EXHIBIT 10.13
Certified translation from the German 1anguage
COOPERATION AGREEMENT
Agreement regarding the cooperation between
APL AMERICAN PHARMED LABS, INC., 21 HENDERSON DRIVE, PO BOX 1327,
WEST CALDWELL, NEW JERSEY 07007-1327, USA,
- hereinafter, also in case of several investors: the "INVESTOR" -
and
TECHNOLOGIE-BETEILIGUNGS-GESELLSCHAFT MBH
DER DEUTSCHEN AUSGLEICHSBANK, LUDWIG-ERHARD-PLATZ 1-3, 53179 BONN
- hereinafter: "TBG" -
in the management of the investments specified in this Agreement in
PHARMED LABS GMBH, TOLZER STR. 12, 82031 GRUNWALD
- hereinafter: the "TECHNOLOGY COMPANY" -
PREAMBLE
Within the scope of the program "Investment Capital for Small Technology
Enterprises" implemented together with the German Ministry for Education,
Science, Research and Technology (BMBF) and Deutsche Ausgleichsbank, tbg
supports technology enterprises of the industry and trade sector, provided that
these enterprises are not older than 10 years and meet the EU qualification
requirements for small and medium-sized enterprises (SMEs) located within the
new German federal states and (East) Berlin and/or for small enterprises located
within the rest of the Federal Republic of Germany, i.e.:
- - employ a maximum staff of 250 (50)
and either
- - generate an annual turnover not exceeding DM 40 million (DM 10 million)
or
- - realize a balance sheet total not exceeding DM 20 million (DM 4 million)
and
- - are held at a maximum share of 25% by one or several enterprises not
fulfilling these requirements (exception: public holding companies,
venture capital companies and - to the extent control is not exercised -
institutional investors).
All of these three preconditions have to be fulfilled simultaneously, i.e. an
enterprise is only considered to be an SME if it enjoys the independence
required, complies with the staff number requirement and does not exceed at
least one of the limits set for the annual turnover and/or balance sheet total.
TBG assumes investments for the financing of innovation projects in accordance
with its investment principles, which form an integral part of this Agreement
and are accepted by the Investor, for:
- - applied research and development up to the crucial moment shortly before
the start of commercial production in accordance with the EU definition
and the following differentiations:
Applied research comprises research and experimental work with the purpose of
gaining new findings in order to facilitate the realization of specific
practical targets such as the creation of new products, production methods or
services. Normally, applied research ends with the creation of a first
prototype. The term "development" comprises work carried out on the basis of
applied research with the purpose of introducing new or essentially improved
products, production methods or services up to - but not including - industrial
application and commercial use. This includes in general pilot and demonstration
projects as well as any required further development work finally resulting in
an information package allowing the commencement of production.
- - investments for market introduction purposes
SECTION 1
COOPERATION
1) TBG intends to assume a silent investment in the Technology Company in the
amount of DM 3,000,000 provided that the investment specified in para. 2
is agreed between the Investor and the Technology Company. A copy of the
investment Agreement contemplated between TBG and the Technology Company
is attached hereto.
2) The investor shall contribute an amount of DM 3,000,000 to the capital
reserve of the Technology Company.
The Investor shall be advised on the management of its investment in the
Technology Company by TVM Techno Venture Management GmbH & Co. KG,
Denninger Str. 15, 81679 Munich (hereinafter: "TVM") as advising company.
The Investor confirms that it does not make use of the refinancing of an
investment in the Technology Company within the scope of the program
"Investment Capital for Small
2
Technology Enterprises" and the promotion (refinancing or provision of
security) of such investment in the Technology Company out of the ERP
Special Fund.
3) The parties shall inform each other in writing immediately as soon as the
abovementioned investment agreements have been concluded with the
Technology Company. To the extent the final investment agreements differ
from the drafts made available, the agreements shall be delivered in their
relevant version and any deviations shall be explained upon request.
4) Any subsequent amendments to the investment agreements, any sale/pledge of
the investments and the claims held against TBG under this Cooperation
Agreement or any further investment or loan agreements shall be agreed by
the parties with the consent of their contractual partner under this
Agreement only. To the extent an ordinary termination of the Investment
Agreement between the Investor and the Technology Company by the Investor
is permissible, such termination shall also require the consent of TBG.
The parties to this Agreement shall inform each other of any termination
for cause immediately, if possible prior to giving notice of such
termination.
SECTION 2
MANAGEMENT OF THE TECHNOLOGY COMPANY
In cooperation with TVM, the Investor shall supervise the management of the
Technology Company and the development of the innovation project promoted by TBG
with due care and assist the Technology Company in management matters if
required.
The Investor is also willing and able in principle - however not obligated - to
make additional financing available to the Technology Company if required.
SECTION 3
USE OF FUNDS
1) Prior to calling the invested funds of TBG, the Investor [and] TVM shall
review the calling requirements agreed between TBG and the Technology
Company and confirm their fulfillment, if applicable. The Investor and TVM
shall support the call if at the time of the call, according to the
knowledge of the Investor, neither economic nor technical concerns exist
regarding the practicability of the innovative project promoted by TBG.
2) The Investor shall review and confirm the statement of use to be furnished
by the Technology Company pursuant to Sec. 3 of the Investment Agreement
concluded between TBG and the Technology Company.
3
SECTION 4
INFORMATION AND CONTROL RIGHTS
1) The Investor undertakes to report to TBG on the economic situation of the
Technology Company and the status of the innovation project promoted by
TBG.
2) Reports shall be provided semi-annually at regular intervals as of March
31 and September 30.
3) Any measures known to the Investor that exceed the scope of the ordinary
course of business of the Technology Company shall be notified to TBG
without delay and if possible in advance. This shall include in particular
the measures requiring consent pursuant to Sec. 5 para. 2 of the
Investment Agreement concluded between TBG and the Technology Company and
the causes for termination specified in Sec. 12 thereof.
4) The reports shall be furnished in writing - and orally in advance in
urgent cases - unless TBG waives this requirement expressly in writing.
5) TBG shall be entitled - acting on its own or through third parties
instructed by TBG - to demand comprehensive information on all legal
relationships of the Investor with the Technology Company and to inspect
all documents held by the Investor which concern the Technology Company.
6) The Investor agrees that TBG forwards the existing data regarding its
investment in the Technology Company to the BMBF or the EU Commission upon
request for supervision and control purposes.
7) The investor further agrees that TBG forwards the data obtained regarding
the investment of the Investor in the Technology Company to the BMBF or an
institute instructed by it for scientific analysis regarding the program
mentioned in the Preamble hereof. In addition, the Investor agrees to
provide the BMBF or an institute instructed by it with the information
required for a scientific analysis regarding such program directly as
well. During the analysis and, if applicable, the publication of data
regarding the program, it shall be ensured that no damage is incurred by
the investor.
SECTION 5
RISK PARTICIPATION
The investor shall be entitled to claim from TBG partial reimbursement of any
loss incurred in connection with its investment in the Technology Company
acquired pursuant to Sec. 1 para. 2 within 5 years from the commencement of the
investment of TBG in the Technology Company.
1) The Investor shall be entitled to assert claims against TBG on the grounds
of a loss incurred if the assets of the Technology Company have been
subjected to bankruptcy proceedings or overall execution has been
instituted or the opening of proceedings has
4
been rejected for lack of assets, if an affirmation in lieu of an oath has
been made for the Technology Company or if the continuing insolvency of
the Technology Company has been proven by other means.
Within 30 calendar days after the date on which claims were asserted
against it, TBG shall reimburse to the Investor an amount of 50% (70% in
case of the Technology Company being located within the new German federal
states or (East) Berlin) of its original invested funds pursuant to Sec. I
para. 2, however not exceeding 50% (70% in case of the Technology Company
being located within the new German federal states or (East) Berlin) of
the invested funds paid by itself to the Technology Company. Any
permissible reduction of the investment of TBG effected pursuant to the
Investment Agreement between TBG and the Technology Company shall be
considered in the calculation of the maximum limit.
2) If, as a result of a settlement in court, the claims of the Investor
arising from its investment(s) specified in Sec. 1 para. 2 have been lost
in part or if the Investor has partially waived the invested funds
mentioned in Sec. 1 para. 2 within the scope of restructuring measures in
which all lenders and investors of the Technology Company have
participated - the latter at an equal rate - , the Investor may claim
reimbursement of its partial loss from TBG. However, TBG shall only be
obligated to pay an amount corresponding to a share in the maximum risk
participation (cf. para. 1) that is proportionate to the share of the
partial loss of the Investor in its entire invested funds as specified in
Sec. 1 para. 2. Such partial claim shall reduce any further obligations of
TBG under the risk participation.
3) Until the end of the sixth calendar month following the assertion of
claims against it, TBG may demand the Investor to transfer the
investment(s) mentioned in Sec. 1 para. 2 to TBG or to a third party
specified by TBG in whole or in part. Any obligations of the Investor
regarding contributions, additional contributions and damages shall not be
transferred to TBG. Any transfer costs shall be borne by the Investor. In
case of assertion of partial claims against TBG pursuant to para. 2, the
transfer obligation of the Investor shall be reduced proportionately to
the payment obligation of TBG.
The transferability shall be guaranteed by the investor and shall constitute a
requirement for making use of the risk participation.
SECTION 6
COMMENCEMENT AND TERM OF COOPERATION
1) The Investor shall be obligated vis-a-vis TBG to manage the Technology
Company pursuant to Sec. 2 and to provide information pursuant to See. 4
hereof as from the signing date of this Agreement and the Investment
Agreements between TBG and the Technology Company as well as the Investor
and the Technology Company.
2) The cooperation shall end upon the termination of the investment of TBG or
of the Investor.
5
3) Ordinary termination of this Cooperation Agreement shall be excluded.
SECTION 7
GENERAL PROVISIONS
1) Any amendments or supplements to this Agreement shall require the written
form. No oral supplementary agreements exist with respect hereto.
2) Should any provision of this Agreement be invalid, the remaining
provisions shall remain unaffected. The Investor and TBG shall be
obligated to replace any invalid provision by a valid provision that come
as close as possible to the intention and purpose of the respective
invalid provision.
3) Place of jurisdiction for all legal disputes arising from this Agreement
and its performance shall be Bonn.
Bonn, [handwritten:]: August 26, 1997 West Caldwell, [handwritten.]
August 11, 1997
Technologie-Beteiligungs- APL American Pharmed Labs, Inc.
Gesellschaft mbH der
Deutschen Ausgleichsbank
[illegible signatures] [illegible signature(s)]
I, Monika Kordt, in my capacity as a sworn translator for the English language,
hereby certify that the above is a correct and complete translation of the
German text presented to me in copy.
Frankfurt am Main, November 8, 2004
/s/ Monika Kordt
------------------
Monika Kordt
Monika Kordt
Dipl. -Ubers. (FH), MSC
Allgemein
vereidigte
Dolmetscherin und
ermochtigte Ubersetzerin
der englischen Sprache
fur die Gerichte und Notare im Lande
Hessen
6