Document:

Exhibit 10.2

 

Manufacturing and Supply
Agreement

(Projekt H 2000)

 

This Manufacturing and Supply Agreement (together
with its Attachments, which are incorporated herein by reference, the "Agreement") is made on June 1st, 2015 (the "Effective
Date") by and between Hapila GmbH, Otto-Schott-Straße 9, 07552 Gera, Germany ("Hapila") and Biofrontera Pharma
GmbH, HemmelratherWeg 201, D-51377 Leverkusen, Germany ("Biofrontera"). Hapila and Biofrontera are hereinafter also
referred to individually as "Party" or collectively as "Parties".

 

WHEREAS:

 

		o	Hapila has substantial experience and expertise in the
development and manufacturing of active pharmaceutical ingredients (APls);

 

		o	Biofrontera is active in the registration and commercialization
of pharmaceutical products, in particular for dermatology. Biofrontera obtained in 2011 an approval in the European Union for
the drug product Ameluz® Ameluz ® is used for photodynamic therapy and contains the active substance 5-aminolevulinic
acid hydrochloride.

 

		o	Biofrontera contracted Hapila in 2012 with the development
of a synthesis process and the required analytical methods and necessary stability tests to manufacture 5- aminolevulinic acid
hydrochloride (“API") according to GMP. Biofrontera has financed the process and analytical development, stability
studies, establishment and validation of the analysis methods and the process validation.

 

		o	With Hapila's support Biofrontera has written an Active
Substance Master File (ASMF) for the API. Biofrontera holds the ASMF (ASMF holder) while Hapila acts as Active Substance Manufacturer
(ASM). The ASMF was submitted by Biofrontera in the EU and third countries in support of the regulatory dossier for the drug product
Ameluz in order to use the API manufactured by Hapila for the manufacturing of Ameluz.

 

		o	All rights related to Ameluz, the ASMF for the API and
all processes and methods developed with financing provided by Biofrontera are the exclusive property of Biofrontera.

 

		o	Biofrontera wishes to have the API manufactured and supplied
(as defined below) by Hapila according to the terms set out in this Agreement;

 

		o	The parties have agreed to enter into this Agreement detailing
the terms upon which the API will be supplied;

 

		o	Hapila and Biofrontera intend to implement this Agreement
in connection with a separate Quality Agreement, dated September, 12th 2014, and any amendment thereto (all together
the "Quality Agreement", as defined below in section 5.3) will be subject to and incorporating by reference the terms
of this Agreement.

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

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NOW, THEREFORE, the Parties hereby agree
as follows:

 

		1.	Definitions

 

In this Agreement the
following expressions shall have the following meaning unless the context requires otherwise:

 

"Active Pharmaceutical
Ingredient, API" shall mean active pharmaceutical ingredient 5- aminolevulinic acid hydrochloride.

 

"Affiliate"
shall mean any corporation, company, partnership, joint venture and/or firm that controls, is controlled by, or is under common
control with a Person. For purposes of this definition, "control" means (a) in the case of corporate entities, direct
or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors,
and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest
with the power to direct the management and policies of such non-corporate entities.

 

"Agreement" shall have the
meaning as defined in the recitals.

 

"Applicable Laws"
shall mean all current laws, regulations, directives, guidelines and other requirements of competent authorities, including
without limitation all European Good Manufacturing Practice standards, as amended from time to time, which are applicable to the
activities under this Agreement.

 

"Batch Size"
shall mean appr. [***] (in words: [***], range from [***]) of Product or such other size as the Parties
may agree from time to time. If the Parties agree to change the Batch Size, then the Parties shall at the same time agree about
a corresponding change of the Purchase Price.

 

"GMP" shall
mean Good Manufacturing Practice as defined by Council Directive 2003/94/EC and/or any other applicable regulatory authority.

 

"Change" shall mean a variation
to the Product, the Specification and/or to this Agreement.

 

"Confidential Information" shall
mean any and all information and materials (whether or not patentable) disclosed in writing, electronically, orally or otherwise
by or on behalf of Biofrontera or any of its Affiliates to Hapila or any of its Affiliates, or on behalf of Hapila or any of its
Affiliates to Biofrontera or any of its Affiliates.

 

"Delivery Date" shall mean
the date of delivery for Product as specified by HAPILAin its confirmation to the respective Purchase Order.

 

"Delivery Destination" shall
mean the delivery destination for the Product, which shall be Biofrontera GmbH, Hemmelrather Weg 201, D-51377 Leverkusen, Germany
unless otherwise specified by Biofrontera in the respective Purchase Order and agreed to by Hapila.

 

"ASMF" or "DMF"
shall mean the "Active Substance Master File" or the "Drug Master File" written by Biofrontera with support
byHapila.

 

"Effective Date" shall have
the meaning as defined in the preamble.

 

"End-Product" shall mean
a pharmaceutical formulation as finished dosage form containing the Product as sole active pharmaceutical ingredient for human
use

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

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“Facility" shall mean Hapila's
facility situated at Otto-Schot-tStra e 9, D-07552, Gera, Germany.

 

“Force Majeure” shall have the meaning as defined
in sec. 13.2.

 

“Initial Term " shall mean a time period of five
(5) years from the Effective Date.

 

"Manufacture" and “Manufacturing”
shall mean all activities related to the manufacture, testing, release, storage and/or shipment of Product.

 

"Minimum Shelf Life"
shall mean, with respect to Product, a remaining shelf life of at least [***] of
the total shelf life for Product as approved by the regulatory authorities in the respective countries in the Territory.

 

"Process" shall mean the manufacturing process
developed by Hapila on behalf of Biofrontera according to the Project Plans "Projektvorschlag H 2000" (drafts 1 to 3)
and the corresponding offers 2011-0048, 2012-0003, 2012-0032 and 2013-0005 as accepted by Biofrontera.

 

"Product Warranties" shall have the meaning as
defined in Section 5.5.

 

"Purchase Order" shall have the meaning as defined
in Section 3.3.

 

"Purchase Price" shall mean the price payable
by Biofrontera or its Affiliates to Hapila under this Agreement for Product, as specified in Attachment 1.

 

Quality Assurance Agreement" shall have the meaning
as defined in Section 5.3.

 

"Specifications" shall mean the specifications
for Product as approved in the marketing authorization(s) for End-Product, as may be amended from time to time by Biofrontera.

 

“Territory" shall mean European Union (EU) and
third-countries which accept EU Guidelines for GMP (e.g. Israel and Switzerland).

 

"Third Party" shall mean any person or entity
other than Hapila and Biofrontera and Affiliates of Biofrontera.

 

		A)	Supply of Products

 

		2.	Supply and Purchase, Exclusivity

 

2.1          Supply
and Purchase. Hapila shall Manufacture and deliver Product to Biofrontera, and Biofrontera shall purchase Product from Hapila
pursuant to and in accordance with the terms and conditions of this Agreement.

 

2.2          Purchase
Obligation. Biofrontera is not obliged to purchase API exclusivel y from Hapila. However, Biofrontera will be obliged to purchase
enough API from Hapila per year to produce at least [***] of the drug product Ameluz
to be marketed in Territory, provided that Hapila fulfills its quality and delivery obligations. [***] before
expiry of the Initial Term, the Parties shall negotiate in good faith a possible extension of the aforementioned percentage of
Biofrontera's supply, provided that any said extension is compliant with the then applicable antitrust and competition laws in
the Territory. For the avoidance of doubt, upon expiry of the Initial Term in circumstances where the Parties do not mutually
agree on a prolongation of the above percentage, Biofrontera's obligation to purchase at least API for [***] of
the Ameluz sold in the Territory shall expire. The purchase of Product from Hapila shall, however, remain possible during the
remainder of the term of the Agreement.

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

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2.3          Exclusivity
Sale Obligation: Hapila shall exclusively sell API (5-aminolevulinic acid hydrochloride) to Biofrontera. Hapila will not provide
API or its salt forms to other customers or any third party without the prior approval by Biofrontera. Biofrontera will be the
exclusive ASMF holder unless otherwise decided and communicated in writing by Biofrontera to Hapila.

 

		3.	Forecasts, Orders and Delivery

 

3.1          Forecasts.
Biofrontera shall use reasonable efforts to assist Hapila with its production planning by providing Hapila with non-binding
[***] rolling written forecasts of its Product requirements for the next [***].
Forecasts will be updated by Biofrontera on a [***] basis. Hapila acknowledges and
agrees that any forecast or any other estimate given by Biofrontera shall be non-binding, and shall not constitute any obligation
whatsoever to place any Purchase Orders or otherwise to purchase or pay for any Product.

 

3.2          Amounts.
The annual requirement of API is about [***] in the year 2015, and is expected
to increase in the following years according to the written forecasts provided by Biofrontera.

 

3.3          Purchase
Orders. Hapila shall Manufacture and supply Product according to purchase orders placed by Biofrontera and/or its Affiliates
pursuant to the terms hereof (each a "Purchase Order"). Purchase Orders shall be made in writing at least [***]
calendar days prior to the Delivery Date for the first order and [***] calendar
days prior to the Delivery Date for any subsequent order, and shall determine quantity of Product ordered, stated as multiples
of the Batch Size, and the Delivery Date for the ordered Product. Hapila shall confirm each Purchase Order placed by Biofrontera
under this Agreement in writing within [***] business days of it being placed, provided
however that Hapila shall fulfill any Purchase Order placed by Biofrontera in accordance with this Agreement regardless of whether
or not such Purchase Order has been confirmed as long as the purchase order does not exceed the according forecast by more or
less than [***].

 

3.4          Delivery
Terms. Hapila shall deliver Products on the Delivery Date confirmed and to the Delivery Destination (as specified in the respective
Purchase Order). Delivery shall be made [***]. The transport will be organized by
and within the responsibility of Hapila but the costs will be passed through to Biofrontera. Hapila shall inform Biofrontera of
the concrete Delivery Date at least [***] calendar days before such delivery takes
place.

 

		4.	Purchase Price

 

4.1          Purchase
Price. In consideration for Product delivered by Hapila to Biofrontera in accordance with this Agreement, Biofrontera shall
pay to Hapila the Purchase Price. Any payments under this Agreement shall be paid in Euro in full without any deduction or withholding
of taxes, except to the extent required by Applicable Laws. If any taxes are required to be deducted or withheld by Biofrontera
pursuant to Applicable Laws, Biofrontera will (i) pay the taxes to the taxing authority, (ii) send proof of such payment to Hapila,
and (iii) use reasonable efforts to assist Hapila in its efforts to obtain a credit for such tax payment. Each Party agrees to
use reasonable efforts to assist the other Party in claiming any legal exemptions from the respective obligation to deduct or
withhold tax under double taxation treaties available under applicable double tax treaties or other Applicable Laws.

 

4.2          Purchase
Price. During the Initial Term the Purchase Price will be according to Attachment 1.

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

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4.3          Invoice,
Payment. Hapila shall invoice Biofrontera for each shipment of Product. Payment of the Purchase Price for any Product delivered
in accordance with the terms of this Agreement shall become due [***] after receipt
of the invoice and delivery of the Product to which the invoice corresponds.

 

		5.	Manufacture, Quality Assurance and Pharmacovigilance

 

5.1          Permits
and Licenses. At all times during the term of this Agreement, Hapila shall hold and maintain in good standing all required
and advisable authorizations and permits needed for the Manufacture and supply of the Product for the manufacturing of API in
the Territory. Hapila shall promptly inform Biofrontera in writing in the event any such authorization or permit is not obtained
in a timely manner or is withdrawn or is threatened to be withdrawn.

 

5.2          Subcontractors.
Hapila shall be entitled to have the API manufactured by Hapila with the involvement of Third Parties provided that such Third
Parties are registered as manufacturers or contract testing laboratories in the ASMF for the API and the marketing authorizations
for Ameluz. Hapila shall in any event be fully responsible and liable for the fulfillment of Hapila's obligations under this Agreement
by its subcontractors, including without limitation to Manufacture and deliver Product in accordance with the terms and conditions
of this Agreement. Hapila shall not be entitled to change any manufacturer, subcontractor and/or the Process and/or the API or
its Third Party supplier thereof without prior written consent of Biofrontera.

 

5.3          Quality
Assurance Agreement. Further responsibilities and obligations of the Parties with respect to the quality of the Product and
related responsibilities of the Parties are defined in a separate written quality assurance agreement, signed between the Parties
with effective date September 12th, 2014, and any amendment thereto (all together the "Quality Assurance Agreement").
The Quality Assurance Agreement and, after signing, any amendment thereto shall become part of this Agreement. If there is any
conflict between the terms of this Agreement and the Quality Assurance Agreement, commercial terms shall prevail of this Agreement,
and terms covering regulatory or legal requirements shall prevail of the Quality Assurance Agreement.

 

5.4          Changes.
Any changes relating to the Process, Manufacture, storage and supply of Product are subject to the change management and change
approval provisions as set forth the Quality Assurance Agreement. Actual and direct costs incurred by a Party as a result of changes
will be allocated as follows:

 

5.4.1       Costs
Borne by Hapila. Hapila shall solely bear all actual and related costs resulting from changes requested by Hapila (irrespective
of any approval of such changes by Biofrontera) and costs related to the establishment and maintenance of GMP or changes required
by modifications of applicable laws and GMP requirements inherent to manufacturing of any active substance or to findings from
inspections by the local Competent Authorities.

 

5.4.2       Costs
Borne by Biofrontera. Biofrontera shall solely bear all actual and related costs resulting from (i) changes requested by Biofrontera,
or (ii) changes requested or required by regulatory authorities relating to the marketing of Ameluz (other than changes listed
under Section 5.4.1(ii) above), or (iii) changes in the materials and/or suppliers of any starting materials or other materials
used for the Manufacture of Product (including the Active Substance) mandated by a regulatory authority in relation to the marketing
of Ameluz or required by Biofrontera.

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

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5.5          Product
Warranties. Hapila warrants that any Product shall, at the time of delivery (i) fully meet the Specifications, (ii) have been
Manufactured and supplied in compilance with all Applicable Laws, the Process and the requirements set out in the Quality Assurance
Agreement, (iii) be free from defects, (iv) have a remaining shelf life of at least the Minimum Shelf Life, and (v) be free from
any liens, encumbrances or other Third Party rights (the "Product Warranties").

 

5.6          Pharmacovigilance.
As between the Parties Biofrontera shall be responsible for fulfilling the pharmacovigilance obligations under Applicable
Laws related to the final drug product.

 

		6.	Inspection and Defects

 

6.1          Visual
Inspection. After delivery of a shipment of the API, Biofrontera or a Third Party on behalf of Biofrontera will perform incoming
visual inspection of the Product delivered and the associated batch documentation. For the purposes of this Agreement, "visual
inspection" shall mean:

 

(i)            comparing
the applicable Purchase Order against the documentation accompanying the shipment to verify that the identity, quantity and exterior
shipment packaging and labeling comply with the Purchase Order ;

 

(ii)           verifying
that the certificate(s) of analysis and other batch documentation for the shipment shows that the Product conforms in all material
respects to the Product Specifications; and

 

(iii)          visually
inspecting the exterior of the packaging of Product to verify that the shipment appears to be in good condition.

 

If any shipment of Product
is incomplete, damaged or fails to comply with the Product Specifications as evident from the accompanying certificate of analysis,
Biofrontera shall inform Hapila thereof no later than [***] days after receipt of the shipment. In the absence of such
notice given by or on behalf of Biofrontera within the aforesaid period, Biofrontera shall be deemed to have accepted such delivery
of Product subject only to the provisions of the following section 6.2.

 

6.2          Notwithstanding
the foregoing, Hapila shall remain liable to Biofrontera for any latent defect in compliance with the Product Warranties that
subsequently is discovered,by e.g. further laboratory testing as defined in the Quality Assurance Agreement, in a shipment of
Product provided that Biofrontera informs Hapila by notice in writing of such latent defect not later than [***]
days from the date of discovery of such latent defect stating in reasonable detail the basis for
the assertion of a latent defect.

 

6.3          Remedies
for Defective Product. If the Product delivered by Hapila has a defect and if Biofrontera has fulfilled its duties of inspection
according to sec. 6.1, Biofrontera shall have the right to reject such defective Products and to demand replacement whereas other
legal remedies are excluded. If Hapila refuses to replace the Product or Hapila's attempts to replace the defective Products with
Products as defined in this Agreement have failed [***], then Biofrontera shall have
the right to either terminate the concrete Purchase Order or to terminate the concrete Purchase Order and this Supply Agreement.
Other legal remedies shall be excluded.

 

6.4          Independent
Testing. In the event the Parties disagree as to whether the Product delivered conforms to the Product Warranties, the rejected
Product along with all associated batch documentation shall be submitted to a mutually acceptable Third Party testing laboratory,
which will determine whether such Product conforms to the Product Warranties, provided however that Hapila's obligations under
Section6.3, including without limitation its obligations to replace Product, shall not be suspended or otherwise affected. The
Parties agree that such testing laboratory's determination shall be final and binding on the Parties. The Party against whom the
testing laboratory rules will bear the reasonable costs of the testing laboratory. If the testing laboratory rules that the Product
meets the Product Warranties, Biofrontera will purchase the Product at the Purchase Price, irrespective of whether Hapila has
already replaced such Product. If the testing laboratory rules that the Product does not meet the Product Warranties and the Product
was not previously replaced, Hapila shall at Biofrontera's option refund the Purchase Price for the affected Batch(es) of Product
to Biofrontera.

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

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		7.	Inspections and Audits

 

7.1          Inspections
by Regulatory Authorities. For any competent authority's audit and/or inspection of Hapila's facilities involved in the manufacture,
supply or shipment of the Product the relevant provisions in the Quality Agreement shall apply.

 

7.2          Audits.
Upon Hapila's receipt of at least [***] notice from Biofrontera, Hapila will give
employees or authorized representatives of Biofrontera, its Affiliates or License Partners for third countries access to any facilities
and records related to the Manufacture of Product, including any facility and records of Hapila's subcontractors for the Product
or Active Substance, in order to audit Hapila's compliance with the terms of this Agreement. The scope and manner of each audit
shall be determined by Biofrontera in consultation with Hapila, provided that each audit shall have a duration of [***]
unless determined otherwise by Biofrontera. If any Third Party's facilities are involved in the
Manufacture and shipment of Product, Hapila shall ensure that such Third Party also adheres to the obligations under this Section
7.2.

 

		B)	Warranties, Indemnifications, Limitation of Liability

 

		8.	Warranties

 

Each Party represents
and warrants that to the best of its knowledge, neither the execution and delivery of this Agreement by it nor its performance
hereunder conflicts with or will result in any violation or breach of, or constitute (with or without due notice or lapse of time
or both) a default under any of the terms or conditions of any license, agreement or other instrument or obligation to which it
is a party or by which it or any of its properties or assets may be bound, or violates any statute, law, rule, regulation, writ,
injunction, judgment, order or decree of any court, administrative agency or governmental authority binding on it or any of its
properties or assets.

 

		9.	Indemnification

 

9.1          Indemnification
by Hapila.

 

Hapila's liability with
respect to any claim under this agreement shall be limited to the extent of coverage of the liability insurance of Hapila with
respect to such claim, but in each occurrence not more than a maximum amount of [***].

 

9.2          Indemnification
by Biofrontera. Subject to any limitation of liability explicitly set out in this Agreement, Biofrontera shall indemnify and
hold Hapila, its Affiliates and their respective officers, employees and agents harmless from and against all Losses resulting
from all claims, demands, actions and other proceedings by any Third Party to the extent arisingfrom (i) the willful and/or gross
negligent breach of any representation, warranty or any other obligation under this Agreement, and/or (ii) non-compliance of Biofrontera'
actions or omissions as distributor of any End-Product with Applicable Laws, except to the extent that any such Loss is resulting
from willful or negligent act or omission of Hapila.

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

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9.3          Procedure.
Upon the filing of any such claim or suit, the Party seeking indemnification hereunder (the "Indemnified Party")
shall immediately notify the other Party (the "Indemnifying Party") thereof, shall give full information and reasonable
assistance in the defense or settlement of such claim or suit and shall permit such Indemnifying Party at its cost, to handle
and control such claim or suit; provided, however, that the Indemnified Party may, at its own expense, retain such additional
attorneys as it may deem necessary. The Indemnified Party's attorneys will be permitted by the Indemnifying Party and its attorneys
to reasonably observe and/or participate in all aspects of the defense of such claims or suits. The Indemnifying Party shall have
the right, after consultation with the Indemnified Party, to resolve and settle any such claims or suits, provided, that in no
event may the Indemnifying Party compromise or settle any such claim in a manner which admits fault or negligence on the part
of the Indemnified Party or includes injunctive relief or includes the payment of money or other property by the Indemnified Party
without the prior written consent of the Indemnified Party.

 

		10.	Limitation of Liabilities, No Other Warranties

 

10.1        Limitation
of Liability. Except as expressly set forth in this Agreement, neither Party shall be liable for any special, indirect, consequential
or incidental damages, except to the extent such damages were caused by intentional misconduct or gross negligence.

 

10.2        Personal
Injury and Death. Neither Party seeks to exclude or limit liability for death or personal injury caused by its negligence
or for fraud or fraudulent misrepresentation or for any liability that cannot legally be excluded or limited under any applicable
law.

 

10.3        No
Other Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS, WAIVES, RELEASES
AND RENOUNCES ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.

 

		C)	Term and Termination

 

		11.	Term and Termination

 

11.1        Term.
This Agreement shall become effective on the Effective Date and shall, unless terminated earlier according to the provisions
of this Agreement, continue in force and effect for the Initial Term. Thereafter, the term of this Agreement shall be automatically
extended by subsequent one (1) year periods, unless terminated by Biofrontera in its sole discretion by giving Hapila written
notice, such notice to be given no later than six (6) months prior to expiry of the then current term.

 

11.2        Termination
by Biofrontera upon Delivery Failures, Force Majeure or due to critical failures.

 

11.2.1      Biofrontera
shall have the right to terminate the purchase agreement in Section 2.2, and Biofrontera shall be free to Manufacture Product
and/or to obtain Product from any other source, if Hapila has not met its obligations to timely fill a binding Purchase Order
in full and/or with Product that meets the Product Warranties, and such failure (i) occurs more often than [***],
or (ii) with respect to one or more Purchase Orders, continues for a period of time of [***];

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

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11.2.2      Biofrontera
shall be entitled to terminate this Agreement with immediate effect by giving written notice to Hapila in the event that a Force
Majeure situation with respect to any obligations of Hapila continues for more than [***];

 

11.3        Termination
by Either Party. Either Party may terminate this Agreement in its entirety with immediate effect by giving written notice
to the other Party in any event that constitutes a good cause under German Civil Law (K0ndigung aus wichtigem Grund). An event
of good cause shall be the following events:

 

11.3.1      in
the event of a material breach by the other Party of, or default with, its obligations under this Agreement or the Quality Agreement
which breach or default has not been cured by the other Party within [***] after receiving
written notice from the terminating Party requiring it to cure such breach; or

 

11.3.2      if
the other Party refuses to perform or to continue to perform its obligations under this Agreement, or

 

11.3.3      in
the event that any third party deviant from, and without being controlled by, the other Party's ultimate parent as of the date
hereof is entitled to directly or indirectly control the other Party, whether by the majority of the voting rights, on a contractual
basis or otherwise; or

 

11.3.4      in
the event that the other Party files for insolvency or bankruptcy, shall be adjudicated insolvent or bankrupt, shall file a petition
under insolvency laws, shall be dissolved or shall have a receiver appointed for substantially all of its property.

 

		12.	Consequences
                                         of Termination

 

12.1       General
Consequences of Termination. Except as explicitly set out otherwise in this Agreement, the expiry or termination of this Agreement
shall have the following consequences:

 

12.1.1    Each Party
shall return the other Party's Confidential Information disclosed under this Agreement within fourteen (14) days after expiry
or termination of this Agreement and receipt of a respective request from the Disclosing Party, subject to retention of one archival
copy which shall be kept confidential and may be used solely for the purpose of monitoring compliance with the confidentiality
and non-use provisions of this Agreement.

 

		D)	Miscellaneous

 

		13.	Miscellaneous

 

13.1        Publicity.
Each Party agrees not to issue any press release or other public statement, whether oral or in writing, disclosing the existence
of this Agreement, the terms hereof or the Parties' relationship under this Agreement without the prior written consent of the
other party, such consent not to be unreasonably withheld, conditioned or delayed, provided, however, that neither Party will
be prevented from complying with any duty of disclosure it may have pursuant to law or governmental regulation or pursuant to
the rules of a recognized stock exchange. However, in the latter case, the Parties shall, to the extent reasonably practicable,
consult with each other and coordinate the wordings of any such announcements.

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

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13.2        Force
Majeure. Neither Party shall be liable to the other for any delay or nonperformance of its obligations under this Agreement
to the extent it arises from national emergency, act of God, fire, floods, earth-quakes, strikes, riots or any other cause beyond
the reasonable control of a Party ("Force Majeure"). The affected Party shall promptly notify the other Party in writing
of the cause and the likely duration of the delay or nonperformance and provided that the affected Party shall use reasonable
endeavors to limit the effect of such event on the other Party; the performance of the affected Party's obligations, to the extent
affected by the cause, shall be suspended during the period that the cause persists.

 

13.3        Notifications.
Any notice required or permitted to be given under this Agreement shall be in writing and in English, and shall be sufficiently
given if delivered by prepaid courier or sent by facsimile to the Party to whom such correspondence is required or permitted to
be given. All correspondence shall be addressed as follows, provided that either Party may, by giving notice as provided in this
Article, change its address for receiving such notice:

 

If addressed to Hapila:

 

Hapila GmbH

 

Otto-Schott-StraBe 9

 

07552 Gera

 

If addressed to Biofrontera: 

 

Biofrontera Pharma GmbH

 

HemmelratherWeg 201

 

D-51377 Leverkusen, Germany

 

13.4        Assignment.
Unless explicitly agreed upon in this Agreement, this Agreement is not assignable or transferable by either Party without
the prior written consent of the other Party.

 

13.5        Waiver.
No omission or delay on the part of any Party hereto to enforce at any time any of the provisions of this Agreement shall
be deemed or construed to be a waiver by the omitting Party of any such provision or of its rights hereunder nor shall any single
or partial exercise of any right or remedy preclude any further or other exercise of such right or remedy.

 

13.6        Entire
Understanding, Amendments, Conflicts. This Agreement constitutes and incorporates the complete and exclusive understanding
of the terms of the agreement between the Parties hereto with respect to the subject matter hereof. No modifications, amendments
or supplements to this Agreement shall be effective for any purpose unless in writing signed by each Party.

 

13.7        Severability.
If any provision of this Agreement is found by any court or administrative body of competent jurisdiction to be invalid or
unenforceable, the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement, and
all provisions not affected by such invalidity or unenforceability shall remain in full force and effect. The Parties agree to
attempt to substitute for any invalid or unenforceable provision a valid or enforceable provision which achieves to the greatest
extent possible the economic objectives of the invalid or unenforceable provision.

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

    	 	 	10

     

    

 

13.8        Governing
Law and jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of Germany with the exception
of its conflict of law rules. Any dispute arising out of or in connection with this Agreement will be finally settled by the District
Court at Berlin without limiting any right of appeal.

 

13.9        Counterparts.
This Agreement may be executed in counterparts and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

    	 	 	11

     

    

 

IN WITNESS WHEREOF, the Parties have executed
this Agreement effective as of the Effective Date:

 

	Hapila GmbH	 	Biofrontera Pharma GmbH
	 	 	 	 	 
	Date: 	 	Date: 
	 	 	 	 	 
	By:/s/ [***]	 	 	By:/s/ [***]	 
	Name: [***]	 	 	Name: [***]	 
	 	 	 	 	 
	Date:	 	Date: 
	 	 	 	 	 
	By:	 	 	By:/s/ [***]	 
	Name:	 	 	Name: [***]	 

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

    	 	 	12

     

    

 

Attachment 1 - Purchase Price

 

I.             Purchase
Price: The Purchase Price according to 1. is based on the concept of an annual amount up to [***].
This quantity of API can be produced in Hapila's qualified [***]. If Biofrontera's
Forecast announces annual quantities of more than [***], the parties will discuss transferring the process to a [***].
The transfer will only take place with Biofrontera's approval. For Products produced in this [***] the
Purchase Price defined in 2. shall apply.

 

		1.	Price/kg for Product produced
in the existing [***]:

 

		a)	The Purchase price shall
be [***].

		b)	The Purchase price shall
be [***].

 

		2.	Price/kg for Product produced
after upscaling to a [***]:

 

		c)	The Purchase price shall
be [***].

		d)	The Purchase price shall
be [***].

		e)	The Purchase price shall
be [***].

 

Confidential treatment has been requested with respect to the
information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

    	 	 	13Exhibit 10.3

 

SUPPLY AGREEMENT

 

This Supply Agreement ("Agreement")
has been made on the 1st day of January 2017 ("Effective Date") by and between

 

Biofrontera Pharma GmbH, a company with its head office at Hemmelrather
Weg 201, D-51377 Leverkusen, Germany (hereinafter called "BIOFRONTERA") and

 

Midas Pharma GmbH, a company with its
head office at Rheinstr. 49, D-55218 lngelheim, Germany (hereinafter called "MIDAS")

 

PREAMBLE

 

WHEREAS, MIDAS has developed and holds a European Active
Substance Master File (ASMF) and a US Drug Master File (DMF) for the active pharmaceutical ingredient 5-Aminolevulinic acid Hydrochloride
that is currently manufactured on behalf and order of MIDAS at a third party contract manufacturing organization; and

 

WHEREAS, BIOFRONTERA is in possession of a registration
dossier for a finished pharmaceutical form with the active substance 5-Aminolevulinic acid Hydrochloride that refers, among others,
to the ASMF and DMF of MIDAS; and

 

WHEREAS, BIOFRONTERA is willing to purchase the active
pharmaceutical ingredient from MIDAS and

 

WHEREAS, MIDAS is willing to supply the active pharmaceutical
ingredient to BIOFRONTERA or, upon request of BIOFRONTERA, directly to its contract manufacturers; and

 

WHEREAS, BIOFRONTERA and MIDAS signed a binding Letter
or Intent (LoI) on 29 December 2012, that sets forth several rights and obligations of MIDAS and BIOFRONTERA, respectively, to
be incorporated into this Agreement.

 

NOW THEREFORE, in consideration of the foregoing
recitals, which are expressly incorporated into the body of this Agreement, the Parties mutually agree as follows:

 

		1.	DEFINITIONS

 

		1.1	"Active Substance Master File" or "ASMF" shall mean the drug master file formerly known as
European Drug Master File (EDMF) as specified in the European Medicines Agency's Guideline on Active Substance Master File Procedure,
and in Annex I to Directive 2001/83/EC as amended Part I, 3.2 Basic principles and requirements, (8) Active Substance Master File
(for Human medicinal products).

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		1.2	“Agreement” shall mean this Supply Agreement between BIOFRONTERA and MIDAS.

 

		1.3	"Affiliate(s)" shall mean with respect to either Party, any person, partnership, corporation, organization
or entity that directly or indirectly controls or is directly or indirectly controlled by or is under common control with such
Party. A person or entity shall be regarded as controlling entity, if (i) it owns more than fifty percent of the voting stock or
other ownership interest of such other entity; or (ii) it directly or indirectly possesses sufficient authority to direct the adoption
and I or execution of the policies, management or operations of such entity by any means whatsoever.

 

		1.4	"Annual Minimum Amount" shall mean at least [***] of the annual purchasing requirements of the AP!
by BIOFRONTERA.

 

		1.5	"API" shall mean the active pharmaceutical ingredient 5-Aminolevulinic acid Hydrochloride as manufactured
by the MANUFACTURER and supplied by MIDAS.

 

		1.6	"APPROVED COMPETITOR" shall mean a competitor comparable to the MANUFACTURER, that manufactures in compliance
with GMP and is accepted by the competent Health Authorities in the EU or US.

 

		1.7	"Confidential Information" shall mean all written information provided by MIDAS to BIOFRONTERA or by BIOFRONTERA
to MIDAS and with regard to the API or the PRODUCT. The term "Confidential information" as used herein shall also include
all terms and conditions of this Agreement.

 

		1.8	"Drug Master File" or "DMF" shall mean the drug master file used for active pharmaceutical
ingredients in the United States of America as specified by the U.S: Food & Drug Administration (FDA) of the U.S. Department
of Health and Human Services,

 

		1.9	"Effective Date" shall mean the date first written above.

 

		1.10	"Health Authorities" shall mean any health authority in a given country, responsible for the evaluation of
the registration dossier and the grant of the Marketing Authorisation for the PRODUCT.

 

		1.11	"Initial Contractual Period" shall have the meaning given to it in Section 14.1.

 

		1.12	"MANUFACTURER(S)" shall mean the manufacturer of the API as contracted by MIDAS and named in the ASMF or DMF,
being [***].

 

		1.13	"Marketing Authorisation" shall mean any authorisation, which is legally required under applicable laws, regulations
or administrative decisions, to launch the PRODUCT in a given country.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

 

		1.14	"Material Breach" shall mean any breach of this Agreement by one Party which, considering the nature and purpose
of the Agreement, makes the continuation of this contractual relationship unreasonable for the non-breaching Party.

 

		1.15	"Minimum Quantity" shall have the meaning given to it in Section 5.2 and Annex B.

 

		1.16	"Party" shall mean each of the contracting parties, BIOFRONTERA and MIDAS separately, whereas "Parties"
shall mean all of the contracting parties together.

 

		1.17	"PRODUCT" shall mean a semisolid formulation for topical use with the API as one/as the main active ingredient
as developed by BIOFRONTERA.

 

		1.18	"Quality Agreement" shall mean a separate agreement between MIDAS governing, without limitation, cGMP and
quality issues involved in the manufacture and control of the API and testing and release of the API for sale. The Parties agree
to sign and execute the Quality Agreement prior to the first commercial supply of the API to BIOFRONTERA.

 

		1.19	"SPECIFICATION" shall mean the specification of the API according to the current Certificate of Suitability
(CEP) and/or Marketing Authorisation of the PRODUCT as stipulated in detail in the corresponding Quality Agreement.

 

		1.20	"Third Party" shall mean any person or entity not being MIDAS or one of its Affiliates or BIOFRONTERA or one
of its Affiliates.

 

		1.21	"Working Day" shall mean each Day from Monday to Friday, except for national public holidays in Germany, Italy
and India.

 

		1.22	Headings are for convenience only and do not affect interpretation. The following rules apply unless the context requires otherwise.

 

		a)	The singular includes the plural and conversely.

 

		b)	A gender includes all genders.

 

		c)	A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them.

 

		d)	A reference to an agreement or document (including, without limitation, a reference to this Agreement) is to the agreement
or document as amended, varied, supplemented or replaced, except to the extent prohibited by this Agreement or that other agreement
or document.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

 

		2.	SUBJECT OF THIS AGREEMENT

 

		2.1	BIOFRONTERA contracts MIDAS with the supply of the API in accordance with the terms and conditions of this Agreement.

 

		2.2	MIDAS accepts such appointment.

 

		2.3	Both Parties agree to perform their respective obligations under this Agreement in accordance with the terms and conditions
set forth herein and in accordance with all applicable national and European laws, regulations or directives.

 

		3.	EXCLUSIVITY OF SUPPLY

 

		3.1	For the entire term of the Initial Contractual Period, Midas shall refrain from selling API to any Third Party within [***].
MIDAS will ensure that the commercial contract between MIDAS and MANUFACTURERs contains an exclusivity clause in accordance with
this contract. Notwithstanding the provisions of this Section 3.1 above, MIDAS shall be entitled to (i) sell the API to Third Parties
for use in the finished pharmaceutical product with the brand name [***] or for use in a generic version of [***],
and (ii) to use and sell the API for an own development and the commercialization of a generic version of [***],

 

		3.2	As consideration for the exclusive supply of API to BIOFRONTERA for use in the Field of Use, BIOFRONTERA shall pay to MIDAS
a [***]. Each lump sum payment shall be due [***].

 

		3.3	Provided that BIOFRONTERA purchases within a calendar year of the Initial Contractual Period more quantities of API than the
Minimum Quantity then the lump sum payable by the 15th of December for the same year will be reduced by [***].

 

For sake of clarity; if BIOFRONTERA
purchases [***] (or more) in one calendar year in addition to the Minimum Quantity then the lump sum in this (same) calendar
year as stipulated in Clause

 

3.2 above will be reduced to zero. Any quantity between
[***] will reduce the lump sum partly.

 

		3.4	After the Initial Contractual Period, the marketing restriction clause according to Clause 3.1 and the lump sum payment according
to 3.2 will cease, if not otherwise agreed between the Parties prior to the expiry of the Initial Contractual Period.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		4.	OBLIGATIONS AND RIGHTS OF MIDAS

 

		4.1	MIDAS' obligation shall be the supply of the API, as manufactured by the MANUFACTURER [***], free of defects, in the
agreed upon time and quantity and in accordance with the SPECIFICATION and the ASMF and DMF. Supply of API from any different MANUFACTURER
than [***] shall only be conducted upon prior mutual consent between the Parties. At the time of delivery of the API to
the first carrier in accordance with incoterms 201O CPT, the API remaining re-test period for the API shall not be less than two
years and shall be extended by another year upon availability of 48 months stability data from the ongoing ICH stability program.

 

		4.2	Without assuming any liability towards BIOFRONTERA for a successful qualification, MIDAS develops [***] as alternative
qualified manufacturing site. Within the year 2016 at least three (3) validation batches of approximately [***] are planned
for production and a stability programme is planned to be initiated with the aim to have the documentation including stability
data relevant for the registration of [***] as manufacturing site with EMA and US-FDA available by beginning of 2017. MIDAS
will as soon as possible provide BIOFRONTERA with quantities of [***] from three different validation batches for the manufacture
of PRODUCT in order to generate appropriate stability data for the submission of the change/variation in order to qualify [***] as API MANUFACTURER for PRODUCT. Upon successful validation and registration of the new MANUFACTURER [***] with the
competent authorities, the validation batches (part of the Minimum Quantity and not exceeding the Minimum Quantity per annum) will
be sold by MIDAS as commercial batches of API to BIOFRONTERA in 2017.

 

		4.3	Unless already provided by MIDAS at the Effective Date, MIDAS shall provide BIOFRONTERA with all data and documentation necessary
to enable BIOFRONTERA to add [***] Italy, as MANUFACTURER to BIOFRONTERA's Dossier for the Product. Any such documentation
shall be provided by MIDAS as soon as it is available at MIDAS without delay.

 

		4.4	Upon request of BIOFRONTERA, MIDAS shall submit reasonable quantities of working standards and reference impurities of the
API to BIOFRONTERA at its own cost, if such standards or reference materials are not elsewhere commercially available.

 

		4.5	MIDAS shall file and maintain the ASMF and DMF and comply with all obligations as ASMF- and DMF holder according to relevant
laws. After termination of this contract, MIDAS shall maintain the ASMF and DMF active as long as BIOFRONTERA has PRODUCT manufactured
with MIDAS API on the market and the associated change/variation is approved.

 

		4.6	MIDAS shall provide the Applicant's Part of the ASMF or
a copy of the CEP for the API to BIOFRONTERA. MIDAS shall file the Restricted Part with the Health Authorities or fill in the
declaration of access box of the CEP and issue the requested Letters of Access and Letters of Commitment, if necessary. Furthermore,
MIDAS shall submit the US-DMF for the API to FDA in USA and provide BIOFRONTERA with a Letter of Authorisation.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		4.7	MIDAS agrees to commit MANUFACTURER to not make any change in the manufacturing and/or testing processes for the API set out
in the ASMF and/or US-DMF which is referred to in the registration dossiers and/or the Marketing Authorisations for the PRODUCT,
without the prior written consent of BIOFRONTERA, which may not be unreasonably withheld. MIDAS shall notify BIOFRONTERA in writing
of any changes that MANUFACTURER proposes to make to the SPECIFICATION, or the manufacturing procedures, for the APL MIDAS shall
deliver with the notice required adequate documentation to enable BIOFRONTERA to determine whether such change requires regulatory
notification or approval. As soon as reasonably practicable BIOFRONTERA shall notify MIDAS if the proposed change would require
regulatory notification or Approval by the Health Authorities. In the event that any such proposed change would require regulatory
notification or approval by the Health Authorities, BIOFRONTERA agrees that it will take the necessary steps to notify the Health
Authorities or to obtain regulatory approval as soon as reasonably practicable. Unless and until BIOFRONTERA has obtained regulatory
approval for such proposed changes, MIDAS shall commit MANUFACTURER to continue to manufacture the API supplied by MIDAS to BIOFRONTERA
in accordance with the provisions of this Agreement, and such API shall conform with the SPECIFICATION and manufacturing processes
previously approved.

 

		5.	OBLIGATIONS AND RIGHTS OF BIOFRONTERA

 

		5.1	BIOFRONTERA undertakes to purchase and take at least the Annual Minimum Amount of the API from MIDAS for the Initial Contractual
Period.

 

		5.2	Notwithstanding the provision of Section 5.1, BIOFRONTERA at no time shall purchase less than a minimum yearly quantity of
API per calendar year as set forth in Annex B to this Agreement ("Minimum Quantity") for the Initial Contractual Period.

 

		5.3	Notwithstanding the foregoing provisions regarding the Annual Minimum Amount and the Minimum Quantity, BIOFRONTERA is only
obligated to purchase the Minimum Quantity or Annual Minimum Amount if the MANUFACTURER [***] is registered in the ASMF
and DMF by MIDAS and accepted by the European Authorities (EMA) and by US-FDA.

 

		5.4	BIOFRONTERA will order from MIDAS [***] of the validation batches manufactured by [***] for MIDAS as soon as
these batches are available. These quantities are part of the Minimum Quantity for 2017. The [***] price shall be [***].

 

		5.5	In the event that BIOFRONTERA omits to purchase from MIDAS (a) its Annual Minimum Amount or (b) the Minimum Quantity, whatever
is the larger amount, MIDAS shall be entitled to invoice to BIOFRONTERA the value of the quantities of API not purchased by BIOFRONTERA
and falling short of the Annual Minimum Amount or the Minimum Quantity, whatever is the larger amount ("Shortfall Quantity").
The exact value of the Shortfall Quantity shall be calculated by multiplying the Shortfall Quantity with the price of the API that
was applicable during the period in which the Shortfall Quantity should have been purchased by BIOFRONTERA.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		5.6	For the avoidance of doubt, BIOFRONTERA wishes to be supplied by the MANUFACTURER [***] for the Initial Contractual
Period and shall not be obligated to buy API from MIDAS that has been produced by MANUFACTURER and/or any other Third Party contract
manufacturer of MIDAS that is not already known to BIOFRONTERA, registered in the ASMF and/or DMF and accepted by the relevant
Health Authority. However, the acceptance and confirmation of any such newly selected manufacturer will not be unreasonably withheld
by BIOFRONTERA.

 

		6.	PRICE AND PAYMENT TERMS

 

		6.1	The prices for the API are listed in Annex A to this Agreement and will be fixed in Euro (EUR). The prices are to be understood
CPT Switzerland or Germany (INCOTERMS 2010), excluding any fees charged by authorities for or related to the PRODUCT, the API,
the ASMF, the DMF and the MANUFACTURER. Should BIOFRONTERA in future require a different delivery destination the Parties will
discuss and agree on the respective terms and conditions for such supply. Any fees that are charged by any authority to MIDAS and/or
MANUFACTURER and that are related to the use of API by BIOFRONTERA for manufacture, marketing or use of a finished pharmaceutical
form within the USA shall be borne by BIOFRONTERA, or in case the respective fee is payable by MIDAS or MANUFACTURER, shall be
reimbursed to MIDAS.

 

However,
if charges are due to quality issues or non-compliance issues caused by MIDAS or its MANUFACTURERS then BIOFRONTERA shall not be
obliged to absorb such cost.

 

		6.2	BIOFRONTERA shall pay the agreed upon price for the API as invoiced by MIDAS within [***] from date of invoice of MIDAS.

 

		6.3	Should the cost- and/or market situation change considerably to the disadvantage of one of the Parties, the Parties shall solve
such a problem in a friendly way, balancing the interests of the Parties.

 

		6.4	As regards the Annual Minimum Amount, BIOFRONTERA undertakes to accept during the Initial Contractual Period a price [***].
Should BIOFRONTERA receive a written quotation for an identical ASMF- or CEP-supported quality of the API offered by an APPROVED
COMPETITOR which is more than [***] below the price of MIDAS, BIOFRONTERA shall provide written notice thereof to an independent
Third Party, mutually agreed upon and appointed by the Parties hereto, for the purposes of verification and validation of said
APPROVED COMPETITOR's offer as bona fide, in particular with regard to the APPROVED COMPETITOR's price and identical quality of
the API. If the offer is bona fide, MIDAS shall have the right to match said Third Party price.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

In case MIDAS cannot offer a
price which is at [***] higher than the price of the APPROVED COMPETITOR, then BIOFRONTERA is free to purchase the quantities
of the API which are offered at such lower price from the APPROVED COMPETITOR. After such quantities are called off from the APPROVED
COMPETITOR, BIOFRONTERA shall purchase again the entire demand from MIDAS provided that MIDAS is offering a price which is at maximum
five (5) % higher than the price of the APPROVED COMPETITOR.

 

Solely for avoidance of doubt,
in case BIOFRONTERA decides in accordance with the above provision to purchase the API from the APPROVED COMPETITOR and not from
MIDAS, MIDAS' obligations under this Agreement, including the obligations mentioned in Clause 4.4 and 4.6, which are considered
as accessory obligations in relation to the supply of API, shall not apply during such period.

 

		7.	ORDERS AND DELIVERY

 

		7.1	BIOFRONTERA will provide MIDAS with a [***] rolling forecast starting from the Effective Date whereas the quantities
given for the first [***] of such forecast are considered to be firm and binding orders. The forecast has to be updated
by BIOFRONTERA every [***]. All delivery schedules are to be mutually agreed upon between the Parties.

 

		7.2	If not previously provided, at the beginning of each new [***] period, according to Clause 7.1, but not later than [***]
of such period, BIOFRONTERA shall send to MIDAS written purchase orders covering all quantities of the API of the binding forecast.

 

		7.3	MIDAS shall accept such orders within [***] from receipt of such orders. In case MIDAS does not comment on the received
orders within such period, MIDAS shall be deemed to have accepted the orders.

 

		7.4	MIDAS shall deliver the API on orders accepted by MIDAS to BIOFRONTERA or its contract manufacturers according to the SPECIFICATION
and in containers suitable for storage and transportation of APls. Delivery shall take place CPT Germany or Switzerland {INCOTERMS
2010), as indicated by BIOFRONTERA.

 

		7.5	The standard delivery time from stock is [***] after receipt of the BIOFRONTERA's written order by MIDAS. Production
campaign planning will be done based on forecast provided by BIOFRONTERA according to Clause 7.1 Should MIDAS expect delays in
delivery times or have general delivery problems, MIDAS will immediately inform BIOFRONTERA thereof.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

 

		7.6	Should MIDAS not be in a position to supply the quantities ordered by BIOFRONTERA at the right time or in the agreed upon quality
BIOFRONTERA will be free to buy from another source to prevent an out of stock situation, until MIDAS has remedied its deficiencies.
In this case, both Annual Minimum Amount and Minimum Quantity will be reduced accordingly.

 

		7.7	The risk of loss of the API will pass pursuant to the agreed upon delivery terms according to INCOTERMS 2010.

 

		7.8	Notwithstanding the delivery and the passing of risk in the API or any other provision of these conditions, the property in
the APls shall not pass to BIOFRONTERA until MIDAS has received payment in full for the price of the respective delivery of the
API. BIOFRONTERA is entitled to resell the delivered goods in the regular course of business. However, BIOFRONTERA shall, at the
time of conclusion of such contract, transfer to MIDAS any and all outstanding claims up to the amount of MIDAS's outstanding payment
claims, independent of whether the goods delivered by MIDAS are sold without or after being further processed. BIOFRONTERA remains
authorized to collect the debts from its respective debtors even after transfer of such claims to MIDAS. Notwithstanding the above,
MIDAS shall also be entitled to collect such debts itself. MIDAS undertakes not to collect such debt as long as BIOFRONTERA complies
with its payment obligations towards MIDAS. In case of breach of payment obligations by BIOFRONTERA, MIDAS shall be entitled to
demand from BIOFRONTERA to reveal to MIDAS the transferred claims and the corresponding debtor and all necessary information and
documentation. In addition BIOFRONTERA shall notify the debtors of the assignment of its claims to MIDAS.

 

		8.	DEFECTS

 

		8.1	Any complaint regarding obvious qualitative defaults, detectable by a visual inspection, including the taking and analysing
of random samples, and/or quantitative shortcomings of the API shall be made in writing by BIOFRONTERA to MIDAS immediately after
their discovery, at the latest within [***] Days after receipt of the API. BIOFRONTERA shall simultaneously send samples
of the faulty API to MIDAS. If BIOFRONTERA fails to notify MIDAS within such period, BIOFRONTERA shall be deemed to have given
his unqualified acceptance regarding the consignment.

 

		8.2	In case of any hidden defects, complaints shall be raised by BIOFRONTERA immediately, but not later than [***] after
their discovery in writing.

 

		8.3	Claims pursuant to Section 8.2 are time-barred after [***], counted from the delivery of the API to BIOFRONTERA. If
BIOFRONTERA fails to notify MIDAS of any hidden defects within the period pursuant to Section 8.2, BIOFRONTERA shall be deemed
to have given his unqualified acceptance regarding the consignment.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		8.4	In case of timely and justified claims, MIDAS shall have the following options and BIOFRONTERA's rights against MIDAS shall
be restricted to the following:

 

		a)	In case of short delivery MIDAS shall use all commercially reasonable efforts to deliver the missing quantities within the
shortest reasonable period of time.

 

		b)	In all other cases MIDAS shall (i) replace those quantities of the API which are found to be defective, as long as the performance
of such replacement is not impossible, or (ii) in case the performance of such replacement is impossible or only possible at disproportionate
costs, MIDAS shall, at its own option, take back the API which is not in accordance with the SPECIFICATION and refund the purchase
price to BIOFRONTERA.

 

		8.5	It is hereby agreed that in the case that MIDAS does not acknowledge the defect of the API, which BIOFRONTERA has found to
be defective; the Parties shall endeavour to settle such disagreement amicably and constructively between themselves. In the event
that they fail to agree within [***] after receipt of the notice of defects, the Parties agree to nominate an independent,
reputable laboratory, acceptable to all Parties, which shall examine representative samples taken from such consignment, using
the methods of analysis indicated in the specification, and the result shall be binding for all Parties. The charges for such examination
shall be borne by the Party found to be at fault. Substitute deliveries on the basis of complaints subsequently recognised as not
justified will be invoiced to BIOFRONTERA by MIDAS.

 

		9.	LIABILITY

 

		9.1	Unless otherwise provided for in this Agreement, the Parties' liability towards each other in case of simple negligence (/eichte
Fahrlassigkeit) shall be excluded. The Parties' liability to each other in case of damages and losses resulting from gross negligence
(grobe Fahrlassigkeit) shall be limited to direct losses, excluding in particular any indirect, punitive or consequential damages
or loss of profits, whether based on contract or tort, or arising under applicable law or otherwise.

 

		9.2	The limitation of liability set forth in this Section 9 shall not apply to the injury to life, limb or health; or to the intentionalviolation
of the obligations of this Agreement by a Party.

 

		9.3	All defect and liability claims arising from this contract are subject, to the extent legally possible, to a limitation period
of [***] from statutory commencement of the limitation period. The running of the limitation period shall not be suspended
or interrupted due to the Parties' negotiation of the claim or the claim's circumstances, unless otherwise agreed in writing.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		10.	FORCE MAJEURE

 

Any delay in the performance
of any of the duties or obligations of either Party caused by an event outside the affected Party's reasonable control including
those events affecting suppliers of such Party, shall not be considered a breach of this Agreement and the time required for the
performance shall be extended for a period equal to the period of such delay. The Party so affected shall give prompt notice to
the other Party of such cause, and shall take whatever reasonable steps are appropriate in that Party's discretion to relieve the
effect of such cause as rapidly as possible. Should one of the Parties be prevented from fulfilling its contractual obligations
for more than [***] due to Force Majeure, the other Party shall be entitled to terminate this Agreement irrespective of
the general provisions providing for termination in Section 14.

 

		11.	CONFIDENTIALITY

 

		11.1	Neither Party shall disclose any Confidential Information to third parties without the prior written consent of the respective
disclosing party of such Confidential Information. However, BIOFRONTERA may disclose Confidential Information received from MIDAS
to the appropriate regulatory authorities and to its licensees, provided a corresponding confidentiality agreement has been concluded
between MIDAS and/or BIOFRONTERA and the respective licensees beforehand. In addition, MIDAS shall be entitled to disclose Confidential
Information received from BIOFRONTERA to MANUFACTURER, provided a corresponding confidentiality agreement has been concluded between
MIDAS and MANUFACTURER beforehand.

 

		11.2	The above mentioned obligation shall not apply or shall cease to apply to any information which:

 

		a)	is in the public domain at the time of disclosure;

 

		b)	is published or otherwise becomes part of the public domain through no fault of the receiving party;

 

		c)	is known to the receiving party before receipt thereof under this Agreement, as shown by prior written records;

 

		d)	becomes available from a Third Party which is not known by receiving party to be prohibited from disclosing such information
by contractual or legal obligation to the disclosing Party; or

 

		e)	has to be revealed according to a court decision or an administrative order.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		11.3	This confidentiality obligation will continue for a period of [***] after the termination date of this Agreement. None
of the Parties shall be required to disclose to any of the other Parties any information known to be property of, or obtained under
obligations of secrecy from a Third Party.

 

		12.	INDEMNIFICATION

 

		12.1	MIDAS shall defend, indemnify and hold BIOFRONTERA harmless from any Third Party claim or suit resulting from the use or application
of the PRODUCTS, (i) if such loss or damage is due to a breach of warranties of MIDAS under this Agreement, (ii) is solely due
to the API supplied by MIDAS not being in conformity with the Specifications, or (iii) is due to any grossly negligent or intentionally
wrongful breach, error or omission of contractual obligations of MIDAS under this Agreement.

 

		12.2	BIOFRONTERA shall defend, indemnify and hold MIDAS harmless from any third Party claim or suit on for loss or damages, (i)
resulting from a breach of warranties of BIOFRONTERA under this Agreement, (ii) resulting from the manufacture, marketing, use
or application of the PRODUCT, (iii) resulting from any grossly negligent or intentionally wrongful breach, error or omission of
BIOFRONTERA in performing its contractual obligations under this Agreement, or (iv) resulting from any alleged or proven infringements
of Third Party intellectual property rights by the marketing, use or application of PRODUCTS, unless such damages result solely
from the breach of this Agreement by MIDAS or are otherwise covered by the indemnity clause of Section 12.1above.

 

		12.3	Any Party seeking to be indemnified by virtue of this Agreement shall notify the Party from which indemnification is sought
promptly in writing of any and all respective claims, actions and proceedings made or instituted against it.

 

		12.4	Each Party (the Indemnified Party) shall conduct its own defence against Third Party claims for which it seeks indemnification
from the other Party {the Indemnifying Party) under this Agreement, but shall make sure that the Indemnifying Party obtains access
to all documentation related to the case, and is allowed to participate in defending the case. The Indemnifying Party shall be
entitled, but under no obligations, to assist the Indemnified Party's defence in the respective case to the extend as it may deem
the Indemnifying Party appropriate under the circumstances. The Indemnified Party will not agree to any settlement without the
Indemnifying Party's prior written consent.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		13.	INSURANCE

 

Both Parties undertake
to obtain and to maintain during the term of this Agreement and [***] after its termination or expiry in full force and
effect a valid commercial general liability insurance with a reasonable coverage. Upon request of the other Party, each Party shall
forward the other Party a copy of the respective insurance policy.

 

		14.	TERM AND TERMINATION

 

		14.1	This Agreement shall be initially valid for a period commencing on the Effective Date and ending on 31 December 2021 ("Initial
Contractual Period").

 

		14.2	After the Initial Contractual Period this Agreement shall be automatically renewed for further periods of two (2) years each,
unless either Party gives the other a six (6) month notice of termination prior to the end of the Initial Contractual Period or
any prolongation period.

 

		14.3	Without prejudice to Section 14.2, this Agreement may be terminated by either Party for an important reason without observing
a period of notice.

 

An important reason would be in particular:

 

		a)	debt settlement proceedings (in particular insolvency) are instituted against the assets of the other Party or an application
is filed in this respect and, despite specific request, the other Party cannot prove within a reasonable period of time that such
application is obviously without foundation;

 

		b)	the other Party commits a Material Breach notwithstanding a warning letter admitting the Party in breach a [***] period
to cure such Material Breach.

 

		14.4	All notices of termination have to be made in writing, shall be delivered by prepaid registered Airmail or personal courier.
A termination notice issued by the terminating Party shall become effective on the date of receipt by the other Party.

 

		15.	ASSIGNMENT

 

		15.1	Subject to the other terms of this Agreement, neither Party shall have the right or the power to assign any of its rights,
or delegate or subcontract the performance of any of its obligations under this Agreement, without the prior written authorization
of the other Party, such written authorization not to be unreasonably withheld or delayed.

 

		15.2	The prior written authorization of the other Party shall not be required for a Party to assign its rights and delegate its
obligations hereunder, in whole or in part, to an Affiliate.

 

		15.3	In case of an assignment to an Affiliate the assigning Party shall notify the other Party in writing of the extent of the assignment
of contractual rights and obligations to the Affiliate, and whether the Affiliate shall be entitled to directly invoice any contractual
services to the other Party due to the assignment.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		16.	LEGAL SUCCESSOR

 

This Agreement shall
be binding on and shall inure to the benefit of the Parties and their legal successors. Each Party shall commit its respective
successor to enter into and therefore become a new Party to this Agreement.

 

		17.	DISPUTE RESOLUTION

 

		17.1	This Agreement shall be governed and construed in accordance with the laws of Germany without giving effect to the choice of
laws principles thereof which would result in the application of the laws of another jurisdiction. The Convention on Contracts
for the International Sales of Goods (CISG 1980) shall not apply.

 

		17.2	Any disputes arising between the Parties out of or in connection with this Agreement (including, without limitation, any questions
regarding its existence, validity or termination) which cannot be solved by the Parties using their best efforts shall be subject
to the courts having jurisdiction over Cologne, Germany.

 

		18.	NOTICES

 

Unless otherwise provided
for herein, any notice required to be given under this shall be in writing and shall be given by facsimile, personal delivery or
by prepaid registered mail addressed as follows:

 

Biofrontera Pharma GmbH

Hemmelrather Weg 201

D-51377 Leverkusen

Germany

[***]

Tel.: [***]

Fax.: [***]

Email: [***]

 

Midas Pharma GmbH

Rheinstraße 49

D-55218 lngelheim

Germany

[***]

Tel.: [***]

Fax.: [***]

Email: [***]

or at such other address as such Party has advised the other Parties of in writing.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

		19.	MISCELLANEOUS

 

		19.1	If, at any time, any provision of this Agreement is or becomes unenforceable in any respect under the laws of the applicable
jurisdiction, the remaining provisions of this Agreement shall remain unaffected thereby. The Parties shall negotiate in good faith
and replace the invalid or unenforceable provision by a valid and enforceable provision, which comes closest to the original intention
of the Parties.

 

		19.2	This Agreement, including the Annex(es) referred to in this Agreement, shall constitute the entire agreement between the Parties
with respect to the subject matter of this Agreement and shall supersede all previous negotiations, agreements, and commitments,
whether written or unwritten, with respect to such subject matter.

 

		19.3	No failure of any Party to exercise any power given it under this Agreement, or to insist upon strict compliance with any provision
of this Agreement, and no custom or practice of the Parties at variance with the terms of this Agreement shall constitute a waiver
of any Party's right to demand strict compliance with the terms of this Agreement.

 

		19.4	All clauses and articles herein were negotiable and negotiated between the Parties without any restriction or limitation. They
were left to the free and unrestricted negotiations of the Parties and reflect the result of such negotiations.

 

		19.5	Modifications to the provisions set forth in this Agreement must be confirmed and accepted in writing by duly authorised officers
of all Parties. Any oral modification of this section shall be void.

 

		19.6	Headings contained herein are for convenience and reference only and shall not control the interpretation of any term or provision
of this Agreement.

 

		19.7	The Parties agree to inform their respective Affiliates of the existence of this Agreement and to commit those Affiliates to
respect this Agreement and not to circumvent it by entering into other agreements contradicting the content of this Agreement.

 

		19.8	If not otherwise provided for herein, the Sections 9 (Liability), 11 (Confidentiality), 12 (Indemnification) and 17 (Dispute
Resolution) shall survive the termination of this Agreement.

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

 

 

IN WITNESS WHEREOF, the Parties have caused
this Agreement to be executed by their representatives.

 

	 	Biofrontera Pharma GmbH	 	Midas Pharma GmbH
	 	 	 	 
	Date:	20.12.2016	 	22.12.2016
	Name:	[***]	 	[***]
	Title:	Chief Executive Officer	 	Managing Director
	 	 	 	 
	Signature:	/s/[***]	 	/s/[***]
	 	 	 	 
	Date:	20.12.2016	 	22.12.2016
	Name:	[***]	 	[***]
	Title:	Vice President Controlling	 	Head of Marketing & Sales NCE – Ims
	 	 	 	 
	Signature:	/s/[***]	 	/s/[***]

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

Annex A

 

to the SUPPLY AGREEMENT

 

by and between BIOFRONTERA and MIDAS

 

Price according to Section 6.1 of this Agreement shall be:

 

	[***]	[***] per annum	at	[***]	 
	[***]	[***] per annum	at	[***]	 
	[***]	[***] per annum	at	[***]	 

 

	 	Biofrontera Pharma GmbH	 	Midas Pharma GmbH
	 	 	 	 
	Date:	20.12.2016	 	22.12.2016
	Name:	Prof. Dr. Hermann Lübbert	 	Dr. Marcus Stumpf
	Title:	Chief Executive Officer	 	Managing Director
	 	 	 	 
	Signature:	/s/[***]	 	/s/[***]
	 	 	 	 
	Date:	20.12.2016	 	22.12.2016
	Name:	Hans-Dieter Stock	 	Florian Tetzner
	Title:	Vice President Controlling	 	Head of Marketing & Sales NCE – Ims
	 	 	 	 
	Signature:	/s/[***]	 	/s/[***]

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

 

     

     

    

  

Annex B

 

to the SUPPLY AGREEMENT

 

by and between BIOFRONTERA and MIDAS

 

Minimum Quantities according to Section 5.2 of this Agreement
are:

For 2017: [***]

For 2018 and for each following calendar year: [***]

 

	 	Biofrontera Pharma GmbH	 	Midas Pharma GmbH
	 	 	 	 
	Date:	20.12.2016	 	22.12.2016
	Name:	[***]	 	[***]
	Title:	Chief Executive Officer	 	Managing Director
	 	 	 	 
	Signature:	/s/[***]	 	/s/[***]
	 	 	 	 
	Date:	20.12.2016	 	22.12.2016
	Name:	[***]	 	[***]
	Title:	Vice President Controlling	 	Head of Marketing & Sales NCE – Ims
	 	 	 	 
	Signature:	/s/[***]	 	/s/[***]

 

Confidential treatment has been requested with respect to
the information contained within the [***] marking. Such portions have been omitted from this filing and have been filed separately
with the Securities and Exchange Commission.

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