Document:

ex10_4.htm

    Exhibit 10.4

     

    
      

      FIRST AMENDMENT TO TERM LOAN
FACILITY AGREEMENT

       

      FIRST
AMENDMENT, dated as of December 28, 2009 (this “Amendment”) to the
Term Loan Facility Agreement, dated as of February 25, 2009 (as further amended,
supplemented or otherwise modified through the date hereof, the “Term Loan Facility
Agreement”), between The Talbots, Inc., a Delaware corporation (the
“Borrower”) and
Aeon (U.S.A.), Inc., a Delaware corporation (the “Lender”).

       

      WITNESSETH

       

      WHEREAS,
the parties hereto are parties to the Term Loan Facility Agreement and wish to
amend the Term Loan Facility Agreement;

       

      NOW,
THEREFORE, in consideration of the premises and the covenants and agreements
contained herein, the parties hereto agree as follows:

       

      1.         
    Defined Terms. Unless
otherwise defined herein, capitalized terms defined in the Term Loan Facility
Agreement shall have such defined meanings when used herein.

       

      2.      
       Amendment to Section 1 of
the Term Loan Facility Agreement.  Section 1 of the Term Loan
Facility Agreement is hereby amended by:

       

      
        	
                 
      

              	
                a.

              	
                deleting
      in its entirety the definition of “Maturity Date” and inserting in lieu
      thereof the following new
definition:

              

      

       

      “Maturity
Date” shall mean the earliest of (i) August 31, 2009, or, if such day is not a
Business Day, the next succeeding Business Day; provided, that , the
Borrower shall be permitted, in its sole discretion, to extend such date for
successive six-month periods upon prior written notice to the Lender no later
than five Business Days prior to the last day of such six-month period; provided , further, that, in no
event shall the Maturity Date extend past February 27, 2012, (ii) the date of
the consummation of a Qualified Transaction and (iii) such earlier date on which
the Term Loan become due and payable (whether at stated maturity, by mandatory
prepayment, by acceleration or otherwise) in accordance with the terms
hereof.

       

      
        	
                 
      

              	
                b.

              	
                (i)
      deleting the phrase “; and” set forth in clause (f) of the definition of
      “Permitted Indebtedness”, (ii) deleting the period at the end of clause
      (g) of such definition and inserting in lieu thereof the phrase “; and”
      and (iii) inserting the following new clause (h) immediately after clause
      (g) of such definition:

                 

                “(h)           Indebtedness
      under the Secured Revolving Loan Agreement in a principal amount not to
      exceed $250,000,000 and guaranties of such
  Indebtedness.”

              

      

       

      
        	
                 
      

              	
                c.

              	
                (i)
      deleting the period at the end of clause (g) of the definition of
      “Permitted Liens” and inserting a semicolon in lieu thereof, (ii) deleting
      the period at the end of clause (h) of such definition and inserting in
      lieu thereof the phrase “; and” and (iii) inserting the following new
      clause (i) immediately after clause (h) of such definition:

                 

                “(i)           Liens
      securing the obligations under the Secured Revolving Loan Agreement and
      any guaranties of such obligations.”

              

      

       

      
        	
                 
      

              	
                d.

              	
                Adding
      the following new definitions in the appropriate alphabetical order in
      such Section 1:

                 

                “Aeon Agreement” shall mean the Repurchase, Repayment
      and Support Agreement, dated as of December 8, 2009, by and between the
      Borrower, BPW Acquisition Corp., a Delaware corporation, Aeon (U.S.A.),
      Inc., a Delaware corporation, and the Lender, as amended, supplemented or
      otherwise modified from time to time.

              

      

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      
        
          	
                   
      

                	
                   

                	
                  
                    “Qualified
      Transaction” shall collectively refer to (i) the merger of BPW Acquisition
      Corp. with and into Talbots Acquisition, Inc. pursuant to the terms and
      conditions of the BPW Merger Agreement and (ii) the Stock Repurchase and
      Debt Repayment (as such terms are defined in, and contemplated by, the
      Aeon Agreement); provided, such transactions, together with any concurrent
      financing, will result in sufficient net cash proceeds to the Borrower to
      enable the Borrower to repay, in full, all of its then outstanding
      obligations under the Secured Revolving Loan Agreement and all then
      outstanding Indebtedness described in Schedule 4.17 thereto upon the
      closing of such transactions.

                     

                    “Secured
      Revolving Loan Agreement” means the Amended and Restated Secured Revolving
      Loan Agreement, dated as of December 28, 2009 (as amended, supplemented or
      otherwise modified from time to time), between the Borrower and the
      Lender.

                     

                    “Secured
      Revolving Loan Agreement” means the Amended and Restated Secured Revolving
      Loan Agreement, dated as of December 28, 2009 (as amended, supplemented or
      otherwise modified from time to time), between the Borrower and the
      Lender.

                  

                

        

         

      

      3.     
       Amendment to Section 4.1 of
the Term Loan Facility Agreement.  Section 4.1(aa) of the Term
Loan Facility Agreement is hereby amended by deleting the phrase “and (iii)” set
forth therein and inserting in lieu thereof the phrase “, (iii) the Secured
Revolving Loan Agreement and the Term Loan Agreement, dated as of July 16, 2008,
between the Borrower and the Lender and (iv)”.

       

      4.   
         Amendment to Section 8 of
the Term Loan Facility Agreement.  Section 8 of the Term Loan Facility
Agreement is hereby amended by inserting the following new Section 8.13
immediately after Section 8.12:

       

      “8.13           Confidentiality.  The
Lender agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates’ respective directors, officers, employees, agents,
advisors and representatives, in each case, who have a need to know as a result
of their being involved in the execution or performance of this agreement and
the transactions contemplated hereby (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to a Loan Document,
(e) in connection with the exercise of any remedies hereunder or under any other
Loan Document or any action or proceeding relating to this Credit Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section 8.13, to any Assignee of or participant in, or any
prospective Assignee of or participant in, any of its rights or obligations
under this Credit Agreement or any pledgee referred to in Section 8.3, (g) with
the consent of the Borrower or (h) to the extent such Information becomes
publicly available other than as a result of a breach of this Section or becomes
available to the Lender or any of its Affiliates on a non-confidential basis
from a source other than the Borrower.  For purposes of this Section
8.13, “Information” means
all information received from the Borrower relating to the Borrower or any
Subsidiary or their respective businesses, other than any such information that
is available to the Lender on a non-confidential basis prior to disclosure by
the Borrower or any Subsidiary.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      5.       
     Reaffirmation of
Guaranty.

       

      
        	
                 
      

              	
                a.

              	
                Each
      Guarantor hereby acknowledges that it has reviewed the terms and
      provisions of the Credit Agreement and this Amendment and consents to the
      amendment of the Credit Agreement effected pursuant to this
      Amendment.  Each Guarantor hereby confirms that each Loan
      Document to which it is a party (including, without limitation, the
      Guaranty) will continue to guarantee the payment and performance of all
      obligations of the Borrower under the Credit Agreement as amended by this
      Amendment.

              

      

       

      
        	
                 
      

              	
                b.

              	
                Each
      Guarantor acknowledges and agrees that any of the Loan Documents to which
      it is a party or otherwise bound (including, without limitation, the
      Guaranty) shall continue in full force and effect and that all of its
      obligations thereunder shall be valid and enforceable and shall not be
      impaired or limited by the execution or effectiveness of this
      Amendment.

              

      

       

      
        	
                 
      

              	
                c.

              	
                Each
      Guarantor acknowledges and agrees that nothing in the Credit Agreement,
      this Amendment or any other Loan Document shall be deemed to require the
      consent of such Guarantor to this Amendment or any future amendments to
      the Credit Agreement.

              

      

       

      6.        
     No other Amendments;
Confirmation. On and after the date hereof, each reference in the Credit
Agreement to “this Credit Agreement”, “hereunder”, “hereof’, “herein” or words
of like import referring to the Credit Agreement, and each reference in the
other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof’ or words
of like import referring to the Credit Agreement shall mean and be a reference
to the Credit Agreement as amended by this Amendment.  Except as
expressly set forth herein, the provisions of the Term Loan Facility Agreement
are and shall remain in full force and effect.  The execution,
delivery and performance of this Amendment shall not constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of the Lender
under the Credit Agreement or any of the other Loan Documents.

       

      7.        
     Governing Law. This
Amendment shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.

       

      8.          
   Counterparts. This
Amendment may be executed by the parties hereto on any number of counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. This Amendment may be delivered by facsimile or
electronic mail transmission of the relevant signature pages
hereof.

       

      [The rest of this page is
intentionally left blank]

       

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

       

      IN
WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written.

      
        	 
      	 
      	 
      	 
      	 
      
	 
      	
                THE
      TALBOTS, INC.

                  

              	 
      
	 
      	
                By:  

              	
                /s/
      Richard T. O’Connell, Jr.

              	 
      
	 
      	 
      	
                Name:  

              	
                Richard
      T. O’Connell, Jr.

              	 
      
	 
      	 
      	
                Title:  

              	
                Secretary

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                Signed
      in:

              	 
      
	 
      
	 
      
	 
      
	 
      	
                AEON
      (U.S.A.), INC.

                 

                  

              	 
      
	 
      	
                By:  

              	
                /s/
      Isao Tsuruta

              	 
      
	 
      	 
      	
                Name:  

              	
                Isao
      Tsuruta

              	 
      
	 
      	 
      	
                Title:  

              	
                Executive
      Vice President & GM

              	 
      
	 
      
	 
      	
                Signed
      in: New York, NY

                 

                  

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      

      

       

       

      [First
Amendment to Term Loan Facility Agreement]ex-10_1.htm

Adamis Pharmaceuticals Corporation 8-K

 

Exhibit 10.1

 

 

 

Convertible Promissory Note

	
Principal Amount: $500,000
	
December 29, 2009

The Borrower is Adamis Pharmaceuticals Corporation, a Delaware corporation, located at 2658 Del Mar Heights Road, #555, Del Mar, California 92014.

The Lender is The G-Max Trust, located at in San Diego, California.

 

1.           Principal

For value received, Borrower promises to pay Lender five hundred thousand dollars ($500,000.00) with interest thereon calculated in accordance with the terms and provisions herein.  All sums owed under this Note are payable in lawful money of the United States of America. Payment shall be made at Lender's address
as above.

2.           Interest

Interest shall accrue daily and compound monthly on the outstanding principal amount of this Note at a rate per annum equal to 10% and shall be due and payable on the first Business Day of each month in cash beginning February 1, 2010, subject to the subordination provisions set forth in Section 11 below.  On
the Maturity Date, the Company shall pay to the Lender all accrued but unpaid interest hereunder.  Interest shall be calculated on the basis of a 360-day year and actual days elapsed.

3.           Maturity

The Principal Amount of this Note shall become due and payable on December 31, 2010 (the “Maturity Date”). The failure of the Lender to insist upon immediate payment in full upon the Maturity Date shall not be deemed a waiver of such
right. The Lender has the right to extend the Maturity Date in its sole discretion by delivery of notice, as described below.

4.           Conversion Right

At any time on or before the Maturity Date, the Lender has the right to convert part or all of the principal and accrued interest into common stock of Adamis Pharmaceuticals Corporation at $0.20 per share (which figure shall be subject to proportionate adjustment to reflect any stock dividend, stock split, reverse stock
split, reclassification, or other similar event affecting the number of outstanding shares of common stock of Borrower).

  

  

  

If Lender desires to exercise such conversion right, it shall deliver a notice to Borrower no later than five (5) business days before the Maturity Date.

In the event of conversion, the Lender will surrender the original copy of this Note for conversion at the principal office of the Borrower.  Lender agrees to execute such documents in connection with the conversion of this Note as Borrower reasonably requests.  If upon conversion of this Note a fraction
of a share would result, then Borrower will, at Borrower’s election, either round up to the next highest share or pay cash in lieu of such fractional share, calculated on the basis of the fair market value (as determined by Borrower) of a share.  All rights with respect to the converted portion of this Note shall terminate upon issuance of the corresponding securities to the Lender.  In connection with a partial conversion of this Note, Lender agrees to surrender this Note to Borrower
for cancellation as to that portion of the Note that the Lender elects to convert, and Borrower shall execute and deliver a new Note upon the same terms and conditions set forth herein, dated the date hereof, evidencing the right of the Lender to the balance of the principal that was not converted (and accrued but unpaid interest thereon, as applicable).  As soon as reasonably practicable after conversion of this Note and receipt of the original Note and related documents, Borrower at its expense will
cause to be issued in the name of and delivered to the Lender, a certificate or certificates (or, if Borrower determines that the shares will be represented in uncertificated form, then appropriate share notices) for the number of shares to which the Lender is entitled on such conversion (bearing such legends as Borrower determines are necessary or appropriate), together with any other securities and property, if any, to which the Lender is entitled on such conversion under the terms of this Note.

5.           Stock Sale

As further consideration for making the loan described herein, Borrower has agreed to sell Lender five hundred thousand (500,000) shares of common stock of Borrower for a total price of five hundred dollars ($500.00).

 

6.           Default

Borrower will be in default if any of the following occurs: (a) Borrower fails to make payment of the Principal Amount when due and fails to cure the default within the time period specified herein; and/or (b) Borrower fails in any material respect to comply with or to perform when due any other material term, obligation,
covenant, or condition contained in this Note and fails to cure the default within the time period specified herein.  Notwithstanding any provisions to the contrary contained in this Note, in the event of default by the Borrower, the Lender must provide Borrower with written notice of default, and the Borrower will have five (5) business days to cure the default.

  

  

  

7.           Lender's Rights

Upon default, Lender may declare the entire unpaid Principal Amount immediately due, subject to the subordination provisions set forth in Section 11 below. Upon the failure to pay the Principal Amount upon final maturity, Lender, at its option, may charge default interest on this Note at a rate equal to the lesser of
(i) eighteen percent (18%) per annum and (ii) the maximum rate permitted under applicable usury or other laws.

8.           Collection Costs

If Lender prevails in a lawsuit to collect on this Note, Borrower will pay Lender's costs and attorneys’ fees in an amount the court finds to be reasonable.

9.           Investment Representations

The Lender hereby represents, warrants, acknowledges and agrees that:

 

9.1           Investment.  The Lender is acquiring this Note, the securities issuable upon conversion of this Note, and the shares of common stock issuable pursuant to Section 5 above (collectively,
the “Securities” and the shares of common stock included in the Securities referred to as the “Transaction Shares”) for the Lender’s own account, and not directly or indirectly for the account of any other person.  The Lender is acquiring the Securities for investment and not with a view to distribution or resale thereof
except in compliance with Securities Act of 1933 (the “Act”) and any applicable state law regulating securities.  Lender must bear the economic risk of investment for an indefinite period of time because the Securities have not been registered under the Act and therefore cannot and will not be sold unless they are subsequently registered under the Act or an exemption from such registration is available.

 

9.2           Access to Information.  The Lender has had the opportunity to ask questions of, and to receive answers from, the chief executive officer of Borrower with respect to the terms
and conditions of the transactions contemplated hereby and with respect to the business and affairs of Borrower.  The Lender has had access to such financial and other information as Lender considers necessary in order for the Lender to make a fully informed decision as to investment in the Securities.

 

9.3           Experience; Pre-Existing Relationship.  Lender has such business or financial expertise as to be able to protect the Lender’s own interests in connection with the purchase
of the Securities.  Lender has a preexisting personal or business relationship with Borrower and/or certain of its officers and/or directors of a nature and duration sufficient to make Lender aware of the character, business acumen and general business and financial circumstances of Borrower and/or such officers and directors.  By reason of Lender’s business or financial experience, Lender is capable of evaluating the merits and risks of this investment, has the ability to protect Lender’s
own interests in this transaction and is financially capable of bearing a total loss of this investment.

 

  

  

  

9.4           No Tax Advice.  Lender represents and warrants that Lender is not relying on Borrower for any tax advice concerning the federal or state consequences of this Note or the other
Securities acquired hereunder by Lender.

9.5           Accredited Investor; No General Solicitation.  Lender is an “accredited investor” within the meaning of Regulation D promulgated under the Act.  At no time
was Lender presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and purchase of the Securities.

9.6           Restrictions on Transfer; Securities Laws.  Lender understands that Lender may not transfer any Securities unless such Securities are registered under the Act and qualified under
any applicable state securities laws or unless, in the opinion of counsel to Borrower, exemptions from such registration and qualification requirements are available.  Lender has also been advised that exemptions from registration and qualification may not be available or may not permit Lender to transfer all or any of the Securities in the amounts or at the times proposed by Lender.  In addition, Lender has been advised that SEC Rule 144 promulgated under the Act, which permits certain
limited sales of unregistered securities, requires that the Securities be held for certain minimum time periods after they have been purchased and paid for (within the meaning of Rule 144), before they may be resold under Rule 144.

10.           Registration Rights

 

10.1           Public Information; Rule 144.  In general, under Rule 144 promulgated by the Securities and Exchange Commission (the “Commission”),
a person who is not an affiliate of the issuer, such as Lender, may, after a six-month holding period, publicly sell restricted securities without restriction as long as adequate current public information about the issuer is available, and without any restrictions (including the adequate current public information requirement) after a one-year holding period.  With a view to making available the benefits of Rule 144, commencing six months after the date of this Note Borrower agrees to use its reasonable
best efforts to (a) make and keep adequate public information available, as those terms are understood and defined in Rule 144 under the Act, and (b) file with the Commission all reports and other documents required of Borrower under the Act and the Securities Exchange Act of 1934, as amended.  Borrower shall have no obligations pursuant to the preceding sentence at any time that Borrower may sell all Transaction Shares without limitation pursuant to Rule 144 (with Borrower deemed to have net exercised
the Warrant).

 

10.2           Registration.

 

(a)           At any time after one year after the date of the Notes, if the Transaction Shares cannot be sold without restriction pursuant to Rule 144, then if Borrower files a registration statement pursuant to the Act at any time within one year after the date
of the Notes, relating to an offering for the account of others under the Act of any of its equity securities (other than on Form S-4 or Form S-8 (each as promulgated under the Act) or their then equivalents), then Borrower will promptly will give to Lender 

 

  

  

  

 

written notice thereof (which will include a list of the jurisdictions in which Borrower intends to attempt to qualify such securities under the applicable blue sky or other state securities laws) and will, subject to the provisions below, include in such registration and any related qualification under blue sky laws
or other compliance), and in any underwriting involved therein, all Transaction Shares specified by Lender in a written request delivered to Borrower within 10 days after such written notice from Borrower.

 

(b)           Borrower will pay the registration fee relating to the inclusion of the Transaction Shares in the registration.  The Lender shall be responsible for its own fees and expenses, including attorneys’ fees, relating to such registration
and any sale of Transaction Shares pursuant to any such registration.  In connection with any such registration, Lender shall execute such customary documents as Borrower may reasonably request relating to the registration and sale of Transaction Shares pursuant to any such registration statement.

11.           Subordination

11.1           Definitions.  For purposes of this Note:

 

(a)           “Senior Indebtedness” shall mean the principal of and unpaid interest on, and any other obligations under, any and all indebtedness of Borrower (whether or not convertible
into equity securities of Borrower), whether outstanding on the date hereof or hereafter created, pursuant to any secured note (and any agreements or instruments relating thereto) issued or made by Borrower either before or after the date of this Note, and any amendments, renewals or extensions of any such indebtedness, or any debentures, notes or other evidence of indebtedness issued in exchange for such Senior Indebtedness.

 

(b)           “Senior Lender” shall mean any holder of Senior Indebtedness.

(c)           “Subordinated Indebtedness” means all obligations arising under or relating to the Note (together with all renewals, extensions and modifications thereof and any
note or notes issued in substitution therefor) and each and every other debt, liability and obligation of every type and description which the Borrower may now or at any time hereafter owe to the Lender, whether such debt, liability or obligation now exists or is hereafter created or incurred, and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, or joint, several or joint and several.

11.2           Subordination.  The payment of all of principal, interest and any other amounts that may become due under or pursuant to this Subordinated Indebtedness is hereby expressly subordinated
to the extent and in the manner hereinafter set forth to 

 

  

  

  

the payment in full of all Senior Indebtedness; and regardless of any priority otherwise available to the Lender by law or by agreement, as between the holders of Subordinated Indebtedness and the Senior Lender, the Senior Lender shall hold a first priority lien in all collateral relating to the Senior Indebtedness, and
any lien claimed therein by the Lender shall be and remain fully subordinate for all purposes to the lien of the Senior Lender therein for all purposes whatsoever.  The Subordinated Indebtedness shall continue to be subordinated to the Senior Indebtedness even if the Senior Indebtedness is deemed unsecured, under-secured, subordinated, avoided or disallowed under the United States Bankruptcy Code or other applicable law.

11.3           Payments.  Until all of the Senior Indebtedness has been paid in full and the Senior Lender has released its lien in the collateral, the Lender shall not, without the Senior
Lender’s prior written consent, demand, receive or accept any payment, other than current interest payments, from Borrower in respect of the Subordinated Indebtedness, or exercise any right of or permit any setoff in respect of the Subordinated Indebtedness.  If the Lender receives any payment on the Subordinated Indebtedness that the Lender is not entitled to receive under the provisions of this Agreement, the Lender will hold the amount so received in trust for the Senior Lender and will forthwith
turn over such payment to the Senior Lender in the form received (except for the endorsement of the Lender where necessary) for application to then-existing Senior Indebtedness (whether or not due), in such manner of application as the Senior Lender may deem appropriate.  If the Lender exercises any right of setoff which the Lender is not permitted to exercise under the provisions of this Agreement, the Lender will promptly pay over to the Senior Lender, in immediately available funds, an amount equal
to the amount of the claims or obligations offset.  If the Lender fails to make any endorsement required under the provisions of this Section 11, the Senior Lender, or any of its officers or employees or agents on behalf of the Senior Lender, is hereby irrevocably appointed as the attorney-in-fact (which appointment is coupled with an interest) for the Lender to make such endorsement in the Lender’s name.

11.4           Insolvency Proceedings.  If there shall occur any receivership, insolvency, assignment for the benefit of creditors, bankruptcy, arrangements with creditors (whether or not
pursuant to bankruptcy or other insolvency laws), or any other marshalling of the assets and liabilities of Borrower (“Insolvency Proceeding”), (i) no amount shall be paid by Borrower in respect of the principal or other amounts due with respect to the Subordinated Indebtedness at the time outstanding, unless and until the principal of and interest on the Senior Indebtedness then outstanding shall be paid in full, (ii) no
claim or proof of claim shall be filed with Borrower by or on behalf of Holder that shall assert any right to receive any payments in respect of the principal of and interest on the Subordinated Indebtedness except subject to the payment in full of the principal of and interest on all of the Senior Indebtedness then outstanding, and (iii) any payment or distribution of any kind or character that may be payable or deliverable in respect of the Subordinated Indebtedness shall be paid or delivered directly to the
holders of the Senior Indebtedness for application in payment thereof, unless and until all principal and interest on all Senior Indebtedness shall have been paid in full or such payment shall have been provided for.  In the event of any Insolvency Proceeding, the Lender will file all claims, proofs of claim or other instruments of similar character necessary to enforce the obligations of Borrower in respect of the Subordinated Indebtedness

  

  

  

and will hold in trust for the Senior Lender and promptly pay over to the Senior Lender in the form received (except for the endorsement of the Lender where necessary) for application to the then-existing Senior Indebtedness, any and all moneys, dividends or other assets received in any such proceedings on account of
the Subordinated Indebtedness, unless and until the Senior Indebtedness has been paid in full and the Senior Lender’s lien in the Collateral has been terminated.  If the Lender shall fail to take any such action, the Senior Lender, as attorney-in-fact for the Lender, may take such action on the Lender’ behalf.  The Lender hereby irrevocably appoint the Senior Lender, or any of its officers or employees on behalf of the Senior Lender, as the attorney-in-fact for the Lender (which
appointment is coupled with an interest) with the power but not the duty to demand, sue for, collect and receive any and all such moneys, dividends or other assets and give acquittance therefor and to file any claim, proof of claim or other instrument of similar character, to vote claims comprising Subordinated Indebtedness to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or extension and to take such other action in the Senior Lender’s own name or
in the name of the Lender as the Senior Lender may deem necessary or advisable for the enforcement of the agreements contained herein; and the Lender will execute and deliver to the Senior Lender such other and further powers-of-attorney or instruments as the Senior Lender may reasonably request in order to accomplish the foregoing.  If the Senior Lender desires to permit the use of cash collateral or to provide post-petition financing to Borrower, the Lender shall not object to the same or assert that
its interests are not being adequately protected.

11.5           Default on Senior Indebtedness.  If there shall occur an event of default with respect to any Senior Indebtedness, as defined therein, or in the instrument under which it is
outstanding, permitting the holder to accelerate the maturity thereof, then, unless and until such event of default shall have been cured or waived or shall have ceased to exist, or all Senior Indebtedness shall have been paid in full, no payment shall be made in respect of this Note for a period of one hundred eighty (180) days after the first occurrence of such event of default.

11.6           Further Assurances.  By acceptance of this Note, Holder agrees to execute and deliver customary forms of subordination agreements requested from time to time by holders of Senior
Indebtedness, and as a condition to the Holder's rights hereunder, Borrower may require that Holder execute such forms of subordination agreements.

11.7           Subrogation.  Subject to the payment in full of all Senior Indebtedness, Holder shall be subrogated to the rights of the holder(s) of such Senior Indebtedness (to the extent
of the payments or distributions made to the holder(s) of such Senior Indebtedness pursuant to the provisions of this Section to receive payments and distributions of assets of Borrower applicable to the Senior Indebtedness.  No such payments or distributions applicable to the Senior Indebtedness shall, as between the Borrower 

  

  

  

and its creditors, other than the holders of Senior Indebtedness and Holder, be deemed to be a payment by Borrower to or on account of this Note; and for purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness to which Holder would be entitled except for the provisions of this
Section shall, as between Borrower and its creditors, other than the holders of Senior Indebtedness and Holder, be deemed to be a payment by the Company to or on account of the Senior Indebtedness.

11.8           Reliance of Holders of Senior Indebtedness.  Holder, by its acceptance hereof, shall be deemed to acknowledge and agree that the foregoing subordination provisions are, and
are intended to be, an inducement to and a consideration of each holder of Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the creation of the indebtedness evidenced by this Note, and each such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and holding, or in continuing to hold, such Senior Indebtedness.

11.9           Action on Subordinated Indebtedness.  The Lender will not commence any action or proceeding against Borrower to recover all or any part of the Subordinated Indebtedness, or
join with any creditor (unless the Senior Lender shall so join) in bringing any proceeding against the Borrower under any bankruptcy, reorganization, readjustment of debt, arrangement of debt receivership, liquidation or insolvency law or statute of the federal or any state government, or take possession of, sell, or dispose of any Collateral, or exercise or enforce any right or remedy available to the Lender with respect to any such Collateral, unless and until the Senior Lender Indebtedness has been paid in
full and the Senior Lender has released its Lien in the Collateral.

12.           Miscellaneous

12.1           Notices.  Any notice required or permitted under this Note shall be given in writing and shall be deemed effectively given (i) at the time of personal delivery, if delivery
is in person; (ii) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; (iii) three (3) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries when addressed to the party to be notified; or (iv) one (1) business day after transmission by telecopier
with confirmation of successful transmission, to the addresses set forth at the beginning of this Note or at such other address as any party may designate by giving written notice to the other party.

12.2           Entire Agreement.  This Note and the Warrant contemplated hereby (a) represent the entire agreement between the parties and replace and supersede any and all oral agreements
between the parties, as well as any prior agreement and understandings, writings, both written and oral, among the parties with respect to the subject matter hereof; (b) are not intended to confer upon any other person any rights or remedies hereunder; and (c) shall not be assigned (other than by operation of law).

  

  

  

12.3           Successors and Assignees.  This Note binds and benefits the heirs, successors and assignees of the parties.

12.4           Governing Law; Consent to Jurisdiction.  This Note will be governed by and construed in accordance with the laws of the state of California.  Each of the parties hereto
irrevocably consents to the exclusive jurisdiction and venue of any court in San Diego, California, in connection with any matter based upon or arising out of this Note or the matters contemplated herein, agrees that process may be served upon them in any manner authorized in this Note for the delivery of notices, and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and such process.

12.5           Waiver.  If one party waives any term or provision of this Note at any time, that waiver will be effective only for the specific instance and specific purpose for which the
waiver was given. If either party fails to exercise or delays exercising any of its rights or remedies under this Note, that party retains the right to enforce that term or provision at a later time.

12.6           Severability.  If any court determines that any provision of this Note is invalid or unenforceable, any invalidity or unenforceability will affect only that provision and will
not make any other provision of this Note invalid or unenforceable and such provision shall be modified, amended or limited only to the extent necessary to render it valid and enforceable.

12.7           Counterparts.  This Note may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument.

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In witness whereof, Borrower and Lender have executed this Convertible Promissory Note as of the date first written above.

BORROWER

Adamis Pharmaceuticals Corporation

2658 Del Mar Heights Road, Suite 555

Del Mar, California 92014

Dated:  December 29, 2009

	
By:
	

/s/ Dennis J. Carlo

	  
	  	
Dennis J. Carlo
	  
	  	
Chief Executive Officer
	  

LENDER

The G-Max Trust

Dated:  December 29, 2009

	
By:
	

/s/ Christof Boo

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