exhibit10_5.htm


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AGENCY
AGREEMENT

    


    


    


    September
30, 2008

    


    


    SyntheMed,
Inc.

    200
Middlesex Essex Turnpike, Suite 210

    Iselin,
New Jersey 08830

    United
States

    


    Attention:             
Mr. Robert P. Hickey

    President and Chief
Executive Officer

    


    


    Dear
Sirs:

    


    Re:           Offering of
Units

    


    Clubb
Capital Limited (the “Agent”), understands that SyntheMed, Inc. (the
“Corporation”), a Delaware corporation, proposes to issue to investors secured
by the Agent, up to 15,000,000 units (“Units”) each comprised of one common
share of the Corporation’s Common Stock, par value $0.001 per share (“Common
Stock”) and one purchase warrant to purchase one common share of Common Stock
(an “Investor Warrant”). The Units shall be issued and sold at a price of $0.40
per Unit (the “Issue Price”). The Units shall be sold pursuant to a subscription
agreement, as may be supplemented upon mutual agreement of the Corporation and
the Agent, the form of which is attached hereto as Appendix I (the “Subscription
Agreement”). The offering of the Units (the “Offering”) will be consummated in
one or more closings, the final closing to occur on or before October 31, 2008,
or such other date mutually agreed to by the Corporation and the Agent (the date
of each closing being referred to herein as a “Closing Date”). There is no
minimum number of Units being offered in the Offering.

    


    
      	
              1.

            	
              Appointment

            


    

     

    The
Corporation hereby appoints the Agent as its non-exclusive agent and the Agent
accepts the appointment and agrees to act on a “best efforts” basis as a
non-exclusive agent of the Corporation to secure investors for the issuance of
the Units by way of private placement to institutional and other sophisticated
investors or other eligible investors subject to the terms and conditions and in
reliance upon the representations, warranties and covenants of the Corporation
set out in this Agreement.

    


    The Agent
shall be entitled to retain sub-agents selected by it to participate in the
soliciting of offers to purchase the Units, provided that the Agent receives
from each such sub-agent its agreement to be bound by the obligations of the
Agent hereunder prior to any such appointment. The fees payable to such
sub-agents shall be the responsibility and for the account of the
Agent.


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        2 


      

    


    The
Agent’s appointment shall be subject to, amongst other things as outlined below,
completion of its formal client take-on procedures, due diligence by or on
behalf of the Agent on the Corporation to its complete satisfaction and the
receipt of all necessary regulatory approvals which the Corporation agrees to
use its reasonable efforts to obtain.

    


    The
Corporation will permit the Agent and its legal counsel to conduct such due
diligence as the Agent may deem appropriate.

    


    The
Corporation will, on a timely basis, make available or cause to be made
available to the Agent or provide the Agent with access to all such information,
data, documents, advice and opinions respecting the Corporation as the Agent may
reasonably require in order to perform its services hereunder, and will provide
or cause to be provided access to management, lawyers, auditors and such other
professional advisers of the Corporation as the Agent considers necessary or
desirable, acting reasonably, in order to perform its services
hereunder.  The Corporation shall also keep the Agent fully advised of
the material activities of the Corporation and in particular of any developments
in respect of its business that might reasonably be expected to have an effect
on the transactions contemplated hereunder.

    


    The
Corporation undertakes that all such information provided and statements made by
it or on its behalf to the Agent will be accurate and complete in all material
respects and not misleading in a material particular.  The Corporation
agrees that if anything occurs during the term of the Agent’s appointment after
the supply of any such information or statement to render that information or
statement materially untrue or misleading, it will (i) promptly notify the
Agent, and (ii) take all such steps as the Agent may require to correct that
information or statement.

    


    
      	
              2.

            	
              Sales
      Restrictions

            


    

     

    The Agent
represents and agrees that it will comply with the restrictions on offers and
sales of the Units set forth in Schedule “A” hereto, as well as the other
provisions thereof, all of which are hereby incorporated by reference herein and
form a part hereof.

     

    
      	
              3.

            	
              Commission
      and Broker Warrant

            


    

     

    In
consideration of the services rendered and to be rendered by the Agent in acting
as agent of the Corporation on a best efforts basis to secure investors for the
issuance of the Units, the Corporation agrees to pay to the Agent on the Closing
Date a commission (the “Commission”) equal to 7% of that portion of the
gross proceeds of the Units sold on the Closing Date to purchasers secured by
the Agent, payable at the election of the Agent in either cash or Units at the
Issue Price (“Commission Units”) or a combination of the two.

    


    In
further consideration of the services rendered and to be rendered by the Agent
described above, the Corporation agrees to issue to the Agent for no additional
consideration, warrants (the “Broker Warrants”) to purchase an aggregate number
of Shares equal to 7% of the aggregate number of Units issued on the Closing
Date to purchasers secured by the Agent. The Broker Warrants shall have a term
of four (4) years after the date of issue and shall be exercisable at a price of
$0.50 per Share.  Any Commission payable or Broker Warrants issuable
to the Agent


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        3 


      

    


    may, at
the direction of the Agent, be issued to any subagents retained by the Agent in
accordance with this Agreement.

    


    If for
any reason the Offering does not close and within a three (3) year period after
termination of the Offering the Corporation raises funding through one or more
investors introduced to the Corporation for the first time by the Agent (“Agent
Investors”), the Agent shall be entitled to the Commission and Broker Warrants
in respect thereof as if the Offering had not been terminated and the gross
proceeds of sale raised in such financing(s) had been raised under the Offering.
The Agent will after the Closing Date promptly provide the Corporation with a
list of Agent Investors.

    


    
      	
              4.

            	
              Closing

            


    

     

    
      	
              (a)

            	
              The
      issuance of the Units shall be completed (the “Closing”) at the offices of
      the Corporation, or such other place or places as the Corporation and the
      Agent may agree, at 10:00 a.m. (Eastern Standard Time) (the “Closing
      Time”) on the Closing Date.

            


    

     

    
      	
              (b)

            	
              On
      or prior to each Closing Date, the Agent shall provide to the Corporation
      a subscription agreement from each purchaser of Units (a “Purchaser”) who
      is to acquire Units on such Closing Date.  Purchasers shall be
      required to complete and sign the form of Subscription Agreement attached
      hereto as Appendix I.

            


    

     

    
      	
              (c)

            	
              At
      the Closing Time on each Closing Date, upon satisfaction of the conditions
      contained herein, the Agent shall pay or cause payment to be made of the
      net purchase price of the Units sold by the Agent in United States funds
      by wire transfer to such bank and account as may be designated by the
      Corporation, or in such other manner as may be agreed with the
      Corporation, such net purchase price to be equal to the aggregate Issue
      Price of the Units sold by the Agent less the cash portion of the
      Commission (if the Agent elects to receive all or a part thereof in cash)
      and the amount in reimbursement of expenses referred to in section 8
      hereof. Such payment and delivery shall be made
  against:

            


    

     

    
      	
               
      

            	
              (i)

            	
              delivery
      by the Corporation to its transfer agent of instructions to issue
      certificates representing (A) the Units (or the underlying securities) to
      be issued on the Closing Date registered in such name or names as are
      directed in the Subscription Agreements and (B) the Commission Units (and
      the underlying securities);

            


    

     

    
      	
               
      

            	
              (ii)

            	
              delivery
      of the Commission and the Broker Warrants;
and

            


    

     

    
      	
               
      

            	
              (iii)

            	
              delivery
      to the Agent of copies of the certificates, opinions and other documents
      contemplated hereby.

            


    

     

    
      	
              5.

            	
              Representations,
      Warranties and Covenants of the
  Corporation

            


    

     

    The
Corporation represents, warrants and covenants to the Agent as of the date
hereof and as of the Closing Date, which representations, warranties and
covenants shall survive the Closing for a period of two years and any
investigation made by the Agent, that:

     


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        4 


      

    


    (a)           the
Corporation is a validly existing corporation in good standing under the laws of
the jurisdiction in which it is incorporated, and the Corporation has no
subsidiaries;

     

    
      	
              (b)

            	
              the
      Corporation is duly qualified and authorized to do business in the
      jurisdiction(s) in which it carries on business or to own property where
      required under the laws of the jurisdiction(s) in which any such property
      is located;

            


    

     

    
      	
              (c)

            	
              the
      Corporation is current with all material filings required to be made under
      the laws of any jurisdiction in which it carries on any material business,
      and the Corporation has all necessary licenses, leases, permits,
      authorizations and other approvals necessary to permit it to conduct its
      business as currently conducted, except where the failure to have any such
      license, lease, permit, authorization or approval would not have a
      material adverse effect on the Corporation and its
    business;

            


    

     

    
      	
              (d)

            	
              the
      audited financial statements of the Corporation as at and for the year
      ended December 31, 2007 and the interim financial statements of the
      Corporation as at and for the six-month period ended June 30, 2008 present
      fairly, in all material respects, the financial position of the
      Corporation as at the respective period-end dates, and the results of its
      operations and the changes in its financial position for the 12-month
      period ended December 31, 2007 in the case of the audited financial
      statements and 6-month period ended June 30, 2008 in the case of the
      interim financial statements, all in accordance with generally accepted
      accounting principles,  and, since June 30, 2008, there has been
      no material adverse change in the business, affairs or financial or other
      condition of the Corporation or any of its subsidiaries, except as
      disclosed in the notes to the financial statements for the quarter then
      ended;

            


    

     

    
      	
              (e)

            	
              the
      Corporation has all requisite power and authority to carry out its
      obligations under this Agreement, the Subscription Agreement, and the
      Broker Warrants;

            


    

     

    
      	
              (f)

            	
              this
      Agreement and the Subscription Agreement have been, and the Broker
      Warrants will be on the Closing Date, duly authorized, executed and
      delivered by the Corporation and constitute or on the Closing Date will
      constitute, legal, valid and binding obligations of the Corporation
      enforceable in accordance with their terms except that: (i) the
      enforcement hereof or thereof may be limited by bankruptcy, insolvency,
      reorganization and other laws affecting the enforcement of creditors’
      rights generally, (ii) rights of indemnity thereunder may be limited
      under applicable law, and (iii) equitable remedies, including without
      limitation specific performance and injunctive relief, may be granted only
      in the discretion of a court of competent
  jurisdiction;

            


    

     

    
      	
              (g)

            	
              the
      shares of Common Stock included in the Units are or on the Closing Date
      will be duly and validly authorized and, when issued and delivered against
      payment therefor, will be duly and validly issued, fully paid and
      non-assessable shares in the capital stock of the
    Corporation;

            


    

     

    
      	
              (h)

            	
              the
      Corporation will reserve a sufficient number of shares of Common Stock
      unissued as may be required to be issued pursuant to the exercise of the
      Broker Warrants and Investor Warrants and, when issued and delivered upon
      such exercise, such shares of
Common

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        5

      

    

     

    Stock
will be duly and validly issued as fully paid and non-assessable shares in the
capital stock of the Corporation;

     

    
      	
              (i)

            	
              the
      authorized capital of the Corporation consists of 150,000,000 shares of
      Common Stock and 5,000,000 shares of preferred stock, par value of $0.01
      per share.  Of the preferred stock, 200,000 shares have been
      designated as Series D Junior Participating Preferred Stock (underlying
      outstanding rights applicable to each presently and future outstanding
      share of Common Stock under a shareholder rights agreement adopted
      effective May 20, 2008 (the “Rights Plan”) and no other series or class of
      preferred stock is designated.  As of June 30, 2008 there were
      83,761,108 shares of Common Stock and no shares of preferred stock
      outstanding.  In addition, as of that date, the Corporation had
      an aggregate of 15,787,000 shares of Common Stock reserved for issuance
      upon exercise or conversion of the following outstanding securities: (i)
      options which have been granted under the Corporation’s stock option plans
      and other agreements, to purchase an aggregate of 14,102,000 shares of
      Common Stock and (iii) warrants issued to the Agent or its designees to
      purchase an aggregate of 1,685,000 shares of Common
  Stock;

            


    

     

    
      	
              (j)

            	
              the
      Corporation is not, and at the Closing Date will not be: (i) in
      breach or violation of any of the terms or provisions of, or in default
      under, this Agreement, the Subscription Agreement, any other Subscription
      Agreement for the purchase of Units, the Broker Warrants, the Investor
      Warrants, any indenture, mortgage, deed of trust or loan agreement (except
      as disclosed in the Corporation’s filings with the United States
      Securities and Exchange Commission), other agreement (written or oral) or
      instrument to which it is a party or by which it is bound or to which any
      of its property or assets is subject, which breach or violation or the
      consequences thereof would result in a material adverse change to it or
      its business; or (ii) in violation of the provisions of its articles,
      by-laws, resolutions or any statute or any other rule or regulation of any
      court or governmental agency or body having jurisdiction over it or any of
      its properties which violation or the consequences thereof would result in
      a material adverse change to it or its
business;

            


    

     

    
      	
              (k)

            	
              the
      issue and sale of the Units (and the underlying securities), Broker
      Warrants, Investor Warrants, any shares of Common Stock on the exercise of
      the Broker Warrants or Investor Warrants and the performance and
      consummation of the transactions contemplated herein will not conflict
      with or result in a breach or violation of any of the terms or provisions
      of, or constitute a default under, any indenture, mortgage, deed of trust,
      loan agreement or other agreement (written or oral) or instrument to which
      the Corporation or any subsidiary is bound or to which any of the property
      or assets of the Corporation or any subsidiary is subject, which breach or
      violation or the consequences thereof would result in a material adverse
      change to the Corporation or its business, nor will any such action
      conflict with or result in any violation of the provisions of the
      articles, by-laws or resolutions of the Corporation or any statute or any
      order, rule or regulation of any court or governmental agency or body
      having jurisdiction over the Corporation or any subsidiary or any of its
      properties which violation or the consequences thereof would result in a
      material adverse change to the Corporation or its
  business;

            


    

     


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        6

      

    


    
      	
              (l)

            	
              the
      Corporation has established on its books reserves which are adequate for
      the payment of all taxes not yet due and payable; there are no liens or
      other liabilities for taxes on the assets of the Corporation except for
      taxes not yet due; there are no audits of any of the tax returns of the
      Corporation which are known by the Corporation’s management to be pending
      and there are no claims which have been or may be asserted relating to any
      such tax returns which, if determined adversely, would result in the
      assertion by any government or agency of any deficiency having a material
      adverse effect on the properties, business or assets of the
      Corporation;

            


    

     

    
      	
              (m)

            	
              the
      Corporation has good and valid title to its properties, leaseholds and
      assets, including without limitation the properties, leaseholds and assets
      reflected in the balance sheet as of June 30, 2008 referred to in clause
      5(d) above, except properties, leaseholds and assets disposed of since
      such date at fair market value in the ordinary course of business, and has
      good title to all its leasehold estates, in each case subject to no
      mortgage, pledge, lien, lease, encumbrance, charge, rights of first
      refusal or options to purchase, whether or not relating to extensions of
      credit or the borrowing of money, other than as disclosed in such balance
      sheet except as incurred in the ordinary course of business since the date
      of such balance sheet, and except in any event where the failure to hold
      good title or the existence of a mortgage, pledge, lien, lease,
      encumbrance, charge, right of first refusal or option to purchase would
      not have a material adverse effect on the Corporation or its business;
      there exists no condition which interferes with the economic value or use
      of such properties and assets and all tangible assets are in good working
      condition and repair (subject to ordinary wear and tear) except where the
      existence of any such condition would not have a material adverse effect
      on the Corporation or its business;

            


    

     

    
      	
              (n)

            	
              the
      Corporation owns, is licensed or has applied for registration of, all
      patents, trade-marks, service marks, trade names, and copyrights necessary
      for the conduct of its business, except where the failure to so own or
      apply for registration would not have a material adverse effect on the
      Corporation or its business; to the best of the knowledge, information and
      belief of the Corporation none of the past or present activities of the
      Corporation or the products, services or assets of the Corporation
      infringe or constitute an unauthorized use of any proprietary rights of
      others, and the Corporation has not received any notice of infringement
      of, or conflict with, asserted rights of others with respect to any
      patent, trade-mark, service mark, trade name, or copyright that,
      individually or in the aggregate, if the subject of an unfavorable
      decision, ruling, or finding, would result in a material adverse change to
      the Corporation or its business;

            


    

     

    
      	
              (o)

            	
              the
      Corporation has taken reasonable measures to protect and preserve the
      confidentiality of all trade secrets and other non-patented proprietary
      information of the Corporation, including without limitation the
      procurement of proprietary invention assignments and non-disclosure and
      non-competition agreements from employees, consultants, subcontractors,
      customers and other persons who have access to such
      information;

            


    

     

    
      	
              (p)

            	
              the
      Corporation has filed all necessary federal, state and municipal property,
      income and franchise tax returns and has paid all taxes shown as due
      thereon or otherwise owed by it to any taxing authority except those
      contested in good faith and for which appropriate amounts have been
      reserved in accordance with generally accepted accounting
      principles;

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        7

      

    

     

    there is
no tax deficiency which has been, or to the best of the knowledge, information
and belief of the Corporation might be, asserted against the Corporation which
would materially affect the business or operations of the Corporation; the
Corporation has paid all applicable federal and state payroll and withholding
taxes;

     

    
      	
              (q)

            	
              there
      is no collective bargaining or other union agreement to which the
      Corporation is a party or by which it is bound, or which is currently
      being negotiated; except for a defined contribution plan under Section
      401(k) of the US Internal Revenue Code, the Corporation does not sponsor,
      maintain or contribute to any pension, retirement, profit sharing,
      incentive compensation, bonus or other employee benefit plan, including
      without limitation any employee benefit plan covered by Title 4 of the
      Employee Retirement Income Security Act of 1974 (“ERISA”) or any
      “multi-employer plan” as defined in Section 4001(a)(3) of ERISA, or any
      other employee benefit plan; to the best of the knowledge, information and
      belief of the Corporation, (i) no employee of the Corporation is a
      party to or bound by any agreement, contract or commitment, or subject to
      any restrictions, particularly but without limitation in connection with
      any previous employment of any such person, which would result in a
      material adverse change to the Corporation or its business, and
      (ii) no senior officer has any present intention of terminating his
      employment with the Corporation, and the Corporation has no present
      intention of terminating any such
employment;

            


    

     

    
      	
              (r)

            	
              there
      is no adverse claim, action, proceeding or investigation pending or, to
      the knowledge, information and belief of the Corporation, threatened,
      which questions the validity of the issue or sale of the Units (or the
      underlying securities), Broker Warrants, or any shares of Common Stock on
      exercise of the Broker Warrants or Investor Warrants or the validity of
      any action taken or to be taken by the Corporation in connection with this
      Agreement or the Subscription Agreement or which would result in any
      material adverse change in the financial condition, results of operations,
      business or prospects of the
Corporation;

            


    

     

    
      	
              (s)

            	
              the
      Corporation will permit the Agent and its legal counsel to conduct all due
      diligence which the Agent may reasonably require;
  and

            


    

     

    
      	
              (t)

            	
              during
      the period commencing with the engagement of the Agent on the date of this
      Agreement and ending on the date on which the full amount of the Offering
      is sold or the earlier date of termination of the Offering period (the
      “Final Closing Date”), the Corporation will inform the Agent in writing of
      the full particulars of any material change (actual, anticipated or
      threatened) in the assets, liabilities, business or the financial
      condition of the Corporation.

            


    

     

    
      	
              6.

            	
              Closing
      Conditions for the Benefit of the
Agent

            


    

     

    The
obligations of the Agent hereunder are subject to the satisfaction, on or before
the Closing Time, of the following conditions:

    


    
      	
              (a)

            	
              the
      Corporation shall have complied with all of its obligations hereunder; the
      representations and warranties of the Corporation contained herein shall
      be true and

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        8

      

    

     

    correct
in all material respects on and as of each Closing Date as if made on and as of
such Closing Date; and the Agent shall have received on each Closing Date a
certificate, dated as of such Closing Date and signed by one or more executive
officers or directors of the Corporation on behalf of the Corporation and not in
his or their personal capacity, to the foregoing effect;

     

    
      	
              (b)

            	
              the
      Agent shall have received on and as of each Closing Date the favourable
      opinion of the Corporation’s legal counsel on such matters as the Agent
      may reasonably request, including:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      Corporation is incorporated and validly existing under the laws of the
      jurisdiction in which it is incorporated and has the corporate power and
      authority to conduct its business as currently conducted by it and to
      issue and sell the Units (and the underlying securities including the
      shares of Common Stock to be issued under the Investor Warrants) and
      Broker Warrants (including the shares at Common Stock to be issued under
      the Broker Warrants) (collectively referred to as the “Securities”) and to
      enter into and carry out its obligations under this Agreement, the
      Subscription Agreement, the Broker Warrants and the Investor
      Warrants;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              as
      to the Corporation's authorized and issued and outstanding
      capital;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              each
      of this Agreement, the Subscription Agreement and the Securities has been
      duly authorized, executed and delivered by the Corporation and, as
      applicable, is a legal, valid and binding obligation of the Corporation
      enforceable against it in accordance with its
  terms;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              all
      necessary action has been taken by the Corporation to authorize the issue
      of up to 15,000,000 Units (and all underlying securities) and the issue to
      the Agent of up to 1,050,000 Commission Units (and all underlying
      securities) and Broker Warrants exercisable for up to 1,050,000 shares of
      Common Stock and the Corporation has sufficient authorized but unissued
      shares of Common Stock as may be required to be issued upon the exercise
      of the Broker Warrants and the Investor
  Warrants;

            


    

     

    
      	
               
      

            	
              (v)

            	
              the
      execution and delivery of this Agreement and the Subscription Agreement
      and the completion of the transactions contemplated hereby and thereby,
      the issue of the Units (and the underlying securities), the Commission
      Units (and the underlying securities), the Broker Warrants, and the issue
      of the shares of Common Stock issuable upon exercise of the Broker
      Warrants and Investor Warrants do not violate or constitute a breach of
      any provisions of the articles of incorporation or by-laws of the
      Corporation, any material contract or other material agreement to which it
      is a party or by which it is bound and of which such counsel is aware, or
      any New York, Delaware corporate or United States law or regulation (other
      than federal and state Securities or “blue sky” laws, as to which such
      counsel expresses no opinion in this
paragraph);

            


    

     


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        9 


      

    


    
      	
               
      

            	
              (vi)

            	
              the
      Units (and underlying securities) issued to the investors and the
      Commission Units (and underlying securities) issued to the Agent, if any,
      have been duly and validly issued by the Corporation and the shares of
      Common Stock underlying same are outstanding as fully paid and
      non-assessable shares in the capital of the Corporation and the shares of
      Common Stock issuable upon exercise of the Broker Warrants and Investor
      Warrants will, when issued in accordance with the respective terms and
      conditions of the Broker Warrants or Investor Warrants, as applicable, be
      validly issued as fully paid and non-assessable shares in the capital of
      the Corporation;

            


    

     

    
      	
               
      

            	
              (vii)

            	
              the
      certificates representing the Units (and the underlying securities),
      Commission Units (and the underlying securities) and Broker Warrants
      comply with the requirements of the state laws and any federal laws of the
      United States applicable to the Corporation and such certificates have
      been duly and properly approved by the directors of the
      Corporation;

            


    

     

    
      	
               

            	
              (viii)

            	
              the
      exemption from any consent, approval, authorization, order, registration,
      filing or qualification of or with any governmental authority of the
      United States (or New York or Delaware corporate authority) (other than
      federal and state securities or “blue sky” laws, as to which such counsel
      expresses no opinion in this paragraph) for the valid authorization,
      issue, sale and delivery of the Units, and Commission Units (and the
      underlying securities) and the shares of Common Stock issuable upon
      exercise of the Broker Warrants and Investor Warrants and the issue and
      delivery of the Broker Warrants;
and

            


    

     

    
      	
               
      

            	
              (ix)

            	
              the
      exemption from registration of the issuance of the Units (and the
      underlying securities), Commission Units (and the underlying securities),
      Broker Warrants including the shares of Common Stock underlying the Broker
      Warrants and Investor Warrants under the terms contemplated by the
      Subscription Agreement and the Agency
Agreement.

            


    

     

    In giving
the opinions contemplated above, legal counsel to the Corporation shall be
entitled to rely, where appropriate, upon opinions of local counsel and, as to
matters of fact, to rely upon the representations and warranties of Purchasers
contained in the executed Subscription Agreements, a certificate of fact of the
Corporation signed by those officers in a position to have knowledge of such
facts and their accuracy, and certificates of such public officials and other
persons as are necessary or desirable, and may qualify its opinion described in
(iii) above with respect to (1) bankruptcy, insolvency, reorganization and other
laws affecting the enforcement of creditors' rights generally and (2)
limitations on the availability of equitable remedies such as specific
performance, and its opinion may include other reasonable and standard opinion
qualifications;

    


    
      	
              (c)

            	
              the
      Agent shall have received copies of the Subscription Agreements executed
      by the Corporation;

            


    

     


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        10 


      

    


    
      	
              (d)

            	
              the
      Agent shall have received such other agreements, certificates, opinions or
      documents as the Agent may reasonably request;
  and

            


    

     

    
      	
              (e)

            	
              the
      fulfilment, to the reasonable satisfaction of counsel for the Agent, of
      all legal requirements to permit the offer and sale of the Units (and the
      underlying securities) and the issue of the Broker Warrants to the
      Agent.

            


    

     

    The
foregoing conditions are included for the benefit of the Agent and may be waived
in writing by the Agent, in whole or in part.

    


    Notwithstanding
anything contained in this Agreement, the Agent may by written notice to the
Corporation terminate this Agreement at any time before the Closing Time if, in
the opinion of the Agent, there shall have been such a change in national or
international financial, political or economic conditions or currency exchange
rates or exchange controls as would in its reasonable view be likely to
prejudice materially the success of the Offering or distribution of the Units or
if the Agent is not reasonably satisfied with the results of its due diligence
review of the Corporation and, upon notice being given, the parties to this
Agreement shall (except for the liability of the Corporation in relation to
expenses as provided in section 8 and except for any liability arising before or
in relation to such termination) be released and discharged from their
respective obligations under this Agreement.

    


    
      	
              7.

            	
              Confidentiality

            


    

     

    The Agent
agrees that it will not disclose the terms of the Offering or any information it
may have acquired from the Corporation in the course of executing this Agency
Agreement which the Corporation has identified as material non-public
information, except to the extent (i) that such terms or other information
becomes generally available to the public other than by disclosure in violation
of this Agency Agreement, (ii) that such information was properly within
the Agent’s possession prior to being furnished by the Corporation,
(iii) that such information becomes available to the Agent on a
non-confidential basis, such as through disclosure by third parties who have the
right to disclose the information, and (iv) compelled by judicial process,
provided that in the event of compulsion by judicial process the Agent will
inform the Corporation promptly upon its receipt of notice of judicial process
compelling such disclosure.

     

    
      	
              8.

            	
              Expenses

            


    

     

    In
further consideration of the agreement with the Agent herein contained, the
Corporation covenants and agrees to reimburse the Agent, regardless of whether
the Offering is completed, for the Agent’s reasonable costs, fees and expenses
including (without limitation) reasonable fees and expenses of Agent’s legal
counsel, due diligence expenses, travel expenses and expenses incurred in
connection with the holding of roadshows, investor meetings and presentations
and printing and preparation of any offering documents and marketing materials
(collectively the “Expenses”). The Corporation shall not be responsible for
Agent’s legal expenses in excess of US$20,000 (the “Cap”).  The
Corporation acknowledges and agrees that the Cap has been set based on the
parties’ joint expectation of the amount of work involved to complete the
Offering (based on, for example, an existing set of negotiated documents for an
earlier financing for the Corporation in which the Agent participated), and the
Corporation


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        11 


      

    


    further
acknowledges and agrees that in the event of unforeseen circumstances or delay
in closing the Offering resulting in a greater than anticipated workload for the
Agent’s legal counsel, such counsel’s reasonable fees and expenses in excess of
the Cap shall also be paid by the Corporation. Expenses incurred up to each
Closing Date shall be reimbursed, upon submission to the Corporation of
invoices, receipts or similar proof of expenditure, at the Closing Time for such
Closing Date and may be deducted by the Agent from the proceeds of sale of the
Units at such Closing. Expenses incurred after the Final Closing Date shall be
reimbursed, upon submission to the Corporation of invoices, receipts or similar
proof of expenditure, forthwith following the delivery to the Corporation of
accounts in respect thereof.

    


    All fees
and expenses are subject to all applicable taxes.

    


    
      	
              9.

            	
              Documents
      and Announcements

            


    

     

    
      	
              (a)

            	
              As
      is standard in the UK, the Corporation shall consult with the Agent on the
      making of any public announcements and in particular shall not make any
      announcement concerning the subject matter of the Agent’s appointment,
      whether formal or informal, without the Agent’s prior written consent
      unless the Corporation is required to do so by any applicable laws or
      stock exchange rules, in which case the Corporation shall notify the Agent
      in writing prior to the making of such announcement. The Corporation and
      its directors will accept full responsibility for the contents of any
      document or announcement published by the Corporation in connection with
      the Agent’s duties hereunder.

            


    

     

    
      	
              (b)

            	
              The
      Agent will be entitled to rely on any information supplied or published by
      the Corporation or its agents or advisers and contained in any such
      document or announcement and will not be responsible for verifying the
      accuracy or completeness of any
information.

            


    

     

    
      	
              (c)

            	
              If
      the Agent is asked by the Corporation to approve any document or
      announcement which will or might constitute a non real-time financial
      promotion within the meaning of section 21(1) of the Financial Services
      and Markets Act 2000 (a “Financial Promotion”), then in addition to the
      foregoing provisions of this Section
8:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      Corporation shall make such amendments to the Financial Promotion as the
      Agent considers necessary or desirable prior to any such
      approval;  and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Agent shall be free to qualify such approval in such manner as it
      considers necessary or appropriate to ensure compliance with the rules and
      regulations made by the Financial Services Authority (“FSA”) and if the
      Agent does so the Corporation will ensure that the Financial Promotion is
      published and distributed only in accordance with the terms of such rules
      and such approval.

            


    

     

    
      	
              (d)

            	
              The
      Corporation agrees that the Agent shall not be obliged to approve any
      Financial Promotion.

            


    

     


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        12 


      

    


    
      	
              10.

            	
              Money-laundering
      regulations

            


    

     

    The
Corporation agrees to provide such evidence of its identity and that of its
directors, partners, trustees and controllers and of all connected shareholders
and other parties as the Agent may reasonably require in order to comply with
its obligations under applicable legislation and regulations against money
laundering and drug trafficking. The Agent may cease to act for the Corporation
if it fails to comply and may at any time make such disclosures to the competent
authorities as are reasonable as a result of such failure or otherwise upon
suspecting that the Corporation or any such connected party is involved in money
laundering and/or drug trafficking.

     

    
      	
              11.

            	
              Data
      Protection Act

            


    

     

    The
Corporation hereby consents to the Agent using all information it maintains
about the Corporation in order to send details of other services offered by the
Agent that it considers may be of interest to the Corporation.

     

    
      	
              12.

            	
              Compliance

            


    

     

    
      	
              (a)

            	
              The
      Corporation confirms to the Agent that it will not breach any contractual,
      legal, regulatory or other obligation by entering into this Agreement and
      that the Corporation knows of no matter as a result of which it would not
      be able to give this confirmation were it required to repeat it at any
      time during the term of the Agent’s appointment. The Corporation confirms
      that it will at all times comply with all such
  obligations.

            


    

     

    
      	
              (b)

            	
              All
      services provided by the Agent are subject to the rules and regulations
      for the time being in force of the
FSA.

            


    

     

    
      	
              (c)

            	
              The
      Corporation shall comply with, and shall assist the Agent in complying,
      with all applicable legal and regulatory requirements relating to the
      transactions contemplated herein.

            


    

     

    
      	
              13.

            	
              Confidentiality
      and the Agent’s Advice

            


    

     

    
      	
              (a)

            	
              The
      Corporation will not publish or disclose to any third party (other than to
      its other advisers for the purposes of the transaction contemplated
      hereunder) any documents generated by the Agent without the prior written
      consent of the Agent unless such publication is required by applicable
      law, regulation, legal process or regulatory
  authority.

            


    

     

    
      	
              (b)

            	
              The
      Corporation agrees that any advice given by the Agent pursuant to this
      Agreement is provided solely for the purpose of the Agent’s appointment
      and for the use and benefit of the Corporation and may not be used or
      relied on for any other purpose without the prior written consent of the
      Agent.

            


    

     


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        13 


      

    


    
      	
              14.

            	
              Client
      Classification

            


    

     

    
      	
              (a)

            	
              The
      Corporation has been classified as an “elective professional client” (as
      defined by the FSA Rules) in respect of all investment services and
      activities and ancillary services which the Agent may conduct with or for
      the Corporation, whether in relation to the Agent’s appointment or
      otherwise, because the Corporation satisfies at least two of the following
      criteria:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      Corporation carried out transactions, in significant size, on the relevant
      market at an average frequency of 10 per quarter over the previous four
      quarters;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      size of the Corporation’s financial instrument portfolio, defined as
      including cash deposits and financial instruments, exceeds EUR
      500,000;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Corporation works or has worked in the financial sector for at least one
      year in a professional position, which requires knowledge of the
      transactions or services envisaged.

            


    

     

    
      	
              (b)

            	
              As
      a consequence, the Corporation will lose the following protections
      afforded to retail clients (apart from those which are also provided to
      elective professional clients) under the FSA
  Rules:

            


    

     

    
      	
               
      

            	
              (i)

            	
              Direct
      offer financial promotions –the Agent will not be obliged to comply with
      the FSA Rules relating to restrictions on and the required contents of
      direct offer financial promotions.  The Agent does not need to
      provide the Corporation in a direct offer financial promotion, with
      sufficient information for the Corporation to make an informed assessment
      of the investment to which it
relates;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Understanding
      of risk – the Agent will not be required to provide the Corporation with
      the written risk warnings and notice required for retail clients in
      relation to transactions in complex financial instruments, in particular
      derivatives and warrants, and stock
lending;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Disclosure
      of charges, remuneration and commission – the Agent will not be required
      to disclose in writing before conducting any designated business on the
      Corporation’s behalf the basis or amount of their charges for conducting
      that business, or the amount of remuneration or other income payable to
      the Agent or its affiliates for conducting the regulated
      business;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              Financial
      Ombudsman Service - access to the Financial Ombudsman will not extend to
      the Corporation as an elective professional
  client.

            


    

     

    
      	
              (c)

            	
              The
      Corporation’s attention is also drawn to the following rules, which are
      limited in their application to elective professional clients with the
      following possible consequences for
clients:

            


    

     


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        14 


      

    


    
      	
               
      

            	
              (i)

            	
              Financial
      promotion - certain FSA Rules relating to the form, content and checking
      and otherwise concerning financial promotions generally will not
      apply;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Appropriateness
      – the Agent may have regard to the Corporation’s expertise as an elective
      professional client when complying with the requirements that transactions
      are appropriate;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Confirmation
      of transactions to customers - the FSA Rules relating to the confirmation
      of transactions will apply in a modified form. Provisions regarding extra
      reporting requirements for dealings with retail clients and provision of
      hard copies of confirmations not accessed electronically will not
      apply.

            


    

     

    
      	
               
      

            	
              (iv)

            	
              Communication
      – the Agent may have regard to the Corporation’s expertise as an elective
      professional client when complying with the requirements under the
      regulatory system that communications be clear, fair and not misleading.
      Additionally, the Agent may have regard to the Corporation’s expertise as
      an elective professional client when complying with the requirements to
      provide the Corporation with a general description of the nature and risks
      of particular transactions. If the Corporation has any queries on this
      warning or requires any further information, the Corporation shall contact
      the Agent’s Compliance Officer.

            


    

     

    The
Corporation shall keep the Agent informed of any change which could affect its
categorisation as an elective professional client. The Corporation is however
aware that the Agent may in any event take appropriate action where the Agent
becomes aware that the Corporation no longer fulfils the criteria set out
above.

     

    As the
Corporation will not receive the protections afforded to retail clients under
the FSA Rules the Corporation shall contact the Agent immediately if the
Corporation does not agree with this categorisation or if there is any change in
the Corporation’s corporate, regulatory or financial status.  The
Corporation has the right under the FSA Rules to request to be treated as a
retail client on a general basis or in respect of one or more particular
transactions. However, the Agent does not undertake any transactions on behalf
of retail clients. Therefore, if the Corporation wishes to be treated as a
retail client this may require the Corporation ceasing to be a customer of the
Agent either generally or in respect of particular transactions.

     

    The FSA
Rules provide a mechanism for clients to elect a different categorisation,
namely as an eligible counterparty or retail client.  If the
Corporation seeks to elect eligible counterparty categorisation, it will not
receive all the protections afforded to professional clients, such as those
relating to conduct of business, client information and communication and
financial promotion, non-advised services and order execution and
handling.

     

    If the
Corporation is acting as an agent for another person, the Agent will treat the
Corporation as its client for the purposes of the FSA Rules.

     

    The
Agent’s Allocation Policy is set out in Appendix II to this
Agreement.

     


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        15 


      

    


    15.           Material
Interests and Conflicts of Interest

     

    The Agent
and certain of its Associates are involved in investment business for their own
account and for clients.  In certain circumstances their interests may
be regarded or perceived to be, material from the perspective of a client in
relation to a particular transaction. The Agent is authorised for the purposes
of the Financial Services and Markets Act 2000, and has procedures in place to
ensure independence of advice. The Corporation acknowledges and accepts, so as
to override any duty or restriction which would otherwise be implied by law,
that the Agent and its Associates may have a material interest and that
employees or Associates responsible for providing the services under the
Engagement may be doing so despite the existence of a potential material
interest.

     

    The
Corporation acknowledges and accepts (a) that, by reason of contractual, legal,
regulatory or other obligations, the Agent and its Associates may be prohibited
from disclosing, or it may be inappropriate for them to disclose, information to
the Corporation, in particular in connection with a potential material interest;
and (b) that the Agent may provide its services under the Engagement and earn
(and retain) all fees payable under Section 7 notwithstanding the potential
existence of material interests within the Agent and its
Associates.

     

    The
Agent’s duty in respect of the Agent’s appointment is owed to the Corporation,
but its responsibilities to provide services to its investment clients are
unchanged. The Agent has in place systems, controls and procedures for
identifying and managing such conflicts as may exist in connection with the
allocation of the issuer’s securities to its investment clients.

     

    
      	
              16.

            	
              Indemnification

            


    

     

    (a)           The
Corporation agrees to ensure that no claim is made by the Corporation or any of
its Associates against any Indemnified Person to recover any Loss which the
Corporation or any of its Associates may suffer or incur directly or indirectly
as a result of the Agent and its Associates’ performance of its services under
the Engagement.

     

    (b)           Section
16(a) shall not apply to the extent that the relevant Loss is finally determined
by a Court or binding arbitration to be the result of the fraud, gross
negligence or wilful default of an Indemnified Person.

     

    (c)           The
Corporation will indemnify each of the Indemnified Persons against:

     

    (i)           any
Loss; or

     

    (ii)           any
action, proceedings, demand or judgment in respect of any Loss (including the
cost of defending such proceedings),

     

    which any
of the Indemnified Persons may suffer or incur directly or indirectly in
relation to the Engagement.

     


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        16 


      

    


    (d)           Section
16(c) shall not apply to the extent that the relevant Loss is finally determined
by a Court or binding arbitration to be the result of the fraud, gross
negligence or wilful default of an Indemnified Person.

     

    (e)           Neither
of Sections 16(a) or (c) shall apply in relation to any particular Loss to the
extent that the application of that Section in relation to the Loss would have
the effect of excluding or restricting any duty or liability which the Agent may
have to the Corporation or any of its Associates under the regulatory system (as
defined in the FSA Handbook).

     

    (f)           the
Agent will promptly, upon becoming aware of it, notify the Corporation of any
claim against an Indemnified Person which is relevant under this Section
16.  the Agent will consult the Corporation on its conduct of the
claim and will supply the Corporation with copies of all information and
documents relating to the claim that it reasonably requests, subject
to:

     

    (i)           the
Indemnified Persons being indemnified against any increased Loss that may result
from consultation with the Corporation or from the Agent supplying the
Corporation with such copies; and

     

    (ii)           any
requirements of the Agent’s insurers.

     

    (g)           Where
the Agent or any Indemnified Person is or would be indemnified by the
Corporation under Section 16(c), the Corporation shall not, without the Agent’s
prior written consent (such consent not to be unreasonably withheld or delayed),
settle, admit liability for, or compromise any actual, pending or threatened
claim, action, proceeding or investigation (“Claim”) against or in respect of
the Corporation, whether or not any Indemnified Person is also an actual or
potential party to such Claim.

     

    (h)           All
sums payable to an Indemnified Person under this Agreement shall be paid free of
any deduction or withholding tax.  If the Corporation is required by
law to make any deduction or withhold any tax it shall pay such additional
amount as is necessary to ensure that the net amount received by the Indemnified
Person remains unaffected by such deduction or withholding.

     

    (i)           Where
any accountants or other advisers are engaged by the Corporation or any of its
Associates and/or the Agent in connection with the Engagement and a limitation
on the liability of those accountants or other advisers is agreed by the
Corporation or any of its Associates and/or the Agent, the liability of the
Agent for any Loss will not be increased as a result.  Without
prejudice to the generality of the preceding sentence, any Loss for which the
Agent and those accountants or other advisers would otherwise be jointly and
severally liable will only be recoverable from the Agent to the extent of the
Agent’s responsibility for such Loss, as if the liability of the accountants or
other advisers were not limited.

     

    (j)           For
the purposes of this Agreement:

     

    “Associates”
shall mean, in relation to any person, (i) the officers, directors and employees
from time to time of that person, (ii) the subsidiaries and holding companies
(if any) from time to time of such person, (iii) each of the subsidiaries of any
such holding company from time to time, and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        17

      

       

    

     

    (iv) the
officers, directors and employees from time to time of any subsidiary or holding
company which is itself an Associate; and

     

    “Indemnified
Persons” shall mean the Agent and its Associates; and

     

    “Loss”
shall mean any claim, damage, loss, cost, charge, liability or expense
(including professional and legal fees which have been properly
incurred).

     

    


     

    
      	
              17.

            	
              Notices,
      etc.

            


    

     

    All
notices hereunder may be hand delivered or given by facsimile or any other means
of instantaneous written communication to such respective party hereto as
follows (or at such other address as may hereafter be communicated by either
party hereto to the other party):

    


    If to the Agent:

    


    Clubb Capital Limited

    35 Piccadilly

    London W1J 0DW

    England

    


    Attention:                                Joerg
Gruber

     

    Telephone:                              44-20-7851-9081

    Facsimile:                                44-20-7851-9088

    


    With a copy to:

    


    Blake, Cassels & Graydon
LLP

    181 West Madison Street

    Chicago,
IL  60602-4645

    U.S.A

    


    Attention:                                John
A. Kolada

    


    Telephone:                             (312)
739-3612

    Facsimile:                                (312)
739 3611

    



    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        18 


      

    


    If to the Corporation:

    


    SyntheMed, Inc.

    200
Middlesex Essex Turnpike, Suite 210

    Iselin,
New Jersey 08830

    United
States

    


    Attention:                                Robert
P. Hickey

          President and Chief Executive
Officer

    


    Telephone:                             732-404-1117

    Facsimile:                                732-404-1118

    


    With a copy to:

    


    Eilenberg, Krause & Paul
LLP

    11East 44th Street,
17th
Floor

    New York, NY 10017

    


    Attention:                                Keith
Moskowitz

    


    Telephone:                             212-986-9700

    Facsimile:                                212-986-2399

    


    
      	
              18.

            	
              Counterparts

            


    

     

    This
Agreement may be signed and delivered in counterparts, and by facsimile, with
the same effect as if the signatures thereto and hereto were upon the same
instrument and delivered in person.

    


    
      	
              19.

            	
              Survival

            


    

     

    All
representations, covenants, undertakings and indemnities herein will survive for
a period of two years following each and every Closing Date, notwithstanding the
completion of the transactions contemplated hereby and shall apply regardless of
any investigation made by or on behalf of any indemnified party.

    


    
      	
              20.

            	
              Governing
      Law

            


    

     

    This
Agreement shall be governed by and construed in accordance with the laws of
England and Wales and the parties submit to the exclusive jurisdiction of the
English Courts.

    


    
      	
              21.

            	
              Time

            


    

     

    Time is
of the essence in this Agreement.


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
        
        

      

    


    
      	
              22.

            	
              Entire
      Agreement

            


    

     

    This
Agreement constitutes the entire agreement between the parties pertaining to the
subject matter of this Agreement and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or
written.  There are no conditions, warranties, representations or
other agreements between the parties in connection with the subject matter of
this Agreement (whether oral or written, express or implied, statutory or
otherwise) except as specifically set out in this Agreement.

    


    
      	
              23.

            	
              Miscellaneous

            


    

     

    This
Agreement shall enure to the benefit of, and be binding upon, the successors of
the Corporation and the Agent.

    


    Yours sincerely,

    


    CLUBB CAPITAL LIMITED

    
 

    By:          s/Joerg Gruber

                                                 


    


    


    


    Accepted
and agreed as of the 30th day of September, 2008.

    


    


    SYNTHEMED,
INC.

    


    


    By:           s/Robert P. Hickey   

     Robert P. Hickey

          President and Chief Executive
Officer


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
         


      

    


    Schedule
“A”

    


    Restrictions
on Offers and Sales of the Units

    


    1.           The
Agent represents and agrees that: (i) it has not offered or sold and, prior to
the expiry of the period of six months after the Closing Date, will not offer or
sell any Units to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (ii) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Units in, from or otherwise involving the
United Kingdom, and (iii) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection with the
issue of the Units to a person who is of a kind described in Article 11(3) of
the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1995 or is a person to whom such document may otherwise lawfully be issued or
passed on; and (iv) it has complied and will comply with all applicable
securities laws in the United Kingdom and elsewhere in Europe in connection with
the Offering.

    


    2.           The
Agent acknowledges that the Units (and the underlying securities) including the
shares of Common Stock issuable upon exercise of the Broker Warrants and
Investor Warrants (collectively the “Securities”) have not been registered under
the 1933 Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. Persons (as defined in Rule 902(o) of
Regulation S promulgated under the Securities Act) except under an effective
registration statement under the Securities Act, in accordance with Regulation S
under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act. Offers and sales will be made in reliance on
the exemption from registration provided by Section 4(2) of the Securities Act
of 1933 and Rule 506 of Regulation D promulgated hereunder and/or in
reliance on Regulation S under the Securities Act of 1933, and the Agent will
comply with the provisions thereof in connection with the Offering.

    


    3.           Terms
with initial capital letters used but not defined in this Schedule shall have
the meanings given to them in the Agency Agreement to which this Schedule is
attached.

    



    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
         


      

    


    Appendix
I

    SUBSCRIPTION
AGREEMENT

    [Intentionally
omitted from SEC-filed version – See Exhibit 10.4]


    
      
        
          9005677.4

        

         


      

      
         


        
          

        

      

      
         


      

    


    Appendix
II

    ALLOCATION
POLICY

    


    The
information in this Appendix II is provided in accordance with the requirements
of the FSA.  Under FSA rules, The Agent is obliged to inform an issuer
of securities of the points set out below in relation to the allocation of
securities of the issuer and the potential conflicts of interest that may
exist.  The Agent has in place systems, controls and procedures for
identifying and managing such conflicts.

     

    In
identifying the target group of investors for the issue, the Agent will take
into account the holdings and participation of investors in European equity
markets, including their shareholdings in other companies in the sector or the
peer group, and the participation of those investors in other offerings of
securities.  This universe of target investors may be further refined
in the course of the investor education programme undertaken by a research
analyst following the publication of an independent research report prepared by
the analyst.

     

    Decisions
about pricing and allocation will be made in consultation with the
Corporation.  When recommending the pricing of the issue to the
Corporation, the Agent will draw upon the book of demand generated through the
bookbuilding period and take into account feedback provided by investors during
the course of the marketing period and the investor education
meetings.  Updates as to the state of the book of demand will be
provided throughout the marketing period, according to the Corporation’s
requirements.

     

    When
recommending allocations to the Corporation, the Agent will judge each investor
against a list of key criteria which have been pre-agreed with the
Corporation.  These criteria will include:

     

    
      	
               
      

            	
              ·

            	
              The perceived quality of the
      investor.

            


    

     

    
      	
               
      

            	
              ·

            	
              The size of investor demand,
      particularly in relation to the investor’s funds under management and
      likely order size.

            


    

     

    
      	
               
      

            	
              ·

            	
              The propensity of the investor to
      hold the shares for the medium to long
  term.

            


    

     

    
      	
               
      

            	
              ·

            	
              The probability that the investor
      will use their allocation as a starting point for building a larger
      shareholding (this may include indications of after market
      demand).

            


    

     

    
      	
               
      

            	
              ·

            	
              The extent of the investor’s
      participation in management
marketing.

            


    

     

    
      	
               
      

            	
              ·

            	
              The extent of the investor’s
      participation in investor education meetings with syndicate research
      analysts.

            


    

     

    
      	
               
      

            	
              ·

            	
              The price leadership and
      timeliness of order (particularly in relation to a management
      meeting).

            


    

     

    
      	
               
      

            	
              ·

            	
              The extent to which the order is
      consistent with the investor’s existing portfolio strategy and/or existing
      shareholdings.

            


    

     

    
      	
               
      

            	
              ·

            	
              The type and location of the
      investor – to ensure targeting of suitable investor types (eg specialist
      funds) and geographical
spread.

            


    

     

    In
assessing the above criteria, account will be taken of the investor’s behaviour
in other primary issues.

     

    Whilst
the Agent will intend to allocate shares to investors who are likely to act as
long term, supportive shareholders to the Corporation, provision of liquidity to
the aftermarket is an important aspect of any primary issue and some allocations
will be made to liquidity providers. This may include allocating shares to the
proprietary/market making book of the Agent and/or its Associates.