Adamis Pharmaceuticals Corporation 8-K [admp-8k_091420.htm]

 

Exhibit 10.2

 

AUGUST 2020 AMENDED AND RESTATED
PROMISSORY NOTE
Loan No. 5500000152

$2,092,112.00 August 8, 2020   Little Rock, Arkansas

FOR VALUE RECEIVED, US COMPOUNDING, INC., an Arkansas corporation (“USC”), and
ADAMIS PHARMACEUTICALS CORPORATION, a Delaware corporation (“Adamis” and
together with USC, the “Maker”), jointly, severally, unconditionally and
irrevocably promise to pay to the order of ARVEST BANK, an Arkansas state bank,
as successor in interest to BEAR STATE BANK, N.A., whose mailing address is 2200
W. Pleasant Grove Road, Rogers, Arkansas 72758, its successors and assigns
(“Bank”), or to the order of any subsequent holder hereof, in lawful money of
the United States of America, the principal sum of Two Million Ninety Two
Thousand One Hundred Twelve and No/100 United States Dollars ($2,092,112.00), or
so much as may be advanced hereunder, together with interest on the unpaid
principal balance (calculated on the basis of a hypothetical year of three
hundred sixty (360) days, but multiplied by the actual number of days in the
interest calculation period), from the date hereof at a variable rate which
shall, from day to day, be equal to the lesser of: (a) the maximum rate of
interest which Bank may lawfully charge under applicable Law in effect from time
to time (the “Maximum Rate”), or (b) a rate equal to the sum of: (i) the prime
commercial rate of interest charged by banks in New York, New York, as reflected
in the Central Edition of The Wall Street Journal (the “Prime Rate”) as posted
on August 1, 2020, plus (ii) two and one half of one percent (2.50%), provided
however, the interest rate at any time during the term of this August 2020 Note
shall not be less than six percent (6.00%) per annum. The interest rate shall be
adjusted, daily. Maker further agrees changes in the Prime Rate shall
automatically result in a change in the interest charged pursuant to this August
2020 Amended and Restated Promissory Note (the “August 2020 Note”), and such
change in the interest rate shall be effective regardless of notice to Maker,
resulting in recomputation of the required monthly payment of principal and
interest.

In the event the foregoing provisions should be construed by a court of
competent jurisdiction not to constitute a valid, enforceable designation of a
rate of interest or method of determining same, the unpaid principal balance
pursuant to this August 2020 Note shall bear interest at the Maximum Rate.
Repayment of the indebtedness represented hereby shall be as follows:

Commencing on September 8, 2020, Maker shall pay to Bank monthly payments of
principal and interest, based on a one hundred sixty eight (168) month
amortization period, with a final payment of the entire outstanding principal
balance, all accrued and unpaid interest, accrued as of the Maturity Date, and
all other sums payable pursuant to this August 2020 Note, or any of the other
Security Documents (defined below) being absolutely and unconditionally due and
payable on August 8, 2021 (the “Maturity Date”), unless sooner provided.

Bank undertakes no obligation to extend the maturity of this August 2020 Note,
and Maker acknowledges and agrees that no such representation has been made to
Maker by Bank, or anyone by or on behalf of Bank.

All installments of principal and interest shall be payable to Bank at P.O. Box
1219, Lowell, Arkansas 72745, or such other places as Bank or the holder hereof
may designate in writing from time to time. If any payment of principal and
interest on this August 2020 Note shall become due on a Saturday, Sunday or
public holiday under the laws of the State of Arkansas, on which the Bank or
subsequent holder is not open for business, such payment shall be made on the
next succeeding business day and such extension of time shall in such case be
included in computing interest in connection with such payment.

There shall be due from Maker to Bank, in addition to all other amounts set
forth herein, the sum of Five Hundred and No/100 United States Dollars ($500.00)
plus any legal fees as a loan origination fee payable on or before the execution
date of this Note. This fee is fully earned when paid, non-refundable and shall
not apply as a payment toward principal or interest.

 - 1 - 

 

 

Maker shall pay to Bank a late charge for any installment not received by the
Bank within ten (10) days after the installment is due in the amount of four
percent (4.0%) of the applicable installment and notwithstanding the above; such
late charge shall apply separately to each installment past due, but shall only
be assessed once as to each late payment. Maker stipulates and agrees that any
such late charge(s) shall not be deemed to be additional interest but shall
compensate for Bank’s administrative expenses of addressing late payments. This
provision for late charges shall not be deemed to extend the time for payment or
be a “grace period” or “cure period” that gives Maker a right to cure a default.
Imposition of late charges is not contingent upon the giving of any notice or
lapse of any cure period provided for in the Mortgage and shall not be deemed a
waiver of any right or remedy of Bank, including without limitation,
acceleration of this August 2020 Note.

This August 2020 Note may be prepaid in whole or in part. All payments and
prepayments made by Maker are to be applied first to any late charges,
protective disbursements, and other reimbursements owed to Bank; then in the
reduction of interest then due at the rate stated herein; and any amount
remaining after such payment of interest shall be applied in reduction of the
outstanding principal balance due hereunder.

Upon the occurrence of any of the following events of default (an “Event of
Default”), the holder hereof may declare the entire outstanding indebtedness of
Maker evidenced by this August 2020 Note due and payable as to principal and
accrued interest including any late charges:

(a)                  Maker shall fail to pay any amount of principal or interest
or any pail thereof, under this August 2020 Note by the due date thereof; or

(b)                 Maker shall Voluntarily become a party to any insolvency,
bankruptcy, composition or reorganization proceeding; or make any assignment for
the benefit of creditors; or if any involuntary bankruptcy, insolvency,
composition, or other reorganization proceeding be filed against Maker, and the
same shall not be dismissed within thirty (30) days alter the commencement of
any such involuntary proceeding; or

(c)                Upon any default in any of the terms, warranties, covenants,
provisions obligations contained in any Security Document (defined herein) or
under any other promissory note or guaranty executed by or other obligation owed
(directly or as a guarantor of indebtedness owed to Bank by any person or
entity) by Maker to Bank; or

(d)                Upon any default in any other trust deed, mortgage, security
agreement, assignment, or other instrument of pledge, security or hypothecation
which now or hereafter secures the payment of the indebtedness evidenced hereby;
or

(e)                Upon any default by Maker in any of the terms, warranties,
covenants, provisions or obligations contained in the Warrant (as defined in the
Security Documents); or

(f)                 Upon any default in any of the terms, warranties, covenants
ox provisions of any of the Security Documents (defined below) or any other
promissory note executed by or other obligation owed by Maker to Bank entitling
Bank to accelerate the maturity of this August 2020 Note.

If this August 2020 Note is placed in the hands of an attorney for collection,
by suit or otherwise, or for the protection of Bank’s interest hereunder, Maker
shall pay all costs of collection and all court costs and attorneys’ fees, costs
and expenses incurred by Bank, including, but not limited to, attorneys’ fees,
costs and expenses incurred in any bankruptcy proceeding in which Maker or any
other obligor appears as a debtor.

From and after the Maturity Date hereof or the date of default (in the event of
acceleration of the indebtedness evidenced hereby by reason of Maker’s default
or otherwise), the entire indebtedness due hereunder including any accrued
interest and late charges shall bear interest, at the option of Bank, at a rate
equal to the lesser of (i) the rate in effect at the time of default, plus three
percent (3.0%); or (ii) the Maximum Rate, until payment in full of all principal
and interest, late payment charges and other sums due hereunder are made.

Maker waives presentment, demand, protest, and notice of protest, demand,
dishonor and nonpayment.

 - 2 - 

 

Time is of the essence of all obligations to be performed by Maker hereunder.
Any reference herein or in the other Security Documents to a day or business day
shall be deemed to refer to a banking day which shall be a day on which Bank is
open for the transaction of business, excluding any national holidays, and any
performance which would otherwise be required on a day other than a banking day
shall be timely performed in such instance, if performed on the next succeeding
business day. Notwithstanding such timely performance, ‘interest shall continue
to accrue hereunder until such payment or performance has been made.

Maker authorizes Bank, as provided in the Security Documents, without notice or
demand and without affecting its liability hereunder, from time to time, to take
and hold security for the payment of this August 2020 Note or any renewals or
extensions hereof; perfect such security, whether or not such security is
required as a condition to the making of the Loan evidenced by this August 2020
Note; exchange, enforce, waive or release (whether intentionally or
unintentionally) any such security, or any part thereof; purchase such security
at a public or private sale (without any obligation to so purchase) and apply
such security and direct the order or manner of sale thereof as Bank, in its
discretion, may determine.

It is the intention of Bank and Maker to comply strictly with applicable usury
law, as may be preempted by federal law. In no event, and upon no contingency,
shall die Bank or subsequent holder hereof ever be entitled to receive, collect
or apply as interest, any interest, fees, charges or other payments equivalent
to interest, in excess of the Maximum Rate which Bank may lawfully charge under
applicable statutes and laws from time to time in effect; and in the event the
Bank or subsequent holder hereof ever receives, collects, or applies as
interest, any such excess, which, but for this provision, would be excessive
interest, shall be applied to the reduction of the principal amount of the
indebtedness hereby evidenced; and if the principal amount of the indebtedness
evidenced hereby, all lawful interest thereon and all lawful fees, prepayment
premiums and charges in connection therewith, are paid in full, any remaining
excess shall forthwith be paid to Maker, or other party lawfully entitled
thereto. Any provision hereof or any other agreement between the Bank and Maker
that operates to bind, obligate or compel the undersigned to pay interest in
excess of the Maximum Rate shall be construed to require the payment of the
Maximum Rate only. The provisions of this paragraph shall be given precedence
over any other provision contained herein, or in any other agreement between the
holder and the undersigned that it is in conflict with the provisions of this
paragraph.

If any provision hereof shall be construed to be invalid or unenforceable, the
remaining provisions hereof shall not be affected by such invalidity or
unenforceability. Each term or provision hereof shall, however, be valid and be
enforced to the fullest extent permitted by law.

This August 2020 Note and the indebtedness represented and evidenced hereby is
secured by, among other things, a Loan Amendment and Assumption Agreement
executed September 30, 2016 (as subsequently amended), and, upon mutual
agreement of Maker and Bank, may now or hereafter be secured by other mortgages,
guaranties, trust deeds, assignments, security agreements, or other instruments
of pledge or hypothecation (collectively, the “Security Documents” or
separately, a “Security Document”).

Upon the occurrence of any Event of Default, Bank shall have the right,
immediately, and without notice to the Maker, to set off against this August
2020 Note all money owed by the Bank in any capacity to Maker, or to any
endorser or other person who is or may be liable for payment hereof, whether or
not due, and the Bank shall be deemed to have exercised such right of setoff and
to have made a charge against such money immediately upon the occurrence of such
Event of Default even though such charge is made or entered on the books of the
Bank subsequently thereto.

The rights, obligations and liabilities of Maker hereunder may not be assigned,
either in whole or in part, to any other person or party whomsoever. This August
2020 Note may be negotiated or assigned by Bank, either in whole or in part, and
any negotiation or assignment hereof or of the Security Documents, or any
portion or portions hereof or thereof, shall operate to vest in any such
transferee the rights and powers, either in whole or in part, as the context so
requires, herein and therein granted to Bank. In the event Bank shall transfer
this August 2020 Note or the other Security Documents in whole, Bank shall
thereupon be relieved of all duties, responsibilities and liabilities whatsoever
hereunder or thereunder. Bank may share with any potential transferee or
participant any information regarding Maker or any collateral securing this
August 2020 Note.

 - 3 - 

 

This August 2020 Note shall be governed by and construed in accordance with the
laws of tile State of Arkansas and, as to the maximum rate of interest, by
applicable federal laws.

This August 2020 Note: (i) is merely an amendment and restatement of the
existing debt obligations represented by that certain Promissory Note of 4 HIMS,
LLC, an Arkansas limited liability company, in favor of Bank in the amount of
$2,586,892.09 (Loan No. 5500000152) (the “Initial Note”) as amended by that
certain September 2016 Amended, Restated and Substituted Promissory Note dated
September 30, 2016 in the principal amount of $2,453,879.12 (the “September 2016
Note”); (ii) is not a novation, substitution or creation of a new debt
obligation of Bank; and (iii) shall not change or affect in any manlier the
conditions and stipulations of the documents evidencing or securing the loan
evidenced by the Initial Note (collectively, the “Loan Documents”), except as
herein specifically provided. Specifically, this Note merely restates, amends
and substitutes the Initial Note and the September 2016 Note, the indebtedness
hereinafter being evidenced by this Note without release of any other
instrument, Security Document or Loan Document.

(Signature Page Follows.)

 - 4 - 

 

 

Signature Page
AUGUST 2020 AMENDED AND RESTATED PROMISSORY NOTE

MAKER AND BANK FULLY, VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY
WAIVE ANY RIGHT TO A TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN ANY DISPUTE,
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) UNDER THIS AGREEMENT, OR UNDER ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED (OR WHICH MAY IN THE FUTURE BE DELIVERED) IN
CONNECTION HEREWITH. MAKER AND BANK AGREE THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO BANK TO PROVIDE THE FINANCING TO MAKER PURSUANT HERETO.
MAKER AND BANK ARE AWARE OF THE DECISIONS IN TILLEY V. MALVERN NATIONAL BANK,
2017 ARK. 343 (2017) AND 2019 ARK. 376 (2019), AND INTEND TO FOLLOW THE
PROVISION OF ARK. CODE ANN. § 16-30-104; HOWEVER, TO THE EXTENT THE JURY TRIAL
WAIVER PROVIDED HEREIN IS DEEMED UNENFORCEABLE, MAKER AND BANK AGREE SUCH
PROVISION SHALL BE SEVERED WITHOUT AFFECT UPON THE ENFORCEABILITY OF THE
REMAINING PROVISIONS OF THIS AUGUST 2020 NOTE.

  MAKER:   US COMPOUNDING, INC.,   an Arkansas corporation               By: /s/
Robert O. Hopkins   Name: Robert O. Hopkins   Title: SVP & CFO           ADAMIS
PHARMACEUTICALS CORPORATION,   a Delaware corporation               By: /s/
Robert O. Hopkins   Name: Robert O. Hopkins   Title: SVP & CFO

 

 

 

 

 - 5 -