Document:

Exhibit 10.10

 

	
 
    	
[*] Certain confidential   information contained in this document, marked by brackets, has been omitted   and filed separately with the Securities and Exchange Commission pursuant to   Rule 406 of the Securities Act of 1933, as amended.
    

 

EXCLUSIVE LICENSE AGREEMENT

 

This Exclusive License Agreement (“Agreement”) is entered into as of April 26 2013 (“Effective Date”), by and between Rose U LLC, a California limited liability company (“Licensor”), and Dermira, Inc., a Delaware corporation (“Dermira”) (collectively, the “Parties” and individually, a “Party”).

 

RECITALS

 

A.                                    Licensor is the owner of the Patent Rights and Technology (as defined below), and has also licensed the Stiefel Data (as defined below) and obtained certain other rights from Stiefel Laboratories, Inc. (“Stiefel”) pursuant to a License and Post-Termination Agreement dated April 26 2013 (the “Stiefel Agreement”), a copy of which is attached as Appendix B;

 

B.                                    Licensor desires to license the Patent Rights and Technology and sublicense the Stiefel Data, to Dermira, and Dermira desires to obtain such license and sublicense, all upon the terms and conditions and as further set forth in this Agreement.

 

C.                                    Concurrently with the execution of this Agreement, Dermira and Stiefel are entering into a letter agreement (the “Stiefel Side Letter”), a copy of which is attached as Appendix C, pursuant to which, among other things, Dermira agrees to pay license fees arising from the use of the Stiefel Data directly to Stiefel and indemnify Stiefel.

 

NOW, THEREFORE, Licensor and Dermira agree as follows:

 

ARTICLE 1
  DEFINITIONS

 

Section 1.1                                   “Affiliate” means, with respect to a person, any corporation, partnership, business joint venture or other entity that directly or indirectly controls, is controlled by or is under common control of such person.  For purposes of this section, “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the entity in question (whether through ownership of securities or other ownership interests, by contract or otherwise).

 

Section 1.2                                   “Combination Product” means a product that is a combination of a Licensed Product with one or more other products that contain an active pharmaceutical ingredient that is not a Licensed Product (such other products, “NLPs”).

 

Section 1.3                                   “Commercially Reasonable Efforts” means efforts that, taken together, would constitute a reasonable level of effort by [*] to develop and commercialize in a [*] manner, one of such company’s [*] giving full consideration to all [*].

 

 

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Section 1.4                                   “ [*] Payment” has the meaning given to it in the Stiefel Agreement.

 

Section 1.5                                   “FDA” means the United States Food and Drug Administration.

 

Section 1.6                                   “Field” means the use of topical products containing [*] or other compounds identified in the patents listed in Appendix A, for any indications, including without limitation, for the treatment and prevention of hyperhidrosis, [*], or excessive sweating, provided that the indications included in the “Field” as it applies to the use of Stiefel Data shall be limited to the treatment and prevention of hyperhidrosis [*], or excessive sweating.  For clarity, the Field, in all cases, includes such products sold [*].

 

Section 1.7                                   “Generic Product” means, with respect to a Licensed Product, a product that (1) (a) contains as an active ingredient, active moiety, or molecular entity which is the same active ingredient, active moiety, or molecular entity as such Licensed Product; (b) is approved by the Regulatory Authority in such country for use in such country for the same human indication within the Field as such Licensed Product; and (c) is substitutable or interchangeable for such Licensed Product by healthcare practitioners or pharmacists in the applicable country; or (2) obtains marketing approval pursuant to an abbreviated regulatory approval process relying in whole or in part on marketing approvals for the Licensed Product or data submitted to a Regulatory Authority by or on behalf of Dermira or a Dermira Affiliate or a Sublicensee for a Licensed Product; or (3) otherwise references the Licensed Product to obtain such marketing approval based on a demonstration of bioequivalence or biosimilarity to a Licensed Product.

 

Section 1.8                                   “Improvement” means, with respect to Dermira or Licensor, as applicable, any and all new or useful know-how, discoveries, inventions, contributions, findings, improvements, and enhancements to a Licensed Product for use in the Field, including, without limitation, any enhancements of its use, dosage, form, presentation (including packaging, applicators and the like) and/or formulation, whether or not patented or patentable, conceived, reduced to practice or otherwise developed by or for such Party, either solely or jointly, as the case may be.  “Improvement” also means the change in regulatory classification or status of a Licensed Product (e.g. from prescription pharmaceutical to over-the-counter pharmaceutical).

 

Section 1.9                                   “Know-How Royalty Term” means the period calculated on a [*] basis commencing on the first commercial sale of the first Licensed Product in the [*] and ending [*] thereafter; provided that in no event shall the Know-How Royalty Term for any [*] extend beyond the date that is [*] following the commencement of the first Know-How Royalty Term.

 

Section 1.10                            “Licensed Product” means any product, process or service in the Field which incorporates in whole or in part, or the use or sale of which absent this license would otherwise infringe, the Patent Rights and Technology or the Stiefel Data.

 

Section 1.11                            “Liquidity Event” means (i) an initial public offering of Dermira’s common stock on any nationally recognized stock exchange (including without limitation NASDAQ, NYSE, TSE, London Stock Exchange, or equivalents in other countries) at a price 

 

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per share representing an enterprise value for Dermira equal to at least [*] times the aggregate amount of invested capital (including all equity and unrepaid debt investments) received by Dermira prior to such offering; or (ii) a merger, acquisition, or the sale of all or substantially all of Dermira’s assets or of the assets of a division or product line that includes the Licensed Product.

 

Section 1.12                            “Net Sales” means the gross amount invoiced or otherwise received by Dermira or a Dermira Affiliate or a Sublicensee from sales of Licensed Product, whether or not assembled (and, except as provided below with respect to Combination Products, without excluding any components or subassemblies thereof), less the following items but only insofar as they actually pertain to the disposition of such Licensed Product by Dermira or an Affiliate of Dermira or a Sublicensee: (a) any import, export, sale, use, or excise taxes (including value added taxes to the extent that such value added tax is incurred and not reimbursed, refunded, or credited under a tax authority); (b) costs of transportation, packing, and insurance from the place of manufacture to the customer’s premises or point of sale; (c) credits for returns, allowances, or trades, or allowances for uncollectable accounts; or (d) discounts for prompt payment or volume purchases, or other discounts or rebates paid or credited to promote the inclusion of Licensed Product in applicable formulary programs.  Sales among Dermira, Affiliates of Dermira and Sublicensees shall be excluded from the computation of Net Sales.

 

In the event a Licensed Product is sold in a country as part of a Combination Product, then for purposes of determining payments due to Licensor under this Agreement, Net Sales shall be calculated by multiplying the Net Sales of the Combination Product by the fraction A over A+B, in which:

 

“A” is the Gross Selling Price of the Licensed Product when such Licensed Product is sold in the relevant country in substantial quantities where the Licensed Product is the sole active pharmaceutical ingredient, and

 

“B” is the Gross Selling Price of the NLPs contained in the Combination Product sold separately in the relevant country in substantial quantities.

 

All Gross Selling Prices of the Licensed Product and NLPs shall be calculated as the average Gross Selling Prices of such products in the relevant country during the applicable accounting period for which the Net Sales are being calculated.  In the event that no separate sale of either the Licensed Product as the sole active pharmaceutical ingredient or the NLPs are made in the relevant country during the accounting period in which the sale was made, or if the Gross Selling Price for a Licensed Product or NLP cannot be determined for an accounting period, Net Sales allocable to the Licensed Product and NLPs shall be determined by mutual agreement reached in good faith by the Parties prior to the end of the accounting period in question based on an equitable method of determining same that takes into account the relative contribution of each active pharmaceutical ingredient in the Combination Product, and relative value to the end user of each active pharmaceutical ingredient.  For purposes of this definition, “Gross Selling Price” means the gross price at which a product containing the active pharmaceutical ingredient in question is sold to a third party, before discounts, deductions, credits, taxes or allowances.

 

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Section 1.13                            “Patent Rights and Technology” means: (a) Licensor’s rights under all patents, and patent applications listed on Appendix A, as well as all foreign counterpart patents and patent applications (including future foreign counterparts to the patents and patent applications listed in Appendix A or described in “(b)” and “(c)” below); (b) all reissues, reexaminations, renewals, extensions, divisionals, continuations, and continuations-in-part of the patents and patent applications listed in Appendix A and/or described in “(c)” below, and any patents which issue on the foregoing; (c) unless Dermira elects otherwise with respect to a given patent or patent application, all patent applications that are owned by Licensor or an Affiliate of Licensor during the Term, or to which Licensor or an Affiliate of Licensor otherwise acquires rights during the Term, which are Improvements or enhancements of the patents or patent applications listed in Appendix A and/or described in (b) above; and (d) any know-how or other enabling information relating to the use of [*] (or other compounds identified in the patents listed in Appendix A) in the Field that is or comes into the possession and control of Licensor or its Affiliates (other than the Stiefel Data) during the Term.

 

Section 1.14                            “Program Inventory and Supplies” has the meaning given to it in the Stiefel Agreement.

 

Section 1.15                            “Quarter” means each period of three (3) consecutive months during the Term ending on a Quarter Date provided that the period from the: (a) Effective Date until the first Quarter Date is deemed to be a Quarter; and (b) last Quarter Date prior to termination, through the termination date, of this Agreement is deemed to be a Quarter.

 

Section 1.16                            “Quarter Date” means one of March 31, June 30, September 30, or December 31.

 

Section 1.17                            “Region” means each of [*].

 

Section 1.18                            “Regulatory Authority” means the FDA and/or its equivalent in other countries of the Territory, or any successor entity thereto.

 

Section 1.19                            “Regulatory Materials” means the regulatory applications, submissions, notifications, registrations, regulatory approvals or other submissions or correspondence assigned to Licensor under the Stiefel Agreement, or that relate to the use of [*] (or other compounds identified in the patents or patent applications listed in Appendix A) in the Field and are in or during the Term come into the possession and control of Licensor.  For clarity, the Regulatory Materials include [*].

 

Section 1.21                            “Rose U Patents” means the issued patents identified as the “Rose U Patents” in Appendix A; and “Non-Rose U Patents” means all patent rights included in the Patent Rights and Technology, other than the Rose U Patents.

 

Section 1.23                            “Stiefel Data”has the meaning given to it in the Stiefel Agreement.

 

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Section 1.25                            “Sublicense Agreement” means a written agreement under which Dermira or a Dermira Affiliate grants a sublicense of the rights granted under Section 2.1 or 2.2 to a Sublicensee which rights include the right to commercialize Licensed Product.

 

Section 1.27                            “Sublicensing Revenue” means amounts received by Dermira or an Affiliate of Dermira under a Sublicense Agreement in the form of [*], in each case to the extent attributable to the grant of sublicenses of the Patent Rights and Technology or Stiefel Data.  For clarity, Sublicensing Revenue shall not include (without limitation): (i) payments in return for research services or activities, including costs of materials, equipment or clinical testing; (ii) payments for the manufacturing and supply of Licensed Product, (iii) bona-fide equity or debt investments, or amounts received by Dermira in respect of any sale or assignment of assets; or (iv) reimbursements of patent prosecution costs and patent maintenance expenses.

 

Section 1.28                            “Term” has the meaning given to it in Article 13.

 

Section 1.29                            “Territory” means all countries, states and territories worldwide.

 

Section 1.30                            “Valid Claim” means either: (a) a claim of an issued and unexpired patent included within the Patents Rights and Technology, which has not been permanently revoked or declared unenforceable or invalid by an unreversed and unappealable or unreversed and unappealed decision of a court or other appropriate body of competent jurisdiction, and that has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise, or (b) a claim of a pending patent application included within the Patents Rights and Technology, which claim (i) was filed in good faith and has not been irretrievably cancelled, withdrawn or abandoned or finally disallowed without the possibility of appeal or refiling of such application, and (ii) has not been pending for more than [*] from the earliest priority date of the pending application reciting such claim.

 

ARTICLE 2
  GRANT OF RIGHTS; TECHNOLOGY TRANSFER

 

Section 2.1                                   License to Patent Rights and Technology.  Subject to the terms of this Agreement, Licensor hereby grants Dermira and its Affiliates an exclusive (even as to Licensor), worldwide, perpetual license under the Patent Rights and Technology to research, develop, have developed, make, have made, promote, have promoted, import, have imported, distribute, have distributed, use, have used, sell, have sold, offer for sale, have offered for sale, sublicense through multiple tiers and otherwise fully exploit any and all products, processes and services whatsoever, throughout the Territory in the Field.

 

Section 2.2                                   Sublicense to Stiefel Data.  Subject to the terms of this Agreement, Licensor hereby grants Dermira and its Affiliates a worldwide, exclusive (except as to Stiefel and its Affiliates) license (including the right to grant sublicenses through multiple tiers pursuant 

 

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to the provisions of Section 2.3) to use the Stiefel Data in the Field.  Stiefel and its Affiliates are intended third party beneficiaries of this Agreement.

 

Section 2.3                                   Sublicenses.  Dermira and its Affiliates shall have the right to grant sublicenses (through multiple tiers) to third parties (each such third party, a “Sublicensee”) of the rights licensed under Sections 2.1 and 2.2.  Sublicenses of the rights granted to Dermira and its Affiliates under Section 2.2 may only be granted to a third party to which Dermira, an Affiliate of Dermira or a Sublicensee grants the right to research, develop or commercialize products in the Field using Stiefel Data.  However, notwithstanding the grant of sublicenses by Dermira and/or its Affiliates hereunder, Dermira shall remain obligated to pay all milestone payments under Section 4.1 that become due as a result of activities by Affiliates of Dermira or Sublicensees, and all royalties due to Licensor with respect to Net Sales of Licensed Products by Affiliates of Dermira and Sublicensees.  Any sublicense agreement, whether by Dermira or an Affiliate of Dermira or a Sublicensee, shall not be inconsistent with the terms of this Agreement nor exceed the scope of the license granted to Dermira under this Agreement and shall include (i) an obligation of the Sublicensee to indemnify Licensor and its Affiliates as provided in Section 11.1 and Stiefel and its Affiliates as provided in the Stiefel Side Letter, subject to conditions and procedures substantially equivalent to those contained in Section 11.2 and the Stiefel Side Letter, (ii) confidentiality obligations of the Sublicensee no less protective of the Stiefel Data than those contained in Article 9, and (iii) an express statement that Stiefel and its Affiliates are intended third party beneficiaries of such sublicense agreement.  Dermira shall promptly thereafter provide Licensor a true and correct copy of each such sublicense, provided that Dermira or the Sublicensee may redact confidential provisions of the sublicense agreement that are not reasonably required for Licensor to confirm compliance with this Agreement (but not the identity of the Sublicensee).  Licensor agrees that the obligations in (i) and (iii) above and the obligation to provide copies of sublicenses shall not apply to sublicense agreements entered into by Dermira or its Affiliates or a Sublicensee with contract research organizations, contract manufacturing organizations and similar third parties performing services for the benefit of Dermira or its Affiliates or a Sublicensee which sublicense does not include any right to commercialize Licensed Product.

 

Section 2.4                                   Technology Transfer Obligations.

 

(a)                                 Patent Rights and Technology.  Promptly following the Effective Date, Licensor shall provide Dermira with copies of all documents (whether in written or electronic form) in Licensor’s possession or control which embody any know-how or information included in the Patent Rights and Technology.

 

(b)                                 Stiefel Data.  Promptly following the Effective Date, Licensor shall (or shall cause Stiefel to) provide Dermira with copies of all documents (whether in written or electronic form) listed on Exhibit A-1 to the Stiefel Agreement or that otherwise come into the possession or control of Licensor and describe or contain any Stiefel Data, and shall cause Stiefel to provide Dermira with such technical assistance and access to and cooperation of Stiefel personnel as Dermira may reasonably request in connection with the delivery to Dermira of factual knowledge and information relating to the Stiefel Data, Regulatory Materials and Program Inventory and Supplies, subject to the terms and condition of Section 3.3 of the Stiefel Agreement.  Dermira shall reimburse Licensor for any out-of-pocket expenses of Stiefel for 

 

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which Licensor becomes liable under Section 3.3 of the Stiefel Agreement to the extent such expenses have been approved in advance by Dermira in writing.

 

(c)                                  Regulatory Materials.  Licensor hereby assigns to Dermira all of its right, title and interest in and to the Regulatory Materials, and promptly following the Effective Date shall (or shall cause Stiefel to) promptly deliver the Regulatory Materials (whether in written or electronic form) to Dermira and take (and cause under the Stiefel Agreement Stiefel to take) such additional steps and execute such additional documents as Dermira may reasonably request in order to effect such assignment and delivery, including the transfer of any regulatory applications into the name of Dermira.

 

Section 2.5                                   Program Inventory and Supplies.  Promptly following the Effective Date, to the extent the Program Inventory and Supplies still exists and to the extent it is able to under the terms of the Stiefel Agreement, Licensor shall (or shall cause Stiefel to) assign, transfer and deliver the Program Inventory and Supplies to Dermira, and shall cause Stiefel to take such additional steps and execute such additional documents as Dermira may reasonably request in order to effect such assignment, transfer and delivery.  In addition, Licensor will cause Stiefel to use commercially reasonable efforts subject to the provisions of Section 3.4.2 of the Stiefel Agreement to (i) introduce Dermira to the contract manufacturing organization (“CMO”) that provided the Program Inventory and Supplies to Stiefel, and (ii) facilitate the transition of manufacturing to a  CMO designated by Dermira, provided that Stiefel shall not be obligated to place any orders from a CMO on behalf of Dermira nor to provide any other assistance with respect to a CMO except as specifically set forth in Section 3.4.2 of the Stiefel Agreement.  Upon the request of Dermira, Licensor will cause Stiefel to provide such Stiefel consent as is reasonably necessary to allow Dermira to work with service providers who have provided services to Stiefel in connection with the [*] Program (as defined in the Stiefel Agreement), including consenting to the use by such contractors of any Stiefel Data in the possession or control of such contractors to provide services to Dermira, its Affiliates or any Sublicensees.

 

Section 2.6                                   Amendment or Termination of Stiefel Agreement.  Licensor acknowledges that the rights and obligations arising under the Stiefel Agreement are fundamental to Dermira’s willingness to agree to the terms and conditions of this Agreement, and therefore Licensor agrees that it shall (i) promptly notify Dermira of any notices or other communications received by Licensor from Stiefel that relate to alleged breaches or violations of the Stiefel Agreement and (ii) shall not agree to any amendment, modification or termination of the Stiefel Agreement without Dermira’s prior written consent.  If the Stiefel Agreement is terminated prior to its expiration, the provisions of Section 8.3 of the Stiefel Agreement and Paragraph 4 of the Stiefel Side Letter shall apply such that the sublicense to the Stiefel Data granted by Licensor to Dermira under this Agreement shall be automatically assigned to and assumed by Stiefel and this Agreement shall be deemed amended to provide for such assignment in part of the rights and obligations of Dermira relating to the Stiefel Data under this Agreement.  Such assignment and assumption of the sublicense to the Stiefel Data shall not affect the other provisions of this Agreement, including without limitation, the license of the Patent Rights and Technology to Dermira and the milestone, royalty and other payment obligations of Dermira to Licensor under Article 4.

 

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ARTICLE 3
  DILIGENCE

 

Section 3.1                                   Diligence Obligation.  As an inducement to Licensor to enter into this Agreement, Dermira agrees to use Commercially Reasonable Efforts to proceed with the development, manufacture, sale, and lease of Licensed Products in [*], and the development of markets for such Licensed Products in applicable [*] countries.  The foregoing obligations shall include, where consistent with the Commercially Reasonable Efforts standard, an obligation to select commercially capable Sublicensees and to monitor and enforce the terms of sublicense agreements between Dermira and such Sublicensees.

 

Section 3.2                                   Progress Reports.  In connection with this obligation, Dermira shall provide annual progress reports on September 1 of each year detailing its progress through the year ending June 30 toward commercialization of the Licensed Products.  Such report shall include, at a minimum, a summary of work completed, key scientific discoveries, summary of work in progress, current schedule of anticipated events or milestones, and market plans for introduction of Licensed Product.

 

Section 3.3                                   Disputes as to Diligence.  If Licensor believes that Dermira is out of compliance with its diligence obligations (including the obligation to use Commercially Reasonable Efforts as specified in Section 3.1), Licensor shall notify Dermira of such belief and Licensor’s grounds for such belief, including a reasonably detailed written statement of the minimum steps that Licensor believes Dermira would have to take during the ensuing [*] to bring itself into compliance with such obligations. If Dermira believes in good faith that it is in compliance with such diligence obligations, or that such steps are more than would be required in order to bring Dermira into such compliance during such ensuing [*], then Dermira may seek to resolve the matter with Licensor, either through good faith negotiations or pursuant to arbitration in accordance with Section 15.2.  In the event that Licensor seeks to resolve such matter through arbitration, the following additional provisions shall apply:  (i) the arbitrator(s) selected pursuant to the procedure described in Section 15.2 shall have, as part of their relevant industry expertise, experience with pharmaceutical development and commercialization, (ii) the purpose of the arbitration shall be initially to determine if Dermira was, as asserted by Licensor, failing to comply with the applicable diligence obligations and if such non-compliance was material, (iii) if the arbitrator determines that Dermira was materially failing to comply with such diligence obligations, then Dermira and Licensor shall each submit to the arbitrator a written proposal that sets forth a commercially reasonable (using the standard established under the definition of “Commercially Reasonable Efforts”) set of tasks, and a reasonable timeline that includes specific dates for completing such tasks (such timeline not to exceed [*]), that Dermira shall undertake in order to satisfy the specific diligence obligations for such period.  The arbitrator(s) shall review the written proposals submitted by Dermira and Licensor, and shall determine which of the written proposals shall be adopted as the plan for complying with the applicable diligence obligations (the “Cure Plan”).  If Dermira then materially fails to perform the tasks set forth in the Cure Plan within the timeline established by such Cure Plan, and fails to cure such noncompliance within [*] after written notice by Licensor, then Licensor shall be entitled, as Licensor’s sole remedy, to terminate the licenses granted in Section 2.1 and 2.2, solely with respect to the specific territories 

 

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and/or applications for which Dermira has failed to exercise the level of diligence required by Section 3.1.

 

ARTICLE 4
  MILESTONE PAYMENT, ROYALTIES AND PAYMENT TERMS

 

In consideration for the licenses granted pursuant to this Agreement, Dermira shall pay Licensor or Stiefel (as set out below) the onetime milestone payments and shall pay Licensor the royalties identified below.

 

Section 4.1                                   Milestone Payments.  Dermira shall pay Licensor the following noncreditable, nonrefundable milestone payments in accordance with the milestone events listed below:

 

	
Milestone Event
    	
 
    	
Amount Due
   to Licensor
    	
 
    
	
Upon [*]
    	
 
    	
 
    	
[*]
    	
 
    
	
Upon [*]for a Licensed Product [*]
    	
 
    	
 
    	
[*]
    	
 
    
	
Upon Dermira’s [*] of a Licensed Product
    	
 
    	
 
    	
[*]
    	
 
    
	
Upon [*] for a Licensed Product [*]
    	
 
    	
 
    	
[*]
    	
 
    
	
Upon [*] of a Licensed   Product in the [*]
    	
 
    	
 
    	
[*]
    	
 
    
	
Upon [*] of a Licensed Product in the [*]
    	
 
    	
 
    	
[*]
    	
 
    
	
In the event of [*] for Licensed Product [*]
    	
 
    	
 
    	
[*]
    	
 
    

[*]

 

For avoidance of doubt, each milestone payment above will be payable once regardless of whether milestones are achieved with respect to multiple products.

 

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[*]

 

In addition, Dermira shall pay Stiefel the [*] Payment as and if it becomes payable under the terms of the Stiefel Side Letter.

 

Section 4.2                                   Royalty Payments.  Dermira shall pay Licensor the following royalties and other amounts:

 

(a)                                 Net Sales.

 

(i)                                     Dermira shall pay Licensor a royalty on Net Sales as follows:

 

(A)                               [*]% of Net Sales in the Territory until [*] (the “Rose U Patent Royalty Term”),

 

(B)                               Following the Rose U Patent Royalty Term:

 

a.                                      For Licensed Product which at the time of sale are [*]% of Net Sales in the country of sale;

 

b.                                      Until the expiration of the applicable Know-How Royalty Term, for Licensed Product which at the time of sale are [*]% of Net Sales in the country of sale;

 

c.                                       Following the expiration of the applicable Know-How Royalty Term, the licenses granted hereunder for Licensed Product which at the time of sale are [*] shall be considered fully paid up, and Dermira shall have no obligation to pay royalties on any Net Sales on such Licensed Products occurring after such date in such countries; and

 

d.                                      Following the expiration of the last to occur of (i) the last Know-How Royalty Term, and (ii) the last Valid Claim of the Non-Rose U Patents, the licenses granted hereunder for all Licensed Products shall be considered fully paid up and Dermira shall have no obligation to pay royalties on any Net Sales of any Licensed Products occurring after such date.

 

(ii)                                  This Section 4.2(a)(ii) applies only after the expiration of the Rose U Patent Royalty Term and only to adjust the royalty rate under Section 4.2(a)(i)(B)a above.  If at any time one or more third parties launches, sells or otherwise distributes a Generic Product in any country and such Generic Product(s) account for [*] percent [*] or more of aggregate prescriptions of Licensed Product and all Generic Products in the given country in any given

 

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Quarter according to [*] (or any similar third party mutually agreed by the Parties), then the royalty rate under Section 4.2(a)(i)(B)a, from and after the date such Generic Product(s) account for  [*] percent [*] or more of aggregate prescriptions of Licensed Product and all Generic Products in the given country in any given Quarter as determined above, shall be [*]%.

 

(iii)                               If Dermira is required or otherwise determines it necessary to pay additional royalties or other amounts to third parties in respect of intellectual property rights included in a Licensed Product (other than the [*] Payment), then the royalties for such Licensed Product that are due pursuant to Section 4.2(a)(i)(A) and Section 4.2(a)(i)(B) (as may be revised by the application of Section 4.2(a)(ii)) shall be reduced by [*] percent [*] of the amount of royalties or other amounts paid to such third parties, provided that in no event will the royalties payable to Licensor be reduced to less than [*] percent [*] of the amounts specified in Section 4.2(a)(i)(A) and 4.2(a)(i)(B) (as may be revised by the application of Section 4.2(a)(ii)).

 

(b)                                 Sublicensing Revenue Payments.  In addition, until the expiration of the last Valid Claim included in the applicable sublicensing agreement, Dermira shall pay Licensor a royalty equal to a percentage of the Sublicensing Revenue received by Dermira from a Sublicensee, determined based on the date that the applicable sublicensing agreement is entered into by Dermira and the Sublicensee in accordance with the following schedule:

 

	
Effective Date of Sublicensing Agreement
    	
 
    	
Applicable Percentage
    	
 
    
	
Within [*] after Effective Date
    	
 
    	
[*]%
    	
 
    
	
More than [*] after Effective Date
    	
 
    	
[*]%
    	
 
    

 

In the event the Sublicensing Revenue is nonmonetary (including without limitation a cross-license), it shall be assigned a fair market value in good faith and the specified percentage of that fair market value shall be paid to Licensor.

 

(c)                                  Crediting of [*] Payment.  Dermira shall be entitled to deduct from amounts payable to Licensor under this Section 4.2 an amount equal to the [*] Payment paid by Dermira to Stiefel under the Stiefel Side Letter as follows: after Dermira has paid the [*] Payment to Stiefel, Dermira shall be entitled to reduce royalties on Net Sales or Sublicensing Revenue otherwise payable under this Section 4.2 by [*] percent [*]%) until the full amount of the [*] Payment has been credited against such portion of royalties on Net Sales or Sublicensing Revenue payable by Dermira under this Section 4.2 after Dermira’s payment of the [*] Payment.

 

(d)                                 Liquidity Events.  In the event that Dermira undergoes a Liquidity Event during the Rose U Patent Royalty Term, it shall pay Licensor a royalty of $[*].  For avoidance of doubt, the Liquidity Event  payment will be payable once regardless of whether Dermira or its successors undergo multiple Liquidity Events.

 

(e)                                  Worldwide Scope.  The parties acknowledge that Licensed Products, and components incorporated with or into Licensed Products, are mobile and may be transported from country to country across the world.  Accordingly, for ease of accounting and the

 

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convenience of the parties in calculating payments due Licensor, the royalties and other amounts due under this Agreement are based on worldwide sales of Licensed Products regardless of whether a particular Licensed Product is covered by a current patent claim in the country of manufacture, sale, use, or importation, and the parties acknowledge that the amounts due Licensor under this Agreement have been reduced to account for this.

 

Section 4.3                                   Payment Terms.  All payments made pursuant to this Agreement shall be in U.S. dollars.

 

(a)                                 Milestone Payments.  Milestone payments payable to Licensor pursuant to Section 4.1 that become payable during the Term shall be paid by Dermira to Licensor within [*] of the completion of the milestone event giving rise to such payment as set forth in Section 4.1.  [*] Payment arising under the Stiefel Side Letter shall be paid by Dermira in accordance with the terms of the Stiefel Side Letter.

 

(b)                                 Royalties.  Any payments pursuant to Section 4.2 that become due and payable during the Term shall be paid by Dermira to Licensor within [*] after the end of the Quarter in which the Net Sales occurred or Sublicensing Revenue is received by Dermira.

 

(c)                                  Service Fees.  Any payments due to Licensor that are not paid within the time provided in this Agreement shall be subject to a service charge of [*] percent per month, calculated on the number of days such payment is delinquent, or, if lower, the maximum charge permitted under applicable law.  This Section 4.3(c) shall in no way limit any other remedies available to Licensor.

 

Section 4.4                                   Royalty Reports.  No later than [*] after each Quarter Date commencing after the earlier of (i) first commercial sale of a Licensed Product, and (ii) the first Sublicense Agreement entered into by Dermira or an Affiliate of Dermira, Dermira shall provide Licensor with a written statement that identifies the: (a) Net Sales (including without limitation information broken out by country, product name, entity making sale, and details of amounts deducted from the proceeds invoiced for the purpose of calculating Net Sales) received during the Quarter in question; (b) Sublicensing Revenue received during the Quarter in question; and (c) any royalties due and payable to Licensor pursuant to this Agreement.  Each report shall also identify any Sublicense Agreements entered into with a Sublicensee during the Quarter and a report detailing the compensation received from each such Sublicensee that quarter broken out in the same way as the reports described above.

 

Section 4.5                                   Right to Audit.

 

(a)                                 Dermira shall keep and maintain records for a period of [*] showing the manufacture, sale, use, sublicensing, and other disposition of Licensed Products sold or otherwise disposed of under this Agreement in sufficient detail to enable an outside accountant to determine the amounts due under this Agreement.  Dermira will permit an accountant from a nationally-recognized accounting firm designated by Licensor, and who has entered into a confidentiality agreement in a form reasonably requested by Dermira, to review Dermira’s records related to Licensed Products, milestone payments and royalties payable

 

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pursuant to this Agreement.  The designated accountant will have access to such records during regular business hours and upon at least [*] prior written notice, for the purpose of verifying the accuracy of any royalty paid or payable under this Agreement for the [*] preceding such an audit.  Licensor may not exercise this right more than once in any calendar year.  Licensor will provide Dermira with a copy of any report prepared as a result of the audit.  Licensor shall bear the full cost of such audit unless such audit discloses an underpayment by Dermira to Licensor of more than [*] of the amount due in any Quarter examined, in which case, Dermira shall bear the full cost of the audit.

 

(b)                                 Except for purposes of enforcing this Agreement, or as otherwise required by law, Licensor agrees to hold confidential all non-public, confidential information learned in the course of any examination of Dermira’s books and records under this Agreement.

 

Section 4.6                                   Payment Adjustments.  Any adjustment to royalty or milestone payments made by Dermira to Licensor (whether payment or reimbursement, as the case may be) required as a result of an audit conducted pursuant to Section 4.5 shall be made within [*] after the date on which the accountant conducting the audit issues a written report to Licensor and Dermira containing the results of the audit.

 

Section 4.7                                   Audit Conditions.  Dermira will supply all records to Licensor and its accountant in the English language and such records will be collated, indexed or otherwise mapped and made available for review in a well-lighted, climate-controlled location at Dermira’s facilities.  Dermira agrees that all records relating to this Agreement subject to audit will be maintained and presented by English speaking personnel within Dermira’s organization who have authority and responsibility for such records.

 

ARTICLE 5
  LICENSED PRODUCT DEVELOPMENT AND RIGHTS

 

Section 5.1                                   Dermira Future Development and Inventions.  Dermira shall be responsible, at its sole cost and expense and in accordance with its obligations under Article 3, for the formulation, preclinical, clinical development and registration work to develop and market Licensed Products (“Development Work”).

 

Section 5.2                                   Intellectual Property Ownership.  As between Licensor and Dermira, Dermira will have and retain ownership of all right, title and interest to technology and intellectual property developed by Dermira, its Affiliates and their personnel, whether or not relating to the Patent Rights and Technology.  Without limiting the generality of the foregoing, Dermira shall be the owner of any Improvements to the Licensed Product developed by Dermira, its Affiliates or their personnel as part of the Development Work under Section 5.1.

 

ARTICLE 6
  PATENT PROSECUTION

 

Section 6.1                                   Responsibility for Prosecution of Patent Rights and Technology.  Dermira shall be responsible for (and shall use Commercially Reasonable Efforts toward) the

 

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prosecution and maintenance of the U.S. and foreign patents and patent applications included in the Patent Rights and Technology, using counsel of its choice, and shall bear all expenses incurred in connection with such prosecution or maintenance.  Dermira shall provide Licensor with copies of relevant documentation so that Licensor may be informed and apprised of the continuing prosecution of such patent applications.  Dermira shall provide Licensor  with an opportunity to review and comment on the text of each patent application and material responses to office actions before filing, and shall take Licensor’s comments and suggestions into consideration when framing responses and submissions to patent offices.  At Dermira’s sole expense, Licensor agrees to reasonably cooperate with Dermira in preparing, filing, prosecuting and maintaining any such patent applications and patents (including without limitation by using reasonable efforts to make the applicable inventor(s) available to Dermira as a liaison and resource during patent prosecution), and Licensor agrees to execute any documents as shall be necessary for such purpose.

 

Section 6.2                                   Abandoned Patents.  Notwithstanding Section 6.1, if Dermira elects to abandon prosecution of a patent or patent application included in the Patent Rights and Technology, then Dermira shall notify Licensor in writing and if Licensor so elects by written notice to Dermira within [*] thereafter, then (a) such patent or patent application shall no longer be part of the Patent Rights and Technology and (b) Licensor shall be entitled (at its own expense) to assume and continue the prosecution and maintenance of such abandoned patent or patent application.

 

ARTICLE 7
  INFRINGEMENT

 

Section 7.1                                   Notification of Infringement.  Each Party agrees to provide written notice to the other Party promptly after becoming aware of any suspected infringement or alleged infringement of the Patent Rights and Technology.  Such notifying Party shall provide the other Party with any available evidence of such suspected infringement or alleged infringement.

 

Section 7.2                                   Right to Pursue Infringers.

 

(a)                                 In the event of suspected infringement of the Patent Rights and Technology by a third party, Dermira shall have the first right to enforce the Patent Rights and Technology, and shall be entitled to (in consultation with counsel of its choice) control all aspects of any enforcement action, including without limitation the degree, timing, object, and methods of enforcement (such methods including but not limited to licensing, litigating for damages and injunctive relief, and settling disputes).  If requested by Dermira (and at Dermira’s expense) Licensor (i) shall join in (or if necessary, initiate) a suit against alleged infringers of the Patent Rights and Technology, and (ii) provide (at Dermira’s expense) all assistance, information and authority reasonably requested by Dermira in connection with any enforcement action initiated or requested by Dermira.  In the event of an enforcement action initiated or requested by Dermira pursuant to this Section 7.2(a), Dermira shall be entitled to retain any amounts awarded or received by way of judgment or settlement, except that any amounts received by Dermira in excess of Dermira’s costs and expenses associated with such enforcement action shall be treated

 

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as Sublicensing Revenue and shall be subject to the payment obligations contained in Section 4.2(b).

 

(b)                                 Notwithstanding Section 7.2(a), if Licensor has provided Dermira with written notice of suspected infringement or alleged infringement of the Patent Rights and Technology, and Dermira does not within [*] after such notice (the “Dermira First Right Period”) elect to initiate settlement discussions or an enforcement action with respect to such infringement, then Licensor shall have the right, exercisable at any time within [*] after the expiration of the Dermira First Right Period to notify Dermira in writing that it wishes to initiate an enforcement action against the alleged infringers, in which case:

 

(i)                                     If Dermira so elects within [*] after receiving such notice from Licensor, then (A) Dermira and Licensor shall be entitled to jointly control all aspects of such enforcement action (it being understood that unless Dermira in its sole discretion agrees in writing, the Parties shall not be entitled to enter into any settlement that provides the alleged infringer with any rights or license to the Patent Rights and Technology), (B) the expenses of such enforcement shall be shared equally by Dermira and Licensor, and each Party shall provide any assistance, information and authority reasonably requested by the other in connection with such enforcement action, and (C) all recoveries awarded or received by way of judgment or settlement will first be allocated to each Party [*] to reimburse all attorney’s costs, fees, and other related expenses incurred by such Party, with any remaining amount shared [*] between the Parties.

 

(ii)                                  If Dermira declines to participate in such enforcement action or fails to respond within [*] after receiving such notice, then (A) Licensor shall be entitled to control all aspects of such enforcement action, provided that unless Dermira in its sole discretion agrees in writing, Licensor shall not be entitled to enter into any settlement that provides the alleged infringer with any rights or license to the Patent Rights and Technology, and  (B) such enforcement action shall be at Licensor’s sole cost and expense, provided that Dermira shall (at Licensor’s expense) provide any assistance, information and authority reasonably requested by Licensor in connection with such enforcement action, and (C) Licensor shall be entitled to retain [*] awarded or received by way of judgment or settlement.

 

ARTICLE 8
  REPRESENTATIONS AND WARRANTIES

 

Section 8.1                                   Licensor Representations and Warranties.  Licensor represents and warrants to Dermira that: (a) Licensor has full power to make the assignments and transfers and grant the rights, licenses and privileges granted in this Agreement; (b) Licensor has not licensed, pledged, granted a security interest in, encumbered or assigned any of the Patent Rights and Technology, Stiefel Data, Regulatory Materials, or Program Inventory and Supplies to any third party, other than Stiefel’s retention of certain rights to Stiefel Data under the Stiefel Agreement, and the license of certain Patent Rights and Technology pursuant to a prior license described in Recital A of the Stiefel Agreement which was terminated by Stiefel (with no remaining rights to Patent Rights (as defined therein) held by the former licensee) pursuant to a termination notice

 

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issued by Stiefel on [*]; (c) the Stiefel Agreement has been executed and delivered by Licensor and Stiefel and remains in full force and effect; (d) there no patents or patent applications in the name of [*] in existence as of the Effective Date related to the Field which have not been assigned to Licensor, and (e) Licensor will ensure that any inventions or discoveries made by [*] during the Term which would be included in Patent Rights and Technology if assigned to Licensor are assigned by [*] to Licensor.

 

Section 8.2                                   Dermira Representations and Warranties.  Dermira represents and warrants that: (a) it has full power and authority to enter into this Agreement; and (b) in exercising its rights under this Agreement, it shall fully comply with the requirements of any and all applicable laws, regulations, rules, and orders of any governmental body having jurisdiction over the exercise of the rights hereunder.

 

Section 8.3                                   Disclaimer; Negation of Warranties by Licensor.

 

EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 8, LICENSOR MAKES NO WARRANTIES OR REPRESENTATION (EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE) WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL WARRANTIES AND REPRESENTATIONS OF NONINFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

 

Nothing contained in this Agreement shall be construed as:

 

(a)                                 a warranty or representation by Licensor as to the validity, enforceability, or scope of any of the Patent Rights and Technology;

 

(b)                                 a warranty or representation by Licensor that the manufacture, sale, offer for sale, lease, import, use, or other exploitation of the Licensed Products will be free from infringement of intellectual property rights of third parties;

 

(c)                                  conferring any rights to use in advertising, publicity, or other marketing activities any name, trademark, or other designation of either party, except as otherwise expressly set forth herein;

 

(d)                                 granting by implication, estoppel, or otherwise any licenses or rights under patents or other rights of Licensor or other persons other than the Patent Rights and Technology and the Stiefel Data; or

 

(e)                                  an obligation to furnish any technical information or know-how except as expressly provided.

 

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ARTICLE 9
  CONFIDENTIALITY

 

Section 9.1                                   Treatment of Confidential Information.  Each Party agrees that all inventions, processes, materials, chemicals, know-how and ideas, and all other business, technical and financial information, it obtains from the other Party (which includes disclosures by Stiefel in the case of disclosures by Licensor) is the confidential property of the disclosing Party (“Confidential Information” of the disclosing Party). Except as expressly allowed in this Agreement, the receiving Party will hold in confidence and not use or disclose any Confidential Information of the disclosing Party; provided, however, that Dermira, its Affiliates and Sublicensees may disclose information relating to the Patent Rights and Technology and the Stiefel Data (a) to actual or potential Sublicensees, investors or acquirers provided that each such actual or potential Sublicensee, investor or acquirer agrees in writing to abide by confidentiality and non-use restrictions similar to those contained in this paragraph, (b) to consultants, contractors, suppliers and Affiliates, provided that each such consultant, contractor, supplier and Affiliate agrees in writing to abide by confidentiality and non-use restrictions similar to those contained in this paragraph, and (c) to legal, financial, and tax advisors of Dermira or its Affiliates or of a Sublicensee, provided that such advisors are subject to confidentiality obligations with respect to any Confidential Information.  No provision of this paragraph shall be interpreted to prevent Dermira, its Affiliates or a Sublicensee from making disclosures of Confidential Information to Regulatory Authorities as necessary: (i) for the research and development of Licensed Products; or (ii) to seek or obtain patents.  Furthermore, Licensor agrees (without limitation on Licensor’s obligations under Article 2) that during the Term, Licensor shall treat the Patent Rights and Technology as Confidential Information of Dermira.  Dermira acknowledges that, pursuant to Section 9.1 of the Stiefel Agreement, if Stiefel reasonably believes that a potential sublicensee of Dermira of rights to commercialize Licensed Product may be using any of the Stiefel Data in breach of any confidentiality or non-use obligation to Dermira or sublicense or other authorization provided by Dermira, Stiefel may request in writing of Licensor whether Dermira disclosed the Stiefel Data to such third party or an Affiliate or representative thereof, and Dermira shall provide Licensor with the information for Licensor to answer Stiefel’s request, provided that answering such request does not constitute a breach of any legal obligation of Dermira to such third party, including representing to Licensor whether Dermira made such a disclosure.  Dermira will ensure that any non-disclosure or other agreement with such a third party under which Stiefel Data is disclosed, does not prevent Dermira from making such a disclosure in response to a court order.

 

Section 9.2                                   Release from Restrictions.  The provisions of Section 9.1 shall not apply to any Confidential Information disclosed hereunder which:

 

(a)                                 was known or used by the receiving Party prior to its date of disclosure to the receiving Party, as evidenced by the prior written records of the receiving Party; or

 

 

(b)                                 either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party by sources other than the disclosing Party rightfully in possession of such information, and such source was not under a duty of confidentiality with respect to such information; or

 

(c)                                  either before or after the date of the disclosure to the receiving Party becomes published or generally known to the public, through no fault or omission on the part of the receiving Party or an affiliated party; or

 

(d)                                 is independently developed by or for the receiving Party without reference to or reliance upon the Confidential Information; or

 

(e)                                  is required to be disclosed by the receiving Party to comply with applicable laws, court order, or governmental regulations, provided that the receiving Party (i) provides (A) prior written notice of such disclosure requirement to the other Party and (B) an adequate opportunity to seek appropriate legal relief to prevent such disclosure or limit use and further disclosure of the Confidential Information and (ii) takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure, and provided, further, that the receiving Party shall furnish only such portion of the Confidential Information that is legally required to be disclosed and shall promptly inform the disclosing Party in writing of which portion of the Confidential Information was so disclosed.

 

Notwithstanding the foregoing or anything set forth herein or otherwise, and for the avoidance of doubt, [*]  shall be considered to be Confidential Information.

 

ARTICLE 10
  MARKING

 

Prior to their expiration, Dermira, its Affiliates, and its Sublicensees shall mark, or shall cause to be marked, each Licensed Product with a notice that the Licensed Product is “Licensed under one or more of U.S. Patents Nos. [*]” and/or all such additional patents covered by this Agreement as they issue and shall otherwise so mark Licensed Products in accordance with applicable patent laws and practices of the country in which the Licensed Product is sold.  To the extent permitted and effective pursuant to applicable law, however, and if marking the Licensed Product is not practicable, then the Licensed Product will be considered marked if the above notice is included in a manual or literature accompanying the Licensed Product.

 

ARTICLE 11
  INDEMNIFICATION

 

Section 11.1                            By Dermira.  Dermira shall indemnify, defend, and hold Licensor, its members, employees, directors, officers, successors and assigns and [*] (individually and collectively “Licensor Indemnitees”) harmless from and against any and all third party claims, actions, suits, proceedings, demands, costs, expenses (including

 

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reasonable attorneys’ fees), liabilities and/or losses (collectively, “Losses”) arising out of or in connection with third party claims based on the exercise or practice by Dermira, its Affiliates and/or its Sublicensees of the rights and licenses granted under this Agreement by Licensor, including without limitation (i) the development, manufacture, use, sale or other disposition of Licensed Products by Dermira, or its Affiliates and Sublicensees and (ii) the use by any person of Licensed Products made, used, sold or otherwise distributed by Dermira, or its Affiliates and Sublicensees; provided, however, that the foregoing indemnification obligations shall not apply to any claim arising out of the gross negligence or willful misconduct of a Licensor Indemnitee or any breach of Licensor’s representations and warranties under Article 8.  Notwithstanding the foregoing, Dermira’s indemnification and defense obligations under this Section 11.1 shall not apply to the extent that the act of such indemnification itself would constitute a violation of California Civil Code Section 2773.

 

Section 11.2                            Indemnification and Defense Procedure.  A Licensor Indemnitee (each, an “Indemnified Person”) shall reasonably promptly notify Dermira (the “Indemnifying Party”) in writing, of any claim for which indemnification may be sought under Section 11.1; provided, however, that any delay in notification shall not nullify any indemnification obligation except to the extent of actual and substantial prejudice.  The Indemnifying Party shall control the investigation, trial, defense and settlement of such lawsuit or action (including all negotiations to effect a settlement) and any appeal arising therefrom.  The Indemnified Person may, at its own cost, participate in such investigation, trial and defense of such lawsuit or action and any resulting appeal.  At the Indemnifying Party’s expense, the Indemnified Person shall reasonably cooperate in good faith with the Indemnifying Party at all times during the pendency of the claim or lawsuit including, without limitation, promptly providing the Indemnifying Party with all available information and documents concerning the claim that are in the Indemnified Person’s possession.  Notwithstanding the foregoing, an Indemnified Person’s consent, which shall not be unreasonably withheld, shall be obtained in the event any compromise or settlement under this Article 11 that includes a finding or admission of any violation of any law by such Indemnified Person, or requires the payment of any money by the Indemnified Person.

 

Section 11.3                            Indemnification and Personal Liability Disclaimer.  Licensor shall have no obligation of defense, contribution, or indemnity with respect to any actual or alleged intellectual property infringement, product liability, personal injury, or otherwise with respect to the Patent Rights and Technology or otherwise arising from this Agreement.  Licensor shall have no liability arising out of any such actual or alleged intellectual property infringements, product liability, or personal injury.  However, the foregoing provisions of this Section 11.3 shall not limit Licensor’s obligations or liability with respect to any breach of Licensor’s representations and warranties under Article 8.

 

Section 11.4                            Indemnification of Stiefel.  Dermira, its Affiliates and Sublicensees shall indemnify Stiefel and its Affiliates, and other related indemnified persons as set out in the Stiefel Side Letter.

 

 

ARTICLE 12

LIMITATION OF LIABILITY

 

IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO THE LOSS OF OPPORTUNITY, OR LOSS OF REVENUE OR PROFIT HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

ARTICLE 13

TERM

 

Unless terminated earlier, as provided in this Agreement, the term of this Agreement shall commence on the Effective Date and continue in full force and effect until the later of (i) the expiry of the last Valid Claim, or (ii) expiration of the last Know-How Royalty Term (the “Term”), provided that upon expiration of the Term, the licenses granted to Dermira and its Affiliates pursuant to Section 2.1, 2.2 and 2.3 shall become nonexclusive, irrevocable and royalty-free and remain in full force and effect in perpetuity.  Notwithstanding the foregoing, the sublicense to Stiefel Data shall not become irrevocable before the date that is [*] following the Effective Date.

 

ARTICLE 14

TERMINATION

 

This Agreement may be terminated as follows:

 

Section 14.1                            By Licensor.  During the Term, Licensor shall be permitted to immediately terminate this Agreement in the event Dermira commits a material breach of this Agreement (other than Article 3) and fails to cure such breach within [*] (or in the event of a breach of Dermira’s payment obligations that is not being disputed in good faith, within [*]) after Dermira receives written notice from Licensor identifying this Agreement and the action giving rise to the claimed material breach.  Any actual or alleged breach by Dermira of its obligations under Article 3 shall be governed by, and Licensor’s remedies for such breach shall be as set forth in, Article 3.  In addition, Licensor shall be permitted to immediately terminate the sublicense to the Stiefel Data in the event Dermira commits a material breach of this Agreement or the Stiefel Side Letter which causes Licensor to be in material breach of the Stiefel Agreement and Dermira fails to cure such breach within [*] after Dermira receives written notice from Licensor or Stiefel identifying this Agreement and the action giving rise to the material breach.  In addition, in the event that Stiefel and Dermira become involved in an arbitration under Paragraph 10 of the Stiefel Side Letter, to avoid having two dispute proceedings being conducted at the same time, if Licensor wishes to issue a written notice of material breach of this Agreement to Dermira prior to the completion of the Stiefel - Dermira arbitration proceedings, in addition to Licensor’s other rights under this Section 14.1, Licensor may elect to issue such notice but specify that the notice will become

 

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effective only simultaneously with the arbitrator issuing its decision in the Stiefel - Dermira arbitration.

 

Section 14.2                            By Dermira.  During the Term, Dermira shall be permitted to immediately terminate this Agreement in the event:

 

(a)                                 Licensor commits a material breach of this Agreement and fails to cure such breach within [*] after Licensor receives written notice from Dermira identifying this Agreement and the action giving rise to the claimed material breach; or

 

(b)                                 In Dermira’s sole and reasonable opinion [*] of Licensed Products is [*] Licensed Product or, before or after approval of Licensed Products for sale [*].  Upon any termination pursuant to this Section 14.2(b), (x) all rights to the Patent Rights and Technology shall revert to Licensor, and (y) Dermira agrees, subject to Licensor’s agreement to a release of claims against Dermira and its Affiliates in a form reasonably requested by Dermira, to (1) [*], and (2) for a period of [*] after such termination to provide Licensor (at Licensor’s expense) with such technical assistance and access to and cooperation of Dermira personnel as Licensor may reasonably request in connection with the license of such Improvements to Licensor.

 

Section 14.3                            Termination for Insolvency.  Either Party may terminate this Agreement immediately upon delivery of written notice to the other Party: (i) upon the institution by or against the other Party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of the other Party’s debts, and provided in the case of an involuntary proceeding initiated against a Party that such proceeding is not stayed or dismissed within [*] after its initiation; (ii) upon the other Party’s making an assignment for the benefit of creditors; (iii) upon the other Party’s dissolution or ceasing to do business; or (iv) upon the appointment of a receiver or receiver and manager, trustee, administrator or official manager or agent of a secured or unsecured creditor to any of the other Party’s property.  For clarity, in the event of a dissolution of Licensor, unless this Agreement is affirmatively terminated by Dermira by written notice as permitted under this Section 14.3, it shall remain in full force and effect and be binding upon Licensor’s successors and assigns resulting from such dissolution, as provided in Article 18.

 

Section 14.4                            Effect of Insolvency or Bankruptcy of Licensor.  The Parties acknowledge and agree that all rights and licenses to intellectual property granted to Dermira and its Affiliates and Sublicensees pursuant to this Agreement are, for all purposes of Section 365(n) of the United Stated Bankruptcy Code, as amended (the “Bankruptcy Code”), licenses of rights to “intellectual property” as defined in the Bankruptcy Code, and that in the event Licensor becomes a debtor in bankruptcy, the provisions of Section 365(n) of the Bankruptcy Code shall apply and each of Dermira and each Sublicensee shall continue to have rights under such

 

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licenses as long as such party continues to fulfill all of its obligations, including its obligations to pay royalties, under this Agreement, as and to the extent provided in Section 365(n).

 

Section 14.5                            Effect of Termination.  Expiration or termination of this Agreement for any reason shall not release the other Party from any liability that at the time of such termination or expiration has already accrued to the other Party.  Upon the expiration or termination of this Agreement, (a) the license granted to Dermira and its Affiliates shall terminate, and (b) any sublicense of the rights granted to Dermira and its Affiliates hereunder shall automatically be assigned to and assumed by Licensor, and shall remain in full force and effect with Licensor as the licensor instead of Dermira or its Affiliate (provided that, unless Licensor agrees in writing otherwise, the obligations of Licensor under the assigned sublicenses will not be greater than the obligations of Licensor under this Agreement).  Within [*] after any expiration or termination, Dermira shall pay any and all amounts owing to Licensor, and all royalties accrued, as of the date of such expiration or termination.

 

ARTICLE 15
  DISPUTE RESOLUTION

 

Section 15.1                            Mandatory Procedures.  The Parties agree that any dispute arising out of or relating to this Agreement shall be resolved solely by means of the procedures set forth in this Article, and that such procedures constitute legally binding obligations that are an essential provision of this Agreement.  If either Party fails to observe the procedures of this Article, as may be modified by their written agreement, the other Party may bring an action for specific performance of these procedures in any court of competent jurisdiction.

 

Section 15.2                            Arbitration.  The Parties shall endeavor to resolve in good faith any disputes or conflicts arising from or relating to the subject matter of this Agreement, failing which either Party shall submit such conflict for resolution to an executive officer of Dermira and Licensor.  If the executive officers of Dermira and Licensor are unable to resolve such conflict within [*] after such conflict is submitted to them for resolution, such conflict may be submitted to binding arbitration in accordance with the rules of arbitration of the American Arbitration Association (in accordance with its Commercial Arbitration Rules then in effect and this Agreement) and heard before a arbitrator or panel of arbitrators selected as follows: (i) for a period of [*] after submission of a dispute to arbitration, the Parties shall confer in good faith to attempt to mutually agree as to the selection of a single arbitrator with relevant industry expertise, and if they so agree then the dispute will be heard before the single arbitrator so selected, and (ii) if after such [*] period, the Parties have failed to reach mutual agreement, then each Party shall select an arbitrator with relevant industry expertise, the two arbitrators so selected shall select a third arbitrator with relevant industry expertise, and the dispute shall be heard before the three arbitrator panel so selected.  Such arbitration will be held in Palo Alto, California and conducted in English.  The arbitrator(s) will apply California law, without regard to its conflict of laws rules or principles.  The arbitrator(s) will allow such discovery as is appropriate for the purpose of arbitration in accomplishing a fair, speedy and cost-effective resolution of the dispute.  The arbitrator(s) will have the authority to award compensatory damages only.  Any award by the arbitrator(s) will be accompanied by a written opinion setting forth the findings of fact and conclusions of law relied

 

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upon in reaching the decision.  The award rendered by the arbitrator(s) will be final, binding and, except as permitted by applicable law, non-appealable.

 

ARTICLE 16
  GOVERNING LAW; JURISDICTION

 

This Agreement and all disputes arising out of or related to this Agreement shall be governed by the laws of the state of California, without regard to conflict of laws principles.  The Parties hereby agree that any dispute arising out of this Agreement that is not subject to arbitration pursuant to Article 15 shall be subject to the exclusive jurisdiction of and venue in the federal and state courts within Santa Clara County, California.  Each Party hereby irrevocably consents to the personal and exclusive jurisdiction and venue of such courts.

 

ARTICLE 17
  NOTICE

 

Any notices required or permitted under this Agreement shall be in writing, in English, specifically refer to this Agreement, and shall be sent by prepaid registered or certified mail, return receipt requested; by recognized overnight courier; or by personal delivery, in each case addressed to the other Party as follows:

 

	
If   to Dermira:
    	
If   to Licensor:
    
	
Dermira, Inc.

2055   Woodside Road, Ste. #270

Redwood   City, California 9406
    	
Rose U LLC

[*]

Palo Alto, CA 94303
    
	
Attention: Chief Executive   Officer

Fax: (650) 365-3410
    	
Attention:   [*]
    
	
 
    	
 
    
	
With a copy to:
    	
With   a copy to:
    
	
Fenwick &   West LLP

Silicon   Valley Center

555   California Street

12th   Floor

San   Francisco, CA 94104

Attention:   Douglas Cogen

Fax:   (415) 281-1350
    	
[*]
    

 

Either Party may designate a different address, telephone number and/or facsimile number by giving notice, pursuant to this Article, to the other Party.  Any notice given pursuant to this Article shall be deemed to have been given:  (a) three (3) business days after sent by prepaid registered or certified mail; (b) two (2) business days after sent by recognized overnight courier and (c) when received if by personal delivery.

 

 

ARTICLE 18
  ASSIGNMENT

 

Neither Party may assign or transfer this Agreement or any rights or obligations under this Agreement, whether voluntary or by operation of law, without the prior written consent of the other Party; provided, however, that a Party may (without requirement to obtain the other Party’s consent) assign or transfer this Agreement to any successor or third party in connection with a merger, acquisition or sale of all or substantially all of the assets of such Party that relate to the business activities conducted pursuant to this Agreement (and, for clarity, in the case of an assignment by Dermira in connection with a Liquidity Event, Dermira shall timely make any payment required under Section 4.2(c) above).  In addition, in the event of an assignment or transfer of this Agreement by Dermira to a third party in connection with a sale of all or substantially all of the assets of Dermira that relate to the business activities conducted pursuant to this Agreement, Dermira shall make any payments arising from such assignment to Stiefel that are required to be made under the Stiefel Side Letter.  Any assignment or transfer or attempted assignment or transfer of this Agreement made in contravention of the terms of this Article shall be null, void and without effect.  Subject to the foregoing, this Agreement shall be binding on and inure to the benefit of the Parties’ respective successors and permitted assigns.

 

ARTICLE 19
  WAIVER

 

No failure or delay on the part of a Party in exercising any right under this Agreement will operate as a waiver of, or impair, any such right, unless a waiver is made in writing signed by the waiving Party.  No single or partial exercise of any such right will preclude any other or further exercise thereof or the exercise of any other right.  No waiver of any such right will be deemed a waiver of any other right under this Agreement.

 

ARTICLE 20
  PARTIAL INVALIDITY

 

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction:  (a) such provision will be deemed amended to conform to applicable laws of such jurisdiction so as to be valid and enforceable, or, if it cannot be so amended without materially altering the intention of the Parties, it will be stricken; (b) the remaining provisions shall remain in full force and effect; (c) the validity, legality and enforceability of such provision will not in any way be affected or impaired in any other jurisdiction and (d) the remainder of this Agreement will remain in full force and effect.  The Parties agree to renegotiate in good faith any term of this Agreement held to be invalid, illegal or unenforceable and agree to be bound by the mutually agreed substitute provision in order to give the most approximate effect intended by the Parties.

 

 

ARTICLE 21
  HEADINGS

 

All headings are for convenience only and shall not affect the meaning of any provision of this Agreement.

 

ARTICLE 22
  FORCE MAJEURE

 

A Party shall be excused from (and not liable to the other Party for) any failure or delay in performance of any obligation under this Agreement (other than obligations to make payment) to the extent such failure or delay is due to an event or circumstance beyond the reasonable control of such Party, including, without limitation, war, rebellion, civil commotion, strikes, lock-outs or industrial disputes; fire, explosion, earthquake, acts of God, flood, drought or bad weather; acts of terror or the requisitioning or other act or order by any government department, council or other constituted body (a “Force Majeure”).  In the event of a Force Majeure, the non-performing Party will promptly notify the other Party thereof and use its best efforts to resume performance as soon as practicable.

 

ARTICLE 23
  NO PUBLICITY

 

Neither Party shall make any public or press announcement about this Agreement, its terms or its business relationship with the other Party, without the prior written consent of the other Party.  The form and content of any such announcement shall be subject to the prior approval of each Party.

 

ARTICLE 24
  USE OF NAME, SYMBOLS AND MARKS

 

Licensor and Dermira shall not use the name, symbols and/or marks of the other Party in any form of publicity without the prior written authorization of the other Party.  However, each Party has the right to use the other Party’s name on governmental filings and elsewhere as required by law.

 

ARTICLE 25
  SURVIVAL

 

The terms and provisions of Articles 1, 5, 8, 9, 11, 12, 13, 14.5 and 15 through 30 shall survive any expiration or termination of this Agreement.

 

 

ARTICLE 26
  INDEPENDENT CONTRACTOR

 

Licensor’s status and relationship with Dermira shall be that of an independent contractor, and Licensor shall not state or imply, directly or indirectly, that it is empowered or authorized to commit or bind Dermira or to incur any liabilities or expenses on behalf of Dermira or to enter into any oral or written agreement in the name of or on behalf of Dermira.  Nothing in this Agreement shall create, expressly or by implication, a partnership, joint venture, agency or other association of the Parties.

 

ARTICLE 27
  MULTIPLE COUNTERPARTS

 

This Agreement may be executed in two (2) identical counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

ARTICLE 28
  AMENDMENT

 

This Agreement may be amended, supplemented or otherwise modified only by means of a written instrument signed by both Parties.

 

ARTICLE 29
  ENTIRE AGREEMENT

 

This Agreement including the Appendices hereto, constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements or understandings, oral or written, between the Parties relating to the subject matter of this Agreement.

 

ARTICLE 30

[*]

[*] shall have no liability or obligation to Dermira or any other parties arising out of this Agreement and shall be direct and intended third-party beneficiaries of Article 11 (Indemnification) and this Article, entitled to enforce the same directly against Dermira.

 

*Confidential Treatment Requested

 

 

IN WITNESS WHEREOF, the Parties have caused their duly authorized officers to execute and deliver this Exclusive License Agreement as of the Effective Date.

 

 

	
“LICENSOR”
    	
“DERMIRA”
    
	
 
    	
 
    
	
 
    	
 
    
	
ROSE   U LLC
    	
DERMIRA, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature:
    	
/s/   Jeffrey D. Urman
    	
 
    	
Signature:
    	
/s/   Thomas Wiggans
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Print:
    	
Jeffrey   D. Urman
    	
 
    	
Print:
    	
Thomas   Wiggans
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Secretary   Treasurer
    	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
April   2, 2013
    	
 
    	
Date:
    	
April   26, 2013
    
	
 
    	
 
    	
 
    	
 
    	
 
    

[SIGNATURE PAGE TO EXCLUSIVE LICENSE AGREEMENT]

 

 

APPENDIX A

 

LIST OF PATENT APPLICATIONS AND PATENTS

 

ROSE U PATENTS

[*]

 

NON-ROSE U PATENTS

[*]

 

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APPENDIX B

 

STIEFEL AGREEMENT

 

(ATTACHED)

 

 

LICENSE AND POST-TERMINATION AGREEMENT

 

This License and Post-Termination Agreement (this “Agreement”) is entered into as of April 26, 2013 (“Effective Date”), by and between Stiefel Laboratories, Inc. (“Stiefel”), a Delaware corporation with a place of business at 20 T.W. Alexander Drive, Research Triangle Park, NC 27709 and Rose U LLC, (“Rose U”) a California limited liability company with a place of business at [*], Palo Alto, CA 94303.  Each of Rose U and Stiefel may be referred to herein as a “Party” and collectively as the “Parties”.

 

RECITALS

 

A.                                    Rose U and Connetics Corporation (“Connetics”) entered into an Exclusive Patent License Agreement dated [*], which agreement was amended on [*] (the “Prior License Agreement”). Stiefel acquired Connetics on December 29, 2006, and as a result of such acquisition, Stiefel became the successor in interest to, and assumed the rights and obligations of, Connetics under the Prior License Agreement.

 

B.                                    On [*], Stiefel notified Rose U in writing that Stiefel had terminated the Prior License Agreement pursuant to Section [*] of the Prior License Agreement effectively immediately as of the date of the letter.

 

C.                                    Pursuant to Section [*] of the Prior License Agreement, upon the termination of such agreement, the Parties are required to negotiate in good faith the licensing of the data generated by Connetics/Stiefel supporting the development work under such agreement to Rose U at a mutually agreed upon compensation.  The Parties have engaged in such negotiations.

 

D.                                    Rose U and Stiefel now wish to enter into this Agreement in order to document certain agreements and understandings relating to the termination of the Prior License Agreement, and to provide Rose U with certain rights to such data developed by Connetics/Stiefel, and other matters, in connection with the Prior License Agreement, all upon the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, the parties agree as follows:

 

ARTICLE 1.  DEFINITIONS

 

“Affiliate” means, with respect to a person, any corporation, partnership, business joint venture or other entity that directly or indirectly controls, is controlled by or is under common control with such person. For purposes of this definition, “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the entity in question (whether through ownership of securities or other ownership interests, by contract or otherwise).

 

*Confidential Treatment Requested

 

 

“Control” or “Controlled” means, with respect to any item of Stiefel Data, patent rights, or other intellectual property right, the possession (whether by ownership or license) by a Party of the ability to grant to the other Party access, a license or a sublicense (as applicable), or to extend other rights as provided in this Agreement, to such intellectual property right, without violating the terms of any agreement or other arrangements with any third party.

 

“Dermira” means Dermira, Inc. and any successor or assign of Dermira, Inc. through merger, reorganization, consolidation or sale of all or substantially all of the assets of Dermira, Inc. to which the sublicense of the rights granted under this Agreement relates.  Dermira shall also be considered to be a Designated Sublicensee where such defined term is used throughout this Agreement.

 

“Designated Sublicensee” is defined in Section 3.5.

 

“Field” shall mean the use of topical products containing [*] or other compounds identified in the Rose U Patents for the treatment and prevention of hyperhidrosis, [*], or excessive sweating.  For clarity, the Field includes such products sold [*].

 

“[*] Program” means the programs of research and development conducted by Connetics, Stiefel, or any combination of the foregoing directly and through their Affiliates and contractors relating to applications of [*] or other compounds identified in the Rose U Patents, including as undertaken in relation to [*] and any similar registrations with regulatory authorities.

 

“Licensed Product” means any product, process or service (i) that incorporates in whole or in part Stiefel Data, or (ii) in the Field that incorporates [*], provided that Licensed Product does not include a Pre-Existing Product, where a “Pre-Existing Product” means a product, process or service in the Field that (a) incorporates [*], (b) does not incorporate, in whole or in part, any Stiefel Data and (c) was in clinical development by a Designated Sublicensee or an Affiliate or permitted sublicensee of a Designated Sublicensee or an Affiliate of any such sublicensee prior to any access to Stiefel Data by the relevant entity; provided, that such entity shall promptly provide Stiefel proof of such development prior to the date of access to Stiefel Data upon the request of Stiefel.  Rose U represents and warrants that neither Rose U, Dermira, Inc. nor any of their Affiliates has any product, process or service in the Field that incorporates [*] in clinical development as of the Effective Date.

 

“Program Inventory and Supplies” means the drug substance, drug product and inventory relating to the [*] Program owned or Controlled by Stiefel or its Affiliates that is specified on Exhibit A-2.

 

“Regulatory Materials” means regulatory applications, submissions, notifications, registrations, regulatory approvals or other submissions or correspondence made to, with or from a regulatory authority prior to the Effective Date in connection with the [*] Program. Regulatory Materials include Investigational New Drug applications, drug approval applications, or any similar applications with regulatory authorities anywhere in the world, amendments and supplements for any of the foregoing, and applications for pricing approvals.  For clarity, the

 

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Regulatory Materials include [*].

 

“Rose U Patents” means U.S. Patents [*].

 

“Stiefel Data” means the documentation, reports and data relating to the [*] Program that is specified on Exhibit A-1 that is owned or Controlled by Stiefel or its Affiliates and was developed or used in connection with the [*] Program, together with any additional information delivered by Stiefel pursuant to Section 3.3.

 

“Stiefel’s Knowledge” means the actual knowledge of [*]  with no further investigation.

 

ARTICLE 2.  TERMINATION OF PRIOR LICENSE AGREEMENT; RELEASE

 

Section 2.1                                   Termination.  Rose U and Stiefel acknowledge and agree that the Prior License Agreement was terminated.

 

Section 2.2                                   Release.  Rose U and Stiefel (each, a “Releasor”), on behalf of themselves and their heirs, executors, administrators, predecessors, subsidiaries, affiliates, successors, and assigns, knowingly and voluntarily release and discharge the other and the other’s respective officers, directors, stockholders, members, employees, agents and affiliates (collectively, the “Released Parties”), from any and all claims, liabilities, damages and obligations that each Party may have against any such Released Party, through the Effective Date based upon any matter, cause or thing whatsoever related to or arising out of the Prior License Agreement and the resulting relationship between the parties (collectively, the “Released Matters”).  This release shall not extend to the Parties’ rights to enforce the terms and conditions of this Agreement, all of which rights shall be preserved.  Releasor hereby covenants and agrees not to bring suit in any forum, or prosecute in any fashion, any suit or other legal proceeding of any sort at any time, now or in the future, against any Released Party with respect to any of the Released Matters.

 

ARTICLE 3.  TRANSFER OF [*] PROGRAM

 

Section 3.1                                   Assignment of Patent Rights.  In connection with this Agreement, Stiefel has assigned and transferred all of its and its Affiliates’ right, title and interest in and to certain patent rights to Rose U.  Such assignment was formalized by the execution and delivery by Stiefel to Rose U of an assignment in the form attached as Exhibit A-3 (the patents, applications and rights assigned pursuant thereto, the “Assigned Patent Applications”).

 

Section 3.2                                   License to Stiefel Data.  Subject to the terms of this Agreement (including but not limited to Section 3.5.4 hereof), Stiefel hereby grants Rose U a worldwide, exclusive (except as to Stiefel and its Affiliates) license (including the right to grant sublicenses through multiple tiers pursuant to the provisions of Section 3.5 hereof) to use the Stiefel Data in the Field.

 

Section 3.3                                   Delivery of Stiefel Data.  Promptly following the Effective Date, Stiefel shall transfer and assign to Rose U copies of all documents (whether in written or electronic

 

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form) listed on Exhibit A-1.  Additionally, for a period of [*] after the Effective Date, Stiefel shall provide Rose U or Dermira at no cost to Rose U (other than reimbursement of Stiefel’s actual out-of-pocket expenses, which shall be paid by Rose U to Stiefel) with such technical assistance and access to and cooperation of Stiefel personnel as Rose U or Dermira may reasonably request in connection with the delivery to Rose U of factual knowledge and information relating to the Stiefel Data, Regulatory Materials and Program Inventory and Supplies, provided that in no event shall Stiefel be required to provide more than [*] of employee time for such purpose (the “Technical Assistance”).

 

Section 3.4                                   Regulatory Materials and Program Inventory and Supplies.

 

3.4.1                     Stiefel hereby assigns to Rose U all of its right, title and interest in and to the Regulatory Materials.  At the request of Rose U, Stiefel shall promptly deliver the Regulatory Materials to Rose U and shall take such additional steps and execute such additional documents as Rose U may reasonably request in order to effect such assignment and delivery, including the transfer of any regulatory applications into the name of Rose U.

 

3.4.2                     Upon Rose U’s request within [*] of the Effective Date, Stiefel shall, to the extent it is able to do so in compliance with its internal policies and to the extent such Program Inventory and Supplies still exists, assign, transfer and deliver the Program Inventory and Supplies to Rose U and shall take such additional steps and execute such additional documents as Rose U may reasonably request in order to effect such assignment, transfer and delivery.  In addition, if requested by Rose U or Dermira, Stiefel shall use commercially reasonable efforts, but only during such [*] period (such time spent by Stiefel to count toward the [*] cap on Technical Assistance), to (i) introduce Rose U and/or Dermira to the contract manufacturing organization (“CMO”) that provided the Program Inventory and Supplies to Stiefel, and (ii) facilitate the transition of manufacturing to a CMO designated by Rose U or Dermira, provided that Stiefel shall not be obligated to place any orders from a CMO on behalf of Rose U or Dermira nor to provide any other assistance with respect to a CMO except as specifically set forth in this Section 3.4.2.  If Rose U does not request delivery of the Program Inventory and Supplies within [*] of the Effective Date or if Stiefel determines that its internal policies prevent Stiefel from transferring any or all of the Program Inventory and Supplies to Rose U or that such Program Inventory and Supplies no longer exist, Stiefel may destroy such materials at its sole discretion without notice to Rose U.  Upon the request of Rose U or Dermira, Stiefel will provide such Stiefel consent as is reasonably necessary to allow Rose U or Designated Sublicensees to work with service providers who have provided services to Stiefel in connection with the [*] Program, including consenting to the use by such contractors of any Stiefel Data in the possession or control of such contractors to provide services to Rose U or Designated Sublicensees.

 

Section 3.5                                   Sublicenses.

 

3.5.1                     The license granted to Rose U pursuant to Section 3.2 includes the right to grant sublicenses of such rights through multiple layers of sublicenses to third parties or Affiliates (each such sublicensee, a “Designated Sublicensee”) to which Rose U or a Designated Sublicensee is granting the right to research, develop or commercialize products in the Field using Stiefel Data.

 

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3.5.2                     Any sublicense agreement, whether by Rose U or a Designated Sublicensee, shall not be inconsistent with the terms of this Agreement nor exceed the scope of the license granted to Rose U under this Agreement and shall include (i) an obligation of the Designated Sublicensee to indemnify Stiefel and its Affiliates as provided in Section 6.1 hereof, subject to conditions and procedures substantially equivalent to those contained in Section 6.2 and Article 7, (ii) confidentiality obligations of the Designated Sublicensee no less protective of the Stiefel Data than those contained in Article 9 of this Agreement, and (iii) an express statement that Stiefel and its Affiliates are intended third party beneficiaries of such sublicense agreement.  Rose U shall promptly thereafter provide Stiefel a true and correct copy of each such sublicense, provided that Rose U or the Designated Sublicensee may redact confidential provisions of the sublicense agreement that are not reasonably required for Stiefel to confirm compliance with this Agreement (but not the identity of the Designated Sublicensee).

 

3.5.3                     Rose U represents and warrants that the copy it has provided to Stiefel of the sublicense it is entering into with Dermira simultaneously with this Agreement is a true and correct copy thereof (the “Rose U-Dermira Sublicense”), except that the financial terms regarding the amounts to be paid by Dermira to Rose U have been redacted from the copy provided to Stiefel.

 

3.5.4                     Simultaneous with Dermira and Rose U entering into the Rose U-Dermira Sublicense, Dermira and Stiefel are entering into a letter agreement in the form attached as Exhibit B (the “Side Letter Agreement”).  If the Rose U-Dermira Sublicense is terminated for any reason, then in the event that Rose U seeks to engage a subsequent Designated Sublicensee to replace Dermira, Rose U may request such subsequent Designated Sublicensee to enter into a letter agreement with Stiefel substantially in the form of Exhibit B (a “Subsequent Side Letter Agreement”), with any changes made thereto only as Stiefel finds acceptable.  Stiefel may, in its sole discretion, agree or decline to enter into a Subsequent Side Letter Agreement.  In the event that Stiefel declines to enter into the Subsequent Side Letter Agreement, Rose U may still elect to sublicense to such subsequent Designated Sublicensee but the provisions of Section 4.3 herein shall not apply and Rose U shall be liable to Stiefel to make the [*] Payment.  If Stiefel does elect to enter into a Subsequent Side Letter Agreement with such Designated Sublicensee, then the provisions of Section 4.3 herein shall continue to apply with the subsequent Designated Sublicensee replacing Dermira in such section of this Agreement.  Rose U acknowledges the possibility of the license grant in Section 3.2 hereof (the “License Grant”) being converted to a non-exclusive grant pursuant to Paragraph 10 of the Side Letter Agreement.  Notwithstanding the foregoing, in the event that Rose U sends a notice to Dermira to terminate the Rose U-Dermira Sublicense for material breach prior to or simultaneously with an arbitrator decision to order such a conversion of the License Grant (such that the Side Letter Agreement would be terminated pursuant to Paragraph 11 thereof if the Rose U-Dermira Sublicense were terminated), then the License Grant shall remain as “exclusive (except as to Stiefel and its Affiliates).”

 

3.5.5                     For clarity, the definition of “Designated Sublicensee” shall include any permitted subsequent sublicensees permitted in accordance with this Section 3.5.

 

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ARTICLE 4.  PAYMENTS, AND PAYMENT TERMS

 

Section 4.1                                   Payments.  Subject to Section 4.3 (and, as applicable in the event the Rose U-Dermira Sublicense is terminated, Section 3.5.4), Rose U shall pay Stiefel [*] US dollars (US $[*]) upon [*] (the “[*] Payment”), at which point no further royalties or other amounts shall be due and payable and the license granted hereunder shall be deemed fully paid-up and royalty-free.

 

Section 4.2                                   Payment Terms.  Subject to Section 4.3, the [*] Payment shall be made directly by Rose U to Stiefel in US dollars, by wire transfer of immediately available funds to an account designated by Stiefel in writing, as Stiefel may update from time to time.  The [*] Payment shall be made within [*] following [*].  In no event shall Rose U have any right to reclaim the [*] Payment or any part thereof.

 

Section 4.3                                   Payment by Dermira or Subsequent Designated Sublicensee Directly to Stiefel.  The Parties acknowledge and agree that, through the Side Letter Agreement, Dermira has assumed Rose U’s obligation to pay the [*] Payment that arises from [*].  For clarity, no other obligations of Rose U, including any indemnity obligations hereunder, are being transferred to Dermira.  Accordingly, as long as the Side Letter Agreement remains in place, Stiefel will not seek payment of any such [*] Payment from Rose U, and will instead seek payment from Dermira pursuant to the terms of the Side Letter Agreement.  Similarly if the Rose U-Dermira Sublicense is terminated, and Rose U requests a subsequent Designated Sublicensee to replace Dermira and to enter into a Subsequent Side Letter Agreement with Stiefel, and Stiefel at its sole discretion elects to enter into such Subsequent Side Letter Agreement (all in accordance with Section 3.5.4 hereof), then such Designated Sublicensee would assume Rose U’s obligation to pay the [*] Payment that arises from [*] of a Licensed Product [*] by such Designated Sublicensee or its sublicensees.  Accordingly, in such case Stiefel would not seek payment of any such [*] Payment from Rose U, and would instead seek payment from the subsequent Designated Sublicensee pursuant to the terms of the Subsequent Side Letter Agreement.

 

ARTICLE 5.  REPRESENTATIONS AND WARRANTIES

 

Section 5.1                                   Stiefel Representations and Warranties.  Stiefel represents and warrants to Rose U as follows:

 

(a)                                 Stiefel has the full corporate right, power and authority to enter into and perform its obligations under this Agreement;

 

(b)                                 this Agreement is legally binding upon Stiefel and enforceable in accordance with its terms, and the execution, delivery, and performance of this Agreement by

 

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Stiefel does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound;

 

(c)                                  to Stiefel’s Knowledge, neither Stiefel nor any of its employees or any of its contractors involved in the [*] Program or their personnel, have been “debarred” by the FDA, or subject to a similar sanction from another regulatory, or convicted of a felony under the laws of the United States for conduct relating to regulations under the FDCA; and

 

(d)                                 other than as may be set forth in the Stiefel Data, to Stiefel’s Knowledge, it is not aware of any materially adverse regulatory action that has been taken or determination that has been made with respect to the [*] Program, nor to Stiefel’s Knowledge is it aware of any materially adverse safety or toxicology data relating to the use of topical products containing [*].

 

Section 5.2                                   Rose U Representations and Warranties. Rose U represents and warrants to Stiefel as follows:

 

(a)                                 Rose U has the full limited liability company right, power and authority to enter into and perform its obligations under this Agreement; and

 

(b)                                 this Agreement is legally binding upon Rose U and enforceable in accordance with its terms, and the execution, delivery, and performance of this Agreement by Rose U does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound.

 

Section 5.3                                   DISCLAIMER; NEGATION OF WARRANTIES.  EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 5, NEITHER STIEFEL NOR ROSE U MAKES ANY WARRANTIES OR REPRESENTATIONS (EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE) WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL WARRANTIES AND REPRESENTATIONS OF NONINFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

 

ARTICLE 6.  INDEMNIFICATION

 

Section 6.1                                   Subject to the limitations set forth in Article 7 hereof, and notwithstanding any transfer to Dermira or a subsequent Designated Sublicensee of Rose U’s obligation to make the [*] Payment, Rose U shall indemnify, defend, and hold Stiefel and its Affiliates, and their stockholders, employees, directors, officers, successors and assigns (individually and collectively “Indemnified Persons”) harmless from and against any claims, actions, suits, proceedings, demands, costs, expenses (including reasonable attorneys’ fees), liabilities and/or losses (collectively, “Losses”) arising out of or in connection with third party claims based on (a) the development, manufacture, use, sale or other disposition of Licensed Products by Rose U or any Designated Sublicensee, or (b) the use by any person of Licensed Products made, used, sold or otherwise distributed by Rose U or any Designated Sublicensee.

 

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Rose U shall contractually require Dermira to, and shall contractually require each subsequent Designated Sublicensee to, provide the same indemnity in favor of the Indemnified Persons as to each such Designated Sublicensee and its subsequent sublicensees.

 

Section 6.2                                   Indemnification and Defense Procedure.  An Indemnified Person shall reasonably promptly notify Rose U and any relevant Designated Sublicensee from which the Indemnified Person elects to seek indemnification under this Article 6 (each such Party, the “Indemnifying Party”) in writing, of any claim for which indemnification may be sought under this Article 6; provided however that any delay in notification shall not nullify any indemnification obligation except to the extent of actual prejudice.  The Indemnifying Party shall have the right, using counsel acceptable to the Indemnified Person, to control the investigation, trial, defense and settlement of such lawsuit or action (including all negotiations to effect a settlement) and any appeal arising therefrom, provided (a) that such claim involves (and continues to involve) solely monetary damages, (b) that the Indemnifying Party has notified the Indemnified Persons in writing of its intention to do so within [*] of receiving notice of a claim from the Indemnified Persons, and (c) that the Indemnifying Party shall diligently contest the claim (clauses a, b and c hereof, the “Litigation Conditions”).  The Indemnified Person may, at its own cost, participate in such investigation, trial and defense of such lawsuit or action and any resulting appeal.  At the Indemnifying Party’s expense, the Indemnified Person shall reasonably cooperate in good faith with it at all times during the pendency of the claim or lawsuit including, without limitation, promptly providing all available information and documents concerning the claim that are in the Indemnified Person’s possession.  The Indemnifying Party shall not have, or shall lose, as applicable, the right to control the investigation, trial, defense and settlement of such lawsuit or action in the event that any of the Litigation Conditions are not, or are no longer, met, as applicable.  An Indemnified Person’s consent shall be required in the event that any proposed compromise or settlement under this Article 6 (i) includes a finding or admission of any violation of any law by such Indemnified Person, or (ii) requires the payment of any money by the Indemnified Person, or (iii) requires the Indemnified Person to take, or to forebear taking, any action, or (iv) does not provide for a complete release by such third party claimant of the Indemnified Person.

 

ARTICLE 7.  LIMITATION OF LIABILITY

 

Section 7.1                                   IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY THIRD PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO THE LOSS OF OPPORTUNITY, OR LOSS OF REVENUE OR PROFIT HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

ARTICLE 8.  TERM; TERMINATION

 

Section 8.1                                   Term.  Unless terminated earlier as provided in this Agreement, the term of this Agreement shall commence on the Effective Date and continue in full force and effect until [*] from the Effective Date.  Upon expiration of the term, Rose U’s license to the Stiefel Data shall become an irrevocable, royalty free, sublicensable, non-exclusive license to

 

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the Stiefel Data.  Expiration of the term pursuant to this Section 8.1 shall not affect the assignment of rights pursuant to Section 3.1 herein.

 

Section 8.2                                   Termination for Breach.  Each Party shall be entitled to terminate this Agreement by written notice to the other Party in the event that the other Party commits a material breach of this Agreement and does not cure such breach within [*] after written notice from the non-breaching Party; provided, however, that the Release set forth in Section 2.2 is irrevocable.

 

Section 8.3                                   Effect of Termination.  Upon the termination of this Agreement other than pursuant to Section 8.1: (i) the licenses granted to Rose U under Section 3.2 (and the obligations to pay fees under Article 4) shall terminate; and (ii) any sublicense of the rights granted to Rose U hereunder shall automatically be assigned to and assumed by Stiefel, and shall remain in full force and effect with Stiefel as the licensor instead of Rose U (provided that, unless Stiefel agrees in writing otherwise, the obligations of Stiefel under the assigned sublicenses will not be greater than the obligations of Stiefel under this Agreement).  Expiration or termination of this Agreement for any reason shall not release the other Party hereto from any liability that at the time of such termination or expiration has already accrued to such other Party.

 

ARTICLE 9.  CONFIDENTIALITY

 

Section 9.1                                   Treatment of Confidential Information.  Each Party agrees (and Rose U agrees on behalf of each Designated Sublicensee) that all inventions, processes, materials, chemicals, know-how and ideas and all other business, technical and financial information it obtains from the other Party under this Agreement are the confidential property of the disclosing Party (“Confidential Information” of the disclosing Party).  Except as expressly allowed in this Agreement, the receiving Party will hold in confidence and not use or disclose any Confidential Information of the disclosing Party; provided, however, that Rose U and the Designated Sublicensees may disclose information relating to the Stiefel Data (a) to actual or potential Designated Sublicensees (including, for the avoidance of doubt, disclosure by Rose U to Dermira and disclosure by the Designated Sublicensees to each of its or their actual or potential Designated Sublicensees), investors or acquirers, provided that each such actual or potential Designated Sublicensee (including, for the avoidance of doubt, Dermira), investor or acquirer agrees in writing to abide by confidentiality and non-use restrictions similar to those contained in this paragraph, and (b) to consultants, contractors, suppliers and Affiliates, provided that each such consultant, contractor, supplier and Affiliate agrees in writing to abide by confidentiality and non-use restrictions similar to those contained in this paragraph, and (c) to legal, financial, and tax advisors of Rose U or Designated Sublicensees, provided that such advisors are subject to confidentiality obligations with respect to any Confidential Information.  No provision of this paragraph shall be interpreted to prevent Rose U or a Designated Sublicensee from making disclosures of Confidential Information to regulatory authorities as necessary: (i) for the research and development of Licensed Products; or (ii) to seek or obtain patents.  Notwithstanding anything to the contrary herein, in recognition of Dermira’s concerns with respect to disclosing to Stiefel the identities of its potential sublicensees of rights to commercialize Licensed Product except in the case that it actually enters into a sublicense with one (in which case a copy of the sublicense must be delivered to Stiefel in accordance with Section 3.5.2 hereof), the Parties agree that if Stiefel reasonably believes that such a third party may be using any of the Stiefel Data in

 

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breach of any confidentiality or non-use obligation to Rose U or Dermira or sublicense or other authorization provided by Rose U or Dermira, Stiefel may request in writing of Rose U whether Rose U or Dermira disclosed the Stiefel Data to such third party or an Affiliate or representative thereof, and Rose U shall answer Stiefel’s request, provided that answering such request does not constitute a breach of any legal obligation of Rose U or Dermira to such third party including representing to Stiefel whether Dermira made such a disclosure.  Rose U and Dermira will ensure that any non-disclosure or other agreement with such a third party under which Stiefel Data is disclosed, does not prevent Rose U or Dermira from making such a disclosure in response to a court order.

 

Section 9.2                                   Release from Restrictions.  The provisions of Section 9.1 shall not apply to any Confidential Information disclosed under this Agreement that:

 

(a)                                 was known or used by the receiving Party prior to its date of disclosure to the receiving Party, as evidenced by the prior written records of the receiving Party; or

 

(b)                                 either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party by sources other than the disclosing Party rightfully in possession of such information, and such source was not under a duty of confidentiality with respect to such information; or

 

(c)                                  either before or after the date of the disclosure to the receiving Party becomes published or generally known to the public, through no fault or omission on the part of the receiving Party or an affiliated party; or

 

(d)                                 is independently developed by or for the receiving Party without reference to or reliance upon the Confidential Information; or

 

(e)                                  is required to be disclosed by the receiving Party to comply with applicable laws, court order, or governmental regulations, provided that the receiving Party (i) provides (A) prior written notice of such disclosure requirement to the other Party and (B) an adequate opportunity to seek appropriate legal relief to prevent such disclosure or limit use and further disclosure of the Confidential Information and (ii) takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure, and provided, further, that the receiving Party shall furnish only such portion of the Confidential Information that is legally required to be disclosed and shall promptly inform the disclosing Party in writing of which portion of the Confidential Information was so disclosed.

 

Notwithstanding the foregoing or anything set forth herein or otherwise, and for the avoidance of doubt, [*] shall be considered to be Confidential Information.

 

ARTICLE 10.  DISPUTE RESOLUTION AND JURISDICTION

 

Section 10.1                            Mandatory Procedures.  The Parties agree that any dispute arising out of or relating to this Agreement shall be resolved solely by means of the procedures set forth in this Article, and that such procedures constitute legally binding obligations that are an essential

 

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provision of this Agreement.  If either Party fails to observe the procedures of this Article, as may be modified by their written agreement, the other Party may bring an action for specific performance of these procedures in any court of competent jurisdiction.

 

Section 10.2                            Negotiation.  The Parties shall endeavor to resolve in good faith any disputes or conflict arising from or relating to the subject matter of this Agreement, failing which either Party may submit such dispute for resolution to appropriate senior management of Rose U and Stiefel.  If such senior management representatives are unable to resolve such dispute within [*] after such conflict is submitted to them for resolution, either Party may refer the dispute for mediation as set forth in Section 10.3.

 

Section 10.3                            Mediation.  If the Parties are unable to resolve a dispute arising out of or relating to this Agreement through the negotiation procedures set forth in Section 10.2, the Parties agree that they shall submit such dispute for confidential mediation under the CPR Mediation Procedure then in effect at the start of mediation with the International Institute for Conflict Prevention & Resolution (www.cpradr.org) (the “CPR”).  Unless otherwise agreed, the Parties shall select a mediator from the CPR Panels of Distinguished Neutrals.  If the Parties cannot agree, they will defer to the CPR to select a mediator.  The cost of the mediator shall be borne equally by the Parties.  Any dispute not resolved within [*] (or within such other time period as may be agreed to by the Parties in writing) after appointment of a mediator shall be finally resolved by arbitration pursuant to Section 10.4.

 

Section 10.4                            Arbitration.  If the Parties are unable to resolve a dispute arising out of or relating to this Agreement through the negotiation procedures set forth in Section 10.2 and the mediation procedures set forth in Section 10.3, the Parties agree that they shall submit such dispute for final settlement via binding arbitration.  The arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the Parties, and heard before a single arbitrator as selected in accordance with the Commercial Arbitration Rules.  Such arbitration will be held in [*] and shall be conducted in English.  Each Party shall be responsible for its own expenses in connection therewith.  The Parties hereby submit to the non-exclusive jurisdiction of the United States District Court for the [*] for the limited purpose of enforcing this Agreement to arbitrate.  The arbitration award shall be final and binding, and judgment over the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Party and its assets.

 

ARTICLE 11.  GOVERNING LAW

 

Section 11.1                            This Agreement and all disputes arising out of or related to this Agreement shall be governed by the laws of the state of Delaware, without regard to conflict of laws principles.

 

ARTICLE 12.  NOTICE

 

Section 12.1                            Any notices required or permitted under this Agreement shall be in writing, in English, specifically refer to this Agreement, and shall be sent by prepaid registered

 

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or certified mail, return receipt requested; by recognized overnight courier; or by personal delivery, in each case addressed to the other Party as follows:

 

	
If to Rose U:
    	
 
    	
If to Stiefel:
    
	
 
    	
 
    	
 
    
	
Rose U LLC

[*]

Palo Alto, CA 94303

Attention: [*]
    	
 
    	
Stiefel Laboratories, Inc.

20 TW Alexander Drive

PO Box 14910

Research Triangle Park, N.C. 19102

Attention: Alliance Management
    
	
 
    	
 
    	
 
    
	
With a copy to:
    	
 
    	
With a copy to:
    
	
 
    	
 
    	
 
    
	
[*]

   

   
    	
 
    	
GlaxoSmithKline, LLC

2301 Renaissance Boulevard

Mail Code RN0220

King of Prussia, PA 19406

Attn: V.P. and Associate General Counsel

Legal Operations — Business Development   Transactions
    

 

Either Party may designate a different address, telephone number, or facsimile number by giving notice, pursuant to this Article, to the other Party.  Any notice given pursuant to this Article shall be deemed to have been given: (a) [*] after sent by prepaid registered or certified mail; (b) [*] after sent by recognized overnight courier and (c) when received if by personal delivery.

 

ARTICLE 13.  ASSIGNMENT

 

Section 13.1                            Neither Party may assign or transfer this Agreement or any rights or obligations under this Agreement, whether voluntary or by operation of law, without the prior written consent of the other Party, provided that (a) Stiefel shall be permitted to assign this Agreement in connection with the sale or disposition of all or substantially all of the assets or business to which this Agreement pertains, and (b) Rose U shall be permitted to assign this Agreement in connection with the sale or disposition of all or substantially all of the assets or business to which this Agreement pertains provided that, prior to Stiefel’s receipt of the [*] Payment and except in the case of a sale or disposition to Dermira or an Affiliate of Dermira (provided that in no event will Dermira or the Affiliate of Dermira be relieved of its liability to make the [*] Payment to Stiefel under the terms of the Side Letter Agreement), the assignee may not be a party to which the Stiefel Data has been sublicensed or any Affiliate thereof.  Any assignment or transfer or attempted assignment or transfer of this Agreement made in contravention of the terms of this Article shall be null, void

 

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and without effect.  Subject to the foregoing, this Agreement shall be binding on and inure to the benefit of the Parties’ respective successors and permitted assigns.

 

ARTICLE 14.  WAIVER

 

Section 14.1                            No failure or delay on the part of a Party in exercising any right under this Agreement will operate as a waiver of, or impair, any such right, unless a waiver is made in writing signed by the waiving Party.  No single or partial exercise of any such right will preclude any other or further exercise thereof or the exercise of any other right.  No waiver of any such right will be deemed a waiver of any other right under this Agreement.

 

ARTICLE 15.  PARTIAL INVALIDITY

 

Section 15.1                            If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction: (a) such provision will be deemed amended to conform to applicable laws of such jurisdiction so as to be valid and enforceable, or, if it cannot be so amended without materially altering the intention of the Parties, it will be stricken; (b) the remaining provisions shall remain in full force and effect; (c) the validity, legality and enforceability of such provision will not in any way be affected or impaired in any other jurisdiction and (d) the remainder of this Agreement will remain in full force and effect.  The Parties agree to renegotiate in good faith any term of this Agreement held to be invalid, illegal or unenforceable and agree to be bound by the mutually agreed substitute provision in order to give the most approximate effect intended by the Parties.

 

ARTICLE 16.  HEADINGS

 

Section 16.1                            All headings are for convenience only and shall not affect the meaning of any provision of this Agreement.

 

ARTICLE 17.  NO PUBLICITY

 

Section 17.1                            Neither Party shall make any public or press announcement or other disclosure to any third party about this Agreement, its terms or its business relationship with the other Party, without the prior written consent of the other Party; provided, that Rose U may disclose and may permit Dermira to disclose this agreement to a third party that is subject to confidentiality restrictions substantially similar to the proviso in Section 9.1 hereof in connection with a possible sublicense or other transaction relating to its rights hereunder to such third party.  The form and content of any such announcement shall be subject to the prior approval of each Party.

 

ARTICLE 18.  USE OF NAME, SYMBOLS AND MARKS

 

Section 18.1                            Stiefel and Rose U shall not use the name, symbols and/or marks of the other Party in any form of publicity without the prior written authorization of the other Party.  However, each Party has the right to use the other Party’s name on governmental filings and elsewhere as required by law.

 

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ARTICLE 19.  INDEPENDENT CONTRACTOR

 

Section 19.1                            Each Party’s status and relationship with the other Party shall be that of an independent contractor, and neither Party shall state or imply, directly or indirectly, that it is empowered or authorized to commit or bind the other Party or to incur any liabilities or expenses on behalf of the other Party or to enter into any oral or written agreement in the name of or on behalf of the other Party.  Nothing in this Agreement shall create, expressly or by implication, a partnership, joint venture, agency or other association of the Parties.

 

ARTICLE 20.  MULTIPLE COUNTERPARTS

 

Section 20.1                            This Agreement may be executed in two (2) identical counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

ARTICLE 21.  AMENDMENT

 

Section 21.1                            This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both Parties.

 

ARTICLE 22.  ENTIRE AGREEMENT

 

Section 22.1                            This Agreement including the Exhibits hereto constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements or understandings, oral or written, between the Parties relating to the subject matter of this Agreement.

 

ARTICLE 23.  NO THIRD PARTY BENEFICIARIES AND NO LIABILITY OF LLC MEMBERS

 

Section 23.1                            Nothing express or implied in this Agreement is intended to confer, nor shall anything herein confer, upon any person other than the Parties and their permitted successors or assigns any rights, remedies, obligations or liabilities whatsoever.  For the avoidance of doubt, [*] in their individual capacities shall have no personal liability or obligation to Stiefel or any other parties arising out of this Agreement and Stiefel will not bring a claim directly against [*] in their individual capacities relating to this Agreement; provided, that nothing in this Section shall limit any claims against Rose U.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the Parties have caused their duly authorized officers to execute and deliver this License and Post-Termination Agreement as of the Effective Date.

 

	
“STIEFEL”
    	
 
    	
“ROSE U”
    
	
STIEFEL   LABORATORIES, INC.
    	
 
    	
ROSE U, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature:
    	
 
    	
Signature:
    
	
 
    	
 
    	
 
    
	
/s/ Justin T. Huang
    	
 
    	
/s/ Jeffrey D. Urman
    
	
 
    	
 
    	
 
    
	
Print:
    	
 
    	
Print:
    
	
Justin T. Huang
    	
 
    	
Jeffrey D. Urman
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
Title:
    
	
Assistant Secretary 
    	
 
    	
Secretary / Treasurer
    
	
 
    	
 
    	
 
    
	
Date: 
    	
 
    	
Date: 
    
	
4/26/13
    	
 
    	
April 2, 2013
    

 

[SIGNATURE PAGE TO LICENSE AND POST-TERMINATION AGREEMENT]

 

 

Exhibit A-1

 

Stiefel Data

 

To the extent existing:

[*]

 

*Confidential Treatment Requested

 

 

Exhibit A-2

 

Program Inventory and Supplies

 

[*]

 

*Confidential Treatment Requested

 

 

Exhibit A-3

 

ASSIGNMENT

 

WHEREAS, [*], incorporated in [*], having an address of [*], a [*] of [*], a [*] corporation, having an address at [*], (collectively, hereinafter the “ASSIGNOR”), are the owner of the invention listed in Schedule I attached herewith (hereinafter the “Patents”), and

 

WHEREAS, Rose U, a limited liability corporation (hereinafter “ASSIGNEE”), having an address at [*], Palo Alto, California, 94303, is desirous of acquiring ASSIGNOR’s entire right, title and interest in and to said Patents, and in and to any application for or issued Letters Patent therefore, and any and all Letters Patent continuations, divisions, continuations in part, extensions, substitutions, reissues and reexaminations therefore;

 

NOW, THEREFORE, TO ALL WHOM IT MAY CONCERN, BE IT KNOWN, that the said ASSIGNOR’s, for and in consideration of the payment by ASSIGNEE of one dollar ($1.00) and other good and valuable consideration, hereby sells, assigns, transfers and conveys all right title and interest in and to the Patents to ASSIGNEE, its successors and assigns, ASSIGNOR’s entire right, title and interest in and to said Patents and any application for or issued Letters Patent therefore, including any extensions or adjustments in term thereof and any continuations, divisions, continuations-in-part, extensions, substitutions, reissues and reexaminations thereof, TO HAVE AND TO HOLD THE SAME;

 

AND the said ASSIGNOR, for the considerations aforesaid, does hereby covenant and agree to and with the said ASSIGNEE, its successors and assigns, that it has the full power to make this assignment and that the rights assigned are not encumbered by any grant, license or right heretofore given, and that said ASSIGNOR, it successors and assigns, shall and will use commercially reasonable efforts to procure or make, execute, and deliver any and all other instruments, and any and all further application papers; affidavits, assignments or other documents which may be required or necessary to secure to and vest in said ASSIGNEE, its successors and assigns, the whole right, title and interest in and to said Patents, Letters Patent, applications for Letters Patent, rights, title, benefits, privileges and advantages hereby sold, assigned, transferred and conveyed or intended so to be.

 

[Signature page follows]

 

*Confidential Treatment Requested

 

 

IN WITNESS WHEREOF, this agreement is executed below by an authorized representative of [*]:

 

	
 
    	
[*]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    

 

*Confidential Treatment Requested

 

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Schedule I to ASSIGNMENT

[*]

 

	
Country
    	
 
    	
Application Date
    	
 
    	
Application Number
    	
 
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*Confidential Treatment Requested

 

 

EXHIBIT B

 

DERMIRA — STIEFEL LETTER AGREEMENT

 

April 26, 2013

 

[*]

VP, Global Business Development & Licensing

Stiefel Laboratories, Inc.

20 TW Alexander Drive

PO Box 14910

Research Triangle Park, NC 19102

 

Re: Sublicense to Dermira, Inc. (“Dermira”) under the License and Post-Termination Agreement between Stiefel Laboratories, Inc. (“Stiefel”)  and Rose U LLC (“Rose U”) effective April 26, 2013 (the “License and Post-Termination Agreement”)

 

Dear [*]:

 

1)             As you know, Dermira is in the process of negotiating a license agreement with Rose U (the “Rose U-Dermira License Agreement”) which includes a sublicense of certain development data and related information which were licensed, in the first instance, by Rose U from Stiefel under the License and Post-Termination Agreement (the “Sublicense”).  Defined terms used in this letter agreement shall have the meaning given to them in the License and Post-Termination Agreement.

 

2)             Dermira now seeks certain agreements from Stiefel regarding the rights sublicensed by Rose U to Dermira which have as their source the License and Post-Termination Agreement and in return Stiefel requires Dermira to confirm certain obligations to Stiefel arising from such sublicense.

 

3)             Without in any way diminishing Dermira’s obligation to indemnify Stiefel set out below, Stiefel agrees that the obligation in Sections 3.5.2(i) and (iii) of the License and Post-Termination Agreement to include certain terms in sublicense agreements and the obligation to provide Stiefel with copies of sublicense agreements shall not apply to sublicense agreements entered into by Dermira or its Designated Sublicensees with contract research organizations, contract manufacturing organizations and similar third parties performing services for the benefit of Dermira or its Affiliates or Designated Sublicensees which sublicense does not include any right to commercialize Licensed Product.

 

4)             Consistent with Section 8.3 of the License and Post-Termination Agreement, in the event of a termination of the License and Post-Termination Agreement, the Sublicense granted by Rose U to Dermira under the Rose U-Dermira License Agreement shall survive such termination subject to the terms of the Rose U-Dermira License Agreement and this letter agreement and shall automatically be assigned to and assumed by Stiefel and remain in full force and effect with Stiefel as the licensor instead of Rose U, provided that, unless Stiefel agrees in writing otherwise, the obligations of Stiefel under the assigned Sublicense will not be greater than the obligations of Stiefel under this Agreement, and further provided that a default by Dermira was not the cause of such termination and at the time of such termination Dermira is not in material breach of the Rose U-Dermira License Agreement or this letter agreement.

 

5)             Dermira shall directly pay Stiefel the [*] Payment upon [*] (the “[*]”).  Dermira shall pay the [*] Payment directly to Stiefel in accordance with Section 4.2 of the License and Post-Termination Agreement.  Stiefel shall be entitled to terminate this letter agreement and the Sublicense to Dermira by written notice to

 

*Confidential Treatment Requested

 

 

Dermira in the event that Dermira fails to pay Stiefel the [*] Payment when due and does not cure such breach within [*] after written notice from Stiefel to Dermira.

 

6)             Dermira shall indemnify, defend, and hold Stiefel and its Affiliates, and their stockholders, employees, directors, officers, successors and assigns (individually and collectively “Indemnified Persons”) harmless from and against any claims, actions, suits, proceedings, demands, costs, expenses (including reasonable attorneys’ fees), liabilities and/or losses (collectively, “Losses”) arising out of or in connection with third party claims based on (a) the development, manufacture, use, sale or other disposition of Licensed Products (as such term is defined in the License and Post-Termination Agreement) by Dermira, any Dermira sublicensee or any subsequent sublicensee, or (b) the use by any person of Licensed Products made, used, sold or otherwise distributed by Dermira, any Dermira sublicensee or any subsequent sublicensee.  Dermira shall contractually require each of its sublicensees (other than contract research organizations, contract manufacturing organizations and similar third parties performing services for the benefit of Dermira or its Affiliates or Designated Sublicensees who do not receive any right to commercialize Licensed Product) to provide the same indemnity in favor of the Indemnified Persons as to such sublicensee and its subsequent sublicensees (subject to conditions and procedures substantially equivalent to those contained in paragraphs numbered 7 and 8 below).

 

7)             An Indemnified Person shall reasonably promptly notify Dermira and any relevant Designated Sublicensee from which the Indemnified Person elects to seek indemnification hereunder  (each such person, the “Indemnifying Party”) in writing, of any claim for which indemnification may be sought under this indemnification; provided however that any delay in notification shall not nullify any indemnification obligation except to the extent of actual prejudice.  The Indemnifying Party shall have the right, using counsel acceptable to the Indemnified Person, to control the investigation, trial, defense and settlement of such lawsuit or action (including all negotiations to effect a settlement) and any appeal arising therefrom, provided (a) that such claim involves (and continues to involve) solely monetary damages, (b) that the Indemnifying Party has notified the Indemnified Persons in writing of its intention to do so within [*] of receiving notice of a claim from the Indemnified Persons, and (c) that the Indemnifying Party shall diligently contest the claim (clauses a, b and c hereof, the “Litigation Conditions”).  The Indemnified Person may, at its own cost, participate in such investigation, trial and defense of such lawsuit or action and any resulting appeal.  At the Indemnifying Party’s expense, the Indemnified Person shall reasonably cooperate in good faith with it at all times during the pendency of the claim or lawsuit including, without limitation, promptly providing all available information and documents concerning the claim that are in the Indemnified Person’s possession.  The Indemnifying Party shall not have, or shall lose, as applicable, the right to control the investigation, trial, defense and settlement of such lawsuit or action in the event that any of the Litigation Conditions are not, or are no longer, met, as applicable.  An Indemnified Person’s consent shall be required in the event that any proposed compromise or settlement under this indemnification (i) includes a finding or admission of any violation of any law by such Indemnified Person, or (ii) requires the payment of any money by the Indemnified Person, or (iii) requires the Indemnified Person to take, or to forebear taking, any action, or (iv) does not provide for a complete release by such third party claimant of the Indemnified Person.

 

8)             IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO THE LOSS OF OPPORTUNITY, OR LOSS OF REVENUE OR PROFIT HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF THE OTHER PERSON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

9)             Subject to Paragraph 10 hereof, Dermira shall only have the right to assign this letter agreement to a third party in connection with an assignment of the Rose U-Dermira License Agreement arising from (a) a merger, consolidation or reorganization of Dermira or a sale of all or substantially all of the assets of Dermira (an “Acquisition Transaction”), or (b) a sale of all or substantially all of the assets of Dermira to which the Rose U-Dermira License Agreement relates (an “Assignment Transaction”), and Dermira agrees that it shall so assign this letter agreement in any such scenario where the Rose U-Dermira License Agreement has been assigned, provided that, in the case of an Assignment Transaction, (i) Dermira shall

 

*Confidential Treatment Requested

 

 

not be relieved of its obligations under this letter agreement but shall be jointly and severally liable with the assignee hereunder, and (ii)[*].  Any further assignments from Dermira or a subsequent assignee to a different third party assignee shall only be made in accordance with Paragraph 9 hereof, and, following an Assignment Transaction, Dermira shall continue not to be relieved of its obligations under this letter agreement but shall be jointly and severally liable with its assignee and any such further assignees hereunder.  Any assignment or transfer or attempted assignment or transfer of this letter agreement made in contravention of the terms of this Paragraph shall be null, void and without effect.  Subject to the foregoing, this letter agreement shall be binding on and inure to the benefit of Dermira’s respective successors and permitted assigns.

 

10)      Providing that the [*] Payment has not yet been made, until the [*] anniversary of the date hereof, Dermira shall use Commercially Reasonable Efforts to develop and commercialize a Licensed Product, whether by itself, through an Affiliate, or a through a Designated Sublicensee.  In the event that Stiefel reasonably believes Dermira is not using such Commercially Reasonable Efforts, Dermira and Stiefel shall meet to discuss the issue.  In the event that Dermira and Stiefel cannot reach resolution on such matter, Dermira and Stiefel agree to engage in a dispute resolution process equivalent to that set forth Article 10 of the License and Post-Termination Agreement.  Dermira and Stiefel agree that the result of such dispute resolution process by binding arbitration (but not pursuant to the negotiation in Section 10.2 or the non-binding mediation in Section 10.3, through which resolution Dermira and Stiefel may mutually agree as they choose) shall be limited to a finding by the arbitrator that either (a) Dermira owes Stiefel (i) none, (ii) all or (iii) some portion to be decided by the arbitrator of the [*] Payment, or that (b) the license grant to Rose U in the License and Post-Termination Agreement shall (i) be converted into a non-exclusive license such that Stiefel may license the Stiefel Data to other parties of its choice or (ii) shall remain in place with no change.  In the License and Post-Termination Agreement executed as the date hereof, Rose U is agreeing to such possibility of the conversion of the license grant to Rose U from “exclusive (except as to Stiefel and its Affiliates)” to “non-exclusive” as set forth in this Paragraph 10.  For the purposes of this Paragraph 10, “Commercially Reasonable Efforts” means efforts that, taken together, would constitute a reasonable level of effort by [*] to develop and commercialize in a [*] manner, one of such company’s [*] giving full consideration to all [*] .

 

11)      This letter agreement shall terminate upon any termination of the Rose U-Dermira License Agreement, unless such termination was effected by the acquisition of Rose U by Dermira or an Affiliate thereof, or unless, in a series of related transactions, Dermira’s [*] program related to the Rose U-Dermira License Agreement has been substantially divested and this letter agreement is terminated and not assigned in conjunction therewith and a new license agreement has been entered into by and between the assignee of Dermira’s [*] program related to the Rose U-Dermira License Agreement and Rose U, in either of which case this letter agreement shall not terminate. Notwithstanding the foregoing, paragraphs numbered 6, 7, 8, and this Paragraph 11 shall survive any termination of this letter agreement, and provided that Dermira’s obligations under Paragraph 5, 9 and 10 shall survive any termination of this letter agreement but only if the [*] Payment or payment obligation in Paragraph 9 or 10 accrued prior to termination but was not received by Stiefel prior to termination.

 

[Remainder of page intentionally blank]

 

*Confidential Treatment Requested

 

 

If you are in agreement with the foregoing, kindly sign and date this letter where indicated below and return an executed copy to me at your convenience.

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
/s/   Tom Wiggans
    
	
 
    	
Tom   Wiggans
    
	
 
    	
 
    
	
 
    	
Chief   Executive Officer
    

 

The foregoing is hereby agreed to

 

Stiefel Laboratories, Inc.

 

 

	
By:
    	
/s/   Justin T. Huang
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Justin   T. Huang
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Assistant   Secretary
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
4/26/13
    	
 
    

 

[SIGNATURE PAGE TO DERMIRA — STIEFEL LETTER AGREEMENT]

 

 

APPENDIX C

 

STIEFEL SIDE LETTER

 

(ATTACHED)Exhibit 10.11

 

DERMIRA, INC.

 

LOAN AND SECURITY AGREEMENT

 

Dermira, Inc. LSA Execution Version

 

 

This LOAN AND SECURITY AGREEMENT (the “Agreement”) is entered into as of December 11, 2013, by and between Square 1 Bank (“Bank”) and Dermira, Inc. (“Borrower”).

 

RECITALS

 

Borrower wishes to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower. This Agreement sets forth the terms on which Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank.

 

AGREEMENT

 

The parties agree as follows:

 

1.                                      DEFINITIONS AND CONSTRUCTION.

 

1.1                               Definitions. As used in this Agreement, all capitalized terms shall have the definitions set forth on Exhibit A. Any term used in the Code and not defined herein shall have the meaning given to the term in the Code.

 

1.2                               Accounting Terms. Any accounting term not specifically defined on Exhibit A shall be construed in accordance with GAAP and all calculations shall be made in accordance with GAAP (except for non-compliance with FASB Accounting Standards Codification Topic 718, Compensation — Stock Compensation in monthly reporting). The term “financial statements” shall include the accompanying notes and schedules.

 

2.                                      LOAN AND TERMS OF PAYMENT.

 

2.1                               Credit Extensions.

 

(a)                                 Promise to Pay. Borrower promises to pay to Bank, in lawful money of the United States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrower, together with interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms hereof.

 

(b)                                Term Loan A.

 

(i)                                     Subject to and upon the terms and conditions of this Agreement, Bank agrees to make one (1) term loan to Borrower in an aggregate principal amount equal to Two Million Dollars ($2,000,000) (the “Term Loan A”). Borrower hereby requests that Bank make the Term Loan A on or about the Closing Date. The proceeds of the Term Loan A shall be used for general working capital purposes and for capital expenditures.

 

(ii)                                Interest shall accrue from the date of the Term Loan A at the rate specified in Section 2.3(a), and prior to the Interest Only End Date shall be payable monthly beginning on the 11th day of the month next following such Term Loan A, and continuing on the same day of each month thereafter. Any Term Loan A that is outstanding on the Term Loan A Interest Only End Date shall be payable in 30 equal monthly installments of principal, plus all accrued interest, beginning on the last day of the month immediately following the Term Loan A

 

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Interest Only End Date, and continuing on the same day of each month thereafter through the Term Loan A Maturity Date, at which time all amounts due in connection with the Term Loan A and any other amounts due under this Agreement shall be immediately due and payable. The Term Loan A, once repaid, may not be reborrowed. Borrower may prepay the Term Loan A without penalty or premium.

 

(c)                                  Term Loan B.

 

(i)                           Subject to and upon the terms and conditions of this Agreement, Bank agrees to make one (1) term loan to Borrower in an aggregate principal amount not to exceed Five Million Five Hundred Thousand Dollars ($5,500,000) (the “Term Loan B”, and together with the Term Loan A, the “Term Loans”). Borrower may request the Term Loan B at any time from the Term Loan B Availability Start Date through the Term Loan B Availability End Date. The proceeds of the Term Loan B shall be used for general working capital purposes and for capital expenditures.

 

(ii)                        Interest shall accrue from the date of the Term Loan B at the rate specified in Section 2.3(a), and prior to the Term Loan B Interest Only End Date shall be payable monthly beginning on the 11th day of the month next following the Term Loan B, and continuing on the same day of each month thereafter. The Term Loan B that is outstanding on the Term Loan B Interest Only End Date shall be payable in equal monthly installments of principal, plus all accrued interest, beginning on the last day of the month immediately following the Term Loan B Interest Only End Date, and continuing on the same day of each month thereafter through the Term Loan B Maturity Date, at which time all amounts due in connection with the Term Loan B and any other amounts due under this Agreement shall be immediately due and payable. The Term Loan B, once repaid, may not be reborrowed. Borrower may prepay the Term Loan B without penalty or premium.

 

(iii)                   When Borrower desires to obtain the Term Loan B, Borrower shall notify Bank (which notice shall be irrevocable) by facsimile transmission to be received no later than 3:30 p.m. Eastern time on the day on which the Term Loan B is to be made. Such notice shall be substantially in the form of Exhibit C. The notice shall be signed by an Authorized Officer.

 

2.2                               Intentionally Left Blank.

 

2.3                               Interest Rates, Payments, and Calculations.

 

(a)                                 Interest Rates.

 

(i)                                    Term Loans. Except as set forth in Section 2.3(b), the Term Loans shall bear interest, on the outstanding daily balance thereof, at an annual rate equal to the greater of: (A) 5.10% above the Treasury Rate in effect on the date that a Term Loan is funded; or (B) 5.50%, which rate shall be fixed on the date of funding of such Term Loan.

 

(b)                                 Late Fee; Default Rate. If any payment is not made within 15 days after the date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) 5% of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under

 

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applicable law. All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to 5 percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default.

 

(c)                                  Payments. Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit accounts. Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder.

 

(d)                                 Computation. In the event the Treasury Rate is changed from time to time hereafter, the applicable rate of interest hereunder shall be increased or decreased, effective as of the day the Treasury Rate is changed, by an amount equal to such change in the Treasury Rate. All interest chargeable under the Loan Documents shall be computed on the basis of a 360 day year for the actual number of days elapsed.

 

2.4                               Crediting Payments. Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrower specifies. After the occurrence and during the continuance of an Event of Default, Bank shall have the right, in its sole discretion, to immediately apply any wire transfer of funds, check, or other item of payment Bank may receive to conditionally reduce Obligations, but such applications of funds shall not be considered a payment on account unless such payment is of immediately available federal funds or unless and until such check or other item of payment is honored when presented for payment. Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by Bank after 5:30 p.m. Eastern time shall be deemed to have been received by Bank as of the opening of business on the immediately following Business Day. Whenever any payment to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such extension.

 

2.5                            Fees. Borrower shall pay to Bank the following:

 

(a)                                 Intentionally Omitted.

 

(b)                                 Bank Expenses. On the Closing Date, all Bank Expenses incurred through the Closing Date, and, after the Closing Date, all Bank Expenses, as and when they become due.

 

(c)                                  Final Payment Fees. On the earlier of (i) the Term Loan A Maturity Date, or (ii) Borrower’s repayment in full of the Term Loan A, Borrower shall pay Bank a fee equal to 2.75% of the original principal amount borrowed under the Term Loan A. On the earlier of (i) the Term Loan B Maturity Date, or (ii) Borrower’s repayment in full of the Term Loan B, Borrower shall pay Bank a fee equal to 2.75% of the original principal amount borrowed under the Term Loan B. This Section 2.5(c) shall survive any termination of this Agreement.

 

2.6                               Term. This Agreement shall become effective on the Closing Date and, subject to Section 12.7, shall continue in full force and effect for so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement. Upon

 

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(a) indefeasible repayment of the Obligations and termination of this Agreement and Bank’s obligation to make Credit Extensions hereunder, and (b) Bank’s confirmation of such repayment and termination, all security interests granted pursuant to this Agreement shall terminate, and at such time Bank, at Borrower’s sole expense, shall promptly execute all documents and take all actions reasonably requested to terminate or more effectively evidence the termination of this Agreement and such security interests. Notwithstanding the foregoing, (a) Bank shall have the right to terminate its obligation to make Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default, and (b) Borrower shall have the right to terminate the Bank’s obligation to make Credit Extensions hereunder by providing written notice to Bank in accordance with the terms hereof, which notice shall be irrevocable.

 

3.                                      CONDITIONS OF LOANS.

 

3.1                                 Conditions Precedent to Closing. The agreement of Bank to enter into this Agreement on the Closing Date is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, each the following items and completed each of the following requirements:

 

(a)                                 this Agreement;

 

(b)                                 an officer’s certificate of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Agreement;

 

(c)                                  a financing statement (Form UCC-1);

 

(d)                                 Borrower shall have opened and funded not less than $10,000 in deposit accounts held with Bank;

 

(e)                                  payment of the fees and Bank Expenses then due specified in Section 2.5, which may be debited from any of Borrower’s accounts with Bank;

 

(f)                                   current SOS Reports indicating that except for Permitted Liens, there are no other security interests or Liens of record in the Collateral;

 

(g)                                 current financial statements, including audited statements (or such other level required by the Investment Agreement) for Borrower’s most recently ended fiscal year, together with an unqualified opinion (or an opinion qualified only for going concern so long as Borrower’s investors provide additional equity as needed), company prepared consolidated and consolidating balance sheets, income statements, and statements of cash flows for the most recently ended month in accordance with Section 6.2, and such other updated financial information as Bank may reasonably request;

 

(h)                                  current Compliance Certificate in accordance with Section 6.2;

 

(i)                                    a Warrant in form and substance satisfactory to Bank;

 

(j)                                    a Borrower Information Certificate;

 

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(k)                                  a Guarantee and a General Security Agreement, in each case duly executed by Dermira Canada, together with an Officer’s Certificate authorizing the execution and delivery of the foregoing;

 

(l)                                    confirmation by Bank that, on or before October 31, 2013, Borrower initiated Phase 2 clinical trials for at least two separate treatment programs (excluding the Phase 2A clinical trial program for LTS (lemuteporfin)); and

 

(m)                             such other documents or certificates, and completion of such other matters, as Bank may reasonably request.

 

3.2                               Conditions Precedent to all Credit Extensions. The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is contingent upon the Borrower’s compliance with Section 3.1 above, and is further subject to the following conditions:

 

(a)                                 timely receipt by Bank of the Loan Advance/Paydown Request Form as provided in Section 2.1;

 

(b)                                 Borrower shall be in compliance with Section 6.6 hereof; and

 

(c)                                  the representations and warranties contained in Section 5 shall be true and correct in all material respects on and as of the date of such Loan Advance/Paydown Request Form and on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit Extension (provided, however, that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date). The making of each Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2.

 

4.                                       CREATION OF SECURITY INTEREST.

 

4.1                                Grant of Security Interest. Borrower grants and pledges to Bank a continuing security interest in the Collateral to secure prompt repayment of any and all Obligations and to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents. Except for Permitted Liens or as disclosed in the Schedule, such security interest constitutes a valid, first priority security interest in the presently existing Collateral, and will constitute a valid, first priority security interest in later-acquired Collateral. Except for the granting of Permitted Liens and the making of Permitted Transfers, Borrower also hereby agrees not to sell, transfer, assign, mortgage, pledge, lease, grant a security interest in, or encumber any of its Intellectual Property. Notwithstanding any termination of this Agreement or of any filings undertaken related to Bank’s rights under the Code, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations are unpaid.

 

4.2                               Perfection of Security Interest. Borrower authorizes Bank to file at any time financing statements, continuation statements, and amendments thereto that (i) either specifically describe the Collateral or describe the Collateral as all assets of Borrower of the kind pledged hereunder, and (ii) contain any other information required by the Code for the sufficiency of

 

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filing office acceptance of any financing statement, continuation statement, or amendment, including whether Borrower is an organization, the type of organization and any organizational identification number issued to Borrower, if applicable. Borrower shall have possession of the Collateral, except where expressly otherwise provided in this Agreement or where Bank chooses to perfect its security interest by possession in addition to the filing of a financing statement. Where Collateral is in possession of a third party bailee (excluding materials and parts held by independent third parties in the normal course of development and testing, provided that the book value of such materials and parts do not exceed an aggregate amount of $2,000,000). Borrower shall take such steps as Bank reasonably requests for Bank to (i) subject to Section 7.10 below, obtain an acknowledgment, in form and substance satisfactory to Bank, of the bailee that the bailee holds such Collateral for the benefit of Bank, and (ii) obtain “control” of any Collateral consisting of investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such items and the term “control” are defined in Revised Article 9 of the Code) by causing the securities intermediary or depositary institution or issuing bank to execute a control agreement in form and substance satisfactory to Bank. Borrower will not create any chattel paper without placing a legend on the chattel paper acceptable to Bank indicating that Bank has a security interest in the chattel paper. Borrower from time to time may deposit with Bank specific cash collateral to secure specific Obligations. Borrower authorizes Bank to hold such specific cash balances in pledge and to decline to honor any drafts thereon or any request by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the specific Obligations are outstanding. Borrower shall take such other actions as Bank reasonably requests to perfect its security interests granted under this Agreement.

 

4.3                                Conflict with Security. If there is any conflict between the provisions of this Agreement and those of any security documents given by any guarantor of all or a portion of the Obligations, then the provisions of this Agreement shall prevail.

 

5.                                      REPRESENTATIONS AND WARRANTIES.

 

Borrower represents and warrants as follows:

 

5.1                               Due Organization and Qualification. Borrower and each Subsidiary is a corporation duly existing under the laws of the state in which it is organized and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified, except where the failure to do so would not reasonably be expected to cause a Material Adverse Effect.

 

5.2                               Due Authorization; No Conflict. The execution, delivery, and performance of the Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s Certificate of Incorporation or Bylaws, nor will they constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement by which it is bound, except to the extent such default would not reasonably be expected to cause a Material Adverse Effect.

 

5.3                               Collateral. Borrower has rights in or the power to transfer the Collateral, and its title to the Collateral is free and clear of Liens, adverse claims, and restrictions on transfer or

 

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pledge except for Permitted Liens. Other than movable items of personal property such as laptop computers, all Collateral having an aggregate book value not in excess of $100,000, is located solely in the Collateral States. All Inventory is in all material respects of good and merchantable quality, free from all material defects, except for Inventory for which adequate reserves have been made. Except as set forth in the Schedule, none of the Borrower’s Cash is maintained or invested with a Person other than Bank or Bank’s affiliates.

 

5.4                               Intellectual Property. Borrower is the sole owner of the intellectual property created or purchased by Borrower, except for licenses granted by Borrower to its customers in the ordinary course of business and Permitted Liens. To the best of Borrower’s knowledge, each of the Copyrights, Trademarks and Patents created or purchased by Borrower is valid and enforceable, and no part of the intellectual property created or purchased by Borrower has been judged invalid or unenforceable, in whole or in part, and no claim has been made to Borrower that any part of the intellectual property created or purchased by Borrower violates the rights of any third party except to the extent such claim would not reasonably be expected to cause a Material Adverse Effect.

 

5.5                               Name; Location of Chief Executive Office. Except as disclosed in the Schedule or following notice to Bank in compliance with Section 7.2 hereof, Borrower has not done business under any name other than that specified on the signature page hereof, and its exact legal name is as set forth in the first paragraph of this Agreement. Except following notice to Bank in compliance with Section 7.2 hereof, the principal offices of Borrower is located at the address indicated in Section 10 hereof.

 

5.6                               Litigation. Except as set forth in the Schedule, there are no actions or proceedings pending by or against Borrower or any Subsidiary before any court or administrative agency in which a likely adverse decision would reasonably be expected to have a Material Adverse Effect.

 

5.7                               No Material Adverse Change in Financial Statements. All consolidated and consolidating financial statements related to Borrower and any Subsidiary that are delivered by Borrower to Bank fairly present in all material respects Borrower’s consolidated and consolidating financial condition as of the date thereof and Borrower’s consolidated and consolidating results of operations for the period then ended. There has not been a material adverse change in the consolidated or in the consolidating financial condition of Borrower since the date of the most recent of such financial statements of Borrower submitted to Bank (the “Recent Financial Statements”).

 

5.8                               Solvency, Payment of Debts. Borrower is able to pay its debts (including trade debts) as they mature; the fair saleable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; and Borrower is not left with unreasonably small capital after the transactions contemplated by this Agreement.

 

5.9                               Compliance with Laws and Regulations. Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. No event has occurred resulting from Borrower’s failure to comply with ERISA that is reasonably likely to result in Borrower’s incurring any liability that could have a

 

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Material Adverse Effect. Borrower is not an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940. Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System). Borrower has not violated any statutes, laws, ordinances or rules applicable to it, the violation of which would reasonably be expected to have a Material Adverse Effect. Borrower and each Subsidiary have filed or caused to be filed all tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all taxes reflected therein except those being contested in good faith with adequate reserves under GAAP or where the failure to file such returns or pay such taxes would not reasonably be expected to have a Material Adverse Effect.

 

5.10                       Subsidiaries. Borrower does not own any stock, partnership interest or other equity securities of any Person, except for Permitted Investments.

 

5.11                        Government Consents. Borrower and each Subsidiary have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of Borrower’s business as currently conducted, except where the failure to do so would not reasonably be expected to cause a Material Adverse Effect.

 

5.12                        Inbound Licenses. Except as disclosed on the Schedule or following notification to Bank in compliance with Section 6.8 hereof, Borrower is not a party to, nor is bound by, any material license or other agreement important for the conduct of Borrower’s business that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property important for the conduct of Borrower’s business, other than this Agreement or the other Loan Documents.

 

5.13                        Full Disclosure. No representation, warranty or other statement made by Borrower in any certificate or written statement furnished to Bank taken together with all such certificates and written statements furnished to Bank contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading in light of the circumstances in which they were made, it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not to be viewed as facts and that actual results during the period or periods covered by any such projections and forecasts may differ from the projected or forecasted results.

 

6.                                      AFFIRMATIVE COVENANTS.

 

Borrower covenants that, until payment in full of all outstanding Obligations, and for so long as Bank may have any commitment to make a Credit Extension hereunder, Borrower shall do all of the following:

 

6.1                               Good Standing and Government Compliance. Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing in the respective states of formation, shall maintain qualification and good standing in each other jurisdiction in which the

 

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failure to so qualify would reasonably be expected to have a Material Adverse Effect, and shall furnish to Bank the organizational identification number issued to Borrower by the authorities of the state in which Borrower is organized, if applicable. Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. Borrower shall comply, and shall cause each Subsidiary to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, and shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which or failure to comply with which would reasonably be expected to have a Material Adverse Effect.

 

6.2                               Financial Statements, Reports, Certificates. Borrower shall deliver to Bank: (i) as soon as available, but in any event within 30 days after the end of each calendar month, a company prepared consolidated and consolidating balance sheet, statement of operations, and statement of cash flows covering Borrower’s operations during such period, in a form reasonably acceptable to Bank and certified by a Responsible Officer; (ii) as soon as available, but in any event within 180 days after the end of Borrower’s fiscal year, audited (or such other level as is required by the Investment Agreement) consolidated and consolidating financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an opinion which is either unqualified, qualified only for going concern so long as Borrower’s investors provide additional equity as needed or otherwise consented to in writing by Bank on such financial statements of Ernst & Young LLP; (iii) annual budget promptly after approval by Borrower’s Board of Directors, but no later than January 31 of each year during the term of this Agreement; (iv) if applicable, copies of all statements, reports and notices sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt and, if applicable, all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (v) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or any Subsidiary that could reasonably be expected to result in damages or costs to Borrower or any Subsidiary of $250,000 or more; (vi) promptly upon receipt, each management letter prepared by Borrower’s independent certified public accounting firm regarding Borrower’s management control systems; and (vii) such budgets, sales projections, operating plans or other financial information generally prepared by Borrower in the ordinary course of business as Bank may reasonably request in writing from time to time.

 

(a)                                  Within 30 days after the last day of each month, Borrower shall deliver to Bank with the monthly financial statements a Compliance Certificate certified as of the last day of the applicable month and signed by a Responsible Officer in substantially the form of Exhibit D hereto.

 

(b)                                 Within 3 calendar days after becoming aware of the occurrence or existence of an Event of Default hereunder, a written statement of a Responsible Officer setting forth details of the Event of Default, and the action which Borrower has taken or proposes to take with respect thereto.

 

(c)                                  Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time during Borrower’s usual business hours but no more than twice a year (unless an Event of Default has occurred and is continuing), to inspect Borrower’s Books and to make copies thereof and to check, test, inspect, audit and appraise the

 

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Collateral at Borrower’s expense in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral.

 

Borrower may deliver to Bank on an electronic basis any certificates, reports or information required pursuant to this Section 6.2, and Bank shall be entitled to rely on the information contained in the electronic files, provided that Bank in good faith believes that the files were delivered by a Responsible Officer. Borrower shall include a submission date on any certificates and reports to be delivered electronically.

 

6.3                               Inventory and Equipment; Returns. Borrower shall keep all Inventory and Equipment in good and merchantable condition, free from all material defects except for Inventory and Equipment (i) sold in the ordinary course of business, and (ii) for which adequate reserves have been made, in all cases in the United States and such other locations as to which Borrower gives prior written notice. Returns and allowances, if any, as between Borrower and its account debtors shall be on the same basis and in accordance with the usual customary practices of Borrower, as they exist on the Closing Date. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims involving inventory having a book value of more than $100,000.

 

6.4                               Taxes. Borrower shall make, and cause each Subsidiary to make, due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by law, including, but not limited to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability, and will execute and deliver to Bank, on demand, proof satisfactory to Bank indicating that Borrower or a Subsidiary has made such payments or deposits and any appropriate certificates attesting to the payment or deposit thereof; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower or such Subsidiary.

 

6.5                               Insurance. Borrower, at its expense, shall (i) keep the Collateral insured against loss or damage, and (ii) maintain liability and other insurance, in each case in as ordinarily insured against by other owners in businesses similar to Borrower’s. All such policies of insurance shall be in such form, with such companies, and in such amounts as reasonably satisfactory to Bank. All policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an additional loss payee, and all liability insurance policies shall show Bank as an additional insured and specify that the insurer must give at least 10 days notice to Bank before cancelling its policy for any reason. Within 30 days of the Closing Date, Borrower shall cause to be furnished to Bank a copy of its certificate of insurance including any endorsements covering Bank or showing Bank as an additional insured. Upon Bank’s request, Borrower shall deliver to Bank certified copies of the policies of insurance and evidence of all premium payments. Proceeds payable under any property policy will, at Borrower’s option, be payable to Borrower to replace the property subject to the claim, provided that any such replacement property shall be deemed Collateral in which Bank has been granted a first priority security interest, provided that if an Event of Default has occurred and is continuing, all proceeds payable under any such policy shall, at Bank’s option, be payable to Bank to be applied on account of the Obligations.

 

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6.6                                   Primary Accounts. Subject to the provisions of Section 3.1(d) and 3.2(b), Borrower and its Subsidiaries within 60 days of the Closing Date shall maintain all its depository and operating accounts with Bank and its primary investment accounts with Bank or Bank’s affiliates, provided, however, that Dermira Canada shall be permitted to maintain one or more accounts in Canada (the “Canadian Accounts”), so long as the aggregate balance maintained in the Canadian Accounts does not exceed $800,000 at any time.

 

6.7                               Product Covenants. Borrower shall at all times maintain the following product covenants:

 

(a)                                 Maintenance of Active Drug Development Programs. Borrower shall, at all times, maintain at least two active and ongoing drug development programs.

 

6.8                                Notice of Inbound Licenses. Within ten (10) days after entering into or becoming bound by any material inbound license or agreement, Borrower shall provide written notice to Bank of the material terms of such license or agreement with a description of its likely impact on Borrower’s business or financial condition.

 

6.9                               Creation/Acquisition of Subsidiaries. In the event any Borrower or any Subsidiary of any Borrower creates or acquires any Subsidiary, Borrower or such Subsidiary shall promptly notify Bank of such creation or acquisition, and Borrower or such Subsidiary shall take all actions reasonably requested by Bank to achieve any of the following with respect to such “New Subsidiary” (defined as a Subsidiary formed after the date hereof during the Term of this Agreement): (i) to cause New Subsidiary to become a co-Borrower hereunder, if such New Subsidiary is organized under the laws of the United States, any State thereof or the District of Columbia (a “Domestic Subsidiary”), or, any new Subsidiary which is not a Domestic Subsidiary (a “Foreign Subsidiary”) to become a secured guarantor with respect to the Obligations; and (ii) to grant and pledge to Bank a perfected security interest in 100% of the stock, units or other evidence of ownership held by Borrower or its Subsidiaries of any such Domestic Subsidiary, and 65% of the voting stock, units or other evidence of ownership held by Borrower or its Subsidiaries of any such Foreign Subsidiary.

 

6.10                        Further Assurances. At any time and from time to time Borrower shall execute and deliver such further instruments and take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement.

 

7.                                      NEGATIVE COVENANTS.

 

Borrower covenants and agrees that, so long as any credit hereunder shall be available and until the outstanding Obligations are paid in full or for so long as Bank may have any commitment to make any Credit Extensions, Borrower will not do any of the following without Bank’s prior written consent, which shall not be unreasonably withheld:

 

7.1                               Dispositions. Convey, sell, lease, license, transfer or otherwise dispose of (collectively, to “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, or move cash balances on deposit with Bank to accounts opened at another financial institution, other than Permitted Transfers.

 

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7.2                               Change in Name, Location, Executive Office, or Executive Management; Change in Business; Change in Fiscal Year; Change in Control. (i) Change its name or the state of Borrower’s formation or relocate its chief executive office without delivering written notification to Bank at least 10 days prior to such event; (ii) replace or suffer the departure of its chief executive officer without delivering written notification to Bank within 10 days following such event; (iii) fail to appoint an interim replacement or fill a vacancy in the position of chief executive officer for more than 90 consecutive days following the departure of such officer; (iv) (a) suffer a change on its board of directors which results in the failure of at least one partner, managing director, or principal of Bay City Capital or its Affiliates to serve as a voting member, (b) suffer a change on its board of directors which results in the failure of at least one partner, managing director, or principal of Canaan Partners or its Affiliates to serve as a voting member, (c) suffer a change on its board of directors which results in the failure of at least one partner, managing director, or principal of New Enterprise Associates or its Affiliates to serve as a voting member, or (d) suffer the resignation of one or more directors from its board of directors resulting directly from such director’s anticipation of Borrower’s insolvency, in each case without the prior written consent of Bank which may be withheld in Bank’s sole discretion; (v) take action to liquidate, wind up, or otherwise cease to conduct business in the ordinary course; (vi) engage in any business, or permit any of its Subsidiaries to engage in any business, other than or reasonably related or incidental to the businesses currently engaged in by Borrower; (vii) change its fiscal year end; or (viii) have a Change in Control (provided that, for the sake of clarity, Borrower shall be permitted to have a Change in Control so long as, simultaneously with the Change in Control, the Obligations are repaid in full and Bank’s obligation to make any Credit Extensions hereunder is terminated).

 

7.3                               Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or consolidations of a Subsidiary into another Subsidiary or into Borrower), or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person except where (a) each of the following conditions is applicable: (i) Borrower’s equity issued in such transaction is solely Borrower’s common stock; (ii) the consideration (excluding Borrower’s common stock) paid in connection with such transaction (including assumption of liabilities) does not cause the aggregate consideration (excluding Borrower’s common stock) to exceed $750,000 during any fiscal year of Borrower, (iii) no Event of Default has occurred, is continuing or would exist after giving effect to such transaction, (iv) such transaction does not result in a Change in Control, and (v) Borrower is the surviving entity; or (b) the Obligations are repaid in full concurrently with the closing of any merger or consolidation of Borrower in which Borrower is not the surviving entity; provided, however, that Borrower may not enter into any binding contractual arrangement with any Person to attempt to facilitate a merger or acquisition of Borrower unless (x) no Event of Default exists when such agreement is entered into by Borrower, (y) such agreement does not give such Person the right to claim any fee, payment or damages from any parties, other than from Borrower or Borrower’s investors, in connection with a sale of Borrower’s stock or assets pursuant to or resulting from an assignment for the benefit of creditors, an asset turnover to Borrower’s creditors (including, without limitation, Bank), foreclosure, bankruptcy or similar liquidation, and (z) Borrower notifies Bank in advance of entering into such an agreement (provided the failure to give such notice shall not be deemed a violation of this Agreement).

 

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7.4                               Indebtedness. Create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any Indebtedness, except Indebtedness to Bank.

 

7.5                               Encumbrances. Create, incur, assume or allow any Lien with respect to its property, or assign or otherwise convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens, or covenant to any other Person (other than (i) the licensors of in-licensed property with respect to such property or (ii) the lessors of specific equipment or lenders financing specific equipment with respect to such leased or financed equipment) that Borrower in the future will refrain from creating, incurring, assuming or allowing any Lien with respect to any of Borrower’s property.

 

7.6                               Distributions. Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock, except that Borrower may (i) repurchase the stock of former employees pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase, (ii) convert any of its convertible securities into other equity securities pursuant to the terms of such convertible securities or otherwise in exchange therefor, and (iii) repurchase the stock of former employees pursuant to stock repurchase agreements by the cancellation of indebtedness owed by such former employees to Borrower regardless of whether an Event of Default exists.

 

7.7                               Investments. Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments, or maintain or invest any of its Investment Property with a Person other than Bank or Bank’s Affiliates or permit any Subsidiary to do so unless such Person has entered into a control agreement with Bank, in form and substance satisfactory to Bank, or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise distributing property to Borrower.

 

7.8                               Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower (other than wholly-owned Subsidiaries) except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.

 

7.9                               Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in compliance with the terms of such Subordinated Debt, or amend any provision affecting Bank’s rights contained in any documentation relating to the Subordinated Debt without Bank’s prior written consent.

 

7.10                        Inventory and Equipment. Store the Inventory or the Equipment of a book value in excess of $100,000 with a bailee, warehouseman, collocation facility or similar third party unless the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Bank’s benefit or (b) is in possession of the warehouse receipt, where negotiable,

 

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covering such Inventory or Equipment. Except for Inventory sold in the ordinary course of business and for movable items of personal property having an aggregate book value not in excess of $100,000, and except for such other locations as Bank may approve in writing, Borrower shall keep the Inventory and Equipment only at the location set forth in Section 10 and such other locations of which Borrower gives Bank prior written notice and as to which Bank is able to take such actions as may be necessary to perfect its security interest or to obtain a bailee’s acknowledgment of Bank’s rights in the Collateral.

 

7.11                         No Investment Company; Margin Regulation. Become or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose.

 

8.                                      EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an Event of Default by Borrower under this Agreement:

 

8.1                               Payment Default. If Borrower fails to pay any of the Obligations when due;

 

8.2                               Covenant Default.

 

(a)                                 If Borrower fails to perform any obligation under Sections 6.2 (financial reporting), 6.4 (taxes), 6.5 (insurance), 6.6 (primary accounts) or 6.7 (product covenants), or violates any of the covenants contained in Article 7 of this Agreement; or

 

(b)                                 If Borrower fails or neglects to perform or observe any other material term, provision, condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition or covenant that can be cured, has failed to cure such default within 10 days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the 10 day period or cannot after diligent attempts by Borrower be cured within such 10 day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall not in any case exceed 30 days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made.

 

8.3                               Material Adverse Effect. If there occurs any circumstance or any circumstances which would reasonably be expected to have a Material Adverse Effect;

 

8.4                               Attachment. If any material portion of Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within 10 Business Days, or if Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a

 

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lien or encumbrance upon any material portion of Borrower’s assets, or if a notice of lien, levy, or assessment is filed of record with respect to any material portion of Borrower’s assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within ten days after Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower (provided that no Credit Extensions will be made during such cure period);

 

8.5                                   Insolvency. If Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced against Borrower and is not dismissed or stayed within 30 days (provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding);

 

8.6                               Other Agreements. If there is a default or other failure to perform in any agreement to which Borrower is a party with a third party or parties (a) resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of $700,000 or (b) in connection with any lease of real property material to the conduct of the Borrower’s business resulting in a right by the landlord to terminate such lease, which default is not cured within 10 days, or (c) that would reasonably be expected to have a Material Adverse Effect;

 

8.7                               Judgments. If a final, uninsured judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least $700,000 shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of 10 days (provided that no Credit Extensions will be made prior to the satisfaction or stay of the judgment); or

 

8.8                               Misrepresentations. Borrower or any Person acting for Borrower makes any material representation, warranty, or other statement, either now or later, in this Agreement, any Loan Document or in any writing delivered to Bank to induce Bank to enter into this Agreement or in any Loan Document, and such material representation, warranty, or other statement is incorrect in any material respect when made.

 

8.9                               Guaranty. If any guaranty of all or a portion of the Obligations (a “Guaranty”) ceases for any reason to be in full force and effect, or any guarantor fails to perform any material obligation under any Guaranty or a security agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any event of default occurs under any Guaranty Document or any guarantor revokes or purports to revoke a Guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty Document or in any certificate delivered to Bank in connection with any Guaranty Document, or if any of the circumstances described in Sections 8.3 through 8.8 occur with respect to any guarantor.

 

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9.                                      BANK’S RIGHTS AND REMEDIES.

 

9.1                               Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrower:

 

(a)                                 Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5 (insolvency), all Obligations shall become immediately due and payable without any action by Bank);

 

(b)                                 Demand that Borrower (i) deposit cash with Bank in an amount equal to the amount of any Letters of Credit remaining undrawn, as collateral security for the repayment of any future drawings under such Letters of Credit, and (ii) pay in advance all Letter of Credit fees scheduled to be paid or payable over the remaining term of the Letters of Credit, and Borrower shall promptly deposit and pay such amounts;

 

(c)                                  Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between Borrower and Bank;

 

(d)                                 Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Bank reasonably considers advisable;

 

(e)                                  Make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral. Borrower agrees to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes Bank to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect to any of Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise;

 

(f)                                   Set off and apply to the Obligations any and all (i) balances and deposits of Borrower held by Bank, and (ii) indebtedness at any time owing to or for the credit or the account of Borrower held by Bank;

 

(g)                                   Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit;

 

(h)                                 Sell the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower’s premises) as Bank determines is commercially reasonable, and apply any

 

16

 

proceeds to the Obligations in whatever manner or order Bank deems appropriate. Bank may sell the Collateral without giving any warranties as to the Collateral. Bank may specifically disclaim any warranties of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. If Bank sells any of the Collateral upon credit, Borrower will be credited only with payments actually made by the purchaser, received by Bank, and applied to the indebtedness of the purchaser. If the purchaser fails to pay for the Collateral, Bank may resell the Collateral and Borrower shall be credited with the proceeds of the sale;

 

(i)                                    Bank may credit bid and purchase at any public sale;

 

(j)                                    Apply for the appointment of a receiver, trustee, liquidator or conservator of the Collateral, without notice and without regard to the adequacy of the security for the Obligations and without regard to the solvency of Borrower, any guarantor or any other Person liable for any of the Obligations; and

 

(k)                                 Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrower.

 

Bank may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

 

9.2                               Power of Attorney. Effective only upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests for verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; and (g) file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral; provided Bank may exercise such power of attorney to sign the name of Borrower on any of the documents described in clause (g) above, regardless of whether an Event of Default has occurred. The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed and Bank’s obligation to provide advances hereunder is terminated.

 

9.3                               Accounts Collection. At any time after the occurrence and during the continuation of an Event of Default, Bank may notify any Person owing funds to Borrower of Bank’s security interest in such funds and verify the amount of such Account. Borrower shall collect all amounts owing to Borrower for Bank, receive in trust all payments as Bank’s trustee,

 

17

 

and immediately deliver such payments to Bank in their original form as received from the account debtor, with proper endorsements for deposit.

 

9.4                               Bank Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to Borrower: (a) make payment of the same or any part thereof; and/or (b) obtain and maintain insurance policies of the type discussed in Section 6.5 of this Agreement, and take any action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral. Any payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement.

 

9.5                               Bank’s Liability for Collateral. Bank has no obligation to clean up or otherwise prepare the Collateral for sale. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower.

 

9.6                               No Obligation to Pursue Others. Bank has no obligation to attempt to satisfy the Obligations by collecting them from any other person liable for them and Bank may release, modify or waive any collateral provided by any other Person to secure any of the Obligations, all without affecting Bank’s rights against Borrower. Borrower waives any right it may have to require Bank to pursue any other Person for any of the Obligations.

 

9.7                               Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default on Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and then shall be effective only in the specific instance and for the specific purpose for which it was given. Borrower expressly agrees that this Section 9.7 may not be waived or modified by Bank by course of performance, conduct, estoppel or otherwise.

 

9.8                               Demand; Protest. Except as otherwise provided in this Agreement, Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment and any other notices relating to the Obligations.

 

10.                               NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below:

 

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If to Borrower:
    	
 
    	
Dermira, Inc.
    
	
 
    	
 
    	
2055 Woodside Road
    
	
 
    	
 
    	
Redwood City, CA 94061
    
	
 
    	
 
    	
Attn: Chief Executive Officer
    
	
 
    	
 
    	
EMAIL: info@dermira.com
    
	
 
    	
 
    	
 
    
	
with a copy (which shall   not constitute notice) to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Fenwick & West LLP
    
	
 
    	
 
    	
Silicon Valley Center
    
	
 
    	
 
    	
555 California Street, 12th Floor
    
	
 
    	
 
    	
San Francisco, CA 94104
    
	
 
    	
 
    	
Attention: Douglas Cogen
    
	
 
    	
 
    	
 
    
	
If to Bank:
    	
 
    	
Square 1 Bank
    
	
 
    	
 
    	
406 Blackwell Street, Suite 240
    
	
 
    	
 
    	
Durham, North Carolina 27701
    
	
 
    	
 
    	
Attn: Loan Operations Manager
    
	
 
    	
 
    	
FAX: (919) 314-3080
    
	
 
    	
 
    	
 
    
	
with a copy to:
    	
 
    	
Square 1 Bank
    
	
 
    	
 
    	
2420 Sand Hill Rd.
    
	
 
    	
 
    	
Menlo Park, CA 94025
    
	
 
    	
 
    	
Attn: Monica Beam
    
	
 
    	
 
    	
FAX: (650) 243-2780
    

 

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.

 

11.                               CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of conflicts of law. Jurisdiction shall lie in the State of California. All disputes, controversies, claims, actions and similar proceedings arising with respect to Borrower’s account or any related agreement or transaction shall be brought in the Superior Court of San Mateo County, California or the United States District Court for the Northern District of California, except as provided below with respect to arbitration of such matters. BANK AND BORROWER EACH ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH OF THEM, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR CHOICE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTION OF ANY OF THEM. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN

 

19

 

MODIFIED IN ANY RESPECT OR RELINQUISHED BY BANK OR BORROWER, EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM. If the jury waiver set forth in this Section 11 is not enforceable, then any dispute, controversy, claim, action or similar proceeding arising out of or relating to this Agreement, the Loan Documents or any of the transactions contemplated therein shall be settled by final and binding arbitration held in San Mateo County, California in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with those rules. The arbitrator shall apply California law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration. Judgment upon any award resulting from arbitration may be entered into and enforced by any state or federal court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this Section. The costs and expenses of the arbitration, including without limitation, the arbitrator’s fees and expert witness fees, and reasonable attorneys’ fees, incurred by the parties to the arbitration may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator. Unless and until the arbitrator decides that one party is to pay for all (or a share) of such costs and expenses, both parties shall share equally in the payment of the arbitrator’s fees as and when billed by the arbitrator.

 

12.          GENERAL PROVISIONS.

 

12.1        Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties and shall bind all persons who become bound as a debtor to this Agreement; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank shall have the right without the consent of or notice to Borrower to sell, assign, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder.

 

12.2        Indemnification. Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank, its officers, employees and agents as a result of or in any way arising out of, following, or consequential to transactions between Bank and Borrower whether under this Agreement, or otherwise (including without limitation reasonable attorneys fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct.

 

12.3        Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.

 

12.4        Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

20

 

12.5        Amendments in Writing, Integration. All amendments to or terminations of this Agreement or the other Loan Documents must be in writing. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement and the other Loan Documents, if any, are merged into this Agreement and the Loan Documents.

 

12.6        Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Executed copies of the signature pages of this Agreement sent by facsimile or transmitted electronically in Portable Document Format (“PDF”), or any similar format, shall be treated as originals, fully binding and with full legal force and effect, and the parties waive any rights they may have to object to such treatment.

 

12.7        Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Bank has any obligation to make any Credit Extension to Borrower. The obligations of Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 12.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run.

 

12.8        Confidentiality. In handling any confidential information, Bank and Borrower and all employees and agents of such party shall exercise the same degree of care that such party exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such information may be made (i) in the case of Bank, to the subsidiaries or Affiliates of Bank or Borrower in connection with their present or prospective business relations with Borrower, (ii) in the case of Bank, to prospective transferees or purchasers of any interest in the Credit Extensions, provided that they have entered into a comparable confidentiality agreement in favor of Borrower and have delivered a copy to Borrower, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order, (iv) in the case of Bank, as may be required in connection with the examination, audit or similar investigation of Bank and (v) as Bank may determine in connection with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information that either: (a) is in the public domain or in the knowledge or possession of the receiving party when disclosed to such party, or becomes part of the public domain after disclosure to such receiving party through no fault of such receiving party; or (b) is disclosed to such receiving party by a third party, provided such receiving party does not have actual knowledge that such third party is prohibited from disclosing such information.

 

********

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

 

 

	
DERMIRA, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ Tom Wiggans
    	
 
    
	
 
    	
 
    	
 
    
	
Name: 
    	
Tom Wiggans
    	
 
    
	
 
    	
 
    	
 
    
	
Title: 
    	
CEO
    	
 
    
	
 
    	
 
    
	
SQUARE 1 BANK
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:  
    	
[ILLEGIBLE]
    	
 
    
	
 
    	
 
    	
 
    
	
Name: 
    	
[ILLEGIBLE]
    	
 
    
	
 
    	
 
    	
 
    
	
Title: 
    	
AVP
    	
 
    
				

 

22

 

EXHIBIT A

 

DEFINITIONS

 

“Accounts” means all presently existing and hereafter arising accounts, contract rights, payment intangibles and all other forms of obligations owing to Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other technology) or the rendering of services by Borrower and any and all credit insurance, guaranties, and other security therefore, as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.

 

“Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and general partners.

 

“Authorized Officer” means someone designated as such in the corporate resolution provided by Borrower to Bank in which this Agreement and the transactions contemplated hereunder are authorized by Borrower’s board of directors. If Borrower provides subsequent corporate resolutions to Bank after the Closing Date, the individual(s) designated as “Authorized Officer(s)” in the most-recently provided resolution shall be the only “Authorized Officers” for purposes of this Agreement.

 

“Bank Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, administration, and enforcement of the Loan Documents; reasonable Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses (whether generated in-house or by outside counsel) incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.

 

“Borrower’s Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment, containing such information.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of North Carolina are authorized or required to close.

 

“Cash” means unrestricted cash and cash equivalents.

 

“Change in Control” shall mean a transaction other than a bona fide equity financing or series of financings on terms and from investors reasonably acceptable to Bank in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of Borrower ordinarily entitled to vote in the election of directors, empowering such

 

A-1

 

“person” or “group” to elect a majority of the Board of Directors of Borrower, who did not have such power before such transaction.

 

“Closing Date” means the date of this Agreement.

 

“Code” means the California Uniform Commercial Code as amended or supplemented from time to time.

 

“Collateral” means the property described on Exhibit B attached hereto and all Negotiable Collateral to the extent not described on Exhibit B, except to the extent any such property (i) is non-assignable by its terms without the consent of the licensor thereof or another party (but only to the extent such prohibition on transfer is enforceable under applicable law, including, without limitation, §9406 and §9408 of the Code), (ii) the granting of a security interest therein is contrary to applicable law, provided that upon the cessation of any such restriction or prohibition, such property shall automatically become part of the Collateral, (iii) constitutes the capital stock of a controlled foreign corporation (as defined in the IRC), in excess of 65% of the voting power of all classes of capital stock of such controlled foreign corporations entitled to vote, or (iv) property (including any attachments, accessions or replacements) that is subject to a Lien that is permitted pursuant to clause (c) of the definition of Permitted Liens, if the grant of a security interest with respect to such property pursuant to this Agreement would be prohibited by the agreement creating such Permitted Lien or would otherwise constitute a default thereunder, provided, that such property will be deemed “Collateral” hereunder upon the termination and release of such Permitted Lien.

 

“Collateral State” means the state or states where the Collateral is located, which is California.

 

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

 

“Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published

 

A-2

 

or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held.

 

“Credit Extension” means the Term Loan A, the Term Loan B, or any other extension of credit, by Bank to or for the benefit of Borrower hereunder.

 

“Dermira Canada” means Dermira (Canada) Inc., a wholly owned subsidiary of Borrower organized under the laws of Canada.

 

“Equipment” means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which Borrower has any interest.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.

 

“Event of Default” has the meaning assigned in Article 8.

 

“GAAP” means generally accepted accounting principles, consistently applied, as in effect in the United States.

 

“Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, and (d) all Contingent Obligations, including but not limited to any sublimit contained herein.

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

 

“Inventory” means all present and future inventory in which Borrower has any interest.

 

“Investment” means any beneficial ownership of (including stock, partnership or limited liability company interest or other securities) any Person, or any loan, advance or capital contribution to any Person.

 

“Investment Agreement” means, collectively, Borrower’s stock purchase and other agreement(s) pursuant to which Borrower most recently issued its preferred stock.

 

“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

 

“Letter of Credit” means a commercial or standby letter of credit or similar undertaking issued by Bank at Borrower’s request.

 

“Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other

 

A-3

 

encumbrance.

 

“Loan Documents” means, collectively, this Agreement, any note or notes executed by Borrower, and any other document, instrument or agreement entered into in connection with this Agreement, all as amended or extended from time to time.

 

“Material Adverse Effect” means a material adverse effect on: (i) the operations, business or financial condition of Borrower and its Subsidiaries taken as a whole; (ii) the ability of Borrower to repay the Obligations or otherwise perform its obligations under the Loan Documents; or (iii) Borrower’s interest in, or the value, perfection or priority of Bank’s security interest in the Collateral.

 

“Negotiable Collateral” means all of Borrower’s present and future letters of credit of which it is a beneficiary, drafts, instruments (including promissory notes), securities, documents of title, and chattel paper, and Borrower’s Books relating to any of the foregoing.

 

“Obligations” means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement or any other agreement entered into in connection with this Agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise.

 

“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.

 

“Periodic Payments” means all installments or similar recurring payments that Borrower may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank.

 

“Permitted Indebtedness” means:

 

(a)           Indebtedness of Borrower in favor of Bank arising under this Agreement or any other Loan Document;

 

(b)           Indebtedness existing on the Closing Date and disclosed in the Schedule;

 

(c)           Indebtedness not to exceed $700,000 in the aggregate at any time secured by a lien described in clause (c) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed at the time it is incurred the lesser of the cost or fair market value of the property financed with such Indebtedness;

 

(d)           Subordinated Debt;

 

(e)           Indebtedness to trade creditors incurred in the ordinary course of business; and

 

A-4

 

(f)            Extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.

 

“Permitted Investment” means:

 

(a)           Investments existing on the Closing Date disclosed in the Schedule;

 

(b)           (i) Marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof, (ii) commercial paper maturing no more than one year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) Bank’s certificates of deposit maturing no more than one year from the date of investment therein, and (iv) Bank’s money market accounts; (v) Investments in regular deposit or checking accounts held with Bank or subject to a control agreement in favor of Bank; and (vi) Investments consistent with any investment policy adopted by the Borrower’s board of directors;

 

(c)           Repurchases of stock from former employees or directors of Borrower under the terms of applicable repurchase agreements (i) in an aggregate amount not to exceed $700,000 in any fiscal year, provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases, or (ii) in any amount where the consideration for the repurchase is the cancellation of indebtedness owed by such former employees to Borrower regardless of whether an Event of Default exists;

 

(d)           Investments accepted in connection with Permitted Transfers;

 

(e)   (i) Investments of Subsidiaries in or to other Subsidiaries or Borrower and Investments by Borrower in Subsidiaries (other than Dermira Canada) not to exceed $700,000 in the aggregate in any fiscal year, and (ii) Investments by Borrower in Dermira Canada not to exceed $1,500,000 in the aggregate in any fiscal year;

 

(f)    Investments not to exceed $700,000 outstanding in the aggregate at any time consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements approved by Borrower’s Board of Directors;

 

(g)   Investments in unfinanced capital expenditures in any fiscal year, not to exceed $700,000;

 

(h)   Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of Borrower’s business;

 

(i)    Investments consisting of notes receivable of, or prepaid royalties and other credit

 

A-5

 

extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business, provided that this subparagraph (h) shall not apply to Investments of Borrower in any Subsidiary;

 

(j)    Joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower do not exceed $700,000 in the aggregate in any fiscal year; and

 

(k)   Investments permitted under Section 7.3.

 

“Permitted Liens” means the following:

 

(a)           Any Liens existing on the Closing Date and disclosed in the Schedule (excluding Liens to be satisfied with the proceeds of the Credit Extensions) or arising under this Agreement, the other Loan Documents, or any other agreement in favor of Bank;

 

(b)           Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings and for which Borrower maintains adequate reserves;

 

(c)           Liens not to exceed $700,000 in the aggregate at any time (i) upon or in any Equipment (other than Equipment financed by a Credit Extension) acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such Equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such Equipment, or (ii) existing on such Equipment at the time of its acquisition, in each case provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such Equipment;

 

(d)           Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase;

 

(e)           Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.4 (attachment) or 8.7 (judgments);

 

(f)            Liens securing Subordinated Debt; and

 

(g)           Liens of bailees, carriers, warehousemen, suppliers, or other similar Persons that are possessory in nature arising in the ordinary course of business securing liabilities in the aggregate amount not to exceed One Hundred Thousand Dollars ($100,000) and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto.

 

“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition by Borrower or

 

A-6

 

any Subsidiary of:

 

(a)           Inventory in the ordinary course of business;

 

(b)           licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary course of business;

 

(c)           worn-out, surplus or obsolete Equipment not financed with the proceeds of Credit Extensions;

 

(d)           grants of security interests and other Liens that constitute Permitted Liens; and

 

(e)           other assets of Borrower or its Subsidiaries that do not in the aggregate exceed $700,000 during any fiscal year;

 

(f)            Cash in the ordinary course of business for the purpose of conducting Borrower’s day to day operations, so long as such transfer would not be prohibited by any other provision of this Agreement.

 

“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.

 

“Prime Rate” means the variable rate of interest, per annum, most recently announced by Bank, as its “prime rate,” whether or not such announced rate is the lowest rate available from Bank.

 

“Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, Vice President of Finance and the Controller of Borrower, as well as any other officer or employee identified in as an Authorized Officer in the corporate resolution delivered by Borrower to Bank in connection with this Agreement.

 

“Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any.

 

“SOS Reports” means the official reports from the Secretaries of State of each Collateral State, the state where Borrower’s chief executive office is located, the state of Borrower’s formation and other applicable federal, state or local government offices identifying all current security interests filed in the Collateral and Liens of record as of the date of such report.

 

“Subordinated Debt” means any debt incurred by Borrower that is subordinated in writing to the debt owing by Borrower to Bank on terms reasonably acceptable to Bank (and identified as being such by Borrower and Bank).

 

“Subsidiary” means any corporation, partnership or limited liability company or joint venture in which (i) any general partnership interest or (ii) more than 50% of the stock, limited liability company interest or joint venture of which by the terms thereof ordinary voting power to elect the Board of Directors, managers or trustees of the entity, at the time as of which any determination is being made, is owned by Borrower, either directly or through an Affiliate.

 

A-7

 

“Term Loan A Interest Only End Date” means October 31, 2014.

 

“Term Loan A Maturity Date” means April 30, 2017.

 

“Term Loan B Availability End Date” means October 31, 2014.

 

“Term Loan B Availability Start Date” means the achievement by Borrower of positive top-line results from at least one Phase 2 program which shall be satisfactory to Borrower’s board of directors in their sole discretion, and verified by Bank through a written document signed by the Borrower’s board of directors.

 

“Term Loan B Interest Only End Date” means the earlier of (a) December 31, 2014, or (b) six (6) months following the making of the Term Loan B.

 

“Term Loan B Maturity Date” means June 30, 2017.

 

“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

 

“Treasury Rate” means the variable rate of interest, per annum, most recently announced by Bank, as its “3 year constant maturity treasury rate”.

 

A-8

 

	
DEBTOR:
    	
DERMIRA, INC.
    
	
 
    	
 
    
	
SECURED PARTY:
    	
SQUARE 1 BANK
    

 

EXHIBIT B

 

COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT

 

All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether presently existing or hereafter created or acquired, and wherever located, including, but not limited to:

 

(a)      all accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), financial assets, general intangibles (including patents, trademarks, copyrights, goodwill, payment intangibles, domain names, and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records;

 

(b)      any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9 of the Uniform Commercial Code-Secured Transactions.

 

Notwithstanding the foregoing, the Collateral shall not include any of the intellectual property, in any medium, of any kind or nature whatsoever, now or hereafter owned or acquired or received by Borrower, or in which Borrower now holds or hereafter acquires or receives any right or interest (collectively, the “Intellectual Property”); provided, however, that the Collateral shall include all accounts and general intangibles that consist of rights to payment and proceeds from the sale, licensing or disposition of all or any part, or rights in, the foregoing (the “Rights to Payment”).

 

Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security interest in the Rights to Payment, then the Collateral shall automatically, and effective as of December 11, 2013, include the Intellectual Property to the extent and only to the extent necessary to permit perfection of Bank’s security interest in the Rights to Payment, and further provided, however, that Bank’s enforcement rights with respect to any security interest in the Intellectual Property shall be absolutely limited to the Rights to

 

B-1

 

Payment only, and Bank shall have no recourse whatsoever with respect to the underlying Intellectual Property.

 

B-2

 

EXHIBIT C

 

LOAN ADVANCE/PAYDOWN REQUEST FORM

 

[Please refer to New Borrower Kit]

 

C-1

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

[Please refer to New Borrower Kit]

 

D-1

 

SCHEDULE OF EXCEPTIONS

 

Permitted Indebtedness (Exhibit A) — Borrower owns 100% of the outstanding capital stock of Dermira (Canada), Inc.

 

Permitted Investments (Exhibit A) — None.

 

Permitted Liens (Exhibit A) — None.

 

Prior Names (Section 5.5) — Borrower did business as “Skintelligence, Inc.” from the date of incorporation on August 18, 2010 until Borrower changed its name to “Dermira, Inc.” pursuant to filing a Certificate of Amendment of Restated Certificate of Incorporation with the Secretary of State of the State of Delaware on September 9, 2011.

 

Litigation (Section 5.6) — None.

 

Inbound Licenses (Section 5.12) —

 

·                  Month-To-Month Lease Agreement by and between the Company and Woodside Road Holdings, LLC dated May 10, 2011, as amended by that certain First Amendment to Lease dated November 18, 2011.

 

D-1

 

CORPORATE RESOLUTION

 

The undersigned duly elected and qualified [Assistant] Secretary of Dermira, Inc. (the “Company”) do hereby certify that the following is a true and correct copy of certain resolutions adopted by the Company’s Board of Directors in accordance with applicable law and the Company’s bylaws, and that such resolutions are now unmodified and in full force and effect:

 

BE IT RESOLVED, that:

 

1)             Any one (1) of the following, duly elected officers of the Company (each, an “Authorized Officer”) whose genuine original signature appears next to his or her name is authorized to act for, on behalf of, and in the name of the Company in connection with the resolutions below:

 

	
Title
    	
 
    	
Name
    	
 
    	
Authorized Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
CEO
    	
 
    	
Tom   Wiggans
    	
 
    	
/s/   Tom Wiggans
    

 

2)             Any Authorized Officer may borrow money from time to time from Bank, and may negotiate and procure loans, letters of credit, foreign exchange contracts and other financial accommodations from Bank, including without limitation, that certain Loan and Security Agreement dated as of December 11, 2013, and also to execute and deliver to Bank one or more renewals, extensions, or modifications thereof;

 

a)             Give security for any liabilities of the Company to Bank by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of the Company;

 

b)             Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by the Company, whether or not registered in the name of the Company;

 

c)              Discount with the Bank, commercial or other business paper belonging to the Company made or drawn by or upon third parties, without limit as to amount;

 

d)             The Bank is authorized and directed to pay the proceeds of any such loans or discounts as directed by the persons so authorized to sign;

 

e)              Issue a warrant or warrants to purchase the Company’s capital stock; and

 

2

 

f)               Execute and deliver in Form and content as may be required by the Bank any and all notes, evidences of indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, any or all of which may relate to all or to substantially all of the Company’s property and assets;

 

3)             The Authorized Officers may designate additional or alternate individuals as being authorized to request loan advances, to do and perform such other acts and things, to pay any and all fees and costs, and to execute and deliver such other documents and agreements as he or she may in his or her discretion deem reasonably necessary or proper in order to carry into effect the provisions of these Resolutions.

 

4)             Any and all acts authorized pursuant to these resolutions and performed prior to the passage of these resolutions are hereby ratified and approved, and the authority conferred herein may be exercised singly by any such officer, and these resolutions shall continue in full force and effect until written notice of modification or revocation is received and accepted by Bank (such notice to have no effect on any action previously taken by the Bank in reliance on these Resolutions). Bank may rely upon any form of notice, which it in good faith believes to be genuine or what it purports to be.

 

5)             The Resolutions are in full force and effect as of the date of this Certificate and are intended to replace, as of this date, any Resolutions previously given by the Company to Bank in connection with the matters described herein; these Resolutions and any borrowings or financial accommodations under these Resolutions have been properly noted in the corporate books and records, and have not been rescinded, revoked or modified; neither the foregoing Resolutions nor any actions to be taken pursuant to them are or will be in contravention of any provision of the articles of incorporation or bylaws of the Company or of any agreement, indenture or other instrument to which the Company is a party or by which it is bound; and to the extent the articles of incorporation or bylaws of the Company or any agreement, indenture or other instrument to which the Company is a party or by which it is bound require the vote or consent of shareholders of the Company to authorize any act, matter or thing described in the foregoing Resolutions, such vote or consent has been obtained.

 

In Witness Whereof, I have affixed my name as [Assistant] Secretary and have caused the corporate seal (where available} of said Company to be affixed on December 11, 2013,

 

 

	
 
    	
/s/ Tom Wiggans
    
	
 
    	
[Assistant] Secretary*
    

 

*If the certifying officer is designated as the only signer in these resolution then another corporate officer must also sign.

 

	
 
    	
/s/ Eugene Bauer
    

 

3

 

USA PATRIOT ACT

NOTICE

OF

CUSTOMER IDENTIFICATION

 

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

 

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.

 

WHAT THIS MEANS FOR YOU: when you open an account, we will ask your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

 

D-4

 

SQUARE 1 BANK

AUTOMATIC DEBIT AUTHORIZATION

Member FDIC

 

To: Square 1 Bank

 

Re: Loan #

 

You are hereby authorized and instructed to charge account No.       in the name of Dermira, Inc. for facility fees, principal, interest and other payments due on above referenced loan as set forth below and credit the loan referenced above.

 

o Debit the Facility Fee as it becomes due according to the terms of the Loan and Security Agreement and any renewals or amendments thereof.

 

x Debit each interest payment as it becomes due according to the terms of the Loan and Security Agreement and any renewals or amendments thereof.

 

x Debit each principal payment as it becomes due according to the terms of the Loan and Security Agreement and any renewals or amendments thereof.

 

x Debit each payment for Bank Expenses as it becomes due according to the terms of the Loan and Security Agreement and any renewals or amendments thereof.

 

This Authorization is to remain in full force and effect until revoked in writing.

 

	
Borrower Signature
    	
/s/ Tom Wiggans
    	
 
    	
Date
    	
12/11/13
    

 

5

 

We are excited to have you as a Square 1 Bank client and want to spread the word about your success!

 

From press releases to mentions on social media sites, and all points in between. Square 1’s marketing and communications team is constantly seeking new opportunities to promote our clients and to connect them to prospects, existing customers, and the larger entrepreneurial/venture capital community.

 

If you complete the authorization below and return it to us, you are authorizing us to reference and or include your company as part of our marketing and advertising efforts without further review or advance approval by you. Please select all areas that you approve.

 

o                 All items listed below

o                 List company as a Square 1 Bank customer on social media sites, including Twitter, Linkedln, Facebook, Square I Bank corporate blog, or any other social media site

o                 Press release including your company as a Square 1 Bank client (to include company name and description only; may appear alongside other clients)

o                 Press release including your company as a Square 1 Bank client (general press release not focused on your company, but referring to your company as a client, and including your company’s name, description, and editorial comments; may appear alongside other clients)

o                 Provide quote for inclusion in a Square 1 Bank press release

o                 Use of company name and logo in Square 1 Bank marketing materials including corporate marketing collateral, website, social media sites, and other advertising campaigns

o                 Provide quotes for inclusion in Square 1 Bank marketing materials including corporate marketing collateral, website, social media sites, and other advertising campaigns

o                 Customer case study/application brief (success story to be posted on website, included in press kits and/or pitched to publications as potential articles)

o                 Willing to participate in a video testimonial highlighting your banking relationship and experiences with Square 1 Bank

o                 Other (please describe):

None

 

If you have questions, please contact your Square I banker, or our Marketing Communications department at marketing@square1bank.com

 

Please acknowledge your authorization by signing below:

 

	
Company Name:
    	
Dermira, Inc.
    	
 
    
	
 
    	
 
    	
 
    
	
Authorized Signer:
    	
/s/ Tom Wiggans
    	
 
    
	
 
    	
 
    	
 
    
	
Name :
    	
Tom Wiggans
    	
 
    
	
 
    	
 
    	
 
    
	
Title :
    	
CEO
    	
 
    
	
 
    	
 
    	
 
    
	
Date :
    	
12/11/13
    	
 
    

 

6

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