Document:

Exhibit 10.1
AMENDMENT TO ASSET ACQUISITION AGREEMENT
(THIS “AMENDMENT”)
Reference is made to that certain Asset Acquisition Agreement, dated February 28, 2019 (the “Agreement”) by and among Timber Pharmaceuticals LLC, a Delaware limited liability company (the “Company”), Patagonia Pharmaceuticals LLC, a New Jersey limited liability company (“Patagonia”), Jonathan Rome (“J Rome”) and Zachary Rome (“Z Rome” and, collectively with the Company, Patagonia and J Rome, the “Parties”). All capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Agreement.
RECITALS
WHEREAS, Section 7.3 of the Agreement provides that the Agreement may not be modified except in a writing signed by the Parties;
WHEREAS, on June 21, 2022 the Company enrolled its first patient in a Phase 3 pivotal trial for the Product (as defined in the Agreement), and thus pursuant to Section 5 of the Agreement has become obligated to pay to Seller a certain Milestone Payment on September 1, 2022 (as also defined in the Agreement); and
WHEREAS, the Parties have determined that this Amendment is advisable and in the best interests of their respective entities.
The Parties, intending to be legally bound, and in accordance with Section 7.3 of the Purchase Agreement, hereby agree as follows:
		1.
	To amend Section 5(a) in its entirety to state:

		(a)(i)
	upon signing this Amendment, a one-time payment of $12,500 toward Patagonia’s legal fees;

		(a)(ii)
	no later than September 1, 2022, a one-time payment of $2.25 million (“First Payment”);

		(a)(iii)
	no later than September 1, 2023, a one-time payment of $2.065 million (“Second Payment”); and

		(a)(iv)
	until the Second Payment has been paid in full, Timber shall (1) assign and transfer to the Seller and grant to the Seller a continuing security interest in the Collateral defined in the Security Agreement, in the form of Exhibit C, attached hereto, (2) provide to Seller, on a calendar quarter basis within forty-five (45) Business Days after each applicable calendar quarter for the first three quarters of each year and within ninety (90) Business Days of year end, (i) an updated balance sheet setting forth in reasonable detail Timber’s fixed and current assets, and current and long term liabilities (it being agreed that filing its Form 10-Q or Form 10-K with the SEC, as applicable shall satisfy this obligation), (ii) if there have been any changes to Schedule I to Exhibit C during such calendar quarter, an updated Schedule I, and (3) provide to Seller written notice before (i) the Phase 3 pivotal trial will be or is interrupted or prematurely ended, (ii) Timber fails to make a material payment required for the Phase 3 pivotal trial, or (iii) Timber adopts a prepackaged bankruptcy plan or files for bankruptcy or reorganization.

​

		2.
	To amend Section 6(a) in its entirety to state:

(a)Unless otherwise specified in Section 5, Milestone Payments payable under Section 5 shall be payable on a calendar quarter basis within forty-five (45) Business Days after the applicable calendar quarter, via wire transfer to:
Account Holder:
Bank Name:
Bank Address:
ABA/Routing:
Acct Number:
Swift Code:
Timber and Seller agree that any payments made to Seller under this Section 6 shall be treated as an addition to the purchase price paid by Timber pursuant to this Agreement for all tax purposes. Timber and Seller hereby agree to report for all tax purposes (including in connection with any tax return) any income with respect of any amounts paid under this Section 6 in a manner that is consistent with the foregoing and applicable law.
		3.
	To amend Section 7.1 in its entirety to state:

7 .1Notices.  All notices required or permitted hereunder shall be in writing addressed to the parties at their respective addresses as set forth below, unless another address shall have been designated:
If to Timber, to:
Timber Pharmaceuticals LLC
110 Allen Road, Suite 401
Basking Ridge, NJ 07920
Attn: John Koconis, CEO
With a copy (which shall not constitute notice) to:
Garry A. Berger, Esq.
Berger Legal LLC
58 Olmstead Lane
Ridgefield, Connecticut 06877
If to Seller, to:
Patagonia Pharmaceuticals LLC
1199 Hillside Road
Fairfield, CT 06824
Attn.: Zachary Rome, President
With a copy (which shall not constitute notice) to:
David R. Cleveland, Esq.
Patterson Thuente Pederson, P.A
4800 IDS Center, 80 South 8th Street
Minneapolis, MN 55402-2100
​

		4.
	Entire Agreement.  This Amendment and the Agreement contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, understandings, promises and representations, whether written or oral, between the Parties with respect to the subject matter hereof and thereof. All references in the Agreement to “this Agreement”, “hereof”, “hereby” and words of similar import shall refer to the Agreement as amended by this Amendment.

		5.
	Counterparts.  This Amendment may be executed in any number of counterparts (which may be delivered by facsimile, email transmission of a .pdf or other electronic transmission), each of which shall be deemed to be an original, but all which shall be deemed to be one and the same instrument.

​
​

This Amendment is executed by the undersigned as of the last date set forth below.
	​
	TIMBER PHARMACEUTICALS LLC

	​
	​

	​
	By:
	/s/ John Koconis

	​
	​
	John Koconis

	​
	​
	CEO

	​
	​
	​

	​
	Date:
	July 20, 2022
	​

​
	​
	PATAGONIA PHARMACEUTICALS LLC

	​
	​

	​
	By:
	/s/ Zachary Rome

	​
	​
	Zachary Rome

	​
	​
	President

	​
	​
	​

	​
	Date:
	July 13, 2022
	​

​
	​

	​

	​

	​

	​
	/s/ Jonathan Rome

	​
	Jonathan Rome, an Individual

	​
	​

	​
	Date:
	July 13, 2022
	​

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​
	​
	/s/ Zachary Rome

	​
	Zachary Rome, an Individual

	​
	​

	​
	Date:
	July 13, 2022
	​

​

[Signature Page to Amendment]Exhibit
10.1

July 13, 2022

 

Mr. Kevin Schmid

Dear Kevin,

 

I am pleased
to offer you a position with Modular Medical, Inc. (“Modular” or the “Company”) as Chief Operating Officer,
an exempt position, reporting to the Company’s President. This offer letter (the “Agreement”) sets forth the
terms and conditions of the Company’s offer of employment. This is intended to be a binding agreement, and, if the terms
contained in this Agreement are acceptable to you, please acknowledge your acceptance by signing in the signature block, below.

 

The Company’s
offer of employment is conditioned upon: (1) your presenting satisfactory evidence of your authorization to work in the United
States and your identity sufficient to allow the Company to complete the I-9 form required by law within three business days of
the commencement of your employment with the Company; (2) your consent to, and satisfactory completion of, a reference and background
check; (3) your execution of the Company’s standard form of Employment Agreement and (4) ratification of this offer by the
Company’s board of directors (the “Board”).

 

Compensation
and Benefits

 

	Base Salary:	Your annual base salary will be $250,000
    per year (“Base Salary”), less applicable withholdings and deductions, payable in accordance with the Company’s
    normal payroll procedures.

 

	Bonus:	You
                                         will be eligible to receive an annual target incentive  bonus of up to 50% of your
                                         Base Salary, payable after the end of the Company’s fiscal year and determined
                                         at the discretion of the Board.

 

	Equity Award:	You
will be granted an option to purchase 175,000 shares of the Company’s common stock. The option will vest over a three-year period,
and the terms of such award shall be in accordance with the terms of the Company’s Amended 2017 Equity Incentive Plan.

 

	Benefits:	You
                                         will also be eligible to participate, subject to the generally applicable terms and conditions
                                         of the plan or program in question and the determination of any committee administering
                                         such plan or program, in the Company’s health and welfare plans available for senior
                                         management. Please consult the terms of those plans, which govern your eligibility and
                                         terms, and/or contact the Company’s Human Resources Department. You will be reimbursed
                                         on a regular basis for reasonable, necessary and properly documented business and travel
                                         expenses incurred for the purpose of conducting Modular’s business, in accordance
                                         with Modular’s policies and procedures.

	Severance:	If
                                         you experience a Constructive Termination (as defined below), you will be entitled to
                                         receive the following severance benefits from the Company:

 

		a.	a
                                         single lump sum severance payment equal to six months of your then-current Base Salary,
                                         payable to you within 60 days following the termination of your employment; and
		b.	reimbursement
                                         of the full premium amount (less withholding taxes) charged under the Consolidated Omnibus
                                         Budget Reconciliation Act (COBRA) for continuation of the group health insurance in effect
                                         for you and your participating dependents, for a period of six months following the termination
                                         of your employment, subject to earlier termination of reimbursement as of the effective
                                         date you receive coverage under a group health insurance plan of another employer.

    	 

    	 

    

	Release
of Claims:	Your
                                         right to receive any severance benefits pursuant to this Agreement if you experience
                                         a Constructive Termination will be subject to your signing and not revoking a release
                                         of claims agreement in a form approved by the Company, and such release becoming effective
                                         and irrevocable within 60 days of the termination of your employment or such earlier
                                         deadline required by the release. If the release does not become effective within the
                                         time period set forth above, you will forfeit all rights to receive such severance benefits.

 

For
the purposes of this Agreement:

		·	“Constructive
                                         Termination” shall mean the termination of your employment (i) by the Company other
                                         than for Cause or (ii) by you for Good Reason;
		·	“Cause”
                                         shall mean: (i) conviction of a felony or similar crime causing material harm to the
                                         standing and reputation of the Company; (ii) dishonesty or fraud; (iii) gross fiscal
                                         or fiduciary malfeasance or (iv) willful failure to attend to duties that is not cured
                                         within 30 days of receiving written notice from the Company’s President or Chief
                                         Executive Officer specifying such failure; and
		·	“Good
                                         Reason shall mean (i) a material reduction or adverse
                                         change in title, position, duties or compensation without your prior express written
                                         consent or (ii) any change in reporting responsibilities other than to the Company’s
                                         Chairman of the Board, President or Chief Executive Officer.

 

You acknowledge
that your employment with the Company is for an unspecified duration, that it constitutes “at-will” employment, and
that either you or the Company can terminate the employment relationship at any time, with or without cause and with or without
notice.

 

This offer
will be governed by the laws of the State of California, without regard to any conflicts of law. You hereby expressly consent
to the personal jurisdiction of the state and federal courts located in San Diego County California.

 

This Agreement
sets forth the entire agreement and understanding between the Company and you relating to your employment and supersedes all prior
verbal discussions between us. Any subsequent change or changes in your duties, salary, benefits or other compensation will not
affect the validity or scope of this Agreement. Any change to the “at-will” term of this Agreement must be executed
in writing and signed by the Company’s President.

 

We are
pleased to offer you this opportunity to become part of the team at Modular, and are confident that your skills, knowledge and
expertise will be an asset and contribute to the success of the Company.

 

If the
proposed terms of this Agreement are acceptable to you, please indicate below with your signature. This offer is valid for three
business days.

 

Very truly yours,

 

	Paul DiPerna	 
	President	 
	 	
	ACCEPTED AND AGREED
    TO	 
	This 15th day of July 2022.	 
	 	 
	 	/s/ Kevin Schmid
	 	Kevin Schmid

 

16772
West Bernardo Drive, San Diego, CA 92127 – www.modular-medical.com

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