SHARE LENDING AGREEMENT
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By and Between:
XXXXXX XXXXXX, Businessperson, of Providenciales, Turks and Caicos Islands,
B.W.I.
(hereinafter referred to as "Xxxxxx")
And
BERRA HOLDINGS LTD., a private company incorporated pursuant to the laws of the
Turks and Caicos Islands, B.W.I.
(hereinafter referred to as "Berra")
And
VEM AKTIENBANK AG, duly represented by its CEO, Xxxxxxx Xxxxx, and maintaining
its corporate offices at Xxxxxxxx 0, 00000 Xxxxxx, Xxxxxxx
(hereinafter referred to as "VEM")
PREAMBLE:
Dermisonics, Inc. (the "Company") is an operating company incorporated pursuant
to the laws of the State of Nevada, one of the United States of America, which
maintains a market for its common shares, par value $0.001, in Germany through
listings in the Freiverkehr at the Berlin-Bremen Stock Exchange ("Berlin
Exchange") and the Frankfurt Stock Exchange ("Frankfurt Exchange") where, in
both cases, the trading symbol is FQC and the WKN is AODK4Y and also maintains a
market for its common shares, par value $0.001, in the United States through the
National Association of Securities Dealers' Over-the-Counter Bulletin Board
("OTCBB") where the trading symbol is DMSI and the ISIN is US24983U1043;
Xxxxxx and Xxxxx (jointly referred to hereinafter as "Lenders") are each the
registered and beneficial owners of at least one million (1,000,000) common
shares in the capital stock of the Company and are jointly willing to lend a
total of one million, nine hundred thousand (1,900,000) registered and fully
negotiable common shares in the capital stock of the Company (the "Shares") with
a nominal value of $1,900. to VEM.
Now therefore, the Parties hereto hereby agree as follows
SEC. 1
OBJECT OF THE AGREEMENT, DELIVERY OF THE SHARES
1. Xxxxxx shall lend VEM one million (1,000,000) registered and fully
negotiable common shares in the capital stock of the Company and Berra
shall lend VEM nine hundred (900,000) registered and fully negotiable
common shares in the capital stock of the Company thereby representing
a total loan to VEM of one million, nine hundred thousand (1,900,000)
common shares in the capital stock of the Company.
2. The Lenders shall deliver the Shares as specified in Section 1, Para 1
of this Share Lending Agreement (the "Agreement") to VEM as soon as is
practicably possible after execution of this Agreement. The Lenders
shall deliver the Shares, in certificate form, registered in the name
of VEM and on a basis that is free of any costs or charges to VEM, to
VEM's deposit number 19 51 055, at Bankhaus Xxxx X. Plump & Co.,
Bremen, Germany, Sorting Code 29030400, Clearstream Banking,
Luxembourg (CEDE LU LL) - formerly: CEDEL, a/c: 63359, Bankhaus bPlump
& Co (PLUM DE 29).
SEC. 2
USE OF SHARES, SHAREHOLDERS RIGHTS
1. VEM shall be solely entitled to sell the Shares provided that, upon
completion of the said sales, a minimum of sixty percent (60%) of the
proceeds realized by VEM from the sale of the Shares shall be used by
used by VEM to subscribe for Convertible Promissory Notes to be issued
by the Company.
2. It is the intention of the Parties hereto that, throughout the term of
this Agreement, the Lenders shall retain all rights attached to the
Shares including, without limiting the generality of the foregoing,
all voting and participatory rights on their respective allotments of
the Shares in the Company as specified in Section 1, Para 1 of this
Agreement. Inasmuch as VEM has requested that the Shares be registered
to VEM prior to delivery as specified in Section 2, Para 1 of the
Agreement, VEM shall convey to the Lenders, at the expense of the
Lenders, all voting and participatory rights in those shares which
constitute their respective contributions to the Shares.
SEC. 3
RETURN OF LOAN, RETURN SURROGATES
1. VEM shall return to each of the Lenders a Convertible Promissory Note
(the "Note") to be issued by the Company in favor of VEM Aktienbank AG
and assigned by VEM to each of the Lenders. The terms of the Note
shall be negotiated as between VEM and the Company provided that the
principal amount of the Notes shall total a minimum of sixty percent
(60%) of the proceeds realized
by VEM from the sale of the Shares and the said proceeds shall be
allocated between the Lenders as the principal in their respective
Notes on a basis that is in direct proportion to the number of Shares
each Lender has lent to VEM. The Notes shall bear interest in the
amount of ten percent (10%) per annum, shall become due and payable
two (2) years after the date of issuance by the Company, and shall
include, inter alia, a right in the holder of the Note to convert the
principal amount of the Note and any interest that may have accrued
thereunder into common shares, par value $0.001, of the Company
provided that, in the event that the holders of the Notes elect to
convert, the total number of shares of the Company to be issued on
account of principal shall not exceed two million, four hundred
thousand (2,400,000) common shares (par value $0.001) of the Company.
The Notes to be issued by the Company shall, in all other material
respects, be similar in form and substance to the document which is
attached hereto as Schedule A
2. In the event that this Agreement is terminated pursuant to the
provisions of Section 5 hereof, the return of the loan in accordance
with this Section 3 shall be effected within two (2) weeks after
receipt by VEM of notice of termination.
3. In the event that the Company is not be able to validly execute the
capital increase(s) contemplated by this Share Lending Agreement and
the Agreement between VEM and the Company and VEM is therefore not
able to subscribe for the Convertible Promissory Notes, VEM can effect
repayment of the loan to the Lenders by payment in cash of all
proceeds collected by VEM in the sale of the Shares, less a handling
fee of 10 %.
4. VEM will assign and deliver the Notes to the Lenders as soon after
receipt by VEM of the Notes as is practicably possible.
SEC. 4
NO LOAN COSTS
1. No loan costs shall be charged to VEM, that is, the lending of the
Shares to VEM shall be free of charge.
SEC. 5
TERM OF THE AGREEMENT, TERMINATION
1. This Agreement shall come into effect after execution and delivery of
the Agreement by all parties and shall have an indefinite term. In
case the increase(s) in capital of the Company can not be performed
for mandatory statutory reasons, VEM will return the Shares and/or the
proceeds, less a fee of 10 % within two weeks of notice being given by
the Company of the impossibility to resolve upon share capital
increases by the Company, such notice detailing the legal impediments
faced by the Company in the form of a legal opinion by Company's U.S.
counsel. Until the Company has made a decision whether to perform
increase(s) in capital, this Agreement can only be terminated by
either party for good reason.
SEC. 6
CONFIDENTIALITY
No party to this Agreement shall, without the prior written consent of
the other parties, disclose any information concerning the existence
and/or terms of this Agreement to a third party except in the proper
performance of this Agreement or as required by law or a competent
authority. This duty of confidentiality shall survive the termination
of this Agreement.
SEC. 7
MISCELLANEOUS
1. This Agreement shall be exclusively subject to the laws of the Federal
Republic of Germany and the exclusive place of venue shall be Munich,
Germany.
2. No amendment, modification or waiver of this agreement shall be
binding or effective for any purpose unless it is made in a writing
signed by the party against who enforcement of such amendment,
modification or waiver is sought. No course of dealing between the
parties to this agreement shall be deemed to affect or to modify,
amend or discharge any provision or term of this agreement. No delay
on the part of the Client or Consultant in the exercise of any of
their respective rights or remedies shall operate as a waiver thereof,
and no single or partial exercise by the Client or Consultant of any
such right or remedy shall preclude other or further exercises
thereof. A waiver of right or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right or remedy on any
other occasion.
3. This agreement and any appendices hereto constitute the full and
entire understanding and agreement between the parties with regard to
the subject hereof and no party shall be liable or bound to any other
in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein.
4. Whenever possible each provision and term of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision or term of this agreement shall
be held to be prohibited by or invalid under such applicable law, then
such provision or term shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or affecting in any
manner whatsoever the remainder of such provision or term or the
remaining provisions or terms of this agreement.
Dated this ____ day of May, 2005 at Munich, Germany
APPENDIX 1 TO THE SHARE LENDING AGREEMENT
MINIMUM PRICE (S. 4, PARA 3)
The minimum price as defined in S. 4, Para 3 of the Share Lending Agreement
shall be EUR
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Dated this day of May, 2005 at Munich, Germany
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Xxxxxxx Xxxxx (Vorstand)
VEM Aktienbank AG
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Berra Holdings Ltd.
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Xxxxxxx Xxxxx (Vorstand)
VEM Aktienbank AG
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Berra Holdings Ltd.
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Xxxxxx Xxxxxx Witness
Xxxxxx Xxxxxx Witness
