Document:

Exhibit 10.1

 

SECOND AMENDMENT TO LEASE

 

This Second Amendment to Lease (“Second Amendment”) is made this 22nd day of January, 2018 by and between Faith Realty II, LLC (“Landlord”) and Summer Infant (USA), Inc. (“Tenant”).

 

BACKGROUND

 

The Landlord and Tenant entered into that certain Lease dated March 24, 2009 (“Initial Lease”), which was amended by Amendment to Lease dated May 13, 2015 (“Amendment” and together with the Initial Lease referred to as the “Lease”). The Tenant has exercised its right to extend the term of the Lease for the period commencing on April 1, 2018 and running through March 31, 2021 (the “Extension Period”) on the terms and conditions set forth in the Amendment. The parties have had discussions regarding a build out by the Landlord of a mezzanine area in the Premises, and towards that end, the parties entered into that certain Letter of Intent, dated August 17, 2017 (“LOI”). The Tenant has informed the Landlord that it does not want to proceed with the build out of the mezzanine area as contemplated by the LOI. The parties do desire, however, to make further modifications to the Lease to incorporate certain work that the Landlord has agreed to perform and to address the performance by the Tenant of the work needed to repair/replace the damage caused by a casualty loss, all on the terms and conditions hereinafter set forth.

 

Now, therefore, in consideration of the mutual promises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Landlord and Tenant agree as follows:

 

1.                                      Capitalized Terms.

 

Capitalized terms not otherwise defined herein shall have the same meaning ascribed to such terms in the Lease.

 

2.                                      Additional Definitions.

 

(a)                                 The following definitions shall apply to this Second Amendment:

 

Casualty Loss:  means the repair and/or replacement of the damage caused by burst pipe in the Building.

 

Casualty Scope of Work:  is the work to be perform to repair and/or replace of the damage caused by the Casualty Loss as set forth on Exhibit A, attached hereto

 

(b)                                 The following definitions shall be amended:

 

Operating Costs:                                                 There shall be added to exclusions to Operating Costs set forth in this definition a new (iii) to be added to the end of this definition as follows:  “(iii) any repairs to

 

 

the roof caused by the installation, use or maintenance of solar panels, including, without limitation, any damage from leaks caused by or resulting from the installation, use or maintenance of the solar panels.”

 

Rooftop Equipment:                             There shall be added to the end of this definition the following: “but shall not include any solar panels installed by the Landlord.”

 

3.                                      Payment of Expenses.

 

In accordance with the provisions of the LOI, as a result of Tenant’s decision not to enter into an amendment of the Lease incorporating the provisions of the LOI, the Tenant is required to reimburse the Landlord for its actual out of pocket costs and expenses incurred by the landlord, not to exceed $30,000. Attached hereto as Schedule 1, is a list of the actual out of pocket costs and expenses incurred by the Landlord in regard to the LOI (“Reimbursable Expenses”). The Tenant shall pay to the Landlord the Reimbursable Expenses on or before January 31, 2018. Failure by the Tenant to pay to the Landlord the Reimbursable Expenses on or before January 31, 2018, shall be deemed non- payment of rent and shall be a default under the Lease.

 

4.                                      Casualty Loss.

 

4.1                               The Tenant covenants and agrees to use its best efforts to develop and finalize the plans and specifications needed to perform the Casualty Scope of Work (collectively, the “Casualty Plans”) and the budget (“Casualty Budget”) for submission to the Landlord for its approval, which approval will not be unreasonably withheld.

 

4.2                               The Tenant shall be responsible to engage a licensed contractor, (contractor is subject to the reasonable approval of the Landlord which approval shall not be unreasonably approved) to repair and/or replace the damage caused by the Casualty Loss  and to perform the  Casualty Scope of Work in accordance with the Casualty Plans and applicable law. The Tenant agrees that there shall be no changes to the Casualty Plans without the written consent of the Landlord which consent shall not be unreasonably withheld.

 

4.3                               The Tenant shall be responsible to pay for all costs and expenses incurred in repairing and/or replacing the damage caused by the Casualty Loss and to perform the Casualty Scope of Work in accordance with the Casualty Plans and applicable law.

 

4.4                               The Tenant will use best efforts to ensure that the Casualty Scope of Work will be completed no later than nine (9) months following the date of execution of this Second Amendment.  If requested by Tenant, provided the Tenant has made reasonable progress towards completing the Casualty Scope of Work in the reasonable opinion of the Landlord, then the Landlord will grant Tenant an additional three (3) months to complete.

 

 

4.5                               Tenant shall not permit any mechanics’, laborers’ or materialmen’s liens to stand against Landlord’s Property or Tenant’s interest in the Premises, this Lease, or the estate created hereby for any labor or materials furnished to Tenant or claimed to have been furnished to Tenant in connection with the Casualty Loss and the Casualty Scope of Work performed or claimed to have been performed in or on the Premises by or at the direction or sufferance of Tenant.  Upon completion of the Casualty Scope of Work the Tenant shall submit to the Landlord, lien waivers signed by the contractor hired by the Tenant to perform the Casualty Scope of Work (the form and content of the lien waivers subject to the approval of the Landlord, which approval will not be unreasonably withheld.

 

5.                                      Landlord’s Work

 

Landlord has performed and/or agrees to perform, at its sole cost and expense, the work set forth on Schedule 2, attached hereto and incorporated herein (“Landlord’s Work”).

 

6.                                      Base Rent For Extension Period.

 

The Base rent for the Extension Period shall be in the amount and shall be payable in accordance with the provisions of the Amendment as follows:

 

	
Period
    	
 
    	
Annual Rent
    	
 
    	
Monthly Rent
    	
 
    	
PSF Rate
    	
 
    
	
Three (3) years of the   Extension Term
    	
 
    	
$
    	
468,000
    	
 
    	
$
    	
39,000
    	
 
    	
$
    	
9.00
    	
 
    
											

 

7.                                      Extension Option.

 

7.1                               Section 2.4 (b) of the Lease is hereby deleted in its entirety. There shall be no further right to extend or renew the Lease Term beyond the lease expiration date of March 31, 2021.

 

8.                                      Solar Panels

 

8.1                               Article V of the Lease shall be amended by adding a new Section 5.6 to read as follows:

 

“5.6 (a) The Landlord shall have the right to install or cause to be installed, at its sole cost and expense, on the roof of the Building, solar panels in a location so as not to interfere with the Tenant’s Rooftop Equipment, if any. The Landlord and/or its agents shall cause the solar panels to be installed in accordance with all Legal Requirements.

 

(b)                                 The Landlord shall provide the Tenant with not less than sixty (60) day prior notice before commencing any work on the installation of the solar panels, which notice must set forth the name(s) of the contractors who will be performing the work along with a time line of how long the work will take to be completed.

 

 

(c)                                  No work will be performed in connection with the installation of the solar panels that will unreasonably interfere with the Tenant’s use of the Premises. No contractor involved in the installation of the solar panels shall be allowed access to the inside of the Building without, in each instance, obtaining the tenant’s prior consent thereto.

 

(d)                                 The Landlord shall be responsible to repair any damages caused to the roof by the installation, use and/or maintenance of the solar panels and further, the Landlord shall indemnify and save the Tenant harmless from all claims, losses, damages and expenses arising out of the installation, use and maintenance of the solar panels on the roof of the Building.

 

9.                                      Purchase Option.

 

9.1                               Section 13.16 of the Lease is hereby deleted in its entirety.

 

10.                               Lease Ratification.

 

10.1                        Except as modified or amended by this Second Amendment, the Lease is hereby ratified and affirmed.

 

[Signature page follows]

 

 

Tenant and Landlord, each by its duly authorized officer, has signed this Amendment as of the date first set forth above.

 

	
 
    	
LANDLORD
    
	
 
    	
 
    
	
 
    	
Faith   Realty II, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jason   P. Macari
    
	
 
    	
Name:
    	
Jason P.   Macari
    
	
 
    	
Title:
    	
Member
    
	
 
    	
 
    
	
 
    	
TENANT
    
	
 
    	
 
    
	
 
    	
Summer   Infant (USA), Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   William Mote
    
	
 
    	
Name:
    	
William   Mote
    
	
 
    	
Title:
    	
CFOExhibit
10.11

 

SERVICE
CONTRACT

 

between

 

Biofrontera
Aktiengesellschaft, Hemmelrather Weg 201, 51377 Leverkusen, represented by the Supervisory Board, in turn represented by its Chairman,
Mr. Jürgen Baumann,

 

-
hereinafter referred to as the “Company” –

and

 

Prof.
Dr. Hermann Lübbert, Höhenstraße 59, 51381 Leverkusen,

 

-
hereinafter also referred to as the “Management Board
Chairman/CEO” – with the 

Company and the Chairman hereinafter referred to together as the “Parties” -

 

Preliminary
remarks

 

Prof.
Dr. Lübbert was appointed by a resolution of the Supervisory Board to be the Company’s Management Board Chairman (Chief Executive
Officer/CEO), with effect from November 10, 2010, for a further five years until December 31, 2015. This Management Board appointment
was extended until October 31, 2020. Prof. Dr. Lübbert was again appointed Management Board Chairman (Management Board Chairman/CEO).

 

The
Service Contract, which was concluded on a firm basis for the period between November 1, 2010 and October 31, 2015, exists between
the Parties (hereinafter referred to as “Service Contract 2010”). In
the instance of a further appointment of the Management Board Chairman/CEO to the Company’s Management Board, the Service Contract
shall extend by the period of the appointment.

 

Based
on the foregoing, the Parties shall hereby agree the following in relation to contractual implementation:

 

    	 	 	 

     

    

  

Section
1

Appointment, management, representation

 

		(1)	By resolution dated [•] of the Company’s
Supervisory Board, Prof. Dr. Lübbert shall be appointed to be a member and Chairman of the Company’s Management Board for
the period from November 1, 2015 until October 31, 2020, – and consequently for a period of five years.

 

		(2)	Prof. Dr. Lübbert shall manage the Company’s
business as Management Board Chairman/CEO together with the other member, or members, of the Management Board.

 

		(3)	The Management Board Chairman/CEO shall
be entitled to represent the Company on a sole basis. To this extent, he shall be exempt from the restrictions of Section 181 of
the German Civil Code (BGB), insofar as he shall be entitled to implement legal transactions on the Company’s behalf, with himself
as the representative of a third party.

 

Section
2

Tasks,
activities for subsidiaries

 

		(1)	Irrespective of his overall responsibilities,
the Management Board Chairman shall perform the areas of tasks designated in greater detail in the respective valid business allocation
plan according to laws, the Company’s bylaws and the rules of business procedure for the Management Board as approved by the Supervisory
Board.

 

		(2)	The Management Board Chairman shall declare
himself prepared to assume managerial activities in companies in which the Company holds majority interests either directly or
indirectly, or in which it will hold majority interests in the future (affiliates in the meaning of Sections 15 et seq. of the
German Stock Corporation Act [AktG]). This shall also include the readiness to assume corresponding managing director/management
board positions. No additional compensation shall be paid for this, by either the Company or respective affiliates. Rather, his
related activities shall be deemed to be services under this contract, which shall be compensated by remuneration under this contract.
He shall immediately step down from such offices at the wish of the Supervisory Board as far as legally permissible.

 

    	 	-2-	 

     

    

  

		(3)	The Management Board Chairman
shall be obligated at the wish of the Supervisory Board to assume Supervisory Board mandates or seats on other controlling bodies
at other companies as well as honorary functions in associations. He must step down from such offices at any time at the wish
of the Supervisory Board, and at the latest as of the ending of the appointment as Management Board member as far as legally permissible.

 

		(4)	The transactions designated
in the Company’s bylaws or by the Supervisory Board in a set of rules of business procedure or in an individual case shall
require prior approval by the Supervisory Board (Section 111 (4) of the German Stock Corporation Act [AktG]).

 

Section
3

Working hours

 

		(1)	The Management Board Chairman/CEO shall not
be bound by fixed working hours. The Management Board Chairman/CEO shall nevertheless be required to be available for service if
and to the extent required for the Company’s benefit.

 

		(2)	Irrespective of the regulation in Section
2 (2), the Management Board Chairman/CEO must make his entire working hours available to the Company. Any paid or unpaid ancillary
activity, including the exercising of Supervisory Board mandates as well as publication and lecturing activities, shall require
prior Supervisory Board approval, although this can only be denied if such activities conflict with the justified interests of
the Company or its affiliates. If the Management Board Chairman/CEO notifies the Supervisory Board, represented by the Supervisory
Board Chair, that he wishes to take up an ancillary activity, the Supervisory Board must decide whether to issue or refuse approval
at its next meeting following such notification.

 

		(3)	The Management Board Chairman/CEO shall be
permitted to perform his activity as Professor at the Ruhr University Bochum. Furthermore, he shall be permitted to act as Managing
Director for Biofrontera Bioscience GmbH and Biofrontera Pharma GmbH as well as Biofrontera Development GmbH and Biofrontera Neuroscience
GmbH, and as Chairman of Biofrontera Inc.

 

    	 	-3-	 

     

    

  

Section
4

Compensation

 

		(1)	The
Management Board Chairman/CEO shall receive fixed annual compensation
of EUR 350,000.00 gross (in words: EURO three hundred and fifty thousand) to be paid in arrears in twelve equal monthly instalments
– in compliance with statutory deductions. With the attainment of a consolidated net profit (positive consolidated net result),
as reported in the Company’s approved consolidated financial statements, the fixed annual salary shall increase to EUR 400,000.00
at the start of the following fiscal year. Payment in arrears of the increased salary shall be made for the months between the
reporting cut-off date of the corresponding consolidated financial statements until the month in which the financial statements
are approved (inclusive), and a monthly payment of the increased compensation shall be made from the month following the approval
of the corresponding consolidated financial statements. If the contact appointment ends during the year, payment shall be made
pro rata temporis.

  

		(2)	The Management Board Chairman/CEO
shall receive an annual bonus. From the 2015 calendar year, the bonus payment shall amount to EUR 80,000.00 gross given full
target attainment (100%). If the target is exceeded, the amount shall increase on a linear basis by the respective percentage
rate to a maximum of 150%. In the case of a shortfall in relation to the target of up to 70%, the bonus payment shall reduce on
a linear basis; in the case of a shortfall in relation to the target of more than 70%, no bonus payment shall be made. The measurement
factors for the 2015 fiscal year were already determined before this Service Contract was concluded, and thereafter shall be determined
by mutual consent in a target agreement in each case as of the end of a fiscal year for the subsequent fiscal year. If no unanimity
is reached between the Management Board Chairman/CEO and the Company, the Supervisory Board shall decide on the structure of the
target agreement at its discretion. The possibility of imposing limits is to be considered especially for extraordinary developments.
The due date of the bonus payment shall in each case occur one month after the Company’s Supervisory Board approves the
separate annual financial statements and the consolidated financial statements. If the Company terminates the Service Contract
on good grounds in the meaning of Section 626 of the German Civil Code (BGB), the bonus payment for the fiscal year in which the
determination becomes effective shall be cancelled. Otherwise, the bonus payment shall reduce proportionally pro rata temporis
if the service arrangement begins or ends for other reasons during the year.

 

		(3)	As long-term performance component, the Management
Board Chairman/CEO shall be granted stock options from the 2010 Stock Option Program as well as from its successor program or other
share-based compensation. The stock options that are granted shall include four-year blocking periods.

 

    	 	-4-	 

     

    

  

		(4)	To further enhance the long-term incentive
effect of variable compensation and consequently its orientation to the Company’s long-term development and growth, the Management
Board member shall be obligated to privately hold one of the Company’s common shares for each stock option granted from the 2010
Stock Option Program or from its successor program, for the period of three years commencing one month after the date on which
the options are issued (“Blocking Shares”). This shall apply accordingly for other share-based compensation. The
Management Board Chairman/CEO must immediately report an early sale of such Blocking Shares to the Supervisory Board Chair, and
the Company can request a return transfer of an equivalent number of stock options free of charge within a month of receiving such
notification, with the most recently granted options being those that must be returned first (last in, first out). A return transfer
is not required if the Management Board Chairman/CEO can demonstrate that the sale of the restricted shares was necessary to meet
pressing financial obligations.

 

		(5)	These payments settle the entire activity
of the Management Board Chairman/CEO for the Company and other affiliates in the meaning of Section 2 (2) as well as for all overtime,
additional work, and work on Sundays and public holidays.

 

		(6)	Compensation that the Management Board Chairman/CEO
receives from mandates or activities performed in the Company’s interest pursuant to Section 2 (3) are to be rendered to the Company;
tax charges are also to be taken into consideration where relevant. For the sake of clarification and to avoid misunderstandings,
this shall not apply to the professorial compensation paid by the Region of North Rhine-Westphalia, and for lecturing activities,
if the compensation paid for lecturing activities does not exceed the total amount of EUR 8,000.00 per annum.

 

		(7)	The transfer and assignment of compensation
claims to third parties is not permitted.

 

Section
5

Vehicle / outlays

 

		(1)	The Company shall provide
the Management Board Chairman/CEO with a car with maximum leasing and insurance costs of up to EUR 20,000 net per year for
business and private use. The Company shall also bear all other costs connected with the vehicle. The Management Board Chairman/CEO
is required to have the private use of the vehicle be taxed as a benefit in kind.

 

    	 	-5-	 

     

    

  

		(2)	The Management Board Chairman/CEO shall hereby
expressly waive all claims and shall indemnify the Company from any claims that might accrue to him, his dependents or third parties
from the Company about the private use of the company car, if they are not covered by the Company’s insurance protection.

 

		(3)	The Company shall reimburse the Management
Board Chairman/CEO for expenses he incurs in performing his tasks as part of this agreement, including travel and business entertainment
expenses according to the respective fiscally permissible maximum rates. If the expenses exceed these maximum rates, they shall
be reimbursed after submitting the corresponding vouchers.

 

Section
6

Continued
payment of compensation in the case of sickness or death

 

		(1)	If the Management Board Chairman/CEO is prevented
from performing his activities through illness or other circumstances not caused by gross negligence or intentionally, the Company
shall pay in full the fixed compensation pursuant to the above Section 4 (1) for the calendar month in which the incapacity commences,
as well as for a further twelve months, albeit at maximum until the end of this Service Contract. The bonus payment pursuant to
above Section 4 (2) shall be granted correspondingly, although it shall reduce proportionally if the Management Board Chairman/CEO
fails to perform his work, for example due to illness-related incapacity to work, for a period of more than 9 months p.a. (9/12
in the case of one year of illness, for example). Sickness benefits paid by the health insurance fund/private health insurance
shall be deducted from compensation.

 

		(2)	If the Management Board Chairman/CEO dies
during active employment, his widow and children, to the extent that they are under 25 years of age and are still undergoing professional
training, shall be entitled as joint and several creditors to the continued payment of the fixed salary pursuant to Section 4 (1)
for the month of death and the six subsequent months, albeit at maximum until the end of this Service Contract. They shall also
be entitled to any still-unpaid bonus for a fiscal year elapsed preceding the death, and pro rata temporis until the death to the
bonus for the year of death.

 

    	 	-6-	 

     

    

  

		(3)	In relation to the payment to be continued
to be paid pursuant to the above Sections 1 and 2, the Management Board Chairman/CEO and/or his remaining dependants shall be required
to deduct the following – if the payments are congruent with the fixed compensation and do not exceed the fixed compensation:

 

		(i)	any private pension if and to the extent
that the premiums were last paid by the Company or one of its affiliates;

 

		(ii)	if the incapacity to work has occurred because
of an accident, those payments that the Management Board Chairman/CEO obtains from another party due to an accident, especially
also from an accident insurance policy concluded by the Company or by one of its affiliates for him, or from the individual that
is required to compensate for the consequences of the accident.

 

The
Management Board Chairman/CEO and his remaining dependants shall be obligated to provide information about the scope of deductible
benefits.

 

		(4)	The Management Board Chairman/CEO shall hereby
cede his loss compensation claims to the Company in the instance that such be infringed by third parties, if the Company pays continued
compensation in the meaning of the above paragraph. He shall be obligated to provide the Company with the information required
to assert his claims, and to support it in the prosecution of an action.

 

Section
7

Insurance / D & O insurance

 

		(1)	The Company shall insure
the Management Board Chairman/CEO against accident with a cover amount of EUR 1,000,000 and occupational incapacity with
a monthly disability income benefit of EUR 25,000 (term until the age of 67), as well as premiums for a term life insurance
policy with a cover amount of EUR 1,000,000. It shall also assume the wage and church taxes that are incurred.

 

		(2)	The Company shall additionally assume the
flat-rate wage and church taxes in relation to the direct insurance concluded by the Management Board Chairman/CEO at Allianz Pensionskasse
AG and at ERGO Lebensversicherungs AG.

 

		(3)	The
Company shall arrange as part of the permissible statutory options (especially considering the deductible pursuant to Section
93 (2) Clause 3 of the German Stock Corporation Act [AktG]) Directors & Officers Liability insurance cover for the Management
Board Chairman/CEO to a level appropriate to the related risk, albeit at least in an amount of EUR 10,000,000 (ten million),
and shall bear the related costs. The Management Board Chairman/CEO himself shall bear any taxes relating to the monetary benefit
that this generates.

 

    	 	-7-	 

     

    

  

Section
8

Vacation

 

		(1)	The Management Board Chairman/CEO shall be
entitled to annual vacation of 30 working days (Monday to Friday, apart from statutory public holidays). Settlement of vacation
entitlement in cash shall not be permitted.

 

		(2)	The dates and duration of vacation are to
be coordinated and determined in agreement with the Supervisory Board Chairman and in collegial coordination with the other Management
Board members, considering the Company’s operating matters.

 

Section
9

Confidentiality, records

 

		(1)	The Management Board Chairman/CEO may not
exploit or communicate to other individuals business and operating secrets and any of the Company’s other matters and transactions
that are not intended for third parties, which are entrusted to him or made known to him as part of his activity for the Company,
unless their publication is required in the Company’s interest, or a mandatory statutory obligation to provide information exists.

 

    	 	-8-	 

     

    

  

		(2)	If the Management Board Chairman/CEO leaves
the Company’s services, or after his being released from the obligation to render services, or at the demand of the Company’s Supervisory
Board at any time, the Management Board Chairman/CEO shall be obligated to immediately transfer to the Company, in other words,
to an individual nominated by the Supervisory Board, all work resources (e.g. laptops and similar) and all written documents, correspondence,
records, drafts, papers, copies, photocopies and similar (hereinafter also referred to as documents), which relate to the Company’s
matters and which are still in his possession. The Management Board Chairman/CEO shall not be entitled to exercise a right of retention
to such work resources and documents. The Management Board Chairman/CEO shall be entitled to make copies at his own cost of any
documents that serve or could serve to discharge the Management Board Chairman/CEO. The Management Board Chairman/CEO must prepare
a list of the copied documents in the aforementioned meaning, and submit it to the Company, in other words, to an individual nominated
by the Supervisory Board.

 

Section
10

General
prohibition of competition

 

The
prohibition of competition pursuant to Section 88 the German Stock Corporation Act (AktG) shall apply during the duration of the
Service Contract. Moreover, the Management Board Chairman/CEO shall not acquire an interest in a company that competes with the
Company or maintains a significant scope of business relationships with it. Shareholdings amounting to less than 5% of the share
capital or voting rights of the company as specified in the above Clause 1 and which do not enable any influence over the boards
of the respective company shall not be deemed an interest in the meaning of this provision. Shareholdings of more than 5% in the
share capital of voting rights of the company as specified in above Clause 1 shall require express prior written approval by the
Supervisory Board. If the Management Board Chairman/CEO indicates to the Supervisory Board that he wishes to enter into an investment
in one of the companies specified in the above Clause 1, the Supervisory Board at its next meeting following the notification shall
decide whether to issue or refuse approval, if the Management Board Chairman/CEO informs the Supervisory Board at least 21 days
before the Supervisory Board meeting concerning his wish to enter into an investment. For each case of infringement against the
prohibition of competition, the Management Board Chairman/CEO shall pay to the Company a contractual penalty equivalent to 1/12
of his fixed annual salary.

 

    	 	-9-	 

     

    

  

Section
11

Post contractual prohibition of competition

 

		(1)	The Management Board Chairman/CEO shall obligate
himself during the period of two years after the end of the Service Contract not to work for a company that competes with the Company
or with one of its direct or indirect affiliates. The prohibition of competition shall be applicable in countries in which the
Company or its direct or indirect affiliates are active as of the date of the end of the Service Contract. A competing company
shall be deemed to be any company whose focus of activities as per its respective corporate purpose corresponds to the Company
or to one of its direct or indirect subsidiaries.

 

Accordingly,
and in particular, the Management Board Chairman/CEO shall obligate himself:

 

		(i)	not to enter into any service, work, independent
advisory, or representative relationships at such a company,

 

		(ii)	not himself to form or acquire such a company,
and

 

		(iii)	not to acquire a direct or indirect interest
in such a company; this shall not apply for interests of less than 10% in the share capital of a listed company.

 

		(2)	The post-contractual prohibition of competition
shall not apply if the Service Contract ends because of partial or complete reduction in earning capacity. If the employment with
the Company ends due to the Management Board Chairman/CEO starting early or final retirement, the post-contractual prohibition
of competition shall also not come into force. If a party terminates the Service Contract without notice for an important reason
pursuant to Section 626 of the German Civil Code (BGB), the prohibition of competition shall become ineffective if the Party entitled
to terminate has issued a written declaration before the expiry of the month after receipt of the termination that it does not
consider itself bound by the agreement. The Management Board Chairman/CEO shall be required to address the declaration to the Chair
of the Company’s Supervisory Board.

 

		(3)	The Company shall pay to the Management Board Chairman/CEO for the duration of the post-contractual
prohibition of competition compensation of 50% of the average annual salary for the last three years per year for the duration
of the prohibition of competition, unless he expressly waives in writing the assertion of the prohibition of competition in corresponding
application of the principle of Section 75 a of the German Commercial Code (HGB).

 

    	 	-10-	 

     

    

  

		(4)	All compensation payments shall be disbursed
in monthly instalments as of the month-end. Income that the Management Board Chairman/CEO generates during the duration of the
competition arrangement through other application of his work shall be deducted from the compensation if the revenue and the compensation
together would exceed by more than 15% the contractual benefits that he last procured.

 

		(5)	If the post-contractual prohibition of competition
is infringed, the Company shall be released from the obligation to pay the compensation, and is especially entitled to assert claims
to non-performance and full loss compensation. Each case of infringement against the prohibition of competition, the Management
Board Chairman/CEO shall pay to the Company a contractual penalty equivalent to 1/12 of the fixed annual salary.

 

Section
12

Work eligible for special protection
rights

 

		(1)	All results of the work of the Management
Board Chairman/CEO shall accrue solely to the Company both in rem and economically. In particular, copyrights and industrial property
rights as well as rights to technical inventions or improvements that the Management Board Chairman/CEO has made or developed during
his activity for the Company or on the basis of work for the Company shall be solely attributable to the Company. The Management
Board Chairman/CEO shall hereby cede all corresponding rights to the Company, which shall expressly accept such cession. Employee
invention law shall not be applicable to the Management Board Chairman/CEO.

 

		(2)	Irrespective of (1), and furthermore if a
transfer in rem is not possible or has not occurred, the Management Board Chairman/CEO shall hereby transfer the global exclusive
right of use, which shall not be limited in terms of time or content, to any copyrights arising in his person to works created
in connection with his activity based on his experience from his activity for the Company or based on the Company’s works, to the
Company, which shall accept such transfer. The rights shall relate to all purposes that the Company pursues or will pursue as part
of its respective – in other words also future – business activities. In particular, the transfer of rights shall not
be limited to the duration of the activity for the Company. The Management Board Chairman/CEO shall waive designation as originator.

 

    	 	-11-	 

     

    

  

		(3)	The exploitation of technical organisational
improvements proposed by the Management Board Chairman/CEO shall accrue exclusively to the Company.

 

		(4)	In relation to the aforementioned cession
or transfer or exploitation of rights that accrue to it, the Company shall not be obligated to render any additional compensation.
Mandatory statutory compensation claims shall be hereby unaffected.

 

		(5)	The provisions of this Section 15 shall apply
in relation to the Company’s direct or indirect affiliates – at the Company’s option for the benefit of the Company or the
benefit of the respective affiliate – correspondingly.

 

		(6)	To clarify to avoid misunderstandings, the
provisions of this Section 15 shall not apply for all results of the work of the Management Board Chairman/CEO at the Ruhr University
Bochum, especially to the extent that these are utilised by Ruhr University Bochum.

 

Section
13

Contractual duration

 

		(1)	This service contact shall be concluded on
a firm basis for the duration from November 1, 2015 until October 31, 2020. In the instance of a further appointment of the Management
Board Chairman to the Company’s Management Board, it shall extend by the period of the appointment. The Parties shall agree on
a further appointment at the latest nine months before the expiry of an appointment period.

 

		(2)	The right to termination on good grounds
pursuant to Section 626 of the German Civil Code (BGB) shall be unaffected. If the Management Board Chairman/CEO becomes wholly
or partly incapable of working in the meaning of social security legislation during the term of the Service Contract, the Service
Contract shall discontinue at the end of the next quarter in which the partial or complete reduction in earning capacity is determined,
albeit at the latest as of the date on which the Service Contract would have ended without the partial or complete reduction in
earning capacity.

 

		(3)	The Company shall be entitled at any time,
albeit especially after the termination of the Service Contract, to release the Management Board Chairman/CEO from his obligation
to work for the Company.

 

    	 	-12-	 

     

    

  

		(4)	Severance pay in the case of early termination
of Management Board duties without good grounds shall be capped at twice the specified annual salary, and shall amount to no more
than the total remuneration due for the remaining period of the contract. A deduction of income from other sources pursuant to
Section 326 (2), 615 Clause 2 of the German Commercial Code (BGB) shall not occur in this instance. The severance entitlement shall
fall due for payment with the discontinuation of the employment

 

Section
14

Special
termination right, change-of-control clause

 

		(1)	For the instance of a change of control,
the Management Board Chairman/CEO shall have the right to terminate on an extraordinary basis the employment contract with a notice
period of three months as of the month-end (special termination right) and to step down from his office as a member of the Management
Board and Management Board Chairman/CEO giving such notice period. The special termination right of the Management Board Chairman/CEO
shall lapse if he does not exercise it within three months after being notified of the change of control.

 

		(2)	A
change of control in the meaning of this agreement shall exist

 

if
the Company’s shares have been admitted to stock market listing

 

		(i)	given attainment or exceeding the control
threshold in the meaning of Section 29 of the German Securities Takeover Act (WpÜG) (at least 30% of the voting rights),

 

		(ii)	given attainment or exceeding the thresholds
of 50% and/or 75% of the voting rights pursuant to Section 21 et seq. of the German Securities Trading Act (WpHG),

 

		(iii)	if a shareholder or group of shareholders
acting in coordination in the meaning of Section 30 WpÜG combines to form a simple majority of the voting rights at the Company’s
General Meeting of Shareholders, without reaching or exceeding the control threshold in the meaning of Section 29 WpÜG (a
so-called “constructive majority at the general meeting of shareholders”);

 

    	 	-13-	 

     

    

  

if
the Company’s shares are not admitted to stock market listing

 

		(iv)	in the case of the acquisition of a majority
interest pursuant to Section 20 (4) of the German Stock Corporation Act (AktG) requiring notification pursuant to Section 20 (4)
AktG,

 

		(v)	if a shareholder or group of shareholders
acting in coordination and the meaning of Section 30 WpÜG combines to form a simple majority of the voting rights at the Company’s
General Meeting of Shareholders (a so-called “constructive majority at the general
meeting of shareholders”);

 

		(3)	The
date of notification shall be deemed to be

 

		(i)	the date on which the Company publishes the
voting rights announcement pursuant to the provisions of the WpHG

 

		(ii)	the date on which the bidder or party obligated
to make an offer announces the reaching or exceeding of the control threshold pursuant to the provisions of the WpÜG;

 

		(iii)	the date on which the Company announces the
existence of the interest in the company bulletin pursuant to Section 20 (6) AktG,

 

		(iv)	the date on which the Company becomes aware
that a shareholder or a group of shareholders acting in coordination and the meaning of Section 30 WpÜG combines or has combined
at the Company’s General Meeting of Shareholders to form a simple majority of the voting rights;

 

		(4)	If
the special termination right is exercised, the Management Board Chairman/CEO shall be entitled to a severance payment. A severance
payment shall consist of three years’ salaries (fixed salary plus variable compensation pursuant to Section 4 (2) (annual
bonus) based on an imputed 100% target attainment). Income derived from other sources shall not be deducted pursuant to Sections
326 (2), 615 Clause 2 of the German Civil Code (BGB). The severance entitlement shall fall due for payment with the discontinuation
of employment. Stock options and/or other share-based compensation shall be settled based on any related agreed terms.

 

    	 	-14-	 

     

    

  

		(5)	In the instance of the aforementioned exercising
of his special termination right, the Management Board Chairman/CEO shall relinquish without being asked his office as Management
Board Chairman/CEO as of the date when the termination becomes effective through declaration to the Company, as represented by
the Supervisory Board Chair.

 

Section
15

Final provisions

 

		(1)	All amendments to this Service Contract shall
require written form to be legally effective, as well as the Supervisory Board’s express and written approval. This shall also
apply for the amendment to the above Clause 1.

 

		(2)	No
verbal subsidiary agreements have been entered into.

 

		(3)	Should individual provisions of this Service
Contract be or become invalid, this shall not affect the efficacy of the other provisions. In such case, the Parties shall be obligated
to replace the ineffective provision by an effective provision that as far as possible achieves the intended aim of the ineffective
provision. This will also apply if the ineffectiveness of a provision is based on a measure of performance or time; the legally
permissible measure shall then be valid.

 

		(4)	Both Parties shall declare that in each case
they have received an original copy of this service agreement signed by both Parties.

 

Jürgen
Baumann

 

    	 	-15-

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