Adamis Pharmaceuticals Corp 8-K


Exhibit 10.1


 


[***]  Certain
information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is both not material
and is the type that the Registrant treats as private or confidential.


 

SUPPLY
AGREEMENT ADDENDUM


 


This
Supply Agreement Addendum (the “Addendum”), is entered into by and between Fagron Compounding Services,
LLC d/b/a Fagron Sterile Services (“FSS” or “Purchaser”), US Compounding,
Inc. (“USC”) and Adamis Pharmaceuticals Corporation (“Owner”), and is entered
into in connection with the Asset Purchase Agreement entered into by the Parties contemporaneously herewith (the “Sales
Agreement”).


 


WHEREAS,
the Parties have entered into the Asset Purchase Agreement contemporaneously herewith;


 


WHEREAS,
on and after the Effective Date, Purchaser may not be willing or able to manufacture all products that USC sold to the Book
of Business Customers prior to the Effective Date;


 


WHEREAS,
Purchaser wishes to have USC fill orders that it gets from Book of Business Customers for certain products, as listed in Exhibit
E-1 hereto (such products, the “Products”), during the 90 (ninety) day period (or such extended
period, as may be mutually agreed by the Parties in writing, including in connection with Section 3.2 herein) following
the Effective Date (the “Transition Period”), in order to provide Purchaser time to transition to replacement
offerings;


 


WHEREAS,
USC wishes to sell such Products, on the terms and subject to the conditions contained herein, in order to enable Purchaser
to fulfill orders for Products from the Book of Business Customers during the Transition Period; and


 


WHEREAS,
Purchaser and USC agree that the sale of the Products are regulated by the Federal Food Drug and Cosmetic Act, and regulations
of the Federal Food and Drug Administration (“FDA,” and such laws being referred to as
“Good Manufacturing Practices” or “cGMP”).


 


NOW,
THEREFORE, in consideration of the mutual representations, warranties, covenants, agreements, and conditions contained herein,
and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:


 


ARTICLE
I CERTAIN DEFINITIONS


 


1.1       General.
Any capitalized term used but not defined herein will have the meaning set forth in the Sales Agreement.


 


1.2       “Specifications”
means the procedures, requirements, formulae and standards related to Products, and as stated in Exhibit E-1.


 


 



     


     


    




ARTICLE
II OBLIGATIONS OF USC


 


Subject
to the limitations and conditions of this Addendum and the Sales Agreement, during the Transition Period, USC will:


 


2.1       Promptly
fill orders for Products from Customers in the Book of Business, as relayed to USC by Purchaser, at the price per Product set
forth in Exhibit E-1. For the avoidance of doubt, Purchaser shall never take possession or ownership of the Products. USC
shall ship Products directly to customers, and shall have sole responsibility for all regulatory compliance requirements relating
to the Products unless specifically otherwise agreed to by the Parties. Orders for Products to Customers will be shipped on or
before the second business day following the date on which they are received, provided that USC is provided all required information.
Standard shipping costs are included in the prices listed in Exhibit E-1.


 


2.2       Provide
Products which conform, in all material respects, to the Specifications and are consistent, in all material respects, with the
products that USC supplied to Customers prior to the Effective Date.


 


 2.3      Have
in stock, as of the Effective Date, the minimum inventory of each Product set forth opposite the name of such Product on Exhibit
E-1, with sufficient shelf life to be saleable during the Transition Period. For the avoidance of doubt, USC is not under
any obligation to manufacture additional quantities of any Product after the inventory set forth on Exhibit E-1 has been
sold pursuant to this Addendum. However, while Purchaser is not obligated to make sales to consume the quantities of Products
specified on Exhibit E-1, Purchaser agrees to use its best efforts to make sufficient sales during the Transition Period
to consume the quantities of Products specified on Exhibit E-1.


 


2.4       Invoice
Purchaser on a monthly basis, based on the pricing set forth on Exhibit E-1, which is fair market value in an arm's-length
transaction, consistent with the general market value of the subject transaction, for all Products ordered by Customers during
the Transition Period which were fulfilled by USC, and maintain appropriate records to support all invoices. For the avoidance
of doubt, the monthly invoice for sales of Products during the last month of the Transition Period shall be provided promptly
following the expiration of the Transition Period.


 


2.5       Handle
all customer inquiries, complaints, adverse event investigation and reporting, and recalls or market withdrawals relating to orders
filled by USC.


 


2.6       Reasonably
cooperate with Purchaser to (i) resolve any disputes with Customers and (ii) ensure a high-quality Customer experience.


 


2.7       At
all times operate, in all material respects, in compliance with all applicable laws relating to the sales of Products, including
cGMP.


 






     


     


    

 


ARTICLE
III OBLIGATIONS OF PURCHASER


 


Subject
to the limitations and conditions of this Addendum and the Sales Agreement, during the Transition Period, Purchaser will:


 


3.1       Where
it does not make a Product that would satisfy a Customer in the Book of


Business
and such Customer wishes to order a Product, Purchaser will relay orders from Customers in the Book of Business to USC during
the Transition Period. Such relayed orders will include all information necessary for USC to properly fill the orders. Purchaser
shall be solely responsible for the accuracy of information related to orders for Products from Customers pursuant to this Addendum.


 


3.2       For
any Products that Purchaser does not begin manufacturing during the Transition Period, but Book of Business Customers continue
to order, Purchaser shall continue to relay such orders to USC until the minimum inventory listed in Exhibit E-1 is exhausted
or is no longer salable for any reason, including insufficient shelf life for individual Products.


 


3.3       Handle
all customer inquiries and complaints relating to orders for Products filled by Purchaser and not dispensed under UCS’s
label.


 


3.4       Pay
USC, in immediately available funds, for all invoices delivered by USC to Purchaser pursuant to Section 2.4 herein. All
payments shall be due within thirty (30) days of USC invoicing Purchaser for such deliveries.


 


ARTICLE
IV COMPLIANCE WITH LAWS


 


4.1       The
Parties intend for this Addendum to comply with all applicable laws. Should any of the Parties reasonably conclude that any portion
of this Addendum does not comply with any applicable law or regulation, the Parties will negotiate in good faith to modify as
appropriate to ensure legal compliance. Should the Parties fail to reach a mutually agreeable resolution which brings this Addendum
into compliance with applicable laws and regulations, this Addendum shall be deemed automatically terminated upon such failure,
and all amounts due to USC for orders fulfilled prior to such termination shall become immediately due and payable.


 


ARTICLE
V PATENTS & INTELLECTUAL PROPERTY


 


5.1       The
trademarks, patents and other intellectual property of each of the Parties prior to the Effective Date shall remain the property
of the respective owners of such intellectual property and nothing herein shall be construed so as to transfer ownership of any
such intellectual property from the owner of the same prior to the Effective Date.


 


ARTICLE
VI USC'S WARRANTY


 


6.1       Compliance
with Specifications. USC warrants that the Products will be in material compliance with the Specifications and the other provisions
of this Addendum respecting quality and cGMP and any other applicable law or regulatory requirement (including as it relates to
the adulteration or misbranding of Products, as those terms are defined by the Federal Food Drug and Cosmetic Act, as amended,
and regulations issued thereunder) at the time such Products are delivered to a common carrier for shipment to Book of Business
Customers.


 



     


     


    

 


6.2       USC
warrants that all goods delivered hereunder shall be merchantable, fit for their intended purpose and free from defects, whether
latent or apparent. USC warrants that all services performed hereunder shall be performed in a good and workmanlike manner by
qualified, trained personnel, free from material errors.


 


6.3       EXCEPT
AS EXPRESSLY SET FORTH IN THIS ADDENDUM, USC MAKES NO OTHER REPRESENTATIONS, STATEMENTS OR WARRANTIES WITH RESPECT TO THE SERVICES
TO BE PROVIDED PURSUANT TO THIS ADDENDUM, AND ALL IMPLIED WARRANTIES ARE HEREBY DISCLAIMED.


 


ARTICLE
VII INDEMNIFICATION


 


7.1       USC
will defend, indemnify, and hold Purchaser and its officers, directors,


employees,
agents, affiliates, insurers, consultants and attorneys (the “Purchaser Indemnitees”) harmless from
and against any and all claims, losses, liabilities, damages, costs and expenses actually incurred (including, without limitation,
reasonable fees and expenses of attorneys incurred by Purchaser) arising from or relating to USC’s breach of this Addendum.
The indemnification provisions herein shall not apply to the extent that a loss is caused by the negligence or intentional conduct
of the Purchaser Indemnitees.


 


7.2       Purchaser
will defend, indemnify, and hold USC and its officers, directors, employees, agents, affiliates, insurers, consultants and attorneys
(the “USC Indemnitees”) harmless from and against any and all claims, losses, liabilities, damages,
costs and expenses actually incurred (including, without limitation, reasonable fees and expenses of attorneys incurred by USC)
arising from or relating to Purchaser’ breach of this Addendum. The indemnification provisions herein shall not apply to
the extent that a loss is caused by the negligence of intentional conduct of the USC Indemnitees.


 


7.3       Each
Party hereby waives, acknowledges and agrees that it shall not have and shall not exercise or assert, any right of indemnity or
other right or remedy under the terms of this Addendum against any other Party in connection with any right of indemnity or other
right or remedy brought against such other Party under the terms of the Sales Agreement.


 


7.4       Notwithstanding
anything to the contrary herein, no Party shall be liable, whether in contract, in tort (including negligence and strict liability),
in connection with the indemnification obligations in this Article VII or otherwise, for any special, indirect, punitive,
exemplary, incidental or consequential damages whatsoever which in any way arise out of this Addendum.


 


ARTICLE
VIII INSURANCE


 


8.1       USC
shall obtain and maintain product liability insurance covering the Products with policy limits of not less than $2,000,000 and
shall maintain such insurance for four years after shipment of the Product pursuant to this Addendum, which coverage may be satisfied
through tail coverage. Upon request, evidence of such insurance shall be provided by USC to Purchaser.


 



     


     


    

 


ARTICLE
IX TERM AND TERMINATION


 


9.1       Term.
This Addendum shall automatically terminate upon the earlier to occur of (a) expiration of the Transition Period and (b) the
sale of all quantities of Products set forth on Exhibit E-1, unless terminated earlier or extended in accordance with this
Addendum.


 


9.2       Termination.
A party not in default under this Agreement (the "Non-Defaulting Party") may terminate this Agreement
by giving written notice to the other party (the "Defaulting Party") of the Non-Defaulting Party's intention
to terminate this Agreement upon the occurrence of either or both of the following events:


 


(a)        a
material breach by the Defaulting Party of any of its obligations hereunder; or


 


		(b)	the
                                         filing by or against the Defaulting Party of a petition in bankruptcy, or any appointment
                                         of a receiver for the Defaulting Party or any substantial part of its assets, or any
                                         assignment for the benefit of the Defaulting Party's creditors.



 


Such
notice will identify a date for termination of this Agreement, which date will not be sooner than fifteen (15) business days after
receipt of such notice by the Defaulting Party ("Termination Date"). If the event on which the notice
is based is not cured prior to the Termination Date, then this Agreement shall terminate on the Termination Date pursuant to such
notice.


 


9.3       Effect
on Other Agreements/Survival of Certain Provisions. Any Sections which by their nature are intended to survive termination
of expiration of this Addendum shall survive any such termination or expiration including: Articles V through XI.


 


ARTICLE
X MISCELLANEOUS


 


10.1     Entire
Agreement. This Addendum, along with the exhibits hereto and the Sales Agreement constitute the entire agreement between USC
and Purchaser with respect to, among other things, the sale of Products by USC. In the event of any inconsistency between this
Addendum and the Sales Agreement, the Sales Agreement shall control.


 


10.2     No
Strict Construction. The Parties hereto have participated jointly in the negotiation and drafting of this Addendum. In the
event an ambiguity or question of intent or interpretation arises, this Addendum shall be construed as if drafted jointly by the
Parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any Party hereto by virtue of the authorship
of any of the provisions of this Addendum.


 


10.3     Assignment.
The obligations of the Parties hereunder shall not be assignable except with the written consent of the other Parties.


 



     


     


    

 


10.4     Independent
Status. This Addendum shall not be construed as forming a partnership, joint venture or similar relationship between any of
the Parties. All employees and representatives of USC providing services pursuant to this Addendum shall be under the direction,
control and supervision of USC (and not of Purchaser), and USC shall have the sole right to exercise all authority with respect
to such employees and representatives and in no event shall such employees and representatives be deemed to be employees or agents
of Purchaser.


 


10.5     Force
Majeure. Neither Party will be liable to the other for failure to perform any part of this Addendum if such failure results
from an act of God, war, terrorism, revolt, revolution, sabotage, actions of a governmental entity, laws, regulations, embargo,
fire, strike, other labor trouble, endemic, insolvency or other financial difficulty of any manufacturer or any cause beyond a
party's control. Upon the occurrence of any such event which results in, or will result in, delay or failure to perform according
to the terms of this Addendum, the impacted party will promptly give notice to the other party of such occurrence and the effect
and/or anticipated effect of such occurrence. The impacted party will use its reasonable efforts to minimize disruptions in its
performance and to resume performance of its obligations under this Addendum as soon as practicable; provided, however,
the resolution of any strike or labor trouble shall be within the sole discretion of the impacted party. USC shall have the right
to shut down temporarily, for routine maintenance purposes, the operation of the facilities providing any services pursuant to
this Addendum whenever, in its reasonable judgement, such action is necessary; provided, however, that such shut down shall
not materially adversely and unduly affect Purchaser. USC shall be relieved of its obligations to provide services pursuant to
this Addendum only for the period of time that its facilities are so shut down but shall use diligent and commercially reasonable
efforts to minimize any such shutdown.


 


10.6     Notice.
Whenever written notice is required or permitted to be given by one party to the other under this Addendum, a Party may satisfy
such notice requirements by conforming with the requirements for giving notice in the Sales Agreement.


 


10.7     Governing
Law. This Addendum shall be governed by the laws of the State of Delaware, except with regard to its conflict of law provisions
and the Parties subject themselves to the jurisdiction of the state and federal courts located in New Castle County, Delaware.
Should any provision of this Addendum be declared illegal or unenforceable by any court of competent jurisdiction and cannot be
modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Addendum in full
force and effect. THE PARTIES HEREBY WAIVE THE RIGHT TO A JURY TRIAL WITH REGARD TO ANY DISPUTE RELATING TO OR ARISING FROM THIS
ADDENDUM.


 


10.8     Confidentiality.
The Confidential Disclosure Agreement that was executed between Owner and Purchaser’s parent company, Fagron Holding
USA, LLC, on or about May 5, 2021 (the “NDA”) shall apply to this Addendum. The Parties agree to treat
the terms of this Addendum as Confidential Information, as defined in the NDA, except that each of the Parties can disclose the
minimum amount of Confidential Information necessary to employees, officers, shareholders, agents, consultants and customers as
necessary to carry out the purpose of this Addendum.


 



     


     


    

 


IN
WITNESS WHEREOF, the parties, by their duly authorized officers whose signatures appear below, have executed this Addendum effective
as of the date first set forth above.


 


Fagron
Compounding Services, LLC


d/b/a
Fagron Sterile Services


 


	By	:	/s/
    Andrew Pulido
	Name	:	Andrew
    Pulido
	Date	:	July
    30, 2021






US
Compounding, Inc.


 


	By	:	/s/
    Dennis J. Carlo
	Name	:	Dennis
    J. Carlo
	Date	:	July
    30, 2021



 


Adamis
Pharmaceuticals Corporation


 


	By	: 	/s/
    Dennis J. Carlo
	Name	: 	Dennis
    J. Carlo
	Date	: 	July
    30, 2021



 






    	 



     


    

 


EXHIBIT E-1


 


[***]