Exhibit 10.1
THIS INSTRUMENT AND THE INDEBTEDNESS, RIGHTS AND OBLIGATIONS EVIDENCED HEREBY
AND ANY LIENS OR OTHER SECURITY INTERESTS SECURING SUCH RIGHTS AND OBLIGATIONS
ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AGREEMENT (AS AMENDED, RESTATED, SUPPLEMENTED OR MODIFIED FROM
TIME TO TIME, THE “SUBORDINATION AGREEMENT”) DATED AS OF SEPTEMBER 2, 2009, BY
AND AMONG THE SUBORDINATED CREDITORS IDENTIFIED THEREIN AND GENERAL ELECTRIC
CAPITAL CORPORATION (“GECC”) IN ITS CAPACITY AS AGENT FOR CERTAIN LENDERS
(TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, “SENIOR CREDITOR AGENT”), TO CERTAIN
INDEBTEDNESS, RIGHTS, AND OBLIGATIONS OF PEPLIN LIMITED (ACN 090 819 275),
PEPLIN, INC. AND THE GUARANTORS PARTY THERETO, TO SENIOR CREDITOR AGENT AND
SENIOR CREDITOR (AS DEFINED THEREIN) AND LIENS AND SECURITY INTERESTS OF SENIOR
CREDITOR AGENT SECURING THE SAME ALL AS DESCRIBED IN THE SUBORDINATION
AGREEMENT; AND EACH HOLDER AND TRANSFEREE OF THIS INSTRUMENT, BY ITS ACCEPTANCE
HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
AGREEMENT.
LOAN AGREEMENT
     This Loan Agreement (this “Agreement”) is made and entered into as of
September 2, 2009 (the “Effective Date”), by and between Peplin, Inc., a
Delaware corporation (“Borrower”), and Leo Pharma A/S (“Lender”).
RECITALS
     WHEREAS, concurrently with the execution of this Agreement, Lender, a
wholly owned subsidiary of Lender (“Merger Sub”) and Borrower have entered into
an Agreement and Plan of Merger (the “Merger Agreement”) whereby Borrower will
acquire Lender pursuant to the merger (the “Merger”) of Merger Sub with and into
Borrower according to the terms set forth therein.
     WHEREAS, as a material inducement to enter into the Merger Agreement,
Borrower desires Lender to make available, and Lender is willing to make
available, a revolving credit facility to Borrower of up to an aggregate
principal amount of $24,000,000 (the “Aggregate Amount”).
     NOW, THEREFORE, the parties agree as follows:
     1. DEFINITIONS
          1.1 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
               “Advance” means advances made from time to time to Borrower
pursuant to this Agreement.

 

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               “Acquisition” means any of the following transactions (other than
the Merger): (a) any acquisition or purchase by any person of more than a 40%
interest in the total outstanding voting securities of Borrower or consummation
of any tender offer or exchange offer that results in any person or group
beneficially owning securities representing 40% or more of the total outstanding
voting power of Borrower, or any merger, consolidation, business combination,
share exchange or similar transaction involving Borrower pursuant to which the
Borrower’s stockholders immediately preceding such transaction hold securities
representing less than 60% of the total outstanding voting power of the
surviving or resulting entity of such transaction (or parent entity of such
surviving or resulting entity); or (b) any sale, exchange, transfer, exclusive
license, or disposition of any business or businesses or assets that constitute
or account representing 40% or more of the aggregate fair market value of the
consolidated assets of Borrower and its subsidiaries taken as a whole..
               “Applicable Margin” means 200 basis points; provided that from
and after the Termination Date the Applicable Margin shall be 900 basis points.
               “Business Day” means a weekday on which commercial banks are open
for business in San Francisco, California.
               “Consummation Date” means the effective date of the Merger
pursuant to the terms of the Merger Agreement.
               “Debtor Relief Laws” means the Bankruptcy Code of the United
States, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
               “Default” or “default” means any of the events specified in
Section 6.1, whether or not any requirement in such Section for the giving of
notice or the lapse of time or the happening of any further condition, event or
act shall have been satisfied.
               “Default Rate” means the rate of interest per annum specified in
the Note to be payable when a Default has occurred and is continuing.
               “GECC Facility” means the Loan Agreement, dated as of
December 28, 2007, among Borrower, the guarantors party thereto, General
Electric Capital Corporation as agent for the lenders party thereto, General
Electric Capital Corporation as security trustee and General Electric Capital
Corporation and Oxford Finance Corporation as lenders, as such agreement may be
amended, supplemented or otherwise modified from time to time.
               “Lender Expenses” means all expenses (including, without
limitation, audit fees and expenses and attorney’s fees and costs) incurred by
Lender in connection with (i) the enforcement of any of its rights or remedies
(including, without limitation, the assertion or protection of such rights or
remedies in connection with advancing or protecting its interests or position in
any proceeding of Borrower or any of its Subsidiaries under any Debtor Relief
Laws,

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such as, by way of example, a motion for relief from the automatic stay and/or
adequate protection) under any of the Loan Documents, or (ii) from and after the
Termination Date, the negotiation or documentation of any amendments,
modification, restatement, consent or waiver of any provision of the Loan
Documents.
               “Loan” means an Advance under this Agreement.
               “Loan Documents” means this Agreement, the Notes and the Advance
Requests.
               “Maturity Date” means that date which is the earlier to occur of:
(a) April 1, 2011; (b) the date that is seven (7) days after the Consummation
Date, (c) the date that is seven (7) days after the consummation of an
Acquisition, and (d) the date that is six (6) months after the termination of
the GECC Facility.
               “Maximum Permissible Advance Amount” means, as of the date of any
Advance Request, (1) sum of (A) the expenditures set forth in the line titled
“Net Cash Flow” in the Operating Budget for the calendar month in which such
Advance Request shall be delivered to Lender plus (B) the out of pocket costs
and expenses of Borrower relating to the Merger, and the other actions
contemplated by the Merger Agreement, incurred in such calendar month, minus
(2) the amount (if any) borrowed hereunder by Borrower pursuant to any Advance
Request previously delivered in such calendar month.
               “Obligations” means all obligations and liabilities of Borrower
to Lender in connection with the Loans and the Loan Documents, including,
without limitation, amounts owed or to be owed under the terms of the Loan
Documents, or arising out of the transactions described therein, including,
without limitation, the Loans, together with all interest accruing thereon
(including any interest accrued after the commencement of any proceedings of
Borrower or any of its Subsidiaries under Debtor Relief Laws), and any Lender
Expenses.
               “Operating Budget” means the operating budget consisting of the
projected cash flow position of Borrower and its Subsidiaries attached hereto as
Exhibit A.
               “Program Budget” means, with respect to any existing clinical
study, the program budget for such study, as approved by the Company Board and
disclosed to Lender prior to the date hereof.
               “Termination Date” means the effective date of any termination of
the Merger Agreement.
          1.2 Capitalized terms used herein and not otherwise defined shall have
the meanings set forth therefor in the Merger Agreement.

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     2. LOAN FACILITY
          2.1 Commitment; Availability Period. Subject to the terms of this
Agreement, the Lender hereby agrees and commits to make Advances to Borrower as
set forth in Section 2.2 from the Effective Date until the earlier of (a) the
Consummation Date and (b) the Termination Date.
          2.2 Advances. Lender shall make each Advance to Borrower pursuant to
the wire instructions set forth on Exhibit A no later than two Business Days
following the date of each Advance Request (as defined below) pursuant to
Section 2.3; provided, that, (a) no more than one Advance shall be made in any
15-day period, (b) in no event shall the principal amount of any one Advance
exceed the lesser of (i) $2.0 million and (ii) the Maximum Permissible Advance
Amount, and (c) in no event shall the aggregate principal amount of all
outstanding Advances exceed the Aggregate Amount.
          2.3 Advance Requests. To obtain an Advance, Borrower shall submit a
borrowing request (the “Advance Request”) to Lender by facsimile as set forth in
Section 5.3.
          2.4 Promissory Note. Each Advance shall be evidenced by the unsecured
promissory note, in the form attached hereto as Exhibit B, dated the date of
this Agreement from Borrower to Lender (as amended, modified, supplemented,
restated or renewed from time to time, the “Note”) and shall be repayable in
accordance with the terms of the Note and this Agreement.
          2.5 Interest; Repayment of Advances.
               (a) Each Advance shall accrue interest on the outstanding
principal balance of such Advance at a rate per annum equal to the sum of
(i) applicable one-month London Inter-Bank Offering Rate (LIBOR) for the U.S.
dollar as reported in The Wall Street Journal on the date of the applicable
Advance Request plus (ii) the Applicable Margin, from the date of such Advance
until such Advance has been paid in full; provided that from and after an Event
of Default interest shall accrue at the Default Rate.
               (b) Each Advance shall mature, and the principal amount thereof
and all interest and other amounts payable under the Loan Documents shall be due
and payable, on the Maturity Date.
               (c) Borrower unconditionally promises to make the required
payment of principal of and interest on the Loans in lawful money of the United
States by wire transfer in immediately available funds to an account designated
in writing by Lender on or before the Maturity Date or any interest payment
date.
          2.6 Overdue Amounts. Any payments required pursuant to any Loan
Document not made as and when due shall bear interest from the date due until
paid to Lender at the Default Rate, in Lender’s sole discretion.
          2.7 Calculation of Interest. All interest under the Notes or hereunder
shall be calculated on the basis of a 365-day year for the actual days during
which such amounts are outstanding.

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          2.8 Term. This Agreement shall be effective as of the Effective Date
and shall continue in full force and effect so long as any Obligation is
outstanding. Notwithstanding the foregoing, Lender shall have the right to
terminate this Agreement immediately upon the occurrence of a Default.
     3. CONDITIONS TO ADVANCES
          3.1 Condition to Initial Advance. Lender’s shall not be obligated to
make the initial Advance until Borrower shall have provided to Lender evidence
that the aggregate amount of cash and cash equivalents and short term
investments of Borrower and its Subsidiaries is less than $3.0 million (which
may be evidenced by a certification from the Chief Financial Officer of
Borrower).
          3.2 Conditions to all Advances. Lender’s obligations to make each
Advance, including the initial Advance, is subject to the following:
               (a) timely receipt of an Advance Request;
               (b) the representations and warranties in Section 4 below shall
be true and accurate in all material respects on the date of the Advance
Request; and
               (c) no Default or Event of Default shall have occurred and be
continuing or shall result from such Advance.
     4. REPRESENTATIONS AND WARRANTIES
          Borrower represents and warrants as follows:
          4.1 Existence, Qualification and Power. Borrower (a) is duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own or
lease its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents, and (c) is duly qualified and is
licensed and, as applicable, in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license.
          4.2 Authorization; No Contravention. The execution, delivery and
performance by Borrower of each Loan Document have been duly authorized by all
necessary corporate action, and do not and will not (a) contravene the terms of
any of Borrower’s certificate of incorporation or by-laws; (b) conflict with or
result in any breach or contravention of, or the creation of any Encumbrance
under, or require any payment to be made under any Company Contract or (ii) any
Order to which Borrower or its property is subject; or (c) violate any Legal
Requirement.
          4.3 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Body or any other Person is necessary or required in connection
with the execution, delivery or

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performance by, or enforcement against, Borrower of any Loan Document, other
than any filings and actions required in connection with the judicial
enforcement of this Agreement.
          4.4 Binding Effect. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly authorized, executed
and delivered by Borrower that is party thereto. This Agreement constitutes, and
each other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as enforceability may be limited by Debtor Relief Laws or by
general equitable principles (whether enforcement is sought by proceedings in
law or in equity).
          4.5 Margin Regulations; Investment Company Act.
               (a) Borrower is not engaged and will not engage, principally or
as one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock. None of
the proceeds of any Advance is being used, directly or indirectly for the
purpose of purchasing or carrying margin stock.
               (b) Borrower is not, and is not required to be registered as, an
“investment company” under the Investment Company Act of 1940.
          4.6 Use of Proceeds. The proceeds of each Advance shall not be used
for personal, family or household purposes and shall be used solely as permitted
under Section 5.4.
     5. COVENANTS
     So long as Lender has any commitment to make Advances hereunder, or any
Advance or other Obligation hereunder shall remain unpaid or unsatisfied (other
than solely indemnification obligations), Borrower shall:
          5.1 Financial Statements and Information. From and after the
Termination Date, deliver to Lender the same financial statements, compliance
certificates and other information as Borrower is required to deliver to the
agent and the lenders under the GECC Facility (as in effect on the date hereof),
such financial statements to be and information to be delivered within the same
time frames as set forth in the GECC Facility and irrespective of whether the
GECC Facility remains in effect at such time.
          5.2 Notices. Promptly notify Lender:
               (a) of the occurrence of any Default; and
               (b) from and after the Termination Date, of any matter that has
resulted or would reasonably be expected to result in a Material Adverse Effect
(as defined in the GECC Facility as in effect on the date hereof).

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          5.3 Inspection Rights. From and after the Termination Date, permit
representatives and independent contractors of Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, all at reasonable times during normal business hours; provided,
however, that upon and during the continuation of an Event of Default, Lender
shall be afforded such access at any time it so requests.
          5.4 Use of Proceeds. Use any proceeds of Advances solely to fund
expenses and liabilities as set forth in the Operating Budget and any existing
clinical study as set forth in applicable Program Budget.
          5.5 GECC Facility Covenants. From and after the Termination Date,
comply with each and every covenant set forth in Sections 6 and 7 of the GECC
Facility (as in effect on the date hereof). For the avoidance of doubt, the
covenants set forth in Sections 6 and 7 (other than Sections 6.6, 6.8, 7.10 and
7.11) are hereby incorporated by reference mutatis mutandis such that such
covenants shall apply for the benefit of Lender from and after the Termination
Date and shall continue to be binding on the Company irrespective of whether the
GECC Facility has been terminated, amended, supplemented or otherwise modified
after the date hereof.
     6. DEFAULT
          6.1 Events of Default. Each of the following shall constitute an
“Event of Default”:
               (a) Borrower shall fail to pay any principal of, and interest on
any Loan at the Maturity Date;
               (b) Borrower fails to perform any obligation in Sections 5.1, 5.2
or 5.4 or, from and after the Termination Date violates any covenant set forth
in Section 6 of the GECC Facility and incorporated herein by virtue of
Section 5.5; or
               (c) From and after the Termination Date, Borrower breaches any of
its other obligations under any of the Loan Documents and fails to cure such
breach within 30 days after the earlier of (i) the date on which an officer of
Borrower becomes aware, or through the exercise of reasonable diligence should
have become aware, of such failure and (ii) the date on which notice shall have
been given to Borrower from Lender;
               (d) Any representation, warranty, certification or statement of
fact made or deemed made by or on behalf of Borrower in any Loan Document shall
be incorrect or misleading in any material respect when made or deemed made;
               (e) From and after the Termination Date, any “Event of Default”
under and as defined in the GECC Facility occurs.

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               (f) Any provision other than an immaterial provision of any Loan
Document shall fail to be valid and binding on, or enforceable against, Borrower
or (ii) Borrower shall state in writing that any of the events described in
clause (i) above shall have occurred;
               (g) (i) from and after the Termination Date, Borrower or any of
its Subsidiaries fails to make (after any applicable grace period) any payment
when due (whether due because of scheduled maturity, required prepayment
provisions, acceleration, demand or otherwise) on any Material Indebtedness (as
defined in the GECC Facility as in effect on the date hereof), or (ii) any such
Material Indebtedness or the Indebtedness under the GECC Facility shall become
or be declared to be due and payable, or be required to be prepaid, redeemed,
defeased or repurchased (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof, or (iii) from and after the
Termination Date, Borrower or any of its Subsidiaries defaults under any
obligation for payments due under any lease agreement in excess of $100,000;
               (h) From and after the Termination Date, one or more money
judgments, orders or decrees shall be rendered against Borrower or any of its
Subsidiaries that exceeds by more than $100,000 any insurance coverage
applicable thereto (to the extent the relevant insurer has been notified of such
claim and has not denied coverage therefor) and either (i) enforcement
proceedings shall have been entered or filed against Borrower or such Subsidiary
by any creditor upon any such judgment, order or decree or (ii) such judgment,
order or decree shall not have been vacated or discharged for a period of 10
consecutive days and there shall not be in effect (by reason of a pending appeal
or otherwise) any stay of enforcement thereof;
               (i) Borrower shall voluntarily dissolve, liquidate or terminate
operations or apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, intervenor, liquidator or similar
official or of a substantial part of its assets, admit in writing its inability,
or be generally unable, to pay its debts as the debts become due, make a general
assignment for the benefit of its creditors, commence a voluntary case under, or
file a petition seeking to take advantage of, any Debtor Relief Laws, fail to
controvert in a timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under any Debtor Relief Laws,
or take any corporate action for the purpose of effecting any of the foregoing;
and
               (j) An involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of Borrower or its debts, or of a substantial part of
its assets, under any Debtor Relief Laws, or (ii) the appointment of a receiver,
custodian, trustee, intervenor, liquidator or similar official for Borrower or
for a substantial part of its assets, and, in any such case, such proceeding or
petition shall not have been dismissed within sixty days of the commencement or
filing, as the case may be, thereof; or an order, order for relief, judgment or
decree shall be entered by any court of competent jurisdiction or other
competent authority approving or ordering any of the foregoing actions.

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          6.2 Remedies.
               (a) If any Event of Default shall occur and be continuing, Lender
shall have no further obligation to make Advances to Borrower and may, at its
option, declare any or all Obligations to be immediately due and payable, bring
suit against Borrower to collect the Obligations, exercise any remedy available
to Lender hereunder at law or in equity and take any action or exercise any
remedy provided herein or in any other Loan Document or under applicable law or
in equity; provided that if any Event of Default described in Section 6.1(k) or
6.1(l) occurs, all Obligations shall become immediately due and payable without
any further action or notice by Lender. For purposes of this Agreement, an Event
of Default is “continuing” if it has not been waived.
               (b) No remedy shall be exclusive of other remedies or impair the
right of Lender to exercise any other remedies.
               (c) Borrower waives demand, notice of default or dishonor, notice
of payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Lender on which Borrower is
liable..
     7. REPAYMENT; PREPAYMENT
          7.1 Application of Payments. Any payments made by Borrower pursuant to
this Agreement shall be applied as follows: first, to the costs and expenses,
including reasonable attorneys’ fees and expenses, incurred by Lender in
connection with the exercise of Lender’s rights and remedies hereunder;
secondly, to the interest due upon any of the Obligations; and thirdly, to the
principal amount of the Obligations.
          7.2 Prepayment. Borrower may prepay, without penalty, in whole or in
part, the unpaid balance of this Note at any time prior to the Maturity Date.
Any amounts so prepaid may not be reborrowed.
     8. MISCELLANEOUS
          8.1 No Waiver, Remedies Cumulative. No failure on the part of Lender
or Borrower to exercise, and no delay in exercising, any right hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and are in addition to any other remedies provided by
law, in equity, any Loan Document or otherwise. No waiver hereunder shall be
effective unless signed by Lender and then is only effective for the specific
instance and purpose for which it is given.
          8.2 Survival of Agreement. All covenants, agreements, representations
and warranties made by Borrower herein and in any other Loan Document shall
survive the making of the Loans hereunder and the execution and delivery of the
Notes, regardless of any investigation made by Lender or on its behalf, and
shall continue in full force and effect so long as any Obligation is
outstanding, and there exists any commitment to lend by Lender to Borrower.

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          8.3 Notices. Any notice or other communication required or permitted
to be given under this Agreement will be in writing, will be delivered
personally or by facsimile or by mail or express delivery, postage prepaid, and
will be deemed given upon actual delivery or, if mailed by registered or
certified mail, on the third Business Day following deposit in the mails,
addressed as follows:

  (a)   If to Parent:         Leo Pharma A/S
Industriparken 55
DK – 2750 Ballerup
Denmark
Attention:
Fax:         with a copy to:         Cooley Godward Kronish LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Glen Y. Sato
Fax: (650) 849-7400     (b)   If to Company:         Peplin, Inc.
6475 Christie Avenue, Suite 300
Emeryville, California 94608
Attention: Chief Executive Officer and Chief Financial Officer
Fax: (510) 653-9704
        with a copy to:         Fenwick & West LLP
555 California Street, 12th Floor
San Francisco, CA 94104
Attention: Douglas N. Cogen
                 David K. Michaels
        Fax: (415) 281-1350

          8.4 Expenses; Indemnification. Borrower shall, upon demand, pay to the
Lender the amount of any and all Lender Expenses.
          8.5 Governing Law. This Agreement and the Loan Documents shall be
deemed contracts made under the laws of the State of California and shall be
governed by and construed in accordance with the laws of said state (excluding
its conflict of laws provisions if such provisions would require application of
the laws of another jurisdiction).

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          8.6 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of Borrower and Lender, and their respective
successors and assigns; provided that no party may assign their rights under
this Agreement or any other Loan Document without the express written consent of
the other, and any such assignment made without such consent will be void.
          8.7 Amendment. This Agreement may be amended by the parties hereto at
any time by execution of an instrument in writing signed on behalf of each of
Lender and Borrower.
          8.8 Entire Agreement. This Agreement and the other Loan Documents
(a) constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and (b) are not intended to confer upon any other person any rights or
remedies hereunder.
          8.9 Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
          8.10 Waiver Of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH OF LENDER AND BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF LENDER
OR BORROWER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF.
WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial
by jury is not enforceable, the parties hereto agree that any and all disputes
or controversies of any nature between them arising at any time shall be decided
by a reference to a private judge, mutually selected by the parties (or, if they
cannot agree, by the Presiding Judge of the San Mateo County, California
Superior Court) appointed in accordance with California Code of Civil Procedure
Section 638 (or pursuant to comparable provisions of federal law if the dispute
falls within the exclusive jurisdiction of the federal courts), sitting without
a jury, in San Mateo County, California; and the parties hereby submit to the
jurisdiction of such court. The reference proceedings shall be conducted
pursuant to and in accordance with the provisions of California Code of Civil
Procedure §§ 638 through 645.1, inclusive. The private judge shall have the
power, among others, to grant provisional relief, including without limitation,
entering temporary restraining orders, issuing preliminary and permanent
injunctions and appointing receivers. All such proceedings shall be closed to
the public and confidential and all records

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relating thereto shall be permanently sealed. If during the course of any
dispute, a party desires to seek provisional relief, but a judge has not been
appointed at that point pursuant to the judicial reference procedures, then such
party may apply to the San Mateo County, California Superior Court for such
relief. The proceeding before the private judge shall be conducted in the same
manner as it would be before a court under the rules of evidence applicable to
judicial proceedings. The parties shall be entitled to discovery which shall be
conducted in the same manner as it would be before a court under the rules of
discovery applicable to judicial proceedings. The private judge shall oversee
discovery and may enforce all discovery rules and order applicable to judicial
proceedings in the same manner as a trial court judge. The parties agree that
the selected or appointed private judge shall have the power to decide all
issues in the action or proceeding, whether of fact or of law, and shall report
a statement of decision thereon pursuant to the California Code of Civil
Procedure § 644(a). Nothing in this paragraph shall limit the right of any party
at any time to exercise self-help remedies, foreclose against collateral, or
obtain provisional remedies. The private judge shall also determine all issues
relating to the applicability, interpretation, and enforceability of this
paragraph.
          8.11 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute but one and the same instrument.
          8.12 No Usury. Regardless of any other provision of this Agreement,
the Note or in any other Loan Document, if for any reason the effective interest
should exceed the maximum lawful interest, the effective interest shall be
deemed reduced to, and shall be, such maximum lawful interest, and (a) the
amount which would be excessive interest shall be deemed applied to the
reduction of the principal balance of the Note and not to the payment of
interest, and (b) if the Loan evidenced by the Note have been or is thereby paid
in full, the excess shall be returned to the party paying same, such application
to the principal balance of the Note or the refunding of excess to be a complete
settlement and acquittance thereof.
          8.13 Cross-References. References to Sections and Schedules herein
shall be construed as referring to the Sections and Schedules of this Agreement,
unless otherwise stated.
[Remainder of Page Intentionally Left Blank]

12

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     In Witness Whereof, the parties hereto have caused this Loan Agreement to
be duly executed as of the day and year first above written.

             
 
  LENDER:    
 
                LEO PHARMA A/S    
 
           
 
  By:   /s/ Gitte P. Aabo    
 
  Name:  
 
Gitte P. Aabo    
 
  Title:   President and Chief Executive Officer    
 
           
 
  By:   /s/ John Mehlbye    
 
  Name:  
 
John Mehlbye     
 
  Title:   Executive Vice-President, Plants & Manufacturing     

[Signature Page to Loan Agreement]

 

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  BORROWER:    
 
                PEPLIN, INC.    
 
           
 
  By:   /s/ Thomas Wiggans    
 
  Name:   Thomas Wiggans    
 
  Title:   Chief Executive Officer    
 
           

[Signature Page to Loan Agreement]

 

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Exhibit A
Wire Instructions
Acct Name: Peplin Ltd <USD a/c>
Bank: Commonwealth Bank, 48 Martin Place Sydney, Australia
SWIFT code: CTBAAU2S
Acct No.: 100617627USD1156

A-1

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Exhibit B
Form of Unsecured Promissory Note
THIS INSTRUMENT AND THE INDEBTEDNESS, RIGHTS AND OBLIGATIONS EVIDENCED HEREBY
AND ANY LIENS OR OTHER SECURITY INTERESTS SECURING SUCH RIGHTS AND OBLIGATIONS
ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AGREEMENT (AS AMENDED, RESTATED, SUPPLEMENTED OR MODIFIED FROM
TIME TO TIME, THE “SUBORDINATION AGREEMENT”) DATED AS OF SEPTEMBER 2, 2009, BY
AND AMONG THE SUBORDINATED CREDITORS IDENTIFIED THEREIN AND GENERAL ELECTRIC
CAPITAL CORPORATION (“GECC”) IN ITS CAPACITY AS AGENT FOR CERTAIN LENDERS
(TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, “SENIOR CREDITOR AGENT”), TO CERTAIN
INDEBTEDNESS, RIGHTS, AND OBLIGATIONS OF PEPLIN LIMITED (ACN 090 819 275),
PEPLIN, INC. AND THE GUARANTORS PARTY THERETO, TO SENIOR CREDITOR AGENT AND
SENIOR CREDITOR (AS DEFINED THEREIN) AND LIENS AND SECURITY INTERESTS OF SENIOR
CREDITOR AGENT SECURING THE SAME ALL AS DESCRIBED IN THE SUBORDINATION
AGREEMENT; AND EACH HOLDER AND TRANSFEREE OF THIS INSTRUMENT, BY ITS ACCEPTANCE
HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
AGREEMENT.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.
UNSECURED PROMISSORY NOTE
September 2, 2009
Emeryville, California
     For value received, the receipt and sufficiency of which are hereby
acknowledged, Peplin, Inc., a Delaware corporation (“Borrower”), hereby promises
to pay to the order of Leo Pharma A/S (“Lender”), the aggregate unpaid sum of
all Advances made by the Lender to the Borrower, together with accrued interest
thereon to be computed on each Advance from the date of its disbursement,
pursuant to the terms and conditions of the Agreement (as defined below).
     1. Loan Agreement. This Unsecured Promissory Note (this “Note”) is the Note
issued under, and entitled to the benefits of, the Loan Agreement by and between
Borrower and Lender dated as of September 2, 2009 (said agreement, as the same
may be amended, restated or

B-1

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supplemented from time to time, being herein called the “Agreement”), and the
other Loan Documents, the terms and conditions of which are made a part hereof
to the same extent and with the same effect as if fully set forth herein. This
Note is entitled to the benefit of the rights provided in the Agreement.
Capitalized terms not defined in this Note shall have the respective meanings
assigned to them in the Agreement.
     2. Interest. Interest on the outstanding principal balance under this Note
is payable at a rate per annum equal to the sum of (a) the applicable one-month
London Inter-Bank Offering Rate (LIBOR) for the U.S. dollar as reported on the
date of the applicable Advance Request in The Wall Street Journal (the “Interest
Rate”), plus (b) the Applicable Margin; provided that at any time at which an
Event of Default has occurred and is continuing, interest shall be payable at a
rate per annum equal to 200 basis points over the Interest Rate (the “Default
Rate”), in immediately available United States Dollars at the time and in the
manner specified in the Agreement. The outstanding principal and interest under
this Note shall be immediately due and payable on the Maturity Date. Payments
received by Lender shall be applied first to the payment of accrued, but unpaid
interest on this Note and then to the reduction of the unpaid principal balance
of this Note.
     3. Recordation. The Lender is authorized to endorse the amount and the date
on which each Advance is made, the maturity date therefore and each payment of
principal with respect thereto on Schedule A hereto and made a part hereof, or
on continuations thereof which shall be attached hereto and made a part hereof;
provided, that, any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect any obligation of the
Borrower under the Agreement and this Note.
     4. Waiver. To the fullest extent permitted by applicable law and except as
specifically required in the Agreement, Borrower waives: (a) presentment, demand
and protest, and notice of presentment, dishonor, intent to accelerate,
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all of the Obligations, the Loan
Documents or this Note; and (b) all rights to notice and a hearing prior to
Lender’s taking possession or control of, or to Lender’s replevy, attachment or
levy upon, or any bond or security that might be required by any court prior to
allowing Lender to exercise any of its remedies.
     5. Surrender. Lender agrees to surrender this note to the Borrower for
cancellation following repayment of all principal and accrued interest
outstanding under this Note.
     6. Governing Law. This Note and the obligations of Borrower and the rights
of Lender shall be governed by and construed in accordance with the internal
substantive laws of the State of California without giving effect to the
conflicts of laws rules thereof.
[Remainder of Page Intentionally Left Blank]

B-2

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     In Witness Whereof, the parties hereto have caused this Unsecured
Promissory Note to be duly executed as of the day and year first above written.

                  PEPLIN, INC.    
 
           
 
  By:      
 
  Name:  
Thomas Wiggans
   
 
  Title:   Chief Executive Officer    
 
           

[Signature Page to Unsecured Promissory Note]

 

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Schedule A to Note
ADVANCES AND REPAYMENT OF ADVANCES

                      (2)   (3)   (4)         Amount   Maturity   Repayment  
(5) (1)   of   Date of   of   Notation Date   Advance   Advance   Advance   Made
By