Document:

Adamis Pharmaceutical Corporation 8-K

Exhibit 10.2

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

This
Amended and Restated Registration Rights Agreement (the “Agreement”) is dated as of January 26, 2016
(the “Agreement Date”) and is entered into by and among Adamis Pharmaceuticals Corporation, a Delaware
corporation (the “Company”), and the “Investors” named in that certain Purchase
Agreement dated August 19, 2014 by and between the company and each of the Investors (the “2014 Purchase Agreement”)
and that certain Purchase Agreement dated the date hereof and entered into by and between the Company and each of the Investors
(the “2016 Purchase Agreement” and collectively with the 2014 Purchase Agreement, “Purchase
Agreement”). Capitalized terms used herein have the respective meanings ascribed thereto in the Purchase Agreement,
unless otherwise defined herein.

 

WHEREAS, as of the date hereof, the Investors
own Registrable Securities of the Company;

 

WHEREAS, the parties desire to set forth certain
registration rights applicable to the Registrable Securities;

 

WHEREAS, Section 7 of the Existing Registration
Rights Agreement (as defined below) provides that any term thereof may be amended with the written consent of the Company and the
Required Investors (each as defined in the Existing Registration Rights Agreement);

 

WHEREAS, the undersigned Investors constitute
the Required Investors; and

 

WHEREAS, this Agreement
amends, restates, replaces and supersedes in its entirety that certain Registration Rights Agreement, dated as of August 19, 2014,
by and among the Investors and the Company (the “Existing Registration Rights Agreement”).

 

NOW, THEREFORE, in consideration
of the foregoing and the mutual promises, covenants and agreements of the parties hereto, and for other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties hereto amend and restate the Existing Registration Rights
Agreement and agree as follows:

 

1. Certain
Definitions.

 

As used in this Agreement,
the following terms shall have the following meanings:

 

“Investors”
means the Investors identified in the Purchase Agreement and any Affiliate or permitted transferee of any Investor who is a subsequent
holder of any Registrable Securities.

 

“Prospectus”
means (i) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by
all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference
in such prospectus, and (ii) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.

 

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“Register,”
“registered” and “registration” refer to a registration made by preparing and filing a Registration
Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness
of such Registration Statement or document.

 

“Registrable Securities”
means, collectively, the (i) the Shares, (ii) the Warrant Shares, and (iii) any other securities issued or issuable with respect
to or in exchange for Registrable Securities, whether by merger, charter amendment or otherwise; provided, that, a security shall
cease to be a Registrable Security upon (A) sale to the public pursuant to a Registration Statement or Rule 144 under the 1933
Act, or (B) such security becoming eligible for sale without volume restrictions by the applicable Investor pursuant to Rule 144
(and, with respect to Warrant Shares, giving effect to and assuming a net exercise of the Warrant by the Investor).

 

“Registration
Deadline” means the sixtieth (60th) calendar day following the Initial Filing Deadline.

 

“Registration
Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of
the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

“Required Investors”
means the Investors beneficially owning a majority of the Registrable Securities (without taking into account any limitations on
conversion or exercise).

 

“SEC”
or the “Commission” means the U.S. Securities and Exchange Commission.

 

“Shares”
means the shares of Common Stock that are issued or issuable upon conversion of the shares of the Company’s Series A-1 Convertible
Preferred Stock (“Preferred Stock”) that were issued pursuant to the Purchase Agreement (without taking
into account any limitations on conversion).

 

“Warrants”
means the Common Stock purchase warrants issued to the Investors pursuant to the Purchase Agreement.

 

“Warrant Shares”
means the shares of Common Stock issued or issuable upon exercise of the Warrants (without taking into account any limitations
on conversion) and shares of Common Stock issuable on the conversion of Preferred Stock issued or issuable on exercise of the Warrants.

 

“1934 Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

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2. Registration.

 

(a)
Registration Statements.

 

(i) Filing
of Registration Statement. As soon as reasonably practicable following the Agreement Date, but
no later than March 31, 2016 (the “Initial Filing Deadline”), the
Company shall prepare and file with the SEC one Registration Statement on Form S-3 (or, if Form S-3 is not then available to
the Company, on such form of registration statement as is then available to effect a registration for resale of
the Registrable Securities), covering the resale of all of the Registrable Securities, and shall use its best efforts
to cause such Registration Statement to be declared effective as promptly as reasonably practicable thereafter. Subject to
any SEC comments, such Registration Statement shall include the plan of distribution attached hereto as Exhibit A (or
such other plan reasonably requested by the Required Investors). Such Registration Statement also shall cover, to the
extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number
of additional shares of Common Stock as may become issuable due to an increase in the number of Shares or Warrant
Shares resulting from changes in the conversion rate of the Preferred Stock, or the number of shares issuable upon exercise
of the Warrants. Such Registration Statement may include any shares of Common Stock or other securities for the account of
any other holder with registration rights pursuant to written agreements entered into with the Company before the date of
this Agreement (or such shares may be registered on separate registration statements filed before or after the
Registration Statement is filed), but shall not include any other shares of Common Stock or other securities without the
prior written consent of the Required Investors. Except as contemplated by the preceding sentence or pursuant to registration
statements filed and declared effective by the SEC before the Agreement Date, the Company shall not register additional
shares of Common Stock until the Registration Statement is declared effective or, if earlier, until the Registrable
Securities no longer constitute Registrable Securities. The Registration Statement (and each amendment or supplement thereto,
and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the
Investors and their counsel prior to its filing or other submission. If a Registration Statement covering the Registrable
Securities as provided above is not filed with the SEC on or prior to the Initial Filing Deadline the Company will make pro
rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to one percent (1.0%) of the
aggregate purchase price of the Warrants and Preferred Stock purchased by such Investor pursuant to the Purchase Agreement
for each 30-day period or pro rata for any portion thereof following the Initial Filing Deadline for which no Registration
Statement is filed with respect to the Registrable Securities, until such time as the Registrable Securities (giving effect
to and assuming a net exercise of the Warrant by the Investor) may be sold without volume limitations pursuant to Rule 144.
Any such payment shall be in addition to any other remedies available to the Investor at law or in equity, whether pursuant
to the terms hereof, the Purchase Agreement, the Certificate of Designation, or otherwise. Such payments shall be made to
each Investor in cash no later than three (3) Business Days after the end of each 30-day period.

 

(b)
Expenses. The Company will pay all expenses associated with effecting the registration of the Registrable Securities, including
filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable
Securities for sale under applicable state securities laws, listing fees, and reasonable fees and expenses of one counsel to the
Investors, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities
industry professionals with respect to the Registrable Securities being sold.

 

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(c) Effectiveness.

 

(i)
The Company shall use best efforts to have the Registration Statement declared effective as soon as reasonably practicable after
filing, but in no event later than the Registration Deadline. The Company shall respond promptly to any and all comments made
by the staff of the Commission on the Registration Statement, and shall submit to the Commission, with two (2) Business Days after
the Company learns that no review of the Registration Statement will be made by the staff of the Commission or that the staff
of the Commission has no further comments on the Registration Statement, as the case may be, a request for acceleration of the
effectiveness of the Registration Statement to a time and date not later than two (2) Business Days after the submission of such
request. The Company shall notify the Investors by facsimile or e-mail as promptly as reasonably practicable, and in any event,
within twenty-four (24) hours, after the Registration Statement is declared effective and shall simultaneously provide or make
available to the Investors copies of any related Prospectus to be used in connection with the sale or other disposition of the
securities covered thereby. If, subject to Section 2(d) hereof, (A) a Registration Statement covering the Registrable Securities
is not declared effective by the SEC prior to the earlier of (i) five (5) Business Days after the SEC shall have informed the
Company that no review of the Registration Statement will be made or that the SEC has no further comments on the Registration
Statement, or (ii) the 60th day after the Initial Filing Deadline (the 90th day if the SEC reviews the Registration
Statement), or (B) after the Registration Statement has been declared effective by the
SEC, sales cannot be made pursuant to such Registration Statement for any reason (including, without limitation, by reason of
a stop order, or the Company’s failure to update the Registration Statement), but excluding the inability of any Investor
to sell the Registrable Securities covered thereby solely due to market conditions, then the Company will make pro rata
payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.0% of the aggregate amount invested
by such Investor for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement
should have been effective (the “Blackout Period”), until such time as the Registrable Securities (giving
effect to and assuming a net exercise of the Warrant by the Investor) may be sold without volume limitations pursuant to Rule
144. Any such payment shall be in addition to any other remedies available to the Investor at law or in equity, whether pursuant
to the terms hereof, the Purchase Agreement, the Certificate of Designation, or otherwise. The amounts payable as liquidated damages
pursuant to this paragraph shall be paid monthly within three (3) Business Days of the last day of each month following the commencement
of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each Investor in cash.

 

(ii) For not more than
sixty (60) days (which need not be consecutive days) in any twelve (12) month period, the Company may suspend the use of any Prospectus
included in any Registration Statement contemplated by this Section in the event that the Company determines in good faith that
such suspension is necessary to (A) delay the disclosure of material non-public information concerning the Company, the disclosure
of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company, or (B) amend or supplement
the affected Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading (an
“Allowed Delay”); provided, that the Company shall promptly (a) notify each Investor in writing of the
commencement of an Allowed Delay, but shall not (without the prior written consent of an Investor) disclose to such Investor any
material non-public information giving rise to an Allowed Delay, (b) advise the Investors in writing to cease all sales under the
Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay
as promptly as practicable. Notwithstanding the provisions of this Section, if an Allowed Delay is not in connection with the review
by the SEC of a Registration Statement or the financial statements contained therein, such Allowed Delay shall not be for a period
exceeding twenty (20) consecutive days. Although an Allowed Delay would not be a breach of this Agreement, liquidated damages would
accrue during such Allowed Delay pursuant to Section 2(c)(i).

 

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(d) Rule 415; Cutback.
If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement
is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act or requires any
Investor to be named as an “underwriter,” the Company shall use its reasonable best efforts to persuade the SEC that
the offering contemplated by the Registration Statement is a valid secondary offering and not an offering “by or on behalf
of the issuer” as defined in Rule 415 and that none of the Investors is an “underwriter.” The Investors shall
have the right to participate or have their counsel participate in any meetings or discussions with the SEC regarding the SEC’s
position and to comment or have their counsel comment on any written submission made to the SEC with respect thereto. No such written
submission shall be made to the SEC to which the Investors’ counsel reasonably objects. In the event that, despite the Company’s
best efforts and compliance with the terms of this Section 2(d), the SEC refuses to alter its position, the Company shall (i) remove
from the Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”), and/or
(ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require
to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”).
Any cut-back imposed on the Investors pursuant to this Section 2(d) shall be allocated among the Investors on a pro rata basis
and shall be applied first to any Warrant Shares covered by such Registration Statement, unless the SEC Restrictions otherwise
require or provide or the Investors otherwise agree. Such required cut-back would not be considered a breach of this Agreement,
unless continuing past the 60th day (or the 90th day if the SEC reviews the registration statement)
after such date as the Company is permitted to effect the registration of such Cut Back Shares in accordance with any SEC
Restrictions (such date, the “Restriction Termination Date” of such Cut Back Shares), provided that liquidating
damages would accrue as a result as provided in Section 2(c)(i).

 

3. Company Obligations.
The Company will use best efforts to effect the registration of the Registrable Securities in accordance with the terms hereof,
and pursuant thereto the Company will, as expeditiously as possible:

 

(a) use best efforts to cause
such Registration Statement to become effective and to remain continuously effective (other than during an Allowed Delay) for a
period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration Statement
as amended from time to time, have been sold, and (iii) the date on which all Registrable Securities covered by such Registration
Statement may be sold without volume restriction pursuant to Rule 144 (giving effect to and assuming a net exercise of the Warrant
by the Investor) (the “Effectiveness Period”) and advise the Investors in writing when the Effectiveness
Period has expired;

 

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(b) prepare and file with
the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be necessary to keep
the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934
Act with respect to the distribution of all of the Registrable Securities covered thereby;

 

(c) provide copies to and
permit counsel designated by the Investors to review each Registration Statement and all amendments and supplements thereto no
fewer than two (2) days prior to their filing with the SEC and not file any document to which such counsel reasonably objects,
provided that the Company is notified of such objection, including the substance of such objection, in writing no later than three
Business Days after such counsel has been so furnished copies of such documents;

 

(d) furnish or otherwise
make available (including via EDGAR) to the Investors and their legal counsel (i) promptly after the same is prepared and publicly
distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt
date or sending date, as the case may be) one (1) copy of any Registration Statement and any amendment thereto, each preliminary
prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the
SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such
Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements
thereto and such other documents as each Investor may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor that are covered by the related Registration Statement;

 

(e) use best efforts to (i)
prevent the issuance of any stop order or other suspension of effectiveness, and (ii) if such order is issued, obtain the withdrawal
of any such order at the earliest possible moment and to notify the Investors of the issuance of such order and the resolution
thereof;

 

(f) use best efforts to register
or qualify (unless an exemption from the registration or qualification exists) or cooperate with the Investors and their counsel
in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or
blue sky laws of such domestic jurisdictions as are reasonably requested by the Investors and do any and all other commercially
reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities
covered by the Registration Statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify, but for this Section 3(f), (ii) subject itself to general taxation in any jurisdiction where
it would not otherwise be so subject, but for this Section 3(f), or (iii) file a general consent to service of process in any such
jurisdiction;

 

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(g) use best efforts to cause
all Registrable Securities covered by a Registration Statement to be listed on each securities exchange, interdealer quotation
system or other market on which similar securities issued by the Company are then listed;

 

(h) immediately notify the
Investors, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as
a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and,
subject to Section 2(c)(ii) hereof promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment
of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the
circumstances then existing;

 

(i) otherwise use best efforts
to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation,
Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to
Rule 424 under the 1933 Act, promptly inform the Investors in writing if, at any time during the Effectiveness Period, the Company
does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investors are required to deliver a Prospectus
in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate
the registration of the Registrable Securities hereunder; and

 

(j) with a view to making
available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may
at any time permit the Investors to sell shares of Common Stock to the public without registration, the Company covenants and agrees
to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of
(A) such date as all of the Registrable Securities may be sold without restriction by the holders thereof pursuant to Rule 144
or any other rule of similar effect, or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with
the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii) furnish to each
Investor upon request (including via EDGAR), as long as such Investor owns any Registrable Securities, (A) a written statement
by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy (or a link to a website containing
the same) of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information
as may be reasonably requested in order to avail such Investor of any rule or regulation of the SEC that permits the selling of
any such Registrable Securities without registration under Rule 144.

 

4. Due Diligence Review;
Information. The Company shall make available, during normal business hours, for inspection and review by the Investors, advisors
to and representatives of the Investors (who may or may not be affiliated with the Investors and who are reasonably acceptable
to the Company), all SEC Filings (as defined in the Purchase Agreement) and other filings with the SEC, and all other corporate
documents and properties of the Company as may be reasonably necessary for the purpose of such review, for the sole purpose of
enabling the Investors and such representatives, advisors and underwriters and their respective accountants and attorneys to conduct
initial and ongoing due diligence with respect to the accuracy of such Registration Statement.

 

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5. Obligations
of the Investors.

 

(a) Each Investor shall furnish
in writing to the Company such information regarding itself, the Registrable Securities and Company securities held by it and the
intended method of disposition of the Registrable Securities held by it, as shall be required to effect the registration of such
Registrable Securities, to respond to requests by the SEC, FINRA or any state securities commission or as may be required to be
disclosed by applicable securities laws and shall execute such documents in connection with such registration as the Company may
reasonably request. At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the
Company shall notify each Investor of the information the Company requires from such Investor if such Investor elects to have any
of the Registrable Securities included in the Registration Statement.

 

(b) Each Investor agrees
that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii),
or (ii) the happening of an event pursuant to Section 3(h) hereof, such Investor will use its commercially reasonable efforts to
promptly discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities,
until the Investor is advised by the Company that such dispositions may again be made. The Company may provide appropriate stop
orders to enforce the provisions of this paragraph.

 

(c) The Company shall have
no obligation to make liquidated damages payments under this Agreement to any Investor as a result of delays caused by its breach
of these obligations.

 

6. Indemnification.

 

(a) Indemnification by
the Company. To the extent permitted by law, the Company will indemnify and hold harmless each Investor and its officers, directors,
members, employees and agents, successors and assigns, and each other person, if any, who controls, or is alleged to control, such
Investor within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which they
may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of
any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or
supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based
upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the
Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue
Sky Application”); (iii) the omission or alleged omission to state in a Blue Sky Application a material fact required
to be stated therein or necessary to make the statements therein not misleading; (iv) any violation by the Company or its agents
of any rule or regulation promulgated under the 1933 Act applicable to the Company or its agents and relating to action or inaction
required of the Company in connection with such registration; or (v) any failure to register or qualify the Registrable Securities
included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed
in writing that the Company will undertake such registration or qualification on an Investor’s behalf pursuant to an Investor’s
affirmative request under Section 3(f) hereof and will reimburse such Investor, and each such officer, director or member and each
such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any
such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Investor or
any such controlling person relating to such Investor in writing specifically for use in such Registration Statement or Prospectus.

 

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(b) Indemnification by
the Investors. Each Investor who is named in such Registration Statement as a selling stockholder agrees, severally, but not
jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees,
stockholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages,
liabilities and expense (including reasonable attorney fees) resulting from (i) any untrue statement of a material fact or any
omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary Prospectus or amendment
or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent that such
untrue statement or omission is contained in any information furnished in writing by such Investor to the Company specifically
for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto, and (ii) the sale of Registrable
Securities in violation of Section 5(c) hereof; provided, however, that the foregoing indemnity shall not apply to amounts paid
in settlement of any loss, claim, damage, liability or expense if such settlement is effected without the consent of such Investor.
In no event shall the liability of an Investor be greater in amount than the dollar amount of the net proceeds received by such
Investor upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification
obligation.

 

(c) Conduct of Indemnification
Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any
claim with respect to which it seeks indemnification, and (ii) permit such indemnifying party to assume the defense of such claim
with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder
shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person, unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b)
the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such
person, or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest
may exist between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the
indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided,
further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying
party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the
indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection
with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any
time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, consent to
entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant
or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

 

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(d) Contribution.
If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party
or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates
to information provided by the Company or by a holder of Registrable Securities. No person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a holder of Registrable Securities together with any indemnification
obligations under Section 6(b) above be greater in amount than the dollar amount of the net received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.

 

(e) The obligations of the
Company and each Investor under this Section 6 shall survive the conversion of the Preferred Stock and exercise of the Warrants
in full, the completion of any offering or sale of Registrable Securities pursuant to a Registration Statement under this Agreement,
or otherwise.

 

7. Miscellaneous.

 

(a) Amendments and Waivers.
This Agreement may be amended only by a writing signed by the Company and the Required Investors. The Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the Required Investors.

 

(b) Notices. All notices
and other communications provided for or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase Agreement.

 

(c) Assignments and Transfers
by Investors. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investors and their respective
successors and assigns. An Investor may transfer or assign, in whole or from time to time in part, to one or more persons its rights
hereunder in connection with the transfer of Registrable Securities by such Investor to such person, provided that such Investor
provides written notice of assignment to the Company promptly after such assignment is effected.

 

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(d) Assignments and Transfers
by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior
written consent of the Required Investors, provided, however, that in the event that the Company is a party to a merger, consolidation,
share exchange or similar business combination transaction, or a transaction involving the transfer or other disposition of all
or substantially all of the Company’s assets to another corporation or entity, or similar transaction, the Company may assign
its rights and delegate its duties hereunder to any surviving or successor corporation without the prior written consent of the
Required Investors, after notice duly given by the Company to each Investor. In any such transaction in which the Common Stock
is converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall,
by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company”
shall be deemed to refer to such Person and the term “Registrable Securities” shall be deemed to include
the securities received by the Investors in connection with such transaction, unless such securities are otherwise freely tradable
by the Investors after giving effect to such transaction.

 

(e) Benefits of the Agreement.
The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors
and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the
parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.

 

(f) Counterparts; Faxes.
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 one and the same instrument. This Agreement may also be executed via facsimile, which shall be deemed an original.

 

(g) Titles and Subtitles.
The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement.

 

(h) Severability.
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, but shall be interpreted
as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable
in any respect.

 

(i) Further Assurances.
The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably
be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

 

    	 	 11	 

    	 

    

 

(j) Entire Agreement.
This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

(k) Governing Law; Consent
to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto irrevocably submits
to the exclusive jurisdiction of the courts of the federal and state courts located in New York for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process
in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods
as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction
of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably
waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. TO THE
MAXIMUM EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH
RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

 

    	 	 12	 

    	 

    

 

IN WITNESS WHEREOF, the
parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above
written.

 

	The Company:	ADAMIS PHARMACEUTICALS CORPORATION
	 	 
	 	By: 	/s/ Dennis J. Carlo
	 	Name:	Dennis J. Carlo
	 	Title:	CEO

 

[Investor Signature Page Immediately
Follows]

 

    	 	13	 

    	 

    

 

Counterpart Signature Page

 

	FOR ENTITY INVESTORS:	 	FOR INDIVIDUAL INVESTORS:

 

	 	 	Signature: 	 
	[Name of Entity]	 	Name: 	 

 

	By: 	 	 	 
	Name: 	 	 	 
	Title: 	 	 	 

 

    	 	14	 

    	 

    

 

EXHIBIT
A

 

PLAN
OF DISTRIBUTION

 

The
selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares
of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as
a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any
or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices
at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.

 

The selling stockholders
may use any one or more of the following methods when disposing of shares or interests therein:

 

	 	–

	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	 	 	 
	 	–	block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
	 	 	 
	 	–	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	 	 	 
	 	–	an exchange distribution in accordance with the rules of the applicable exchange;
	 	 	 
	 	–	privately negotiated transactions;
	 	 	 
	 	–	short sales effected after the date the registration statement of which this Prospectus is a part is declared effective by the SEC;
	 	 	 
	 	–	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
	 	 	 
	 	–	broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
	 	 	 
	 	–	a combination of any such methods of sale; and
	 	 	 
	 	–	any other method permitted by applicable law.

  

The selling stockholders
may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of
common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the 1933 Act amending the list of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.

 

    	 	 A-1	 

    	 

    

 

In connection with the
sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions
they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out
their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus
(as supplemented or amended to reflect such transaction).

 

The aggregate proceeds
to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents
from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents.
We will not receive any of the proceeds from this offering. Upon any exercise of the warrants by payment of cash, however, we will
receive the exercise price of the warrants.

 

The selling stockholders
also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the 1933 Act, provided
that they meet the criteria and conform to the requirements of that rule.

 

The selling stockholders
and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be “underwriters”
within the meaning of Section 2(11) of the 1933 Act. Any discounts, commissions, concessions or profit they earn on any resale
of the shares may be underwriting discounts and commissions under the 1933 Act. Selling stockholders who are “underwriters”
within the meaning of Section 2(11) of the 1933 Act will be subject to the prospectus delivery requirements of the 1933 Act.

 

To the extent required,
the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer
will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement
that includes this prospectus.

 

In order to comply with
the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered
or licensed brokers or dealers. In addition, in some states the common stock may not be sold, unless it has been registered or
qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

 

    	 	 A-2	 

    	 

    

 

We have advised the selling
stockholders that the anti-manipulation rules of Regulation M under the 1934 Act may apply to sales of shares in the market and
to the activities of the selling stockholders and their affiliates. In addition, to the extent applicable we will make copies of
this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose
of satisfying the prospectus delivery requirements of the 1933 Act. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under
the 1933 Act.

 

We have agreed to indemnify
the selling stockholders against liabilities, including liabilities under the 1933 Act and state securities laws, relating to the
registration of the shares offered by this prospectus.

 

We have agreed with the
selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier
of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration
statement, or (2) the date on which all of the shares may be sold without restriction pursuant to Rule 144 of the 1933 Act.

  

 

    	 	 A-3	 

    	 

    

 

EXHIBIT
B

 

SELLING
SECURITYHOLDER NOTICE AND QUESTIONNAIRE

 

The undersigned beneficial
owner of common stock (the “Registrable Securities”) of Adamis Pharmaceuticals Corporation, a Delaware
corporation (the “Company”), understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”)
for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”),
of the Registrable Securities, in accordance with the terms of the Amended and Restated Registration Rights Agreement (the “Registration
Rights Agreement”) of which this document is an exhibit. A copy of the Registration Rights Agreement is available
from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.

 

Certain legal consequences
arise from being named as a selling securityholder in the Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Registration Statement and the related prospectus.

 

NOTICE

 

The undersigned holder
(the “Selling Securityholder”) of Registrable Securities hereby elects to include the Registrable Securities
owned by it and listed below in Item 3 (unless otherwise specified under such Item 3) in the Registration Statement. The undersigned,
by signing and returning this Notice and Questionnaire, understands that it will be bound by the terms and conditions of this Notice
and Questionnaire and the Registration Rights Agreement.

 

The undersigned hereby provides the following
information to the Company and represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

	1.	Name:
	 	 	 
	 	(a) 	Full Legal Name of Selling Securityholder:
	 	 	 
	 	 	 
	 	(b) 	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities listed in Item 3 below are held:
	 	 	 
	 	 	 

 

    	 	 B-1	 

    	 

    

 

 

	 	(c) 	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):
	 	 	 
	 	 	 
	2.	Address for Notices to Selling Securityholder:
	 	 	 
	 	 	 
	 	 	 

 

	 	Telephone: 	 	 
	 	Fax: 	 	 
	 	Contact Person: 	 	 

 

	3.	Beneficial Ownership of Registrable Securities:
	 	 	 
	 	(a) 	Type and Number of Registrable Securities beneficially owned:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	4.	Broker-Dealer Status:
	 	(a) 	Are you a broker-dealer?
	 	Yes  ☐          No ☐
	 	(b) 	If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
	 	Yes  ☐          No ☐
	 	Note: If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
	 	(c) 	Are you an affiliate of a broker-dealer?
	 	Yes  ☐          No ☐
	 	(d) 	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
	 	Yes  ☐          No ☐
	 	Note: If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

    	 	 B-2	 

    	 

    

 

	5.	Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder:
	 	 	 
	 	Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Purchase Agreement and listed above in Item 3.
	 	 	 
	 	(a) 	Type and Amount of other securities beneficially owned by the Selling Securityholder:
	 	 	 
	 	 	 
	 	 	 
	6.	Relationships with the Company:
	 	Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
	 	 	 
	 	 	State any exceptions here:
	 	 	 
	 	 	 

 

The undersigned agrees
to promptly notify the Company of any inaccuracies or changes in the information provided herein (i) that may occur subsequent
to the date hereof until the effective date of the Registration Statement (other than changes in ownership), and (ii) at any time
while the Registration Statement remains effective if requested by the Company in connection with the filing of a prospectus supplement
or a post-effective amendment. All notices hereunder shall be made in writing at the address set forth below.

 

By signing below, the undersigned
consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and the inclusion of such information
in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands
that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

 

    	 	 B-3	 

    	 

    

 

IN WITNESS WHEREOF the
undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.

 

	Dated:	Selling Securityholder: 	 

 

 

	 	By: 	 
	 	Name: 	 
	 	Title: 	 

 

PLEASE FAX A COPY OF THE COMPLETED AND
EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

	[_______________________________]	 	 
	 	 	 
	 	 	 
	 	 	 
	Attention: Chief Financial Officer	 	 
	 	 	 
	Fax No.: (___) ___-____	 	 

 

B-4Exhibit 10.4

CLASS A UNIT PURCHASE AND SALE AGREEMENT

THIS CLASS A UNIT PURCHASE AND SALE AGREEMENT (this “Agreement”), effective as of October 15, 2013 (the “Effective Date”), by and among Canna Security America LLC, a Colorado limited liability company (“Seller”), Dixie Holdings, LLC, a Colorado limited liability company (“Dixie”), and James Willett (“Willett”, and, collectively with Dixie, the “Purchaser”). Purchaser and Seller may be referred to herein as the “Parties” and each, individually, a “Party”.

WHEREAS, Canna Security America LLC was formed as a limited liability company under and pursuant to the provisions of the Colorado Limited Liability Company Act, as amended (the “Act”), and upon the terms and conditions set forth in the Canna Security America LLC Operating Agreement (the “Operating Agreement”).  Terms not otherwise defined herein shall have the meaning set forth in the Operating Agreement.

WHEREAS, Seller desires to sell and Dixie desires to purchase 107,143 Class A Units in Seller (the “Dixie Units”), and Seller desires to sell and Willett desires to purchase 142,857 Class A Units in Seller (the “Willett Units”, and, collectively with the Dixie Units, the “Units”), on and subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the promises, mutual agreements and covenants hereinafter set forth, the Parties hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE

1.1    Purchase and Sale of the Units.

(a)    Upon the terms and subject to the conditions contained in this Agreement, effective as of the Effective Date, Seller hereby sells, assigns and transfers to the Purchaser, and the Purchaser hereby purchases and acquires from Seller, all right, title and interest in and to the Units.

(b)    The total price and other consideration payable by Dixie to Seller for the Dixie Units shall be (i) payment in cash in the amount of $47,143.00 and (ii) cancellation of that certain existing Promissory Note between Seller and Dixie in the principal sum of $60,000.00, dated April 9, 2013 (collectively, the “Dixie Purchase Price”).

(c)    The total price and other consideration payable by Willett to Seller for the Willett Units shall be payment in cash in the amount of $142,857.00, of which Willett has previously contributed $110,000.00 to Seller such that Willett, as a condition to close, shall only be required to pay $32,857.00 to Seller (“Willet Purchase Price”, and, collectively with the Dixie Purchase Price, the “Purchase Price”).

(d)    On the Effective Date, Purchaser agrees to pay such cash component of the Purchase Price by wire transfer of immediately available funds to an account of Seller at a commercial bank located in the United States of America, which account shall be specified by Seller.

 

1

(e)    Purchaser shall not be responsible for payment of any taxes incurred in connection with or otherwise related to this Agreement.  Seller shall be responsible for payment of any taxes incurred in connection with or otherwise related to this Agreement.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES  

2.1    Representations and Warranties of Seller.  As an inducement to the Purchaser to enter into this Agreement, Seller hereby represents and warrants to the Purchaser as follows:

(a)    Authority.  This Agreement has been duly executed and delivered by Seller and constitutes a legal, valid and binding obligation of Seller, enforceable against him in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

(b)    No Conflict.  The execution, delivery and performance of this Agreement does not and will not (i) to the knowledge of Seller, conflict with or violate any legally binding law, statute, treaty, constitution, regulation, rule, ordinance, order or governmental approval, or other governmental restriction, requirement or determination, of or by any governmental authority (collectively, “Laws”) applicable to Seller or his execution of this Agreement; or (ii) conflict with, or result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any contractual obligation or agreement to which Seller is a party or by which he is bound, or result in the creation of any lien on any properties of Seller.

(c)    Units.  Upon payment of the Purchase Price as herein provided, the Purchaser will receive good and marketable title to the Units and will be the record and beneficial owner of the Units (which will be duly authorized and validly issued and fully paid and not assessable).

(d)    No Litigation.  There is no lawsuit, action, proceeding or investigation pending or, to Seller’s knowledge, threatened against Seller in any court or before any arbitrator of any kind or before or by any governmental authority which purports to affect the validity, enforceability or legality of its obligations under this Agreement.

(e)    No Encumbrances.  Seller has good and marketable title to the Units, and such Units will be transferred to the Purchaser free and clear of any mortgage, pledge, lien, encumbrance, charge, or other security interest, or any other liability not created by the Operating Agreement or the terms of this Agreement.

2.2    Representations and Warranties of the Purchaser.  As an inducement to Seller to enter into this Agreement and in reliance upon the representations and warranties made herein by Seller, the Purchaser hereby represents and warrants to Seller as follows:

(a)    Authority.  This Agreement has been duly executed and delivered by the Purchaser and constitutes a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

 

2

(b)    No Conflict.  The execution, delivery and performance of this Agreement does not and will not (i) to the knowledge of Purchaser, conflict with or violate any Laws applicable to Purchaser or his or its execution of this Agreement; or (ii) conflict with, or result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any contractual obligation or agreement to which Purchaser is a party or by which he or it is bound, or result in the creation of any lien on any properties of Purchaser.

(c)    No Litigation.  There is no lawsuit, action, proceeding or investigation pending or, to the Purchaser’s knowledge, threatened against the Purchaser in any court or before any arbitrator of any kind or before or by any governmental authority which purports to affect the validity, enforceability or legality of its obligations under this Agreement.

(d)    Compliance with Securities Laws:

		(i)	Purchaser is acquiring the Units for the Purchaser’s own account, for investment, and not with a view toward the resale or distribution thereof in violation of applicable securities laws.

		(ii)	Purchaser understands that the Units are not registered under the Securities Act, or any applicable state securities laws, and may not be resold unless subsequently registered under the Securities Act of 1933, as amended (the “Securities Act”) and such other laws or unless an exemption from such registration is available. Purchaser understands and agrees that, subject to the terms and conditions contained in the Operating Agreement, it may only pledge, transfer, convey or otherwise dispose of any of the Units in compliance with the Securities Act and applicable state securities laws, as then in effect.

		(iii)	Purchaser has the ability to bear the economic risks of the investment in the Units being purchased hereunder for an indefinite period of time. The Purchaser further acknowledges that Purchaser has had the opportunity to ask questions of, and receive answers from, the officers of Issuer with respect to the business and financial condition of Issuer and the terms and conditions of the Units and to obtain additional information necessary to verify such information.

		(iv)	Purchaser has knowledge and experience in financial and business matters such that Purchaser is capable of evaluating the merits and risks of its investment in the Units. Purchaser further represents that Purchaser is an “accredited investor” as such term is defined in Rule 501 under the Securities Act and is a “qualified purchaser” as such term is defined in Section 2(a)(51) of the Investment Company Act.

ARTICLE 3

ADDITIONAL AGREEMENTS

3.1    Further Action.  Subject to the terms and conditions of this Agreement, each Party agrees to perform (or procure the performance of) all further acts and things, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required by applicable Laws or the terms of the Operating Agreement, or as any other Party may reasonably require, whether on or after the date hereof, to implement and/or give effect to this Agreement and the transactions contemplated herein and for the purposes of vesting in the Purchaser the full benefit of the assets, rights and benefits to be transferred to the Purchaser under this Agreement.

 

3

ARTICLE 4

MANDATORY BUY-OUT

4.1    Buy-Out. Once Seller has received financing or capital of any form totaling the Series A raise amount of $1.96 million, such financing party shall be required to buy back from each of Dixie and Willett fifty percent (50%) of the Dixie Units and fifty percent (50%) of the Willett Units at a price equal to $3.20 for each Unit in connection with and as a condition to the closing of any such financing. The terms and conditions of the buy-back shall be upon similar terms and conditions as set forth in this Agreement. Following the closing of such buy-out, no further buy-out shall be required as a condition to any future financing of Seller.

ARTICLE 5

GENERAL PROVISIONS

5.1    Expenses.

(a)    Subject to Section 5.1(b) and except as otherwise expressly specified in this Agreement, all costs and expenses, attorneys fees and other professional fees and expenses, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses.

(b)    In the event either Party initiates any legal action or proceeding to enforce the terms of this Agreement, the prevailing Party in such action or proceeding will be entitled to award of its attorneys fees and other costs incurred in connection with such action.

5.2    Waivers; Amendments

(a)    No Deemed Waivers; Remedies Cumulative.  No failure or delay by any Party in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Party therefrom shall in any event be effective unless the same shall be effected as provided in Section 5.2(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

(b)    Amendments.  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by each of the Parties.

5.3    Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different Parties on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement constitutes the entire contract between the Parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by each of the Parties. Delivery of an executed counterpart of a signature page to this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

 

4

 

5.4    Governing Law; Jurisdiction; Etc.

(a)    Governing Law.  This Agreement shall be construed in accordance with, and this Agreement and all matters arising out of or relating in any way to this Agreement (whether in contract, tort or otherwise) shall be governed by, the law of the State of Colorado, without regard to the principles of contracts of laws thereof.

5.5    WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

5.6    Counsel Representations.  Seller, Dixie, and Willett acknowledge that Seller and Dixie are represented by the same legal counsel (“Counsel”), which has prepared this Agreement on behalf of, and in the course of its representation of Seller. Seller, Dixie and Willett represent and/or acknowledge the following:

(a)    Counsel has advised Seller, Willett, and Dixie to seek the advice of independent counsel and that they have had the opportunity to do so.

(b)    Counsel has advised that there may be tax and legal consequences to this Agreement and that Counsel has not advised as to the tax and/or legal consequences to the individual interests of Seller, Dixie and Willett with respect to this Agreement and the transactions referenced herein.

(c)    Counsel has represented Seller in connection with this Agreement and the transactions referenced herein, and that Counsel at the present time does and may in the future, represent Dixie and, notwithstanding this conflict, Seller and Dixie have each waived any conflict of interest and acknowledge and consent to Counsel representing Seller in this transaction, notwithstanding such representation of Dixie.

 [Signatures appear on next page]

 

5

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date.

SELLER:

CANNA SECURITY AMERICA LLC

By: /s/ Daniel Williams

Name: Daniel William

Title: Manager

PURCHASER:

DIXIE HOLDINGS, LLC

By: /s/ Charles K. Smith

Name: Charles K. Smith

Title: Manager

/s/ James Willet                                                                                                  

James Willett, an individual

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

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