Exhibit 10.27


 


Please note parts of this Agreement and attachments are designated
with an “*” which indicates that material has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.


 


VENDOR AND EXCLUSIVITY AGREEMENT FOR
PROVISION OF MEDICAL FOODS


 


THIS VENDOR AND EXCLUSIVITY
AGREEMENT FOR PROVISION OF MEDICAL FOODS (“Agreement”) is entered into and executed effective as of August 15, 2011,
by and between Kalisthenics, Inc. (“Kalisthenics”), and Targeted Medical Pharma Inc. (“TMP”), with respect
to the following recitals:


 


A.                
Kalisthenics is a supplier of various medical products to skilled nursing facilities and other long-term care facilities
in California.


 


B.                
TMP a specialty pharmaceutical company that develops, manufactures and sell and proprietary nutrient pharmaceutical systems
including medical foods as such term is defined in Section 5(b) of the Orphan Drug Act (21 U.S.C. 360ee (b) (3); the “Act”))
(“Medical Foods”) and which are regulated by the United States Food and Drug Administration (“FDA”).


 


C.                
Kalisthenics desires to purchase exclusively from TMP and TMP desires to provide and sell exclusively to Kalisthenics for
distribution into skilled nursing facilities in California all of the Medical Foods set forth in Exhibit A attached hereto (“Medical
Foods Products”), for exclusive distribution as the sole distributor to skilled nursing facilities and other long-term care
facilities in California. Kalisthenics will have the non-exclusive rights for distribution outside of California.


 


D.                
TMP acknowledges that Kalisthenics will be expending significant efforts including time, work and money to establish this
distributorship business thus necessitating a vendor and exclusivity agreement as the sole distributor to skilled nursing facilities
and other long-term care facilities in California.


 


NOW, THEREFORE, the parties agree as follows:


 


1.                 
Kalisthenics Requirements of Medical Foods Products.


 


1.1.           
During the term of this Agreement, TMP shall provide and sell exclusively to Kalisthenics for distribution in California,
its full line of Medical Foods Products. TMP shall not distribute, provide or sell any of its Medical Foods Products to any skilled
nursing or long-term care facility or other provider, distributor or pharmacy other than Kalisthenics, as the sole distributor
for TMP, without the prior written consent of Kalisthenics in California..


 


1.2.           
In the event TMP provides Medical Foods Products to any skilled nursing or long-term care facility or other provider, distributor
or pharmacy, Kalisthenics has the right to request that TMP discontinue providing product to them.


 


1.3.           
The price list for each of the Medical Foods Products is set forth in Exhibit A attached hereto.


 


1.4.           
Kalisthenics acknowledges that its usual total monthly requirements of the Medical Foods Products are set forth in Exhibit
A; provided, however, TMP acknowledges and agrees that (a) Kalisthenics guarantees that it will make an upfront of Medical Foods
Products equal to one year’s supply (the quantity to be determined by the parties), (b) Kalisthenics will purchase minimum
amounts of the Medical Foods Products each month during the term of this Agreement as specified in Exhibit A, and (c) Kalisthenics’
monthly requirements may change from time to time. Notwithstanding the foregoing, in the event that there will be a significant
change in Kalisthenics’ requirements for the Medical Foods Products, Kalisthenics will use commercially reasonable efforts
to provide TMP with notice of such change.


 



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1.5.           
Kalisthenics will provide TMP with its order(s) for its Medical Foods Products Requirements on or before the 15th
day of each calendar month during the term hereof and TMP shall deliver the Medical Foods Products ordered by Kalisthenics to the
Kalisthenics facility on the days of each month and during the times set forth in Exhibit B.


 


2.                 
Invoice; Payment. On or before the 15th day of each calendar month during the term hereof, TMP shall deliver
to Kalisthenics a detailed invoice for all Medical Foods Products purchased by Kalisthenics and delivered by TMP as set forth herein
during the immediately preceding calendar month. Kalisthenics shall pay the amount of each such invoice to TMP within forty-five
(45) days following Kalisthenics’ receipt thereof on a “45-day net” basis.


 


3.                 
Representations and Warrantees of TMP.


 


3.1.           
TMP hereby represents and warrants that at all times during the term of this Agreement (a) all Medical Foods Products have
been manufactured in strict accordance with all applicable federal and state laws, regulations and rules including, without limitation,
the Act and all other requirements of the FDA, and (ii) it is in compliance with the requirements of the FDA Compliance Program
for Medical Foods – Import and Domestic.


 


3.2.           
TMP will disclose to and notify Kalisthenics of any communications made to TMP with respect to product purchase by any skilled
nursing or long-term care facility or other provider, distributor or pharmacy within three (3) days of such communication.


 


4.                 
Term and Termination.


 


4.1.           
The initial term of this Agreement shall be five (5) years commencing on July 1, 2011, and ending on June 30, 2016 (“Initial
Term”), provided that following the Initial Term both parties will negotiate, in good faith, a new 5-year agreement, provided
that Kalisthenics has been and is fulfilling its purchasing obligations hereunder Addendum A. New minimum order requirements to
maintain the Kalisthenics exclusivity will be negotiated by the parties on or before August 1st of each year,


 


4.2.           
Either party may terminate this Agreement for “cause” which, for purposes of this Agreement, shall include,
but not be limited to, the occurrence of one or more of following events:


 


a.                  
The other party is in breach of any material term or condition of this Agreement, and such breach has not been cured within
ten (10) days following notice of such breach.


 



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b.                 
Any representation or warranty by TMP is false or was false at the time it was originally made.


 


5.                 
Jeopardy. Notwithstanding anything to the contrary contained in this Agreement, in the event the performance by either
party hereto of any term, covenant, condition or provision of this Agreement should jeopardize Kalisthenics’ participation
in Medicare, Medi-Cal, or other reimbursement or payment programs, or if for any other reason such performance should be in violation
of any statute, ordinance, or be otherwise deemed illegal, or be deemed unethical by any recognized body, agency, or association
in the medical long-term healthcare fields, the affected party may at its option terminate this Agreement immediately.


 


6.                 
Liquidated Damages. In the event TMP sells or provides Medical Foods Products to any skilled nursing or long-term
care facility or other provider, distributor or pharmacy other than Kalisthenics, TMP will pay Kalisthenics, because damages in
connection with such a breach by TMP are nearly impossible to calculate, liquidated damages equal to (i) lost revenue or potential
profit had Kalisthenics been able to sell such Medical Foods Products, and (ii) TMP’s gross profits made on the sales of
such Medical Foods Products.


 


7.                 
Verification of Costs. If and to the extent required by Section 1395x(v)(1)(A)(I) of Title 42 of the United States
Code, until the expiration of four (4) years after the termination of this Agreement, TMP shall make available, upon written request
to the Secretary of the United States Department of Health and Human Services, or upon request to the Comptroller General of the
United States General Accounting Office, or any of their duly authorized representatives, a copy of this Agreement and such books,
documents and records as are necessary to certify the nature and extent of the costs of the services provided by TMP under this
Agreement.


 


8.                 
Notices. Whenever under the terms of this Agreement written notice is required or permitted to be given by any party
to any other party, such notice shall be deemed to have been sufficiently given (i) on the date of delivery if personally delivered,
or (ii) one (1) day following deposit with a national overnight courier service, or (iii) two (2) days following deposit in the
United States Mail, certified or registered mail, return-receipt-requested, addressed to the party to whom it is to be given at
the address specified on the signature page hereof and to Kalisthenics’ attorney at the following address: Hooper, Lundy
& Bookman, P.C., 1875 Century Park East, Suite 1600, Los Angeles, California 90067, Attn: Mark Johnson. Either party hereto
may change its respective address by written notice in accordance with this Section.


 


9.                 
Relationship of Parties. Neither party is for any purpose an agent, partner or employee of the other; and this Agreement
does not constitute a joint venture between the parties. For all purposes under this Agreement the parties are independent contractors.


 


10.             
Force Majeure. If either party fails to perform its obligations hereunder (except for the obligation to pay money)
because of strikes, accidents, acts of God, weather conditions, or action or inaction of any governmental body or other proper
authority or other causes beyond such party’s control, then such failure to perform will not be deemed a default hereunder
and will be excused without penalty until such time as such party is capable of performing.


 



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11.             
Entirety; Amendment. This Agreement contains the sole and entire agreement between the parties with respect to the
subject matter hereof and shall supersede any and all prior agreements between the parties with respect to such subject matter.
This Agreement may not be amended except by a writing signed by both parties.


 


12.             
Waiver. No waiver of any covenant, condition or limitation contained herein shall be valid unless in writing and
duly executed by the party to be charged therewith. The waiver of any covenant, condition, or limitation contained herein, or of
the breach thereof, shall not be construed as a waiver of any other covenant, condition, limitation or breach, or a waiver of the
same covenant, condition, limitation or breach in any other instance.


 


13.             
Assignment. TMP shall not have the right to assign this Agreement nor any of its rights or obligations hereunder,
and any attempted or purported assignment shall be null and void and of no effect.


 


14.             
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original.


 


15.             
Governing Law. This Agreement shall be governed by the laws of the State of California.


 


16.             
First order of * Units at $* per unit. Kalisthenics shall pay the amount of each such invoice to TMP within one
hundred eighty (180) days following Kalisthenics receipt thereof.


 


17.             
If Kalisthenics does not meet the minimum purchase order as outlined in Addendum A attached to this contract, TMP must give
Kalisthenics advance notice in writing to cancel the exclusivity agreement. Kalisthenics will then have 60 days to cure by buying
the required amount of product.


 



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IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first set forth above.


 


	Kalisthenics:	KALISTHENICS, INC.
	 	 
	 	 	 
	 	By: /s/ David Zeffren                                               
	 	       David Zeffren, Senior Vice President
	 	 
	 	Address:	7846 Commonwealth Avenue
	 	 	Buena Park, CA 90621-2423
	 	 	 
	 	 	 
	TMP:	TARGETED MEDICAL PHARMA INC.
	 	 
	 	 	 
	 	By: /s/ William Shell                                            
	 	        William Shell, CEO
	 	 
	 	Address:	2980 Beverly Glen Circle, Suite 301
	 	 	Los Angeles, CA 90077




 



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EXHIBIT A


Medical Foods Products


 


	Medical Foods Products – Item Nos.	Price per unit	Kalisthenics’ Usual Total Monthly Requirements
	 	 	 
	Theramine	*	*
	 	 	 
	Sentra AM	*	*
	 	 	 
	Sentra PM	*	*
	 	 	 
	GABAdone	*	*
	 	 	 
	Hypertensa	*	*
	 	 	 
	Lister V	*	*
	 	 	 
	AppTrim / AppTrim-D	*	*




 



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EXHIBIT B


Delivery Schedule


 


LOCATION:


 


Kalisthenics Facility


 


7846 Commonwealth Ave


Buena Park, CA 90621-2423


Phone: 888-314-0555


 


Delivery Schedule:


 



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Addendum A: Minimum Purchase Orders


 


	Month	Number of Units
	 	 
	September, 2011	*
	 	 
	October, 2011	*
	 	 
	November, 2011	*
	 	 
	December, 2011	*
	 	 
	January, 2012	*
	 	 
	February, 2012	*
	 	 
	March, 2012	*
	 	 
	April, 2012	*
	 	 
	May, 2012	*
	 	 
	June, 2012	*
	 	 
	July, 2012	*
	 	 
	August, 2012	*




 


Initials_______

           _______






 



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