EXHIBIT 10.3
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. OMISSIONS ARE DESIGNATED [***].
Execution Version
Fifth AMENDMENT and Waiver TO CREDIT AGREEMENT
This FIFTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of August 2, 2024 by and among VERRICA PHARMACEUTICALS INC., a Delaware corporation (the “Borrower”), the Lenders party hereto (the “Lenders”), and ORBIMED ROYALTY & CREDIT OPPORTUNITIES IV, LP, as administrative agent for the Lenders (together with its Affiliates, successors, transferees and assignees, the “Administrative Agent”).
WHEREAS, the Borrower, the Lenders and the Administrative Agent entered into a Credit Agreement, dated as of July 26, 2023 (as amended by that First Amendment to Credit Agreement, dated as of December 20, 2023, as further amended by that certain Second Amendment to Credit Agreement, dated as of January 31, 2024, as further amended by that certain Third Amendment and Waiver to Credit Agreement, dated as of May 6, 2024, and as further amended by that certain Fourth Amendment to Credit Agreement, dated as of June 26, 2024 the “Existing Credit Agreement”; the Existing Credit Agreement as amended by this Amendment and as may be further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have extended credit to the Borrower on the terms set forth therein;
WHEREAS, pursuant to Section 7.1(b) of the Credit Agreement, the Borrower is required, among other things, to deliver to the Administrative Agent consolidated financial statements of the Borrower and its Subsidiaries for each Fiscal Quarter, which financial statements shall be without any “going concern” or like qualification (the “Going Concern Requirement”);
WHEREAS, the Borrower has requested that the Lenders waive, solely in respect of the Borrower’s quarterly unaudited financial statements for the Fiscal Quarters ended June 30, 2024 and September 30, 2024 (the “Specified Quarterly Financials”), the Going Concern Requirement, and the Lenders agree to provide such waiver on the terms and subject to the conditions set forth herein;
WHEREAS, pursuant to Section 10.1 of the Credit Agreement, the Credit Agreement may be amended or waived by an instrument in writing signed by the Borrower and the Lenders and acknowledged by the Administrative Agent; and
WHEREAS, the Borrower and the Lenders desire to amend certain provisions of the Existing Credit Agreement as provided in this Amendment.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Test Dates | Ycanth Revenue Base for the 12-month period ending on such Test Date |
December 31, 2024 | $[***] |
March 31, 2025 | $[***] |
June 30, 2025 | $[***] |
September 30, 2025 | $[***] |
December 31, 2025 | $[***] |
March 31, 2026 and each Fiscal Quarter ending thereafter | $[***] |
SECTION 3.8 Exit Fee. Upon the prepayment or repayment of principal of all or any portion of any Loans (or upon the date any such prepayment or repayment is required to be paid), whether on the Maturity Date, or pursuant to Section 3.2, Section 9.2, Section 9.3, or otherwise, the Borrower shall pay to the Administrative Agent for the account of each Lender, in cash, on the date on which such prepayment or repayment is paid or required to be paid, as the case may be, in addition to the other Obligations (including the Repayment Premium, if any) so prepaid, repaid or required to be prepaid or repaid, a fee (the “Exit Fee”) in an amount equal to (a) with respect to any prepayment or repayment of any Initial Loans, seven and a half percent (7.50%), or (b) with respect to any prepayment or repayment of any Loans other than Initial Loans, five percent (5.00%), in each case, of the principal amount of the Loans prepaid, repaid or required to be prepaid or repaid, as the case may be, on such date.
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A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release, and that if known by him or her, would have materially affected his or her settlement with the debtor or released party.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.
| VERRICA PHARMACEUTICALS INC. as the Borrower |
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| By: /s/ Terry Kohler |
| Name: Terry Kohler |
| Title: Chief Financial Officer |
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[Signature Page to Fifth Amendment and Waiver to Credit Agreement]
ORBIMED ROYALTY & CREDIT OPPORTUNITIES IV, LP,
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By: OrbiMed ROF IV LLC, |
its General Partner
By: OrbiMed Advisors LLC, its Managing Member |
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By: /s/ Matthew Rizzo |
Name: Matthew Rizzo |
Title: Member
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ORBIMED ROYALTY & CREDIT OPPORTUNITIES IV OFFSHORE, LP,
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By: OrbiMed ROF IV LLC, |
its General Partner
By: OrbiMed Advisors LLC, its Managing Member |
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By: /s/ Matthew Rizzo |
Name: Matthew Rizzo |
Title: Member
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[Signature Page to Fifth Amendment and Waiver to Credit Agreement]
ACKNOWLEDGED BY: ORBIMED ROYALTY & CREDIT OPPORTUNITIES IV, LP |
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By: OrbiMed ROF IV LLC, |
its General Partner
By: OrbiMed Advisors LLC, its Managing Member |
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By: /s/ Matthew Rizzo |
Name: Matthew Rizzo |
Title: Member |
[Signature Page to Fifth Amendment and Waiver to Credit Agreement]