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ADMP > SEC Filings for ADMP > Form 8-K on 12-Apr-2016All Recent SEC Filings




Entry into a Material Definitive Agreement, Completion of Acquisition

Item 1.01 Entry into a Material Definitive Agreement

Loan Agreements and Loan Documents

As described above and further below, pursuant to the terms of the Merger Agreement and related agreements, the Company acquired or shortly after the closing of the Merger will acquire from certain third party entities the building and real property on which USC's principal offices and facilities are located, and USC acquired certain laboratory equipment used in connection with USC's operations, in consideration of the Company's agreement to become an additional borrower and to assume the obligations under the loan agreements and related loan documents relating to such assets.

In addition, in consideration for the transfer of such assets and for the consent of the lender under such loan documents to the transactions contemplated by the Merger Agreement, pursuant to the Loan Amendment Agreement described below the Company agreed to become an additional borrower and assume the obligations under two loan agreements described above and also the two existing loan agreements, a working capital loan and an equipment loan, and related loan documents evidencing loans previously made to USC (all of the above loan agreements and loan documents, sometimes referred to collectively as the "Existing Loan Documents"). The lender in all of the above loans and loan agreements was First Federal Bank and/or its successor Bear State Bank ("Lender" or "Bank").

In connection with the closing of the Merger, the Company and the parties to the Existing Loan Documents entered into a Loan Amendment, Forbearance and Assumption Agreement (the "Loan Amendment Agreement"). Pursuant to the Loan Amendment Agreement, Adamis was added as a "Borrower" under the Existing Loan Documents and assumed all of the rights, duties, liabilities and obligations as a Borrower and a party under the Existing Loan Documents, and each of the other parties of the Existing Loan Documents acknowledged their obligations under the Existing Loan Documents. In addition, in recognition of the fact that the loans made by the Bank under the Existing Loan Documents are currently in default with respect to certain nonmonetary covenants in the Existing Loan Documents, the Bank agreed that until October 31, 2016, and subject to compliance with the other provisions of the Loan Amendment Agreement, it would not pursue available remedies as a result of such noncompliance or demand payment under the promissory notes included in the Existing Loan Documents.

In addition, in the Loan Amendment Agreement the Company and the Bank agreed to discuss in good faith mutually agreeable amendments or modifications to the Existing Loan Documents in light of the changes in circumstances resulting from the Merger and the transfer of the real property and equipment discussed above to Adamis and USC.

A summary of certain additional terms, conditions and provisions of the Existing Loan Documents to which Adamis was added as an additional "Borrower" thereunder, and the Loan Amendment Agreement, is contained on Addendum A to this Report and is incorporated herein by reference.

Employment Agreement

USC and Eddie Glover, the Chief Executive Officer of USC, have entered into an employment agreement. The agreement provides for the employment of Mr. Glover as the chief executive officer of USC. The agreement provides for an initial salary at a rate of $300,000 per annum. Under the agreement, the officer is eligible to participate in benefit programs of USC that are routinely made available to officers of USC, as well as stock option and equity incentive plans maintained or sponsored by the Company. The board of directors may also, in its discretion, approve discretionary cash or equity bonuses to any officer or employee.

The agreement is terminable at any time by either party. If USC terminates the officer's employment at any time, the officer will be entitled to receive any unpaid prorated base salary for the actual number of days worked along with all benefits and expense reimbursements to which the officer is entitled by virtue of the officer's past employment with USC. The agreement provides that if the officer's employment is terminated without cause (as defined in the employment agreement), the officer will be entitled to receive severance payments at the officer's then-annual base salary for nine months from the date of termination. The officer would (assuming eligibility and timely elections) be entitled to be reimbursed for payment of USC's portion of the premiums required to continue the officer's medical, dental and vision insurance coverage pursuant to COBRA during . . .

Item 2.01 Completion of Acquisition or Disposition of Assets

The discussion in the "Introductory Note" above regarding the completion of the Merger transaction pursuant to the Merger Agreement effective April 11, 2016, is hereby incorporated by reference into this Item.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information disclosed in the Introductory Note and in Item 1.01 above under the heading "Loan Agreements and Loan Documents" is incorporated herein by reference.

Item 3.02 Unregistered Sale of Equity Securities.

The information set forth in the Introductory Note and in Item 2.01 above with respect to the issuance of shares of Adamis common stock as part of the merger consideration is incorporated into this Item 3.02 by reference. The securities were issued to a small number of stockholders in a private placement in reliance on Section 4(2) of the Securities Act of 1933, as amended. Each stockholder represented that it was an accredited investor, as defined in Rule 501 of Regulation D or a sophisticated investor, that it was acquiring the securities for its own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Act, that it had received all information that the investor requested concerning USC and Adamis, and that the stockholder had such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the stockholder's investment in the Company's securities and was able to bear the economic risks of such investment.

Item 8.01 Other Events

The Company has issued a press release announcing the completion of the Merger. The press release is filed as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Business Acquired

The financial statements of U.S. Compounding, Inc. required by this Item have not been filed on this Report on Form 8-K but will be filed within the time periods permitted by applicable rules relating to this Report.

(b) Pro Forma Financial Information

The pro forma financial statements required by this Item have not been filed on this Report on Form 8-K but will be filed by amendment within the time periods permitted by applicable rules relating to this Report.

(d) Exhibits

2.1   Agreement and Plan of Merger, dated as of March 28, 2016, by and among the
      Company, U.S. Compounding, Inc., Ursula MergerSub Corp., and Eddie Glover,
      as Stockholders' Representative. (1)
2.2   Form of Joinder Agreement, dated as of March 28, 2016, by and between the
      Company and certain stockholders of U.S. Compounding, Inc. (1)
10.1  Loan and Security Agreement by and between Adamis Pharmaceuticals
      Corporation and Bear State Bank, N.A. (1)
10.2  Warrant dated March 28, 2016. (1)
99.1    Press Release of the Company, dated April 12, 2016  .

(1) Incorporated by reference to exhibits filed with the Company's Report on Form 8-K, filed on March 29, 2016.

(a) Exhibits.


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