Document:

SYNTHEMED, INC.

INVESTOR RIGHTS AGREEMENT

 

This Investor Rights Agreement (this “Agreement”) is made and entered into by and among SyntheMed, Inc., a Delaware corporation (the “Corporation”), and the investors listed on the signature pages hereto (the “Investors”), as of the date of execution by the Corporation.

RECITALS

WHEREAS the Corporation desires the Investors to purchase up to 15,000,000 shares of Common Stock of the Corporation (the “Shares”) at a purchase price of $0.40 per share (the “Offering”) pursuant to a subscription agreement (the “Subscription Agreement”);

AND WHEREAS as an inducement for the Investors to enter into the Subscription Agreement, the Corporation desires to enter into this Agreement with the Investors;

NOW THEREFORE in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

	
            1.
 	
            DEFINITIONS .
 

 

	
             
 	
            (a)
 	
            “Common Stock” means the Corporation’s Common Stock, par value of $0.001 per share.
 

 
 

	
             
 	
            (b)
 	
            Exchange Act” means the United States Securities Exchange Act of 1934, as amended.
 

 
 

	
             
 	
            (c)
 	
            “Final Closing” means the date on which the full amount of the Offering is sold or the earlier termination of the Offering period as determined by mutual agreement of the Corporation and the placement agent.
 

 
 

	
             
 	
            (d)
 	
            “Holder” means any person owning of record Registrable Securities or securities convertible, exchangeable or exercisable into Registrable Securities that have not been sold in a public offering or sold pursuant to Rule 144 promulgated under the Securities Act or any assignee of record of such Registrable Securities to whom rights under this Agreement have been duly assigned in accordance with this Agreement.
 

 
 

	
             
 	
            (e)
 	
            “register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement.
 

 
 

	
             
 	
            (f)
 	
            “Registrable Securities” means: (i) the Shares and any shares of Common Stock issued to the placement agent in connection with the Offering or underlying warrants (“Broker Warrants”) issued to the placement agent in connection with the Offering and (ii) any shares of Common Stock or other securities issued in connection with any stock split, stock dividend, recapitalization, reorganization, 
 

 

 

merger, sale of assets or similar event in respect of the foregoing securities; excluding in all cases, however, any securities that would otherwise be Registrable Securities that have been sold by a person in a transaction in which rights under this Agreement are not assigned in accordance with this Agreement, any securities that would otherwise be Registrable Securities that have been sold in a public offering or sold pursuant to Rule 144 promulgated under the Securities Act.  Notwithstanding the foregoing, shares of Common Stock issued or issuable pursuant to exercise of the Broker Warrants shall be deemed Registrable Securities only for so long, and for such purposes, as Shares continue to be Registrable Securities.

 

	
             
 	
            (g)
 	
            “Registration Expenses” means all expenses incurred by the Corporation in complying with Section 2.1 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and accountants for the Corporation, reasonable fees and expenses of one counsel for all the Holders, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Corporation, which shall be paid in any event by the Corporation).
 

 
 

	
             
 	
            (h)
 	
            “Securities Act” means the United States Securities Act of 1933, as amended.
 

 

	
            2.
 	
            Registration.
 

2.1              Registration.  Within 60 days following the Final Closing, the Corporation will file with the SEC a registration statement on Form SB-2 (or such other form as the Corporation may then be eligible to utilize) covering resale of the Registrable Securities by the Holders thereof, together with any other securities entitled to be included in such registration statement pursuant to contractual rights of the holders thereof; provided, however, that the Corporation shall not be obligated to effect, or take any action to effect, any such registration pursuant to this Section 2 in any particular jurisdiction in which the Corporation would be required to execute a general consent to service of process in
effecting such registration, unless the Corporation is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder.

2.2              Expenses of Registration.  All Registration Expenses incurred in connection with the registration pursuant to Section 2.1 shall be borne by the Corporation.

2.3              Obligations of the Corporation.  In connection with the registration pursuant to Section 2.1, the Corporation shall, as expeditiously as reasonably possible:

(a)               Prepare and file with the SEC a registration statement with respect to the Registrable Securities (such filing to occur not later than the time referred to in Section 2.1) and use its best efforts to cause such registration statement to become effective on the earlier to occur of (i) 90 days following the final closing of the Offering or, in the case of SEC review, 120 days following the final closing of the Offering and (ii) five days following the date of SEC clearance to request effectiveness of the registration statement, and keep such registration statement effective and the related prospectus current until the distribution is completed, but not more than two years or such earlier date as any of the Registrable Securities become eligible for sale 

 

pursuant to Rule 144(k) under the Securities Act, provided that such two year period shall be extended for a period of time equal to the period the Holder refrains from selling any Registrable Securities included in such registration statement due to circumstances described in Section 2.3(f).

(b)               Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.

(c)               Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and all amendments and supplements thereto, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration.

(d)               Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided, however, that the Corporation shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions unless the Corporation is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder.

	
            (e)
 	
            [Intentionally omitted].
 

(f)                Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act if such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and, following such notification, promptly deliver to each Holder copies of all amendments or supplements referred to in paragraphs (b) and (c) of this Section 2.3.

(g)               Furnish, at the request of Holders of a majority of the Registrable Securities (other than the Holders of Broker Warrants), on the date that the registration statement becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Corporation for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering addressed to the Holders and (ii) a “comfort” letter dated as of such date, from the independent certified public accountants of the Corporation, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to Holders of a majority of the
Registrable Securities (other than Holders of Broker Warrants), addressed to the Holders.

(h)               Use its best efforts to list the Registrable Securities covered by such registration statement with any securities exchange or interdealer quotation system on which the Common Stock is then listed or quoted.

 

 

(i)                Make available for inspection by each seller of Registrable Securities, and any attorney, accountant or other agent retained by such seller (an “Advisor”), all financial and other records, pertinent corporate documents and properties of the Corporation, and cause the Corporation’s officers, directors and employees to supply all information reasonably requested by any such seller, attorney, accountant or agent in connection with such registration statement.  Such seller will keep, and will cause its Advisors to keep, such information confidential subject to Section 4.14.

2.4              Furnish Information.  It shall be a condition precedent to the obligations of the Corporation to take any action pursuant to Section 2.1 that the selling Holders shall timely furnish to the Corporation such information regarding themselves, the Registrable Securities and other securities held by them, and the intended method of disposition of such securities as shall be required to effect the registration of Registrable Securities.

	
            2.5
 	
            Indemnification.  In connection with the registration pursuant to Section 2.1:
 

(a)               By the Corporation.  To the extent permitted by law, the Corporation will indemnify and hold harmless each Holder, the partners, members, officers and directors of each Holder, and each person, if any, who controls such Holder within the meaning of the Securities Act against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”):

(i)                any untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto;

(ii)               the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or 

(iii)              any violation or alleged violation by the Corporation of the Securities Act, the Exchange Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any federal or state securities law in connection with the offering covered by such registration statement; and the Corporation will reimburse each such Holder, partner, member, officer or director, underwriter or controlling person for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection  shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent of the Corporation (which consent shall not be unreasonably withheld), nor shall the Corporation be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information and expressly stated to be for use in connection with such registration by such Holder, partner, member, officer, director, underwriter or controlling person of such Holder.

 (b)           By Selling Holders.  To the extent permitted by law, each selling Holder will, severally and not jointly, if Registrable Securities held by such Holder are included in the 

 

securities as to which such registration is being effected, indemnify and hold harmless the Corporation, each of its directors, each of its officers who have signed the registration statement, each person, if any, who controls the Corporation within the meaning of the Securities Act, any underwriter (as defined in the Securities Act) and any other Holder selling securities under such registration statement or any of such other Holder’s partners, members, directors or officers or any person who controls such underwriter or other Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which the Corporation or any such director, officer, controlling person, underwriter or other such Holder, or a member, partner, director, officer or controlling person of such underwriter or other Holder may become subject under the
Securities Act, the Exchange Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any federal or state securities law in connection with the offering covered by such registration statement, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder by an instrument duly executed by such Holder and stated to be specifically for use in such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Corporation or any such director, officer, controlling person, underwriter or other Holder, partner, member, officer, director or controlling person of such other Holder or underwriter in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection  shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further, that the total amounts payable in indemnity by a Holder under this Section 2.5(b) in respect of any Violation shall not exceed the net proceeds received by such Holder in the registered offering out of which such Violation arises.

(c)               Notice.  Promptly after receipt by an indemnified party of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.5, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by
the indemnifying party, if the defendants include both the indemnifying party and the indemnified party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.5, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.5.

 

 

(d)               Contribution.  If the indemnification provided for in this Section 2.5 is unavailable to a party entitled to indemnification, then the indemnifying party shall contribute to the aggregate losses, claims, damages or liabilities of the indemnified party as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that, in any such case, (1) no Holder shall be required to contribute any amount in excess of the public offering price of all Registrable Securities offered and sold by such Holder pursuant to such registration statement; and (2) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(e)               Survival.  The obligations of the Corporation and Holders under this Section 2.5 shall survive the completion of any offering of Registrable Securities in a registration statement.

2.6              Remedy.  If, regardless of the reason, the registration statement referred to in this Section 2 is not declared effective by the Securities and Exchange Commission within six months of the Final Closing, the Corporation agrees to grant to the Holders registration rights with respect to the Registrable Securities on terms similar to the registration rights granted to investors in the Corporation’s Series C Convertible Preferred Stock and warrant financing in March 2003, subject to obtaining any consents required under agreements with existing holders of registration rights (and the Corporation agrees to use its best efforts to obtain any such required consents, it being
understood that such efforts will not require the Corporation to provide any additional consideration to or for the benefit of such registration right holders).

	
            3.
 	
            Legends.  
 

The Holders understand that any Share certificates shall be endorsed with the legend(s) referred to in the Subscription Agreement. 

	
            4.
 	
            MISCELLANEOUS.
 

4.1.             Successors and Assigns.  Except as otherwise expressly provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted transferees and permitted assigns of the parties.

4.2.             Governing Law.  This Agreement shall be governed in all respects by the laws of the State of New York as applied to contracts made and to be performed entirely within that state between residents of that state.

4.3.             Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument.

 

 

4.4.             Titles and Subtitles.  The titles of the paragraphs and subparagraphs of this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

4.5.             Stock Splits, etc.  All share numbers used in this Agreement are subject to adjustment in the case of any stock split, reverse stock split, combination or similar events.

4.6.             Notices.  Any notice required or permitted to be given to a party pursuant to the provisions of this Agreement shall be in writing and shall be effective on (a) the date of delivery in person, or the date of delivery by facsimile with confirmation receipt, (b) the business day after deposit with a nationally-recognized courier or overnight service, for United States deliveries or (c) five (5) business days after deposit in the United States mail by registered or certified mail for United States deliveries.  All notices not delivered personally or by facsimile will be sent with postage and other charges prepaid and properly addressed to the party to be notified at the address set forth below such party’s signature on this
Agreement or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto.  All notices for delivery outside the United States will be sent by facsimile, or by nationally recognized courier or overnight service.  Any notice given hereunder to more than one person will be deemed to have been given, for purposes of counting time periods hereunder, on the date given to the last party required to be given such notice.  Notices to the Corporation will be marked to the attention of the President, with a copy to Keith Moskowitz, Eilenberg & Krause LLP, 11 East 44th Street, 17th Floor, New York, NY 10017.  Notices shall be sent to the addresses on the signature pages hereto, or such other addresses as a party may provide to the other parties from time to time.

4.7.             Attorneys’ Fees.  If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

4.8.             Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the party against whom enforcement of such amendment or waiver is sought; provided, however that with respect to any Holder, the consent of the Holders of more than sixty-six and two-thirds percent (662/3%) of the Registrable Securities (other than Broker Warrants) shall be sufficient to bind any and all Holders.

4.9.             Severability.  If any provision of this Agreement is held to be unenforceable under applicable law, then such provision shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.

4.10.          Entire Agreement.  This Agreement and the Subscription Agreements constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof and supersede all prior negotiations, correspondence, agreements, understandings, duties or obligations among the parties with respect to the subject matter hereof.

 

 

4.11.          Further Assurances.  From and after the date of this Agreement, upon the request of a party, the other parties shall execute and deliver such instruments, documents or other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

4.12.          Assignment.  Rights under this Agreement may be assigned in connection with any transfer or assignment of Registrable Securities provided that:  (a) such transfer may otherwise be effected in accordance with applicable securities laws, and (b) such other party agrees in writing with the Corporation to be bound by all of the provisions of this Agreement to the same extent as the transferor.

4.13.          Changes in Stock.  If, and as often as, there is any change in the Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made to the provisions hereof so that the rights granted hereby shall continue with respect to the Common Stock as so changed.

4.14.          Confidentiality.  Information related to the terms and conditions of the Offering, as well as all information contained in the Subscription Agreement (except information relating solely to an Investor) and instruments and agreements delivered in connection therewith, shall be deemed confidential and shall not be disclosed by the Investor to any person unless and until such information becomes generally available to the public other than by disclosure in violation of this Agreement.  All other information that has been designated by the Corporation as “confidential” shall likewise be deemed confidential and not disclosed by the Investor to any person unless and until such information (i) is or becomes generally available to the public other
than by disclosure in violation of this Agreement, (ii) was properly within such Investor’s possession prior to its being furnished by the Corporation to such Investor, or (iii) becomes available to such Investor through disclosure by third parties who have the right to disclose such information

[Remainder of page intentionally left blank].

 

 

INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 1

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights Agreement.

SYNTHEMED, INC.

 

	
            By:
 

Robert Hickey

President and CEO

Address:  PO Box 219

	
            Little Silver, New Jersey 07739
 

Dated:

 

 

 

INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 2

 

 

	
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INVESTOR RIGHTS AGREEMENT

SIGNATURE PAGE 3

 

 

	
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            By:                                                                                                                                                  

Name:

Title:

AddressAGENCY AGREEMENT

 

 

April 3, 2006

 

SyntheMed, Inc.

P.O. Box 219

Little Silver, NJ  07739

U.S.A

 

	
            Attention:
 	
            Mr. Robert P. Hickey
 	
             

	
             
	
            President and Chief Executive Officer
 

 

 

Dear Sirs:

 

Re:         Offering of Shares

 

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 shares (the “Shares”) of the Corporation’s Common Stock, par value $0.001 per share (“Common Stock”). The Shares shall be issued and sold at a price of $0.40 per Share or such other price as may be agreed by the Agent and the Corporation (in either case the “Issue Price”).  The Shares 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 Shares (the “Offering”) will be consummated in one or more closings, the final closing to occur on or about April 30, 2006, 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 Shares 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 Shares 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 Shares, including for solicitation of eligible investors in Canada and the United States, 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.

 

 

 

 

	
            2.
 	
            Sales Restrictions
 

 

The Agent represents and agrees that it will comply with the restrictions on offers and sales of the Shares 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 Shares, the Corporation agrees to pay to the Agent on the Closing Date a commission (the ”Commission”) equal to 10% of that portion of the gross proceeds of the Shares sold on the Closing Date to purchasers secured by the Agent, payable at the election of the Agent in either cash or Shares at the Issue Price (“Commission Shares”) or a combination of the two.  The Agent acknowledges and agrees that no Commission shall be payable on any Shares issued to any of the investors listed on Schedule “B” attached hereto, as the same may subsequently be amended from time to time until the Closing Date (the “Excluded Parties”), or on the Commission Shares.

 

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, a warrant (the “Broker Warrant”) to purchase an aggregate number of Shares equal to 10% of the aggregate number of Shares issued on the Closing Date to purchasers secured by the Agent, excluding Shares sold to Excluded Parties.  The Broker Warrant shall have a term of four (4) years after the date of issue and shall be exercisable to acquire Shares at a price of $0.60 per Share.  Any Commission payable or Broker Warrant issuable to the Agent 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 Shares 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 Shares (a “Purchaser”) who is to acquire Shares 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 Shares 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 Shares 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 the Shares to be issued on the Closing Date registered in such name or names as are directed in the Subscription Agreements;
 

 
 

	
             
 	
            (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:

 

	
            (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, 2005 present fairly, in all material respects, the financial position of the Corporation as at that date, and the results of its operations and the changes in its financial position for the 12-month period then ended in accordance with generally accepted accounting principles, and there has been no material adverse change in the business, affairs or financial or other condition of the Corporation, except as disclosed in the notes to the financial statements for the 12-month period then ended; 
 

 

 

 

	
            (e)
 	
            the Corporation has all requisite power and authority to carry out its obligations under this Agreement, the Subscription Agreement, the investor rights agreement in the form set forth in Appendix I to the Subscription Agreement (the “Investor Rights Agreement”) and the Broker Warrants;
 

 
 

	
            (f)
 	
            this Agreement, the Subscription Agreement and the Investor Rights 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 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, when issued and delivered upon such exercise, such shares of Common 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 100,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value of $0.01 per share. Of the preferred stock, 500,000 shares have been designated as Series A Convertible Preferred Stock, 1,116,500 shares have been designated as Series B Convertible Preferred Stock and 663,000 shares have been designated as Series C Convertible Preferred Stock. As of March 28, 2006, there are 66,696,447 shares of Common Stock outstanding and no shares of preferred stock outstanding. In addition, the Corporation has (i) outstanding a convertible note held by Dimotech Ltd. (the “Convertible Note”) in the principal amount of $40,000 which is convertible, at the holder’s option, into Common Stock at a price of $1.00 per share or into any series of preferred shares
at the price paid by the purchasers thereof; provided, however, that if any such preferred shares are convertible into Common Stock, the holder would be entitled to receive no more than the number of preferred shares which, at the then existing conversion rate, would convert into 40,000 shares of Common Stock, (ii) outstanding a convertible note held by Polymer Technology Group, Inc. in the principal amount of $70,000 which is convertible, at the holder’s option, into Common Stock at a price of $1.00 per share and (iii) available for issuance pursuant to options which have been granted under its 2000 Stock Option Plan, 2001 Stock Option Plan and other agreements, an aggregate of approximately 12,001,000 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 Shares, the Investor Rights Agreement, the Broker Warrants, any indenture, mortgage, deed of trust or loan agreement (except as disclosed in the Corporation’s SEC filings), 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 Shares, Broker Warrants, any shares of Common Stock on the exercise of the Broker 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;
 

 
 

	
            (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 December 31, 2005 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 (i) for a security interest in the Corporation’s
tangible assets to secure payment of the Convertible Note, and (ii) 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; 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; 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 Shares, Broker Warrants or any shares of Common Stock on exercise of the Broker Warrants or the validity of any action taken or to be taken by the Corporation in connection with this Agreement, the Subscription Agreement or the Investor Rights 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 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 Shares and Broker Warrants (the Shares and 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 Investor Rights Agreement, and the Broker Warrants; 
 

 
 

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

 

 

 

	
             
 	
            (iii)
 	
            each of this Agreement, the Subscription Agreement, the Investor Rights Agreement and the Securities has been duly authorized, executed and delivered by the Corporation and 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 Shares and the issue to the Agent of up to 1,500,000 Commission Shares and a Broker Warrant exercisable for up to 1,500,000 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 Warrant; 
 

 
 

	
             
 	
            (v)
 	
            the execution and delivery of this Agreement, the Subscription Agreement and the Investor Rights Agreement and the completion of the transactions contemplated hereby and thereby, the issue of the Shares, the Commission Shares and the Broker Warrant, and the issue of the shares of Common Stock issuable upon exercise of the Broker Warrant 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);
 

 
 

	
             
 	
            (vi)
 	
            the Shares issued to the investors and the Commission Shares issued to the Agent have been duly and validly issued by the Corporation and 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 Warrant will, when issued in accordance with the respective terms and conditions of the Broker Warrant, be validly issued as fully paid and non-assessable shares in the capital of the Corporation;
 

 
 

	
             
 	
            (vii)
 	
            the certificates representing the Shares, Commission Shares and Broker Warrant 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 Shares and Commission Shares and the shares of Common Stock issuable upon exercise of the Broker Warrant and the issue and delivery of the Broker Warrant; and 
 

 
 

	
             
 	
            (ix)
 	
            the exemption from registration of the issuance of the Shares, Commission Shares and Broker Warrant (including the shares of Common Stock underlying the 
 

 

 

Broker Warrant 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 Agreement and the Investor Rights Agreement executed by the Corporation;
 

 
 

	
            (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 Shares and the issue of the Broker Warrant 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 Shares 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 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 $35,000 (the “Cap”), it being understood that the Cap does not include legal expenses of the Agent’s counsel incurred after the Final Closing in connection with the anticipated resale registration of the securities issued in the
Offering.  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 further acknowledges and agrees that in the event of unforeseen circumstances or delay in closing the Offering resulting in the 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 Shares 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.

 

	
            9.
 	
            Indemnification
 

 
 

	
            (a)
 	
            The Corporation agrees to indemnify and hold harmless the Agent and its respective directors, officers, shareholders, employees and agents from and against any and all losses, claims, damages, expenses and liabilities (collectively, “Losses”) arising out of, in relation to or in connection with (i) any breach or non-compliance by the Corporation of or with any of its covenants or representations and warranties herein, or (ii) the services provided by the Agent hereunder, except to the extent that any Losses result from the Agent’s negligence, recklessness or bad faith in performing such services or from the making by the Agent of any unauthorized representations with respect to the Corporation.  This indemnity shall survive any termination of this Agreement.
 

 
 

	
            (b)
 	
            In case any proceeding (including any governmental investigation) shall be instituted involving any indemnified party in respect of which indemnity may be sought pursuant to the preceding paragraph, such party shall promptly notify the Corporation in writing, and the Corporation, upon the request of such party, shall retain counsel reasonably satisfactory to such party to represent such party and any others the Corporation may 
 

 

 

designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding.

 

	
            (c)
 	
            In any such proceeding, such indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such party unless (i) the Corporation and such party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include the Corporation and such party and representation of both parties by the same counsel is not appropriate as a result of differing interests between them.  The Corporation shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment or determination in respect of which the indemnity referred to in this Section 9 is claimed, the Corporation agrees to indemnify such party
from and against any loss or liability by reason of such settlement, judgment or determination.
 

 
 

	
            10.
 	
            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
 
	
            2 Physic Place
 	
             

	
            London  SW3 4HQ
 	
             

	
            England
 	
             

				

 

	
            Attention:
 	
            Joerg Gruber
 

 

	
            Telephone:
 	
            44-20-7349-3101
 
	
            Facsimile:
 	
            44-20-7349-3140
 

 

	
            With a copy to:
 

 

	
            Blake, Cassels & Graydon LLP
 	
             

	
            199 Bay Street, Commerce Court West
 
	
            Toronto, ON  M5L 1A9
 	
             

	
            Canada
 	
             

				

 

	
            Attention:
 	
            John A. Kolada
 

 

	
            Telephone:
 	
            (416) 863-4171
 
	
            Facsimile:
 	
            (416) 863-2653
 

 

 

 

	
            If to the Corporation:
 

 

	
            SyntheMed, Inc.
 

P.O. Box 219

Little Silver, NJ  07739

U.S.A

 

	
            Attention:
 	
            Robert P. Hickey
 	
             

	
             
	
            President and Chief Executive Officer
 

 

	
            Telephone:
 	
            732-728-1769
 
	
            Facsimile:
 	
            732-728-1769
 

 

	
            With a copy to:
 	
            Eilenberg & Krause LLP
 	
             

	
             
	
            11East 44th Street, 17th Floor
 
	
             
	
            New York, NY 10017
 	
             

				

 

	
            Attention:
 	
            Keith Moskowitz
 

 

	
            Telephone:
 	
            212-986-9700
 
	
            Facsimile:
 	
            212-986-2399
 

 

 

	
            11.
 	
            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.

 

	
            12.
 	
            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.

 

	
            13.
 	
            Governing Law
 

 

This Agreement shall be governed by and construed in accordance with the laws of England and Wales.

 

	
            14.
 	
            Time
 

 

Time is of the essence in this Agreement.

 

 

 

	
            15.
 	
            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.

 

	
            16.
 	
            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
 
	
             
	
            Joerg Gruber
 	
             

	
             
	
            Chairman
 	
             

				

 

 

	
            Accepted and agreed as of the   3rd  
 	
            day of  ___April________, 2006.
 

 

 

SYNTHEMED, INC.

 

 

	
            By:
 	
            s/Robert P. Hickey
 	
             

	
             
	
            Robert P. Hickey
 	
             

	
             
	
            President and Chief Executive Officer
 
				

 

 

Schedule “A”

 

Restrictions on Offers and Sales of the Shares

 

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 Shares 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 Shares 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 Shares 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 Shares including the shares of Common Stock issuable upon exercise of the Broker Warrant (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 made outside the United States will be made in reliance on Regulation S under the Securities Act of 1933, and offers and sales within the
United States 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 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.

 

 

 

[Schedule B and Appendix I intentionally omitted]

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