EX-10.2 2 derm-20220331xex10d2.htm EX-10.2

Exhibit 10.2

CONSENT AND FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

This CONSENT AND FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (“Consent”) is entered into as of March 3_1_, 2021 by and between EAST WEST BANK (“Bank”) and JOURNEY MEDICAL CORPORATION (“Journey”) and JG PHARMA, INC. (“JG”; Journey and JG are sometimes referred to, individually, as a “Borrower” and, collectively, the “Borrowers”).

RECITALS

A.Borrowers and Bank are parties to a Loan and Security Agreement dated as of March 31, 2021 (as amended from time to time, the “Agreement”).

B.Journey proposes to enter into an Asset Purchase Agreement with Dermira, Inc. relating to the Qbrexza®product dated as of March 31, 2021 (the “Acquisition Agreement”; and the transaction contemplated by the Acquisition Agreement is sometimes referred to as the “Acquisition”). Section 7.3 of the Agreement prohibits consummation of the Acquisition. Bank wishes to consent to the Acquisition in accordance with the terms of this Consent and amend the terms of the Agreement as set forth below.

NOW, THEREFORE, the parties agree as follows:

1.Schedule 6.9 in Section 6.9(b) of the Agreement is replaced by Schedule 6.9 attached hereto.
2.Notwithstanding the provisions of Section 7.3 of the Agreement, Bank consents to the execution, delivery and performance of the Acquisition Agreement and consummation of the Acquisition, provided an Event of Default does not exist immediately before consummation of the Acquisition nor immediately after giving effect to the Acquisition.
3.Borrowers shall provide an execution version of the Acquisition Agreement to Bank prior to signing, and such version shall be substantially in the form as provided to Lender prior to the Closing Date.
4.Unless otherwise defined, all initially capitalized terms in this Consent shall be as defined in the Agreement. Except as amended hereby, the Agreement remains in full force and effect.
5.Borrowers represent and warrant that (i) the Acquisition Agreement presented to Bank as of the date hereof is a true and correct copy of the Acquisition Agreement and (ii) the representations and warranties contained in the Agreement are true and correct as of the date of this Consent in all material respects (provided, however, that (a) those representations and warranties that are qualified by materiality shall be true and correct as of the date of this Consent and (b) those representations and warranties expressly referring to another date shall be true, correct and complete as of such date).
6.This Consent may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.
7.As a condition to the effectiveness of this Consent, Bank shall have received, in form and substance satisfactory to Bank, the following:
(a)this Consent;
(b)copy of the Acquisition Agreement executed by the parties thereto;
(c)evidence that Journey has received at least $11,000,000 of proceeds, net of transaction fees and expenses, from the sale or issuance of its equity or Subordinated Debt securities, to finance the Acquisition;
(d)payment of an amount equal to all Bank Expenses incurred through the date of this Consent; and

(e)such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned have executed this Consent as of the first date above written.

JOURNEY MEDICAL CORPORATION

By:

/s/ Claude Maraoui

Name:

Claude Maraoui

Title:

President & CEO

JG PHARMA, INC

By:

/s/ Claude Maraoui

Name:

Claude Maraoui

Title:

President & CEO

EAST WEST BANK

By:

/s/ James Tai

Name:

James Tai

Title:

Managing Director / Head of Life Sciences


SCHEDULE 6.9 MINIMUM EBITDA

Performance To Plan Covenant Schedule (including Qbrexza)

Required EBIDA with Qbrexza

Jan-21

$1

Measured on trailing 3 month basis

Feb-21

$1

Measured on trailing 3 month basis

Mar-21

$1

Measured on trailing 3 month basis

Apr-21

$3,313,700

Measured on trailing 12 month basis

May-21

$4,189,471

Measured on trailing 12 month basis

Jun-21

$3,853,431

Measured on trailing 12 month basis

Jul-21

$3,551,014

Measured on trailing 12 month basis

Aug-21

$4,061,947

Measured on trailing 12 month basis

Sep-21

$4,311,640

Measured on trailing 12 month basis

Oct-21

$3,285,153

Measured on trailing 12 month basis

Nov-21

$4,266,680

Measured on trailing 12 month basis

Dec-21

$3,998,521

Measured on trailing 12 month basis

Mar-22

$4,288,252

Measured on trailing 12 month basis

Jun-22

$4,911,967

Measured on trailing 12 month basis

Sep-22

$5,834,753

Measured on trailing 12 month basis

Dec-22

$7,271,030

Measured on trailing 12 month basis

Mar-23

$9,182,798

Measured on trailing 12 month basis

Jun-23

$10,516,152

Measured on trailing 12 month basis

Sep-23

$11,599,416

Measured on trailing 12 month basis

Dec-23

$11,448,978

Measured on trailing 12 month basis

Mar-24

$12,266,637

Measured on trailing 12 month basis