Document:

ADAMIS PHARMACEUTICALS CORPORATION 10-K

 

 

Exhibit 10.65

 

LOAN RELEASE AGREEMENT

  

THIS LOAN RELEASE AGREEMENT (this “Agreement”) is made and entered into as of November 14, 2016 (the “Agreement Date”), by and among 4 HIMS, LLC, an Arkansas limited liability company (“4 HIMS”), TRIBUTE LABS, LLC, a Nevada limited liability company (“Tribute”), U.S. COMPOUNDING, INC., an Arkansas corporation (“USC”); EDDIE GLOVER, an individual; WILLIAM L. SPARKS, an individual; SAM GLOVER, an individual; RUSTY WOOTEN, an individual; STUART BURKE, an individual; and KRISTEN RIDDLE, an individual (collectively, the “Individual Guarantors”); ADAMIS PHARMACEUTICALS CORPORATION, a Delaware corporation (“Adamis”); and BEAR STATE BANK, INC., a national banking association (“Bank”).

 

BACKGROUND

 

A.        Pursuant to that certain Business Loan Agreement (as modified, amended or supplemented, the “4 HIMS Loan Agreement”) dated as of August 8, 2014, entered into by and between 4 HIMS, as borrower, and Bank, as lender, Bank agreed to make a loan, Loan No. 5500000152 (the “4 HIMS Loan”) to 4 HIMS in the initial principal amount of up to Two Million Five Hundred Eight-Six Thousand Eight Hundred Ninety-Two and 09/100 Dollars ($2,586,892.09). The 4 HIMS Loan is evidenced by that certain Commercial Promissory Note (as modified, amended or supplemented, the “4 HIMS Note”) dated as of August 8, 2014, executed by 4 HIMS in favor of Bank. The 4 HIMS Note is secured by, among other things, that certain Commercial Real Estate Mortgage (as modified, amended or supplemented, the “4 HIMS Mortgage”) dated as of August 8, 2014, executed by 4 RIMS in favor of Bank and recorded in the Official Records of Faulkner County as Doc #2014-11418, encumbering certain real property more particularly described in the 4 HIMS Mortgage. In connection with the 4 HIMS Loan, 4 HIMS also entered into certain other agreements and instruments, (the 4 HIMS Loan Agreement, the 4 HIMS Note, the 4 HIMS Mortgage, the 4 HIMS Guaranties and all other documents executed in connection with the 4 HIMS Loan, all as previously modified, amended or supplemented, collectively referred herein as the “4 HIMS Loan Documents”). Certain of the Individual Guarantors and USC guaranteed repayment of the 4 HIMS Loan pursuant to those certain documents each titled Guaranty of Specific Transaction (such guaranties by the Individual Guarantors and USC, as may be modified, amended or supplemented, referred to as the “4 HIMS Guaranties”) dated as of August 8, 2014, entered into by each of them for the benefit of Bank.

 

B.        Pursuant to that certain Business Loan Agreement (as modified, amended or supplemented, the “Tribute Loan Agreement”) dated as of March 21, 2014, entered into by and between Tribute, as borrower, and Bank, as lender, Bank agreed to make a loan, Loan No. 55000024132 (the “Tribute Loan”) to Tribute in the initial principal amount of Five Hundred Eighteen Thousand Two Hundred Thirty-Three and 24/100 United States Dollars ($518,233.24). The Tribute Loan is evidenced by that certain Commercial Promissory Note (as modified, amended or supplemented, the “Tribute Note”) dated as of March 21, 2014, executed by Tribute in favor of Bank (the Tribute Loan Agreement, the Tribute Note, the Tribute Guaranties and all other documents executed in connection with the Tribute Loan, all as previously modified, amended or supplemented, collectively referred herein as the “Tribute Loan Documents”). Certain of the Individual Guarantors guaranteed repayment of the Tribute Loan pursuant to those certain documents titled Guaranty of Specific Transaction (such guaranties by the Individual Guarantors, as may be modified, amended or supplemented, referred to as the “Tribute Guaranties”) dated as of March 21, 2014, entered into by each of them for the benefit of Bank.

 

 

 

 

C.        Pursuant to that certain Business Loan Agreement (as modified, amended or supplemented, the “USC Equipment Loan Agreement”) dated as of July 14, 2014, entered into by and between USC, as borrower, and Bank, as lender (the “USC Equipment Loan”) Bank agreed to make a loan to USC in the initial principal amount of One Million and No 100 Dollars ($1,000,000.00). The USC Equipment Loan is evidenced by that certain Commercial Line of Credit Renewal Agreement and Note (as modified, amended or supplemented, the “USC Equipment Note”) dated as of July 14, 2014, executed by USC in favor of Bank. The USC Equipment Loan is secured by, among other things, a first priority security interest in all equipment of USC, pursuant to that certain Commercial Security Agreement between USC and the Bank (the “USC Equipment Security Agreement”) (the collateral referenced in the USC Equipment Security Agreement and any other real or personal property, if any, securing the USC Equipment Loan collectively referred to herein as the USC Equipment Property”). In connection with the USC Equipment Loan, USC also entered into certain other agreements and instruments, (the USC Equipment Loan Agreement, the USC Equipment Note and all other documents executed in connection with the USC Equipment Loan, all as previously modified, amended or supplemented, collectively referred herein as the “USC Equipment Loan Documents”). Certain of the Individual Guarantors guaranteed repayment of the USC Working Capital Loan pursuant to those certain documents titled Guaranty of Specific Transaction (such guarantees by such Individual Guarantors, as may be modified, amended or supplemented, referred to as the “USC Equipment Guarantees”) dated as of July 14, 2014, entered into by each of them for the benefit of Bank.

 

D.        For purposes of this Agreement, the 4 HIMS Loan, the USC Equipment Loan and the Tribute Loan are collectively hereinafter referred to as the “Loans” and the 4 HIMS Loan Documents and the Tribute Loan Documents are collectively hereinafter referred to as the “Loan Documents.”

 

E.        Adamis has entered into a merger transaction with USC (the “Merger”), pursuant to that certain Agreement and Plan of Merger dated as of March 28, 2016 (the “Merger Agreement”). In connection with the Merger Agreement, Tribute has previously transferred certain property, including without limitation all property of Tribute which is collateral and security for the Tribute Loan, to USC. Therefore, in connection with the Merger and effective as of the closing of the transfer of the real property secured by the 4 HIMS Mortgage from 4 HIMS to Adamis (the “Real Property Transfer”), as contemplated by the Merger Agreement, the Bank wishes to release 4 HIMS, Tribute and the Individual Guarantors from their respective obligations under the Loans and the Loan Documents.

 

AGREEMENT

  

NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.       Release.

  

  (a)       Effective upon the closing of the Real Property Transfer, the Bank does hereby fully, completely, unconditionally, irrevocably, jointly and severally release 4 HIMS, Tribute and each of the Individual Guarantors from any obligations, liabilities, causes of action, judgments, executions, suits, debts, claims, demands, damages, and expenses of any and every kind or nature, whether heretofore or hereafter arising, for or because of any matter or thing done, omitted, or suffered to be done by 4 HIMS, Tribute or any of the Individual Guarantors prior to and including the date of execution hereof, and in any way directly or indirectly arising out of or in any way connected to the Loans or the Loan Documents.

 

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  (b)       4  HIMS, Tribute and the Individual Guarantors unconditionally, irrevocably, jointly and severally release the Bank, its respective past, present or future affiliates, subsidiaries, holding company, owners, officers, directors, shareholders, employees, agents, independent contractors, attorneys, or other persons or entities employed or engaged by or affiliated with the Bank, in addition to any purchaser of all or a portion of any of the Loans and current or future owners of participation in the Loans (collectively, the “Released Parties”) (whether signatory hereto or not, and if not a party to this Agreement, being an intended (and not incidental) third party beneficiary hereof) from any causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages, and expenses of any and every kind or nature, whether heretofore or hereafter arising, for or because of any matter or thing done, omitted, or suffered to be done by any of the Released Parties prior to and including the date of execution hereof, and in any way directly or indirectly arising out of or in any way connected to this Agreement, the Loans and the Loan Documents. The provisions of this Section 1 (b) and the remainder of this Agreement shall inure to the Bank and also run in favor of and inure to the maximum extent permitted by law to intended (and not incidental) third-party beneficiaries, which 4 HIMS, Tribute and the Individual Guarantors agree shall include, without limitation, the Released Parties.

 

2.        No Impairment; Forbearance Not a Waiver. Except as expressly set forth in this Agreement, the terms and provisions set forth in the Loan Documents, all of which are incorporated herein, are unmodified and shall remain in full force and effect as between the Bank, Adamis and USC, such parties hereby ratifying and confirming such terms and provisions and this Agreement shall not be deemed to or shall in any manner prejudice or impair, or act as a release or relinquishment of, any of the Loan Documents or any rights of the Bank under the Loan Documents, or any lien, security interest or assignment granted to or held by the Bank in connection with the Loans. The execution of this Agreement by the Bank does not constitute a waiver, limitation, or modification of any of the Bank’s rights or remedies under the Loan Documents or applicable law, all of which Bank hereby expressly reserves, nor shall the same constitute a waiver of any default which may have heretofore occurred or which may hereafter occur with respect to the Loan Documents. No omission or failure by the Bank to exercise, and no delay in exercising, any right or remedy hereunder or under the Loan Documents executed in connection herewith shall operate as a waiver of any right or remedy, which the Bank may have hereunder or under any applicable law. All rights and remedies shall be cumulative and may be exercised concurrently or consecutively. No single or partial exercise by the Bank of any right or remedy shall preclude the concurrent or subsequent exercise of any right or remedy.

 

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3.          General Provisions.

   

3.1       Continuing Force and Effect. Except as modified hereby, all of the terms and provisions of the Loan Documents will remain in full force and effect.

 

3.2        Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto as well as their respective heirs, executors, administrators, successors and permitted assigns.

 

3.3        Governing Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Arkansas, without reference to conflicts of laws principles.

 

3.4        Entire Agreement. This Agreement constitutes the entire understanding between the parties hereto with respect to the subject matter hereof, superseding all prior written or oral understandings or communications. This Agreement may not be amended or modified, except by a written agreement signed by each of the parties hereto (with such applicability determined under each of the Loan Documents) and Bank.

 

3.5       Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same document.

  

	4 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Agreement Date.

 

	 	 	4 HIMS:
	 	 
	 	 	4 HIMS, LLC, 
	 	 	an Arkansas limited liability company
	 	 
	 	By:	
	 	 	[Signature]
	 	 	 
	 	   	Eddie Glover
	 	 	[Print Name]
	 	 	 
	 	 	Partner
	 	 	[Title]
	 	 
	 	 	TRIBUTE:
	 	 
	 	 	TRIBUTE LABS, LLC,
	 	 	a Nevada limited liability company
	 	 
	 	By:	
	 	 	[Signature]
	 	 	 
	 	  	Eddie Glover
	 	 	[Print Name]
	 	 	 
	 	 	Partner
	 	 	[Title]
	 	 
	 	 	USC:
	 	 
	 	 	U.S. COMPOUNDING, INC., 
	 	 	an Arkansas corporation
	 	 
	 	By:	
	 	 	[Signature]
	 	 	 
	 	  	Eddie Glover
	 	 	[Print Name]
	 	 	 
	 	 	CEO
	 	 	[Title]

 

[INDIVIDUAL GUARANTORS SIGNATURE PAGE FOLLOWS]

  

	5 

 

 

	 	 	INDIVIDUAL GUARANTORS:
	 	 	 
	 	 	 
	 	 	EDDIE GLOVER, an individual
	 	 	 
	 	 	 
	 	 	WILLIAM L. SPARKS, an individual
	 	 	 
	 	 	 
	 	 	KRISTEN RIDDLE, an individual
	 	 	 
	 	 	 
	 	 	SAM GLOVER, an individual
	 	 	 
	 	 	 
	 	 	RUSTY WOOTEN, an individual
	 	 	 
	 	 	 
	 	 	STUART BURKE, an individual

 

[ADAMIS SIGNATURE PAGE FOLLOWS]

 

	6 

 

  

		 	ADAMIS:
	 	 
	 	 	ADAMIS PHARMACEUTICALS CORPORATION, 
	 	 	a Delaware corporation
	 	 
	 	By:	
	 	 	[Signature]
	 	 	 
	 	   	Robert O. Hopkins
	 	 	[Print Name]
	 	 	 
	 	 	CFO
	 	 	[Title]

 

[BANK SIGNATURE PAGE FOLLOWS]

 

	7 

 

 

 

		 	BANK:
	 	 
	 	 	BEAR STATE BANK, INC, 
	 	 	a national banking association
	 	 
	 	By:	/s/ Steve Moore
	 	 	[Signature]
	 	 	 
	 	   	Steve Moore
	 	 	[Print Name]
	 	 	 
	 	 	Executive Vice President
	 	 	[Title]

 

	8ADAMIS PHARMACEUTICALS CORPORATION 10-K

 

 

Exhibit 10.80

 

 

 

 

 

 

ADAMIS PHARMACEUTICALS CORPORATION 

2017 BONUS PLAN

 

 

 

 

 

 

 

 

* Excludes those covered under the Field Sales Incentive Plans

 

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Adamis Pharmaceuticals Corporation 

2017 Bonus Plan

 

The Adamis Pharmaceuticals Corporation (“Adamis” or the “Company”) 2017 Bonus Plan (the “Plan”) is designed to offer employees a performance based plan that rewards the achievement of corporate goals, as well as individual goals that are consistent with the corporate goals.

 

Purpose of the Plan

 

The Plan is designed to:

 

	 	●	Provide a bonus program that helps achieve overall corporate goals and enhances shareholder value
	 	 	 
	 	●	Reward individuals for achievement of corporate and individual goals
	 	 	 
	 	●	Encourage teamwork among all disciplines within the Company
	 	 	 
	 	●	Offer an attractive bonus program to help attract and retain key employees

 

Plan Governance

 

The Compensation Committee of the Board of Directors (the “Committee”) is responsible for reviewing and approving the Plan and any proposed modifications to the Plan. The President and CEO of Adamis is responsible for administration of the Plan; provided that the Committee is responsible for reviewing and approving all compensation, including compensation under this Plan, for all officers, vice presidents, executive directors and any other employees with an annual base salary greater than or equal to $250,000.

 

Eligibility

 

All regular employees of the Company who are regularly scheduled to work at least 20 hours per week will be eligible to participate in the Plan, other than any employee eligible to participate in the Company’s Field Sales Incentive Plans. Temporary employees and part-time employees (who are regularly scheduled to work less than 20 hours per week) are not included in this Plan. In order to be eligible to receive any bonus award (or “Bonus”) under this Plan, a participant: (a) must have commenced their employment with the Company prior to October 1, 2017 and remained continuously employed through December 31, 2017 and until the time Bonuses are paid; and (b) must be an employee in good standing (e.g., not on a performance improvement plan as of December 31, 2017 or an Unacceptable performer as determined during the 2017 review cycle), as determined by the Committee or the President and CEO of Adamis, as applicable in their sole discretion. Employees joining during the bonus plan year will have their actual bonus amount prorated based on their actual time with the Company during the Plan year.

 

A participant whose employment terminates voluntarily prior to the payment of a Bonus award will not be eligible to receive a Bonus award. Continued employment is a condition of payout for the plan. If a participant’s employment is terminated involuntarily during the Plan year, or prior to payment of Bonus awards, it will be at the absolute discretion of the Company whether or not a Bonus award payment is made.

 

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Corporate and Individual Performance

 

The President and CEO will present to the Committee a list of the overall corporate goals for the Plan year, which is subject to approval by both the Committee and (if different) the independent members of the Board of Directors. All participants in the Plan will then develop a list of key individual goals, which will be subject to approval by their manager and used for the basis of the performance review and individual performance rating.

 

The total bonus pool for the Plan will be based on achievement of the 2017 corporate goals and, where applicable, the individual’s annual performance review rating.

 

Notwithstanding anything else in this Plan, including without limitation the weighting factors, target bonus percentages or goal multipliers described elsewhere in this Plan, the Committee or the President and/or CEO of the Company may, in their discretion, develop and specify different corporate goals, individual performance goals, weighting factors, target bonus percentages and/or goal multipliers that will apply to one or more officers or employees of the Company and that may differ from those developed and specified for other officers or employees, including officers or employees within similar Groups.

 

Bonus Awards

 

The Bonus will be paid in cash and is based on achievement of the 2017 corporate goals and achievement of individual goals. The Bonus will be calculated by using the base salary as of December 31, 2017, weighting factor, target bonus percentage, and goal multipliers as identified below:

 

Weighting Factor

 

The relative weight between the corporate and individual Bonus components will vary based on levels within the organization. The weighting factors will be reviewed annually and adjusted, as necessary or appropriate. The weighting for 2017 will be as follows (subject to the authority of the Committee and the President or CEO to specify different relative weighting factors in individual cases): 

 

 

	Position	Corporate	Individual
	President and CEO	100%	
	Group K (EVP Level Officer)	100%	
	Group J (SVP Officers)	100%	
	Group I (Non-Officer VPs)	80%	20%
	Group H (Executive Directors)	80%	20%
	Group G (Senior Directors)	80%	20%
	Group F (Directors)	80%	20%
	Group E (Senior Managers)	60%	40%
	Group D (Managers)	60%	40%
	Group C	40%	60%
	Group A & B	20%	80%

 

 

	 	3	 

 

 

 

 

Target Bonus Percentages

 

Bonus amounts will be determined by applying a “target bonus percentage” to the base salary of employees in the Plan. Following are the 2017 target bonus percentages (subject to the authority of the Committee and the President or CEO to specify different relative target bonus percentages in individual cases): 

 

 

	Position	Target Bonus Percentages
	President and CEO	50%
	Group K	45%
	Group J	40%
	Group I	30%
	Group H	25%
	Group G	20%
	Group F	17%
	Group E	15%
	Group D	12%
	Group C	10%
	Group B	10%
	Group A	10%

 

 

The base salary as of December 31, 2017 times the target bonus percentage will be used to establish the target Bonus amount for the 2017 year.

 

Goal Multipliers

 

Corporate Goal Multiplier: The following scale will be used by the Committee and (if applicable) the independent members of the Board of Directors to determine the “total corporate goal multiplier” based upon measurement of actual corporate performance versus the pre-established corporate goals. The Committee will evaluate each corporate goal as follows (subject to the authority of the Committee and the President or CEO to specify different goal multipliers in individual cases): 

 

	Performance Category	Goal Multiplier
	
1.       Performance for the year significantly exceeded the goal or was excellent in view of prevailing conditions 

	100-150%
	 	 
	
2.       Performance fully met the year’s goal or is considered achieved in view of prevailing conditions 

	100%
	 	 
	
3.       Performance for the year met some aspects of the goal but not all or met most aspects in view of prevailing conditions

	40-100%
	 	 
	
4.       Performance for the year was significantly less than the goal (i.e., below 40%) 

	0%

 

 

	 	4	 

 

 

 

 

Each goal is evaluated separately, weighting applied and a total corporate goal multiplier is reached. A total corporate goal multiplier of at least 40% is required prior to any payout of Bonuses under the Plan (provided, however, that the Committee shall retain the discretion to determine otherwise and to approve payouts based on a multiplier of less than 40%), and the total corporate goal multiplier may not exceed 150%.

 

Individual Goal Multiplier: The “individual goal multiplier” will be determined by taking into account the performance rating (Outstanding, Exceeds, Meets, Fair, etc.) given to the individual through the 2017 review cycle as well as any other relevant criteria relating to the individual’s job performance during 2017.

 

Calculation of Bonus Amount

 

The example below shows a sample Bonus amount calculation under the Plan. First, a target Bonus amount is calculated for each Plan participant by multiplying the employee’s base salary by the target bonus percentage. This dollar figure is then divided between the corporate component and the individual component based on the weighting factor for that position. This calculation establishes specific dollar target Bonus amounts for the performance period for each of the corporate and individual components.

 

At the end of the performance period, corporate and individual goal multipliers will be established using the criteria described above. The corporate goal multiplier, which is based on overall corporate performance, is used to calculate the corporate component of the Bonus amount for all Plan participants. This is accomplished by multiplying the target corporate Bonus amount established for each individual by the total corporate goal multiplier. The individual goal multiplier, which is based on an individual’s performance rating, is used in the same way to calculate the actual individual component of the Bonus amount. 

 

	Example: Actual Bonus Amount Calculation	 
	   Group Level	B
	   Position	Executive Assistant
	   Base Salary as of December 31	$50,000
	   Target Bonus Percentage	10%
	   Performance Rating	Exceeds
	   Target Bonus Amount	$5,000
	 	 
	   Target Bonus Components:	 
	   Target Bonus Amount based on corporate performance (20%)	$1,000
	   Target Bonus Amount based on individual performance (80%)	$4,000
	 	 
	   Corporate Goal Multiplier	80%
	   Individual Goal Multiplier 	105%
	 	 
	Actual Bonus Amount Calculation:	 
	Corporate Bonus Amount	$800 ($1,000 x 80%)
	Individual Bonus Amount	$4,200 ($4,000 x 105%)
	Actual Cash Bonus Amount	$5,000

 

 

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Payment of the Bonus Amounts

 

Annual performance reviews for Plan participants will be completed by January 31, 2018 or as soon thereafter as practicable. Payments of actual Bonus amounts will be made as soon as practical, but not later than March 15, 2018. Participants’ entitlement to Bonuses under this Plan does not occur until the Bonuses are actually paid. This plan is not intended to be subject to Section 409A of the Internal Revenue Code of 1986, as amended.

 

Company’s Absolute Right to Alter or Abolish the Plan

 

The Committee reserves the right in its absolute discretion to terminate and/or abolish all or any portion of the Plan at any time or to alter the terms and conditions under which a Bonus will be paid. In the event of the Plan’s termination prior to the payment of a Bonus, such Bonus will not be payable under this Plan. Such discretion may be exercised any time before, during, and after the Plan year is completed. No participant shall have any right to receive any payment until actual delivery of such compensation. Notwithstanding the generality of the foregoing, at the Company’s discretion, and subject to compliance in all events with, and if and only if permitted by, applicable federal and state securities laws and the listing rules and requirements of any stock exchange or trading market on which the Company’s common stock is listed or traded, all or a portion of a Bonus payment may be made in vested shares of the Company’s common stock. No payment in stock or other equity under this Plan may be made if such issuance or payment would conflict with any such securities laws or listing rules or requirements.

 

The Committee, in its discretion, may also determine whether to increase the payout under the Plan for extraordinary achievement or to reduce payout if economic and business conditions warrant such action.

 

Employment Duration/Employment Relationship

 

This Plan does not, and the Company’s policies and practices in administering this Plan do not, constitute an express or implied contract or other agreement concerning the duration of any participant’s employment with the Company. The employment relationship of each participant is “at will” and may be terminated at any time by the Company or by the participant with or without cause. 

 

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