Document:

<PAGE>

                                                                    Exhibit 10.5

EXECUTION VERSION

                       FIFTH AMENDMENT TO LOAN DOCUMENTS
                              AND WAIVER AGREEMENT

      THIS FIFTH AMENDMENT TO LOAN DOCUMENTS AND WAIVER AGREEMENT (this "FIFTH
AMENDMENT") is made as of the 29th day of September, 2004, among INTELLIGROUP,
INC., a corporation organized under the laws of the State of New Jersey and
EMPOWER, INC., a corporation organized under the laws of the State of Michigan
(each a "BORROWER" and collectively "BORROWERS"), the financial institutions
which are now or which hereafter become a party hereto (collectively, the
"LENDERS" and individually a "LENDER") and PNC BANK, NATIONAL ASSOCIATION
("PNC"), as agent for Lenders (PNC, in such capacity, the "AGENT").

                                   BACKGROUND

      A.    Borrowers have executed and delivered to PNC, in its capacity as the
Agent and sole Lender with respect to this transaction, one or more promissory
notes, letter agreements, loan agreements, security agreements, mortgages,
pledge agreements, collateral assignments, and other agreements, instruments,
certificates and documents, some or all of which are more fully described on
attached Exhibit A, which is made a part of this Fifth Amendment (collectively,
as amended from time to time, the "LOAN DOCUMENTS"), which Loan Documents
evidence or secure some or all of Borrowers' obligations to Lenders for one or
more loans or other extensions of credit (the "OBLIGATIONS").

      B.    Borrowers, Agent and Lenders desire to amend the Loan Documents as
provided for in this Fifth Amendment.

      NOW, THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:

      1.    Certain of the Loan Documents are amended as set forth in Exhibit A.
Any and all references to any Loan Document in any other Loan Document shall be
deemed to refer to such Loan Document as amended by this Fifth Amendment. This
Fifth Amendment is deemed incorporated into each of the Loan Documents. Any
initially capitalized terms used in this Fifth Amendment without definition
shall have the meanings assigned to those terms in the Loan Documents. To the
extent that any term or provision of this Fifth Amendment is or may be
inconsistent with any term or provision in any Loan Document, the terms and
provisions of this Fifth Amendment shall control.

      2.    Borrowers hereby certify that, except as otherwise waived as set
forth in Exhibit A: (a) all of their representations and warranties in the Loan
Documents, as amended by this Fifth Amendment, are, except as may otherwise be
stated in this Fifth Amendment: (i) true and correct as of the date of this
Fifth Amendment, (ii) ratified and confirmed without condition as if made anew,
and (iii) incorporated into this Fifth Amendment by reference; (b) no Event of
Default or event which, with the passage of time or the giving of notice or
both, would constitute an Event of Default, exists under any Loan Document which
will not be cured by the execution and effectiveness of this Fifth Amendment;
(c) no consent, approval, order or authorization of, or registration or filing
with, any third party is required in connection with the execution, delivery and
carrying out of this Fifth Amendment or, if required, has been obtained; and (d)
this Fifth Amendment has been duly authorized, executed and delivered so that it
constitutes the legal, valid and binding obligation of Borrowers, enforceable in
accordance with its terms. Borrowers confirm that the Obligations remain
outstanding without defense, set off, counterclaim, discount or charge of any
kind as of the date of this Fifth Amendment.

<PAGE>

      3.    Borrowers hereby confirm that any collateral for the Obligations,
including liens, security interests, mortgages, and pledges granted by Borrowers
or third parties (if applicable), shall continue unimpaired and in full force
and effect, and shall cover and secure all of Borrowers' existing and future
Obligations, as modified by this Fifth Amendment.

      4.    As a condition precedent to the effectiveness of this Fifth
Amendment, Borrowers shall comply with the terms and conditions (if any)
specified in Exhibit A.

      5.    This Fifth Amendment may be signed in any number of counterpart
copies and by the parties to this Fifth Amendment on separate counterparts, but
all such copies shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Fifth Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart.
Any party so executing this Fifth Amendment by facsimile transmission shall
promptly deliver a manually executed counterpart, provided that any failure to
do so shall not affect the validity of the counterpart executed by facsimile
transmission.

      6.    This Fifth Amendment will be binding upon and inure to the benefit
of Borrowers, Agent and Lenders and their respective successors and assigns.

      7.    This Fifth Amendment will be interpreted and the rights and
liabilities of the parties hereto determined in accordance with the laws of the
State of New Jersey, excluding its conflict of laws rules.

      8.    Except as amended hereby, the terms and provisions of the Loan
Documents remain unchanged, are and shall remain in full force and effect unless
and until modified or amended in writing in accordance with their terms, and are
hereby ratified and confirmed. Except as expressly provided herein, this Fifth
Amendment shall not constitute an amendment, waiver, consent or release with
respect to any provision of any Loan Document, a waiver of any default or Event
of Default under any Loan Document, or a waiver or release of any of Agent's or
Lenders' rights and remedies (all of which are hereby reserved). BORROWERS
EXPRESSLY RATIFY AND CONFIRM THE WAIVER OF JURY TRIAL PROVISIONS CONTAINED IN
THE LOAN DOCUMENTS.

                            [SIGNATURE PAGE FOLLOWS]

                                       2
<PAGE>

      WITNESS the due execution of this Fifth Amendment as a document under seal
as of the date first written above.

                                             INTELLIGROUP, INC.

                                             By:
                                                --------------------------------
                                             Name:  David J. Distel
                                             Title: Chief Financial Officer and
                                                    Treasurer

                                             499 Thornall Street
                                             Edison, New Jersey 08837

                                             EMPOWER, INC.

                                             By:
                                                --------------------------------
                                             Name:  David J. Distel
                                             Title: Treasurer

                                             c/o Intelligroup, Inc.
                                             499 Thornall Street
                                             Edison, New Jersey 08837

                                             PNC BANK, NATIONAL ASSOCIATION,
                                             as Lender and as Agent

                                             By:
                                                --------------------------------
                                             Name:  Marc J. Hansen
                                             Title: Vice President

                                             PNC Business Credit
                                             70 East 55th Street, 14th Floor
                                             New York, New York 10022

                                             Commitment Percentage:  100%

                                       3
<PAGE>

                                  EXHIBIT A TO
                       FIFTH AMENDMENT TO LOAN DOCUMENTS
                        DATED AS OF SEPTEMBER 29TH, 2004

A.    The "Loan Documents" that are the subject of this Fifth Amendment include
      the following (as any of the foregoing have previously been amended,
      modified or otherwise supplemented):

      1.    The Amended and Restated Revolving Credit Loan and Security
            Agreement dated May 31, 2000, as amended by the First Amendment to
            Loan Documents and Waiver Agreement dated March 27, 2002, as amended
            by the Second Amendment to Loan Documents and Waiver Agreement dated
            January 6, 2003, as amended by the Third Amendment to Loan Documents
            dated July 31, 2003, as amended by the Fourth Amendment to Loan
            Documents and Waiver Agreement dated October 2, 2003, and as further
            amended by this Fifth Amendment (as amended, the "Loan Agreement");
            and

      2.    All other documents, instruments (including, without limitation,
            promissory notes), agreements, and certificates executed and
            delivered in connection with the Loan Documents.

B.    The Loan Documents are hereby amended as follows:

      1.    Section 1.2 of the Loan Agreement, "General Terms" is hereby amended
            to add the definitions of "Average Undrawn Availability" and "Fixed
            Charge Coverage" as new material, which definitions shall be deemed
            inserted in proper alphabetical order:

                  "Average Undrawn Availability" shall mean Undrawn Availability
            (but unlimited as to the Maximum Revolving Advance Amount)
            calculated monthly as of the close of business each Friday in each
            calendar month and divided by the number of Fridays in such calendar
            month.

                  "Fixed Charge Coverage" shall mean the ratio of (i) EBITDA
            minus the total of unfinanced capital expenditures and cash taxes
            paid to (ii) the current portion of Borrowers' long term debt plus
            interest expense, whether, but without duplication, due or paid.

      2.    Section 7.18, 7.19, 7.20 of Article VII of the Loan Agreement,
            "Negative Covenants", are hereby amended and restated as follows:

                  7.18. Total Stockholders Equity. Cause, suffer or permit Total
            Stockholders Equity to be or become: (a) as at September 30, 2004,
            not less than Twenty Six Million Two Hundred Eighteen Thousand
            Dollars ($26,218,000.00), (b) as at December 31, 2004, not less than
            Twenty Five Million Eight Hundred Forty One Thousand Dollars
            ($25,841,000.00), and (c) (i) commencing with the quarter ending
            March 31, 2005, as at the end of the first three fiscal quarters in
            each fiscal year, not less than ninety-five percent (95%) of actual
            Total Stockholders Equity for the immediately preceding fiscal
            year-end; and (ii) as at the end of the fourth fiscal quarter in any
            fiscal year, not less than one hundred five percent (105%) of actual
            Total Stockholders Equity as of the prior fiscal year end; provided
            also, however, that this covenant shall be tested only for any
            fiscal quarters, in which Average Undrawn Availability for any month
            is less than Five Million Dollars ($5,000,000.00).

                                       4
<PAGE>

                  7.19. Unconsolidated Stockholders Equity. Cause, suffer or
            permit Unconsolidated Stockholders Equity to be or become: (a) as at
            September 30, 2004, Twenty Four Million Six Hundred Seventy Seven
            Thousand Dollars ($24,677,000.00), (b) as at December 31, 2004, not
            less than Twenty Two Million Six Hundred Seventy Seven Thousand
            Dollars ($22,677,000.00), and (c) (i) commencing with the quarter
            ending March 31, 2005, as at the end of the first three fiscal
            quarters in each fiscal year, not less than ninety-five percent
            (95%) of actual Unconsolidated Stockholders Equity for the
            immediately preceding fiscal year-end; and (ii) as at the end of the
            fourth fiscal quarter in any fiscal year, not less than one hundred
            five percent (105%) of actual Unconsolidated Stockholders Equity as
            of the prior fiscal year end; provided also, however, that this
            covenant shall be tested only for any fiscal quarters, in which
            Average Undrawn Availability for any month is less than Five Million
            Dollars ($5,000,000.00).

                  7.20 Intentionally omitted.

      3.    Article VII of the Loan Agreement, "Negative Covenants", is hereby
            amend to add Section 7.21 "Fixed Charge Coverage Ratio" as new
            material, as follows:

                  7.21 Fixed Charge Coverage Ratio. Cause suffer or permit Fixed
            Charge Coverage, calculated on a rolling four quarter basis, to
            become less than 1.0 to 1.0 as at the end of any fiscal quarter
            commencing with the quarter ending September 30, 2004; provided
            also, however, that this covenant shall be tested only for any
            fiscal quarters, in which Average Undrawn Availability for any month
            is less than Five Million Dollars ($5,000,000.00).

C.    Waiver Agreement:

      1.    Borrowers hereby acknowledge and disclose that:

            (a)   Under the terms of the Loan Agreement, Borrowers agreed to
                  comply with certain covenants, terms and conditions. Borrowers
                  have failed to comply or anticipate that they shall fail to
                  comply with a number of such covenants, terms and conditions,
                  as enumerated on Schedule A attached hereto and made a part
                  hereof.

            (b)   These existing and prospective failures to comply constitute
                  existing or prospective Events of Default under the terms and
                  conditions of the Loan Agreement.

      2.    Borrowers have requested that Lenders waive:

                                       5
<PAGE>

            (a)   the existing and prospective Events of Default enumerated on
                  Schedule A; and

            (b)   the rights and remedies available as a result of the existence
                  or future occurrence of the existing and prospective Events of
                  Default enumerated on Schedule A.

      3.    Lenders hereby waive:

            (a)   the existing and prospective Events of Default enumerated on
                  Schedule A; and

            (b)   the right to exercise the rights and remedies which are
                  available to Agent and Lenders pursuant to the Loan Agreement,
                  at law and in equity as a result of the existence of the
                  Events of Default enumerated on Schedule A.

      4.    It is hereby agreed and acknowledged, as follows:

            (a)   These waivers are specific to the Events of Default enumerated
                  on Schedule A.

            (b)   These waivers are not intended and shall not be deemed to
                  extend to any other Default or Event of Default whether known
                  or unknown which may presently exist under the Loan Agreement
                  or which may occur hereafter.

            (c)   These waivers shall not obligate the Agent or any Lender, or
                  be construed to require the Agent or any Lender, to waive any
                  other Defaults or Events of Default, whether now existing or
                  which may occur after the date of this waiver.

            (d)   These waivers shall not relieve or release Borrowers in any
                  way from any of their duties, obligations, covenants or
                  agreements under the Loan Agreement or the other Loan
                  Documents or from the consequences of any Defaults or Events
                  of Default thereunder, except as expressly described above.

D.    In consideration of the facilities being granted by Agent and Lenders to
      Borrowers under the terms and conditions of this Fifth Amendment and for
      other good and valuable consideration, the receipt and sufficiency of
      which are hereby acknowledged, the continued effectiveness of this Fifth
      Amendment is conditioned upon satisfaction by Borrowers of each of the
      following:

                                       6
<PAGE>

      1.    Borrowers' payment to Agent of a fee in the sum of Twenty Thousand
            Dollars ($20,000.00) which fee, shall be due and payable in full,
            and deemed non-refundable upon the execution and delivery of this
            Fifth Amendment. Such fee may be paid by Agent's charging an Advance
            against the Borrowers' Revolving Loan and paying the proceeds of
            such Advance to Lenders. Borrowers hereby consent to Agent's making
            such charge.

      2.    Agent's receipt of a fully executed counterpart of (a) this Fifth
            Amendment, (b) a corporate resolution by each Borrower, in form and
            substance acceptable to Agent, authorizing this Fifth Amendment, and
            (c) each other document and instrument as may be required by Agent
            in conjunction with this Fifth Amendment, in form and substance
            satisfactory to Agent.

      3.    Borrowers shall maintain Average Undrawn Availability of at least
            Five Million Dollars ($5,000,000.00) for each month prior to the
            issuance of the quarterly financial statements for the quarter
            ending September 30, 2004 ("3rd Quarter Financial Statements");

      4.    Borrowers shall submit the 3rd Quarter Financial Statements to Agent
            and Lender within sixty (60) days of the end of such quarter.

      5.    (a) Borrowers shall deliver to Agent and Lender a fully and finally
            executed copy of the Common Stock Purchase Agreement by and among
            Intelligroup, Inc. and SB Asia Infrastructure Fund, L.P. and Venture
            Tech Assts, Ltd. (collectively, "Purchasers"), which shall be
            substantially similar to, in all material respects, the draft
            disseminated September 29, 2004 delivered to Agent for review (the
            "Purchase Agreement"), together with all related documents and
            instruments, (b) the Purchase Price (as hereinafter defined) shall
            be paid, and (c) all other acts and things required to be done on or
            prior to the closing of the Purchase Agreement, in conjunction with
            such Purchase Agreement shall be completed.

      6.    Immediately upon receipt of the purchase price in the sum of Fifteen
            Million Dollars ($15,000,000.00) (the "Purchase Price") to be paid
            by Purchasers pursuant to the Purchase Agreement Borrowers shall
            cause the Purchase Price to be allocated as follows: (a) a
            sufficient portion of the Purchase Price shall be applied to
            Borrowers' Revolving Loan Obligations under the Loan Agreement so as
            to cause Undrawn Availability to be not less than Five Million
            Dollars ($5,000,000.00), (ii) the balance of the Purchase Price
            shall be deposited in a controlled account at BlackRock, Inc. opened
            in Agent's name for the benefit of Borrowers (the "BlackRock
            Account") and provided that, so long as no Default or Event of
            Default has occurred and is continuing, Borrowers shall exercise the
            investment options available for the BlackRock Account and give
            written directions to Agent setting forth the options selected from
            time to time. Borrowers shall also execute and deliver to Agent such
            pledge or control agreements as may be reasonably required to
            perfect Agent's security interest in and to the funds on deposit in
            the BlackRock Account.

                                       7
<PAGE>

      7.    Borrowers' payment to Agent's counsel, immediately upon presentation
            of an invoice, of all reasonable fees and expenses of such counsel
            incurred in conjunction with the preparation and execution of this
            Fifth Amendment. Such fees and expenses may be paid by Agent's
            charging an Advance against the Borrowers' Revolving Loan and
            retaining the proceeds of such Advance. Borrowers hereby consent to
            Agent's making such charge.

                     [END OF EXHIBIT A TO FIFTH AMENDMENT]

                                       8
<PAGE>

                                   SCHEDULE A
                        TO EXHIBIT A TO FIFTH AMENDMENT
                            WAIVED EVENTS OF DEFAULT

1.    Borrowers' failure to comply with the following Sections of the Loan
      Agreement: (i) Section 7.18, "Total Stockholders Equity", (ii) Section
      7.19, "Unconsolidated Stockholders Equity" and (iii) Section 7.20,
      "Minimum EBITDA" for the quarter ending June 30, 2004.

2.    Borrowers failure to comply with Sections 5.2(a), "Formation and
      Qualification" and Section 7.15, "Amendment of Articles of Incorporation,
      By-Laws" of the Loan Agreement, due to the amendment of Intelligroup,
      Inc.'s Certificate of Incorporation during June, 2004.

3.    Any Event of Default which would otherwise occur, if any, due to the
      failure to file or delay in filing reports on Form 10-Q with any
      applicable government agency or the NASDAQ Stock Market ("NASDAQ") for the
      second and third quarters of 2004 or the untimely filing of any other
      financial disclosures to any applicable government agency.

4.    Any Event of Default which would otherwise occur upon the issuance of
      restatements of Borrowers' previously issued financial statements for the
      fiscal quarter and fiscal year ends of fiscal years 2001, 2002 and 2003
      and for any fiscal quarter during fiscal year 2004, arising solely as a
      result of (a) the untimely delivery to Agent of financial statements which
      comply in all respects with the requirements of the Loan Agreement or (b)
      the recalculation of financial covenants based upon such restated
      financial statements, provided however, such waiver shall not extend to
      the delivery of incorrect information as a result of fraud, intentional
      misrepresentation or malfeasance on the part of Borrowers' officers,
      directors or shareholders.

5.    Any Event of Default which would otherwise occur, if any, as a result of
      the consummation of the Purchase Agreement.

6.    Any Event of Default which would otherwise occur, if any, as a result of a
      NASDAQ delisting proceeding or the delisting of Intelligroup, Inc.'s stock
      from NASDAQ, in each instance whether voluntarily on the part of
      Intelligroup, Inc. or as a result of a violation of NASDAQ's rules..

                                       9DNAPrint INVESTMENT AGREEMENT

                            DATED September 28, 2004

                                   relating to

                                 Biofrontera AG

                                ALLEN & OVERY LLP

                                    Frankfurt

10.47.Investment_Agreement.DOC
<PAGE>

                                    contents

Clause                                                                  ge

1.       Interpretation...................................................5

2.       DNAPrint's Investment............................................6

3.       Default of Payment...............................................9

4.       The Use of Proceeds.............................................12

5.       Silent Partnership..............................................12

6.       Representations and Warranties of the Company...................12

7.       Guarantee and Undertaking of DNAPrint...........................14

8.       Management structure............................................14

9.       Transaction Costs...............................................14

10.      Bridge Loan Agreement.............................................

11.      Additional Financing............................................15

12.      SEC Filing......................................................16

13.      Obligations of the Company and the parties......................16

14.      Press/Media.....................................................17

15.      Status of this Agreement........................................17

16.      Right to Rescind................................................17

17.      Closing.........................................................18

18.      General.........................................................19

19.      Governing Law and Jurisdiction..................................20

Annex

1.       Share Sale and Transfer Agreement...............................22

2.       Guarantees......................................................25

3.       Due Diligence Index.............................................33

4.       Contingent Capital..............................................34

5.       Authorized Capital IV...........................................36

6.       Authorised Capital III..........................................37
<PAGE>

THIS AGREEMENT is made on 28 September, 2004 BETWEEN:

(1)   Prof. Dr. Hermann Lubbert, Hohenstr. 59, 51381 Leverkusen, Germany;

(2)   Dr. Montserrat Foguet-Lubbert, Hohenstr. 59, 51381 Leverkusen, Germany;

(3)   Richard Gabriel, 20 Blodgett Ave., Swampscott, MA 01907, USA;

(4)   Monica Tamborini, 20 Blodgett Ave., Swampscott, MA 01907, USA;

(5)   LeVenture Kapitalbeteiligungsgesellschaft mbH & Co. KG,
      Friedrich-Ebert-Stra(beta)e 39, 51373 Leverkusen, Germany; hereinafter
      also referred to as LeVenture;

(6)   TechnoMedia Kapitalbeteiligungsgesellschaft Koln mbH, Spinnmuhlengasse 9,
      50676 Koln, Germany; hereinafter also referred to as TMK;

(7)   3i Group Investments Limited Partnership, 91 Waterloo Road, SE1 London
      8XP, GB; hereinafter also referred to as 3i;

(8)   PRICAP Venture Partners AG, Rotenbaumchaussee 54, 20148 Hamburg, Germany;

(9)   TRE Holding AG, Bosch 71, 6331 Hunenberg, Switzerland;

(10)  tbg Technologie-Beteiligungs-Gesellschaft mbH, Ludwig-Erhard-Platz 3,
      53179 Bonn, Germany; hereinafter also referred to as tbg;

(11)  Dr. Peter Engels, Am Muhlenberg 29, 51465 Bergisch Gladbach;

(12)  Armin Ollig, Hamberger Stra(beta)e 74, 51381 Leverkusen;

(13)  Dr. Stefan Zwilling, Munstersga(beta)chen 20, 51375 Leverkusen;

(14)  Inga Engels-Kunz, Rothbroicher Stra(beta)e 6, 51467 Bergisch Gladbach;

(15)  Dr. Christine Stichel-Gunkel, Ginsterweg 1B, 51427 Bergisch Gladbach;

(16)  Christian Schramm, Am Maarhof 2, 51145 Koln;

(17)  Dr. Barbara Welters, Griesberger Stra(beta)e 27, 50768 Koln;

(18)  Dr. Beate Schmitz, Helmholtzstra(beta)e 78, 50825 Koln;

(19)  Regina Hiltawsky, Schleswigstra(beta)e 6, 51065 Koln;

(20)  Ulrike Ebel, Muhlenweg 150, 51373 Leverkusen;

(21)  Prof. Dr. Detlev Riesner, Sonsbecker Stra(beta)e 17, 40547 Dusseldorf;

(22)  Heidelberg Innovation BioScience Venture II GmbH & Co. KG, represented by
      Heidelberg Innovation Fonds Management GmbH, Im Neuenheimer Feld 581,
      69120 Heidelberg, Germany; hereinafter also referred to as BSV II;

                                       1
<PAGE>

(23)  Heidelberg Innovation Parallel-Beteiligungs GmbH & Co. KG a.A.,
      represented by Heidelberg Innovation Fonds Management GmbH, Im Neuenheimer
      Feld 581, 69120 Heidelberg; hereinafter also referred to as HIPB;

(24)  Stefan Weber, Im Furstenbrunnchen 32, 51429 Bergisch-Gladbach;

(25)  Biofrontera AG, Hemmelrather Weg 201, 51377 Leverkusen, Germany;
      hereinafter also referred to as the Company or Biofrontera AG;

(26)  Biofrontera Pharmaceuticals GmbH, Hemmelrather Weg 201, 51377 Leverkusen,
      Germany; hereinafter also referred to as Biofrontera GmbH;

(27)  Biofrontera Discovery GmbH, Waldhofer Str. 104, 69123 Heidelberg;
      hereinafter also referred to as Biofrontera Discovery GmbH;

(28)  DNAPrint genomics, Inc., 900 Cocoanut Ave. Sarasotar, FL 34236, USA;
      hereinafter referred to as DNAPrint.

In this Agreement the parties named in (1) to (23) are collectively or
individually referred to as the Current Shareholders. The parties named in (1)
to (23) and (28) are collectively or individually referred to as the
Shareholders.

Unless otherwise specified, any listings in this Agreement include both the
first and the last items specified, e.g. "the parties named in (2) to (9) of the
Preamble" includes both the party named in (2) and the party named in (9), as
well as (3), (4), (5), (6), (7) and (8).

                                       I.

(A)   Biofrontera AG is a German stock corporation, registered in the commercial
      register of the local court of Cologne under HRB 49717, located in
      Leverkusen, with its principal office at Hemmelrather Weg 201, 51377
      Leverkusen, Germany. Biofrontera AG owns 100% of the shares in Biofrontera
      GmbH and Biofrontera Discovery GmbH.

(B)   Prior to the capital measures planned in this Agreement, the Current
      Shareholders hold shares in the Company as set forth in the following
      table:

<TABLE>
<CAPTION>
         --------------------------------------------------------------------- -----------------------------------

         Shareholder                                                              Number of Shares
         --------------------------------------------------------------------- -----------------------------------
<S>                                                                              <C>

         Prof. Dr. Hermann Lubbert                                                403,200 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Dr. Montserrat Foguet-Lubbert 25,200 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Richard Gabriel                                                          12,600 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Monica Tamborini                                                         12,600 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         LeVenture                                                                99,120 Preferred A

                                                                                  63,766 Preferred B
         --------------------------------------------------------------------- -----------------------------------
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>
         --------------------------------------------------------------------- -----------------------------------

         Shareholder                                                              Number of Shares
         --------------------------------------------------------------------- -----------------------------------
<S>                                                                              <C>
         TMK                                                                      99,120 Preferred A

                                                                                  63,766 Preferred B
         --------------------------------------------------------------------- -----------------------------------

         3i                                                                       191,520 Preferred A

                                                                                  231,587 Preferred B
         --------------------------------------------------------------------- -----------------------------------

         PRICAP Venture Partners AG                                               39,480 Preferred A
         --------------------------------------------------------------------- -----------------------------------

         TRE Holding AG                                                           39,480 Preferred A
         --------------------------------------------------------------------- -----------------------------------

         tbg Technologie-Beteiligungs-Gesellschaft mbH                            89,880 Preferred A
         --------------------------------------------------------------------- -----------------------------------

         Dr. Peter Engels 784 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Armin Ollig                                                              420 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Dr. Stefan Zwilling 308 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Inga Engels-Kunz                                                         196 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         PD Dr. Christine Stichel-Gunkel                                          140 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Christian Schramm                                                        70 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Dr. Barbara Welters 70 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Dr. Beate Schmitz 56 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Regina Hiltawsky                                                         14 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Ulrike Ebel                                                              14 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Prof. Dr. Detlev Riesner                                                 5,371 Preferred B
         --------------------------------------------------------------------- -----------------------------------

         BSV II                                                                   314,178 Preferred B
         --------------------------------------------------------------------- -----------------------------------

         HIPB                                                                     169,173 Preferred B
         --------------------------------------------------------------------- -----------------------------------

         Own Shares                                                               756 Common Shares
         --------------------------------------------------------------------- -----------------------------------

         Share capital                                                            1,862,869
         --------------------------------------------------------------------- -----------------------------------
</TABLE>

         The parties acknowledge that under the current ESOP 4,217 convertible
         bonds have been issued, which may require the issuance of another
         59,038 Shares. Furthermore, there are further 13,734 convertible bonds
         which have not been issued yet under the ESOP and which cannot be
         issued anymore since the empowerment elapsed.

                                       3
<PAGE>

                                       II.

The parties named in (1) and (2), (5) to (27) and Johnson Matthey
Pharmaceuticals Materials Inc. (hereinafter referred to as Johnson Matthey)
entered into (i) a "Shareholders' Agreement" dated 3 July 2003, (ii) in July
2003 into an "Amendment to Shareholders' Agreement dated 3 July 2003" and (iii)
and an "Investment Agreement" dated 3 July 2003. The parties named in (1), (2)
and (5) to (27) entered into (iv) an "Amendment to Investment Agreement dated 3
July 2003" dated 31 December 2003. In May 2004 the parties named in (3) and (4)
acquired the shares of Johnson Matthey and took over its rights and obligations
under the agreements named in (i), (ii) and (iii) and became party to the
agreement named in (iv). The agreements named in (i) and (ii) are collectively
referred to as the Shareholders' Agreement. The agreements named in (iii) and
(iv) are collectively referred to as the Investment Agreement.

On the day of the signing of this Agreement the parties named in (1) to (28)
will also enter into an agreement on the accession and second amendment to the
Shareholders' Agreement (hereinafter referred to as the Accession Agreement).
The parties to this Agreement acknowledge that Biofrontera, BSV II, HIPB, TMK,
3i and Prof. Dr. Detlev Riesner entered into bridge loan agreement on the
granting of a loan amounting up to EUR 1,200,000 dated the same date as this
Agreement (hereinafter referred to as the Bridge Loan Agreement).

                                       4
<PAGE>

IT IS AGREED as follows:

1.    Interpretation

1.1   In this Agreement the capitalised terms have the following meaning unless
      the context requires otherwise:

      Additional Payments means additional payments in the sense of Sec. 272
      Sub.-sec. 2 No. 4 of the German Commercial Code (HGB);

      A Investors means the parties listed in (5) to (10) of the Preamble of
      this Agreement or any of their legal successors if the relevant legal
      successor becomes A Shareholder, i.e. a holder of Preferred A in the
      Company, jointly or individually or both;

      Agreement means this DNAPrint Investment Agreement, including any Annexes;

      B Investors means the parties listed in (5) to (7), (21) to (23) and (28)
      of the Preamble of this Agreement or any of their legal successors if the
      relevant legal successor becomes B Shareholder, i.e. a holder of Preferred
      B in the Company, jointly or individually or both;

      B Shareholders means any or all holders of Preferred B in respect of the
      Preferred B held by it or them, jointly or individually or both;

      Common Shares means any or all non-par value registered shares with a
      proportionate amount of the Company's share capital of 1.00 allotted to
      each share in the Company except for Preferred A, Preferred B;

      Company or Biofrontera AG means Biofrontera AG, with its principal place
      of business at Hemmelrather Weg 201, 51377 Leverkusen, Germany and
      registered in the commercial register of the local court Cologne under HRB
      49717;

      Current Shareholders means the parties named in (1) to (23) of the
      Preamble of this Agreement or any of their legal successors if the
      relevant legal successor becomes shareholder in the Company, jointly or
      individually or both;

      ESOP means the current employee stock option plan of the Company as
      defined in Clause 6 of the Shareholders' Agreement;

      Investors means all A Investors and B Investors jointly or individually or
      both;

      Management Board means the management board of the Company;

      Preferred A means any or all non-par value registered shares with a
      proportionate amount of the Company's share capital of 1.00
      allotted to each share issued by the Company as voting preference shares
      class A;

      Preferred B means any or all non-par value registered shares with a
      proportionate amount of the Company's share capital of 1.00 allotted to
      each share issued or to be issued by the Company as voting preference
      shares class B;

                                       5
<PAGE>

      Preferred Shareholders means any or all holders of Preferred A and
      Preferred B, jointly or individually or both;

      SEC Approval means the approval as defined in Clause 12;

      Shares means any or all non-par value registered shares in the Company
      with a proportionate amount of the Company's share capital of 1.00
      allotted to each share issued or to be issued, including Common Shares,
      Preferred A and Preferred B;

      Shareholders means the parties named in (1) to (23) and (28) of the
      Preamble of this Agreement or any of their legal successors if the
      relevant legal successor becomes Shareholder in the Company, jointly or
      individually or both;

      Silent Partnership I means the participation agreement entered into
      between the Company and tbg concerning the formation of a silent
      partnership about DM 2 mill. dated 2nd October, 1998 and 10th October,
      1998;

      Silent Partnership II means the participation agreement entered into
      between the Company and tbg concerning the formation of a silent
      partnership about DM 3 mill. dated 2nd October, 1998 and 10th October,
      1998;

      Silent Partnership III means the participation agreement entered into
      between the Company and tbg concerning the formation of a silent
      partnership about 2,954,800 dated 8th January, 2001;

      Subscription Rights means all subscription rights related to Shares;

      Subsidiary (or Subsidiaries) means a company (or all companies) in which
      the Company has a controlling interest;

      Supervisory Board means the supervisory board of the Company;

1.2   Unless otherwise specified, any references to Clauses, Subclauses,
      Paragraphs and Annexes are references to clauses, Subclauses, paragraphs
      and annexes of this Agreement, e.g. "subject to Subclause 2.7" means
      "subject to Subclause 2.7 of this Agreement".

1.3   Where a defined term refers to a word in plural the same term in singular
      beginning with a capital letter in this Agreement shall have the same
      meaning as the defined term, e.g. "If any Shareholder wishes to dispose"
      shall refer to all Shareholders in the sense of this Clause.

2.    DNAPrint's Investment

2.1   In a shareholders' meeting to be held immediately after signing of this
      Agreement the Current Shareholders shall resolve to increase the share
      capital of the Company from 1,862,869 by 2,157,497 to 4,020,366 in return
      for cash contributions through the issuance of 2,157,497 non-par value
      registered shares as voting preference shares class B with a portion of
      the Company's share capital of 1.00 each. The new Preferred B shall be
      issued as follows:

      (a)   The issue price (Issue Price) shall be 1.00 per Preferred B.

      (b)   Each new Preferred B shall grant one vote.

      (c)   Each new Preferred B shall grant the right to participate in profits
            from 1st January, 2004.

                                       6
<PAGE>

2.2   The shareholders' resolution for the capital increase shall provide that
      the Current Shareholders waive their subscription rights and that DNAPrint
      is eligible to subscribe for all 2,157,497 new Preferred B, indicating the
      Issue Price as a pro rata amount of the Company share capital without a
      premium, i.e., as 1.00 per share so that the total amount of the Issue
      Price is 2,157,497. DNAPrint shall only be obliged and entitled to
      subscribe for the new Preferred B if the SEC Approval has been granted.
      DNAPrint shall be obliged to subscribe for the new Preferred B without
      undue delay, but not later than fifteen (15) days after the SEC Approval.
      The corresponding subscription form shall provide that the subscription
      shall not be binding if the consummation of the share capital increase is
      not registered in the commercial register of the Company within six (6)
      months after the capital increase was resolved.

2.3   The total Issue Price shall be paid in three instalments amounting to
      833,333, 833,333 and 490,831 respectively. The first instalment is due
      five (5) days after subscription and the two subsequent instalments are
      due on the same day of the following two months (e.g., if the first
      instalment is due on 3 August, the following two instalments are due on 3
      September and 3 October). DNAPrint shall pay the total amount of the Issue
      Price into the Company's special account for the increase of capital at
      Deutsche Bank Leverkusen, account number 704 545 301, bank sorting code
      375 700 64.

2.4   The Shareholders agree that in addition to the Issue Price DNAPrint shall
      pay an extra amount of 8.27 per share, which shall be recorded as other
      Additional Payments (referred to collectively with the Issue Price as the
      DNA Purchase Price). The total amount of the Additional Payments is
      17,842,500.19. DNAPrint's obligation shall exist exclusively vis-a-vis the
      Current Shareholders, but for the sole benefit of the Company. A
      corresponding claim of the Company shall not be created.

2.5   The total amount of the Additional Payments shall be paid by DNAPrint in
      22 monthly instalments into the Company's account at Sparkasse Leverkusen,
      account number 100 119 510, bank sorting code 375 514 40. The first
      instalment is due on the same date as the last instalment of the Issue
      Price and amounts to 342,502. The other 21 instalments are due on the same
      day of the following months and amount to 833,333 each.

2.6   The payment obligations under Subclauses 2.3 to 2.5 shall be discharged
      only on the day on which the amount is booked on the respective Company's
      account. Payments pursuant to Subclauses 2.3 to 2.5 shall be made by wire
      transfer to the Company's respective account free of any fees, costs and
      charges and in Euro. DNAPrint shall be entitled to pay any or all
      instalments before their respective due dates.

2.7   Each of the Shareholders undertakes individually vis-a-vis every other
      Shareholder to do everything necessary or appropriate to carry out the
      measures agreed to in Clause 2. In particular the Current Shareholders
      undertake to co-operate in the increase of the share capital as described
      by exercising their voting rights in the shareholders' meeting of the
      Company accordingly and by waiving all their Subscription Rights in
      connection with the share capital increase. The Current Shareholders
      undertake vis-a-vis each other and the Company not to institute an action
      to set aside or to nullify the resolution on the share capital increase
      described in Clause 2, and the Current Shareholders hereby waive all
      rights they have or might have for whatever reason to challenge or to
      apply for the judicial determination regarding the resolution's nullity,
      in particular but not exclusively due to or in connection with the
      exclusion of their Subscription Rights or the issue price of the new
      Preferred B. The Shareholders undertake vis-a-vis each other and the
      Company not to institute an action for damages against the Company, its
      Management Board, its Supervisory Board, any members of these boards or
      each other based on the increase of share capital by issuing new shares in
      consideration for cash as foreseen in Clause 2.

                                       7
<PAGE>

2.8   After the subscription and the receipt of the first instalment of the
      Issue Price the Company shall without undue delay apply for registration
      in the commercial register of the resolution on the increase of the share
      capital and of the consummation of the increase of share capital in
      accordance with Section 188 German Stock Corporation Act. The Company, the
      Managers and the Shareholders shall take all measures and make all
      declarations necessary or appropriate for the increase of share capital to
      become effective.

2.9   Each of the Shareholders undertakes individually vis-a-vis every other
      Shareholder to carry out a new shareholders' resolution, should the
      resolution under Subclause 2.1 be ineffective for whatever reason.

2.10  Once the increase of share capital described in Subclause 2.1 has become
      effective, the Shareholders shall hold shares, each with the portion of
      the Company's share capital of 1.00 as set forth in the following table:

<TABLE>
<CAPTION>
       ------------------------------------------------------------------- -----------------------------------

         Shareholder                                                             Number of Shares
         ------------------------------------------------------------------- -----------------------------------
<S>                                                                             <C>

         Prof. Dr. Hermann Lubbert                                               403,200 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Dr. Montserrat Foguet-Lubbert 25,200 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Richard Gabriel                                                         12,600 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Monica Tomborini                                                        12,600 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         LeVenture                                                               99,120 Preferred A

                                                                                 63,766 Preferred B
         ------------------------------------------------------------------- -----------------------------------

         TMK                                                                     99,120 Preferred A

                                                                                 63,766 Preferred B
         ------------------------------------------------------------------- -----------------------------------

         3i                                                                      191,520 Preferred A

                                                                                 231,587Preferred B
         ------------------------------------------------------------------- -----------------------------------

         PRICAP Venture Partners AG                                              39,480 Preferred A
         ------------------------------------------------------------------- -----------------------------------

         TRE Holding AG                                                          39,480 Preferred A
         ------------------------------------------------------------------- -----------------------------------

         tbg Technologie-Beteiligungs-Gesellschaft mbH                           89,880 Preferred A
         ------------------------------------------------------------------- -----------------------------------

         Dr. Peter Engels 784 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Armin Ollig                                                             420 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Dr. Stefan Zwilling 308 Common Shares
         ------------------------------------------------------------------- -----------------------------------
</TABLE>

                                       8
<PAGE>

<TABLE>
<CAPTION>
       ------------------------------------------------------------------- -----------------------------------

         Shareholder                                                             Number of Shares
         ------------------------------------------------------------------- -----------------------------------
<S>                                                                             <C>
         Inga Engels-Kunz                                                        196 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         PD Dr. Christine Stichel-Gunkel                                         140 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Christian Schramm                                                       70 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Dr. Barbara Welters 70 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Dr. Beate Schmitz 56 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Regina Hiltawsky                                                        14 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Ulrike Ebel                                                             14 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         BSV II                                                                  314,178 Preferred B
         ------------------------------------------------------------------- -----------------------------------

         HIPB                                                                    169,173 Preferred B
         ------------------------------------------------------------------- -----------------------------------

         Prof. Dr. Detlev Riesner                                                5,371 Preferred B
         ------------------------------------------------------------------- -----------------------------------

         DNAPrint                                                                2,157,497 Preferred B
         ------------------------------------------------------------------- -----------------------------------

         Own Shares                                                              756 Common Shares
         ------------------------------------------------------------------- -----------------------------------

         Share capital                                                           4,020,366
         ------------------------------------------------------------------- -----------------------------------
</TABLE>

      The parties acknowledge that under the current ESOP 4,217 convertible
      bonds have been issued, which may require the issuance of another 59,038
      Shares.

3.    Default of Payment

3.1   DNAPrint declares herewith the following:

(a)

      (i)   DNAPrint consents herewith that the Company may redeem DNAPrint's
            Preferred B pursuant to ss. 30 (1) of the Articles of Association
            for which DNAPrint did not pay the aggregate DNA Purchase Price in
            accordance with this Agreement. The number of Preferred B to be kept
            by DNAPrint shall be calculated as follows: the sum of the aggregate
            DNA Purchase Price already paid is to be divided by EUR 9.27.
            Accordingly, the number of Preferred B to be redeemed is the
            difference between the aggregate number of DNAPrint's Preferred B
            and DNAPrint's Preferred B to be kept.

      (ii)  DNAPrint waives any claims for compensation it may have pursuant to
            the Company's articles of association.

      (iii) DNAPrint consents that the Shareholders' Agreement as amended by the
            Accession Agreement shall be amended to reflect the lower number of
            Preferred B held by DNAPrint after redemption. The amendments will
            be mutually agreed between the parties concerned, taking into
            account the number of Preferred B kept by DNAPrint and Subclauses
            2.6 and 2.7 of the Shareholders' Agreement as amended by the
            Accession Agreement.

                                       9
<PAGE>

(b)

      (i)   DNAPrint authorizes herewith the Company to sell to a third party
            determined by the Company the number of DNAPrint's Preferred B for
            which DNAPrint did not pay the aggregate DNA Purchase Price in
            accordance with this Agreement. The number of Preferred B to be kept
            by DNAPrint shall be calculated as follows: the sum of the DNA
            Purchase Price already paid is to be divided by EUR 9.27.
            Accordingly, the number of Preferred B to be sold by the Company is
            the difference between the aggregate number of DNAPrint's Preferred
            B and DNAPrint 's Preferred B to be kept. The sale agreement shall
            have substantially the form of Annex 1. The total sale price agreed
            upon with ------- the third party (the Third Party Sale Price) may
            be determined by the Company. The agreement of sale with the third
            party shall stipulate that the Third Party Sale Price is paid
            directly to the Company. DNAPrint shall not be liable for the
            remaining amount if the Third Party Sale Price is lower than the
            aggregate DNA Purchase Price that DNAPrint has failed to pay.

      (ii)  DNAPrint herewith assigns its claim of the Third Party Sale Price to
            the Company without any compensation.

      (iii) DNAPrint consents that the Shareholders' Agreement as amended by the
            Accession Agreement shall be amended to reflect the lower number of
            Preferred B held by DNAPrint after the sale. The amendments will be
            mutually agreed between the parties concerned, taking into account
            the number of Preferred B kept by DNAPrint and Subclauses 2.6 and
            2.7 of the Shareholders' Agreement as amended by the Accession
            Agreement.

3.2   A statement of the account into which the payment is to be made pursuant
      to Clause 2 dated as of the day after expiration of the curing period set
      forth in the written demand pursuant to Subclause 3.3 shall suffice as
      proof of the non-fulfilment of the DNAPrint payment obligation.

3.3   If DNAPrint is in default with its payment obligations pursuant to Clause
      2 in accordance with Section 286 of the German Civil Code (BGB) and the
      Company issued a written demand to DNAPrint providing for a ten (10) days
      curing period and DNAPrint did not pay the due and demanded payment during
      the curing period, the Company is entitled to decide at its sole
      discretion whether it will

      (a)   accept DNAPrint's offer pursuant to Paragraph 3.1(a) and redeem
            DNAPrint's Preferred B in accordance with Paragraph 3.1(a); or

      (b)   accept DNAPrint's offer to sell the shares to a third party as agent
            pursuant to Paragraph 3.1(b).

3.4   With respect to half of the amount of each monthly instalment pursuant to
      Clause 2 objections against DNAPrint's payment obligations, i.e. against
      the corresponding Company's claims cannot be raised unless explicitly
      allowed under this Agreement. If DNAPrint does not pay the other half of
      the amount of each monthly instalment pursuant to Clause 2 and invokes an
      objection the Company shall not be entitled to redeem or sell DNAPrint's
      shares pursuant to Clause 3.3 without DNAPrint confirming its consent. The
      rights of the Company and DNAPrint to pursue their respective rights
      against DNAPrint or the Company, as the case may be, shall remain
      unaffected.

                                       10
<PAGE>

3.5   DNAPrint undertakes vis-a-vis each of the Current Shareholders to do
      everything necessary or appropriate to carry out the measures to which it
      obliged itself in Subclause 3.1, in particular to exercise its voting
      rights to effect the redemption of its Preferred B, or to the transfer of
      its Preferred B or to re-confirm any of its declarations made under
      Subclause 3.1, DNAPrint hereby irrevocably authorises 3i, TMK, HIPB and
      BSVII, each to act alone, to represent DNAPrint in the relevant
      shareholders' meeting; a separate power of attorney to be signed by
      DNAPrint is attached as Annex 7. The Current Shareholders waive herewith
      any rights they may have based on the principle of non-discrimination
      pursuant to sec. 53a AktG in connection with the sale.

3.6   If DNAPrint does not fulfil its payment obligations under Clause 2
      pursuant to Subclauses 3.3 and 3.4 DNAPrint undertakes herewith vis-a-vis
      the Company and each of its Current Shareholders to exercise its rights as
      shareholder of the Company, including its voting rights with regard to
      those shares which can be redeemed or sold pursuant to Subclause 3.1 as
      follows:

(a)   DNAPrint shall lose its voting rights regarding Internal Votes as defined
      in the Accession Agreement; and

(b)

      (i)   DNAPrint shall exercise its voting rights in shareholders' meeting
            including the exercise of its voting rights regarding special
            resolutions in the meaning of the AktG and the Company's articles of
            associations in compliance with the result of the relevant Internal
            Vote passed by the B Shareholders other than DNAPrint; or

      (ii)  If the Shareholders' Agreement as amended by the Accession Agreement
            does not provide for an Internal Vote of the B Shareholders with
            respect to the specific shareholders' resolution or special
            resolution DNAPrint shall exercise its voting rights pursuant to an
            internal vote passed by the B Shareholders other than DNAPrint to
            which the stipulation regarding the Internal Vote shall apply
            mutatis mutandis.

(c)   DNAPrint herewith authorises irrevocably 3i, TMK, HIPB and BSVII each to
      act alone to represent DNAPrint in shareholders' meeting and to exercise
      DNAPrint's voting right in accordance with Paragraphs 3.6(a)-(c) if
      DNAPrint does not fulfil its payment obligations pursuant to Subclause
      3.3; a separate power of attorney to be signed by DNAPrint is attached as
      Annex 8.

3.7   The parties to this Agreement agree that the Company's and the Current
      Shareholders' remedies for DNAPrint's failure to pay the DNA Purchase
      Price are restricted to those set out in Clause 3 and that other remedies
      for DNAPrint's failure to pay the DNA Purchase Price, including but not
      limited to, claims for damages (e.g. Sections 280 ff. of the BGB) shall be
      excluded. The Company's or the Shareholders' right to set off any
      outstanding payment of the DNA Purchase Price with any of DNAPrint's Claim
      for Damages in accordance with Clause 6 or the right to withhold
      performance of obligations shall remain unaffected..

                                       11
<PAGE>

4.    The Use of Proceeds

4.1   The proceeds from the share capital increase pursuant to Clause 2, i.e.,
      the aggregate Additional Payments pursuant to Subclause 2.4, shall be used
      for purposes of funding growth, e.g., for working capital needs, capital
      expenditures and the general corporate purposes of the Company, in
      accordance with the business plan (Business Plan) to be set up by the
      Company without undue delay. The Business Plan shall be agreed upon by the
      Company and the B Investors based on an Internal Vote of the B Investors.

4.2   The Shareholders agree to aim for an IPO on a stock exchange in particular
      Nasdaq, NYSE or an European stock exchange, whichever may be preferable to
      optimise the shareholders' value.

5.    Silent Partnership

      Tbg's consent to the measures stipulated in this Agreement and in the
      Accession Agreement required under the Silent Partnerships I - III, in
      particular for the participation of DNAPrint and the increase of the share
      capital pursuant to Clause 2.1 has been granted and is herewith confirmed
      by tbg.

6.    Representations and Warranties of the Company

6.1   Subject to the provisions of this Clause, the Company and its Subsidiaries
      jointly and severally guarantee vis-a-vis DNAPrint by way of independent
      guarantees within the meaning of Section 311 German Civil Code (BGB) that
      the statements set forth in Annex 2 of this Agreement are true and correct
      as of the date of the signing of this Agreement.

6.2   Where one or more of the statements set forth in Annex 2 proves to be
      untrue or incorrect (for the purposes of this Clause, Breach of
      Guarantee), DNAPrint shall have the right to demand the Company or its
      Subsidiaries or both to take such measures as required to remedy the
      Breach of Guarantee and the Company or its Subsidiaries or both shall be
      obliged to remedy this Breach of Guarantee in accordance with the demand,
      within an appropriate time period as specified in the demand, and in no
      case later than one month after issuance of the demand (the Specified
      Period). If the Breach of Guarantee is not remedied by the Company or its
      Subsidiaries within the Specified Period, or if such remedy is not
      possible, the Company and its subsidiaries shall be jointly and severally
      liable to DNAPrint for damages in accordance with the subsequent
      Subclauses. The liability is not conditional on any fault or other
      responsibility on the part of Company or its Subsidiaries. DNAPrint is
      deemed to know the facts that were disclosed in the limited financial,
      legal and technical due diligence. The parties agree that Section 442 of
      the BGB shall apply with the provision that only the documents marked in
      Annex 3 were submitted to DNAPrint and its advisors respectively in the
      course of limited financial and legal due diligence and are therefore
      deemed to be known by DNAPrint. With regard to technical due diligence,
      all documents with regard to which the Company can prove that they were
      submitted to DNAPrint or their advisers are deemed to be known by DNAPrint
      as well.

6.3   Without prejudice to the obligation of the Company and its Subsidiaries to
      remedy a Breach of Guarantee as requested by DNAPrint, DNAPrint shall only
      have the right to claim damages (including but not limited to
      consequential damages and loss of profits) under Subclause 6.2 if the
      aggregate amount of an admissible claim exceeds 100,000 (Claim for
      Damages). In the event of an excess of 100,000 they shall have the right
      to claim the full amount (and not only the amount exceeding 100,000); the
      liability of the Company or its Subsidiaries pursuant to Subclause 6.2
      shall in total not exceed the DNA Purchase Price. This limitation does not
      apply with respect to liability for legal defects in relation to the
      Preferred B. If the aggregate DNA Purchase Price is actually reduced due
      to an effective redemption or an effective sale of DNAPrint's Preferred B
      pursuant to Clause 3 the liability of the Company or its Subsidiaries
      shall be limited to the aggregate DNA Purchase Price actually paid by
      DNAPrint.

                                       12
<PAGE>

6.4   Should DNAPrint be entitled to a Claim for Damages according to Subclauses
      6.1 to 6.3 and 6.6 and 6.7 DNAPrint shall only be entitled to demand
      payment of this Claim for Damages up to the amount of the DNA Purchase
      Price actually paid on the date on which the Company settles the Claim for
      Damages by payment to DNAPrint. Additionally, DNAPrint shall be entitled
      to set off its remaining Claim for Damages with outstanding Additional
      Payments when due however only with the portion of each monthly instalment
      set out in Subclause 3.4 Sentence 2. The Current Shareholders explicitly
      agree to such set-off. The right to set-off outstanding Additional Payment
      with a Claim for Damages shall also apply for the Company and the Current
      Shareholders. The Current Shareholders explicitly agree to such set-off.

6.5   Pursuant to Sub-clauses 6.5 (a) and (b) Professor Dr. Lubbert guarantees
      personally by way of independent guarantee that the statements set forth
      in Annex 2 (except for the statement under F (4) 3. Sentence) are true and
      accurate to the best of his knowledge as of the date of the signing of
      this Agreement.

      (a)   Where one or more of the statements set forth in Annex 2 proves to
            be false or inaccurate DNAPrint shall have the right to demand that
            Professor Dr. Lubbert bears the costs of remedying the Breach of
            Guarantee incurred by the Company, its Subsidiaries or DNAPrint
            (Indemnification Claim) if these costs account for a damage of
            DNAPrint. Alternatively, if the Breach of Guarantee has not been
            remedied within the Specified Period or if this remedy is
            impossible, DNAPrint shall have the right to demand that Professor
            Dr. Lubbert pays compensation either to the Company and its
            Subsidiaries or DNAPrint for the expenditures incurred and damages
            suffered due to the Breach of Guarantee (Claim for Damages I).

      (b)   The liability of Professor Dr. Lubbert shall be limited to
            1,000,000. If the aggregate DNA Purchase Price is actually reduced
            due to an effective redemption or sale of DNAPrint's Preferred B
            pursuant to Clause 3, the liability of the Professor Dr. Lubbert
            shall be limited to (euro) 1,000,000 or to the aggregate DNA
            Purchase Price actually paid by DNAPrint which ever is lesser.
            Professor Dr. Lubbert shall be entitled to compensate DNAPrint by
            delivering Shares in Biofrontera at the DNA Purchase Price up to the
            amount of 950,000.

6.6   Without prejudice to Subclause 6.5, DNAPrint shall be entitled to claim
      the amount payable due to the same Breach of Guarantee (Claim of Damages
      and Claim of Damages I) either by the Company, its Subsidiaries or
      Professor Dr. Lubbert once only. However, should DNAPrint request
      Professor Dr. Lubbert compensate the damages he shall not be entitled to
      have recourse to the Company or its Subsidiaries.

6.7   Except as set forth below all rights of DNAPrint in relation to a Breach
      of Guarantee are subject to a limitation period of one (1) year beginning
      with the signing of this Agreement. In the event of a wilful concealment
      of any facts or circumstances of a Breach of Guarantee, a limitation
      period of ten (10) years shall apply. With respect to tax guarantees given
      under F of Annex 2 the limitation period shall be six months and shall
      begin with the issuance of legally valid notification relating to the time
      period until signing of this Agreement, which shall not be subject to
      verification. The limitation period for tax guarantees shall in no case
      exceed 30 years from the signing of this Agreement. The limitation period
      shall be interrupted on demand as described in Subclauses 6.2 and 6.5.

                                       13
<PAGE>

6.8   The provisions of this Clause relating to the consequences of a Breach of
      Guarantee form an integral part of the guarantees and the guarantees are
      only given subject to these provisions and limitations. Any other
      recourse, including statutory recourse, is excluded.

7.    Guarantee and Undertaking of DNAPrint

7.1   DNAPrint warrants that the standby equity distribution agreement mentioned
      in Clause 12 is signed until the date of the signing of this Agreement, is
      legally binding (subject to the SEC Approval) and enables DNAPrint to
      fulfil this Agreement, in particular that there are no side agreements
      preventing DNAPrint from fulfilling this Agreement.

7.2   DNAPrint shall use commercially reasonable efforts to have authorized, and
      reserved for the purpose of issuance, such number of shares of common
      stock as shall be necessary to raise the capital necessary to pay the DNA
      Purchase Price in accordance with this Agreement. If at any time DNAPrint
      does not have available such shares of common stock, DNAPrint shall call
      and hold a special meeting of the shareholders for the purpose of
      increasing the number of shares authorized. DNAPrint shall recommend that
      the shareholders vote in favour of increasing the number of shares of
      common stock authorized.

8.    Management structure

8.1   DNAPrint wishes that the current members of the Management Board shall not
      be dismissed and that their current competencies shall not be altered. The
      Shareholders consent to this. Hence, the Shareholders agree that the terms
      of the current service agreements of the members of the Management Board
      shall be extended for another five (5) year term at financial conditions
      reflecting at least the conditions of the current service agreements and
      taking into consideration the position of both within Biofrontera and the
      relative position within the Management Board.

8.2   DNAPrint will grant Prof. Dr. Hermann Lubbert one seat in its board of
      directors within one (1) month after the signing of this Agreement.

8.3   To the extent legally permissible each of the Shareholders undertakes
      individually vis-a-vis every other Shareholder to do everything necessary
      or appropriate to bring into effect Subclauses 8.1 and 8.2.

9.    Transaction Costs

      Except for the court fees and notary's costs in connection with capital
      measures pursuant to this Agreement and amendments to the Articles of
      Associations provided for in the Accession Agreement as well as DNAPrint's
      costs for legal counsel up to Euro 100,000 which shall be borne by the
      Company, the parties shall each bear their own legal and other expenses
      concerning the measures foreseen in this Agreement and in the Accession
      Agreement of the same date. DNAPrint's costs to be borne by the Company
      pursuant the foregoing sentence shall be paid in twelve instalments
      (without any interest being owed) and be deducted from the first twelve
      (12) instalments of the Additional Payments.

                                       14
<PAGE>

10.   Bridge Loan Agreement

10.1  The Current Shareholders undertake vis-a-vis each other to pass a
      resolution on a contingent capital substantially in the form of Annex 4 in
      the Shareholders' meeting in which the share capital increase pursuant to
      Clause 2 is resolved.

10.2  The Shareholders agree that the lenders of the Bridge Loan Agreement shall
      be entitled to convert any or all outstanding issued instalments and/or
      accrued interests pursuant to ss. 8 of the Bridge Loan Agreement by
      receiving newly issued Preferred B generated by the use of the authorised
      capital created pursuant to Clause 11 for which the lenders shall pay the
      lowest possible issue price of (euro) 1.00 for each Preferred B in cash.
      The lenders undertake to enter into an agreement between the lenders of
      the Bridge Loan Agreement and the remaining Shareholders on the
      contribution of lenders' repayment claim of any or all outstanding issued
      instalments and/or the accrued interest thereon to the Company pursuant to
      the Bridge Loan Agreement, as additional payments in the sense of Sec. 272
      Sub.-Sec. 2 No. 4 of the HGB.

10.3  Each of the Shareholders undertakes individually vis-a-vis every other
      Shareholder to do everything necessary or appropriate to carry out the
      measures agreed to in Clause 10. In particular the Current Shareholders
      undertake to co-operate in the passing of the shareholders' resolution as
      described in Subclause 10.1 by exercising their voting rights in the
      shareholders' meeting of the Company accordingly and by waiving all their
      Subscription Rights in connection with the creation or use of the
      contingent capital. The Current Shareholders undertake vis-a-vis each
      other and the Company not to institute an action to set aside or to
      nullify the resolution on the contingent capital described in Clause 10.1,
      and the Current Shareholders hereby waive all rights they have or might
      have for whatever reason to challenge or to apply for the judicial
      determination regarding the resolution's nullity, in particular but not
      exclusively due to or in connection with the exclusion of their
      Subscription Rights. The Shareholders undertake vis-a-vis each other and
      the Company not to institute an action for damages against the Company,
      its Management Board, its Supervisory Board, any members of these boards
      or each other based on the issuance of convertible bonds or shares as
      foreseen in Clause 10.1.

11.   Additional Financing

11.1  The Current Shareholders undertake vis-a-vis each other to pass a
      resolution on an authorised capital substantially in the form of Annex 5
      in the shareholders' meeting in which the share capital increase pursuant
      to Clause 2 is resolved .

11.2  The Shareholders agree that the Investors or other investors may invest
      into the Company on terms and conditions equivalent to those of this
      Agreement (including but not limited to the payment of an Additional
      Payment to the Company reflecting the difference between the issuance
      price and the pre-money valuation of (euro) 17.6 million) up to the amount
      of 5 million in aggregate, based on a pre-money valuation of the Company
      of 17.6 million and by receiving newly issued Preferred B during a period
      of twelve (12) months after signing of this Agreement. The parties to this
      Agreement confirm that 5 million shall be inclusive of any funds
      contributed by a conversion of the lenders' repayment claim of the
      outstanding issued instalments and/or accrued interest thereon pursuant to
      the Bridge Loan Agreement and Clause 10. The Company is only entitled to
      use the authorised capital created pursuant to Subclause 11.1 and Annex 4
      upon prior approval of the Supervisory Board members nominated by DNAPrint
      which shall not be withheld unreasonably. A consent with respect to the
      conversion of the lenders' repayment claim of the outstanding issued
      instalments and/or accrued interest thereon pursuant to the Bridge Loan
      Agreement and Clause 10 is however not required. The Company and the
      lenders undertake not to amend the Bridge Loan Agreement without the
      consent of the Supervisory Board members nominated by DNAPrint, which
      shall not unreasonably be withheld.

                                       15
<PAGE>

11.3  Each of the Shareholders undertakes individually vis-a-vis every other
      Shareholder to do everything necessary or appropriate to carry out the
      measures agreed to in Clause 11. In particular the Current Shareholders
      undertake to co-operate in passing of the shareholders' resolution as
      described by exercising their voting rights in the shareholders' meeting
      of the Company accordingly and by waiving all their Subscription Rights in
      connection with the creation and use of the authorised capital. The
      Current Shareholders undertake vis-a-vis each other and the Company not to
      institute an action to set aside or to nullify the resolution on the
      authorised capital described in Clause 11.1, and the Current Shareholders
      hereby waive all rights they have or might have for whatever reason to
      challenge or to apply for the judicial determination regarding the
      resolution's nullity, in particular but not exclusively due to or in
      connection with the exclusion of their Subscription Rights or the issue
      price of the new shares to be issued by using the authorised capital. The
      Shareholders undertake vis-a-vis each other and the Company not to
      institute an action for damages against the Company, its Management Board,
      its Supervisory Board, any members of these boards or each other based on
      the issuance of new shares by using the authorised capital as foreseen in
      Clause 11.1.

12.   SEC Filing

12.1  The parties to this Agreement acknowledge that DNAPrint has to file with
      the US Securities and Exchange Commission a registration statement
      registering certain common stock to be issued in connection with a standby
      equity distribution agreement to be entered into by DNAPrint and Dutchess
      Advisors LLP. The US Securities and Exchange Commission's declaration of
      effectiveness of such registration statement is hereinafter referred to as
      the SEC Approval.

12.2  DNAPrint undertakes vis-a-vis the Company that it will undertake
      everything necessary or appropriate to obtain the SEC Approval including
      to file the registration statement pursuant to Subclause 12.1 within ten
      (10) business days after the signing of this Agreement. Biofrontera shall
      support DNAPrint with regard to obtaining the SEC Approval to the extent
      reasonably necessary.

13.   Obligations of the Company and the parties

13.1  The parties to this Agreement acknowledge that there might exist an
      uncertainty whether the share capital increase of the Company resolved by
      its shareholders' meeting on 28 May 2001 amounting to EUR 202 was
      consummated by validly registering the consummation with the commercial
      register. The Company and the parties to this Agreement therefore
      undertake vis-a-vis DNAPrint and vis-a-vis each other to do everything
      necessary or appropriate to clear any uncertainties without undue delay
      after the signing of this Agreement so that the number of shareholders and
      their stockholding in the Company comply to the table of shareholdings
      under Section I (B) before subscription by DNAPrint. The Management Board
      undertakes to report to the Supervisory Board about the status of the
      Company's undertaking regularly to each meeting of the Supervisory Board.
      The Company undertakes to indemnify DNAPrint from any liabilities
      vis-a-vis and claims from the Company, its Current or previous
      Shareholders arising in connection with the capital increase by EUR 202,
      any subsequent capital increase or the fulfilment of the Company's
      undertaking pursuant to Subclause 13.1 Sentence 2.

                                       16
<PAGE>

13.2  The parties to this Agreement acknowledge that the appointment of Mr.
      Weber und Professor Dr. Lubbert as managing directors of Biofrontera GmbH
      and Biofrontera Discovery GmbH respectively may not have been correct. The
      Company undertakes to do everything necessary or appropriate to pursue
      that Mr. Weber and Professor Dr. Lubbert are appointed as managing
      directors of Biofrontera GmbH and Biofrontera Discovery GmbH appropriately
      by Biofrontera AG represented in the respective shareholders meetings of
      Biofrontera GmbH and Biofrontera Discovery GmbH by the Supervisory Board
      of Biofrontera AG. The Management Board undertakes to report to the
      Supervisory Board about the status of the Company's undertaking regularly
      to each meeting of the Supervisory Board.

13.3  The parties to this Agreement undertake to perform all such measures which
      are necessary and appropriate to ensure the registration of the Silent
      Partnership I and the Silent Partnership II which have not yet been
      registered with the commercial register.

14.   Press/Media

      With regard to the fundraising of DNAPrint the Company and DNAPrint shall
      without undue delay after signing of this Agreement and in good faith
      agree to the content of an initial press release pertaining to the
      investment as contained in this Agreement, as well as to the time at which
      this press release shall be made. DNAPrint is entitled to publish all
      statements which are required under applicable US securities laws and
      regulations and stock exchange rules. The Company shall cooperate fully
      with DNAPrint in its filing with the US Securities and Exchange Commission
      of a current report on Form 8-K disclosing the transaction contemplated by
      this Agreement, and any financial statements and other financial
      information required to be filed with such report, all in a timely
      fashion. The Company shall cooperate, and shall cause its accountants to
      cooperate, in the preparation of such financial statements and other
      financial information. The parties acknowledge that such filing and the
      relationship between the Company and DNAPrint created by this Agreement
      will require DNAPrint to file and to make publicly available the text of
      this Agreement and any other Agreements executed by DNAPrint in connection
      with the transaction contemplated by this Agreement.

15.   Status of this Agreement

15.1  The Shareholders will regulate their legal relationship as shareholders of
      the Company by entering into the separate Accession Agreement on the same
      date as this Agreement.

15.2  The JV Framework Agreement to be entered each by Biofrontera
      Pharmaceuticals GmbH and DNAPrint on the same date as this Agreement, this
      Agreement and the Accession Agreement shall supersede and replace the
      Letter of Intent between DNAPrint and the Company dated 23 June 2004. The
      Shareholders' Agreement shall remain effective as amended by this
      Agreement and the Accession Agreement. The Investment Agreement is
      unaltered by this Agreement and remains effective. The parties to this
      Agreement acknowledge that there are no side-agreements to this Agreement.

16.   Right to Rescind

16.1  Biofrontera shall have the right to rescind this Agreement in writing if

      (a)   the SEC Approval is not granted within 130 days after the signing of
            this Agreement; or

      (b)   DNAPrint does not sign the subscription certificate in accordance
            with Subclause 2.2; or

      (c)   DNAPrint does not pay the first installment of the Issue Price
            pursuant to Subclauses 2.3 and 2.6.

                                       17
<PAGE>

16.2  If Biofrontera rescinds this Agreement the obligations of the Current
      Shareholders and the Company pursuant to Clauses 10 and 11 shall survive
      mutatis mutandis subject to that the Current Shareholders undertake to
      pass the shareholders' resolution substantially in the form of Annex 6
      instead of a shareholders' resolution substantially in the form of Annex
      5. The preceding sentence shall apply until all obligations pursuant to
      this sentence are complied with.

16.3  If the right to rescind is exercised, there shall be no liability or
      obligation under or due to this Agreement on the part of either party due
      to the rescission.

17.   Closing

      17.1  The consummation of this Agreement, save for the consummation of the
            additional financing set forth in Subclause 17.4, shall take place
            20 days after SEC Approval has been granted or such other date as
            the parties hereto may agree upon from time to time, however no
            later than 31 January 2005 (the Initial Closing). The following
            measures and actions shall be taken on or before the Initial
            Closing:

      (a)   The Current Shareholders shall resolve on the following issues:

            (i)   Appointment of the members of the Supervisory Board nominated
                  by DNAPrint in accordance with Subclause 2.4 of the
                  Shareholders' Agreement as amended by the Accession Agreement.

            (ii)  Amendment of the Articles of Association in accordance with
                  Subclause 3.1 of the Shareholders' Agreement as amended by the
                  Accession Agreement.

      (b)   Subject to the conditions set forth in Subclause 17.2 DNAPrint shall
            have signed and delivered a subscription certificate for 2,157,497
            Preferred B, provided that such subscription certificate stipulate
            that the obligation to subscribe for new shares shall expire 6
            months after the capital increase was resolved;

      (c)   Subject to the conditions set forth in Subclause 17.2 DNAPrint shall
            make payment of the first instalment as set forth in Subclause 2.3;

      (d)   Subject to the fulfilment of the actions set forth under Paragraphs
            17.1 (a) through and including 17.1 (c) and subject to the
            conditions in Subclause 17.2 below the Company shall apply for
            registration of the passed resolutions with the commercial register
            as soon as reasonably practicable.

17.2  The actions set forth in Subclause 17.1 are subject to the following
      cumulative conditions precedent:

      (a)   Signing and delivery of the Accession Agreement; and

      (b)   Signing and delivery of this Agreement by all parties concerned; and

      (c)   SEC Approval.

      Each party to this Agreement shall be entitled to individually rescind
      this Agreement by giving notice to the Company, which shall then inform
      all other parties to this Agreement, if the Initial Closing has not
      occurred until 31 January 2005. Subclauses 16.2 and 16.3 shall apply.

                                       18
<PAGE>

17.3  The consummation of the additional financing in accordance with Clause 11,
      if any, shall take place on or before 18 September 2005 (the Subsequent
      Closing). In particular the following measures and actions shall be taken
      on or before the Subsequent Closing:

      (a)   The subscribers of the newly issued shares ("New Investors") become
            a party to this Agreement, and to the Shareholders' Agreement as
            amended by the Accession Agreement.

      (b)   The New Investors sign and deliver subscription certificates for the
            shares to the Company.

      (c)   The New Investors make the payment of the subscription price for the
            shares they subscribe for.

      (d)   Subject to the fulfilment of the actions set forth under Paragraphs
            17.3 (a) to 17.3 (d), the Company shall apply for registration of
            the passed resolutions with the commercial register as soon as
            reasonably practicable.

      The consummation of the additional financing shall be deemed to have
      failed, and all actions already taken with respect to such consummation
      shall be deemed null and void, if the Subsequent Closing has not occurred
      until 18 September 2005.

18.   General

18.1  The Preferred Shareholders are entitled to transfer their rights deriving
      from this Agreement in whole or in part to the entities determined in
      Clause 13 of the Shareholders' Agreement. Preferred Shareholders' rights
      arising from this Agreement which depend directly or indirectly on the
      circumstance that the Preferred Shareholder is a Shareholder may be
      transferred to the extent that the right may reasonably be separated from
      the holding of the Shares; e.g. claims due to Preference in Proceeds may
      be transferred. The Preferred Shareholders shall give notice in writing
      about any such transfer to the Company.

18.2  If this Agreements provides that an obligation is undertaken vis-a-vis a
      group, e.g. as in Paragraph 2.4 each single person/entity of the group
      vis-a-vis whom the obligation was undertaken shall be entitled to enforce
      the obligation.

18.3  BSV II and HIPB shall always act through BSV II who is herewith authorized
      by HIPB to act in the name and on behalf of HIPB and to act as receiving
      agent.

18.4  This Agreement may be executed in two or more counterparts, each of which
      shall be deemed to be an original, but all of which together shall
      constitute one and the same instrument. This Agreement fulfils any written
      form requirements or other form requirements requisite for amendments and
      additions to the Shareholders' Agreement (such as Clause 24.6 of the
      Shareholders' Agreement) and the Investment Agreement (such as Clause 12.5
      of the Investment Agreement).

18.5  Each party to this Agreement authorises Biofrontera AG to receive the
      respective declaration of will consenting to this Agreement of the other
      parties. The parties to this Agreement agree that Biofrontera AG shall
      collect and keep the signed copies of this Agreement. Biofrontera AG shall
      notify the parties to this Agreement if all parties to this Agreement
      consented.

18.6  Amendments and additions to this Agreement are only effective if made in
      writing, to the extent that notarisation is not required. The written form
      requirement also applies to any waivers, including a waiver of the written
      form requirement.

                                       19
<PAGE>

18.7  Should individual terms of this Agreement be or become invalid or
      unenforceable or should this Agreement contain gaps, the validity of the
      remaining terms of the Agreement shall remain unaffected. In place of the
      invalid, unenforceable or missing term, a valid term upon which the
      parties would have reasonably agreed, had they been aware at the signing
      of this Agreement that the relevant term was invalid, unenforceable or
      missing, shall be deemed to have been agreed upon. Should a term of this
      Agreement be or become invalid because of the scope of performance for
      which it provides, then the agreed scope of performance shall be amended
      to correspond with the extent legally permitted.

19.   Governing Law and Jurisdiction

19.1  This Investment Agreement is governed by and shall be construed in
      accordance with the laws of the Federal Republic of Germany.

19.2  To the extent legally permissible, each party submits to the exclusive
      jurisdiction of the courts of Frankfurt am Main, Germany for all purposes
      relating to this Agreement. The parties waive any objection to the German
      courts on grounds that they are an inconvenient or inappropriate forum to
      settle any such dispute. DNAPrint shall at any time have appointed an
      agent for service of process domiciled in Germany and undertakes to inform
      the Company of any change within a period of ten (10) days after the
      change has been effected. ss. 170 of the BGB shall remain unaffected.
      DNAPrint herewith appoints Mayer, Brown, Rowe & Maw LLP, Bockenheimer
      Landstra(beta)e 98-100, 60323 Frankfurt am Main as its agent in Germany
      for service of process.

                                       20
<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Prof. Dr. Hermann Lubbert                                  Dr. Christine Stichel-Gunkel
---------------------------------------------------------  ------------------------------------------------------

Dr. Montserrat Foguet-Lubbert                              Christian Schramm
---------------------------------------------------------  ------------------------------------------------------

Richard Gabriel                                            Dr. Barbara Welters
---------------------------------------------------------  ------------------------------------------------------

Monica Tamborini                                           Dr. Beate Schmitz
---------------------------------------------------------  ------------------------------------------------------

LeVenture Kapitalbeteiligungsgesellschaft mbH & Co. KG,    Regina Hiltawsky
---------------------------------------------------------  ------------------------------------------------------

TechnoMedia Kapitalbeteiligungsgesellschaft Koln mbH       Ulrike Ebel
---------------------------------------------------------  ------------------------------------------------------

3i Group Investments Limited Partnership                   Prof. Dr. Detlev Riesner
---------------------------------------------------------  ------------------------------------------------------

PRICAP Venture Partners AG,                                Heidelberg Innovation BioScience Venture II GmbH &
                                                           Co. KG
---------------------------------------------------------  ------------------------------------------------------

TRE Holding AG                                             Heidelberg Innovation Parallel-Beteiligungs GmbH &
                                                           Co. KG a.A.
---------------------------------------------------------  ------------------------------------------------------

tbg Technologie-Beteiligungs-Gesellschaft mbH              Stefan Weber
---------------------------------------------------------  ------------------------------------------------------

Dr. Peter Engels                                           Biofrontera AG represented by the Managing Board
---------------------------------------------------------  ------------------------------------------------------

Armin Ollig,                                               Biofrontera Pharmaceuticals GmbH
---------------------------------------------------------  ------------------------------------------------------

Dr. Stefan Zwilling                                        Biofrontera Discovery GmbH
---------------------------------------------------------  ------------------------------------------------------

Inga Engels-Kunz                                           DNAPrint
---------------------------------------------------------  ------------------------------------------------------
</TABLE>

----------
Biofrontera AG represented by the Supervisory Board to the extent rights and
obligations between the Managing Board and the Company are established by this
Agreement.
-

                                       21
<PAGE>

                                    Annex 1

                        Share Sale and Transfer Agreement

between

(1) DNAPrint,

                                     hereafter referred to as DNAPrint or Seller

and

(2)      [   ]

                                          hereafter referred to as the Purchaser

Preamble:

The Seller holds o in Biofrontera AG, a German stock corporation registered with
the commercial register of the local court Cologne under HRB 49717, with its
principle office at Hemmelrather Weg 201, 51377 Leverkusen, Germany (hereafter
referred to as Biofrontera AG). The share capital of Biofrontera AG amounts to
EUR o and is divided into onon-par value shares with a proportional amount of
the share capital of EUR 1,- each. The shares are in registered form and not
certified; no single or multiple share certificates have been issued. The o held
by the Seller are hereafter referred to as the Shares.

The parties to this Agreement therefore stipulate the following:

1.       Sale and Assignment of the Shares

1.       Seller herewith sells o Shares to Purchaser including and together with
         all ancillary rights and associate rights of the Shares. The Purchaser
         accepts herewith the sale of the Shares.

2.       Subject to the payment of the Purchase Price the Seller herewith
         assigns o Shares to the Purchaser including and together with all
         ancillary rights and associates rights of the Shares. The Purchaser
         accepts herewith the assignment of the Shares.

3.       The right to all results of Biofrontera AG of the current fiscal year
         and all possible profits of Biofrontera AG incurred in previous fiscal
         years which have not yet been distributed to the shareholders of
         Biofrontera AG shall be sold and assigned as well.

2.       Purchase Price

1.       The total purchase price for the Shares is EUR o (Euro o) (hereafter
         referred to as the Purchase Price). The Purchase Price is owed to
         Biofrontera AG (Sec. 328 BGB); Biofrontera AG shall have an own right
         to demand payment.

2.       The Purchase Price becomes due two weeks after the consent requirements
         pursuant to Clause 4 have been fulfilled and the Purchaser has been
         notified thereof by the Seller. The Purchase Price is to be paid to the
         bank Biofrontera AG's account, account number o at o, bank code o.

                                       22
<PAGE>

3.       Should any relevant tax authority or court rule that the sale and
         assignment of the Shares set out in Clause 1 is taxable for VAT, the
         Purchaser agrees to pay the VAT to Seller in accordance with such
         decision and applicable law.

3.       Warranty

         The Parties have decided to leave the statutory system of agreements on
         qualities and guarantees for the quality of the Shares as well as
         section 444 alternative 2 BGB, the applicability of which is in dispute
         but which in their view is not applicable, and in their place to
         provide for a separate provision of liability as follows:

         Seller guarantees the correctness and completeness of the following
         statements by means of an independent guarantee promise within the
         meaning of section 311 para 1 BGB, which according to the Parties'
         express intention does not constitute a guarantee for the quality of
         the Shares within the meaning of sections 443 para 1 alternative 1, 444
         alternative 2 BGB but a promise which is made from the start only with
         the content restricted to the following:

         (a)      Seller is the holder of the Shares. The Shares are not
                  encumbered with third parties' rights (except for obligations
                  under the agreements referred to in Annex 1).

         (b)      No further warranties and guarantees are granted.

4.       Consent Requirements/Assignment of Contract

1.       The parties to this Agreement acknowledge that pursuant to Clause 8 (3)
         of Biofrontera AG's Articles of Association the assignment of the
         Shares requires the consent of Biofrontera AG. Pursuant to Clause 8 (3)
         sentence 2 of Biofrontera AG's Articles of Association Biofrontera AG's
         management board declares such consent on the basis of a shareholders'
         resolution. Additionally, Clause 26 (1) letter f of Biofrontera AG's
         Articles of Association provides that the holders of the preferred
         shares class B have to consent to the shareholders' resolution as well.

2.       This Agreement shall become effective with the receipt of consent of
         Biofrontera AG to the Purchaser.

3.       The parties of this Agreement agree to enter into an agreement
         stipulating the assignment of contracts to which the Seller is party
         substantially in the form of Annex 1.

5.       Final Provision

1.       Costs and expenses in connection with this Agreement, if any, including
         the fees of Purchaser's advisers are to be borne by the Purchaser.

2.       This Agreement is governed by and shall be construed in accordance with
         German law. To the extent legally permissible, jurisdiction for all
         disputes arising out of, or in connection with this Agreement shall be
         with the competent courts in Frankfurt am Main, Germany.

3.       The parties irrevocably waive their right to seek dissolution of this
         Agreement after it has been completed.

4.       Amendments and additions to this Agreement are only effective if made
         in writing, to the extend that notarisation is not required. The
         written form requirement also applies to any waivers, including a
         waiver of the written form requirement.

                                       23
<PAGE>

5.       This Agreement may be executed in two or more counterparts, each of
         which shall be deemed to be an original, but all of which together
         shall constitute one and the same instrument.

6.       Should individual terms of this Agreement be or become invalid or
         unenforceable or should this Agreement contain gaps, the validity of
         the remaining terms of the Agreement shall remain unaffected and in
         place of the invalid, unenforceable or missing terms a valid term for
         which the parties would have reasonably agreed, had they been aware at
         the signing of this Agreement that the relevant term was invalid,
         unenforceable or missing, shall be deemed to have been agreed upon.
         Should a term of this Agreement be or become invalid because of the
         scope of performance for which it provides then the agreed scope of
         performance shall be amended to correspond with the extent legally
         permitted.

--------------------------                     ---------------------------------

place/date                                     o

                                               for and on behalf of

                                               Seller

--------------------------                     ---------------------------------

place/date                                     Purchaser

                                       24
<PAGE>

                                    Annex 2

                                   Guarantees

         For the purposes of this Annex 2 the Company shall mean both
         Biofrontera AG and its Subsidiaries, unless expressly stated otherwise.

                  Reference to the best knowledge of the Company means the best
         knowledge of the Company's Management Board and/or managing directors
         of the Subsidiaries, as the case may be.

(A)      Corporate Law Matters

(1)      The Company is validly incorporated and existing. Except as described
         in Clause 13 of this Investment Agreement, Annex 2 A.1 completely and
         accurately reflects the Company's shareholder structure.

(2)      All the issued and outstanding shares of the Company's capital stock
         have been duly and validly authorised and issued except as described in
         Clause 13 of this Investment Agreement, are fully paid in (including
         any applicable share premiums or any payments to the capital reserves
         as the case may be), and have not been repaid.

(3)      Except as set forth in Annex 2 A.3, there exist no silent partnership
         agreements, loans with profit participation, participation rights or
         any other rights entitling to a share in the Company's profit, turnover
         or liquidation proceeds.

(4)      Except as expressly described in this Investment Agreement, the
         Shareholders' Agreement as well as the Accession and Second Amendment
         to the Shareholders' Agreement and in the articles of association of
         the Company, and except as set forth in Annex 2 A.4, there exist,
         whether issued or not, no options, warrants or other rights to
         purchase, rights conferring an obligation to issue new shares or
         granting voting rights or rights to convert any obligation into or
         exchange any securities for shares of the Company.

(5)      Except as described in Clause 13 of the Investment Agreement, the
         entries in the commercial register completely and accurately reflect
         the Company's corporate structure. Copies of up-to-date commercial
         register extracts are attached as Annex 2 A.5.

(6)      The Company's Articles of Association in their version dated
         [14.11.2003] have not been modified or amended since. Except as set
         forth in Annex 2 A.6, there exist no other agreements between any
         shareholders or any third parties and the Company, relating to the
         shareholding in the Company.

(7)      Except for the silent partnerships mentioned in Annex 2 A.3 and the
         shareholdings listed in Annex 2 A.7, the Company does not maintain any
         relationships under corporate law with any third parties such as
         shareholdings or sub-shareholdings in any other company.

(8)      Except as described in Clause 13 of this Investment Agreement, the
         statements contained in the Preamble and in the Preamble of the
         Shareholders' Agreement dated 3 July 2003 under (A) to (N) are true and
         accurate. The Company and Professor Dr. Lubbert undertake to do or
         cause to be done everything reasonably necessary that the non-repayable
         subsidy of the state North-Rhine-Westphalia which has been granted in
         an amount of   4,031,316 will be paid out in accordance with its
         terms and will not become repayable.

                                       25
<PAGE>

(9)      The Company has not been dissolved and has not been the subject of any
         action taken to dissolve it.

(10)     The Company has full corporate power and authority to own or lease and
         to operate its properties and conduct its business as well as to enter
         into the DNA Print Investment Agreement and Shareholders' Agreement as
         well as the Accession and Second Amendment to the Shareholders'
         Agreement and to take all actions set forth therein and such agreements
         constitute valid and legally binding obligations of the Company.

(11)     All issued and outstanding shares of share capital of subsidiaries of
         the Company are owned by the Company free and clear of any security
         interest, claim, lien, pledge, other encumbrance or third party rights,
         except as provided in this Investment Agreement, the Shareholders'
         Agreement as well as the Accession and Second Amendment to the
         Shareholders' Agreement.

(12)     Except as provided in this Investment Agreement, the Shareholders'
         Agreement as well as the Accession and Second Amendment to the
         Shareholders' Agreement, the Preferred B issued to DNA Print will be
         duly authorised, validly issued, non-assessable and not subject to any
         pre-emption rights or other restrictions on transferability,
         subscription rights of Current Shareholders or similar rights; the
         Preferred B will be issued free from all pledges, adverse claims, liens
         and other third party rights of any nature whatsoever and DNA Print
         will be entitled to participate in all dividends and other
         distributions declared, paid or made after the signing of this
         Agreement.

(13)     Except for the transfer of the Intellectual Property Rights still
         registered or applied for in the name of Biofrontera AG, Biofrontera
         AG's operative business has been validly transferred to Biofrontera
         Pharmaceuticals GmbH as agreed upon by Biofrontera AG and Biofrontera
         Pharmaceuticals GmbH in the Subscription Agreement and Contribution
         Agreement dated 19th March, 2002.

(B)      Balance Sheet Warranties / Business Plan

(1)      The Business Plan of the Company issued in March 2004 which is attached
         as Annex 2 B.1 (the "Business Plan"), was prepared by applying the due
         care of a diligent businessman, and no facts specifically relating to
         the Company have been omitted which, if considered part of the Business
         Plan, may have a material adverse impact on the achievability of this
         plan and on the Company's financial situation and profits. The factual
         information relating to the Company underlying the Business Plan was
         true and correct as of its date of issue. The parties are aware of the
         fact that there is no guarantee as to the actual development of any
         projected figures or, in particular, the attainment of any desired
         research results.

(2)      The financial statements of the Company for the year ended 31st
         December, 2003, prepared in accordance with German GAAP, which are
         attached as Annex 2 B.2, for the purposes of this Annex 2 referred to
         as the Financial Statements, have been confirmed by an audit . The
         Financial Statements accurately reflect the information contained in
         the Company's corporate records and documents and were accurately and
         completely prepared in accordance with the applicable statutory balance
         sheet provisions as well as German generally accepted accounting
         principles, observing the principle of balance sheet consistency. The
         balance sheet information as at the previous balance sheet date was and
         will be used and continued, applying the same legally permissible
         valuation principles. All existing valuation options have been applied
         and exercised consistently.

                                       26
<PAGE>

(3)      All reserves and deferrals required pursuant to the applicable
         accounting principles under commercial law have been made. Insofar as
         such reserves and deferrals are optional, these options have been
         exercised in accordance with reasonable judgement of a prudent business
         man.

(4)      The Biofrontera AG's equity as of 31st December, 2003 amounts to
         8,972,576.01.

(C)      Financial Situation

(1)      All assets which are material in connection with the operation of the
         Company, with the exception of any retentions of title under commercial
         law, are owned by the Company or used by virtue of contractually agreed
         licence rights, and the Company may freely dispose of these assets in
         connection with licence rights. Insofar as there exist any customary
         security rights (such as under the Loan), these have been created
         exclusively with respect to the Company's liabilities. In this respect,
         the Company has a right of disposal in its ordinary course of business.

(2)      To the Company's best knowledge, there are no obligations of the
         Company in connection with any transactions which are likely to cause
         any losses.

(3)      No insolvency proceedings have been applied for or instituted in
         respect of the Company's assets.

(4)      The Company has not entered into any commitments under any pension,
         old-age or survivors' pension schemes or similar commitments except as
         set forth in the attached Annex 2 C.4.

(5)      All material assets forming part of the Company's operating assets are
         in operating condition subject to ordinary wear and tear.

(6)      Between the closing date of the Financial Statements and the date of
         the signing of this Agreement no changes have occurred in respect of
         the Company's financial situation which, objectively, may be of
         material importance with regard to the execution of this Agreement; in
         particular, no obligations have been entered into which have not been
         set off by reasonable consideration; no assets have been sold without
         reasonable and valuable consideration; and no damage or loss has been
         sustained which, individually or cumulatively, may have a material
         impact on the Company or its financial situation. The Company's
         business activities are accurately and truly reflected in the reporting
         document, the income statement and cash-flow statement (together
         referred to as Current Financial Statements) as set forth in the
         attached Annex 2 C.6. These Current Financial Statements were
         accurately and completely prepared in accordance with the applicable
         statutory balance sheet provisions as well as German general accepted
         accounting principles, observing the principle of balance sheet
         consistency. As of the date of the Current Financial Statements, there
         exist no liabilities other then those indicated in these Current
         Financial Statements or reflected as below-the-line-items. All
         liabilities have been entered into by the Company have been incurred in
         the ordinary course of business.

(7)      Between the balance sheet date of the Financial Statements and the date
         of the signing of this Agreement, no withdrawals or distributions of
         profit (whether in cash or in kind, open or concealed) in respect of
         Biofrontera AG have been made or resolved upon.

(D)      Contractual Relationships of the Company

(1)      All (i) agency, dealer, licence or other agreements relating to
         Intellectual Property as defined in E below, research, consultancy,
         co-operation as well as (ii) all supply and lease agreements,
         obligations to accept or terms and conditions constituting liabilities
         in excess of   50,000.00 in an individual case as well as (iii)
         any agreements with any shareholder, director, officer, or relatives
         within the meaning of Section 15 of the German Tax Code or affiliated
         companies within the meaning of Section 15 et seq. German Stock
         Corporation Act are listed in Annex 2 D.1. To the best knowledge of the
         Company no cases of defective performance have occurred in relation to
         any of these agreements, and there exist no circumstances which may
         impair or put at risk the unchanged continued existence of these
         agreements. To the best knowledge of the Company there are no grounds
         for termination for an important reason.

                                       27
<PAGE>

(2)      Outside the ordinary course of business, no contractually agreed
         liabilities have been entered into.

(3)      The Company has not issued any guarantees or letters of comfort for the
         benefit of any third parties and is not contractually bound to
         guarantee the liabilities, or contingent liabilities, of any third
         parties.

(4)      Except as set forth in Annex 2 D.4, the Company has not drawn upon any
         credit facilities.

(5)      All employment and service agreements entered into by the Company
         providing for an annual remuneration (wage/salary payments, payments in
         kind and bonus) in excess of   50,000.00 to the relevant employee
         are listed in Annex 2 D.5.

(6)      Except as set forth in Annex 2 D.6, no wage and salary increases in
         excess of   1,000.00 per employee and month have been promised by
         the Company after the balance sheet date in respect of the Financial
         Statements.

(7)      The Company has applied for, received and used the public subsidies
         listed in Annex 2 D.7, exclusively in accordance with the applicable
         statutory provisions and in observation of any official orders,
         restrictions and impositions. No public grants, in particular subsidies
         and/or allowances, are due for repayment by virtue of the execution,
         delivery and performance of this Agreement, the Shareholders' Agreement
         and the consummation of the transactions contemplated herby and thereby
         or on any other grounds.

(8)      The Company has not entered into any futures, options or margin
         transactions.

(9)      The Company has not entered into any agreements that would constitute a
         post-formation within the meaning of Section 52 Stock of the AktG.

(E)      Copyrights and Intellectual Property Rights

(1)      The Company owns, or is licensed to use, all patents, patent
         applications, design and utility models, trademarks, service marks,
         trade names, copyright, internet domain names, trade secrets,
         information, know-how, formulas, recipes, inventions, proprietary
         rights and processes and other intellectual property rights, including,
         without limitation, all applications therefore, whether registered,
         unregistered or otherwise being capable of being protected (the
         "Intellectual Property") necessary for the research, development,
         commercialisation, marketing and similar activities as now conducted by
         the Company and as proposed to be conducted in the Business Plan,
         without any conflict with or infringement of the rights of others.

(2)      Except as set forth in Annex 2 E.2, the Company is not obligated to
         make any payments by way of royalties, profit or margin sharing, fees
         or otherwise to any owner or licensor of any other Intellectual
         Property, with respect to the use thereof or in connection with the
         conduct of its business, or otherwise. Except as set forth in Annex 2
         E.2, the Company has not granted any third party any option, license or
         other right of any kind to the Intellectual Property.

                                       28
<PAGE>

(3)      To the Company's best knowledge, there is no infringement by a third
         party of any of the Company's rights in the Intellectual Property. The
         Company has not received any communications alleging that the Company
         has violated or, by conducting its business as proposed in the Business
         Plan, would violate any Intellectual Property or other proprietary
         rights of any other person or entity, nor is there, to the Company's
         best knowledge, any basis for any such violation.

(4)      Except for the engagement of Professor Dr. Lubbert with the University
         of Bochum and the engagement of Mrs. Grun-Wollny regarding her
         laboratory, to the Company's best knowledge, none of its key employees
         and managing directors is obligated under any contract (including
         licenses, covenants or commitments of any nature) or other agreement,
         or subject to any judgment, decree or order of any court or
         administrative agency, that would interfere with the use of his or her
         best efforts to promote the interests of the Company or that would
         conflict with the Company's business as conducted or as proposed to be
         conducted.

(5)      Except as set forth in Annex 2 E.5, to the Company's best knowledge its
         employees do not own or have rights to any Intellectual Property
         (patents, licenses, other intellectual property rights) other than
         employee service inventions of which any royalty payment could be
         demanded from the Company or the Company's business could be impeded or
         prohibited in any material respect. The Company has taken reasonable
         measures to be informed by its employees of any free inventions.

(6)      Except as set forth in Annex 2 E.6 all reported employee inventions
         have been claimed and claims of employees relating to such inventions
         have been paid in full at their due dates in accordance with the
         agreements entered into between the Company and the respective
         employees.

(7)      Except as reflected in Annex 2 E.7 and except as provided in this
         Investment Agreement and the transactions contemplated therein, the
         consummation of the transactions contemplated in this Investment
         Agreement does not lead to a loss or an impairment of any of the
         Intellectual Property of the Company.

(8)      Attached hereto as Annex 2 E.8 is a true and complete list of all
         patents, copyrights, registered trademarks, design and utility models
         as well as applications therefore owned by the Company.

(9)      Attached hereto as Annex 2 E.9 is a true and complete list of all
         license and other agreements the Company is a party to with respect to
         the Intellectual Property of any third party that is used within the
         business of the Company and that is not generally available.

(10)     The Company has complied in all material respects with all formalities
         and paid all fees due and carried out all necessary actions which a
         prudent businessman would take, taking into consideration the economic
         significance of the relevant Intellectual Property , to protect and
         enforce the Intellectual Property, and has administered such rights in
         the ordinary course of business.

(11)     Except as disclosed in Annex 2 E.8 attached, no Intellectual Property
         is subject to any outstanding judgment or injunction, judicial order or
         decree, agreement or encumbrance restricting the use of this right by
         the Company or restricting the licensing of this right by the Company
         to any third party, and there are no known circumstances which can
         reasonably be expected to lead to such proceedings.

                                       29
<PAGE>

(12)     The Company ensured the use of all Intellectual Property of Biofrontera
         AG by Biofrontera Pharmaceuticals GmbH.

(F)      Permits, Taxes, Social Security Contributions

(1)      The Company has, obtained all material official permits which are
         required or material for carrying out and continuing the Company's
         current business as well as for the distribution of its products. All
         of the said permits and consents were duly applied for, are valid and
         effective, and the Company's Management Board, managing directors and
         proxies are not aware of anything which may cause these permits or
         consents to be revoked or restricted or which may cause any
         restrictions to be imposed as a consequence of this Agreement, and no
         such measures have been threatened.

(2)      All transactions entered into by the Company have been entered into on
         an arm's length basis and the consideration (if any) charged or
         received or paid the Company on all transactions entered into by it has
         been equal to the consideration which might have been expected to be
         charged, received or paid (as appropriate) between independent persons
         dealing at arm's length and no notice or enquiry by any taxation
         authority has been made in connection with any such transaction.

(3)      The Company is, to its best knowledge, not liable to pay taxation in
         respect of any constructive dividends in any relevant jurisdiction.

(4)      Details of all losses available for tax purposes to the Company are set
         out in Annex 2 F.4. To the Company' best knowledge and subject to tax
         audit all reasonable action has been taken to secure such losses to be
         allowed, except for the consummation of the transactions contemplated
         by this Investment Agreement There will be no liability of the Company
         vis-a-vis the German tax authorities resulting from the spin-off of the
         Company's assets to Biofrontera Pharmaceuticals GmbH effected by 1
         January, 2002. Notwithstanding this and in case the German tax
         authorities will disregard the tax treatment of the spin-off by the
         Company ("Reclassification"), any claims resulting from such
         Reclassification (i) have been and will be offset against any current
         and future loss carry-forwards and/or loss carry-backwards and (ii)
         have been and will be offset against any current and future
         amortization amounts resulting from the amortization of the goodwill
         created by the spin-off. Due to the aforementioned measures the
         additional tax burden resulting from a Reclassification will be nil.

(5)      Except as set forth in Annex 2 F.5 attached, all taxes, social security
         contributions and other public duties, whether owed directly or
         indirectly, in particular any corporation tax, turnover tax,
         unemployment and pension insurance contributions, wage and salary tax
         and all amounts of interest or default interest and surcharges on
         arrears in respect of these taxes and duties have been duly declared
         and paid when due.

         All required declarations towards the competent tax authorities and
         social security institutions have been duly made in respect of the
         period of time until the signing of this Agreement.

(6)      Wage tax and social security audits in respect to the Company have not
         resulted in any material objections. No audits by any tax authorities
         or social security institutions have been carried out in respect of the
         Company and no such audits are currently carried out or pending.

(G)      Legal Compliance

(1)      To its best knowledge the Company has complied with all material laws
         and directives, judgments, orders writs, public agreements, permits and
         other authorizations and ordinances issued on that basis, insofar as
         they relate to the facilities and business establishments used by it.
         The Company has not received any notices to the effect that it is in
         breach of any laws or any other provisions enacted under these laws.

                                       30
<PAGE>

(2)      Except as described in Clause 13 of this Investment Agreement the
         offer, authorization and issuance of the Preferred B as contemplated by
         this Agreement comply with (i) the Company's Articles of Incorporation,
         as amended in accordance with the terms of this Agreement (ii) any
         judgement or order statute, rule or regulation to which the Company is
         subject or (iii) any material agreement. The execution and performance
         of this Agreement and the Shareholders' Agreement and the consummation
         of the transactions contemplated hereby and thereby will not affect the
         validity of any material agreement to which the Company is subject or
         result in a termination right of the other party to such agreement.

(3)      The Company has avoided every condition, and has not performed any act,
         the occurrence of which would result in the Company's loss of any
         material right granted under any license, customer contract or other
         agreement.

(H)      Legal Disputes

         No legal or administrative proceedings or investigations are pending or
         have been threatened, and no such proceedings are, to the Company's
         best knowledge, foreseen or are to be expected in the light of any
         specific circumstances. The Company is not a party or subject to the
         provision of any outstanding order, writ, injunction, judgment,
         settlement or decree of any court or government agency resulting from a
         legal dispute. There is no action, suit proceeding or investigation by
         the Company currently pending or that the Company intents to initiate.

(I)      General

         The documents provided fully reflect the legal relationships and
         aspects mentioned in the preceding Guarantees.

(J)      Governmental Consents

         No consent, approval, order or authorization of, or registration,
         qualification, designation, declaration or filing with, any German or
         other governmental authority on the part of the Company is or will be
         required in connection with the consummation of the transactions
         contemplated by this Agreement or the Shareholders Agreement save for
         registration of the capital increase and the amendment to the Articles
         of Incorporation contemplated hereby and by the Accession and Second
         Amendment to the Shareholders' Agreement date 3 July 2003 to be entered
         into between the parties with the Commercial Register.

(K)      Marketing Rights

        Except as set forth in Annex 2 K, the Company has not granted any rights
        or options to license, market, produce or sell its products and services
        to any other person and is not bound by any agreement that affects the
        Company's exclusive right to develop, distribute, market or sell its
        products and services.

(L)      Outstanding Debt

         Except as set forth in Annex 2 L, the Company has no outstanding
         indebtedness for borrowed money or pledges, and is not a guarantor or
         otherwise contingently liable for any such indebtedness, except
         additional indebtedness incurred, assumed or guaranteed since [o] for
         immaterial amounts. There exists no default under the provisions of any
         instrument evidencing any such indebtedness or of any agreement
         relating thereto.

                                       31
<PAGE>

(M)      Insurance Coverage

         The Company maintains in full force and effect insurance coverage that
         the Company reasonably believes to be adequate against all liabilities,
         claims and risks against which it is customary for comparably situated
         companies to insure.

(N)      Disclosure

         The Company has not knowingly withheld from DNAPrint any material facts
         relating to the assets, business, operations, financial condition or
         prospects of the Company. No statement in any certificate, annex,
         schedule, statement or other document furnished or to be furnished to
         DNAPrint pursuant hereto or in connection with the transactions
         contemplated hereby knowingly contains any untrue statement of a
         material fact or knowingly omits to state any material fact necessary
         to make the statements herein or therein not misleading. The financial
         and other projections provided to DNAPrint, if any, were prepared in
         good faith and based on reasonable assumptions; however, the Company
         does not warrant that it will achieve such projections.

                                       32
<PAGE>

                                    Annex 3

                               Due Diligence Index

                                       33
<PAGE>

                                    Annex 4

                               Contingent Capital

(1)    The Management Board is authorized to issue, with approval of the
       Supervisory Board, until December 31, 2005, in one or several
       transactions convertible bonds with an aggregate nominal value of (euro)
       60,000 and with a term of up to five years and to grant the holders of
       these convertible bonds the right to convert the bonds into non-par value
       registered shares as voting preference shares class B having an aggregate
       nominal value of (euro) 60,000 (Contingent Capital II) in accordance with
       the terms and conditions of the convertible bonds.

(2)    The holders of the convertible bonds are granted the right to convert
       each convertible bond into one non-par value registered share as voting
       preference share class B in accordance with the terms and conditions of
       the convertible bonds.

(3)    The conversion price to be determined per share of the Company shall
       amount to at least (euro) 8.67.

(4)    The conversion price can, pursuant to an anti-dilution protection clause
       and in accordance with the terms and conditions of the convertible bonds,
       be adjusted by a cash payment or reduction of the conversion price upon
       exercise of the conversion rights if the Company increases its share
       capital or issues further convertible bonds or other bonds and grants
       subscription rights to its shareholders but does not grant subscription
       rights to the holders of the convertible bonds as they would be entitled
       to had they already exercised the conversion rights before the capital
       increase or the issuance of further bonds. Instead of a cash payment or a
       reduction of the conversion price the conversion ratio may also be
       adjusted, to the extend possible, by division by the reduced conversion
       price. The terms and conditions for the convertible bonds can also
       provide for anti-dilution protection in the case of a capital decrease.

(5)    The Management Board is authorized to determine further details of the
       issuance and conditions of the convertible bonds, such as interest rate,
       issue price, division, exercise price, transferability or conversion
       period.

(6)    The statutory subscription rights of the shareholders are excluded.

(7)    The convertible bonds may only be issued to the following persons and
       companies:

      o     Heidelberg Innovation BioScience Venture II GmbH & Co. KG, Im
            Neuenheimer Feld 581, 69120 Heidelberg, Germany.

      o     Heidelberg Innovation Parallel-Beteiligungs GmbH & Co. KGaA, Im
            Neuenheimer Feld 581, 69120 Heidelberg, Germany

      o     3i Group Investments Limited Partnership, 91 Waterloo Road, SE1
            London 8XP, GB

      o     TechnoMedia Kapitalbeteiligungsgesellschaft Koln mbH,
            Spinnmuhlengasse 9, 50676 Koln, Germany

      o     Prof. Dr. Detlev Riesner, Sonsbecker Stra(beta)e 17, 40547
            Dusseldorf

(8)    The share capital of the Company is conditionally increased by up to
       (euro) 60,000 by issuance of up to 60,000 non-par value registered shares
       as voting preference shares class B (Conditional Capital II). The
       conditional capital increase is only implemented to the extend that
       holders of convertible bonds which the Management Board may issue in
       accordance with the terms of the shareholders' resolution of the
       September 18, 2004, exercise their conversion rights. The new shares
       participate in profits from the beginning of the fiscal year which is
       running when the conversion right is exercised. The Management Board is
       authorized to determine further details of the implementation of the
       contingent capital increase with approval of the Supervisory Board.

                                       34
<PAGE>

(9)    ss. 7 of the articles of association is amended by the following
       sub-paragraph 4:

       "The share capital is conditionally increased by (euro) 60,000
       (Conditional Capital II). The conditional capital increase is only
       implemented to the extend that holders of convertible bonds which the
       Management Board may issue in accordance with the terms of the
       shareholders' resolution of September 18, 2004 exercise their conversion
       rights. The new shares participate in profits from the beginning of the
       fiscal year which is running when the conversion right is exercised. The
       Management Board is authorized to determine further details of the
       implementation of the contingent capital increase with the approval of
       the Supervisory Board.

                                       35
<PAGE>

                                    Annex 5

                              AUTHORIZED CAPITAL IV

(1)      The Management Board is authorized to increase the share capital with
         the approval of the Supervisory Board until September 17, 2009 in one
         or several transactions by an aggregate amount of (euro) 1,078,799 by
         issuing up to 1,078,799 new non-par value registered shares as voting
         preference shares class A or B each having a calculated nominal value
         of (euro) 1.00 against cash payment or contribution in kind (Authorized
         Capital IV). The Management Board is expressly authorized to issue the
         new shares also at the lowest issue price pursuant to ss. 9 (1) Stock
         Corporation Act. The subscription rights of the shareholders are
         excluded.

(2)      The Management Board is authorized to determine further details of the
         shares and the conditions of the share issuance with the approval of
         the Supervisory Board.

(3)      ss. 7 of articles of association is amended by a new sub-paragraph 8
         which reads as follows:

       "The Management Board is authorized by resolution of the shareholders'
       meeting of September 18, 2004 to increase the share capital of the
       Company with the approval of the Supervisory Board until September 17,
       2009, in one or several transactions by an aggregate amount of up to
       (euro) 1,078,799 by issuance of up to 1,078,799 new non-par value
       registered shares as voting preference shares class A or B, each having a
       calculated nominal value of (euro) 1.00 against cash payment or
       contribution in kind (Authorized Capital IV). The Management Board is
       expressly authorized to issue the new shares also at the lowest issue
       price pursuant to ss. 9 (1) Stock Corporation Act. The subscription
       rights of the shareholders are excluded. Further details of the shares
       and the conditions of the share issuance are determined by the Management
       Board with the approval of the Supervisory Board."

(4)      The Supervisory Board is authorized to adjust the wording of ss. 7 of
         the articles of association (share capital) after complete or partial
         implementation of the capital increase or after expiration of the
         authorization period.

                                       36
<PAGE>

                                    Annex 6

                             Authorised Capital III

First Shareholders' Resolution

(1)    The Authorized Capital II is revoked in an amount of EUR 162,000 to the
       effect that the highest amount is reduced to EUR 189,722.00 and the
       maximum number of shares that can be issued is reduced to 189,722. In all
       other respects, the Authorized Capital II remains unaffected.

(2)    ss. 7 (6) of the articles of association is newly worded as follows:

       "The Management Board was authorized by resolutions of the shareholders'
       meetings of July 3, 2003 and September 18, 2004 to increase the share
       capital of the Company with the approval of the Supervisory Board until
       July 3, 2008 in one or several transactions by up to EUR 189,722 by
       issuing up to 189,722 new non-par value registered shares as voting
       preference shares class B, each having a calculated nominal value of EUR
       1.00 against cash payment (Authorised Capital II). The Management Board
       is expressly authorised to issue the new shares also at the lowest issue
       price pursuant to ss. 9 (1) Stock Corporation Act. The subscription
       rights of the shareholders are excluded. Further details of the shares
       and the terms of the share issuance are determined by the Management
       Board with approval of the Supervisory Board."

Second Shareholders' Resolution

(1)    The Management Board is authorized to increase the Company's share
       capital with the approval of the Supervisory Board until September 17,
       2009 in one or several transactions by up to EUR 162,000 by issuing up to
       162,000 new non-par value registered shares as voting preference shares
       class B, each having a calculated nominal value of EUR 1.00 against cash
       payment or contribution in kind (Authorized Capital III). The Management
       Board is expressly authorized to issue the new shares also at the lowest
       issue price pursuant to ss. 9 (1) Stock Corporation Act. The subscription
       rights of the shareholders are excluded.

(2)    The Management Board is authorized to determine further details of the
       shares and the terms of the share issuance with the approval of the
       Supervisory Board.

(3)    ss. 7 of the articles of association is amended by a new sub-paragraph 7
       which reads as follows:

       "The Management Board was authorized by shareholders' resolution of
       September 18, 2004 to increase the Company's share capital with the
       approval of the Supervisory Board until September 17, 2009 in one or
       several transactions by up to EUR 162,000 by issuing up to 162,000 new
       non-par value registered shares as voting preference shares class B, each
       having a calculated nominal value of EUR 1.00 against cash payment or
       contribution in kind (Authorized Capital III). The Management Board is
       expressly authorised to issue the new shares also at the lowest issue
       price pursuant to ss. 9 (1) Stock Corporation Act. The subscription
       rights of the shareholders are excluded. Further details of the shares
       and the terms of the share issuance are determined by the Management
       Board with the approval of the Supervisory Board."

(4)    The Supervisory Board is authorized to adjust the wording of ss. 7 of the
       articles of association (share capital) after complete a partial
       implementation of the capital increase or after expiration of the
       authorization period.

                                       37
<PAGE>

                                    Annex 7

                                Power of AttornEy

                                                          Power of attorney

                                                          We

                            DNAPrint genomics, Inc.,

                                900 Cocoanut Ave.

                             Sarasota, FL 34236, USA

                                        herewith authorize each of the following

                    3i Group Investments Limited Partnership,

                                91 Waterloo Road,

                               SE1 London 8XP, GB,

              TechnoMedia Kapitalbeteiligungsgesellschaft Koln mbH,

                               Spinnmuhlengasse 9,

                              50676 Koln, Germany,

           Heidelberg Innovation BioScience Venture II GmbH & Co. KG,

           represented by Heidelberg Innovation Fonds Management GmbH,

             Im Neuenheimer Feld 581, 69120 Heidelberg, Germany, and

         Heidelberg Innovation Parallel-Beteiligungs GmbH & Co. KG a.A.,

           represented by Heidelberg Innovation Fonds Management GmbH,

               Im Neuenheimer Feld 581, 69120 Heidelberg, Germany

            - each of them as proxy entitled to represent us alone (each of them
            hereinafter referred to as the "Proxy") -

            to represent us as shareholder of

            Biofrontera AG

            with registered seat in Leverkusen,

            HRB 49717 of the local court Cologne,

            51377 Leverkusen,

            Hemmelrather Weg 201,

            Germany

            (hereinafter referred to as the "Company")

                                       38
<PAGE>

            in and outside of shareholders' meeting of the Company and to
            exercise all our rights as shareholder, in particular the voting
            right to effect the redemption or sale of our shares pursuant to
            Subclauses 3.1 to 3.4. of the DNAPrint Investment Agreement entered
            into on 18.09.2004 between the Company, its subsidiaries, its
            shareholders and us (DNAPrint Investment Agreement). The Proxy is in
            particular authorized for the following:
            a) to consent to resolutions concerning the redemption of our
            shares,
            b) to pass resolutions on share capital increases including
            resolutions on the decrease of the share capital;
            c) to pass resolutions on the consent of the transfer of our shares
            c) to pass resolutions on changes to or on the new formulation of
            the articles of association;
            d) to waive all requirements as to formalities and notice relating
            to the convocation of general meetings;
            e) to waive the submission of reports and audits.

            To effect the redemption or the sale of our shares the Proxy is
            authorized to take all steps to implement all resolutions passed in
            shareholders' meetings, execute all agreements and give all
            declarations which may be necessary or appropriate in connection
            with the redemption of our shares.

            The foregoing power of attorney is restricted to the extent that the
            Proxy may represent our company only if we are in default with our
            payment obligations under the DNAPrint Investment Agreement pursuant
            to Subclauses 3.3 and 3.4 of the DNAPrint Investment Agreement . The
            Proxy is authorized to represent other shareholders in addition to
            us as well.

            The Proxy is exempt from the restrictions of self contracting
            pursuant to sec. 181 of the German Civil Code. He is authorized to
            delegate this power of attorney. The German version of this power of
            attorney is authoritative.

            The power of attorney is governed by German law.

-----------------------                                   ----------------------
Place                                                     Date

on behalf of

                                       39
<PAGE>

                                    Annex 8

                                Power of ATtornEy

                                                           Power of attorney

                                                           We

                            DNAPrint genomics, Inc.,

                                900 Cocoanut Ave.

                             Sarasota, FL 34236, USA

                                       herewith authorize each of the following

                    3i Group Investments Limited Partnership,

                                91 Waterloo Road,

                               SE1 London 8XP, GB

              TechnoMedia Kapitalbeteiligungsgesellschaft Koln mbH,

                               Spinnmuhlengasse 9,

                               50676 Koln, Germany

           Heidelberg Innovation BioScience Venture II GmbH & Co. KG,

           represented by Heidelberg Innovation Fonds Management GmbH,

               Im Neuenheimer Feld 581, 69120 Heidelberg, Germany

         Heidelberg Innovation Parallel-Beteiligungs GmbH & Co. KG a.A.,

           represented by Heidelberg Innovation Fonds Management GmbH,

               Im Neuenheimer Feld 581, 69120 Heidelberg, Germany

            - each of them as proxy entitled to represent me/us alone (each of
            them hereinafter referred to as the "Proxy") -

            to represent us as shareholder of

            Biofrontera AG

            with registered seat in Leverkusen,

            HRB 49717 of the local court Cologne,

            51377 Leverkusen,

            Hemmelrather Weg 201,

            Germany

            (hereinafter referred to as the "Company")

            in and outside of shareholders' meeting of the Company and to
            exercise all our rights as shareholder, in particular the voting
            right and to pass resolutions of any kind. The Proxy is in
            particular authorized for the following:

                                       40
<PAGE>

            a) to consent to resolutions concerning the redemption of our
            shares,
            b) to consent to resolutions concerning the consent to the sale of
            our shares
            c) to pass resolutions on share capital increases including
            resolutions on authorized capital;
            d) to pass resolutions on changes to or on the new formulation of
            the articles of association;
            e) to waive all requirements as to formalities and notice relating
            to the convocation of general meetings;
            f) to waive the submission of reports and audits.

            To implement all the resolutions passed in shareholders' meeting the
            Proxy is authorized to take all steps, execute all agreements and
            give all declarations which may be necessary or appropriate in
            connection with our position as shareholder.

            The foregoing power of attorney is restricted to the extent that the
            Proxy may represent our company only if we are in default with our
            payment obligations under the DNAPrint Investment Agreement entered
            into on 18.09.2004 between the Company, its subsidiaries, its
            shareholders and us (DNAPrint Investment Agreement) pursuant to
            Subclauses 3.3 and 3.4 of the DNAPrint Investment Agreement . The
            foregoing power of attorney is further restricted to the extent that
            the Proxy may represent us only with respect to those shares and may
            only exercise the voting rights of those shares which are subject to
            a redemption or sale pursuant to Subclauses 3.1-3.4 of the DNAPrint
            Investment Agreement. The Proxy is authorized to represent other
            shareholders in addition to us as well.

            The Proxy is exempt from the restrictions of self contracting
            pursuant to sec. 181 of the German Civil Code.

            He is authorized to delegate this power of attorney. The German
            version of this power of attorney is authoritative.

            The power of attorney is governed by German law.

Place,                     Date

                                       41
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