged within
ninety (90) days after such attachment is made or taken; or (vii) the Company or
Ember takes any corporate or similar action for the purpose of effecting any of
the actions, orders or events described in the foregoing clauses of this Section
6(c).

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(d) Dissolution or Liquidation. Dissolution or liquidation of the business of
the Company or Ember or suspension of the usual business of the Company or Ember
for a period of thirty (30) consecutive days.

 

(e) Judgments. Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount in excess of the
$100,000 shall be entered or filed against the Company or Ember and the same
shall not be paid, dismissed, bonded, vacated, stayed or discharged within a
period of thirty (30) days or in any event later than five days prior to the
date of any proposed sale of such property thereunder.

 

(f) Other Payment Defaults. The Company or Ember defaults with respect to its
payment obligations under any indebtedness for borrowed money in an aggregate
amount in excess of $100,000.

 

7.  Remedies. Upon the occurrence of an Event of Default other than as described
in Section 6(c), the Holder may declare all amounts payable by the Company or
Ember to the Holder under the terms of this Note immediately due and payable by
the Company or Ember to the Holder. Upon the occurrence of an Event of Default
described in Section 6(c), all amounts payable by the Company or Ember to the
Holder under the terms of this Note will become automatically due and payable
without presentment, protest or demand of any kind. In addition to the foregoing
remedies, the Holder will have all the rights, powers and remedies available
under the terms of this Note, under applicable law or otherwise. Notwithstanding
the foregoing, in the event the Collateral is insufficient security for the
payment in full of the principal of and interest on this Note, the Holder shall
not seek recourse against the Company or its stockholders for the amount of any
such deficiency.

 

8.  Expenses; Costs of Collection. Each of the Company and Ember agrees to pay
all costs and expenses of collection, including reasonable attorneys’ fees and
expenses, arising in connection with any enforcement action by the Holder in
which the Holder prevails on any of its rights under this Note whether by or
through an attorney-at-law or in an action in bankruptcy, insolvency or other
judicial proceedings.

 

9.  Waiver of Notice, etc. Each of the Company and Ember waives presentment for
payment, demand, protest and notice of nonpayment or dishonor and of protest,
and of the exercise of any option under this Note or under the documents
evidencing, securing or relating to the indebtedness evidenced by this Note.

 

10.  Amendment; Waiver; Assignment. No provision of this Note may be amended,
waived or modified except by an instrument in writing signed by, or on behalf
of, the Company, Ember, and the Holder.

 

11.  Assignment. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Company or Ember without the prior written consent of
Holder. Subject to the foregoing, the rights and obligations of the Company,
Ember, and the Holder of this Note will be binding upon and inure to the benefit
of the successors, assigns, heirs, administrators and transferees of the
parties.

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12.  Notices. Any notice, request or other communication required or permitted
under this Note must be in writing and will be deemed to have been duly given if
personally delivered or mailed by registered or certified mail, postage prepaid,
as follows:

 

(a)              if to Holder:

Stryker Corporation

2825 Airview Blvd.

Kalamazoo, MI 49002

Attn: General Counsel

Facsimile: (269)385-2066

E-mail: michael.hutchinson@stryker.com

 

And

 

Stryker Biotech L.L.C.

One Broadway, 14th Floor

Cambridge, MA 02142

Attn: James Kemler, CEO

E-mail: jamie.kemler@stryker.com

 

with a copy to:

 

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199-3600

Facsimile: (617) 235-0398 Email: james.wilton@ropesgray.com Telephone: (617)
951-7474 Attention:  James M. Wilton

(b)              if to Company:

Mariel Therapeutics, Inc. 135 E. 57th St.

24th Floor

New York, NY 10022

Email:  jhernandez@marieltherapeutics.com Telephone:  646-829-1281
Attention: Yosbani Joseph Hernandez, Executive Chairman

 

with a copy to:

 

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Thompson Hine LLP

335 Madison Avenue, 12th Floor

Facsimile: (212) 344-6101 Email: Faith.Charles@ThompsonHine.com Telephone: (212)
908-3905 Attention: Faith L. Charles

(c)              if to Ember:

Ember Therapeutics, Inc. 135 E. 57th St.

24th Floor

New York, NY 10022

Email:  jhernandez@marieltherapeutics.com Telephone:  646-829-1281 Attention:
Yosbani Joseph Hernandez, Executive Chairman

 

Any party hereto may by notice so given change its address for future notice
hereunder. Notice will conclusively be deemed to have been given when personally
delivered or when deposited in the mail in the manner set forth above and will
be deemed to have been received when delivered.

 

13.  Governing Law. This Note shall be governed by and construed in accordance
with the laws of the State of New York, excluding that body of law relating to
conflict of laws.

 

14.  Counterparts. This Note may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Note. 

 

[Remainder of the page intentionally left blank; signature page follows.]

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IN WITNESS WHEREOF, the each of the Company and Ember has caused this Note to be
issued as of the date first above written.

 

MARIEL THERAPEUTICS, INC.

 

By: /s/ Yosbani Joseph Hernandez

Name: Yosbani Joseph Hernandez

Title: Executive Chairman

 

EMBER THERAPEUTICS, INC.

 

By: /s/ Yosbani Joseph Hernandez

Name: Yosbani Joseph Hernandez

Title: Executive Chairman

 

STRYKER BIOTECH L.L.C.

 

By: /s/ James Kemler

Name: James Kemler

Title: Chief Executive Officer

[Signature page to Second Amended and Restated Secured Promissory Note.]

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