1
EXHIBIT 4.2
PENEDERM INCORPORATED
COMMON STOCK
PURCHASE AGREEMENT
MARCH 3, 1997
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NOTICE TO PURCHASERS IN ALL STATES:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED
BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY
OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
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TABLE OF CONTENTS
PAGE
SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . 1.
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . 1.
2.1 Sale of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2.2 Separate Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
SECTION 3. CLOSING AND DELIVERY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
3.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
3.2 Delivery of the Shares at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . 2.
4.1 Organization and Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
4.2 Corporate Power; Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
4.3 Issuance and Delivery of the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4.4 Confidential Offering Memorandum; SEC Documents; Financial Statements . . . . . . . . . . 3.
4.5 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4.6 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
4.7 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
4.8 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
4.9 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
4.10 Listing; Maintenance of Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS . . . . . . . . . . . . . . . 4.
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS . . . . . . . . . . . . . . . . . . 6.
SECTION 7. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING . . . . . . . . . . . . . . . . . . . . 6.
7.1 Receipt of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
7.2 Registration Statement Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
7.3 Representations and Warranties Correct . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
SECTION 8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING . . . . . . . . . . . . . . . . . . . 7.
8.1 Registration Statement Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8.2 Representations and Warranties Correct . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8.3 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
SECTION 9. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT . . . . . . . . . . . . . . 7.
9.1 Registration Procedures and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
9.2 Transfer of Securities After Registration . . . . . . . . . . . . . . . . . . . . . . . . 9.
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TABLE OF CONTENTS
(CONTINUED)
PAGE
9.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
9.4 Termination of Conditions and Obligations . . . . . . . . . . . . . . . . . . . . . . . . 11.
9.5 Information Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
9.6 Changes in Purchaser Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
SECTION 10. BROKER'S FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
SECTION 11. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
SECTION 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
12.1 Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
12.2 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
12.3 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
12.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
12.5 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
12.6 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
12.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
12.8 Payment of Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
ATTACHMENTS:
Exhibit A - Schedule of Purchasers
Exhibit B - Schedule of Exceptions
Exhibit C - Form of Legal Opinion
Appendix I - Stock Certificate Questionnaire
Appendix II - Registration Statement Questionnaire
Appendix III - Purchaser's Certificate of Subsequent Sale
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COMMON STOCK
PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made as of March 3, 1997 (the
"Effective Date"), by and among PENEDERM INCORPORATED, a California corporation
with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and each of those persons and entities,
severally and not jointly, listed as a Purchaser on the Schedule of Purchasers
attached as Exhibit A hereto. Such persons and entities are hereinafter
collectively referred to herein as "Purchasers" and each individually as a
"Purchaser."
AGREEMENT
In consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and each Purchaser (severally and not jointly) hereby
agree as follows:
SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES. Subject to
the terms and conditions of this Agreement, the Company has, or before the
Closing (as defined below) will have, authorized the sale and issuance of up to
752,000 shares of its Common Stock (the "Common Stock"). The shares of Common
Stock sold hereunder shall be referred to herein as the "Shares" or the
"Securities."
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES.
2.1 SALE OF SHARES.
(a) At the Closing (as defined in Section 3), the Company
will sell to each Purchaser, and each Purchaser will purchase from the Company,
at a purchase price of Twelve dollars and seventy-five cents ($12.75) per
Share, the number of Shares set forth next to such Purchaser's name on the
Schedule of Purchasers attached hereto as Exhibit A (the "Schedule of
Purchasers").
2.2 SEPARATE AGREEMENT. Each Purchaser shall severally, and not
jointly, be liable for only the purchase of the Shares that appear on Exhibit A
hereto and that relate to such Purchaser. The Company's agreement with each of
the Purchasers is a separate agreement, and the sale of Shares to each of the
Purchasers is a separate sale. The obligations of each Purchaser hereunder are
expressly not conditioned on the purchase by any or all of the other Purchasers
of the Shares such other Purchasers have agreed to purchase.
SECTION 3. CLOSING AND DELIVERY.
3.1 CLOSING. The Closing of the purchase and sale of the Shares
pursuant to this Agreement (the "Closing") shall be held as soon as practicable
after the effectiveness of the
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Registration Statement, as set forth in Section 9.1(a) hereof, to be filed with
the Securities and Exchange Commission (the "SEC" or the "Commission"), and
satisfaction or waiver of all other conditions to Closing set forth in Sections
7 and 8 hereof, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or on such other date and place
as may be agreed to by the Company and the Purchasers.
The Company shall give at least five (5) business days prior written
notice to the Purchasers, in a manner provided for in Section 11 hereof, of the
date, time and location of the Closing. At or prior to the Closing, each
Purchaser shall execute any related agreements or other documents required to
be executed hereunder, dated as of the date of the Closing (the "Closing
Date").
3.2 DELIVERY OF THE SHARES AT THE CLOSING. At the Closing, the
Company shall deliver to each Purchaser stock certificates registered in the
name of such Purchaser, or in such nominee name(s) as designated by such
Purchaser, representing the number of shares of Common Stock to be purchased by
such Purchaser at the Closing as set forth in the Schedule of Purchasers
against payment of the purchase price for such shares. The name(s) in which
the stock certificates are to be issued to each Purchaser are set forth in the
Stock Certificate Questionnaire in the form attached hereto as Appendix I, as
completed by each Purchaser.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit B, the Company hereby represents and warrants as of the date hereof to,
and covenants with, the Purchasers as follows:
4.1 ORGANIZATION AND STANDING. The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of California, has full corporate power and authority to own or lease
its properties and conduct its business as presently conducted and as described
in the Confidential Offering Memorandum, dated March 3, 1997 (the
"Memorandum"), and is duly qualified as a foreign corporation and in good
standing in all jurisdictions in which the character of the property owned or
leased or the nature of the business transacted by it makes qualification
necessary (except where the failure to be so qualified would not have a
material adverse effect on the business, properties, financial condition or
results or operations of the Company). The Company has no subsidiaries or
equity interest in any other entity.
4.2 CORPORATE POWER; AUTHORIZATION. The Company has all requisite
corporate power, and has taken all requisite corporate action, to execute and
deliver this Agreement, sell and issue the Shares and carry out and perform all
of its obligations under this Agreement. This Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally, including any specific performance, and (iii) as to those
provisions of Section 9.3 relating to indemnity or contribution.
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The execution and delivery of this Agreement does not, and the performance of
this Agreement and the compliance with the provisions hereof and the issuance,
sale and delivery of the Shares by the Company will not conflict with, or
result in a breach or violation of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any lien
pursuant to the terms of, the Articles of Incorporation or Bylaws of the
Company or any statute, law, rule applicable to the Company or regulation or
any state or federal order, judgment or decree applicable to the Company or any
indenture, mortgage, lease or other agreement or instrument to which the
Company or any of its properties is subject, where such conflict, breach or
violation would have a material adverse effect on the Company.
4.3 ISSUANCE AND DELIVERY OF THE SHARES. The Shares, when issued
and paid for in compliance with the provisions of this Agreement, will be
validly issued, fully paid and nonassessable. The issuance and delivery of the
Shares is not subject to preemptive, co- sale, right of first refusal or any
other similar rights of the shareholders of the Company or any liens or
encumbrances. The Company has not granted any registration rights with respect
to its securities other than the registration rights set forth herein.
4.4 CONFIDENTIAL OFFERING MEMORANDUM; SEC DOCUMENTS; FINANCIAL
STATEMENTS. Each complete or partial statement, report, or proxy statement
included as an Exhibit to the Memorandum is a true and complete copy of or
excerpt from such document as filed by the Company with the SEC. The Company
has filed in a timely manner all documents that the Company was required to
file with the SEC under Sections 13, 14(a) and 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), during the twelve (12) months
preceding the date of this Agreement. As of their respective filing dates (or,
if amended, when amended), all documents filed by the Company with the SEC (the
"SEC Documents") complied in all material respects with the requirements of the
Exchange Act. Neither the Memorandum nor any of the SEC Documents as of their
respective dates contained any untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents and the Memorandum (the "Financial Statements") comply as to form
in all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto. The Financial
Statements have been prepared in accordance with generally accepted accounting
principles consistently applied and fairly present the financial position of
the Company at the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal, recurring adjustments).
4.5 INTELLECTUAL PROPERTY. Except as set forth in the Memorandum,
the Company owns or possesses adequate rights to use all material patents,
patent rights, inventions, trade secrets and know-how described or referred to
in the Memorandum as owned or used by it or that are necessary for the conduct
of its business as presently conducted and as described in the Memorandum.
Except as set forth in the Memorandum, the Company has not received any notice
of, nor has any knowledge of, any infringement of or conflict with asserted
rights of others with respect to any patent, patent right, invention, trade
secret or know-how that, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding,
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would have a material adverse effect on the business, properties, financial
condition or results or operations of the Company.
4.6 CAPITALIZATION. All of the Company s outstanding shares of
capital stock have been duly authorized and validly issued and are fully paid
and nonassessable, have been issued in compliance with all federal and state
securities laws, and were not issued in violation of or subject to any
preemptive right or other rights to subscribe for or purchase securities. The
actual authorized and outstanding capital stock of the Company as of the date
hereof is as set forth in Section 4.6 of Exhibit B. Except as set forth in
Exhibit B, there are no outstanding options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell
shares of the Company s capital stock or any such options, rights, convertible
securities or obligations.
4.7 LITIGATION. Except as set forth in the Memorandum, there is
no pending or, to the Company s knowledge, threatened, action, suit or other
proceeding to which the Company is a party or to which its property or assets
are subject.
4.8 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement except for (a) compliance with the securities
and blue sky laws in the states and other jurisdictions in which shares of
Common Stock are offered and/or sold, which compliance will be effected in
accordance with such laws, and (b) the filing of a registration statement and
all amendments thereto with the SEC as contemplated by Section 9.1 of this
Agreement.
4.9 NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed
herein or in the Memorandum, since September 30, 1996, there have not been any
changes in the assets, liabilities, financial condition or operations of the
Company from that reflected in the Financial Statements except changes in the
ordinary course of business or which have not been, either individually or in
the aggregate, materially adverse.
4.10 LISTING; MAINTENANCE OF LISTING. The Company s Common Stock
is traded on the Nasdaq National Market. For so long as the Company is
obligated to keep in effect the Registration Statements provided under Section
9 hereof, the Company will use its reasonable best efforts to maintain its
listing on The Nasdaq National Market or a national securities exchange, as
defined in the Exchange Act.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PURCHASERS.
5.1 Each Purchaser, severally and not jointly, represents and
warrants to and covenants with the Company that:
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(a) Purchaser, taking into account the personnel and
resources it can practically bring to bear on the purchase of the Securities
contemplated hereby, either alone or together with the advice of such
Purchaser's purchaser representative, is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in shares presenting an investment decision like that involved in
the purchase of the Securities, including investments in securities issued by
the Company, and has requested, received, reviewed and considered, either alone
or with such Purchaser's purchaser representative, all information Purchaser
deems relevant (including the SEC documents and the Memorandum) in making an
informed decision to purchase the Securities.
(b) Purchaser is acquiring the Securities being acquired
by Purchaser pursuant to this Agreement in the ordinary course of its business
and for its own account for investment only and with no present intention of
distributing any of such Securities or any arrangement or understanding with
any other persons regarding the distribution of such Securities, except in
compliance with Section 5(c).
(c) Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the securities
purchased hereunder except in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), applicable blue sky laws, and the rules and
regulations promulgated thereunder.
(d) Purchaser has completed or caused to be completed the
Stock Certificate Questionnaire and the Registration Questionnaire, attached
hereto as Appendix I and Appendix II, respectively, for use in preparation of
the Registration Statements to be filed by the Company, and the answers thereto
are true and correct as of the date hereof and will be true and correct as of
the effective date of the applicable Registration Statement (provided that
Purchaser shall be entitled to update such information by providing notice
thereof to the Company prior to the effective date of such Registration
Statement).
(e) Purchaser has, in connection with its decision to
purchase the Securities, relied with respect to the Company and its affairs
solely upon the SEC Documents and the other information delivered to Purchaser
by the Company as described in Sections 4.4 and 5(a) above and the
representations and warranties of the Company contained herein.
(f) Purchaser is an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act or a
Qualified Institutional Buyer within the meaning of Rule 144A promulgated under
the Securities Act.
(g) Purchaser has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. Upon the execution and
delivery of this Agreement by Purchaser, this Agreement shall constitute a
valid and binding obligation of Purchaser, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating
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to or affecting the enforcement of creditors' rights generally, (ii) as limited
by equitable principles generally, including any specific performance, and
(iii) as to those provisions of Section 9.3 relating to indemnity or
contribution.
(h) Purchaser, together with Purchaser's Affiliates and
Associates (as defined in Rule 12b-2 of the General Rules and Regulations
promulgated under the Exchange Act), is not, and will not by virtue of the
transactions contemplated by this Agreement be, a Beneficial Owner (as defined
in the Rights Agreement dated as of November 20, 1996 between the Company and
ChaseMellon Shareholder Services, L.L.C.) of 20% or more of the outstanding
shares of Common Stock of the Company.
(i) Purchaser (A) is an "institutional investor" within
the meaning of Section 802.64(a) of the rules of the Federal Trade Commission
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇
▇▇▇▇▇") by virtue of being an insurance company or an investment company
registered with the SEC under the Investment Company Act of 1940, and (B) is
purchasing the Shares in the ordinary course of business and for its own
account solely for the purpose of investment within the meaning of Section
802.64(b) of the HSR Rules, and (C) as a result of the acquisition of the
Shares, will not control the Company (as defined in the HSR Rules) and will not
hold voting securities of the Company valued in excess of $25 million (as
defined in the HSR Rules).
5.2 Purchaser represents and warrants to and covenants with the
Company that Purchaser has not engaged and will not engage in any short sales
of the Company's Common Stock prior to the effectiveness of the Registration
Statement, except to the extent that any such short sale is fully covered by
shares of Common Stock of the Company other than the Shares.
5.3 Purchaser understands that nothing in the Memorandum, this
Agreement or any other materials presented to Purchaser in connection with the
purchase and sale of the Shares constitutes legal, tax or investment advice and
that no independent legal counsel has reviewed these documents and materials on
Purchaser's behalf. Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares.
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. Notwithstanding any investigation made by any party to this
Agreement, all covenants, agreements, representations and warranties made by
the Company and each Purchaser herein and in the certificates for the
securities delivered pursuant hereto shall survive the execution of this
Agreement, the delivery to the Purchasers of the securities being purchased and
the payment therefor.
SECTION 7. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING.
The Company's obligation to complete the sale and issuance of the Securities
and deliver shares of Common Stock to each Purchaser, individually, as set
forth in the Schedule of Purchasers shall be subject to the following
conditions to the extent not waived by the Company:
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7.1 RECEIPT OF PAYMENT. The Company shall have received payment,
by check or wire transfer of immediately available funds, in the full amount of
the purchase price for the number of Shares being purchased by such Purchaser
at the Closing as set forth in the Schedule of Purchasers.
7.2 REGISTRATION STATEMENT EFFECTIVE. The Registration Statement
filed by the Company pursuant to Section 9 shall have become effective, and no
stop order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
7.3 REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by such Purchaser in Section 5 hereof shall be true and
correct when made, and shall be true and correct on the Closing Date.
SECTION 8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING.
Each Purchaser's obligation to accept delivery of the Shares and to pay for the
Shares shall be subject to the following conditions to the extent not waived by
such Purchaser:
8.1 REGISTRATION STATEMENT EFFECTIVE. The Registration Statement
required pursuant to Section 9 shall have become effective, and no stop order
suspending the effectiveness thereof shall have been issued and no proceedings
therefor shall be pending or threatened by the Commission.
8.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by the Company in Section 4 hereof shall be true and
correct when made.
8.3 LEGAL OPINION. Purchasers shall have received from ▇▇▇▇▇▇
▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇, counsel to the Company, an opinion letter addressed
to the Purchasers, dated as of the Closing Date, covering the matters set forth
in Exhibit C hereto, subject to customary assumptions and qualifications.
This Agreement may be terminated by any Purchaser with respect to such
Purchaser only if the Closing has not transpired by April 30, 1997.
SECTION 9. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE
SECURITIES ACT.
9.1 REGISTRATION PROCEDURES AND EXPENSES. The Company is
obligated to do the following:
(a) As soon as practicable following the Effective Date
and in any event no later than ten (10) days following the Effective Date, the
Company shall prepare and file with the Commission one or more registration
statements in order to register with the Commission the resale by the
Purchasers, from time to time, of the Shares through Nasdaq or the facilities
of any national securities exchange on which the Company's Common Stock is then
traded, or
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in privately-negotiated transactions (a "Registration Statement"). The Company
shall use its best efforts to cause such Registration Statement to be declared
effective as soon thereafter as reasonably possible.
(b) The Company shall prepare and file with the
Commission (i) such amendments and supplements to the Registration Statement
and the prospectus used in connection therewith, (ii) such SEC Reports and
(iii) such other filings required by the Commission, in each case as may be
necessary to keep the Registration Statement continuously effective and not
misleading until the earliest of (A) the second anniversary date of the
Closing, (B) such date as all of the Shares have been resold or (C) such time
as all of the Shares held by the Purchasers can be sold within a given
three-month period pursuant to Rule 144 under the Securities Act.
Notwithstanding the foregoing, following the effectiveness of the Registration
Statement, the Company may, at any time, suspend the effectiveness of the
Registration Statement for up to no longer than 30 days, as appropriate (a
"Suspension Period"), by giving notice to the Purchasers, if the Company shall
have determined that the Company may be required to disclose any material
corporate development. The Company will use its best efforts to minimize the
length of any Suspension Period. Notwithstanding the foregoing, no more than
two Suspension Periods may occur in any twelve (12) month period. Each
Purchaser agrees that, upon receipt of any notice from the Company of a
Suspension Period, such Purchaser will not sell any Shares pursuant to the
Registration Statement until (i) such Purchaser is advised in writing by the
Company that the use of the applicable prospectus may be resumed, (ii) such
Purchaser has received copies of any additional or supplemental or amended
prospectus, if applicable, and (iii) such Purchaser has received copies of any
additional or supplemental filings which are incorporated or deemed to be
incorporated by reference in such prospectus.
(c) In order to facilitate the public sale or other
disposition of all or any of the shares by each Purchaser, the Company shall
furnish to each Purchaser with respect to the Shares registered under the
Registration Statement such number of copies of prospectuses, prospectus
supplements and preliminary prospectuses as such Purchaser reasonably requests
in conformity with the requirements of the Securities Act.
(d) The Company shall file any documents required of the
Company for normal blue sky clearance in states specified in writing by each
Purchaser; provided, however, that the Company shall not be required to qualify
to do business or consent to service of process in any jurisdiction in which it
is not now so qualified or has not so consented.
(e) Other than fees and expenses, if any, of counsel or
other advisers to the Purchasers, which fees and expenses shall be borne by the
Purchasers except as referred to in Section 12.8 below, the Company shall bear
all expenses (exclusive of any brokerage fees, underwriting discounts and
commissions) in connection with the procedures in paragraphs (a) through (d) of
this Section 9.1.
(f) With a view to making available to the Purchasers the
benefits of Rule 144 promulgated under the Securities Act ("Rule 144") and any
other rule or regulation of the SEC that may at any time permit a Purchaser to
sell Shares to the public without registration or
8.
13
pursuant to registration, the Company covenants and agrees to: (i) make and
keep public information available, as those terms are understood and defined in
Rule 144, until the earlier of (A) the second anniversary of the Closing Date
or (B) such date as all of the Shares shall have been resold; (ii) file with
the SEC in a timely manner all reports and other documents required of the
Company under the Exchange Act; and (iii) furnish to any Purchaser upon
request, as long as the Purchaser owns any Shares, (A) a written statement by
the Company that it has complied with the reporting requirements of the
Exchange Act, (B) a copy of the most recent annual or quarterly report of the
Company, and (C) such other information as may be reasonably requested in order
to avail any Purchaser of any rule or regulation of the SEC that permits the
selling of any such Shares without registration under the Securities Act.
9.2 TRANSFER OF SECURITIES AFTER REGISTRATION. Each Purchaser
agrees that such Purchaser will not effect any disposition of the Shares that
would constitute a sale within the meaning of the Securities Act, except:
(i) pursuant to the Registration Statement, in
which case such Purchaser shall submit the certificates evidencing the Shares
to the Company's transfer agent, accompanied by a separate "Purchaser's
Certificate" (A) in the form of Appendix III attached hereto, (B) executed by
such Purchaser or by an officer of, or other authorized person designated by,
such Purchaser, and (C) to the effect that (1) the Shares have been sold in
accordance with the Registration Statement and (2) the requirement of
delivering a current prospectus has been satisfied; or
(ii) in a transaction exempt from registration
under the Securities Act, in which case such Purchaser shall, prior to
effecting such disposition, submit to the Company an opinion of counsel in form
and substance reasonably satisfactory to the Company to the effect that the
proposed transaction is in compliance with the Securities Act.
9.3 INDEMNIFICATION. As used in this Section 9.3 the following
terms shall have the following respective meanings:
(a) "Selling Shareholder" shall mean a Purchaser of
Securities under this Agreement and any transferee of such a Purchaser who is
entitled to resell Shares pursuant to the Registration Statement;
(b) "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 9.1; and
(c) "Untrue Statement" shall include any untrue statement
or alleged untrue statement, or any omission or alleged omission to state in
the Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
9.
14
The Company agrees to indemnify and hold harmless each Selling
Shareholder from and against any losses, claims, damages or liabilities to
which such Selling Shareholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any Untrue
Statement on or after the effective date of the Registration Statement, or on
or after the date of any prospectus or prospectus supplement or the date of any
sale by Purchaser thereunder, or arise out of any failure by the Company to
fulfill any undertaking included in the Registration Statement and the Company
will reimburse such Selling Shareholder for any reasonable legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim; provided, however, that the Company shall
not be liable to such Selling Shareholder in any such case to the extent that
such loss, claim, damage or liability arises out of, or is based upon, an
Untrue Statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Shareholder specifically for use in preparation of the
Registration Statement, or the failure of such Selling Shareholder to comply
with the covenants and agreements contained in Section 9.1 or 9.2 hereof
respecting sale of the Shares or any statement or omission in any Prospectus
that is corrected in any subsequent prospectus that was delivered to the
Selling Shareholder prior to the pertinent sale or sales by the Selling
Shareholder.
Each Purchaser, severally and not jointly, agrees to indemnify and
hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each officer of the
Company who signs the Registration Statement and each director of the Company)
from and against any losses, claims, damages or liabilities to which the
Company (or any such officer, director or controlling person) may become
subject (under the Securities Act or otherwise), insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any failure to comply with the covenants and
agreements contained in Section 9.1 or 9.2 hereof respecting sale of the
Shares, or any Untrue Statement contained in the Registration Statement on or
after the effective date thereof, or in any prospectus supplement as of its
issue date or date of any sale by Purchaser thereunder, if such Untrue
Statement was made in reliance upon and in conformity with written information
furnished by or on behalf of such Purchaser specifically for use in preparation
of the Registration Statement, and such Purchaser will reimburse the Company
(or such officer, director or controlling person), as the case may be, for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided that in no
event shall any indemnity by a Purchaser under this Section 9.3 exceed the
gross proceeds received by such Purchaser from the sale of Shares covered by
such Registration Statement.
Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 9.3, such
indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein,
and, to the extent it shall wish, to assume the defense thereof, with
10.
15
counsel reasonably satisfactory to such indemnified person. After notice from
the indemnifying person to such indemnified person of its election to assume
the defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for the
fees and expenses of more than one separate counsel for all indemnified
parties.
9.4 TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions
precedent imposed by Section 4, Section 5 or this Section 9 upon the
transferability of the Shares shall cease and terminate as to any particular
number of the Shares when such Shares shall have been sold or otherwise
disposed of in accordance with the intended method of disposition set forth in
the Registration Statement covering such Shares or at such time as an opinion
of counsel satisfactory to the Company shall have been rendered to the effect
that such conditions are not necessary in order to comply with the Securities
Act.
9.5 INFORMATION AVAILABLE. So long as the Registration Statement
is effective covering the resale of Shares owned by the Purchasers, the Company
will furnish to the Purchasers:
(a) as soon as practicable after available (but in the
case of the Company's Annual Report to Shareholders, within 150 days after the
end of each fiscal year of the Company), one copy of (i) its Annual Report to
Shareholders (which Annual Report shall contain financial statements audited in
accordance with generally accepted auditing standards certified by a national
firm of certified public accountants); (ii) its Annual Report on Form 10-K;
(iii) its quarterly reports on Form 10-Q (the foregoing, in each case,
excluding exhibits); (iv) its Proxy Statement; and (v) its current reports on
Form 8-K, if any;
(b) upon the request of any Purchaser, all exhibits
excluded by the parenthetical to subparagraph (a)(iii) of this Section 9.5, in
the form generally available to the public; and
(c) upon the reasonable request of any Purchaser, an
adequate number of copies of the prospectuses and supplements to supply to any
other party requiring such prospectuses.
9.6 CHANGES IN PURCHASER INFORMATION. Each Purchaser agrees to
promptly notify the Company of any changes in the information set forth in the
Registration Statement regarding Purchaser or such Purchaser's plan of
distribution set forth in such Registration Statement.
SECTION 10. BROKER'S FEE. The Company and each Purchaser
(severally and not jointly) hereby represent that, except for amounts to be
paid to the Placement Agent by the
11.
16
Company as described in Section 12.8 hereof, there are no brokers or finders
entitled to compensation in connection with the sale of the Shares, and shall
indemnify each other for any such fees for which they are responsible.
SECTION 11. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be sent by confirmed
facsimile or mailed by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, and shall be
deemed given when so sent in the case of facsimile transmission, or when so
received in the case of mail or courier, and addressed as follows:
(a) if to the Company, to:
Penederm Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy so mailed to:
Heller, Ehrman, White & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
or to such other person at such other place as the Company
shall designate to the Purchasers in writing; and
(b) if to the Purchasers, at the address as set forth at
the end of this Agreement, or at such other address or addresses as may have
been furnished to the Company in writing.
SECTION 12. MISCELLANEOUS.
12.1 WAIVERS AND AMENDMENTS. Neither this Agreement nor any
provision hereof may be changed, waived, discharged, terminated, modified or
amended except upon the written consent of the Company and holders of at least
a majority of the Shares.
12.2 HEADINGS. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
12.3 SEVERABILITY. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
12.
17
12.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as applied to
contracts entered into and performed entirely in California by California
residents, without regard to conflicts of law principles.
12.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.
12.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
12.7 ENTIRE AGREEMENT. This Agreement and other documents
delivered pursuant hereto, including the exhibits, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
12.8 PAYMENT OF FEES AND EXPENSES. Each of the Company and the
Purchasers shall bear its own expenses and legal fees incurred on its behalf
with respect to this Agreement and the transactions contemplated hereby (the
"Offering"); provided, that the Company shall reimburse the Placement Agent for
certain fees and expenses incurred by the Placement Agent in connection with
the Offering as described in the Memorandum. Purchasers acknowledge that the
Placement Agent will receive a commission in the amount described in the
Memorandum. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorney's fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
13.
18
IN WITNESS WHEREO, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PENEDERM INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: President & CEO
-------------------------------
PURCHASER
Purchaser Name: Franklin Resources
----------------------
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Portfolio Manager Franklin
-------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------
Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇
---------------------------
COMMON STOCK PURCHASE AGREEMENT
19
IN WITNESS WHEREO, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PENEDERM INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: President & CEO
-------------------------------
PURCHASER
Purchaser Name:Deerfield Management
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: General Partner
-------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Suite 1930
-----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------
Facsimile: 212-599-3075
---------------------------
COMMON STOCK PURCHASE AGREEMENT
20
IN WITNESS WHEREO, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PENEDERM INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: President & CEO
-------------------------------
PURCHASER
Purchaser Name: RCM Capital Management,
-------------------------
L.L.C. on behalf of such investment
----------------------------------------
companies as set forth in Appendix I
----------------------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Title: Principal
----------------------------------
Address: ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
--------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------
Facsimile:
------------------------------
COMMON STOCK PURCHASE AGREEMENT
21
IN WITNESS WHEREO, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PENEDERM INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: President & CEO
-------------------------------
PURCHASER
Purchaser Name: ProMed Management, L.L.C.
--------------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Title: Managing Member
-----------------------------------
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
---------------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------
---------------------------------
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
---------------------------------
COMMON STOCK PURCHASE AGREEMENT
22
EXHIBIT A
SCHEDULE OF PURCHASERS
-------------------------------------------------------------------------------------------------------
PURCHASER NAME AND ADDRESS NUMBER OF SHARES PURCHASED
-------------------------------------------------------------------------------------------------------
Deerfield Partners, L.P. 91,000
c/o Deerfield Management
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
Deerfield International Limited 9,000
c/o Deerfield Management
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
ProMed Partners, L.P. 9,400
c/o ProMed Management
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
MedCap I Corp. 17,100
c/o ProMed Management
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
HPB Associates, LP 13,500
c/o ProMed Management
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
RCM Global Healthcare Fund, a series of RCM 2,000
Equity Funds, Inc.
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
RCM Small Cap Fund, a series of RCM Capital 26,700
Funds, Inc.
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
RCM Growth Equity Fund, a series of RCM Capital 53,300
Funds, Inc.
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
Franklin Global Health Care Fund 141,500
c/o Franklin Resources
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
Franklin Small Cap Growth Fund 283,400
c/o Franklin Resources
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
Franklin California Growth Fund 94,300
c/o Franklin Resources
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
Franklin Asset Allocation Fund 10,800
c/o Franklin Resources
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
TOTAL SHARES SOLD: 752,000
-------------------------------------------------------------------------------------------------------
23
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(TO BE READ IN CONJUNCTION WITH THE ENTIRE
PURCHASE AGREEMENT WHICH FOLLOWS)
A. Complete the following items on the Purchase Agreement, copies of
which are attached hereto for your convenience:
1. Signature Page.
2. Appendix I - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire.
3. Appendix II - Registration Statement Questionnaire:
Provide the information requested by the Registration
Statement Questionnaire.
4. Return the properly completed and signed Purchase Agreement
including the properly completed and signed Appendix I and
Appendix II to:
▇▇▇▇▇, ▇▇▇▇▇ & Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
PLEASE RETURN THE COMPLETED AND SIGNED PURCHASE AGREEMENT BY
FACSIMILE WITH ALL OF THE ORIGINAL DOCUMENTS FOLLOWING BY
OVERNIGHT COURIER OR MAIL.
B. Instructions regarding the transfer of funds for the purchase of
Securities will be sent separately.
C. Upon the resale of the Shares by the Purchasers after the Registration
Statement covering the Shares is effective as described in the
Purchase Agreement, each Purchaser:
(i) must deliver a current prospectus to the buyer; and
(ii) must send a letter in the form of Appendix III to the
Company so that the Shares may be properly transferred.
24
APPENDIX I
PENEDERM INCORPORATED
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be registered
in (this is the name that will appear on your stock
certificate(s)). You may use a nominee name if
appropriate:
_________________________________________
2. The relationship between the Purchaser of the
Securities and the Registered
Holder listed in response to item 1 above:
_________________________________________
3. The mailing address and facsimile number of the
Registered Holder listed in response to item 1 above:
________________________________________
________________________________________
________________________________________
________________________________________
Facsimile:______________________________
4. The Social Security Number or Tax Identification
Number of the Registered Holder listed in the response
to item 1 above:
________________________________________
Signature:______________________________
Print Name:_____________________________
Title:__________________________________
25
APPENDIX II
PENEDERM INCORPORATED
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Please state your or your organization's name exactly as it
should appear in the Registration Statement:
2. Please provide the following information, as of February 26,
1997:
Number of shares of Common Stock that
you already beneficially own or
Number of Shares that you are that you are purchasing and do
purchasing and seek to include in NOT seek to include in the
the Registration Statement Registration Statement
3. Have you or your organization had any position, office or
other material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Proxy Statement in connection with
the Company's 1996 Annual Meeting of Shareholders?
Yes ____ No ____
If yes, please indicate the nature of any such
relationships:__________________________________________________________________
Signature:______________________________
Print Name:_____________________________
Title:__________________________________
26
APPENDIX III
PURCHASER'S CERTIFICATE OF RESALE OF THE SHARES
The undersigned, an officer of, or other person duly authorized by
__________________________________________________ hereby certifies that he/she
[fill in official name of individual or institution]
[said institution] is the Purchaser of the Shares evidenced by the attached
stock certificate(s) and as such, sold such Shares on _________________________
[date]
in accordance with registration statement number
______________________________________________________________________ and the
[fill in the number of or otherwise identify registration statement]
requirement of delivering a current prospectus and current annual, quarterly
and reports (Forms 10-K, 10-Q, and 8-K) by the Company has been complied with
in connection with such sale.
Print or Type:
Name of Purchaser (Individual or Institution): ________________________________
Name of Individual representing Purchaser
(if an Institution):___________________________________________________________
Title of Individual representing Purchaser
(if an Institution):___________________________________________________________
Signature by:
Individual Purchaser or Individual
representing Purchaser:________________________________________________________