Document:

Purchase Agreement Between Gary Pace and Peplin Limited

 Exhibit 10.5 
  

					
		 	 Governor Phillip Tower
 1 Farrer Place Sydney NSW 2000
 GPO Box 9925 NSW 2001
 Tel +61 2 9210 6500
 Fax +61 2 9210 6611
 www.corrs.com.au
	 	

			
		 		 	Sydney
Melbourne
Brisbane
Perth
Canberra
Gold Coast

 Final 
 23 June 2006

 Dr Gary Pace 
 Peplin Limited 
 Purchase Agreement 
 © Corrs Chambers Westgarth 
  
  

 Contents 
  

					
	1	  	Interpretation	  	1
			
		  	1.1      Definitions	  	1
			
		  	1.2      Construction	  	3
			
		  	1.3      Headings	  	4
			
	2	  	Subscription	  	4
			
		  	2.1      First Tranche subscription and issue of Shares	  	4
			
		  	2.2      Issue of Options	  	4
			
		  	2.3      Terms of issue	  	4
			
	3	  	Conditions	  	4
			
		  	3.1      Conditions to the issue of the First Tranche securities	  	4
			
		  	3.2      Responsibility	  	4
			
		  	3.3      Benefit and satisfaction of conditions	  	4
			
	4	  	First Closing	  	5
			
		  	4.1      Obligations of Dr Pace	  	5
			
		  	4.2      Obligations of Company	  	5
			
	5	  	Period after closing date	  	5
			
		  	5.1      Quotation	  	5
			
		  	5.2      Section 708A notice	  	5
			
		  	5.3      Return of subscription monies	  	5
			
	6	  	Company Warranties	  	6
			
		  	6.1      Giving of the Company Warranties	  	6
			
		  	6.2      Company Warranties	  	6
			
	7	  	Termination	  	8
			
	8	  	Dr Pace Warranties	  	8
			
		  	8.1      Giving of Warranties	  	8
			
		  	8.2      Dr Pace Warranties	  	8
			
	9	  	Dr Pace Covenants	  	9
			
	10	  	Notices	  	10
			
		  	10.1    General	  	10
			
		  	10.2    How to give a communication	  	10
			
		  	10.3    Particulars for delivery of notices	  	10

					
			
		  	10.4    Communications by post	  	11
			
		  	10.5    Communications by fax	  	11
			
		  	10.6    After hours communications	  	11
			
		  	10.7    Communications by email	  	11
			
		  	10.8    Process service	  	11
			
	11	  	GST	  	11
			
		  	11.1    Consideration GST exclusive	  	11

  
  

					
			
		  	11.2    Payment of GST	  	11
			
		  	11.3    Timing of GST payment	  	12
			
		  	11.4    Tax invoice	  	12
			
	12	  	General	  	12
			
		  	12.1    Amendment	  	12
			
		  	12.2    Waiver and exercise of rights	  	12
			
		  	12.3    Further steps	  	12
			
		  	12.4    Counterparts	  	12
			
		  	12.5    Entire understanding	  	12
			
		  	12.6    Governing law	  	12
		
	Schedule 1 – Option Terms 	  	13

  
  

 Date 
 Parties 
 Dr Gary Pace of 6 Robinson Park, Winchester, MA 01890, United States of America (Dr Pace) 
 Peplin Limited ACN 090 819 275 of Level 2, 1 Breakfast Creek Road, Newstead, Qld 4006 (Company) 
 Background 
  

	A	The Company is seeking to raise approximately US$30 million by way of a placement to institutional investors and a pro-rata non-renounceable entitlement issue to shareholders.

  

	B	Under the placement, the Company is seeking to raise approximately US$20 million by offering Shares for subscription at the Subscription Price with three attaching Options to be issued for
every ten Shares subscribed. 

  

	C	Dr Pace intends to participate in the placement and subscribe for the Shares and the attaching Options. 

  

	D	The Company agrees to issue Shares and Options to Dr Pace on the terms set out in this document. 

 Agreed terms 
  

	1	Interpretation 

  

	1.1	Definitions 

 In this document: 
 ASIC means the Australian Securities and Investments Commission. 
 ASX means Australian Stock Exchange Limited ACN 008 624 691. 
 Business Day means a day which is not a Saturday, Sunday or a
public or bank holiday in Brisbane, Australia. 
 Company Warranties means the warranties and representations of the Company as set out in
clause 6.2. 
 Constitution means the constitution of the Company. 
 Corporations Act means the Corporations Act (2001) (Cth). 

 EGM means an extraordinary general meeting of the Company to be convened in order for Shareholders to
approve, amongst other things, the issue of the First Tranche Shares under Listing Rule 7.1. 
 Exercise Notice means the notice of exercise
of Options, in the form provided by the Share Registry or otherwise in the form approved from time to time by the Company. 
 First Closing means
the subscription for and issue of the First Tranche Shares to Dr Pace in accordance with clause 4. 
 First Closing Date means the date
which is 3 Business Days after the Company satisfies the condition to the issue of the First Tranche Shares in accordance with clause 3.3. 
 First Tranche Options means 51,000 Options. 
 First Tranche Shares means the 170,000 Shares. 
 GST Law has the meaning given to that expression in the A New Tax System (Goods and Services Tax) Act (1999) (Cth). 
 Immediately Available Funds means cash or bank cheque or any other form of payment that the parties agree in writing. 
 Listing Rules means the ASX Listing Rules. 
 Material
Adverse Effect means any event, change or occurrence that individually or together with any other event, change or occurrence has had, or could reasonably be expected to have, a material adverse effect on the financial condition, business,
results or prospects of the Company. 
 Official Quotation means official quotation on the ASX. 
 Option means an option to subscribe for a Share on the Option Terms. 
 Option Exercise Price means $0.84. 
 Option Expiry Date means 30 June 2010. 
 Option Terms means the terms of the Options as set out in schedule 1. 
 Optionholder means any person holding Options. 
 Securities Act means the United States Securities Act of 1933, as
amended. 
 Share Registry means Computershare Investor Services Pty Limited, or any other share registry appointed by the Company from time to
time. 
 Shares means fully paid ordinary shares in the capital of the Company. 
 Shareholder means any person holding Shares. 
 Dr Pace
Warranties means the warranties and representations of Dr Pace as set out in clause 8.2. 
 Subscription Price means $0.76 per Share
subscribed for under this document. 

	1.2	Construction 

 Unless expressed to the contrary, in this
document: 
  

	 	(a)	words in the singular include the plural and vice versa; 

  

	 	(b)	if a word or phrase is defined its other grammatical forms have corresponding meanings; 

  

	 	(c)	“includes” means includes without limitation; 

  

	 	(d)	no rule of construction will apply to a clause to the disadvantage of a party merely because that party put forward the clause or would otherwise benefit from it; 

  

	 	(e)	a reference to: 

  

	 	(i)	a person includes a partnership, joint venture, unincorporated association, corporation and a government or statutory body or authority; 

  

	 	(ii)	a person includes the person’s legal personal representatives, successors, assigns and persons substituted by novation; 

  

	 	(iii)	any legislation includes subordinate legislation under it and includes that legislation and subordinate legislation as modified or replaced; 

  

	 	(iv)	an obligation includes a warranty or representation and a reference to a failure to comply with an obligation includes a breach of warranty or representation; 

  

	 	(v)	a right includes a benefit, remedy, discretion or power; 

  

	 	(vi)	time is to local time in Brisbane, Australia; 

  

	 	(vii)	“$” or “dollars” is a reference to Australian currency; 

  

	 	(viii)	“US$” is a reference to the currency of the United States; 

  

	 	(ix)	this or any other document includes the document as novated, varied or replaced and despite any change in the identity of the parties; 

  

	 	(x)	writing includes any mode of representing or reproducing words in tangible and permanently visible form, and includes: 

  

	 	(A)	fax transmissions; and 

  

	 	(B)	words created or stored in any electronic medium and retrievable in perceivable form; 

  

	 	(xi)	this document includes all schedules and annexures to it. 

  

	 	(f)	if the date on or by which any act must be done under this document is not a Business Day, the act must be done on or by the next Business Day; 

  

	 	(g)	where time is to be calculated by reference to a day or event, that day or the day of that event is excluded; 

	 	(h)	words and expressions which are not defined but which have a defined meaning under the Corporations Act have the same meaning as in the Corporations Act; and 

  

	 	(i)	words and expressions which are not defined but which have a defined meaning in GST Law have the same meaning as in the GST Law. 

  

	1.3	Headings 

 Headings do not affect the interpretation of this
document. 
  

	2	Subscription 

  

	2.1	First Tranche subscription and issue of Shares 

 Dr Pace will
subscribe for the First Tranche Shares at the Subscription Price and the Company will issue the First Tranche Shares to Dr Pace on the First Closing Date on and subject to this document. 
  

	2.2	Issue of Options 

  

	 	(a)	The Company will issue to Dr Pace, for no additional consideration, on the First Closing Date three Options for every ten Shares issued to Dr Pace on that date. 

  

	 	(b)	If the number of Shares issued to Dr Pace is not a multiple of ten, the number of Options to be issued Dr Pace will be calculated on the basis of the number of Shares rounded down to a
multiple of ten. 

  

	2.3	Terms of issue 

 On issue transfer of the Shares and Options to
Dr Pace, Dr Pace will be bound by the provisions of the Constitution and the Option Terms (as the case may be). 
  

	3	Conditions 

  

	3.1	Conditions to the issue of the First Tranche securities 

 The
First Closing will not take place and there is no agreement between the Company and Dr Pace to subscribe for and issue the First Tranche Shares and First Tranche Options unless and until the Company obtains shareholder approval at the EGM for the
issue of the First Tranche Shares and First Tranche Options under Listing Rule 7.1 and Listing Rule 10.11. 
  

	3.2	Responsibility 

 The Company is responsible for and must use its
reasonable endeavours to satisfy the condition in clause 3.1 by 30 June 2006. 
  

	3.3	Benefit and satisfaction of conditions 

 The conditions in
clause 3.1 are for the benefit of Dr Pace and will be satisfied in respect of Dr Pace upon the Company announcing to ASX that Shareholder 

 
approval was obtained in accordance with clause 3.1, such announcement to be given no later than one hour after close of the EGM. 
  

	4	First Closing 

  

	4.1	Obligations of Dr Pace 

 On the First Closing Date Dr Pace will
pay to the Company the total Subscription Price for the relevant First Tranche Shares in Immediately Available Funds. 
  

	4.2	Obligations of Company 

 On the First Closing Date, the Company
will: 
  

	 	(a)	allot the First Tranche Shares to each relevant Dr Pace; 

  

	 	(b)	allot the First Tranche Options to each relevant Dr Pace; 

  

	 	(c)	enter each relevant Dr Pace in the share register and option register of the Company; 

  

	 	(d)	deliver a holding statement for the First Tranche Shares to each relevant Dr Pace; and 

  

	 	(e)	deliver a holding statement for the First Tranche Options to each relevant Dr Pace. 

  

	5	Period after closing date 

  

	5.1	Quotation 

  

	 	(a)	As soon as practicable (and in any case no later than 5 Business Days) after the First Closing Date, the Company must apply for Official Quotation of the First Tranche Shares and First
Tranche Options in accordance with the Listing Rules. 

  

	 	(b)	As soon as practicable (and in any case no later than 5 Business Days) after the exercise of Options, the Company must apply for Official Quotation of the Shares issued by the Company on
exercise of the relevant Options in accordance with the Listing Rules. 

  

	5.2	Section 708A notice 

 At the time the First Tranche Shares
are issued, the Company must provide the ASX with a notice in respect of the relevant Shares that complies with section 708A(6) of the Corporations Act. 
  

	5.3	Return of subscription monies 

  

	 	(a)	Any monies received from Dr Pace in respect of the payment of the Subscription Price for First Tranche Shares will be held on trust for Dr Pace until the relevant First Tranche Shares and
First Tranche Options obtain Official Quotation. 

	 	(b)	If the relevant First Tranche Shares and First Tranche Options do not obtain Official Quotation within 10 Business Days after their issue on the First Closing Date, any monies received from
Dr Pace as payment for the relevant Shares will be returned to Dr Pace within 15 Business Days of the date of issue of the relevant Shares. 

  

	6	Company Warranties 

  

	6.1	Giving of the Company Warranties 

  

	 	(a)	The Company gives the Company Warranties in favour of Dr Pace on the date of this document and the First Closing Date. 

  

	 	(b)	The warranties in clauses 6. 2(a), 6. 2(b) and 6. 2(c) will remain in full force and effect after First Closing, notwithstanding that the relevant transactions have been
completed. 

  

	 	(c)	The Company acknowledges Dr Pace have entered into this document in reliance on the Company Warranties. 

  

	6.2	Company Warranties 

  

	 	(a)	Authorisation : The Company has: 

  

	 	(i)	taken all necessary action to authorise the execution, delivery and performance of this document in accordance with its terms; and 

  

	 	(ii)	full authority and all necessary consents to enter into and perform its obligations under this document. 

  

	 	(b)	Compliance with laws: The execution, delivery and performance by the Company of this document does not contravene to a material extent: 

  

	 	(i)	any applicable law, regulation, authorisation, ruling, judgment, order or decree of any government agency, including the Listing Rules; 

  

	 	(ii)	the Constitution; and 

  

	 	(iii)	any encumbrance or other material agreement which is binding on the Company. 

  

	 	(c)	Secondary sales: The Company is relying on the Case 1 exemption in section 708A(5) of the Corporations Act in relation to the Shares issued under this document and:

  

	 	(i)	the Shares issued under this document will be in a class of securities that: 

  

	 	(A)	are quoted securities (as defined in the Corporations Act) of the Company at all times in; and 

  

	 	(B)	are quoted on a financial market operated by ASX without being suspended from trading for more than a total of five trading days during, 

 the 12 months before the date of issue of the Shares issued under this document; and 
  

	 	(ii)	no: 

  

	 	(A)	exemption under section 111AS or 111AT of the Corporations Act; or 

  

	 	(B)	order under sections 340 or 341 of the Corporations Act, 

 does or will cover
the Company, or any person, as a director or auditor of the Company, at any time in the 12 months before the issue of the Shares issued under this document; and 
  

	 	(iii)	ASIC has not, and will not before the date of issue of the Shares issued under this document, make a determination for contravention by the Company within the previous 12 months of any
of the provisions listed in section 708A(2) of the Corporations Act; and 

  

	 	(iv)	each offer for sale and each sale of Shares under this document will not be an offer or sale to which sections 707(3) or 707(4) of the Corporations Act applies so as to require the offeror or
seller to prepare and lodge with ASIC a prospectus or other document relating to the offer or sale. 

  

	(d)	Insolvency: 

  

	 	(i)	No meeting has been convened, resolution proposed, petition presented or order made for the winding up of the Company. 

  

	 	(ii)	No receiver, receiver and manager, provisional liquidator, liquidator or other officer of the Court has been appointed in relation to all or any material assets of the Company.

  

	 	(iii)	The Company is not insolvent within the meaning of section 95 of the Corporations Act. 

  

	 	(iv)	The Company has not stopped paying its debts as and when they become due and payable. 

  

	 	(v)	The Company is not subject to voluntary administration under Part 5.3A of the Corporations Act. 

  

	(e)	Financial statements : The most recent financial statements lodged by the Company with ASX in accordance with the Listing Rules give a true and fair view of the financial position,
assets, liabilities and profits and losses of the Company as at the relevant balance date and are not misleading or deceptive in any material respect. 

  

	(f)	Material adverse effect : no Material Adverse Effect has occurred since 1 September 2005. 

  

	(g)	Litigation : 

  

	 	(i)	The Company is not a party to any material pending or actual prosecution, litigation, arbitration or dispute resolution proceedings 

	 	 
nor is the Company a party to any investigation, audit or other inquiry by a governmental agency. 

  

	 	(ii)	To the best of the Company’s knowledge, information and belief, there are no proceedings, investigations, audits or other inquiries of the type referred to in clause 9. 2(g)(i)
threatened against the Company nor any disputes which may or might give rise to any such proceedings. 

  

	 	(h)	Security interests: all security interests over the assets of the Company have been disclosed to the ASX by the Company. 

  

	 	(i)	Material contracts: all material agreements or arrangements which are binding on the Company have been disclosed to the ASX by the Company. 

  

	 	(j)	Continuous disclosure: the Company has complied with the continuous disclosure requirements under the Listing Rules. 

  

	7	Termination 

 If a Material Adverse Effect occurs at any time from the date of
this document to (but not including) the First Closing Date, Dr Pace may terminate this document by providing written notice to the Company on or prior to the First Closing Date. 
  

	8	Dr Pace Warranties 

  

	8.1	Giving of Warranties 

  

	 	(a)	Dr Pace gives the Dr Pace Warranties in favour of the Company on the date of this document and on the First Closing Date. 

  

	 	(b)	Dr Pace acknowledge that the Company has entered into this document in reliance on Dr Pace Warranties. 

  

	8.2	Dr Pace Warranties 

  

	 	(a)	Compliance with laws : The execution, delivery and performance by Dr Pace of this document does not contravene to a material extent any applicable law, regulation, authorisation,
ruling, judgment, order or decree of any government agency. 

  

	 	(b)	Investor in Australia : If in Australia, Dr Pace is either a “Sophisticated Investor” within the meaning of section 708(8) or a “Professional Investor” within the
meaning of section 708(11) of the Corporations Act. 

  

	 	(c)	Experience : Dr Pace is experienced in evaluating and investing in private placement transactions of securities of companies such as the Company, and has such knowledge and experience
in financial and business matters such Dr Pace is capable of evaluating the merits and risks of the prospective investment in the Company, and has the ability to bear the economic risks of the investment. 

	 	(d)	Accredited investor : Dr Pace is an “accredited investor” within the meaning of Securities and Exchange Commission Rule 501 of Regulation D, as presently in effect,
under the Securities Act. 

  

	 	(e)	Purchase entirely for own account : Dr Pace is acquiring the Shares and Options for investment for Dr Pace’s own account, not as a nominee or agent, and not with the view to, or
for resale in connection with, any distribution thereof. Dr Pace further represents that he does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any third person with respect
to any of the Shares and Options. 

  

	 	(f)	Restricted securities : Dr Pace acknowledges that the Shares and Options must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such
registration is available. Dr Pace is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions; among the
conditions for use of Rule 144 may be the availability of current information to the public about the Company. 

  

	 	(g)	Reliance upon Dr Pace’s representations : Dr Pace understands that the Shares and Options have not been registered under the Securities Act by reason of a specific exemption from
the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein. Dr Pace understands and acknowledges that the offering of the Shares and Options pursuant to
this document will not, and any issuance of Shares and Options on conversion may not, be registered under the Securities Act on the ground that the sale provided for in this document and the issuance of securities hereunder is exempt from the
registration requirements of the Securities Act. 

  

	 	(h)	No disclosure document : Dr Pace acknowledges that no disclosure document has been prepared in connection with the offer to issue Shares and Options under this document.

  

	9	Dr Pace Covenants 

  

	 	(a)	Dr Pace agrees that, in the future, if he decides to sell or otherwise transfer any Shares or Options acquired under this document, he will only do so, and they will inform such other person
that it may only do so, if the offer and sale of such Shares or Options are: 

  

	 	(i)	registered under the Securities Act (which Dr Pace acknowledge the Company has no obligation to do); 

  

	 	(ii)	made in a transaction exempt from the registration requirements of the Securities Act; or 

	 	(iii)	made in regular brokered transactions on the ASX or otherwise outside the United States in accordance with Regulation S under the Securities Act. 

  

	 	(b)	Except for the sale of the Shares or Options in regular brokered transactions on the ASX, Dr Pace agrees that they will notify any person to whom any Shares or Options acquired under this
document are sold or otherwise transferred, prior to any such transfer, of the applicability to such person of the provisions of the immediately preceding paragraph. 

  

	10	Notices 

  

	10.1	General 

 A notice, demand, certification, process or other
communication relating to this agreement must be in writing in English and may be given by an agent of the sender. 
  

	10.2	How to give a communication 

 In addition to any other lawful
means, a communication may be given by being: 
  

	 	(a)	personally delivered; 

  

	 	(b)	left at the party’s current address for notices; 

  

	 	(c)	sent to the party’s current address for notices by pre-paid ordinary mail; or 

  

	 	(d)	sent by fax to the party’s current fax number for notices. 

  

	10.3	Particulars for delivery of notices 

  

	 	(a)	The particulars for delivery of notices are initially: 

  

			
	Company:	  	
	Address:	  	Level 2, The Portal Building, 1 Breakfast Creek Road,
	Fax:	  	 Newstead, Queensland 4006
 +61 7 3250 1299

		
	Attention:	  	David Smith, Company Secretary
		
	Dr Pace:	  	
		
	Address:	  	 6 Robinson Park, Winchester, MA 01890,
 United States of
America

	Email:	  	gwpace@comcast.net
	Fax:	  	+1 781 756 0420
	Attention:	  	Gary Pace

  

	 	(b)	Each party may change its particulars for delivery of notices by notice to each other party. 

	10.4	Communications by post 

 Subject to clause 10.6, a
communication is given if posted: 
  

	 	(a)	within Australia to an Australian address, two Business Days after posting; or 

  

	 	(b)	in any other case, three Business Days after posting. 

  

	10.5	Communications by fax 

 Subject to clause 10.6, a
communication is given if sent by fax, when the sender’s fax machine produces a report that the fax was sent in full to the addressee. That report is conclusive evidence that the addressee received the fax in full at the time indicated on that
report. 
  

	10.6	After hours communications 

 If a communication is given:

  

	 	(a)	after 5.00 pm in the place of receipt; or 

  

	 	(b)	on a day which is a Saturday, Sunday or bank or public holiday in the place of receipt, 

 it is taken as having been given at 9.00 am on the next day which is not a Saturday, Sunday or bank or public holiday in that place. 
  

	10.7	Communications by email 

 Subject to clause 10.6, if a
communication is emailed, a delivery confirmation report received by the sender, which records the time that the email was delivered to the addressee’s last notified email address is prima facie evidence of its receipt by the addressee, unless
the sender receives a delivery failure notification, indicating that the electronic mail has not been delivered to the addressee. 
  

	10.8	Process service 

 Any process or other document relating to
litigation, administrative or arbitral proceedings relating to this document may be served by any method contemplated by this clause 10 or in accordance with any applicable law. 
  

	11	GST 

  

	11.1	Consideration GST exclusive 

 Unless otherwise expressly stated,
all prices or other sums payable or consideration to be provided under this document are exclusive of GST. 
  

	11.2	Payment of GST 

 If GST is payable by a supplier or by the
representative member for a GST group of which the supplier is a member, on any supply made under this document, the recipient will pay to the supplier an amount equal to the GST payable on the supply. 

	11.3	Timing of GST payment 

 The recipient will pay the amount
referred to in clause 11.2 in addition to and at the same time that the consideration for the supply is to be provided under this document. 
  

	11.4	Tax invoice 

 The supplier must deliver a tax invoice or an
adjustment note to the recipient before the supplier is entitled to payment of an amount under clause 11.2. The recipient can withhold payment of the amount until the supplier provides a tax invoice or an adjustment note, as appropriate.

  

	12	General 

  

	12.1	Amendment 

 This document may only be varied or replaced by a
document executed by the parties. 
  

	12.2	Waiver and exercise of rights 

  

	 	(a)	A single or partial exercise or waiver by a party of a right relating to this document does not prevent any other exercise of that right or the exercise of any other right.

  

	 	(b)	A party is not liable for any loss, cost or expense of any other party caused or contributed to by the waiver, exercise, attempted exercise, failure to exercise or delay in the exercise of a
right. 

  

	12.3	Further steps 

 Each party must promptly do whatever any other
party reasonably requires of it to give effect to this document and to perform its obligations under it. 
  

	12.4	Counterparts 

 This document may consist of a number of
counterparts and, if so, the counterparts taken together constitute one document. 
  

	12.5	Entire understanding 

 This document contains the entire
understanding between the parties as to the subject matter of this document and supersedes all previous agreements in respect of the subject matter of this document. 
  

	12.6	Governing law 

  

	 	(a)	This document is governed by and is to be construed in accordance with the laws applicable in Queensland, Australia. 

  

	 	(b)	Each party irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of Queensland, Australia and any courts which have jurisdiction to hear appeals from any of
those courts and waives any right to object to any proceedings being brought in those courts. 

 Schedule 1 
 Option Terms 
  

	1	Exercise rights 

 Each Option entitles an Optionholder to subscribe for
one Share. 
  

	2	Exercise Price 

 The exercise price for each Option is $0.84.

  

	3	Exercise of Options 

  

	 	(a)	An Optionholder may elect to exercise all or part of their Options at any time prior to the Option Expiry Date by lodging an Exercise Notice with the Share Registry. 

 

	 	(b)	The Options may be exercised in parcels of not less than 500 Options (unless the holding of Options is less than 500, in which case the entire holding may be exercised).

  

	 	(c)	If an Optionholder chooses to exercise all or part of their Options, the Exercise Notice must be accompanied by the subscription monies for the relevant Shares, being the number of Options an
Optionholder wishes to exercise multiplied by the Option Exercise Price. 

  

	4	Issue of Shares 

  

	 	(a)	Upon exercise of an Option, the Company will, within the time period required by the Listing Rules, issue to the Optionholder the relevant number of Shares. 

  

	 	(b)	All Shares issued upon exercise of the Options in accordance with these terms will rank equally in all respects with issued Shares. 

  

	5	Trading 

  

	 	(a)	The Company will apply for Official Quotation of the Options on the ASX. If Official Quotation is granted, Optionholders will be able to trade their Options independently from any Shares held
by them. 

  

	 	(b)	There is no requirement for an Optionholder to hold Shares. 

	6	New Issues 

  

	 	(a)	Optionholders will not be entitled to participate in new issues of Shares to Shareholders (including bonus issues and other pro rata issues). 

  

	 	(b)	The Company will ensure that, for the purpose of determining entitlements to any such new issues, Optionholders will be notified of the proposed issue at least 7 Business Days before the
record date of any proposed issue. 

  

	7	Re-organisation of Capital 

 If there is a re-organisation of the issued capital of the
Company (including consolidation, subdivision, reduction, return or cancellation), the terms of the Options and the rights of the Optionholder will be amended to the extent necessary to comply with the Listing Rules applying to a re-organisation of
capital at the time of the re-organisation. 

					
			
	Executed as an agreement.	  		 	
			
	Executed by Dr Pace	  	)	 	
			
	 /s/ Gary W. Pace
	  		 	 /s/ David Smith

		  		 	Witness
			
		  		 	 David Smith

		  		 	Names of Witness (print)
	Executed by Peplin Limited	  	)	 	
			
	 /s/ Cherrell Hirst
	  		 	 /s/ Michael Aldridge

	Director	  		 	Director
			
	 /s/ Cherrell Hirst
	  		 	 Michael Aldridge

	Name of Director	  		 	Name of Director (print)
	(print)Separation Agreement between Peplin, Inc. and Michael Aldridge

 Exhibit 10.6 
 SEPARATION AGREEMENT 
 This Separation Agreement (“Agreement”), dated as of
August 15, 2008 (the “Execution Date”), is made by and among Peplin, Inc. (the “Company” or “Peplin”) and Michael Aldridge (“Executive”) (collectively the
“Parties” or, individually, a “Party”). 
 WHEREAS, the Executive was employed as Chief Executive Officer
of the Company through August 15, 2008 (the “Termination Date”); 
 WHEREAS, Executive and the Company wish to provide
for the terms of Executive’s separation from employment with the Company and his continuing service as a consultant to the Company; 
 NOW, THEREFORE, in consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows: 
 1.            Termination of Employment. 
 (a)      Executive employment as Chief Executive Officer of the Company and any positions as an officer or employee of the
Company’s subsidiaries or affiliates is hereby terminated as of the Termination Date. Executive hereby resigns his position as an officer and director of the Company and its subsidiaries or affiliates as of the Termination Date. Executive
acknowledges that he has received all compensation due to him through the Termination Date, excluding accrued, unused vacation time and reimbursement of certain business expenses incurred during his employment by the Company. The Company will
promptly pay to Executive his accrued, unused vacation time and unreimbursed business expenses. The Parties acknowledge and agree that the employment agreement by and between the Company and Executive dated as of December 11, 2006 (the
“Employment Agreement) (excluding Articles 10, 11, 13 and 14) is hereby terminated and Executive acknowledges that the Company has discharged all of its obligations to Executive under the Employment Agreement, except for those
obligations specifically referenced in this Agreement. 
 (b)      Return of Property. No later than
the 10th day after the Termination Date, Executive shall return to the Company all property of the Company, including without limitation, all keys, access cards, credit cards, calling cards, computer hardware and software, cellular phones and other
mobile communications devices. 
 2.            Payments and Benefits to
Executive. 
 (a)      Payment in Lieu of Notice. Pursuant to Article 1.3 of the Employment
Agreement, the Company will pay to Executive, in a single lump sum, within ten (10) days following Executive’s execution of this Agreement, $175,000, less applicable withholding, which the Parties agree is six (6) months compensation
(the “Payment in Lieu”). In addition, provided you timely elect and remain eligible for COBRA healthcare benefit continuation, the Company will pay the COBRA premium for you and the members of your family covered under the
Company’s healthcare plan(s) for a period of six (6) months following the Termination Date. 

 (b)      Executive Outplacement and Legal Services. The Company
will pay for up to a total of $20,000 towards executive outplacement services by a firm nominated by Executive and reasonably acceptable to the Company and Executive’s attorney’s fees and expenses in connection with the negotiation of and
entry into this Agreement. 
 (c)      Consulting Arrangement. From the Termination Date through
(i) May 15, 2009 or (ii) such earlier time as the consulting services arrangement is terminated by (x) Executive or (y) the Company due to its reasonable dissatisfaction with the quality of or timeliness of Executive’s
services, which deficiencies Executive has failed to cure within twenty (20) days following his receipt of written notice from the Company specifying such deficiencies (the “Consulting Period”), Executive shall provide
consulting services to the Company, its subsidiaries and affiliates in connection with the evaluation of potential sales, mergers, acquisitions, or pharmaceutical partnerships, and the actual or potential parties to such sales, mergers or
acquisitions. Executive shall report to the Company’s Chief Executive Officer (“CEO”) or such other person as the CEO shall direct from time to time during the Consulting Period. Consultant shall provide approximately forty
(40) hours per month of services during the Consulting Period, but shall otherwise be free to engage in other employment, business or consulting activities that do not create a conflict of interest with his consulting services for the Company
or violate his obligations under Articles 10, 11, 13 and 14 of the Employment Agreement. The Company shall provide Executive with reasonable advance notice of requested consulting services and the parties shall reasonably cooperate regarding the
timing of Executive’s performance of such services, to meet the Company’s business needs and avoid undue conflict with other employment or business activities of Executive. Any consulting services in excess of forty (40) hours per
month, and any consulting services requiring travel by Executive, shall be subject to the mutual agreement of Executive and the Company. In exchange for his consulting services, the Company shall pay to Executive a monthly fee of $6,000 for up to
forty (40) hours of services, and shall be paid an additional $150 per hour after forty (40) hours in any month (the “Consulting Fees”). The Company shall reimburse Consultant for travel, food and lodging expenses
reasonably incurred in the performance of his consulting services. Executive shall be an independent contractor during the consulting period and understands and agrees that he shall be responsible for the payment of all taxes on the Consulting Fees.

 (d)      Option Extension. To the maximum extent permitted under the applicable option plans and
agreements, Executive shall continue to vest in certain of his unvested stock options and be able to exercise certain of his vested stock options during the Consulting Period as described on Exhibit A (the “Option Extension”). The
Company represents that Exhibit A accurately sets forth the grant dates, the number of shares subject to options that are vested and unvested as of the Termination Date, and identifies the period in which such options may be exercised. 

3.            Additional Covenants. Neither Party shall, publicly or privately,
disparage, defame or criticize the other Party (and, with respect to Executive’s conduct, he shall not publicly or privately disparage, defame or criticize the Company’s affiliates, subsidiaries, officers, directors or shareholders).

 4.            Release of Claims by
Executive. 
 (a)      General Release. Executive hereby releases and forever discharges the
“Executive Releasees” hereunder, consisting of the Company, and each of its respective parents, subsidiaries, affiliates, partners, members, managers, associates, affiliates, subsidiaries, successors, heirs, assigns, agents,
directors, officers, employees, shareholders, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all Claims, as defined in Section 4(b).
 (b)      Claims Released. The “Claims” released herein include any and all manner of action or
actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or
contingent, which Executive now has or may hereafter have against the Executive Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. Without limiting the generality of the
foregoing, Claims shall include: any claims in any way arising out of, based upon, or related to Executive’s employment by or service as a director to any of the Executive Releasees, or any of them, or the termination thereof; any claim for
wages, salary, commissions, bonuses, fees, incentive payments, profit-sharing payments, expense reimbursements, leave, vacation, severance pay or other benefits (excluding any such payments provided in this Agreement); any claim for benefits under
any stock option, restricted stock or other equity-based incentive plan of the Executive Releasees, or any of them (or any related agreement to which any Releasee is a party) (excluding any such benefits related to the Option Extension); any alleged
breach of any express or implied contract of employment; any alleged torts or other alleged legal restrictions on Releasee’s right to terminate the employment of Executive; and any alleged violation of any federal, state or local statute or
ordinance including, without limitation, Claims arising under: Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621, et seq.; Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of
1991, 42 U.S.C. § 2000 et seq.; Equal Pay Act, as amended, 29 U.S.C. § 206(d); the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.; the
Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq.; the False Claims Act , 31 U.S.C. § 3729 et seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.;
the Worker Adjustment and Retraining Notification Act, as amended, 29 U.S.C. § 2101 et seq. the Fair Labor Standards Act, 29 U.S.C. § 215 et seq., the Sarbanes-Oxley Act of 2002; the California Fair Employment and
Housing Act, as amended, Cal. Lab. Code § 12940 et seq.; the California Equal Pay Law, as amended, Cal. Lab. Code §§ 1197.5(a), 1199.5; the Moore-Brown-Roberti Family Rights Act of 1991, as amended, Cal. Gov’t Code
§§12945.2, 19702.3; California Labor Code §§ 1101, 1102, 69 Ops. Cal. Atty. Gen. 80 (1986); California Labor Code §§ 1102.5(a),(b); the California WARN Act, Cal. Lab. Code § 1400 et seq.; the California
False Claims Act, Cal. Gov’t Code § 12650 et seq.; the California Corporate Criminal Liability Act, Cal. Penal Code § 387; or under the California Labor Code), or any other federal, state or local law. 
 (c)      Claims Not Released. Notwithstanding the generality of the foregoing, Executive does not release the
following claims and rights: 

 (i)         Executive’s rights under this Agreement,
including without limitation his right to the Payment in Lieu, Option Extension and the Consulting Fees; 
 (ii)        Any Claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law; 
 (iii)       Claims to continued participation in certain of the Company’s group benefit plans pursuant to the
terms and conditions of the federal law known as COBRA or the comparable California law known as Cal-COBRA; 
 (iv)       Claims to any benefit entitlements vested as the date of separation of your employment, pursuant to written terms of any Company employee benefit plan; 
 (v)        Executive’s right to bring to the attention of the Equal Employment Opportunity Commission
claims of discrimination; provided, however, that you do release your right to secure any damages for alleged discriminatory treatment; 
 (vi)       Executive’s right, if any, to indemnity pursuant to the California Labor Code and the Company’s bylaws; and 
 (vii)      Any other right that may not be released by private agreement 
 (collectively, the “Executive Unreleased Claims”). 
 (d)      Unknown Claims. EXECUTIVE ACKNOWLEDGES THAT HE IS HEREBY ADVISED OF AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

 “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” 
 EXCEPT WITH RESPECT TO THE EXECUTIVE UNRELEASED CLAIMS, EXECUTIVE, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

 (e)      Review and Revocation. Executive agrees and expressly acknowledges that this Agreement
includes a waiver and release of all claims which Executive has or may have under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621, et seq. 

 
(“ADEA”). The following terms and conditions apply to and are part of the waiver and release of the ADEA claims under this general release:

 (i)        This Agreement is written in a manner calculated to be understood by Executive, and
Executive understands it. 
 (ii)       The waiver and release of claims under the ADEA contained in this
Agreement does not cover rights or claims that may arise after the date on which Executive signs this Agreement. 
 (iii)      This Agreement provides for consideration in addition to anything of value to which Executive is already entitled. 
 (iv)      Executive understands that Executive is hereby advised to consult an attorney before signing this Agreement. 
 (v)       Executive understands that Executive has been granted twenty-one (21) days after receiving this
Agreement to decide whether or not to sign this Agreement. If Executive executes this Agreement prior to the expiration of such period, Executive does so voluntarily and after having had the opportunity to consult with an attorney, and hereby waives
the remainder of the twenty-one (21) day period. 
 (vi)      Executive understands that Executive have
the right to revoke this Agreement within 7 days of signing this Agreement. In the event this Agreement is revoked, this Agreement will be null and void in their entirety, and Executive will not receive the Consulting Fees or otherwise receive the
benefits of the consulting arrangement. 
 If Executive wishes to revoke this Agreement, Executive must deliver written notice stating
Executive’s intent to revoke this Agreement to the Company’s Chief Executive Officer, on or before 5:00 p.m. on the seventh (7th) Day
after the date on which Executive signed this Agreement. 
 (f)      No Assignments of Claims.
Executive represents and warrants that there has been no assignment or other transfer of any interest in any Claim which he may have against Executive Releasees, or any of them, and Executive agrees to indemnify and hold Executive Releasees, and
each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Executive Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such
assignment or transfer. It is the intention of the Parties that this indemnity does not require payment as a condition precedent to recovery by the Executive Releasees against Executive under this indemnity. 
 (g)      No Actions. Executive agrees that if he hereafter commences any suit arising out of, based upon, or
relating to any of the Claims released hereunder or in any manner asserts against Executive Releasees, or any of them, any of the Claims released hereunder, then Executive shall pay to Executive Releasees, and each of them, in addition to any other
damages caused to Executive Releasees thereby, all attorneys’ fees incurred by Executive Releasees in defending or otherwise responding to said suit or Claim. The foregoing shall not apply to: (1) Executive’s right to file a charge
with the United States Equal Employment Opportunity 

 
Commission; however, Executive hereby waives any right to any damages or individual relief resulting from any charge; or (2) any suit or Claim to the
extent it challenges the effectiveness of this release with respect to a claim under the Age Discrimination in Employment Act. 
 (h)      No Admission. Executive further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any
liability whatsoever by the Executive Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to Executive. 
 (i)      No Reliance. Executive acknowledges that different or additional facts may be discovered in addition to what is now known or believed to be true by him with respect to the
matters released in this Agreement, and Executive agrees that this Agreement shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts. 
 5.            Release of Claims by the Company. 
 (a)      General Release. The Company hereby releases and forever discharges the “Company
Releasees” hereunder, consisting of the Executive, his heirs, estates, successors, assigns, lawyers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all Claims, as defined in
Section 5(b).
 (b)      Claims Released. The “Claims” released herein include
any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature
whatsoever, known or unknown, fixed or contingent, which the Company now has or may hereafter have against the Company Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof.
Without limiting the generality of the foregoing, Claims shall include: any claims in any way arising out of, based upon, or related to Executive’s employment by or service as a director to any of the Company Releasees, or any of them, or the
termination thereof. 
 (c)      Claims Not Released. Notwithstanding the generality of the foregoing,
Executive does not release the following claims and rights: 
 (i)        The Company’s rights
under this Agreement and under Articles 10, 11, 13 and 14 of the Employment Agreement; 
 (ii)       Any
Claims arising out of criminal conduct by Executive; 
 (iii)      Any Claims arising out of any fraudulent
conduct by Executive; 
 (iv)      Any Claims arising out of Executive’s intentional misconduct;

 (v)      Any other right that may not be released by private agreement

 (collectively, the “Company Unreleased Claims”). 
 (d)      Unknown Claims. THE COMPANY ACKNOWLEDGES THAT IT IS HEREBY ADVISED OF AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

 “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” 
 EXCEPT WITH RESPECT TO THE COMPANY UNRELEASED CLAIMS, THE COMPANY, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS IT MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

 (e)      No Assignments of Claims. The Company represents and warrants that there has been no
assignment or other transfer of any interest in any Claim which it may have against Company Releasees, or any of them, and the Company agrees to indemnify and hold Company Releasees, and each of them, harmless from any liability, Claims, demands,
damages, costs, expenses and attorneys’ fees incurred by Company Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the Parties
that this indemnity does not require payment as a condition precedent to recovery by the Company Releasees against the Company under this indemnity. 
 (f)      No Actions. The Company agrees that if it hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner
asserts against Company Releasees, or any of them, any of the Claims released hereunder, then the Company shall pay to Company Releasees, and each of them, in addition to any other damages caused to Company Releasees thereby, all attorneys’
fees incurred by Company Releasees in defending or otherwise responding to said suit or Claim. 
 (g)      No Admission. The Company further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any
liability whatsoever by the Company Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the Company. 
 (h)      No Reliance. The Company acknowledges that different or additional facts may be discovered in addition to what is now known or believed to be true by him with respect to
the matters released in this Agreement, and the Company agrees that this Agreement shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts. 

 6.            Notices. 
 All notices, requests, demands and other communications that are required or may be given under this Agreement shall be in writing and shall be deemed
to have been duly given when received if: (i) personally delivered, when transmitted if transmitted by telecopy, electronic or digital transmission method with electronic confirmation of receipt; (ii) the day after it is sent, if sent for
next-day delivery to a domestic address by recognized overnight delivery service (e.g., FedEx); and (iii) upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice shall be sent to: 

 

			
	If to the Company:	 	
		 	 Peplin, Inc.
 6475 Christie Avenue
 Suite 300
 Emeryville, CA 94608
 Attention: Chairman of the Compensation
 Committee of the Board of Directors

 Facsimile: 510-653-9704

		
	with a copy to:	 	 Latham & Watkins LLP
 650 Town Center
Drive
 Suite 2000
 Costa Mesa, CA 92626
 Attention: B. Shayne Kennedy
 Facsimile: 714-755-8290

		
	If to Executive:	 	 Michael Aldridge
 339 Sea View Avenue
 Piedmont CA 94610
 maldridge@mail.com

		
	with a copy to:	 	 Morrison & Foerster LLP
 755 Page Mill
Road
 Palo Alto, CA 94134
 Attention: Christine Lyon

Facsimile: 650-494-0792

 Either Party may change the address for notice by sending written notice of a change of address to the other Party
in accordance with this Section 5. 
 7.            Severability. If
any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to exceed the limitations permitted by applicable law, as determined by such court in such action, then the provisions will be deemed reformed
to apply to the maximum limitations permitted by applicable law and the Parties hereby expressly acknowledge their desire that in such event such action be taken. Notwithstanding the foregoing, the Parties further agree that if any term, provision,
covenant or condition of this Agreement is 

 
held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and in
no way shall be affected, impaired or invalidated. 
 8.            Entire
Agreement; Amendment. This Agreement (which defined term shall include the Exhibit A hereto), represent the entire agreement and understanding among the Parties concerning Executive’s employment and separation from the Company and, except
as expressly set forth herein, supersedes and replaces any and all prior agreements and understandings concerning Executive’s relationship with the Company and his compensation from the Company. This Agreement may only be amended by a writing
signed by both Executive and a duly authorized officer of the Company. Notwithstanding the foregoing, Executive’s obligations under Articles 10, 11, 13 and 14 of the Employment Agreement shall survive the Termination Date and shall not be
amended, limited or superseded by this Agreement. 
 9.            Governing
Law. This Agreement shall be governed by the laws of the State of California without regard to its conflict of laws rules. 
 10.          Cooperation with the Company. Within the confines of the law and to the extent such action does not unreasonably interfere with Executive’s obligations to any future
employer, Executive agrees to cooperate fully with the Company in its defense of, or other participation in, any administrative, judicial or other proceeding arising from any charge, complaint or other action which has been or may be filed and that
relates to Executive’s employment, Executive’s duties and responsibilities to the Company, or events of which Executive has knowledge due to his employment by the Company. Executive shall sign any and all truthful and accurate documents
for which his signature may be needed in connection with any charge, complaint or other action, or Executive’s employment with the Company, including without limitation, any regulatory filings. Executive will not be entitled to any further
compensation for such cooperation; however, the Company will reimburse Executive for reasonable out of pocket expenses actually incurred in connection with his cooperation. 
 11.          Taxes. 
 (a)      Section 409A. Certain payments and benefits under this Agreement are intended to be exempt from the
application of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), while other payments hereunder may constitute “nonqualified deferred compensation” within the meaning of Section 409A, the
payment of which is intended to comply with Section 409A. To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A and Department of Treasury regulations and other interpretive guidance issued
thereunder. Notwithstanding any provision of this Agreement to the contrary, if the Company determines that any such compensation or benefits payable under this Agreement may be subject to Section 409A and related Department of Treasury
guidance, the Company may, with Executive’s prior written consent, adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other
actions, that the Company determines are necessary or appropriate to (i) exempt the compensation and benefits payable under this Agreement from Section 409A and/or preserve the intended tax treatment of such compensation 

 
and benefits, or (ii) comply with the requirements of Section 409A and related Department of Treasury guidance. 
 (b)      Withholding. The Company shall withhold from any amounts payable under this Agreement such federal, state, local
or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. 
 12.          Acknowledgement. Executive acknowledges that the Option Extension is consideration for Executive’s promises and covenants contained and affirmed in this Agreement,
including without limitation, his execution of the Release, and that such consideration is above and beyond any compensation to which he is entitled from the Company in connection with his employment or the termination thereof, or under any contract
or law. 
 13.          Confidentiality. The Parties agree that they shall not,
directly or indirectly, provide to any person or entity any information that concerns or relates to the negotiation of or circumstances leading to the execution of this Agreement or to the terms and conditions hereof, provided that the Parties may
make disclosure of the foregoing: (a) to the extent that such disclosure is specifically required by law or legal process or as authorized in writing by the other Party; (b) to such Party’s tax advisor(s) or accountant(s) as may be
necessary for the preparation of tax returns or other reports required by law; (c) to such Party’s attorney(s); and/(d) by Executive to members of his immediate family, provided, that prior to disclosing any such information (except
disclosures required by law or legal process or as authorized in writing), the disclosing party will inform the recipients that they are bound by the limitations of this Section 12. 
 14.          Attorneys’ Fees. The Company shall bear its own attorneys’ fees and
expenses in connection with the negotiation of and entry into this Agreement, and the Company shall pay Executive’s attorney’s fees and expenses in connection with the negotiation of and entry into this Agreement as provided in
Section 2(b). In the event of any litigation arising out of a dispute as to the interpretation, enforcement or breach of this Agreement, the prevailing party shall be entitled to an award of its attorneys’ fees, expert witness expenses and
legal costs reasonably incurred. 
 15.          No Admissions. By entering into
this Agreement, no Party hereto is admitting any liability or wrongdoing whatsoever, nor does this Agreement constitute an admission of any fact, claim or allegation. This Agreement in no way implies the truth of any claim or allegation.
Furthermore, this Agreement shall not be construed as an admission that any Party violated any order, law, statute, duty, contract, legal duty or obligation. 
 16.          Voluntary Execution of Agreement. Executive acknowledges and agrees that he is executing this Agreement and the Release voluntarily and without any
duress or undue influence on the part or behalf of the Company, with the full intent of releasing all Claims (as defined in the Release). Executive further acknowledges and agrees that he has been represented in the preparation, negotiation and
execution of this Agreement and the Release by legal counsel of his own choice or he has voluntarily declined to seek such counsel. 
 IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first written above. 

					
	COMPANY:	 	Peplin, Inc.
			
		 	By:	 	/s/ James Scopa                
		 		 	James Scopa
		
	EXECUTIVE:	 	/s/ Michael Aldridge                    
		 	Michael Aldridge

 EXHIBIT A 
  

											
	Grant Date	  	Option
Shares	  	Exercise
Price (Australian
dollars)
	  	Vested
 Option Shares
 (as of 7/16/08)
	  	Unvested
Option
Shares	  	 Exercise Following
 Termination

						
	10/13/2003	  	15,000	  	$16.94	  	15,000	  	0	  	Option remains exercisable for up to 270 days as provided in the 2003 employment agreement
						
	10/13/2003	  	85,000	  	$20.00	  	70,000	  	15,000	  	Option remains exercisable for up to 270 days as provided in the 2003 employment agreement
						
	1/20/2005	  	5,000	  	$8.80	  	5,000	  	0	  	Option shall continue to vest and be exercisable through the Consulting Period
						
	1/4/2006	  	6,056	  	$13.80	  	6,056	  	0	  	Option shall continue to vest and be exercisable through the Consulting Period
						
	10/12/2006	  	50,000	  	$14.00	  	33,334	  	16,666	  	Option shall terminate as of the Termination Date.
						
	12/12/2006	  	37,500	  	$17.20	  	25,000	  	12,500	  	Option shall continue to vest and be exercisable through the Consulting Period
						
	1/16/2008	  	31,119	  	$15.00	  	3,894	  	27,225	  	Option shall continue to vest and be exercisable through the Consulting Period

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