Document:

derm-ex1025_434.htm

EXHIBIT 10.25

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT dated as of December 3, 2018 (as amended, modified, restated or supplemented from time to time, this “Security Agreement”) is by and among the party identified as a “Grantor” on the signature pages hereto and such other parties as may become Grantors hereunder after the date hereof (individually a “Grantor”, and collectively the “Grantors”) and Athyrium Opportunities III Acquisition LP, as administrative agent (in such capacity, the “Administrative Agent”) for the Secured Parties.

 

W I T N E S S E T H

 

WHEREAS, a credit facility has been established in favor of Dermira, Inc., a Delaware corporation (the “Borrower”), pursuant to the terms of that certain Credit Agreement dated as of the date hereof (as amended, modified, restated, supplemented or extended from time to time, the “Credit Agreement”) among the Borrower, the Guarantors from time to time party thereto, the Lenders from time to time party thereto and the Administrative Agent; 

 

WHEREAS, it is required under the terms of the Credit Agreement that the Grantors shall have granted the security interests and undertaken the obligations contemplated by this Security Agreement; and

 

WHEREAS, this Security Agreement is required under the terms of the Credit Agreement.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

	
 
	
1.
	
Definitions. 

(a)Capitalized terms used and not otherwise defined herein shall have the meanings provided in the Credit Agreement.

 

(b)The following terms shall have the meanings assigned thereto in the Uniform Commercial Code:  Accession, Account, As-Extracted Collateral, Chattel Paper, Commercial Tort Claim, Consumer Goods, Document, Electronic Chattel Paper, Equipment, Farm Products, Fixtures, General Intangible, Goods, Instrument, Inventory, Letter-of-Credit Right, Manufactured Home, Money, Payment Intangibles, Proceeds, Securities Account, Securities Entitlement, Securities Intermediary, Software, Supporting Obligation and Tangible Chattel Paper.

 

(c)As used herein, the following terms shall have the meanings set forth below:

 

“Administrative Agent” has the meaning provided in the introductory paragraph hereof.

 

“Borrower” has the meaning provided in the recitals hereof.

	
 
	

	
 

“Collateral” has the meaning provided in Section 2 hereof.

 

“Credit Agreement” has the meaning provided in the recitals hereof.

	
 
	

	
 

“Grantor” and “Grantors” have the respective meanings provided in the introductory paragraph hereof.

 

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“Investment Property” means “investment property” (as defined in Article 9 of the Uniform Commercial Code) not constituting Excluded Property.

 

“Security Agreement” has the meaning provided in the introductory paragraph hereof.

 

2.Grant of Security Interest in the Collateral.  To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Obligations, each Grantor hereby grants to the Administrative Agent, for the benefit of the Secured Parties, a continuing security interest in any and all right, title and interest of such Grantor in and to all of the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the “Collateral”):

 

(a)all Accounts;

 

(b)all Chattel Paper;

 

(c)all Commercial Tort Claims, including those identified on Schedule 2(c) attached hereto;

 

(d)all Deposit Accounts;

 

(e)all Documents;

 

(f)all Equipment;

 

(g)all Fixtures;

 

(h)all General Intangibles;

 

(i)all Goods;

 

(j)all Instruments;

 

(k)all Inventory;

 

(l)all Investment Property;

 

(m)all Intellectual Property;

 

(n)all Letter-of-Credit Rights;

 

(o)all license agreements (inbound or outbound) of any Intellectual Property;

 

(p)all Money;

 

(q)all Payment Intangibles;

 

(r)all Regulatory Authorizations;

 

(s)all Software;

 

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(t)all Supporting Obligations; and

 

(u)all Accessions and all Proceeds of any and all of the foregoing.

 

Notwithstanding anything to the contrary contained herein, the security interests granted under this Security Agreement shall not extend to and “Collateral” shall not include (i) any Excluded Property, and (ii) any Pledged Collateral (as defined in the Pledge Agreement).

 

The Grantors and the Administrative Agent, on behalf of the Secured Parties, hereby acknowledge and agree that the security interest created hereby in the Collateral (i) constitutes continuing collateral security for all of the Obligations, whether now existing or hereafter arising and (ii) is not and shall not be construed as an assignment of any Intellectual Property.

 

3.Provision Relating to Accounts. Anything herein to the contrary notwithstanding, each of the Grantors shall remain liable under each of the Accounts to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account.  Neither the Administrative Agent nor any Secured Party shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Security Agreement or the receipt by the Administrative Agent or any Secured Party of any payment relating to such Account pursuant hereto, nor shall the Administrative Agent or any Secured Party be obligated in any manner to perform any of the obligations of a Grantor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.

 

4.Representations and Warranties.  Each Grantor hereby represents and warrants to the Administrative Agent, for the benefit of the Secured Parties, that:

 

(a)Ownership.  Such Grantor is the legal and beneficial owner of, or has rights to use, its Collateral and has the right to pledge, sell, assign or transfer the same. 

 

	

	
(b)Security Interest/Priority.  This Security Agreement creates a valid security interest in favor of the Administrative Agent, for the benefit of the Secured Parties, in the Collateral of such Grantor and, when properly perfected by the filing of a Uniform Commercial Code financing statement or other evidence of the interests granted herein with appropriate Governmental Authorities, shall constitute a valid, perfected, first priority security interest in such Collateral, to the extent such security interest can be perfected by filing a financing statement under the Uniform Commercial Code, free and clear of all Liens except for Permitted Liens.  The taking of possession by the Administrative Agent of any Instrument, Document, Tangible Chattel Paper or Money of such Grantor will perfect and establish the first priority of the Administrative Agent’s security interest in all such Instruments, Documents, Tangible Chattel Paper and Money.  With respect to any Collateral (excluding any Excluded Accounts) of such Grantor consisting of a Deposit Account, Securities Entitlement or held in a Securities Account, upon execution and delivery by such Grantor, the applicable depository bank or Securities Intermediary and the Administrative Agent of an agreement granting control to the Administrative Agent over such Collateral, the Administrative Agent shall have a valid and perfected, first priority security interest in such Collateral, subject to Permitted Liens.

 

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(c)Types of Collateral.  None of the Collateral of such Grantor consists of, or is the Accessions or the Proceeds of, As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes, or standing timber.

 

	

	
(d)Accounts.  Except as otherwise disclosed to the Administrative Agent in writing, (i) Each Account of such Grantor and the papers and documents relating thereto are genuine and in all material respects accurate and what they purport to be, (ii) each such Account with an aggregate payment obligation in excess of $500,000 arises out of (A) a bona fide sale of goods sold and delivered by such Grantor (or is in the process of being delivered) or (B) services theretofore actually rendered by such Grantor to, the account debtor named therein, (iii) no such Account of a Grantor with an aggregate payment obligation in excess of $500,000 is evidenced by any Instrument or Chattel Paper unless such Instrument or Chattel Paper, to the extent requested by the Administrative Agent, has been endorsed over and delivered to, or submitted to the control of, the Administrative Agent, (iv) no surety bond was required or given in connection with any such Account of a Grantor or the contracts or purchase orders out of which they arose and (v) the right to receive payment under each such Account is assignable.

 

(e)Equipment and Inventory.  As of the Closing Date, with respect to any Equipment and/or Inventory of such Grantor, such Grantor has exclusive possession and control of such Equipment and Inventory of such Grantor except for (i) Equipment leased by such Grantor as a lessee, (ii) Equipment or Inventory in transit with common carriers or (iii) Equipment or Inventory in the possession of a bailee, warehouseman, agent or processor as listed on Schedule 4(e) attached hereto.  No Inventory of such Grantor is held by a Person other than a Grantor pursuant to consignment, sale or return, sale on approval or similar arrangement.

 

(f)No Other Instruments, Etc.  As of the Closing Date, no Grantor holds any Instruments, Documents or Tangible Chattel Paper required to be pledged and delivered to the Administrative Agent pursuant to Section 5(b) hereof other than as set forth on Schedule 4(f) attached hereto.  All such Instruments, Documents and Tangible Chattel Paper have been delivered to the Administrative Agent.

 

(g)Consents; Etc.  Except for (i) the filing or recording of Uniform Commercial Code financing statements, (ii) the filing of appropriate notices with the United States Patent and Trademark Office and the United States Copyright Office, (iii) obtaining control to perfect the Liens created by this Security Agreement (to the extent required under Section 5(b) or Section 5(d) hereof), (iv) such actions as may be required by applicable laws affecting the offering and sale of securities, (v) such actions as may be required by foreign applicable laws affecting the pledge of the pledged equity of Foreign Subsidiaries, and (vi) consents, authorizations, filings or other actions which have been obtained or made, no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority and no consent of any other Person (including any stockholder, member or creditor of such Grantor), is required for (A) the grant by such Grantor of the security interest in the Collateral granted hereby or for the execution, delivery or performance of this Security Agreement by such Grantor, (B) the perfection of such security interest (to the extent such security interest can be perfected by filing under the Uniform Commercial Code, the granting of control (to the extent required under Section 5(b) or Section 5(d) hereof) or by filing an appropriate notice with the United States Patent and Trademark Office or the United States Copyright Office) or (C) the exercise by the Administrative Agent or the Secured Parties of the rights and remedies provided for in this Security Agreement.

 

(h)Commercial Tort Claims.  As of the Closing Date, such Grantor has no Commercial Tort Claims in excess of $250,000, other than those listed on Schedule 2(c).

 

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5.Covenants.  Each Grantor covenants that, so long as any Lender shall have any Commitment under the Credit Agreement, and so long as any Loan or other Obligation under the Credit Agreement shall remain unpaid or unsatisfied (other than contingent indemnification obligations for which no claim has been asserted), such Grantor shall:

 

	

	
(a)Other Liens.  Defend the Collateral against Liens thereon other than Permitted Liens.

 

	

	
(b)Instruments/Tangible Chattel Paper/Documents.  (i) If any amount in excess of $500,000 payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument or Tangible Chattel Paper, or if any property constituting Collateral with a value in excess of $500,000 shall be stored or shipped subject to a Document, in either case, ensure that such Instrument, Tangible Chattel Paper or Document is either in the possession of such Grantor at all times or, if requested in writing by the Administrative Agent to perfect its security interest in such Collateral, is delivered to the Administrative Agent, duly endorsed in a manner reasonably satisfactory to the Administrative Agent, and (ii) if requested in writing by the Administrative Agent, ensure that any Collateral consisting of Tangible Chattel Paper is marked with a legend reasonably acceptable to the Administrative Agent indicating the Administrative Agent’s security interest in such Tangible Chattel Paper.

 

(c)Perfection of Security Interest.  Execute and deliver to the Administrative Agent such agreements, assignments or instruments (including affidavits, notices, reaffirmations and amendments and restatements of existing documents, as the Administrative Agent may reasonably request in writing) and do all such other things as the Administrative Agent may reasonably deem necessary or appropriate (i) to assure to the Administrative Agent the effectiveness, perfection and priority of its security interests in the Collateral hereunder, including (A) such instruments as the Administrative Agent may from time to time reasonably request in writing in order to perfect and maintain the security interests granted hereunder in accordance with the Uniform Commercial Code, (B) with regard to registered Copyrights, a Notice of Grant of Security Interest in Copyrights for filing with the United States Copyright Office in the form of Exhibit 5(c)(i)(B) attached hereto, (C) with regard to Patents, a Notice of Grant of Security Interest in Patents for filing with the United States Patent and Trademark Office in the form of Exhibit 5(c)(i)(C) attached hereto and (D) with regard to Trademarks registered with the United States Patent and Trademark Office and all applications for Trademarks filed with the United States Patent and Trademark Office, a Notice of Grant of Security Interest in Trademarks for filing with the United States Patent and Trademark Office in the form of Exhibit 5(c)(i)(D) attached hereto, (ii) to consummate the transactions contemplated hereby and (iii) to otherwise protect and assure the Administrative Agent of its rights and interests hereunder, and, in furtherance of the foregoing, such Grantor hereby (1) authorizes the Administrative Agent to file one or more financing statements (including authorization to describe the Collateral as “all assets” or words of similar meaning) disclosing the Administrative Agent’s security interest in any or all of the Collateral of such Grantor without such Grantor’s signature thereon, (2) irrevocably makes, constitutes and appoints the Administrative Agent, its nominee or any other Person whom the Administrative Agent may designate, as such Grantor’s attorney-in-fact with full power and for the limited purpose to sign in the name of such Grantor any such financing statements (including renewal statements), amendments and supplements, notices or any similar documents that in the Administrative Agent’s reasonable discretion would be necessary, appropriate or convenient in order to perfect and maintain perfection of the security interests granted hereunder, such power, being coupled with an interest, being and remaining irrevocable so long as any Lender shall have any Commitment under the Credit Agreement, and so long as any Loan or other Obligation under the Credit Agreement shall remain unpaid or unsatisfied (other than contingent indemnification obligations for which no claim has been asserted), and (3) agrees that a carbon, photographic or other reproduction of this Security Agreement or any such financing statement is sufficient for filing as a financing statement by the Administrative Agent without 

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notice thereof to such Grantor wherever the Administrative Agent may in its sole discretion desire to file the same.  In the event for any reason the law of any jurisdiction other than New York becomes or is applicable to the Collateral of any Grantor or any part thereof, or to any of the Obligations, such Grantor agrees to execute and deliver all such instruments and to do all such other things as the Administrative Agent in its sole discretion reasonably deems necessary or appropriate to preserve, protect and enforce the security interests of the Administrative Agent under the law of such other jurisdiction (and, if a Grantor shall fail to do so promptly upon the written request of the Administrative Agent, then the Administrative Agent may execute any and all such requested documents on behalf of such Grantor pursuant to the power of attorney granted hereinabove).  If any Collateral is in the possession or control of a Grantor’s agents (other than contract manufacturers and other service providers in the ordinary course of business) and the Administrative Agent so requests in writing, such Grantor agrees to notify such agents in writing of the Administrative Agent’s security interest therein and, upon the Administrative Agent’s reasonable request, instruct them to hold all such Collateral for the account of the Secured Parties, subject to the Administrative Agent’s instructions.  Upon the request of the Administrative Agent, each Grantor agrees to mark its books and records to reflect the security interest of the Administrative Agent in the Collateral.

 

(d)Control.  Execute and deliver (and use commercially reasonable efforts to cause to be executed and delivered by any Person that is not an Affiliate) all agreements, assignments, instruments or other documents as the Administrative Agent shall reasonably request in writing for the purpose of obtaining and maintaining control within the meaning of the Uniform Commercial Code with respect to any Collateral consisting of Deposit Accounts or Securities Accounts (in each case, other than Excluded Accounts), Investment Property (other than Securities Accounts), Letter-of-Credit Rights and Electronic Chattel Paper. 

 

(e)Collateral held by Warehouseman, Bailee, etc.  If any Collateral (other than Collateral in transit between locations owned or leased by a Grantor within the United States in the ordinary course of business) of such Grantor with a value greater than $500,000 is at any time in the possession or control of a warehouseman, bailee, agent or processor of such Grantor, upon request of the Administrative Agent, (i) notify such Person in writing of the Administrative Agent’s security interest in such Collateral, (ii) instruct such Person to hold all such Collateral for the Administrative Agent’s account and subject to the Administrative Agent’s instructions and (iii) use commercially reasonable efforts to obtain written acknowledgment from such Person that it is holding such Collateral for the benefit of the Administrative Agent (which written acknowledgement may be in  the form of a Collateral Access Agreement if the Administrative Agent so requests). 

 

	

	
(f)Treatment of Accounts.  Not grant or extend the time for payment of any Account of such Grantor, or compromise or settle any such Account for less than the full amount thereof, or release any Person or property, in whole or in part, from payment thereof, or allow any credit or discount thereon, in each case other than as normal and customary in the ordinary course of such Grantor’s business, in accordance with customary industry practices as determined by such Grantor in its good faith business judgment or as required by law.

 

(g)Insurance.  Insure, repair and replace the Collateral of such Grantor to the extent set forth in the Credit Agreement (it being understood and agreed that all insurance proceeds shall be subject to the security interest of the Administrative Agent to the extent set forth hereunder).

 

	

	
(h)Commercial Tort Claims.  

 

	

	
(i)Promptly notify the Administrative Agent in writing of the initiation of any Commercial Tort Claim involving amounts in excess of $500,000, and, in connection 

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therewith, promptly forward to the Administrative Agent an updated Schedule 2(c) listing any such Commercial Tort Claim. 

 

(ii)Execute and deliver such statements, documents and notices and do and cause to be done all such things as the Administrative Agent may reasonably deem necessary, appropriate or convenient, or as are required by law, to create, preserve, perfect and maintain the Administrative Agent’s security interest in any Commercial Tort Claim.

 

(i)Collateral Access Agreements. For any real property leased by such Grantor that is subject to a Collateral Access Agreement in favor of the Administrative Agent, (i) promptly notify the Administrative Agent following receipt of written notice delivered to such Grantor under such lease of a change in the identity of the lessor and (ii) use commercially reasonable efforts to obtain such replacement or new Collateral Access Agreements for such real property as the Administrative Agent may request as a result of such change in the identity of the lessor.

 

6.Covenants Relating to IP Collateral.  Each Grantor covenants that, so long as any Lender shall have any Commitment under the Credit Agreement, and so long as any Loan or other Obligation under the Credit Agreement shall remain unpaid or unsatisfied (other than contingent indemnification obligations for which no claim has been asserted), such Grantor shall:

 

(a)Covenants Relating to Copyrights.  (i) Not do any act, or knowingly omit to do any act, whereby any Copyright of such Grantor that is Material Intellectual Property may become dedicated to the public domain, (ii) promptly notify the Administrative Agent if it knows that any Copyright of such Grantor that is Material Intellectual Property is reasonably likely to become dedicated to the public domain or of any adverse determination or development (including the institution of, or any such determination or development in, any court or tribunal in the United States or any other country) regarding such Grantor’s ownership of any such Copyright or its validity or enforceability, and (iii) take all necessary steps as it shall deem appropriate under the circumstances, to maintain and pursue each application (and to obtain the relevant registration) of each Copyright of such Grantor that is Material Intellectual Property and to maintain each registration of each such Copyright that is Material Intellectual Property including filing of applications for renewal where necessary, excluding the maintenance of Intellectual Property that in the commercially reasonable business judgment of the Grantor is not necessary or material for either (x) the conduct of the business of any Loan Party or its Subsidiaries or (y) any material Product Development and Commercialization Activities associated with any Product.

 

	

	
(b)Covenants Relating to Patents and Trademarks.

 

	

	
(i)(A) Maintain as in the past the quality of products and services offered under each Trademark owned by such Grantor that is Material Intellectual Property, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect or a material adverse effect on such Grantor’s rights in such Trademark, (B) employ each Trademark owned by such Grantor that is a Material Intellectual Property with the appropriate notice of registration, if applicable except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect or a material adverse effect on such Grantor’s rights in such Trademark, and (C) not adopt or use any mark that is confusingly similar to or a colorable imitation of any Trademark owned by such Grantor unless the Administrative Agent, for the benefit of the Secured Parties, shall obtain a perfected security interest in such Trademark pursuant to this Security Agreement.

 

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(ii)Notify the Administrative Agent promptly if it knows that any Trademark or Patent owned by such Grantor that is Material Intellectual Property, or any application or registration relating to any Patent or Trademark owned by such Grantor that is Material Intellectual Property, is reasonably likely to become abandoned, invalidated, rendered unenforceable or dedicated to the public, or of any materially adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, or any similar office or agency in any other country) regarding such Grantor’s ownership of any such Patent or Trademark or its right to register the same or to keep and maintain the same.

 

	

	
(iii)Take all reasonable and necessary steps, including in any proceeding before the United States Patent and Trademark Office, or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of each Patent and each Trademark owned by such Grantor that is Material Intellectual Property, including filing of applications for renewal, affidavits of use and affidavits of incontestability but excluding the maintenance and pursuit of any Patent or Trademark that in the commercially reasonable business judgment of the Grantor is not necessary or material for either (x) the conduct of the business of any Loan Party or its Subsidiaries or (y) any material Product Development and Commercialization Activities associated with any Product.

 

(c)Other Covenants Relating to Rights in Intellectual Property.

	

	
 

	

	
(i)Not (and not permit any licensee or sublicensee thereof to) do any act, or omit to do any act, whereby any Material Intellectual Property of such Grantor may become abandoned, invalidated, rendered unenforceable, diluted or dedicated to the public, but excluding Intellectual Property that in the commercially reasonable business judgment of the Grantor is not necessary or material for either (x) the conduct of the business of any Loan Party or its Subsidiaries or (y) any material Product Development and Commercialization Activities associated with any Product.

 

	

	
(ii)Use commercially reasonable efforts to maintain the confidentiality of all confidential information and trade secrets of such Grantor.

 

	

	
(iii)Upon written request of the Administrative Agent, execute and deliver any and all agreements, instruments, documents and papers as the Administrative Agent may reasonably request to evidence and perfect the security interest of the Administrative Agent and the Secured Parties in any Intellectual Property that constitutes Collateral and the goodwill and general intangibles of such Grantor relating thereto or represented thereby.

 

	

	
(iv)Promptly notify the Administrative Agent of any Infringement, of any Material Intellectual Property of such Grantor of which it becomes aware and make such commercially reasonable efforts as it shall determine in its reasonable business judgment to  be appropriate under the circumstances to protect such Material Intellectual Property, including, where appropriate, the bringing of suit for Infringement, or dilution, seeking injunctive relief and seeking to recover any and all damages for such Infringement.

 

	

	
(v)Not make any assignment or agreement in conflict with the security interest in the rights in Intellectual Property of such Grantor hereunder (other than as permitted in the Credit Agreement).

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7.Advances.  On failure of any Grantor to perform any of the covenants and agreements contained herein or in any other Loan Document, the Administrative Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expend such sums as the Administrative Agent may reasonably deem advisable in the performance thereof, including the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien (other than a Permitted Lien), and expenditures made in defending against any adverse claim and all other expenditures that the Administrative Agent may make for the protection of the security hereof or that the Administrative Agent may be compelled to make by operation of law.  All such sums and amounts so expended shall be repayable by the Grantors, on demand, on a joint and several basis (subject to Section 23 hereof) promptly upon timely notice thereof and demand therefor, shall constitute additional Obligations and shall bear interest from the date said amounts are expended at the Default Rate. No such performance of any covenant or agreement by the Administrative Agent on behalf of any Grantor, and no such advance or expenditure therefor, shall relieve the Grantors of any Default or Event of Default until such Default or Event of Default shall have been cured or waived in accordance with the terms of the Credit Agreement. The Administrative Agent may make any payment hereby authorized in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged, without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by a Grantor in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.

 

8.Remedies.

 

(a)General Remedies.  Upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent shall have, in addition to the rights and remedies provided herein, in the Loan Documents, in any other documents relating to the Obligations, or by law (including levy of attachment, garnishment and the rights and remedies set forth in the Uniform Commercial Code of the jurisdiction applicable to the affected Collateral), the rights and remedies of a secured party under the Uniform Commercial Code (regardless of whether the Uniform Commercial Code is the law of the jurisdiction where the rights and remedies are asserted and regardless of whether the Uniform Commercial Code applies to the affected Collateral) and, further, the Administrative Agent may, with or without judicial process or the aid and assistance of others, in each case, to the extent permitted by applicable law, upon the occurrence and during the continuation of an Event of Default, (i) enter on any premises on which any of the Collateral may be located and, without resistance or interference by the Grantors, take possession of the Collateral, (ii) dispose of any Collateral on any such premises, (iii) require the Grantors to assemble and make available to the Administrative Agent at the expense of the Grantors any Collateral at any place and time designated by the Administrative Agent that is reasonably convenient to both parties, (iv) remove any Collateral from any such premises for the purpose of effecting the sale or other disposition thereof, and/or (v) without demand and without advertisement, notice, hearing or process of law, all of which each of the Grantors hereby waives to the fullest extent permitted by law, at any place and time or times, sell and deliver any or all Collateral held by or for it at public or private sale, by one or more contracts, in one or more parcels, for cash, upon credit or otherwise, at such prices and upon such terms as the Administrative Agent deems advisable, in its sole discretion (subject to any and all mandatory legal requirements).  Each of the Grantors acknowledges that any private sale referenced above may be at prices and on terms less favorable to the seller than the prices and terms that might have been obtained at a public sale and, notwithstanding the foregoing, agrees that such private sale shall not be deemed to have been made in a commercially unreasonable manner for such reason.  Neither the Administrative Agent’s compliance with applicable law nor its disclaimer of warranties relating to the Collateral shall be considered to adversely affect the commercial reasonableness of any sale.  In addition to all other sums due the Administrative Agent and the Secured Parties with respect to the Obligations, the Grantors shall pay 

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the Administrative Agent and each of the Secured Parties all reasonable costs and expenses incurred by the Administrative Agent or any such Secured Party, in enforcing its remedies hereunder including, but not limited to, reasonable attorneys’ fees and court costs, in obtaining or liquidating the Collateral, in enforcing payment of the Obligations, or in the prosecution or defense of any action or proceeding by or against the Administrative Agent or the Secured Parties or the Grantors concerning any matter arising out of or connected with this Security Agreement, any Collateral or the Obligations, including any of the foregoing arising in, arising under or related to a case under Debtor Relief Laws.  To the extent the rights of notice cannot be legally waived hereunder, each Grantor agrees that any requirement of reasonable notice shall be met if such notice, specifying the place of any public sale or the time after which any private sale is to be made, is personally served on or mailed, postage prepaid, to the Borrower in accordance with the notice provisions of Section 11.02 of the Credit Agreement at least ten (10) Business Days before the time of sale or other event giving rise to the requirement of such notice.  The Administrative Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.  The Administrative Agent shall not be obligated to make any sale or other disposition of the Collateral regardless of notice having been given.  To the extent permitted by law, any Secured Party may be a purchaser at any such sale.  To the extent permitted by applicable law, each of the Grantors hereby waives all of its rights of redemption with respect to any such sale.  Subject to the provisions of applicable law, the Administrative Agent and the Secured Parties may postpone or cause the postponement of the sale of all or any portion of the Collateral by announcement at the time and place of such sale, and such sale may, without further notice, to the extent permitted by law, be made at the time and place to which the sale was postponed, or the Administrative Agent may further postpone such sale by announcement made at such time and place.

 

(b)Remedies Relating to Accounts.  Upon the occurrence of an Event of Default and during the continuation thereof, whether or not the Administrative Agent has exercised any or all of its rights and remedies hereunder, (i) each Grantor will promptly upon written request of the Administrative Agent instruct all account debtors to remit all payments in respect of Accounts to a mailing location selected by the Administrative Agent and (ii) the Administrative Agent shall have the right to enforce any Grantor’s rights against its customers and account debtors, and the Administrative Agent or its designee may notify (or require any Grantor to notify) any Grantor’s customers and account debtors that the Accounts of such Grantor have been assigned to the Administrative Agent or of the Administrative Agent’s security interest therein, and may (either in its own name or in the name of a Grantor or both) demand, collect (including by way of a lockbox arrangement), receive, take receipt for, sell, sue for, compound, settle, compromise and give acquittance for any and all amounts due or to become due on any Account, and, in the Administrative Agent’s discretion, file any claim or take any other action or proceeding to protect and realize upon the security interest of the Secured Parties in the Accounts.  Each Grantor acknowledges and agrees that the Proceeds of its Accounts remitted to or on behalf of the Administrative Agent in accordance with the provisions hereof shall be solely for the Administrative Agent’s own convenience and that such Grantor shall not have any right, title or interest in such Accounts or in any such other amounts except as expressly provided herein.  The Administrative Agent and the other Secured Parties shall have no liability or responsibility to any Grantor for acceptance of a check, draft or other order for payment of money bearing the legend “payment in full” or words of similar import or any other restrictive legend or endorsement or be responsible for determining the correctness of any remittance.  Furthermore, upon the occurrence of an Event of Default and during the continuation thereof, (A) the Administrative Agent shall have the right, but not the obligation, to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and the Grantors shall furnish all such assistance and information as the Administrative Agent may require in connection with such test verifications, (B) upon the Administrative Agent’s request and at the expense of the Grantors, the Grantors shall cause 

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independent public accountants or others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts and (C) the Administrative Agent in its own name or in the name of others may communicate with account debtors on the Accounts to verify with them to the Administrative Agent’s satisfaction the existence, amount and terms of any Accounts.

 

(c)Access.  In addition to the rights and remedies hereunder, upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent shall have the right to enter and remain upon the various premises of the Grantors without cost or charge to the Administrative Agent, and use the same, together with materials, supplies, books and records of the Grantors for the purpose of collecting and liquidating the Collateral, or for preparing for sale and conducting the sale of the Collateral, whether by foreclosure, auction or otherwise.  In addition, upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may remove Collateral, or any part thereof, from such premises and/or any records with respect thereto, in order to effectively collect or liquidate such Collateral.

 

(d)Nonexclusive Nature of Remedies.  Failure by the Administrative Agent or the Secured Parties to exercise any right, remedy or option under this Security Agreement, any other Loan Document, any other document relating to the Obligations, or as provided by law, or any delay by the Administrative Agent or the Secured Parties in exercising the same, shall not operate as a waiver of any such right, remedy or option.  No waiver hereunder shall be effective unless it is in writing, signed by the party against whom such waiver is sought to be enforced and then only to the extent specifically stated, which in the case of the Administrative Agent or the Secured Parties shall only be granted as provided herein.  Subject to Section 9(d) hereof, to the extent permitted by law, neither the Administrative Agent, the Secured Parties, nor any party acting as attorney for the Administrative Agent or the Secured Parties, shall be liable hereunder for any acts or omissions or for any error of judgment or mistake of fact or law other than their bad faith, gross negligence or willful misconduct hereunder, as determined by a court of competent jurisdiction by final and non-appealable judgment.  The rights and remedies of the Administrative Agent and the Secured Parties under this Security Agreement shall be cumulative and not exclusive of any other right or remedy that the Administrative Agent or the Secured Parties may have.

 

(e)Retention of Collateral.  To the extent permitted by applicable law, in addition to the rights and remedies hereunder, upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent may, after providing the notices required by Sections 9-620 and 9-621 of the Uniform Commercial Code (or any successor section) or otherwise complying with the requirements of applicable law of the relevant jurisdiction, accept or retain all or any portion of the Collateral in satisfaction of the Obligations.  Unless and until the Administrative Agent shall have provided such notices, however, the Administrative Agent shall not be deemed to have accepted or retained any Collateral in satisfaction of any Obligations for any reason.

 

(f)Deficiency.  In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Administrative Agent or the Secured Parties are legally entitled, the Grantors shall be jointly and severally liable for the deficiency (subject to Section 23 hereof), together with interest thereon at the Default Rate, together with the costs of collection and the reasonable fees, charges and disbursements of counsel.  Any surplus remaining after the full payment and satisfaction of the Obligations shall be returned to the Grantors or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto.

 

11

9.Rights of the Administrative Agent.

 

(a)Power of Attorney.  In addition to other powers of attorney contained herein, each Grantor hereby designates and appoints the Administrative Agent, on behalf of the Secured Parties, and each of its designees or agents, as attorney-in-fact of such Grantor, irrevocably and with power of substitution, with authority to take any or all of the following actions upon the occurrence and during the continuation of an Event of Default:

 

(i)to demand, collect, settle, compromise and adjust, and give discharges and releases concerning the Collateral, all as the Administrative Agent may reasonably deem appropriate;

 

(ii)to commence and prosecute any actions at any court for the purposes of collecting any of the Collateral and enforcing any other right in respect thereof;

 

(iii)to defend, settle or compromise any action, suit or proceeding brought and, in connection therewith, give such discharge or release as the Administrative Agent may reasonably deem appropriate;

 

(iv)to receive, open and dispose of mail addressed to such Grantor and endorse checks, notes, drafts, acceptances, money orders, bills of lading, warehouse receipts or other instruments or documents evidencing payment, shipment or storage of the goods giving rise to the Collateral of such Grantor on behalf of and in the name of such Grantor, or securing, or relating to such Collateral;

 

(v)to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Collateral;

 

(vi)to direct any parties liable for any payment in connection with any of the Collateral to make payment of any and all monies due and to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct;

 

(vii)to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Collateral;

 

(viii)to maintain and enforce all Intellectual Property, forming any part of the Collateral;

 

 (ix)to sell, assign, transfer, license, make any agreement in respect of, or otherwise deal with or exercise rights in respect of, any Collateral or the goods or services that have given rise thereto, as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes;

 

(x)to adjust and settle claims under any insurance policy relating thereto;

 

(xi)to execute and deliver all assignments, conveyances, statements, financing statements, renewal financing statements, security and pledge agreements, affidavits, notices and other agreements, instruments and documents that the Administrative Agent may reasonably deem appropriate in order to perfect and maintain the security interests and liens granted in this Security Agreement and in order to fully consummate all of the transactions contemplated therein;

12

 

(xii)to institute any foreclosure proceedings that the Administrative Agent may reasonably deem appropriate;

 

(xiii)to sign and endorse any drafts, assignments, verifications, notices and other documents relating to the Collateral; and

 

(xiv)to do and perform all such other acts and things as the Administrative Agent may deem appropriate or convenient in connection with the Collateral.

 

This power of attorney is a power coupled with an interest and shall be irrevocable for so long as any Lender shall have any Commitment under the Credit Agreement, and so long as any Loan or other Obligation under the Credit Agreement shall remain unpaid or unsatisfied (other than contingent indemnification obligations for which no claim has been asserted).  The Administrative Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or implicitly granted to the Administrative Agent in this Security Agreement, and shall not be liable for any failure to do so or any delay in doing so.  The Administrative Agent shall not be liable for any act or omission or for any error of judgment or any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence, bad faith or willful misconduct, as determined by a court of competent jurisdiction by final and non-appealable judgment.  This power of attorney is conferred on the Administrative Agent solely to protect, preserve and realize upon its security interest in the Collateral.

 

(b)Assignment by the Administrative Agent.  The Administrative Agent may from time to time assign the Obligations to a successor Administrative Agent appointed in accordance with the Credit Agreement, and such successor shall be entitled to all of the rights and remedies of the Administrative Agent under this Security Agreement in relation thereto.

 

(c)Releases of Collateral.  If any Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement, then (i) the Lien of the Administrative Agent created hereby on such Collateral (and only such Collateral) shall be automatically released and (ii) the Administrative Agent, at the request and sole expense of such Grantor, shall promptly execute and deliver to such Grantor all releases and other documents, and take such other action, reasonably necessary for the release of the Liens created hereby or by any other Collateral Document on such Collateral.  If any of the Collateral constituting Intellectual Property is licensed to a third party under, or rights thereto are granted to a third party pursuant to, a license of Intellectual Property permitted by the Credit Agreement, the Liens granted hereunder and under the other Collateral Documents to such Intellectual Property shall be subject to the rights of such third party to use such Intellectual Property in accordance with the terms of such license. 

 

(d)The Administrative Agent’s Duty of Care.  Other than the exercise of reasonable care to assure the safe custody of the Collateral while being held by the Administrative Agent hereunder and to account for all proceeds thereof, the Administrative Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that the Grantors shall be responsible for preservation of all rights in the Collateral, and the Administrative Agent shall be relieved of all responsibility for the Collateral upon surrendering it or tendering the surrender of it to the Grantors.  The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Administrative Agent shall not have responsibility for taking any necessary steps to preserve rights 

13

against any parties with respect to any of the Collateral.  In the event of a public or private sale of Collateral pursuant to Section 8 hereof, the Administrative Agent shall have no responsibility for (i) ascertaining or taking action with respect to any matters relating to any Collateral, whether or not the Administrative Agent has or is deemed to have knowledge of such matters, or (ii) taking any steps to clean, repair or otherwise prepare the Collateral for sale.

 

10.Application of Proceeds.  Upon the acceleration of the Obligations pursuant to Section 9.02 of the Credit Agreement, any payments in respect of the Obligations and any proceeds of the Collateral, when received by the Administrative Agent or any Secured Party in cash or its equivalent, will be applied in reduction of the Obligations in the order set forth in Section 9.03 of the Credit Agreement, and each Grantor irrevocably waives the right to direct the application of such payments and proceeds and acknowledges and agrees that the Administrative Agent shall have the continuing and exclusive right to apply and reapply any and all such payments and proceeds in the Administrative Agent’s sole discretion, notwithstanding any entry to the contrary upon any of its books and records.

 

11.Continuing Agreement.

 

(a)This Security Agreement shall be a continuing agreement in every respect and shall remain in full force and effect for so long as any Lender shall have any Commitment under the Credit Agreement, and so long as any Loan or other Obligation under the Credit Agreement shall remain unpaid or unsatisfied (other than contingent indemnification obligations for which no claim has been asserted), at which time this Security Agreement, and the liens and security interests of the Administrative Agent hereunder, shall be automatically terminated and the Administrative Agent shall, upon the request and at the expense of the Grantors, execute and deliver all Uniform Commercial Code termination statements and/or other documents reasonably requested by the Grantors evidencing such termination and return to Grantors all Collateral in its possession. Notwithstanding the foregoing, all releases and indemnities provided hereunder shall survive termination of this Security Agreement.

 

(b)This Security Agreement shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Secured Party as a preference, fraudulent conveyance or otherwise under any Debtor Relief Law, all as though such payment had not been made; provided, that, in the event payment of all or any part of the Obligations is rescinded or must be restored or returned, all costs and expenses (including any reasonable attorneys’ fees and disbursements) incurred by the Administrative Agent or any Secured Party in defending and enforcing such reinstatement shall be deemed to be included as a part of the Obligations.

 

12.Amendments and Waivers; Modifications.  This Security Agreement and the provisions hereof may not be amended, waived, modified, changed, discharged or terminated except as set forth in Section 11.01 of the Credit Agreement; provided, that, (a) any update or revision to Schedule 2(c) attached hereto delivered by any Grantor in accordance with the terms hereof, or (b) any amendment to the schedules hereof pursuant to a Joinder Agreement (as contemplated by Section 24 hereof), in each case, shall not constitute an amendment for purposes of this Section 12 or Section 11.01 of the Credit Agreement.

 

13.Successors in Interest.  This Security Agreement shall create a continuing security interest in the Collateral and shall be binding upon each Grantor, its successors and permitted assigns, and shall inure, together with the rights and remedies of the Administrative Agent and the Secured Parties hereunder, to the benefit of the Administrative Agent and the Secured Parties and their successors and permitted assigns; provided, however, that, none of the Grantors may assign its rights or delegate its duties hereunder without the prior written consent of the requisite Lenders under the Credit Agreement.  

 

14

14.Notices.  All notices required or permitted to be given under this Security Agreement shall be given as provided in Section 11.02 of the Credit Agreement.

 

15.Counterparts.  This Security Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Security Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Security Agreement.

 

16.Headings.  Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Security Agreement.

 

17.Governing Law; Submission to Jurisdiction; Waiver of Venue, Service of Process, Waiver of Right to Jury Trial.   The terms of Section 11.14 of the Credit Agreement and Section 11.15 of the Credit Agreement with respect to governing law, submission to jurisdiction, waiver of venue, service of process and waiver of the right to a jury trial are each incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.

 

18.Severability.  If any provision of this Security Agreement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Security Agreement shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

19.Entirety.  This Security Agreement, the other Loan Documents and the other documents relating to the Obligations represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any proposal letters or correspondence relating to the Loan Documents, any other documents relating to the Obligations, or the transactions contemplated herein and therein.

 

20.Survival.  All representations and warranties of the Grantors hereunder shall survive the execution and delivery of this Security Agreement, the other Loan Documents and the other documents relating to the Obligations, the delivery of the Notes and the extension of credit thereunder or in connection therewith.

 

21.Other Security.  To the extent that any of the Obligations are now or hereafter secured by property other than the Collateral (including real and other personal property and securities owned by a Grantor), or by a guarantee, endorsement or property of any other Person, then to the extent permitted by applicable law the Administrative Agent shall have the right to proceed against such other property, guarantee or endorsement upon the occurrence and during the continuation of any Event of Default, and the Administrative Agent shall have the right, in its sole discretion, to determine which rights, security, liens, security interests or remedies the Administrative Agent shall at any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them or the Obligations or any of the rights of the Administrative Agent or the Secured Parties under this Security Agreement, under any of the other Loan Documents or under any other document relating to the Obligations.

 

22.Rights of Required Lenders.  All rights of the Administrative Agent hereunder, if not exercised by the Administrative Agent, may be exercised by the Required Lenders. 

15

 

23.Joint and Several Obligations of Grantors.

 

(a)Subject to Section 23(c), each of the Grantors is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the Secured Parties, for the mutual benefit, directly and indirectly, of each of the Grantors and in consideration of the undertakings of each of the Grantors to accept joint and several liability for the obligations of each of them.

 

(b)Subject to Section 23(c), each of the Grantors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Grantors with respect to the payment and performance of all of the Obligations arising under this Security Agreement, the other Loan Documents and any other documents relating to the Obligations, it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each of the Grantors without preferences or distinction among them.

 

(c)Notwithstanding any provision to the contrary contained herein, in any other of the Loan Documents or in any other documents relating to the Obligations, the obligations of each Guarantor under the Credit Agreement, the other Loan Documents and the other documents relating to the Obligations shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of any applicable state law.

 

24.Joinder.  At any time after the date of this Security Agreement, one or more additional Persons may become party hereto by executing and delivering to the Administrative Agent a Joinder Agreement.  Immediately upon such execution and delivery of such Joinder Agreement (and without any further action), each such additional Person will become a party to this Security Agreement as a “Grantor” and have all of the rights and obligations of a Grantor hereunder and this Security Agreement and the schedules hereto shall be deemed amended by such Joinder Agreement.

 

 

[Signature Pages Follow]

 

16

 

Each of the parties hereto has caused a counterpart of this Security Agreement to be duly executed and delivered as of the date first above written.

 

	
GRANTOR:
	
DERMIRA, INC.,

a Delaware corporation

 

By: /s/ Andrew L. Guggenhime

Name: Andrew L. Guggenhime

Title: Chief Financial Officer

 

	

	
 

 

 

 

 

DERMIRA, INc.

Security Agreement

 

Accepted and agreed to as of the date first above written.

 

 

ADMINISTRATIVE AGENT:

 

ATHYRIUM OPPORTUNITIES III ACQUISITION LP,

a Delaware limited partnership

 

By:ATHYRIUM OPPORTUNITIES 

ASSOCIATES III LP, its General Partner

By:ATHYRIUM OPPORTUNITIES

ASSOCIATES III GP LLC, its General Partner

 

 

By:/s/ Andrew C. Hyman

Name: Andrew C. Hyman

Title: Authorized Signatory

 

DERMIRA, INc.

Security Agreement

 

EXHIBIT 5(c)(i)(B)

 

FORM

 

OF

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

COPYRIGHTS

 

 

United States Copyright Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Security Agreement dated as of December 3, 2018 (as the same may be amended, modified, restated or supplemented from time to time, the “Security Agreement”) by and among the Grantors party thereto (each a “Grantor” and collectively, the “Grantors”) and Athyrium Opportunities III Acquisition LP, as Administrative Agent (the “Administrative Agent”) for the Secured Parties referenced therein, the undersigned Grantor has granted a continuing security interest in and continuing lien upon, any and all of its copyrights, copyright licenses and copyright applications, including those copyrights, exclusive copyright licenses and copyright applications that constitute Material Intellectual Property shown on Schedule 1 attached hereto to the Administrative Agent for the ratable benefit of the Secured Parties.

 

The undersigned Grantor and the Administrative Agent, on behalf of the Secured Parties, hereby acknowledge and agree that the security interest in the copyrights, copyright licenses and copyright applications of the undersigned Grantor, including those set forth on Schedule 1 attached hereto (i) may only be terminated in accordance with the terms of the Security Agreement, (ii) is not to be construed as an assignment of any copyright, copyright license or copyright application.

 

[Signature pages follow]

 

 

 

 

Very truly yours,

 

[GRANTOR]

 

By:

Name:

Title:

 

 

 

Acknowledged and Accepted:

 

ADMINISTRATIVE AGENT:

 

ATHYRIUM OPPORTUNITIES III ACQUISITION LP,

a Delaware limited partnership

 

By:ATHYRIUM OPPORTUNITIES 

ASSOCIATES III LP, its General Partner

By:ATHYRIUM OPPORTUNITIES

ASSOCIATES III GP LLC, its General Partner

 

 

By:

Name:

Title:

 

 

 

EXHIBIT 5(c)(i)(C)

 

FORM 

 

OF

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

PATENTS

 

 

United States Patent and Trademark Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Security Agreement dated as of December 3, 2018 (as the same may be amended, modified, restated or supplemented from time to time, the “Security Agreement”) by and among the Grantors party thereto (each a “Grantor” and collectively, the “Grantors”) and Athyrium Opportunities III Acquisition LP, as Administrative Agent (the “Administrative Agent”) for the Secured Parties referenced therein, the undersigned Grantor has granted a continuing security interest in and continuing lien upon, any and all of its patents, patent licenses and patent applications, including those patents, exclusive patent licenses and patent applications that constitute Material Intellectual Property set forth on Schedule 1 attached hereto to the Administrative Agent for the ratable benefit of the Secured Parties.

 

The undersigned Grantor and the Administrative Agent, on behalf of the Secured Parties, hereby acknowledge and agree that the security interest in the patents, patent licenses and patent applications of the undersigned Grantor, including those set forth on Schedule 1 attached hereto (i) may only be terminated in accordance with the terms of the Security Agreement, (ii) is not to be construed as an assignment of any patent, patent license or patent application.

 

[Signature pages follow]

 

 

 

 

Very truly yours,

 

[GRANTOR]

 

By:

Name:

Title:

 

 

 

Acknowledged and Accepted:

 

ADMINISTRATIVE AGENT:

 

ATHYRIUM OPPORTUNITIES III ACQUISITION LP,

a Delaware limited partnership

 

By:ATHYRIUM OPPORTUNITIES 

ASSOCIATES III LP, its General Partner

By:ATHYRIUM OPPORTUNITIES

ASSOCIATES III GP LLC, its General Partner

 

 

By:

Name:

Title:

 

 

 

 

EXHIBIT 5(c)(i)(D)

 

FORM

 

OF

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

TRADEMARKS

 

 

United States Patent and Trademark Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Security Agreement dated as of December 3, 2018 (as the same may be amended, modified, restated or supplemented from time to time, the “Security Agreement”) by and among the Grantors party thereto (each a “Grantor” and collectively, the “Grantors”) and Athyrium Opportunities III Acquisition LP, as Administrative Agent (the “Administrative Agent”) for the Secured Parties referenced therein, the undersigned Grantor has granted a continuing security interest in and continuing lien upon, any and all of its trademarks, trademark licenses and trademark applications, including those trademarks, exclusive trademark licenses and trademark applications that constitute Material Intellectual Property set forth on Schedule 1 attached hereto to the Administrative Agent for the ratable benefit of the Secured Parties.

 

The undersigned Grantor and the Administrative Agent, on behalf of the Secured Parties, hereby acknowledge and agree that the security interest in the trademarks, trademark licenses and trademark applications of the undersigned Grantor, including those set forth on Schedule 1 attached hereto (i) may only be terminated in accordance with the terms of the Security Agreement, (ii) is not to be construed as an assignment of any trademark, trademark license or trademark application.

 

[Signature pages follow]

 

 

 

 

Very truly yours,

 

[GRANTOR]

 

By:

Name:

Title:

 

 

 

Acknowledged and Accepted:

 

ADMINISTRATIVE AGENT:

 

ATHYRIUM OPPORTUNITIES III ACQUISITION LP,

a Delaware limited partnership

 

By:ATHYRIUM OPPORTUNITIES 

ASSOCIATES III LP, its General Partner

By:ATHYRIUM OPPORTUNITIES

ASSOCIATES III GP LLC, its General Partner

 

 

By:

Name:

Title:derm-ex1026_433.htm

EXHIBIT 10.26

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT dated as of December 3, 2018 (as amended, modified, restated or supplemented from time to time, this “Pledge Agreement”) is by and among the party identified as a “Pledgor” on the signature pages hereto and such other parties as may become Pledgors hereunder after the date hereof (individually a “Pledgor”, and collectively, the “Pledgors”) and Athyrium Opportunities III Acquisition LP, as administrative agent (in such capacity, the “Administrative Agent”) for the Secured Parties.

 

W I T N E S S E T H

 

WHEREAS, a credit facility has been established in favor of Dermira, Inc., a Delaware corporation (the “Borrower”), pursuant to the terms of that certain Credit Agreement dated as of the date hereof (as amended, modified, restated, supplemented or extended from time to time, the “Credit Agreement”) among the Borrower, the Guarantors from time to time party thereto, the Lenders from time to time party thereto and the Administrative Agent; 

 

WHEREAS, it is required under the terms of the Credit Agreement that the Pledgors shall have granted, pledged and assigned the security interests and undertaken the obligations contemplated by this Pledge Agreement; and

 

WHEREAS, this Pledge Agreement is required under the terms of the Credit Agreement.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

	
 
	
1.
	
Definitions.  

(a)Capitalized terms used and not otherwise defined herein shall have the meanings provided in the Credit Agreement.

 

(b)As used herein, the following terms shall have the meanings assigned thereto in the Uniform Commercial Code (defined below): Accession, Financial Asset, Investment Company Security, Proceeds, Securities Account, and Security.

 

(c)As used herein, the following terms shall have the meanings set forth below:

 

“Administrative Agent” has the meaning provided in the introductory paragraph hereof.

 

“Borrower” has the meaning provided in the recitals hereof.

 

“Credit Agreement” has the meaning provided in the recitals hereof.

 

“Non-Voting Equity” has the meaning provided in Section 2 hereof.

 

“Pledge Agreement” has the meaning provided in the introductory paragraph hereof.

 

“Pledged Collateral” has the meaning provided in Section 2 hereof.

 

“Pledged Shares” has the meaning provided in Section 2 hereof.

 

“Pledgor” and “Pledgors” have the respective meanings provided in the introductory paragraph hereof.

 

“Voting Equity” has the meaning provided in Section 2 hereof.

 

2.Pledge and Grant of Security Interest.  To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Obligations, each Pledgor hereby grants, pledges and assigns to the Administrative Agent, for the benefit of the Secured Parties, a continuing security interest in any and all right, title and interest of such Pledgor in and to the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the “Pledged Collateral”):

(a)Pledged Shares.  (i) One hundred percent (100%) of the issued and outstanding Equity Interests of each Domestic Subsidiary (including, without limitation, each Domestic Subsidiary that is a Delaware Divided LLC) directly owned by such Pledgor, including the Equity Interests set forth on Schedule 2(a) attached hereto and (ii) sixty-five percent (65%) (or such greater percentage that, (A) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for United States federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s States parent and (B) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treasury Regulations Section 1.956-2(c)(2)) (“Voting Equity”) and one hundred percent (100%) of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treasury Regulations Section 1.956-2(c)(2)) (“Non-Voting Equity”) of each Foreign Subsidiary (other than any Immaterial Foreign Subsidiary), in each case, directly owned by such Pledgor, including the Equity Interests of the Subsidiaries owned by such Pledgor  set forth on Schedule 2(a) attached hereto, in each case together with the certificates (or other agreements or instruments), if any, representing such Equity Interests, and all options and other rights, contractual or otherwise, with respect thereto (collectively, together with the Equity Interests described in Section 2(b) and Section 2(c) below, the “Pledged Shares”), including, but not limited to, the following:

 

(1)all shares, securities, membership interests and other Equity Interests or other property representing a dividend or other distribution on or in respect of any of the Pledged Shares, or representing a distribution or return of capital upon or in respect of the Pledged Shares, or resulting from a stock split, revision, reclassification or other exchange therefor, and any other dividends, distributions, subscriptions, warrants, cash, securities, instruments, rights, options or other property issued to or received or receivable by the holder of, or otherwise in respect of, the Pledged Shares; and

 

(2)without affecting the obligations of the Pledgors under any provision prohibiting such action hereunder or under the Credit Agreement, in the event of any consolidation, merger or division involving the issuer of any Pledged Shares and in which such issuer is not the surviving Person, all Equity Interests of the successor Person formed by or resulting from such consolidation, merger or division, to the extent that such Person is a direct Subsidiary of a Pledgor.

 

(b)Additional Shares.  (i) One hundred percent (100%) of the issued and outstanding Equity Interests of any Person that hereafter becomes a Domestic Subsidiary (including, without limitation, each Domestic Subsidiary that is a Delaware Divided LLC  directly owned by such Pledgor and (ii) sixty-five percent (65%) (or such greater percentage that, (A) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for 

2

 

United States federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s United States parent and (B) could not reasonably be expected to cause any material adverse tax consequences) of the Voting Equity and one hundred percent (100%) of the Non-Voting Equity of any Person that hereafter becomes a Foreign Subsidiary, in each case, directly owned by such Pledgor, including the certificates (or other agreements or instruments) representing such Equity Interests, and all options and other rights, contractual or otherwise, with respect thereto.

 

(c)Accessions and Proceeds.  All Accessions and all Proceeds of any and all of the foregoing.

 

Without limiting the generality of the foregoing, it is hereby specifically understood and agreed that a Pledgor may from time to time hereafter deliver additional Equity Interests to the Administrative Agent as collateral security for the Obligations.  Upon delivery to the Administrative Agent, such additional Equity Interests shall be deemed to be part of the Pledged Collateral of such Pledgor and shall be subject to the terms of this Pledge Agreement whether or not Schedule 2(a) is amended to refer to such additional Equity Interests.

 

Notwithstanding anything to the contrary contained herein, the security interests granted under this Pledge Agreement shall not extend to any Excluded Property.

 

3.Security for Obligations.  The security interest created hereby in the Pledged Collateral of each Pledgor constitutes continuing collateral security for all of the Obligations, whether now existing or hereafter arising.

 

4.Delivery of the Pledged Collateral.  Each Pledgor hereby agrees that:

 

(a)Delivery of Certificates.  (i) Such Pledgor shall deliver to the Administrative Agent (A) simultaneously with or promptly following the execution and delivery of this Pledge Agreement, all certificates (if any) representing the Pledged Shares of such Pledgor, and (B) promptly upon the receipt thereof by or on behalf of a Pledgor, all other certificates and instruments constituting Pledged Collateral of a Pledgor, (ii) prior to delivery to the Administrative Agent, all such certificates and instruments constituting Pledged Collateral of such Pledgor shall be held in trust by such Pledgor for the benefit of the Administrative Agent pursuant hereto, and (iii) all such certificates and instruments shall be delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, substantially in the form provided in Exhibit 4(a) attached hereto.

 

(b)Additional Securities.  If such Pledgor shall receive (or become entitled to receive) by virtue of its being or having been the owner of any Pledged Collateral, any (i) certificate or instrument, including any certificate representing a dividend or distribution in connection with any increase or reduction of capital, reclassification, merger, division, consolidation, sale of assets, combination of shares or membership or other Equity Interests, stock splits, spin-off or split-off, promissory notes or other instruments, (ii) option or right, whether as an addition to, substitution for, conversion of, or an exchange for, any Pledged Collateral or otherwise in respect thereof, (iii) dividends payable in securities, or (iv) distributions of securities or other Equity Interests, cash or other property in connection with a partial or total liquidation, dissolution or reduction of capital, capital surplus or paid-in surplus, then such Pledgor shall accept and receive each such certificate, instrument, option, right, dividend or distribution in trust for the benefit of the Administrative Agent, shall segregate it from such Pledgor’s other property and shall deliver it forthwith to the Administrative Agent in the exact form received together with any necessary endorsement and/or appropriate stock power duly executed in blank, substantially in the form provided in Exhibit 4(a), 

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to be held by the Administrative Agent as Pledged Collateral and as further collateral security for the Obligations.

 

(c)Financing Statements.  Such Pledgor (i) authorizes the Administrative Agent to file one or more financing statements (including authorization to describe the Pledged Collateral as “all assets” or words of similar meaning) disclosing the Administrative Agent’s security interest in the Pledged Collateral, and (ii) agrees to execute and deliver to the Administrative Agent such financing statements and other filings as may be reasonably requested by the Administrative Agent in order to perfect and protect the security interest created hereby in the Pledged Collateral of such Pledgor.

 

5.Representations and Warranties.  Each Pledgor hereby represents and warrants to the Administrative Agent, for the benefit of the Secured Parties, that:

 

(a)Authorization of Pledged Shares.  The Pledged Shares being pledged by such Pledgor are duly authorized and validly issued, are fully paid and nonassessable and are not subject to the preemptive rights of any Person.

 

(b)Title.  Such Pledgor has good and indefeasible title to the Pledged Collateral of such Pledgor and is the legal and beneficial owner of such Pledged Collateral free and clear of any Lien, other than nonconsensual Liens of the type permitted by Section 8.01 of the Credit Agreement.  There exists no “adverse claim” within the meaning of Section 8-102 of the Uniform Commercial Code with respect to the Pledged Shares of such Pledgor.

 

(c)Exercising of Rights.  (i) The exercise by the Administrative Agent of its rights and remedies hereunder will not violate any Law or governmental regulation applicable to such Pledgor or any material contractual restriction binding on or affecting a Pledgor or any of its property, and (ii) there are no restrictions in any Organization Document governing any Pledged Collateral of such Pledgor or any document related thereto which would limit or restrict the grant of a Lien pursuant to this Pledge Agreement on such Pledged Collateral, the perfection of such Lien or the exercise of remedies in respect of such perfected Lien in the Pledged Collateral as contemplated by this Pledge Agreement. 

 

(d)Pledgor’s Authority.  No authorization, approval or action by, and no notice or filing with any Governmental Authority or with the issuer of any Pledged Shares or any other Person is required either (i) for the pledge made by such Pledgor or for the granting of the security interest by such Pledgor pursuant to this Pledge Agreement (except as have been already obtained) or (ii) for the exercise by the Administrative Agent or the Secured Parties of their rights and remedies hereunder (except as may be required by the Uniform Commercial Code or applicable foreign laws or laws affecting the offering and sale of securities).

 

(e)Security Interest/Priority.  (i) This Pledge Agreement creates a valid security interest in favor of the Administrative Agent, for the benefit of the Secured Parties, in the rights of such Pledgor in the Pledged Collateral, and (ii) the taking of possession by the Administrative Agent of the certificates representing the Pledged Shares and all other certificates and instruments constituting Pledged Collateral, together with the taking of possession by the Administrative Agent of duly executed instruments of transfer or assignments in blank, will perfect and establish the first priority of the Administrative Agent’s security interest in the Pledged Shares represented by certificates to the extent such security interest can be perfected by possession and, when properly perfected by filing a Uniform Commercial Code financing statement or registration, in all other Pledged Collateral represented by such Pledged Shares and instruments securing the Obligations 

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to the extent such security interest can be perfected by filing a Uniform Commercial Code financing statement. 

 

(f)Partnership and Membership Interests.  None of the Pledged Shares consisting of partnership or limited liability company interests (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a Security governed by Article 8 of the Uniform Commercial Code, (iii) is an Investment Company Security, (iv) is held in a Securities Account or (v) constitutes a Security or a Financial Asset.

 

(g)No Other Interests.  As of the date hereof, such Pledgor does not own any Equity Interests in any Subsidiary other than as set forth on Schedule 2(a) attached hereto.

 

6.Covenants.  Each Pledgor covenants that, so long as any Lender shall have any Commitment under the Credit Agreement, and so long as any Loan or other Obligation under the Credit Agreement shall remain unpaid or unsatisfied (other than contingent indemnification obligations for which no claim has been asserted), such Pledgor shall:

 

(a)Defense of Title.  Warrant and defend title to and ownership of the Pledged Collateral of such Pledgor at its own expense against the claims and demands of all other parties claiming an interest therein, keep the Pledged Collateral free from all Liens, except for nonconsensual Liens permitted by Section 8.01 of the Credit Agreement, and not sell, exchange, transfer, assign, lease or otherwise dispose of Pledged Collateral of such Pledgor or any interest therein, except as permitted under the Credit Agreement and the other Loan Documents.

 

(b)Further Assurances.  Promptly execute and deliver at its expense all further instruments and documents and take all further action that may be necessary and desirable or that the Administrative Agent may reasonably request in order to (i) perfect and protect the security interest created hereby in the Pledged Collateral of such Pledgor (including any and all other action reasonably necessary to satisfy the Administrative Agent that the Administrative Agent has obtained a first priority perfected security interest in all Pledged Collateral), (ii) enable the Administrative Agent to exercise and enforce its rights and remedies hereunder in respect of the Pledged Collateral of such Pledgor, and (iii) otherwise effect the purposes of this Pledge Agreement, including and if requested by the Administrative Agent, delivering to the Administrative Agent upon its request following the occurrence and continuation of an Event of Default, irrevocable proxies in respect of the Pledged Collateral of such Pledgor.

 

(c)Amendments.  Not make or consent to any amendment or other modification or waiver with respect to any of the Pledged Collateral of such Pledgor or enter into any agreement or allow to exist any restriction with respect to any of the Pledged Collateral of such Pledgor other than as may be permitted under the Credit Agreement.

 

(d)Compliance with Securities Laws.  File all reports and other information now or hereafter required to be filed by such Pledgor with the SEC and any other state, federal or foreign agency in connection with the ownership of the Pledged Collateral of such Pledgor.

 

(e)Books and Records.  Mark its books and records (and shall cause the issuer of the Pledged Shares of such Pledgor to mark its books and records) to reflect the security interest granted pursuant to this Pledge Agreement.

 

(f)Issuance or Acquisition of Equity Interests.  Not, without promptly executing and delivering, or causing to be executed and delivered, to the Administrative Agent such agreements, 

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documents and instruments as the Administrative Agent may reasonably request (or as required under the Credit Agreement) for the purpose of perfecting its security interest therein, issue or acquire any Equity Interests constituting Pledged Collateral consisting of an interest in a partnership or a limited liability company that (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a Security governed by Article 8 of the Uniform Commercial Code, (iii) is an Investment Company Security, (iv) is held in a Securities Account or (v) constitutes a Security or a Financial Asset.

 

7.Advances. On failure of any Pledgor to perform any of the covenants and agreements contained herein or in any other Loan Document, the Administrative Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expend such sums as the Administrative Agent may reasonably deem advisable in the performance thereof, including the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien, expenditures made in defending against any adverse claim and all other expenditures that the Administrative Agent may make for the protection of the security hereof or that the Administrative Agent may be compelled to make by operation of law.  All such sums and amounts so expended shall be repayable by the Pledgors, on demand, on a joint and several basis (subject to Section 23 hereof) promptly upon timely notice thereof and demand therefor, shall constitute additional Obligations and shall bear interest from the date said amounts are expended at the Default Rate.  No such performance of any covenant or agreement by the Administrative Agent on behalf of any Pledgor, and no such advance or expenditure therefor, shall relieve the Pledgors of any Default or Event of Default.  The Administrative Agent may make any payment hereby authorized in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by a Pledgor in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.  

 

8.Remedies.

 

(a)General Remedies.  Upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent shall have, in addition to the rights and remedies provided herein, in the Loan Documents, in any other documents relating to the Obligations, or by law (including levy of attachment, garnishment, and the rights and remedies set forth in the Uniform Commercial Code of the jurisdiction applicable to the affected Pledged Collateral), the rights and remedies of a secured party under the Uniform Commercial Code (regardless of whether the Uniform Commercial Code is the law of the jurisdiction where the rights and remedies are asserted and regardless of whether the Uniform Commercial Code applies to the affected Pledged Collateral.

 

(b)Sale of Pledged Collateral.  Upon the occurrence of an Event of Default and during the continuation thereof, without limiting the generality of this Section 8 and without notice, the Administrative Agent may, in its sole discretion, sell or otherwise dispose of or realize upon the Pledged Collateral, or any part thereof, in one or more parcels, at public or private sale, at any exchange or broker’s board or elsewhere, at such price or prices and on such other terms as the Administrative Agent may deem commercially reasonable, for cash, credit or for future delivery or otherwise in accordance with applicable law.  To the extent permitted by law, any Secured Party may in such event, bid for the purchase of such securities.  Each Pledgor agrees that, to the extent notice of sale shall be required by law and has not been waived by such Pledgor, any requirement of reasonable notice shall be met if such notice, specifying the place of any public sale or the time after which any private sale is to be made, is personally served on or mailed, postage prepaid, to the Borrower, in accordance with the notice provisions of Section 11.02 of the Credit Agreement at least ten (10) Business Days before the time of sale or such other event giving rise to the requirement of such notice.  The Administrative Agent shall not be obligated to make any sale of 

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Pledged Collateral of such Pledgor regardless of notice of sale having been given.  The Administrative Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

 

(c)Private Sale.  Upon the occurrence of an Event of Default and during the continuation thereof, the Pledgors recognize that the Administrative Agent may be unable or deem it impracticable to effect a public sale of all or any part of the Pledged Shares or any of the securities constituting Pledged Collateral and that the Administrative Agent may, therefore, determine to make one or more private sales of any such Pledged Collateral to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such Pledged Collateral for their own account, for investment and not with a view to the distribution or resale thereof.  Each Pledgor acknowledges and agrees that any such private sale may be at prices and on other terms less favorable than the prices and other terms that might have been obtained at a public sale and, notwithstanding the foregoing, agrees that such private sale shall not be deemed for such reason to have been made in a commercially unreasonable manner and that the Administrative Agent shall have no obligation to delay sale of any such Pledged Collateral for the period of time necessary to permit the issuer of such Pledged Collateral to register such Pledged Collateral for public sale under the Securities Act or under applicable state securities laws.  Each Pledgor further acknowledges and agrees that any offer to sell such Pledged Collateral that has been publicly advertised on a bona fide basis in a newspaper or other publication of general circulation in the financial community of New York, New York (to the extent that such offer may be advertised without prior registration under the Securities Act) shall be deemed to involve a “public sale” under the Uniform Commercial Code, notwithstanding that such sale may not constitute a “public offering” under the Securities Act, and the Administrative Agent may, in such event, bid for the purchase of such Pledged Collateral.

 

(d)Retention of Pledged Collateral.  To the extent permitted by applicable law, in addition to the rights and remedies hereunder, upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent may, after providing the notices required by Sections 9-620 and 9-621 of the Uniform Commercial Code (or any successor section) or otherwise complying with the requirements of applicable law of the relevant jurisdiction, accept or retain all or any portion of the Pledged Collateral in satisfaction of the Obligations.  Unless and until the Administrative Agent shall have provided such notices, however, the Administrative Agent shall not be deemed to have accepted or retained any Pledged Collateral in satisfaction of any Obligations for any reason.

 

(e)Deficiency.  In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Administrative Agent or the Secured Parties are legally entitled, the Pledgors shall be jointly and severally liable (subject to Section 23 hereof) for the deficiency, together with interest thereon at the Default Rate, together with the costs of collection and the reasonable fees, charges and disbursements of counsel.  Any surplus remaining after the full payment and satisfaction of the Obligations shall be returned to the Pledgors or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto.

 

9.Rights of the Administrative Agent.

(a)Power of Attorney.  In addition to other powers of attorney contained herein, each Pledgor hereby designates and appoints the Administrative Agent, on behalf of the Secured Parties, and each of its designees or agents, as attorney-in-fact of such Pledgor, irrevocably and with power 

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of substitution, with authority to take any or all of the following actions upon the occurrence and during the continuation of an Event of Default:

 

(i)to demand, collect, settle, compromise and adjust, and give discharges and releases concerning the Pledged Collateral, all as the Administrative Agent may reasonably deem appropriate;

 

(ii)to commence and prosecute any actions at any court for the purposes of collecting any of the Pledged Collateral and enforcing any other right in respect thereof;

 

(iii)to defend, settle or compromise any action, suit or proceeding brought in respect of the Pledged Collateral and, in connection therewith, give such discharge or release as the Administrative Agent may reasonably deem appropriate;

 

(iv)to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Pledged Collateral;

 

(v)to direct any parties liable for any payment in connection with any of the Pledged Collateral to make payment of any and all monies due and to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct;

 

(vi)to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Pledged Collateral;

 

(vii)to sign and endorse any drafts, assignments, proxies, stock powers, verifications, notices and other documents relating to the Pledged Collateral;

 

(viii)to execute and deliver all assignments, conveyances, statements, financing statements, renewal financing statements, security and pledge agreements, affidavits, notices and other agreements, instruments and documents that the Administrative Agent may reasonably deem appropriate in order to perfect and maintain the security interests and liens granted in this Pledge Agreement and in order to fully consummate all of the transactions contemplated therein;

 

(ix)to institute any foreclosure proceedings that the Administrative Agent may reasonably deem appropriate;

 

(x)to exchange any of the Pledged Collateral or other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof and, in connection therewith, deposit any of the Pledged Collateral with any committee, depository, transfer agent, registrar or other designated agency upon such terms as the Administrative Agent may deem reasonably appropriate;

 

(xi)to vote for a shareholder or member resolution, or to sign an instrument in writing, sanctioning the transfer of any or all of the Pledged Collateral into the name of the Administrative Agent or one or more of the Secured Parties or into the name of any transferee to whom the Pledged Collateral or any part thereof may be sold pursuant to Section 8 hereof; and

 

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(xii)to do and perform all such other acts and things as the Administrative Agent may deem appropriate or convenient in connection with the Pledged Collateral.

 

This power of attorney is a power coupled with an interest and shall be irrevocable for so long as any Lender shall have any Commitment under the Credit Agreement, and so long as any Loan or other Obligation under the Credit Agreement shall remain unpaid or unsatisfied (other than contingent indemnification obligations for which no claim has been asserted).  The Administrative Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or implicitly granted to the Administrative Agent in this Pledge Agreement, and shall not be liable for any failure to do so or any delay in doing so.  The Administrative Agent shall not be liable for any act or omission or for any error of judgment or any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence, bad faith or willful misconduct, as determined by a court of competent jurisdiction by final and non-appealable judgment. This power of attorney is conferred on the Administrative Agent solely to protect, preserve and realize upon its security interest in the Pledged Collateral.

 

(b)Assignment by the Administrative Agent.  The Administrative Agent may from time to time assign the Obligations to a successor Administrative Agent appointed in accordance with the Credit Agreement, and such successor shall be entitled to all of the rights and remedies of the Administrative Agent under this Pledge Agreement in relation thereto.

 

(c)The Administrative Agent’s Duty of Care.  Other than the exercise of reasonable care to assure the safe custody of the Pledged Collateral while being held by the Administrative Agent hereunder and to account for all proceeds thereof, the Administrative Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that the Pledgors shall be responsible for preservation of all rights in the Pledged Collateral, and the Administrative Agent shall be relieved of all responsibility for the Pledged Collateral upon surrendering it or tendering the surrender of it to the Pledgors.  The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Administrative Agent shall not have responsibility for taking any necessary steps to preserve rights against any parties with respect to any of the Pledged Collateral.  In the event of a public or private sale of the Pledged Collateral pursuant to Section 8 hereof, the Administrative Agent shall have no responsibility for ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Pledged Collateral, whether or not the Administrative Agent has or is deemed to have knowledge of such matters.

 

(d)Voting Rights in Respect of the Pledged Collateral.

 

(i)So long as no Event of Default shall have occurred and be continuing, each Pledgor may exercise any and all voting and other consensual rights pertaining to the Pledged Collateral of such Pledgor or any part thereof for any purpose not inconsistent with the terms of this Pledge Agreement or the Credit Agreement; and

 

(ii)Upon the occurrence and during the continuance of an Event of Default, and delivery by the Administrative Agent to the applicable Pledgor of notice of its intent to exercise its rights under this Section 9(d), all rights of each Pledgor to exercise the voting and other consensual rights that such Pledgor would otherwise be entitled to exercise 

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pursuant to paragraph (i) of this subsection shall cease and all such rights shall thereupon become vested in the Administrative Agent, which shall then have the sole right to exercise such voting and other consensual rights.

 

(e)Dividend Rights in Respect of the Pledged Collateral.

 

(i)So long as no Event of Default shall have occurred and be continuing and subject to Section 4(b) hereof, each Pledgor may receive and retain any and all dividends and distributions (other than stock dividends and other dividends and distributions constituting Pledged Collateral addressed hereinabove) or interest paid in respect of the Pledged Collateral to the extent permitted under the Credit Agreement; and

 

(ii)Upon the occurrence and during the continuance of an Event of Default and delivery by the Administrative Agent to the applicable Pledgor of notice of its intent to exercise its rights under this Section 9(e):

 

(A)all rights of each Pledgor to receive the dividends, distributions and interest payments that it would otherwise be authorized to receive and retain pursuant to paragraph (i) of this subsection shall cease and all such rights shall thereupon be vested in the Administrative Agent, which shall then have the sole right to receive and hold as Pledged Collateral such dividends, distributions and interest payments; and

 

(B)all dividends and interest payments that are received by such Pledgor contrary to the provisions of paragraph (ii)(A) of this subsection shall be received in trust for the benefit of the Administrative Agent, shall be segregated from other property or funds of such Pledgor, and shall be promptly paid over to the Administrative Agent as Pledged Collateral in the exact form received, to be held by the Administrative Agent as Pledged Collateral and as further collateral security for the Obligations.

 

(f)Release of Pledged Collateral.  The Administrative Agent may release any of the Pledged Collateral from this Pledge Agreement or may substitute any of the Pledged Collateral for other Pledged Collateral without altering, varying or diminishing in any way the force, effect, lien, pledge or security interest of this Pledge Agreement as to any Pledged Collateral not expressly released or substituted, and this Pledge Agreement shall continue as a first priority lien on all Pledged Collateral not expressly released or substituted.  If any of the Pledged Collateral shall be sold, transferred or otherwise disposed of by any Pledgor in a transaction permitted by the Credit Agreement, then the Administrative Agent, at the request and sole expense of such Pledgor, shall execute and deliver to such Pledgor all releases or other documents reasonably necessary for the release of the Liens created hereby on such Pledged Collateral.

 

10.Application of Proceeds.  Upon the acceleration of the Obligations pursuant to Section 9.02 of the Credit Agreement, any payments in respect of the Obligations and any proceeds of the Pledged Collateral, when received by the Administrative Agent or any Secured Party in cash or its equivalent, will be applied in reduction of the Obligations in the order set forth in Section 9.03 of the Credit Agreement, and each Pledgor irrevocably waives the right to direct the application of such payments and proceeds and acknowledges and agrees that the Administrative Agent shall have the continuing and exclusive right to apply and reapply any and all such payments and proceeds in the Administrative Agent’s sole discretion, notwithstanding any entry to the contrary upon any of its books and records.

 

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11.Continuing Agreement.

 

(a)This Pledge Agreement shall be a continuing agreement in every respect and shall remain in full force and effect for so long as any Lender shall have any Commitment under the Credit Agreement, and so long as any Loan or other Obligation under the Credit Agreement shall remain unpaid or unsatisfied (other than contingent indemnification obligations for which no claim has been asserted), at which time this this Pledge Agreement, and the liens and security interests of the Administrative Agent hereunder, shall be automatically terminated and the Administrative Agent shall, upon the request and at the expense of the Pledgors, execute and deliver all Uniform Commercial Code termination statements and/or other documents reasonably requested by the Pledgors evidencing such termination and return to Pledgors all Pledged Collateral in its possession. Notwithstanding the foregoing, all releases and indemnities provided hereunder shall survive termination of this Pledge Agreement. 

 

(b)This Pledge Agreement shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Secured Party as a preference, fraudulent conveyance or otherwise under any Debtor Relief Law, all as though such payment had not been made; provided, that, in the event payment of all or any part of the Obligations is rescinded or must be restored or returned, all costs and expenses (including any reasonable attorneys’ fees and disbursements) incurred by the Administrative Agent or any Secured Party in defending and enforcing such reinstatement shall be deemed to be included as a part of the Obligations.

 

12.Amendments and Waivers; Modifications.  This Pledge Agreement and the provisions hereof may not be amended, waived, modified, changed, discharged or terminated except as set forth in Section 11.01 of the Credit Agreement; provided, that, neither any update or revision to Schedule 2(a) delivered by any Pledgor, nor any amendment to the schedules hereof pursuant to a Joinder Agreement (as contemplated by Section 24 hereof) shall constitute an amendment for purposes of this Section 12 or Section 11.01 of the Credit Agreement.

 

13.Successors in Interest.  This Pledge Agreement shall create a continuing security interest in the Pledged Collateral and shall be binding upon each Pledgor, its successors and permitted assigns, and shall inure, together with the rights and remedies of the Administrative Agent and the Secured Parties hereunder, to the benefit of the Administrative Agent and the Secured Parties and their successors and permitted assigns; provided, however, that, none of the Pledgors may assign its rights or delegate its duties hereunder without the prior written consent of the requisite Lenders under the Credit Agreement. 

 

14.Notices.  All notices required or permitted to be given under this Pledge Agreement shall be given as provided in Section 11.02 of the Credit Agreement.

 

15.Counterparts.  This Pledge Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Pledge Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Pledge Agreement.

 

16.Headings.  Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Pledge Agreement.

 

17.Governing Law; Submission to Jurisdiction; Waiver of Venue, Service of Process, Waiver of Right to Jury Trial.   The terms of Section 11.14 of the Credit Agreement and Section 11.15 of the Credit 

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Agreement with respect to governing law, submission to jurisdiction, waiver of venue, service of process and waiver of the right to a jury trial are each incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.

 

18.Severability.  If any provision of this Pledge Agreement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Pledge Agreement shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

19.Entirety.  This Pledge Agreement, the other Loan Documents and the other documents relating to the Obligations represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any proposal letters or correspondence relating to the Loan Documents, any other documents relating to the Obligations or the transactions contemplated herein and therein.

 

20.Survival.  All representations and warranties of the Pledgors hereunder shall survive the execution and delivery of this Pledge Agreement, the other Loan Documents and the other documents relating to the Obligations, the delivery of the Notes and the extension of credit thereunder or in connection therewith.

 

21.Other Security.  To the extent that any of the Obligations are now or hereafter secured by property other than the Pledged Collateral (including real and other personal property and securities owned by a Pledgor), or by a guarantee, endorsement or property of any other Person, then to the extent permitted by applicable law the Administrative Agent shall have the right to proceed against such other property, guarantee or endorsement upon the occurrence and during the continuation of any Event of Default, and the Administrative Agent shall have the right, in its sole discretion, to determine which rights, security, liens, security interests or remedies the Administrative Agent shall at any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them or the Obligations or any of the rights of the Administrative Agent or the Secured Parties under this Pledge Agreement, under any of the other Loan Documents or under any other document relating to the Obligations.

 

22.Rights of Required Lenders.  All rights of the Administrative Agent hereunder, if not exercised by the Administrative Agent, may be exercised by the Required Lenders. 

 

23.Joint and Several Obligations of Pledgors.

 

(a)Subject to Section 23(c) hereof, each of the Pledgors is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the Secured Parties, for the mutual benefit, directly and indirectly, of each of the Pledgors and in consideration of the undertakings of each of the Pledgors to accept joint and several liability for the obligations of each of them.

 

(b)Subject to Section 23(c) hereof, each of the Pledgors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Pledgors with respect to the payment and performance of all of the Obligations arising under this Pledge Agreement, the other Loan Documents and any other documents relating to the Obligations, it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each of the Pledgors without preferences or distinction among them.

 

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(c)Notwithstanding any provision to the contrary contained herein, in any other of the Loan Documents or in any other documents relating to the Obligations, the obligations of each Guarantor under the Credit Agreement, the other Loan Documents and the other documents relating to the Obligations shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of any applicable state law.

 

24.Joinder.  At any time after the date of this Pledge Agreement, one or more additional Persons may become party hereto by executing and delivering to the Administrative Agent a Joinder Agreement.  Immediately upon such execution and delivery of such Joinder Agreement (and without any further action), each such additional Person will become a party to this Pledge Agreement as a “Pledgor” and have all of the rights and obligations of a Pledgor hereunder and this Pledge Agreement and the schedules hereto shall be deemed amended by such Joinder Agreement.

 

25.Consent of Issuers of Pledged Shares.  Each issuer of Pledged Shares party to this Pledge Agreement hereby acknowledges, consents and agrees to the grant of the security interest in such Pledged Shares by the applicable Pledgors pursuant to this Pledge Agreement, together with all rights accompanying such security interest as provided by this Pledge Agreement and applicable law, notwithstanding any anti-assignment provisions in any operating agreement, limited partnership agreement or similar organizational or governance documents of such issuer.

 

 

[Signature Pages Follow]

 

13

 

 

Each of the parties hereto has caused a counterpart of this Pledge Agreement to be duly executed and delivered as of the date first above written.

 

PLEDGOR:DERMIRA, INC.,

a Delaware corporation

 

By: /s/ Andrew L. Guggenhime

Name: Andrew L. Guggenhime

Title:   Chief Financial Officer

 

DERMIRA, INC.

Pledge Agreement

 

 

Schedule 2(a)

 

EQUITY INTERESTS

 

						
	

 

 
 
Pledgor
	
 

Issuer
	
Number of Shares/Units

Pledged
	
Certificate Number
	
Percentage Ownership
	
Percentage Pledged

	
 
	
 
	
 
	
 
	
 
	
 

 

 

 

 

EXHIBIT 4(a)

 

Form of Irrevocable Stock Power

 

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to

 

 

 

the following Equity Interests of ____________________, a ____________ [corporation][limited liability company]: 

 

 

Number of [Shares][Units]Certificate Number

 

 

 

and irrevocably appoints __________________________________ its agent and attorney-in-fact to transfer all or any part of such Equity Interests and to take all necessary and appropriate action to effect any such transfer.  The agent and attorney-in-fact may substitute and appoint one or more persons to act for him.  

 

Dated: _______________

 

 

 

[HOLDER]

 

By:

Name:

Title:

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