0000921895-12-000437.txt : 20120302 0000921895-12-000437.hdr.sgml : 20120302 20120302172807 ACCESSION NUMBER: 0000921895-12-000437 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20120302 DATE AS OF CHANGE: 20120302 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DERMA SCIENCES, INC. CENTRAL INDEX KEY: 0000892160 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 232328753 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-52013 FILM NUMBER: 12663998 BUSINESS ADDRESS: STREET 1: 214 CARNEGIE CENTER, SUITE 300 CITY: PRINCETON STATE: NJ ZIP: 08540 BUSINESS PHONE: 6095144744 MAIL ADDRESS: STREET 1: 214 CARNEGIE CENTER, SUITE 300 CITY: PRINCETON STATE: NJ ZIP: 08540 FORMER COMPANY: FORMER CONFORMED NAME: DERMA SCIENCES INC DATE OF NAME CHANGE: 19940513 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Raging Capital Management, LLC CENTRAL INDEX KEY: 0001444376 IRS NUMBER: 204306350 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: TEN PRINCETON AVENUE CITY: ROCKY HILL STATE: NJ ZIP: 08553 BUSINESS PHONE: 6099100954 MAIL ADDRESS: STREET 1: TEN PRINCETON AVENUE CITY: ROCKY HILL STATE: NJ ZIP: 08553 SC 13D/A 1 sc13da107738013_03022012.htm AMENDMENT NO. 1 TO THE SCHEDULE 13D sc13da107738013_03022012.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
§ 240.13d-2(a)

(Amendment No. 1)1

Derma Sciences, Inc.
(Name of Issuer)

Common Stock, par value $0.01 per share
(Title of Class of Securities)

249827502
(CUSIP Number)
 
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

March 2, 2012
(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box x.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.


_______________
1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 

 
CUSIP NO. 249827502
 
1
NAME OF REPORTING PERSON
 
Raging Capital Fund, LP
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
WC
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
- 0 -
8
SHARED VOTING POWER
 
587,530 (1)
9
SOLE DISPOSITIVE POWER
 
- 0 -
10
SHARED DISPOSITIVE POWER
 
587,530 (1)
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
        587,530 (1)
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
       5.5%
14
TYPE OF REPORTING PERSON
 
       PN

(1) Includes 115,108 shares of Common Stock issuable upon the exercise of warrants.

 
2

 
CUSIP NO. 249827502
 
1
NAME OF REPORTING PERSON
 
Raging Capital Fund (QP), LP
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
WC
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
- 0 -
8
SHARED VOTING POWER
 
1,226,858 (1)
9
SOLE DISPOSITIVE POWER
 
- 0 -
10
SHARED DISPOSITIVE POWER
 
1,226,858 (1)
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
       1,226,858 (1)
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
       11.1%
14
TYPE OF REPORTING PERSON
 
       PN

(1) Includes 466,723 shares of Common Stock issuable upon the exercise of warrants.

 
3

 
CUSIP NO. 249827502
 
1
NAME OF REPORTING PERSON
 
Raging Capital Management, LLC
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
- 0 -
8
SHARED VOTING POWER
 
1,814,388 (1)
9
SOLE DISPOSITIVE POWER
 
- 0 -
10
SHARED DISPOSITIVE POWER
 
1,814,388 (1)
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
       1,814,388 (1)
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
       16.3%
14
TYPE OF REPORTING PERSON
 
       OO

(1) Includes 581,831 shares of Common Stock issuable upon the exercise of warrants.

 
4

 
CUSIP NO. 249827502
 
1
NAME OF REPORTING PERSON
 
William C. Martin
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
PF, AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
1,500
8
SHARED VOTING POWER
 
1,814,388 (1)
9
SOLE DISPOSITIVE POWER
 
1,500
10
SHARED DISPOSITIVE POWER
 
1,814,388 (1)
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
1,815,888 (1)
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
16.3%
14
TYPE OF REPORTING PERSON
 
       IN

(1) Includes 581,831 shares of Common Stock issuable upon the exercise of warrants.

 
5

 
CUSIP NO. 249827502
 
1
NAME OF REPORTING PERSON
 
Paul M. Gilbert
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
- 0 -
8
SHARED VOTING POWER
 
- 0 -
9
SOLE DISPOSITIVE POWER
 
- 0 -
10
SHARED DISPOSITIVE POWER
 
- 0 -
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
- 0 -
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
0%
14
TYPE OF REPORTING PERSON
 
       IN

 
6

 
CUSIP NO. 249827502
 
The following constitutes Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”).  This Amendment No. 1 amends the Schedule 13D as specifically set forth herein.
 
Item 2.
Identity and Background.
 
Item 2 is hereby amended and restated to read as follows:
 
 
(a)
This statement is filed by:
 
 
(i)
Raging Capital Fund, LP, a Delaware limited partnership (“Raging Capital Fund”);
 
 
(ii)
Raging Capital Fund (QP), LP, a Delaware limited partnership (“Raging Capital Fund QP” and together with Raging Capital Fund, the “Raging Funds”);
 
 
(iii)
Raging Capital Management, LLC, a Delaware limited liability company (“Raging Capital”), who serves as the general partner of each of the Raging Funds;
 
 
(iv)
William C. Martin (“Mr. Martin”), who serves as the managing member of Raging Capital and is a nominee for election to the Board of Directors of the Issuer (the “Board”); and
 
 
(v)
Paul M. Gilbert (“Mr. Gilbert”), a nominee for election to the Board.
 
Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.”  Each of the Reporting Persons is party to that certain Joint Filing and Solicitation Agreement, as further described in Item 6.  Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.
 
(b)           The address of the principal office of each of the Reporting Persons, other than Mr. Gilbert, is Ten Princeton Avenue, Rocky Hill, New Jersey 08553.  Mr. Gilbert’s principal business address is c/o MedAvante, Inc., 100 American Metro Blvd, Hamilton, New Jersey 08619.
 
(c)           The principal business of each of the Raging Funds is investing in securities.  The principal business of Raging Capital is serving as the general partner of each of the Raging Funds.  The principal occupation of Mr. Martin is serving as the managing member of Raging Capital.  The principal occupation of Mr. Gilbert is serving as the Chief Executive Officer of MedAvante, Inc., a technology-enabled global healthcare services organization.
 
(d)           No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
 
(e)           No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
 
 
7

 
CUSIP NO. 249827502
 
(f)           The Raging Funds and Raging Capital are organized under the laws of the State of Delaware.  Messrs. Gilbert and Martin are each citizens of the United States of America.
 
Item 3.
Source and Amount of Funds or Other Consideration.
 
Item 3 is hereby amended and restated to read as follows:
 
The aggregate purchase price of the 1,232,557 Shares owned directly by the Raging Funds and the warrants to purchase 581,831 Shares owned directly by the Raging Funds is approximately $10,207,021, including brokerage commissions.  Such securities were acquired with the working capital of the Raging Funds.
 
The aggregate purchase price of the 1,500 Shares owned directly by Mr. Martin is approximately $14,525, excluding brokerage commissions.  Such securities were acquired with Mr. Martin’s personal funds.
 
The Raging Funds effect purchases of securities primarily through margin accounts maintained for them with prime brokers, which may extend margin credit to them as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations, stock exchange rules and the prime brokers’ credit policies.  In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts.
 
Item 4.
Purpose of Transaction.
 
Item 4 is hereby amended to add the following:
 
On March 2, 2012, Raging Capital Fund delivered a letter to the Issuer nominating Paul M. Gilbert and William C. Martin (together, the “Nominees”), as set forth therein, for election to the Board at the Issuer’s 2012 annual meeting of stockholders (including any other meeting of stockholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof, the “Annual Meeting”).  Raging Capital may enter into discussions with the Issuer regarding, among other things, the size and composition of the Board.
 
Item 5.
Interest in Securities of the Issuer.
 
Item 5(a) is hereby amended and restated to read as follows:
 
(a)           The aggregate percentage of Shares reported owned by each person named herein is based upon 10,577,632 Shares outstanding as of November 9, 2011, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2011.
 
As of the close of business on March 1, 2012, Raging Capital Fund beneficially owned 587,530 Shares, including 115,108 Shares issuable upon the exercise of warrants, constituting approximately 5.5% of the Shares outstanding.  The warrants owned by Raging Capital Fund consist of 70,766 Series O Warrants with an exercise price of $5.50 per Share and 44,342 Series R Warrants with an exercise price of $9.90 per Share.  By virtue of their relationships with Raging Capital Fund discussed in further detail in Item 2, each of Raging Capital and Mr. Martin may be deemed to beneficially own the Shares beneficially owned by Raging Capital Fund.
 
 
8

 
CUSIP NO. 249827502
 
As of the close of business on March 1, 2012, Raging Capital Fund QP beneficially owned 1,226,858 Shares, including 466,723 Shares issuable upon the exercise of warrants, constituting approximately 11.1% of the Shares outstanding.  The warrants owned by Raging Capital Fund QP consist of 57,900 Series O Warrants with an exercise price of $5.50 per Share, 82,930 Series R Warrants with an exercise price of $9.90 per Share, 200,893 Series J Warrants with an exercise price of $6.16 per Share and 125,000 Series K Warrants with an exercise price of $9.60 per Share.  By virtue of their relationships with Raging Capital Fund QP discussed in further detail in Item 2, each of Raging Capital and Mr. Martin may be deemed to beneficially own the Shares beneficially owned by Raging Capital Fund QP.
 
As of the close of business on March 1, 2012, Mr. Martin directly owned 1,500 Shares, constituting less than 1% of the Shares outstanding.
 
As of the close of business on March 1, 2012, Mr. Gilbert did not directly own any Shares.
 
Each of the Reporting Persons, as a member of a “group” with the other Reporting Persons for purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), may be deemed to beneficially own the Shares owned by the other Reporting Persons.  The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any Shares he or it does not directly own.  Each of the Reporting Persons specifically disclaims beneficial ownership of the Shares reported herein that he or it does not directly own.
 
The Series O Warrants and Series R Warrants owned by the Raging Funds contain “blocker” provisions which could restrict the Raging Funds’ ability to exercise all or a portion of the warrants to the extent that the issuance of Shares upon exercise of such warrants would result in the Raging Funds and their affiliates beneficially owning in the aggregate such percentage of the outstanding Shares in excess of specified limits (9.99% of the outstanding Shares in the case of the Series O Warrants and 9.98% of the outstanding Shares in the case of the Series R Warrants).
 
Item 5(c) is hereby amended to add the following:
 
(c)           Schedule A annexed hereto lists all transactions in securities of the Issuer during the past sixty days by the Reporting Persons.  All of such transactions were effected in the open market, except as otherwise indicated on Schedule A.
 
Item 6.
Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
 
Item 6 is hereby amended to add the following:
 
On March 2, 2012, the Reporting Persons entered into a Joint Filing and Solicitation Agreement pursuant to which, among other things, (i) they agreed to the joint filing on behalf of each of them of statements on Schedule 13D, and any amendments thereto, with respect to the securities of the Issuer, (ii) they agreed to solicit proxies or written consents for the election of the Nominees to the Board at the Annual Meeting (the “Solicitation”), and (iii) the Raging Funds agreed to pay directly all pre-approved expenses incurred in connection with the Solicitation.  A copy of the Joint Filing and Solicitation Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
 
On March 2, 2012, Raging Capital Fund entered into an Indemnification Agreement with Paul M. Gilbert pursuant to which it agreed to indemnify Mr. Gilbert from and against claims arising from the Solicitation and any related matters.  A copy of the Indemnification Agreement is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
 
 
9

 
CUSIP NO. 249827502
 
Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.
 
Item 7.
Material to be Filed as Exhibits.
 
Item 7 is hereby amended to add the following exhibits:
 
 
99.1
Joint Filing and Solicitation Agreement by and among Raging Capital Fund, LP, Raging Capital Fund (QP), LP, Raging Capital Management, LLC, William C. Martin and Paul M. Gilbert, dated March 2, 2012.
 
 
99.2
Indemnification Agreement by and between Raging Capital Fund, LP and Paul M. Gilbert, dated March 2, 2012.
 
 
10

 
CUSIP NO. 249827502

SIGNATURES
 
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
 
Dated: March 2, 2012

 
Raging Capital Fund, LP
   
 
By:
Raging Capital Management, LLC
General Partner
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member


 
Raging Capital Fund (QP), LP
     
 
By:
Raging Capital Management, LLC
General Partner
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member


 
Raging Capital Management, LLC
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member


 
/s/ William C. Martin
 
William C. Martin


 
/s/ Paul M. Gilbert
 
Paul M. Gilbert
 
 
11

 
CUSIP NO. 249827502
 
SCHEDULE A

Transactions in the Securities of the Issuer During the Past 60 Days

Class of
Security
Securities
Purchased
Price Per
Security ($)
Date of
Purchase
 
RAGING CAPITAL FUND (QP), LP
 
Common Stock
7,830
 
7.0178
01/04/12
Common Stock
19,879
 
7.1490
01/06/12
Series J Warrants1
200,893
 
3.1000
02/29/12
Series K Warrants2
125,000
 
1.0500
02/29/12



1 Each Series J Warrant is exercisable into one Share at an exercise price of $6.16 per Share.  Such warrants were acquired in a private transaction.
 
2 Each Series K Warrant is exercisable into one Share at an exercise price of $9.60 per Share.  Such warrants were acquired in a private transaction.
EX-99.1 2 ex991to13da107738013_030212.htm JOINT FILING AND SOLICITATION AGREEMENT ex991to13da107738013_030212.htm
Exhibit 99.1
 
JOINT FILING AND SOLICITATION AGREEMENT
 
WHEREAS, certain of the undersigned are shareholders, direct or beneficial, of Derma Sciences, Inc., a Pennsylvania corporation (the “Company”);
 
WHEREAS, Raging Capital Fund, LP, a Delaware limited partnership (“Raging Capital Fund”), Raging Capital Fund (QP), LP, a Delaware limited partnership (“Raging Capital Fund QP”), Raging Capital Management, LLC, a Delaware limited liability company (“Raging Capital”), William C. Martin and Paul M. Gilbert wish to form a group for the purpose of seeking representation on the Board of Directors of the Company (the “Board”) at the 2012 annual meeting of shareholders of the Company (including any other meeting of shareholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof, the “2012 Annual Meeting”) and for the purpose of taking all other action necessary to achieve the foregoing.
 
NOW, IT IS AGREED, this 2nd day of March 2012 by the parties hereto:
 
1.           In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), each of the undersigned (collectively, the “Group”) agrees to the joint filing on behalf of each of them of statements on Schedule 13D, and any amendments thereto, with respect to the securities of the Company.  Each member of the Group shall be responsible for the accuracy and completeness of his/its own disclosure therein, and is not responsible for the accuracy and completeness of the information concerning the other members, unless such member knows or has reason to know that such information is inaccurate.
 
2.           So long as this Agreement is in effect, each of the undersigned shall provide written notice to Olshan Grundman Frome Rosenzweig & Wolosky LLP (“Olshan”) of (i) any of their purchases or sales of securities of the Company, or (ii) any securities of the Company over which they acquire or dispose of beneficial ownership.  Notice shall be given no later than 24 hours after each such transaction.
 
3.           Each of the undersigned agrees to form the Group for the purpose of (i) soliciting proxies or written consents for the election of the persons nominated by Raging Capital Fund to the Board at the 2012 Annual Meeting, (ii) taking such other actions as the parties deem advisable, and (iii) taking all other action necessary or advisable to achieve the foregoing.
 
4.           Raging Capital Fund and Raging Capital Fund QP shall have the right to pre-approve all expenses incurred in connection with the Group’s activities set forth in Section 3 and agree to pay directly all such pre-approved expenses on a pro-rata basis based on the number of shares of common stock of the Company beneficially owned by each of Raging Capital Fund and Raging Capital Fund QP on the date hereof.
 
5.           Each of the undersigned agrees that any SEC filing, press release or shareholder communication proposed to be made or issued by the Group or any member of the Group in connection with the Group’s activities set forth in Section 3 shall be first approved by Raging Capital or its representatives.
 
6.           The relationship of the parties hereto shall be limited to carrying on the business of the Group in accordance with the terms of this Agreement.  Such relationship shall be construed and deemed to be for the sole and limited purpose of carrying on such business as described herein.  Nothing herein shall be construed to authorize any party to act as an agent for any other party, or to create a joint venture or partnership, or to constitute an indemnification.  Nothing herein shall restrict any party’s right to purchase or sell securities of the Company, as he/it deems appropriate, in his/its sole discretion, provided that all such purchases and sales are made in compliance with all applicable securities laws.
 
 
 

 
 
7.           This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute but one and the same instrument, which may be sufficiently evidenced by one counterpart.
 
8.           Any legal action or proceeding arising out of the provisions of this Agreement or the parties’ investment in the Company shall be brought and determined in the United States District Court for the Southern District of New York located in the Borough of Manhattan or the courts of the State of New York located in the County of New York.
 
9.           Any party hereto may terminate his/its obligations under this Agreement on 24 hours’ prior written notice to all other parties, with a copy by fax to Steve Wolosky at Olshan, Fax No. (212) 451-2222.
 
10.           Each party acknowledges that Olshan shall act as counsel for both the Group and Raging Capital and its affiliates relating to their investment in the Company.
 
11.           Each of the undersigned hereby agrees that this Agreement shall be filed as an exhibit to a Schedule 13D pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act.
 
 
2

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

 
Raging Capital Fund, LP
   
 
By:
Raging Capital Management, LLC
General Partner
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member


 
Raging Capital Fund (QP), LP
     
 
By:
Raging Capital Management, LLC
General Partner
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member


 
Raging Capital Management, LLC
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member


 
/s/ William C. Martin
 
William C. Martin


 
/s/ Paul M. Gilbert
 
Paul M. Gilbert
 
 
EX-99.2 3 ex992to13da107738013_030212.htm INDEMNIFICATION AGREEMENT ex992to13da107738013_030212.htm
Exhibit 99.2
 
RAGING CAPITAL FUND, LP
Ten Princeton Avenue
Rocky Hill, New Jersey 08553 

March 2, 2012
 
Paul M. Gilbert
c/o MedAvante, Inc.
100 American Metro Blvd
Hamilton, New Jersey 08619

Re:           Derma Sciences, Inc.
 
Dear Paul:
 
Thank you for agreeing to serve as a nominee for election to the Board of Directors of Derma Sciences, Inc. (the “Company”) in connection with the proxy solicitation that Raging Capital Fund, LP (“Raging Capital”) is considering undertaking to nominate and elect directors at the Company’s 2012 annual meeting of shareholders, or any other meeting of shareholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof (the “Solicitation”).  Your outstanding qualifications, we believe, will prove a valuable asset to the Company and all of its shareholders.  This letter will set forth the terms of our agreement.
 
Raging Capital agrees to indemnify and hold you harmless against any and all claims of any nature arising from the Solicitation and any related transactions, irrespective of the outcome; provided, however, that you will not be entitled to indemnification for claims arising from your gross negligence, willful misconduct, intentional and material violations of law, criminal actions, provision to Raging Capital or its affiliates of false or misleading information (including false or misleading information on any questionnaire you are requested to complete by Raging Capital or its affiliates), or material breach of the terms of this letter agreement; provided further, that upon your becoming a director of the Company, this indemnification shall not apply to any claims made against you in your capacity as a director of the Company.  This indemnification will include any and all losses, liabilities, damages, demands, claims, suits, actions, judgments, or causes of action, assessments, costs and expenses, including, without limitation, interest, penalties, reasonable attorneys’ fees, and any and all reasonable costs and expenses incurred in investigating, preparing for or defending against any litigation, commenced or threatened, any civil, criminal, administrative or arbitration action, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation asserted against, resulting, imposed upon, or incurred or suffered by you, directly or indirectly, as a result of or arising from the Solicitation and any related transactions (each, a “Loss”).
 
In the event of a claim against you pursuant to the prior paragraph or the occurrence of a Loss, you shall give Raging Capital prompt written notice of such claim or Loss (provided that failure to promptly notify Raging Capital shall not relieve it from any liability which it may have on account of this letter agreement, except to the extent it shall have been materially prejudiced by such failure).  Upon receipt of such written notice, Raging Capital will provide you with counsel to represent you.  Such counsel shall be reasonably acceptable to you.  In addition, you will be reimbursed promptly for all Losses suffered by you and as incurred as provided herein.  Raging Capital may not enter into any settlement of Loss or claim without your consent unless such settlement includes a release of you from any and all liability in respect of such Loss or claim.  Notwithstanding anything to the contrary set forth in this letter agreement, Raging Capital shall not be responsible for any fees, costs or expenses of separate legal counsel retained by you without Raging Capital’s prior written approval.  In addition, you agree not to enter into any settlement of Loss or claim without the written consent of Raging Capital, which consent will not be unreasonably withheld.
 
 
 

 
 
You hereby agree to keep confidential and not disclose to any party, without the consent of Raging Capital, any confidential, proprietary or non-public information (collectively, “Information”) that you have heretofore obtained or may obtain in connection with the Solicitation or your service as a nominee hereunder.  Notwithstanding the foregoing, Information shall not include any information that is publicly disclosed by Raging Capital or its affiliates or any information that you can demonstrate is now, or hereafter becomes, through no act or failure to act on your part, otherwise generally known to the public.
 
Notwithstanding the foregoing, if you are required by applicable law, rule, regulation or legal process to disclose any Information you may do so provided that you first promptly notify Raging Capital so that Raging Capital or any of its representatives may seek a protective order or other appropriate remedy or, in Raging Capital’s sole discretion, waive compliance with the terms of this letter agreement.  In the event that no such protective order or other remedy is obtained or Raging Capital does not waive compliance with the terms of this letter agreement, you may consult with counsel at the cost of Raging Capital and you may furnish only that portion of the Information which you are advised by counsel is legally required to be so disclosed and you will request that the party(ies) receiving such Information maintain it as confidential.
 
All Information, all copies thereof, and any studies, notes, records, analyses, compilations or other documents prepared by you containing such Information, shall be and remain the property of Raging Capital and, upon the request of a representative of Raging Capital, all such information shall be returned or, at Raging Capital’s option, destroyed by you, with such destruction confirmed by you to Raging Capital in writing.
 
This letter agreement shall be governed by the laws of the State of New York, without regard to the principles of the conflicts of laws thereof.
 
 
 

 
 
This letter agreement may be executed in counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.

 
Very truly yours,
   
 
Raging Capital Fund, LP
   
 
By:
Raging Capital Management, LLC
General Partner
   
 
By:
/s/ William C. Martin
   
Name:
William C. Martin
   
Title:
Managing Member

 
ACCEPTED AND AGREED:
 
 
/s/ Paul M. Gilbert
PAUL M. GILBERT