PKBO Peak Bio Inc (CE)

Exhibit 10.1

SENIOR SECURED PROMISSORY NOTE

Dated January 23, 2024

FOR VALUE RECEIVED, the undersigned, PEAK BIO, INC., a Delaware corporation (the “Company”), hereby promises to pay Hoyoung Huh, his successors and assigns (the “Lender”), on or before January 23, 2025 (the “Maturity Date”), the principal sum of SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($750,000.00) or such lesser sum which as shall equal the then-outstanding principal amount hereof (the “Bridge Loan”), in lawful money of the United States of America in immediately available funds, together with interest from the date of this Senior Secured Promissory Note (the “Note”), at the rate set forth in Section 2 below. The Company will seek additional Bridge Loans of up to an additional FOUR MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($4,250,000) (the “Senior Secured Loan Cap”) on the same terms and conditions of this Note. The Lender acknowledges and agrees that the Company may secure additional bridge loans and enter into one or more other senior secured promissory notes and security agreements on substantially the same terms as this Note and Security Agreement (as defined below) with additional lenders (collectively with the “Lender” the “Lenders”) up to the Senior Secured Loan Cap (collectively, with this Note, the “Notes” and with the Security Agreement (the “Security Agreements”) and for purposes hereof and thereof, a “Majority-in-Interest” means collectively the Lender and such other Lenders holding more than 50% of the aggregate outstanding principal amount of all of the Notes so issued.

1. Interest. Interest will accrue on the unpaid principal sum from time to time outstanding from the date of this Note at a rate of 15.00% per annum. Interest shall be calculated on the basis of actual number of days elapsed over a year of 365 days. Notwithstanding any other provision of this Note, the Lender does not intend to charge, and the Company shall not be required to pay, any interest or other fees or charges in excess of the maximum permitted by applicable law; any payments in excess of such maximum shall be refunded to the Company or credited to reduce the principal hereunder.

2. Payments and Distributions. The Company may repay this Note and any accrued and unpaid interest, from time to time. There shall be no scheduled principal payments on this Note other than on the Maturity Date. All outstanding principal and accrued and unpaid interest will be paid in cash on the Maturity Date.

3. Security Agreement. This Note is executed and delivered together with a Security Agreement substantially in the form attached hereto as Exhibit A between the Company and the Lender.

4. Prepayment. This Note may be prepaid by the Company in whole or in part, at any time or from time to time, without penalty or premium. All payments received by the Lender will be applied first to costs of collection, if any, then to interest and the balance to principal.

5. Events of Default and Remedies. If any of the following events (each, an “Event of Default”) occurs: (a) the outstanding principal amount of the Note is not paid by the Maturity Date, and such default continues unremedied for a period of 10 calendar days; (b) any failure by the Company to perform any of its obligations under this Note or the Security Agreement, and such default continues unremedied for a period of 30 calendar days; or (c) the occurrence of any of the following: (i) the making of a general assignment for the benefit of creditors; (ii) the filing of any petition or the commencement of any proceeding by or against the Company or any guarantor for any relief under any bankruptcy or insolvency laws, or any laws relating to the relief of debtors, readjustment of indebtedness, reorganizations, compositions, or extensions; (iii) any action initiating the dissolution, liquidation, winding-up or termination of the Company; or (iv) the appointment of a receiver, liquidator, custodian, trustee or similar official or fiduciary for the Company or any guarantor or for any of its property, then:

(I) in an Event of Default described in Sections (a) and (b) above, and at any time thereafter during the continuance of such event, the Lender may by notice to the Company declare the principal amount then outstanding under this Note to be forthwith due and payable in whole or in part, whereupon the principal amount so declared to be due and payable shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Company, anything contained herein to the contrary notwithstanding; and (II) in any event with respect to an Event of Default described in Section (c) above, the principal amount of the Note then outstanding and all other liabilities of the Company accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Company, anything contained herein to the contrary notwithstanding. If any action or proceeding is brought by the Lender to collect or enforce payment of this Note, then the Company shall pay to the Lender any reasonable attorneys’ fees and other reasonable costs and expenses incurred in connection with such collection or enforcement.

6. Waivers; Amendments. Any provision of this Note and the Security Agreement may be amended, waived or modified by written consent of the Company and either (i) the Lender or (ii) a Majority-in-Interest of all then-outstanding Notes, provided that with respect to (A) the principal and interest of a Note may not be amended, waived or modified in this manner, (B) the consent of the Lender and each of the Lenders under such Notes must be solicited (even if not obtained), and (C) such amendment, waiver or modification treats all such Lenders in the same manner. No failure or delay of the Lender in exercising any power or right hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or future exercise thereof or the exercise of any other right or power. The Company hereby expressly waives demand and presentment for payment, notice of nonpayment, notice of dishonor, protest, notice of protest, bringing of suit, and diligence in taking any action to collect amounts called for hereunder, and shall be directly and primarily liable for the payment of all sums owing and to be owing hereon, regardless of and without any notice, diligence, act or omission with respect to the collection of any amount called for hereunder or in connection with any right, lien, interest or property, if any, at any and all times which Lender had or is existing as security for any amount called for hereunder. 

7. Assignment; Successors and Assigns. This Note and the obligations hereunder may not be assigned by the Company without the prior written consent of the Lender, which shall not be unreasonably withheld. Any reference to the Lender hereof shall be deemed to include the successors and assigns of such Lender, and all covenants, promises, and agreements by or on behalf of the Company that are contained in this Note shall bind and inure to the benefit of the successors and assigns of the Lender and to any future holders of this Note, whether or not such persons expressly become parties hereto or thereto.

8. Modification or Discharge. This Note shall not be modified or discharged (other than by payment or as required by law) except by a writing duly executed by the Company and the Lender.

9. Controlling Law. This Note and all matters related hereto shall be governed, construed and interpreted strictly in accordance with the laws of the State of New York without regard to its principles of conflicts of law.

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11. WAIVER OF JURY TRIAL. THE COMPANY WAIVES ALL RIGHTS TO TRIAL BY JURY OF ANY CLAIMS OF ANY KIND ARISING UNDER OR RELATING TO THIS NOTE. THE COMPANY ACKNOWLEDGES THAT THIS IS A WAIVER OF A LEGAL RIGHT AND REPRESENTS TO THE LENDER THAT THIS WAIVER IS MADE KNOWINGLY AND VOLUNTARILY AFTER CONSULTATION WITH COUNSEL. THE COMPANY AGREES THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT OF COMPETENT JURISDICTION WITHOUT A JURY. THIS WAIVER OF JURY TRIAL IS A MATERIAL PART OF THE CONSIDERATION FOR THE LOAN EVIDENCED BY THIS NOTE.

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EXHIBIT A

SECURITY AGREEMENT

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1

Exhibit 10.2

SECURITY AGREEMENT

This Security Agreement (this “Agreement”) by and among (i) PEAK BIO, INC., a Delaware corporation (the “Company”), PEAK BIO CO., LTD., a company orgainized under the laws of the Republic of Korea (“Peak Bio Korea”), PEAK BIO CA, INC., a California corporaiton (“Peak Bio California” and collectively with the Company and Peak Bio Korea, the “Company Entities”), and (ii) Hoyoung Huh (the “Lender”) is made as of this 23^rd day of January, 2024.

A. The Lender has extended a term loan facility to the Company and the Company has issued a promissory note in the original principal amount of $750,000 (the “Note”) to the Lender to evidence its obligations thereunder.

B. As a condition to the closing on the loan, the Company Entities have agreed to grant a security interest in the Collateral (defined below).

NOW, THEREFORE, in consideration of the covenants and mutual considerations provided in this Agreement, and intending to be legally bound, the parties hereto agree as follows:

1. Security.

(a) Grant of Security Interest. As security for the payment and performance of all of the Company’s indebtedness and obligations arising under the Note and any renewals, modifications, and extensions thereof (collectively, the “Obligations”), each of the Company Entities hereby assigns and grants to the Lender a continuing lien on and security interest in the following collateral (the “Collateral”):

(a) all of the Company Entities’ assets, including, without limitation, all fixtures and personal property of every kind and nature including all accounts, goods, documents (including, if applicable, electronic documents), instruments, promissory notes, chattel paper (whether tangible or electronic), letters of credit, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), securities and all other investment property, general intangibles (including all payment intangibles), money, deposit accounts, and any other contract rights, licenses or rights to the payment of money; and

(b) all Trademarks, Copyrights, Patents (including licenses and contracts related thereto), Proceeds and products of each of the foregoing, all books and records relating to the foregoing, all supporting obligations related thereto, and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to Borrower from time to time with respect to any of the foregoing. As used in this Agreement, (i) “Proceeds” means “proceeds” as such term is defined in Section 9-102 of the Uniform Commercial Code (“UCC”) as in effect in the State New York, or as in effect in any other jurisdiction to the extent the perfection, or the effect of perfection or non-perfection, of Lender’s security interests in any Collateral or the availability of any remedy hereunder is governed by the UCC or any other applicable law as in effect on or after the date hereof in such other jurisdiction and, in any event, shall include, without limitation, all dividends or other income from the Collateral, collections thereon or distributions with respect thereto; (ii) “Trademarks” means trademarks, service marks, corporate names, trade names, brand names, product names, logos, slogans, trade dress and other indicia of source or origin, any applications and registrations for any of the foregoing and all renewals and extensions thereof, and all goodwill associated therewith and symbolized thereby; (iii) “Copyrights” means works of authorship (whether or not copyrightable, including all software, whether in source code or object code format) and all copyrights (whether or not registered), including all registrations thereof and applications therefor, and all renewals, extensions, restorations and reversions of the foregoing; and (iv) “Patents” means patents, registrations, invention disclosures, and patent applications, including divisionals, provisionals, continuations, continuations-in-part, renewals, supplementary protection certificates, extensions, reissues and reexaminations thereof, and all patents that may issue on such applications.

The Company shall execute and deliver to the Lender any agreements, documents and instruments upon request to evidence, perfect or protect his lien and security interest in the Collateral hereunder and shall deliver to the Lender all items of which he must receive possession to obtain a perfected security interest. The Company hereby authorizes the Lender to file all financing statements and amendments to financing statements describing the Collateral in any filing office. A reproduction or copy of this Agreement or of a financing statement is sufficient as and may be filed in lieu of a financing statement.

(b) Rights and Remedies on Default. In addition to all other rights and remedies granted to the Lender under this Agreement, the Lender may, upon the occurrence of a default by the Company under any Note (a “Default”), exercise any other rights granted to him under the New York UCC and any other applicable law. The Company hereby agrees that a notice received by it at least ten (10) days before the time of any intended public sale or of the time after which any private sale or other disposition of the Collateral is to be made, shall be deemed to be reasonable notice of such sale or other disposition. The Company covenants and agrees not to interfere with or impose any obstacle to the Lender’s exercise of his rights and remedies with respect to the Collateral, after the occurrence of a default hereunder or under any Note. The Lender shall have the right to proceed against all or any portion of the Collateral in any order and may apply such Collateral to the liabilities and obligations of the Company to the Lender in any order. All rights and remedies granted to the Lender hereunder and under any agreement referred to herein, or otherwise available at law or in equity, shall be deemed concurrent and cumulative, and not alternative remedies, and the Lender may proceed with any number of remedies at the same time until all Obligations of the Company to the Lender are satisfied in full. The exercise of any one right or remedy shall not be deemed a waiver or release of any other right or remedy, and the Lender, upon the occurrence of a Default, may proceed against the Company, and/or the Collateral, at any time, under any agreement, with any available remedy and in any order.

(c) Power of Attorney. Upon a Default, the Lender is hereby irrevocably made, constituted and appointed the true and lawful attorney for the Company (without requiring him to act as such) with full power of substitution to execute in the name of the Company, schedules, assignments, instruments, documents and statements that the Company is obligated to give the Lender hereunder or is necessary to perfect (or continue to evidence the perfection of such security interest and lien) and do such other and further acts and deeds in the name of the Company that the Lender may reasonably deem necessary or desirable to enforce the Lender’s rights hereunder or perfect the Lender’s security interests and liens in the Collateral.

(d) Release of the Company. The security granted under this Section 1 shall terminate and be released when the Obligations have been indefeasibly paid in full in cash or otherwise performed in full. Upon such release of the Obligations hereunder, the Lender will promptly return any Collateral to the Company and shall promptly execute and deliver all instruments and documents, and do all other acts and things, reasonably required for the return of the Collateral to the Company, and to evidence or document the release of the Lender’s interests arising under this Section 1 as reasonably requested by the Company.

2. Representations and Warranties. The Company hereby represents and warrants as follows: (a) the Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full power and authority to perform the transactions contemplated hereby; and (b) this Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and equitable principles of general application (whether applied in a proceeding at law or equity).

3. Miscellaneous.

(a) The provisions of this Agreement shall be binding upon, and inure to the benefit of, the respective successors, assigns, heirs, executors and administrators of the parties hereto. The parties agree that no other person is intended to be a beneficiary of this Agreement.

(b) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision.

(c) This Agreement constitutes the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. This Agreement may be amended, superseded, canceled, renewed or extended only by a written instrument signed by all of the parties.

(d) The parties hereto agree to execute and deliver, or cause to be executed and delivered, such further instruments or documents or take such other action as may reasonably necessary or convenient to carry out the transactions contemplated hereby.

(e) This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to principles of conflict of laws.

(f) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same document. Facsimile execution and delivery of this Agreement shall be legal, valid and binding execution and delivery for all purposes.

(g) In addition to any and all other remedies that may be available at law in the event of any breach of this Agreement, the parties shall be entitled to specific performance of the agreements and obligations of the other parties hereunder and to such other injunctive or other equitable relief as may be granted by a court of competent jurisdiction.

(h) No delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by any other party under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. All remedies, either under this Agreement, or otherwise afforded to any party, shall be cumulative and not alternative.

(i) The Company agrees to pay on demand all reasonable costs and expenses incurred by or on behalf of the Lender (including, without limitation attorneys’ fees and expenses) in enforcing the obligations of the Company under this Agreement.

(j) Each of the parties agrees to keep secret and confidential and shall not disclose any terms or conditions of this Agreement to anyone except to its own advisors and representatives who are actually engaged in the transactions prescribed by the Agreement and except as needed to obtain any consents and waivers required hereby. The existence of this Agreement is considered confidential information.

(k) Time is of the essence in the performance of obligations of the parties hereunder.

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IN WITNESS WHEREOF, the parties hereto have executed this Security Agreement on the day first written above.