Document:

ex10-1.htm

    
    
         

    

    Adamis Pharmaceuticals Corporation 10-Q

    
         Exhibit 10.1
    

    
         
    

    
         
    

    
        JUNE 2018 AMENDMENT TO LOAN AND SECURITY AGREEMENT
    

    
         
    

    
        THIS JUNE 2018 AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "June 2018 Amendment") is dated as of June 28, 2018 (“Agreement Date”), with an effective date of June 1, 2018, and is entered into by and between BEAR STATE BANK, N.A., a national banking association ("Lender"), and ADAMIS PHARMACEUTICALS CORPORATION, a Delaware corporation ("Borrower").
    

    
         
    

    
        WHEREAS, Lender extended a business loan to Borrower, in the initial amount of Two Million and No/100 United States Dollars ($2,000,000.00) (the "Loan"), as set forth in that certain Loan and Security Agreement by and between Lender and Borrower dated March 2016 (collectively, with all previous amendments thereto, including without limitation, that certain Amendment to Loan and Security Agreement dated November 3, 2016, and that certain March 2018 Amendment to Loan and Security Agreement, the "Loan Agreement");
    

    
         
    

    
        WHEREAS, in connection with the Loan and the Loan Agreement, Borrower issued to Lender a Common Stock Purchase Warrant dated March 28, 2016 (the “Warrant”) entitling Lender, in the circumstances set forth in the Warrant, to purchase from Borrower up to 1,000,000 shares (the “Warrant Shares”) of common stock, $0.0001 par value per share, of Borrower (“Common Stock”), at the per share Exercise Price as defined and set forth in the Warrant; and
    

    
         
    

    
        WHEREAS, Borrower and Lender desire that the Loan Agreement and the Warrant be amended as set forth in this June 2018 Amendment, but that all other terms, conditions, and provisions of the Loan Agreement and the Warrant will remain in full force and effect solely except as set forth in this June 2018 Amendment;
    

    
         
    

    
        WHEREAS, Borrower hereby intends to and by execution hereof ratifies and affirms Borrower’s unqualified and unconditional liability on all indebtedness of the Loan;
    

    
         
    

    
        NOW, THEREFORE, for and in consideration of Lender’s agreement to the amendments set forth in this June 2018 Amendment, the Loan Agreement, and the covenants, warranties and representations of Borrower contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by all parties, it is agreed as follows:
    

    
         
    

    
        AGREEMENT
    

    
         
    

    
        The recitals set forth above are not mere recitals of fact but are contractual in nature and are intended by the parties to be incorporated into this June 2018 Amendment by reference, except in the event of a conflict between the incorporated recitals and the numbered sections of this June 2018 Amendment, the numbered sections of this June 2018 Amendment shall control. Terms and provisions which are not otherwise defined herein shall have the same meanings as set forth in the Loan Agreement or the Warrant, as applicable.
    

    
         
    

    
        1.
    

    
        Amendment of Warrant. The second sentence of Section 2(a) of the Warrant is amended to provide in full as follows:
    

    
        “a) (i) Upon the occurrence of an Event of Default (as defined in the Loan Agreement) and the delivery of notice by Holder under the Loan Agreement that Holder is accelerating all amounts owed by the Company under the Loan Agreement and declaring the Obligations (as defined in the Loan Agreement) immediately due and payable, or (ii) if the Company has not paid in full all amounts required to be paid to Holder under the Loan Documents on or before the Maturity Date (as defined in the Loan Agreement) (each, an “Exercise Event”), the Holder shall be entitled to Exercise the rights represented by this Warrant, in whole or in part, to acquire Warrant Shares in a number that Holder in good faith believes will, upon sale of such shares, be sufficient to cure or pay off the Obligations due to Holder under the Loan Documents, at any time or times on or before the Termination Date by facsimile delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed notice of exercise (the “Notice of Exercise”) in substantially the form of the Notice of Exercise Form annexed hereto.”

    
    
         

    

    
         

    

    
    
        2.
    

    
        Amendment of Loan Agreement. 
    

    
        (a)
    

    Section 1.1(j) of the Loan Agreement is amended to provide in full as follows: “"Warrant" shall mean that certain Common Stock Purchase Warrant, Adamis Pharmaceuticals Corporation, dated on or about the date of this Agreement and entered into between Borrower and Lender, as the same may be amended from time to time.”

    
        (b)
    

    
        The last sentence of Section 10.2 of the Loan Agreement is amended to provide in full as follows:
    

    
        “Further, Lender shall have the express right to exercise all rights and powers available to it pursuant to the Warrant, either following the occurrence of an Event of Default, or otherwise as provided in the Warrant, if Borrower has not paid in full all amounts required to be paid to Lender under the Loan Documents on or before the Maturity Date.”
    

    
        3.
    

    
        Estoppel; Waiver; Ratification and Release.  For and in consideration of the Lender’s agreement to amend the Loan Agreement and the Warrant as set forth herein, receipt and sufficiency being acknowledged, Borrower, as evidenced by its signature below, agrees and acknowledges its unqualified and unconditional obligation for the Indebtedness without defense, affirmative defense, counterclaim, right of setoff or other impediment to collection, and the same, if existing, being expressly released and waived by Borrower in consideration for Lender entering into this June 2018 Amendment.
    

    
        4.
    

    
        UCC. Notwithstanding any provisions hereof or execution by Lender, this June 2018 Amendment (and all documents executed in connection herewith) shall be voidable at the option of Lender should any lien searches or other confirmatory title information regarding the Collateral (to be provided at the expense of Borrower) reflect any default under the Loan or creation of any adverse claim or interest regarding the Collateral. In addition, Borrower authorizes Lender to file any and all initial, amendatory or continuation Uniform Commercial Code filings deemed necessary by Lender.
    

    
        5. 
    

    
        Good Standing of Borrower. Notwithstanding any provisions hereof or execution by Lender, this June 2018 Amendment (and all documents executed in connection herewith) shall be voidable at the option of Lender in the event Borrower is not validly existing and under its state of formation at the time of execution of this June 2018 Amendment.
    

    
        6.
    

    
        No Further Modifications. Except as expressly set forth above, the terms and provisions of the Loan Agreement shall remain in full force and effect.
    

    
         
    

    
         
    

    
        [ Signatures appear on following page.]
    

    
         
    

    
         
    

    
         
    

    
    
        
            2
            
             

    

    
         

    

    
    
        IN WITNESS WHEREOF, the parties hereto have duly executed this June 2018 Amendment as of the date first written above, with an effective date as first written above.
    

    
         
    

    
         
    

    	 	BORROWER:
	 	 
	 	ADAMIS PHARMACEUTICALS CORPORATION,
	 	a Delaware corporation
	 	 
	 	 
	 	By:	/s/ Robert O. Hopkins	 
	 	Name:	Robert O. Hopkins	 
	 	Title:	Chief Financial Officer	 
	 	 
	 	 
	 	LENDER:
	 	 
	 	BEAR STATE BANK, N.A.
	 	a national banking association
	 	 
	 	By:	/s/ Steve Moore	 
	 	Name:	Steve Moore	 
	 	Title:	Executive Vice President	 

    
         
    

    
    
        
            3FIRST
AMENDMENT TO Promissory NOTE

 

This
FIRST AMENDMENT TO Promissory Note (this “First Amendment”)
is made and entered into on June 14, 2018, by and among SHEPHERD’S FINANCE, LLC (“Borrower”),
and DANIEL M. WALLACH AND JOYCE S. WALLACH, as tenants by the entirety (together, “Lender”).

 

W
I T N E S S E T H:

 

WHEREAS,
Borrower and Lender have entered into that certain Promissory Note dated as of December 30, 2011 (the “Promissory Note”),
pursuant to which Lender advanced to Borrower a loan in the maximum principal amount of One Million Two Hundred Fifty Thousand
and No/100 Dollars ($1,250,000.00) (the “Loan”), which is secured by that certain Commercial Pledge Agreement,
dated as of December 30, 2011(the “Wallach Commercial Pledge Agreement” and, collectively with the Promissory
Note, the “Loan Documents”) pursuant to which Lender is granted a first priority security interest in certain
of Borrower’s personal property;

 

WHEREAS,
the interest rate to the Borrower on the Promissory Note equals the cost of funds, and management of the Borrower has recommended
that the interest rate to the Borrower on the Promissory Note be changed to equal the cost of funds plus two percent;

 

NOW,
THEREFORE, for and in consideration of the above premises, Ten Dollars in hand paid and other good and valuable consideration,
the receipt and sufficiency whereof are hereby acknowledged, Borrower and Lender hereby agree as follows:

 

1.
Recitals. The foregoing recitals are confirmed by the parties as true and correct and are incorporated herein by reference.
The recitals are a substantive, contractual part of this First Amendment.

 

2.
Capitalized Terms. Capitalized terms used herein but not otherwise defined herein shall have the respective meanings ascribed
thereto in the Loan Documents.

 

3.
Modification to Interest Calculation Method. As of the date hereof, the paragraph that begins “INTEREST CALCULATION
METHOD” is deleted in its entirety and simultaneously substituted in lieu thereof by the following:

 

INTEREST
CALCULATION METHOD. The interest rate on this Note shall equal the “Lender’s Cost of Funds,” which shall
mean a daily rate equal to the “Prime Rate” of interest published in The Wall Street Journal from time to time, plus
three percent. If more than one “Prime Rate” is published in The Wall Street Journal for a day, the average of such
“Prime Rates” shall be used, and such average shall be rounded up to the nearest 1/100th of one percent (0.01%).

 

    	 	 	 

     

    

 

4.
Modification to Governing Law. As of the date hereof, the paragraph that begins “GOVERNING LAW” is deleted
in its entirety and simultaneously substituted in lieu thereof by the following:

 

GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws
of the State of Florida without regard to its conflicts of law provisions. This Note has been accepted by each Lender in the State
of Florida.

 

5.
Modification to Choice of Venue. As of the date hereof, the paragraph that begins “COICE OF VENUE” is
deleted in its entirety and simultaneously substituted in lieu thereof by the following:

 

COICE
OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of
the State of Florida, in the county in which Lender’s following address is located: 13241 Bartram Park Blvd., Suite 2401,
Jacksonville, Florida 32258.

 

6.
Representations and Warranties. Borrower hereby represents and warrants as follows:

 

(a)
after giving effect to this First Amendment each of the representations and warranties in the Wallach Commercial Pledge and in
each of the other Loan Documents are true and correct in all material respects on and as of the date hereof as though made on
and as of such date;

 

(b)
no default or Event of Default has occurred and is continuing as of the date hereof;

 

(c)
the execution, delivery and performance by the Borrower of this First Amendment has been duly authorized by all requisite company
action on the part of the Borrower and will not violate any of its articles of organization, operating agreement, bylaws or other
organizational documents;

 

(d)
this First Amendment has been duly executed and delivered by Borrower, and this First Amendment constitutes the legal, valid and
binding obligation of Borrower enforceable against it in accordance with its terms; and

 

(e)
no action or proceeding, including, without limitation, a voluntary or involuntary petition for bankruptcy under any chapter of
the Bankruptcy Code, has been instituted or threatened by or against Borrower under the Bankruptcy Code or any other federal or
state insolvency laws.

 

7.
Conditions to Effectiveness. This First Amendment shall become effective when the Lender shall have received, in form and
substance satisfactory to the Lender:

 

    	 	 	 

     

    

 

(a)
counterparts of this First Amendment executed by the Borrower and the Lender; and

 

(b)
all reasonable fees and expenses payable or reimbursable by the Borrower as of the date hereof, including, without limitation,
all costs, fees and expenses of the Lender in connection with the preparation, execution and delivery of this First Amendment
and the other instruments and documents to be delivered pursuant hereto (including the reasonable fees and out-of-pocket expenses
of counsel for the Lender with respect thereto).

 

8.
No Other Agreements; No Novation. Except as expressly modified and amended hereby, the Promissory Note shall be and remain
in full force and effect and unchanged and is hereby ratified and confirmed. The execution, delivery and effectiveness of this
First Amendment shall not, except as expressly provided herein, operate as an amendment, waiver or modification of any right,
power or remedy of the Lender under any of the Loan Documents, nor constitute an amendment, waiver or modification of any other
provisions of the Loan Documents. Neither the execution and delivery of this First Amendment, nor the consummation of any transaction
contemplated hereunder, is intended to constitute a novation of the Promissory Note or of any of the other Loan Documents or any
obligations thereunder. This First Amendment shall constitute a Loan Document for all purposes.

 

9.
Reaffirmation and Ratification. Borrower acknowledges and agrees that the security interests and liens granted to the Lender
pursuant to the Loan Documents shall remain outstanding and in full force and effect in accordance with the Loan Documents, and
shall continue to secure the Obligations, and that the security and other interests granted to the Lender thereby are hereby ratified,
confirmed and continued by execution and delivery of this First Amendment. The Loan Documents shall remain extant and in full
force and effect following the execution and delivery of this First Amendment and any other Loan Documents executed in connection
therewith.

 

10.
Waiver of Claims. To induce the Lender to enter into this First Amendment, Borrower warrants and represents to the Lender
that the Loan is not subject to any credits, charges, claims, or rights of offset or deduction of any kind or character whatsoever;
and Borrower releases and discharges the Lender and its respective affiliates, officers, directors, shareholders, employees, attorneys
and agents from any and all claims, defenses and causes of action, whether known or unknown and whether now existing or hereafter
arising that have at any time been owned, or that are hereafter owned, in tort or in contract by Borrower, that arise out of any
one or more circumstances or events that occurred prior to the date of this First Amendment and that relate to the Loan, the Promissory
Note, the Loan Documents or the transactions described therein.

 

11.
Strict Compliance Notice. Lender hereby notifies the Borrower that Lender intends to rely upon the strict terms and conditions
of the Promissory Note and the other Loan Documents, and the Lender expects that the Borrower will strictly comply with the terms
and conditions thereof from and after the date hereof.

 

    	 	 	 

    	 	 	 

    

 

12.
Governing Law. This First Amendment will be governed by federal law applicable to Lender and, to the extent not preempted
by federal law, the laws of the State of Florida without regard to its conflicts of law provisions. This First Amendment has been
accepted by each Lender in the State of Florida.

 

13.
Choice of Venue. If there is a lawsuit, Lender and Borrower agree to submit to the jurisdiction of the courts of the State
of Florida, in the county in which Lender’s following address is located: 13241 Bartram Park Blvd., Suite 2401, Jacksonville,
Florida 32258.

 

14.
Counterparts and Headings. This First Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument. The headings of this First Amendment are for convenience of reference only, are
not part of this First Amendment and are not to affect the construction of, or to be taken into consideration interpreting, this
First Amendment.

 

[SIGNATURES
BEGIN ON THE FOLLOWING PAGE]

 

    	 	 	 

     

    

 

IN
WITNESS WHEREOF, Borrower and Lender have caused this First Amendment to be executed as of the day and year first above written.

 

	 	BORROWER:
	 	 	 
	 	SHEPHERD’S FINANCE, LLC
	 	 	 
	 	By:
    	/s/
    Daniel M. Wallach
	 	Name:	Daniel
M. Wallach
	 	Title:
    	Chief
    Executive Officer

 

[SIGNATURES
CONTINUE ON THE FOLLOWING PAGE]

 

    	 	 	 

     

    

 

	 	LENDER:
	 	 	 
	 	DANIEL M. WALLACH AND JOYCE S. WALLACH,
	 	as tenants by the entirety
	 	 	 
	 	By:
    	/s/
    Daniel M. Wallach
	 	Name:	Daniel
    M. Wallach
	 	 	 
	 	By:	/s/
    Joyce S. Wallach
	 	Name:	Joyce
    S. Wallach

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