AGREEMENT
between
(1) DNA Print genomics, Inc., 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, XXX
referred to as the Purchaser
and
(2) Heidelberg Innovation BioScience Venture II GmbH & Co. KG, represented by
Heidelberg Innovation Fonds Management GmbH, Xxxxxxxxxxx Xxxx 000, 00000
Xxxxxxxxxx,
referred to as BSV II
(3) Heidelberg Innovation Parallel-Beteiligungs GmbH & Co. KG a.A. represented
by Heidelberg Innovation Fonds Management GmbH Xxxxxxxxxxx Xxxx 000, 00000
Xxxxxxxxxx
referred to as HIPB and together with BSV II as Sellers
Preamble
Biofrontera AG is a German stock corporation registered with the commercial
register of the local court Cologne under HRB 49717, with its principle office
at Xxxxxxxxxxxx Xxx 000, 00000 Xxxxxxxxxx, Xxxxxxx (the Biofrontera AG).
As of the signing of this agreement BSVII holds 314,178 preferred shares class B
and HIPB holds 169,173 preferred shares class B in Biofrontera AG. Further,
BSVII and/or HIPB intend to purchase 191,520 preferred shares class A and
231,587 preferred shares class B in Biofrontera AG from 3i Group Investments
Limited Partnership (the 3i). Biofrontera AG intends - with the consent of the
holders of the preferred shares class A and B and the consent of Biofrontera
AG's general meeting - to convert all preferred shares class A and B into common
shares. All shares held by BSVII and HIPB together, including shares acquired
from 3i, now and after the conversion of the preferred shares class A and B into
common shares are referred to as the Shares.
Biofrontera AG's management board with the consent of the supervisory board has
issued 60,000 convertible bonds with the nominal value of EUR 1.00 of each
convertible bond pursuant to the authorisation of Biofrontera AG's general
meeting dated 18 September 2004 (the Convertible Bonds). As of the signing of
this agreement, BSVII holds 22,000 Convertible Bonds and HIPB holds 5,500
Convertible Bonds. Further, BSVII and/or HIPB intend to purchase 15,000
Convertible Bonds from 3i. Each Convertible Bond entitles the bearer to convert
the Convertible Bond into one preferred share class B of Biofrontera AG.
Biofrontera AG intends - with the consent of the bearer of the Convertible Bonds
and the consent of Biofrontera AG's general meeting - to amend the conditions of
the Convertible Bonds so that each Convertible Bonds entitles the bearer to
convert one Convertible Bond into one common share of Biofrontera AG. All
Convertible Bonds held by BSVII and HIPB together, including Convertible Bonds
acquired from 3i, now and after the amendment to the conditions of the
Convertible Bonds are referred to as the H-Convertible Bonds.
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On 18 September 2004 Biofrontera AG as borrower and 3i, BSVII, HIPB, TechnoMedia
Kapitalbeteiligungsgesellschaft Koln mbH and Professor Xx. Xxxxxx Xxxxxxx as
lenders entered into a loan agreement, under which the lenders undertook to
grant EUR 1,200,000 to Biofrontera AG of which EUR 150,000 were only to be
granted to the Company at the sole discretion of the lenders (the 1. Loan
Agreement). Pursuant to the 1. Loan Agreement BSVII granted to Biofrontera AG a
loan in the amount of EUR 357,500 of which EUR 22,000 were paid in settlement of
the issue price of the H-Convertible Bonds issued to BSVII. Pursuant to the 1.
Loan Agreement HIPB granted to Biofrontera AG a loan in the amount of EUR
192,500 of which EUR 5,500 were paid in settlement of the issue price of the
H-Convertible Bonds issued to HIPB. Any and all rights and obligations of BSVII
under the 1. Loan Agreement (in particular its repayment claim of EUR 335,500)
are collectively referred to as the 1. BSVII-Loan. Any and all rights and
obligations of HIPB under the 1. Loan Agreement (in particular its repayment
claim of EUR 187,000) are collectively referred to as the HIPB-Loan. BSVII
and/or HIPB intend to purchase all rights and obligations of 3i under the 1.
Loan Agreement, in particular its repayment claim of EUR 247,500 vis-a-vis the
Company (3i's rights and obligations under the 1. Loan Agreement collectively
referred to as the 3i Loan).
On 13 March 2005 Biofrontera AG as borrower, BSVII, TechnoMedia
Kapitalbeteiligungsgesellschaft Koln GmbH and Professor Xx. Xxxxxx Xxxxxxx as
lenders and the remaining shareholders of Biofrontera AG as of 13 March 2005
entered into loan agreement, under which the lenders undertook to grant EUR
550,000 to Biofrontera AG (the 2. Loan Agreement). Pursuant to the 2. Loan
Agreement BSVII granted to Biofrontera AG a loan in the amount of EUR 306,000.
Any and all rights and obligations of BSVII under the 2. Loan Agreement (in
particular its repayment claim of EUR 306,000) are collectively referred to as
the 2. BSVII-Loan. The 1. and 2. BSVII-Loan, the HIPB-Loan and the 3i Loan are
referred to as the Loans.
Each of the Sellers intends to waive vis-a-vis the shareholders of Biofrontera
AG its rights pursuant to the Loans, subject to the acceptance of Biofrontera
AG, and to subscribe for newly issued common shares in Biofrontera AG in return
for the waiver (the Conversion). The Sellers intend to subscribe for 57,767
newly issued common shares for the 1.BSVII-Loan, 52,449 newly issued common
shares for the 2.BSVII-Loan, 14,441 newly issued common shares for the HIPB-Loan
and 39,388 newly issued common shares for the 3i Loan (together the New Shares).
BSVII and HIPB are parties to a shareholders' agreement dated 5 July 2005 (the
Shareholders' Agreement), which is fully known to all of the parties hereto.
Words in capital letters not defined in this Agreement shall have the meaning
ascribed to them in the Shareholders' Agreement.
Biofrontera AG intends to issue convertible bonds up to the aggregated nominal
value of EUR 20,000,000. The corresponding shareholders' resolutions
substantially in the form of Error! Reference source not found. shall be passed
at a shareholders' meeting on 5 July 2005 (the P-Convertible Bonds).
1. UNDERTAKING OF THE PURCHASER
1.1 Subject to Subclauses 1.4 to 1.7 the Purchaser undertakes vis-a-vis each
of the Sellers to purchase the Shares, the New Shares and the
H-Convertible Bonds from the Sellers under the terms and condition as set
out substantially in Annex 1 (the Purchase Agreement). The parties agree
that the final Purchase Agreement shall specify which and how many Shares,
New Shares (or Loans, as the case may be) and H-Convertible Bonds will be
sold and transferred by which of the Sellers and that each of the Sellers
guarantees severally the warranties for the Shares, New Shares (or Loans,
as the case may be) and the H-Convertible Bonds. If and to the extent that
the Sellers did not effect the Conversion of their Loans as described in
the Preamble and subject to Subclauses 1.4 to 1.7 the Purchaser undertakes
vis-a-vis the Sellers to purchase the Loans for the purchase price of the
New Shares.
1.2 If and to the extent that Shareholders exercise their right of first
refusal pursuant to clause 6 of the Shareholders' Agreement and purchase
some but not all parts of the Shares or New Shares the Purchaser
undertakes - subject to Subclauses 1.4 to 1.7 - vis-a-vis each of the
Sellers to purchase the remaining Shares or New Shares under the terms and
conditions as set out substantially in the Purchase Agreement.
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1.3 If and to the extent that B Investors exercise their Tag-Along Right
pursuant to clause 7 of the Shareholders' Agreement the Purchaser
undertakes - subject to Subclauses 1.4 to 1.7 - vis-a-vis each of the
Sellers to purchase the number of shares of the Exercising B Investors as
provided for in clause 7 of the Shareholders' Agreement instead of the
relevant number of the Shares and New Shares and the remaining Shares and
New Shares under the terms and conditions as set out substantially in the
Purchase Agreement.
1.4 The purchase prices for the Shares, New Shares and the H-Convertible Bonds
as stipulated in Annex 1 shall be adjusted if and to the extent that the
purchase price per share, per Convertible Bond and per New Share
subscribed for in connection with waiving the 3i Loan paid by the Sellers
to 3i respectively is lower than set forth in Annex 1.
1.5 The Sellers shall only be entitled to exercise their rights pursuant to
Subclauses 1.1, 1.2 and 1.3 if Biofrontera AG will not have issued
P-Convertible Bonds in the aggregated amount of at least EUR 10,000,000 by
31 December 2005.
1.6 The Sellers shall only be entitled to exercise their rights pursuant to
Subclauses 1.1 to 1.5 jointly. Subject to Subclauses 1.2 and 1.3 the
Sellers shall only be entitled to exercise their rights pursuant to
Subclauses 1.1 to 1.5 with regard to all Shares, New Shares (or Loans, as
the case may be) and all H-Convertible Bonds.
1.7 The Sellers must notify the Purchaser of the exercise of their rights
pursuant to this Clause in written within the period of 1 January 2006
until 14 January 2006 (inclusive). The receipt of the notice by the
Purchaser is conclusive. The Purchaser acknowledges that such exercise is
subject to the right of first refusal under clause 6 and the Tag-Along
Right under clause 7 of the Shareholders' Agreement. The Purchase
Agreement shall be entered into within two weeks of final determination as
to what extent the aforesaid rights under the Shareholders' Agreement have
been exercised, but in no event later than 12 weeks after the exercise of
the Sellers' rights pursuant to Clause 1. Each party undertakes vis-a-vis
each other to use all reasonable efforts to the effect, that the Purchase
Agreement can be entered into in compliance with this Subclause.
2. CONSIDERATION
In consideration for the put-option pursuant to Clause 1, the Sellers
grant to the Purchaser a call-option with regard to 60,000 preferred
shares class A (acquired from 3i) held by them for the purchase price of
EUR 2.00 per share (the Call-Option).
(a) The Call Option is exercisable for the time period from the date of
the signing of this Agreement up until the earlier of the (i)
exercise of the put-option pursuant to Clause 1 or (ii) the 28 day
after the first day of trading following a stock exchange listing
including an initial public offering of Biofrontera AG.
(b) The Purchaser acknowledges that the exercise of the Call-Option is
subject to the right of first refusal under clause 6 and the
Tag-Along Right under clause 7 of the Shareholders' Agreement and
all other obligations entered into by the Sellers with regard to
their Shares and New Shares under the Shareholders' Agreement.
(c) The Purchaser must notify the Sellers of the exercise of the
Call-Option in written. The receipt of the notice by the Sellers is
conclusive. The purchase agreement between the Purchaser and the
Sellers shall be substantially in the form of the Purchase
Agreement. Subclause 1.1 Sentence 2 applies (the
Call-Option-Purchase Agreement). The Call-Option-Purchase Agreement
shall be entered into within two weeks of final determination as to
what extent the aforesaid rights under the Shareholders' Agreement
have been exercised, but in no event later than 12 weeks after the
exercise of the Purchaser's Call-Option. Each party undertakes
vis-a-vis each other to use all reasonable efforts to the effect,
that the Call-Option-Purchase Agreement can be entered into in
compliance with this Clause.
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3. DURATION
This Agreement lapses the later of
(i) the exercise of Sellers' rights under Clause 1 by or on14 January
2006 and the completion of a Purchase Agreement in accordance with
Subclause 1.7; or
(ii) - if the Sellers' right under Clause 1 has not been exercised by or
on 14 January 2006 - the exercise of the Call-Option and the
completion of a Call-Option-Purchase Agreement in accordance with
Subclause 2(c).
4. ASSIGMENT
Neither party may assign its rights and obligations under this agreement
without the written prior consent of the other parties.
5. FINAL PROVISION
5.1 Each party shall bear its own costs and expenses in connection with this
Agreement, if any.
5.2 BSVII and HIPB shall always act through BSVII who is herewith authorised
by HIPB to act in the name and on behalf of HIPB and to act as receiving
agent.
5.3 This Agreement is governed by and shall be construed in accordance with
the German law. To the extent legally permissible, jurisdiction for all
disputes arising out of, or in connection with this Agreement shall be
with the competent courts in Frankfurt am Main, Germany.
5.4 The parties irrevocably waive their right to seek dissolution of this
Agreement after it has been completed.
5.5 Amendments and additions to this Agreement are only effective if made in
writing, to the extent that notarisation is not required. The written form
requirement also applies to any waivers, including a waiver of the written
form requirement.
5.6 This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
5.7 Should individual terms of this Agreement be or become invalid or
unenforceable or should this Agreement contain gaps, the validity of the
remaining terms of the Agreement shall remain unaffected and in place of
the invalid, unenforceable or missing terms a valid term on which the
parties would have reasonably agreed, had they been aware at the signing
of this Agreement that the relevant term was invalid, unenforceable or
missing, shall be deemed to have been agreed upon. Should a term of this
Agreement be or become invalid because of the scope of performance for
which it provides then the agreed scope of performance shall be amended to
correspond with the extent legally permitted.
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Place, date Place, date
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Place, date
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ANNEX 1
PURCHASE AGREEMENT
between
(1) Heidelberg Innovation BioScience Venture II GmbH & Co. KG, represented by
Heidelberg Innovation Fonds Management GmbH, Xxxxxxxxxxx Xxxx 000, 00000
Xxxxxxxxxx,
referred to as BSVII
(2) Heidelberg Innovation Parallel-Beteiligungs GmbH & Co. KG a.A. represented
by Heidelberg Innovation Fonds Management GmbH Xxxxxxxxxxx Xxxx 000, 00000
Xxxxxxxxxx
referred to as HIPB and together with BSVII as Sellers
and
(3) DNA Print genomics, Inc., 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, XXX
referred to as the Purchaser
Preamble:
Biofrontera AG is a German stock corporation registered with the commercial
register of the local court Cologne under HRB 49717, with its principle office
at Xxxxxxxxxxxx Xxx 000, 00000 Xxxxxxxxxx, Xxxxxxx (the Biofrontera AG).
Words in capital letters shall have the meaning assigned to them in the
agreement between the Purchaser and the Sellers dated [o 2005 which is attached
hereto as Annex o.
The parties to this Agreement stipulate the following:
1. Sale and Assignment of the Shares, the new Shares and H-Convertible Bonds
1.1 The Sellers herewith irrevocably sell, each with regard to the Shares, New
Shares and H-Convertible Bonds held by it only, to the Purchaser the
Shares, the New Shares and the H-Convertible Bonds including and together
with all ancillary and associated rights of the Shares, the New Shares and
the H-Convertible Bonds. The Purchaser irrevocably accepts herewith the
sale of the Shares, the New Shares and the H-Convertible Bonds.
1.2 Subject to the payment of the Purchase Price, each of the Sellers assigns
to the Purchaser the Shares, the New Shares and the H-Convertible Bonds
held by it including and together with all ancillary and associated rights
of the Shares, the New Shares and the H-Convertible Bonds and undertake to
deliver the deeds of the H-Convertible Bonds. The Purchaser accepts
herewith the assignment of the Shares, the New Shares and the Convertible
Bonds.
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1.3 The right to all results of Biofrontera AG of the current fiscal year and
all possible profits of Biofrontera AG incurred in previous fiscal years
which have not yet been distributed to the shareholders of Biofrontera AG
shall be sold and assigned as well.
2. Purchase Price
2.1 The purchase price for each Share or each New Share shall be EUR 3.00
except for 191,520 Shares for which the purchase price shall be EUR 2.00
per Shares (representing the number of preferred shares class A acquired
by 3i). The purchase price for each H-Convertible Bond shall be EUR 0.30.
Hence, the total purchase price for the Shares and the H-Convertible Bonds
is EUR [o] (Euro [o]) (the Purchase Price).
2.2 The Purchase Price becomes due one week after all consent requirements
pursuant to Clause 4 have been fulfilled and the Sellers have notified the
Purchaser thereof. The Purchase Price is to be paid to BSVII's bank
account, account number o at o bank code o. The Purchaser fulfils its
payment obligation to HIPB by transferring the Purchase Price owed to HIPB
to BSVII's account.
2.3 Should any relevant tax authority or court rule that the sales and
assignments of the Shares, the New Shares and the H-Convertible Bonds set
out in Clause 1 are taxable for VAT, the Purchaser agrees to pay the VAT
to the Sellers in accordance with such decision and applicable law.
3. Warranty
As of the date of the signing of this Agreement and as of the date on
which the title to the Shares, the New Shares and the H-Convertible Bonds
is transferred to the Purchaser, each of the Sellers severally but not
jointly, each with regard to the Shares, New Shares and H-Convertible
Bonds held by it only, guarantee the correctness and completeness of the
following statements by means of an independent guarantee promise within
the meaning of section 311 para 1 of the German Civil Code, referred to as
the BGB, which - according to the parties' express intention - does not
constitute a guarantee for the quality of the Shares, the New Shares and
the H-Convertible Bonds within the meaning of sections 443 para 1
alternative 1, 444 alternative 2 of the BGB but a promise which is made
from the start only with the content restricted to the following:
(a) The Sellers are the holders of the Shares, the New Shares and the
H-Convertible Bonds. Neither the Shares, the New Shares nor the
H-Convertible Bonds are encumbered with third party's rights (except
for obligations under the agreements referred to in Schedule 1).
(b) The Shares and the New Shares have been fully paid up. Capital
contributions with regard to the Shares and with regard to the New
Shares have not been paid back to the Sellers. The issue price of
the H-Convertible Bonds has been completely paid.
(c) No further warranties and guarantees are granted. In particular, the
Sellers do not warrant Biofrontera AG's solvency.
4. Consent Requirements/Assignment of Contract
4.1 The parties to this Agreement acknowledge that pursuant to Clause 8 (3) of
Biofrontera AG's articles of association the assignments of the Shares and
the New Shares require the consent of Biofrontera AG. Pursuant to Clause 8
(3) sentence 2 of Biofrontera AG's articles of association Biofrontera
AG's management board declares such consent on the basis of a
shareholders' resolution. Further, Clause 8.2 of the terms of the
H-Convertible Bonds provide that the transfer of the H-Convertible Bonds
requires the consent of the Biofrontera AG.
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4.2 Having regard to the preceding paragraph the parties agree that this
Agreement shall become effective with the receipt of the consents of
Biofrontera AG to the [Purchaser/to the Sellers] pursuant to Clause 4.1.
4.3 The parties of this Agreement agree to enter into an agreement stipulating
the assignment of contracts to which the Sellers are parties, namely the
shareholders' agreement.
5. Final Provision
5.1 Each party shall bear its own costs and expenses in connection with this
Agreement, if any.
5.2 BSVII and HIPB shall always act through BSVII who is herewith authorised
by HIPB to act in the name and on behalf of HIPB and to act as its
receiving agent.
5.3 This Agreement is governed by and shall be construed in accordance with
the German law. To the extent legally permissible, jurisdiction for all
disputes arising out of, or in connection with this Agreement shall be
with the competent courts in Frankfurt am Main, Germany.
5.4 The parties irrevocably waive their right to seek dissolution of this
Agreement after it has been completed.
5.5 Amendments and additions to this Agreement are only effective if made in
writing, to the extent that notarisation is not required. The written form
requirement also applies to any waivers, including a waiver of the written
form requirement.
5.6 This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
5.7 Should individual terms of this Agreement be or become invalid or
unenforceable or should this Agreement contain gaps, the validity of the
remaining terms of the Agreement shall remain unaffected and in place of
the invalid, unenforceable or missing terms a valid term on which the
parties would have reasonably agreed, had they been aware at the signing
of this Agreement that the relevant term was invalid, unenforceable or
missing, shall be deemed to have been agreed upon. Should a term of this
Agreement be or become invalid because of the scope of performance for
which it provides then the agreed scope of performance shall be amended to
correspond with the extent legally permitted.
/s/ Timo Hercegfi
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place/date Heidelberg Innovation BioScience Venture II GmbH & Co. KG
/s/ Timo Hercegfi
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place/date Heidelberg Innovation Parallel-Beteiligungs GmbH & Co. KG
/s/ Xxxxxxx Xxxxxxx
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place/date