SYNTHEMED, INC.

CONSULTING AGREEMENT

        This Consulting Agreement (the "Agreement") is entered into effective
October 1, 2008 (the “Effective Date”) by and between SyntheMed, Inc., a
Delaware corporation (the "Company"), and Richard L. Franklin, MD
("Consultant").

WHEREAS, Consultant is presently Chairman of the Board of Directors of the
Company;

WHEREAS, the Company desires Consultant to assume an expanded role in the
Company in the  capacity of Executive Chairman, and Consultant desires to assume
such role;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
Company and Consultant agree as follows:

        1.    Consulting Relationship.    During the term of this Agreement,
Consultant will serve as Executive Chairman of the Company, which shall be an
executive officer position, and in that capacity Consultant shall have the
rights, powers, authority, functions, duties and responsibilities customarily
associated with the position of an executive chairman, and such additional
rights, powers, authority, functions and responsibilities as the Board of
Directors may assign to Consultant from time to time that are commensurate with
Consultant’s status as Executive Chairman.  Without limiting the foregoing,
Consultant will be actively engaged in, and have responsibility, working with
the Board of Directors and the President and Chief Executive Officer of the
Company, for (i) the overall leadership and strategic direction of the Company,
(ii) providing guidance and support to senior management of the Company, (iii)
the coordination of the activities of the Board of Directors and (iv)
communication with shareholders and other important constituencies.  Consultant
shall be responsible to and shall report to the Board of Directors.  Consultant
shall devote such time and attention to the business of the Company as is
reasonably necessary to fulfill Consultant’s responsibilities as Executive
Chairman.
 
  2.    Compensation.    As full compensation for the services to be rendered by
Consultant in all capacities to the Company, the Company shall pay Consultant
the compensation set forth on Exhibit A hereto, together with such additional
cash (but not equity-based) compensation as the Board of Directors may from time
to time establish for the services of its members generally.
 
        3.    Expense Reimbursement.    Consultant shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred by
Consultant in the performance of services rendered hereunder following
submission of written expense statements and other supporting documentation in
accordance with the policy and practice of the Company.

        4.    Term and Termination.    The term of this Agreement shall commence
on the Effective Date and shall continue until December 31, 2009, subject to
automatic extension for  successive one-year periods unless either party
provides written notice to the other of its intention not to renew at least ten
days prior to the then scheduled expiration date.  Notwithstanding the
foregoing, either party may terminate this Agreement at any time prior to its
then scheduled expiration date, upon thirty (30) days' prior written notice to
the other party if termination is without cause and upon written notice to the
other party if termination is as a result of a breach by the non-terminating
party.  Upon termination of this Agreement, neither Consultant nor the Company
shall have any further obligations under this Agreement, except that any
liabilities accrued through the date of termination (including under Sections 2
and 3) and Sections 5, 7 and 10 shall survive termination.
 
        5.    Independent Contractor.    Consultant's relationship with the
Company will be that of an independent contractor and not that of an employee.

 
 

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        (a)    Method of Provision of Services.    Consultant shall be solely
responsible for determining the method, details and means of rendering services
to the Company hereunder.

        (b)    No Benefits.    Consultant acknowledges and agrees that
Consultant will not be eligible for any Company employee benefits and, to the
extent Consultant otherwise would be eligible for any Company employee benefits
but for the express terms of this Agreement, Consultant hereby expressly
declines to participate in such Company employee benefits.

        (c)    Withholding; Indemnification.    Consultant shall have full
responsibility for applicable withholding taxes for all compensation paid to
Consultant under this Agreement. Consultant agrees to indemnify, defend and hold
the Company harmless from any liability for, or assessment of, any claims or
penalties with respect to such withholding taxes, including any liability for,
or assessment of, withholding taxes imposed on the Company by the relevant
taxing authorities with respect to any compensation paid to Consultant, as well
as reasonable attorneys’ fees incurred in connection therewith.

        6.    [Intentionally omitted]

        7.    Non-Competition, Non-Solicitation and Confidentiality
Restrictions.    In further consideration for the compensation payable by the
Company hereunder and as a condition to the Company’s obligations hereunder,
Consultant agrees to be bound by the provisions set forth on Exhibit B hereto.

        8.    Compliance with Law.  Consultant represents and warrants to the
Company that Consultant will render the services to be performed by Consultant
hereunder in compliance with all applicable laws and regulations.

        9.    Conflicts with this Agreement.    Consultant represents and
warrants that Consultant is not presently under any contractual or other
restriction or obligation which conflicts with, or would be materially breached
by Consultant’s execution and delivery of, this Agreement or the performance of
the services to be rendered by Consultant hereunder, and during the term of this
Agreement, Consultant will not become subject to any such contractual
restriction or obligation, whether written or oral.
 
        10.    Miscellaneous.    

        (a)    Amendments and Waivers.    Any term of this Agreement may be
amended or waived only with the written consent of the parties.

        (b)    Sole Agreement.    This Agreement, including the Exhibits hereto,
constitutes the sole agreement of the parties and supersedes all oral
negotiations and prior writings with respect to the subject matter hereof.

        (c)    Notices.    Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
48 hours after being deposited in the regular mail as certified or registered
mail (airmail if sent internationally) with postage prepaid, if such notice is
addressed, in the case of the Company, to the address or facsimile number of its
corporate headquarters (attention: Board of Directors) with a copy to Eilenberg
Krause & Paul LLP, 11 E 44th Street, NY, NY 10017, and in the case of
Consultant, to Consultant’s address or facsimile number as currently on file
with the Company, or as subsequently modified by written notice.

        (d)    Choice of Law.    The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
Jersey, without giving effect to the principles of conflict of laws.

 
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        (e)    Severability.    If one or more provisions of this Agreement are
held by a court of competent jurisdiction to be unenforceable under applicable
law, then (i) such provision shall be excluded from this Agreement, (ii) the
balance of the Agreement shall be interpreted as if such provision were so
excluded and (iii) the balance of the Agreement shall be enforceable in
accordance with its terms.

        (f)    Counterparts.    This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

        (g)    Arbitration; Consent to Jurisdiction. Any dispute or claim
arising out of or in connection with any provision of this Agreement shall be
exclusively and finally settled by binding arbitration in Middlesex County, New
Jersey, in accordance with the rules of the American Arbitration Association by
one arbitrator appointed in accordance with said rules. The arbitrator shall
apply New York law, without reference to rules of conflicts of law or rules of
statutory arbitration, to the resolution of any dispute. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Notwithstanding the foregoing, the parties may apply to any court of
competent jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this paragraph, without breach of this
arbitration provision. This Section 10(g) shall not apply to the Confidentiality
Agreement. To the extent that any court action is permitted consistent with or
to enforce this Section 10(g), the parties hereby consent to the jurisdiction of
the state and federal courts located in Middlesex County, New
Jersey.  Accordingly, with respect to any such court action, the Consultant
(i) submits to the personal jurisdiction of such courts; (ii) consents to
service of process; and (iii) waives any other requirement (whether imposed by
statute, rule of court, or otherwise) with respect to personal jurisdiction or
service of process.

   (h)   Assignment.    Consultant agrees that Consultant may not assign this
Agreement, as it is personal to Consultant.  The Company may assign this
Agreement upon notice to Consultant.

        (i)    Advice of Counsel.    EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING
THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF
INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OFTHE TERMS AND
PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY
PARTYBY REASON OF THE DRAFTING OR PREPARATION HEREOF.

        The parties have executed this Consulting Agreement on the respective
dates set forth below.

SYNTHEMED, INC.

By:_s/Robert P. Hickey
                    Name:  R. P. Hickey
Title:  President/CEO
Date:  10/1/08

RICHARD L. FRANKLIN, MD

s/Richard L. Franklin

Date:  [not dated]
 
 
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EXHIBIT A

COMPENSATION

Cash Fee:  $100,000 per annum, payable monthly in arrears.

Stock Options: Non-qualified stock options to purchase 750,000 shares of common
stock, exercisable as to 125,000 shares at $.40/share (or such higher price as
is equal to fair market value on the date of grant), 125,000 shares at
$.60/share, 250,000 shares at $.80/share and 250,000 shares at $1.00/share,
provided that vesting of the $.40 and $.60 installments is subject to the 30-day
average stock price achieving a $.60 level by the first anniversary of grant and
vesting of the remaining two installments is subject to the stock price
achieving a $1.00 30-day average level by the second anniversary of the date of,
and expiring on the tenth anniversary of, the date of grant.  The options shall
be granted on the Effective Date or as soon thereafter as is reasonably
practicable.

 
 

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EXHIBIT B

CONFIDENTIALITY, NON-SOLICITATION AND
 NON-COMPETITION AGREEMENT

Capitalized terms used but not defined in this Exhibit B shall have the meanings
ascribed thereto in the Consulting Agreement to which this Exhibit B is
attached.

1. Non-Compete; Non-Solicitation.

(a) No Competition. So long as the Company fulfills its obligations under the
Agreement, including, without limitation, its obligations under Section 2,
during the term of the Agreement, and for 12 months thereafter (the "Restricted
Period"), Consultant shall not, directly or indirectly, own, manage, operate,
join, control, participate in, invest in or otherwise be connected or associated
with, in any manner, including as an officer, director, employee, partner,
stockholder, joint venturer, lender, consultant, advisor, agent, proprietor,
trustee or investor, any Competing Business located in the United States or in
any other location where the Company operates or sells its products or services.

(i)  As used in this Agreement, the term "Competing Business" shall mean any
business or venture which engages in any business area, or sells or provides
products or services that compete or overlap with any business area, in which
the Company engages or is actively developing products or technology to engage
in at any time during the term of the Agreement, or any business or venture
which sells or provides products or services that compete or overlap with the
products or services as sold or provided, or are being actively developed to be
sold or provided, by the Company at any time during the term of the Agreement.
For the avoidance of doubt, and without limiting the foregoing, “Competing
Business” includes any business or venture that offers for sale products or
services to reduce or prevent formation of adhesions in patients following
surgical procedures.

(ii)  For purposes of this Section 4(a), the term "invest" shall not preclude an
investment in not more than one percent (1%) of the outstanding capital stock of
a corporation whose capital stock is listed on a national securities exchange or
included in the NASDAQ Stock Market, so long as Consultant does not have the
power to control or direct the management of, or is not otherwise associated
with, such corporation.

(b) No Solicitation. During the Restricted Period, Consultant shall not,
directly or indirectly, solicit or encourage any employee or consultant of the
Company to leave the employ, or cease his or her relationship with, the Company
for any reason, nor employ or retain such an individual in a Competing Business
or any other business.

(c) Company Customers. Consultant shall not, during the Restricted Period,
directly or indirectly, contact, solicit or do business with any "customers" (as
hereinafter defined) of the Company for the purpose of selling or providing any
product or service then sold or provided by the Company to such customers or
being actively developed to be sold or provided to such customers during
Consultant's retention by the Company or at the time of termination of
Consultant's retention hereunder.

(i)  For the purposes of the provisions of this Section (c), "customer" shall
include any entity that purchased any product or service from the Company or its
distributors within twelve months of the termination of Consultant's retention
hereunder, without regard to the reason for such termination. The term
"customer" also includes any former customer or potential customer of the
Company which the Company has solicited within twelve months of such
termination, for the purpose of selling or providing any product or service then
sold or

 
 

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provided, or then actively being developed to be sold or provided, by the
Company.

(d) Modification of Covenants. The restrictions against competition set forth in
this Exhibit B are considered by the parties to be reasonable for the purposes
of protecting the business of the Company. However, if any such restriction is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic area as to which it
may be enforceable.

2. Confidential Information.

(a) Existence of Confidential Information. The Company owns and has developed
and compiled, and will develop and compile, certain proprietary technology,
know-how and confidential information which have great value to its business
(referred to, collectively, as “Confidential Information”). Confidential
Information includes not only information disclosed by the Company to
Consultant, but also information developed or learned by Consultant during the
course or as a result of retention by the Company, which information shall be
the property of the Company. By way of example and without limitation,
Confidential Information includes all information that has or could have
commercial value or other utility in the business in which the Company is
engaged or contemplates engaging, and all information of which the unauthorized
disclosure could be detrimental to the interests of the Company, whether or not
such information is specifically labeled as Confidential Information. By way of
example and without limitation, Confidential Information includes any and all
information developed, obtained, licensed by or to or owned by the Company
concerning trade secrets, techniques, know-how (including research data,
designs, plans, procedures, merchandising, marketing, distribution and
warehousing know-how, processes, and research records), software, computer
programs, and any other intellectual property created, used or sold (through a
license or otherwise) by the Company, product know-how and processes,
innovations, discoveries, improvements, research, development, test results,
reports, specifications, data, formats, marketing data and plans, business
plans, strategies, forecasts, unpublished financial information, orders,
agreements and other forms of documents, price and cost information,
merchandising opportunities, expansion plans, budgets, projections, customer,
supplier, licensee, licensor and subcontractor identities, characteristics,
agreements and operating procedures, and salary, staffing and employment
information.

(b) Protection of Confidential Information. Consultant acknowledges and agrees
that in the performance of duties hereunder Consultant develops and acquires,
and the Company discloses to and entrusts Consultant with, Confidential
Information which is the exclusive property of the Company and which Consultant
may possess or use only in the performance of duties for the Company. Consultant
also acknowledges that Consultant is aware that the unauthorized disclosure of
Confidential Information, among other things, may be prejudicial to the
Company's interests, an invasion of privacy and an improper disclosure of trade
secrets. Consultant shall not, directly of indirectly, use, make available,
sell, disclose or otherwise communicate to any corporation, partnership,
individual or other third party, other than in the course of Consultant's
assigned duties and for the benefit of the Company, any Confidential
Information, either during the term of the Agreement or thereafter. In the event
Consultant desires to publish the results of Consultant's work for or
experiences with the Company through literature, interviews or speeches,
Consultant will submit requests for such interviews or such literature or
speeches to the Board of Directors of the Company at least fourteen (14) days
before any anticipated dissemination of such information for a determination of
whether such disclosure is in the best interests of the Company, including
whether such disclosure may impair trade secret status or constitute an invasion
of privacy. Consultant agrees not to publish, disclose or otherwise disseminate
such information without the prior written approval of the Board of Directors of
the Company.

 
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3. Invention and Patents.

(a) Consultant will promptly and fully disclose to the Company any and all
inventions, discoveries, trade secrets and improvements, whether or not
patentable or whether or not they are made, conceived or reduced to practice
during working hours or using the Company's data or facilities, which Consultant
shall develop, make, conceive or reduce to practice during Consultant's
retention by the Company, either solely or jointly with others (collectively,
"Developments"). All such Developments related to anti-adhesion products shall
be the sole property of the Company, and Consultant hereby assigns to the
Company, without further compensation, all his right, title and interest in and
to such Developments and any and all related patents, patent applications,
copyrights, copyright applications, trademarks and trade names in the United
States and elsewhere.

(b) Consultant shall keep and maintain adequate and current written records of
all Developments (in the form of notes, sketches, drawings and as may be
specified by the Company), which records shall be available to and, to the
extent related to anti-adhesion products, remain the sole property of the
Company at all times.

(c) Consultant shall assist the Company in obtaining and enforcing patent,
copyright and other forms of legal protection for the Developments related to
anti-adhesion products in any country. Upon request, Consultant shall sign all
applications, assignments, instruments and papers and perform all acts necessary
or desired by the Company and to enable the Company its successors, assigns and
nominees, to secure and enjoy the full exclusive benefits and advantages
thereof.

(d) Consultant understands that Consultant’s obligations under this Section 3
will continue after the termination of his retention with the Company and that
Consultant shall perform such obligations without further compensation, except
(i) for reimbursement of expenses incurred at the request of the Company and
(ii) that after the termination of Consultant’s retention with the Company and
notwithstanding anything in this Section 3 to the contrary, Consultant shall not
be required to provide assistance to the Company in accordance with this Section
3 for more than 50 hours during any twelve-month period. If the Company desires
assistance beyond such 50-hour limitation, such assistance shall be subject to
Consultant’s consent, not to be unreasonably withheld, and the Company will
compensate Consultant on a per diem basis at a per diem rate that is determined
by dividing the Consultant’s annual retention fee in effect when the term of the
Agreement terminated or expired by 250 days.

4.  Injunction. Consultant agrees that the restrictions and agreements contained
in this Exhibit B are reasonable and necessary to protect the legitimate
interests of the Company, and that any violation of these provisions will cause
substantial and irreparable harm to the Company that would not be quantifiable
and for which no adequate remedy would exist at law.  Consultant further
acknowledges that Consultant has requested, or has had the opportunity to
request, that legal counsel review this Exhibit B and the Agreement, and having
exhausted such right, agrees to the terms herein without
reservation.  Accordingly, Consultant authorizes the issuance of injunctive
relief by any court of appropriate jurisdiction, without the requirement of
posting bond, for any actual or threatened violation of the provisions of this
Exhibit B.

 
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