Document:

exhibit10_4.htm

    

      SUBSCRIPTION
AGREEMENT

       

      TO:                     SYNTHEMED,
INC.

       

      AND
TO:           CLUBB
CAPITAL LIMITED

       

      RE:                      SUBSCRIPTION
FOR UNITS

       

      1.           Subscription

       

      The
undersigned (the “Purchaser”) hereby irrevocably subscribes for on and subject
to the terms and conditions set forth herein, from SyntheMed, Inc., a Delaware
corporation (the “Corporation”), the number of units (the “Units”), set forth on
the signature page hereof (the “Purchased Units”).  Each Unit shall
consist of (i) one share of common stock, $0.001(US) par value per share, of the
Corporation (“Common Stock”) and (ii) one Common Stock purchase warrant (a
“Warrant”).  Each Warrant, a sample copy of which is appended as Annex
A-1, will entitle the holder to purchase one share of Common Stock up and until
5:00 p.m. (Eastern Standard Time) on September 30, 2011 upon payment of the
applicable exercise price of $0.50 (US), subject to adjustment as provided in
the Warrant certificate.

       

      The
Purchased Units are being sold to the Purchaser in consideration for $0.40 (US)
per Unit (the “Subscription Price”), and as part of an offering (the “Offering”)
of up to 15,000,000 Units.  If the maximum number of Units offered is
sold, the Corporation will receive gross proceeds of $6,000,000
(US).

       

      There is
no minimum number of Units being offered, and the Corporation reserves the right
to accept or reject subscriptions, in whole or in part, as and when received.
Clubb Capital Limited (the “Agent”) is serving as a placement agent for the
Offering pursuant to an agency agreement to be entered into with the Corporation
(the “Agency Agreement”).

       

      The
Offering is being made to investors resident outside the United States pursuant
to exemptions from local registration, prospectus or similar
requirements.  The Offering is being made in reliance upon the
exemption from registration under the Securities Act of 1933, as amended (the
“Securities Act”), provided by Section 4(2) thereof and/or Regulation D
promulgated thereunder and/or in reliance upon Regulation S promulgated under
the Securities Act and exemptions from local registration, prospectus or similar
requirements.

       

      2.           Use of
Proceeds

       

      The
proceeds of the Offering will be used by the Corporation to fund working capital
and general corporate purposes.

       

      
        
          
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      3.           Documents and Payment to
be provided by the Purchaser

       

      The
Purchaser must complete, sign and return two executed copies of this
Subscription Agreement and the aggregate Subscription Price must be paid in U.S.
dollars by wire transfer to the following account:

       

      Bank of
America NT & SA

      100 West
33rd
Street

      New York,
NY 10048-1191

      Swiftcode:
BOFAUS3N

      ABA No.
026009593

      

      

      For
Further Credit to:

      Canadian
Imperial Bank of Commerce

      Main
Branch, Commerce Court West

      Toronto,
Ontario M5L 1A2

      Swiftcode:
CIBCCATT

      Transit
No. 00002

      Final
Beneficiary: Blake Cassels & Graydon LLP

      Account
No. 000020244414

      Reference:
JACK – 65283/14

      

      or in
such other manner as may be specified by the Agent.  At each Closing
(as defined below), the aggregate Subscription Price for all Purchased Units
subject to such Closing will be released to the Corporation by Blake, Cassels
& Graydon LLP on instructions from the Agent.  The deliveries
required pursuant to this Section 3 are hereinafter referred to as the
“Purchaser’s Closing Deliveries.”

       

      4.           Closing and Delivery of
Share Certificates

       

      Delivery
and sale of the Purchased Units will 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 such date or dates as the Corporation and the Agent may agree (each, a
“Closing Date”). The Final Closing (as defined below) is expected to occur on or
before September 30, 2008. As used herein, “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 the Corporation.

       

      Certificates
representing the Purchased Units (and/or the underlying securities) will be
delivered at Closing against delivery by the Purchaser of the requisite funds by
wire transfer.  The Purchaser, on its own behalf or on behalf of
others for whom it is contracting hereunder, agrees and acknowledges that
counsel for the Agent shall not be liable for any error in judgment or for any
act done or step taken or omitted by it in good faith or for any mistake, in
fact or law, or for anything which it may do or refrain from doing with the
performance of any obligations in this Section 4, except arising out of its
gross negligence or willful misconduct. The Purchaser, on its own behalf or on
behalf of

       

      
        
          
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      others
for whom it is contracting hereunder, hereby appoints the Agent, with full power
of substitution, as its true and lawful attorney and agent with the full power
and authority in its place and stead to swear, execute, file and record any
document necessary to give effect to the delivery and sale of the Purchased
Units, to terminate this subscription on its behalf in the event that any
condition precedent to the Offering has not been satisfied, to execute a receipt
for the Purchased Units and all other documentation, and to modify or waive any
conditions or grant any waivers on its behalf in connection with this
Subscription Agreement and the transactions contemplated hereby.

       

      5.           Certain Matters Relating to
the Offering

       

      The
Purchaser, on its own behalf (or on behalf of others for whom it is contracting
hereunder) acknowledges and agrees that:

       

      
        	
                (a)

              	
                this
      Subscription Agreement sets out the terms of the Purchaser’s
      subscription;

              

      

       

      
        	
                (b)

              	
                it
      (or others for whom it is contracting hereunder) has not been provided
      with, and has not requested, a prospectus or an offering memorandum or any
      similar document in connection with its purchase of
  Units;

              

      

       

      
        	
                (c)

              	
                no
      prospectus or offering memorandum has been filed by the Corporation with
      any securities commission or similar regulatory authority in any
      jurisdiction in connection with the issuance of any Units and, as a
      result;

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      Purchaser is restricted from using certain of the remedies available under
      applicable securities laws;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      Purchaser will not receive information that would otherwise be required to
      be provided to it under applicable securities laws;
  and

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                the
      Corporation is relieved from certain obligations that would otherwise
      apply under applicable securities
laws;

              

      

       

      
        	
                (d)

              	
                the
      sale and delivery of the Purchased Units was not accompanied by any
      advertisement of the Units, including, without limitation, in printed
      public media, radio, television or telecommunications, including
      electronic display or as part of a general
  solicitation;

              

      

       

      
        	
                (e)

              	
                no
      agency, governmental authority, securities commission or other regulatory
      body, stock exchange or other entity has made any finding or determination
      as to, or passed upon the merit for investment of, nor have any such
      agencies, governmental authorities, securities commissions or other
      regulatory bodies, stock exchanges or other entities made any
      recommendation or endorsement with respect to, the
  Units;

              

      

       

      
        	
                (f)

              	
                its
      decision to execute this Subscription Agreement and to subscribe for the
      Purchased Units (on its own behalf or on behalf of others for whom it is
      contracting hereunder) has not been based upon any verbal or written
      representations as to fact or otherwise made by or on behalf of the Agent
      or the Corporation and that the Purchaser’s decision (or the decision of
      others for whom the Purchaser is contracting hereunder) is based
      entirely

              

      

       

      
        
          
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                upon
      publicly available information concerning the Corporation (any such
      information having been delivered to the Purchaser without independent
      investigation or verification by the
Agent);

              

      

       

      
        	
                (g)

              	
                the
      Agent and its directors, officers, employees, agents and representatives
      assume no responsibility or liability of any nature whatsoever for the
      accuracy or adequacy of any such publicly available information or as to
      whether all information concerning the Corporation required to be
      disclosed by it has been generally
disclosed;

              

      

       

      
        	
                (h)

              	
                as
      at the Closing Date, the Units (and the underlying securities) have not
      been registered under the U.S. Securities Act of 1933,
      as amended (the “Securities Act”), with the result that the Purchased
      Units (and the underlying securities) are “restricted securities” within
      the meaning of Regulation S and Rule 144 promulgated under the Securities
      Act and, absent registration under the Securities Act, may not be offered
      or sold within the United States or to or for the account or benefit of a
      U.S. Person (as defined in Rule 902(o) of Regulation S promulgated under
      the Securities Act) except pursuant to an exemption from the registration
      requirements of the Securities Act such as that provided by Rule
      144;

              

      

       

      
        	
                (i)

              	
                the
      Purchaser (or others for whom the Purchaser is contracting hereunder) has
      been advised to consult its own legal advisors with respect to any
      applicable resale restrictions and the Purchaser (or others for whom the
      Purchaser is contracting hereunder) is solely responsible (and neither the
      Corporation nor the Agent is in any way responsible) for compliance with
      applicable resale restrictions;

              

      

       

      
        	
                (j)

              	
                no
      person has made any written or oral
  representations;

              

      

       

      
        	
                 
      

              	
                (i)

              	
                that
      any person will resell or repurchase the
Units;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                that
      the Units (or the underlying securities) will be freely tradeable by the
      Purchaser without any restrictions or hold
  periods;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                that
      any person will refund the purchase price of the Purchased Units;
      or

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                as
      to the future price or value of the Purchased Units (or the underlying
      securities).

              

      

       

      
        	
                (k)

              	
                the
      Purchaser understands and agrees that, except as provided below in this
      paragraph (k), each certificate delivered to the Purchaser representing
      the Purchased Units shall bear a legend in substantially the following
      form (in addition to any legend required under applicable state securities
      laws):

              

      

       

      “THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) AND MAY ONLY BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION (A)
TO

       

      
        
          
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      THE
CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 903 OR 904 OF
REGULATION S UNDER THE 1933 ACT OR (C) PURSUANT TO AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION REQUIREMENTS, PROVIDED IN SUCH LATTER CASE THAT THE HOLDER
UPON REQUEST PRIOR TO SUCH SALE FURNISHES TO THE CORPORATION AN OPINION OF
COUNSEL OF RECOGNIZED STANDING TO THAT EFFECT REASONABLY SATISFACTORY TO THE
CORPORATION.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES
REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT.”

       

      Certificates
evidencing the Purchased Units (and the underlying securities including any
shares of Common Stock issued on, or resulting from, the exercise of the
Warrants) shall not be required to contain the foregoing legend (i) following
any sale of such shares pursuant to Rule 144 if the Purchaser provides the
Corporation with a legal opinion reasonably acceptable to the Corporation to the
effect that the shares can be sold under Rule 144, (ii) if and for so long as
the Purchased Units (and the underlying securities including any shares of
Common Stock issued on, or resulting from, the exercise of the Warrants) are
eligible for sale under Rule 144(b)(1)(i) or (iii) if the holder provides the
Corporation with a legal opinion reasonably acceptable to the Corporation to the
effect that the legend is not required under applicable requirements of the
Securities Act.

       

      
        	
                (l)

              	
                the
      Purchaser’s investment in the Purchased Units involves a significant
      degree of risk, including a risk of total loss of the Purchaser’s
      investment, and the Purchaser has full knowledge of and understands all of
      the risk factors related to the Purchaser’s purchase of the Purchased
      Units;

              

      

       

      
        	
                (m)

              	
                the
      Purchaser has the knowledge and experience in financial and business
      matters and is capable of assessing the proposed investment in the Units
      as a result of its financial and investment experience and business acumen
      or as a result of advice received from a registered person and is capable
      of evaluating the merits and risks of its investment in the Units and is
      able to bear the economic risk of a loss of its entire investment in the
      Purchased Units.

              

      

       

      6.           Representations, Warranties
and Covenants of the Corporation

       

      The
Corporation represents, warrants and covenants to the Agent, the Purchaser (and
to any others on whose behalf the Purchaser is contracting hereunder) as of the
date hereof and as of the Closing Date, which representations, warranties and
covenants shall survive any investigation made by the Agent, the Purchaser or
such others for a period of two years after the Final Closing,
that:

       

      
        
          
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      (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 six-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 Subscription
Agreement;

              

      

       

      
        	
                (f)

              	
                this
      Subscription Agreement has been duly authorized, executed and delivered by
      the Corporation and constitutes or on the Closing Date will constitute, a
      legal, valid and binding obligation of the Corporation enforceable in
      accordance with its terms except that: (i) the enforcement hereof may
      be limited by bankruptcy, insolvency, reorganization and other laws
      affecting the enforcement of creditors’ rights generally, (ii) rights
      of indemnity hereunder 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 out
      of its authorized capital stock as may be required to be issued on, or
      resulting from, the exercise of the Warrants and, when issued and
      delivered upon such exercise, such
shares

              

      

       

      
        
          
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                of
      Common Stock will be duly and validly issued as fully paid and
      non-assessable shares in the capital 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, any other Subscription Agreement for the purchase
      of Units, the Agency Agreement, 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 Purchased Units (and the underlying securities
      including any shares of Common Stock issued on, or resulting from, the
      exercise of the 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

              

      

       

      
        
          
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                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 Section
      6(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 or has valid licenses for the use of, 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

              

      

       

      
        
          
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                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; and

              

      

       

      
        	
                (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, including the shares of Common Stock issued on, or
      resulting from, the exercise of the Warrants) contemplated hereunder or
      the validity of any action taken or to be taken by the Corporation in
      connection with this Subscription Agreement or which would result in any
      material adverse change in the financial condition, results of operations,
      business or prospects of the
Corporation.

              

      

       

      7.           Representations, Warranties
and Covenants of the Purchaser

       

      The
Purchaser represents, warrants and covenants to the Agent and the Corporation
(which representations, warranties and covenants shall survive the Closing and
continue in full and force and effect) that:

       

      
        	
                (a)

              	
                in
      the case of the subscription by the Purchaser for Units as principal for
      its own account and not for the benefit of any other person, the Purchaser
      is purchasing the Purchased Units as principal for its own account, and
      not for the benefit of any other person or company, and this Subscription
      Agreement has been authorized, executed and delivered by, and constitutes
      a legal, valid and binding agreement of the
  undersigned;

              

      

       

      
        	
                (b)

              	
                in
      the case of the subscription by the Purchaser for Units as agent for a
      disclosed principal, each beneficial purchaser of the Purchased Units for
      whom the Purchaser is acting is purchasing as principal for its own
      account and not for the benefit of any other person and the Purchaser is
      an agent with due and proper authority to execute this Subscription
      Agreement and all other documentation in connection with the purchase of
      the Purchased Units on behalf of the beneficial purchaser and this
      Subscription

              

      

       

      
        
          
            9005644.9

          

           

        

        
          
          

          
            

          

        

        
          10 

        

      

      
        	
                 
      

              	
                Agreement
      has been duly authorized, executed and delivered by or on behalf of, and
      constitutes a legal, valid and binding agreement of, the disclosed
      principal;

              

      

       

      
        	
                (c)

              	
                in
      the case of the subscription by the Purchaser of Units as trustee or as
      agent for a principal which is undisclosed or identified by account number
      only, this Subscription Agreement has been duly authorized, executed and
      delivered by, and constitutes a legal, valid and binding agreement of, the
      undersigned acting in such
capacity;

              

      

       

      
        	
                (d)

              	
                if
      the Purchaser is a corporation, the Purchaser is a valid and subsisting
      corporation, has the necessary corporate capacity and authority to execute
      and deliver this Subscription Agreement and to observe and perform its
      covenants and obligations hereunder and has taken all necessary corporate
      action in respect thereof or, if the Purchaser is a partnership, syndicate
      or other form of unincorporated organization, the Purchaser has the
      necessary legal capacity and authority to execute and deliver this
      Subscription Agreement and to observe and perform its covenants and
      obligations hereunder and has obtained all necessary approval in respect
      thereof and, in either case, upon execution by the Corporation, this
      Subscription Agreement constitutes a legal, valid and binding contract of
      the Purchaser enforceable against the Purchaser in accordance with its
      respective terms;

              

      

       

      
        	
                (e)

              	
                if
      the Purchaser is an individual, the Purchaser has attained the age of
      majority and is legally competent to execute this Subscription Agreement
      and to take all actions required pursuant
  hereto;

              

      

       

      
        	
                (f)

              	
                if
      the Purchaser is a US Person within the meaning of Rule 902(o) of
      Regulation S promulgated under the Securities Act of 1933 (“US Person”),
      the Purchaser (1) has read carefully the definition of “Accredited
      Investor” contained in Schedule 1 attached hereto and (2) meets the
      standards of an “Accredited Investor” set forth under Rule 501(a) of
      Regulation D under the Act and has such knowledge and experience in
      financial and business matters that the Investor is capable of evaluating
      the merits and risks of an investment in the Corporation’s securities. The
      Purchaser will promptly notify the Corporation in the event that prior to
      the issuance of any securities to the Purchaser the foregoing
      representation ceases to be
accurate.

              

      

       

      
        	
                (g)

              	
                if
      the Purchaser is not a US Person, the Purchaser makes the representations
      and warranties set forth on Schedule 2
hereto.

              

      

       

      
        	
                (h)

              	
                if
      required by applicable securities legislation, policy or order of a
      securities regulatory authority or other regulatory authority, the
      Purchaser will execute, deliver, file and otherwise assist the Corporation
      in filing such reports and other documents with respect to the issue of
      the Purchased Units (or the underlying securities) as may be reasonably
      required;

              

      

       

      
        	
                (i)

              	
                the
      Purchaser has had access to the Corporation’s public filings with the SEC
      (which are accessible via the SEC’s EDGAR Archives located on the internet
      at www.sec.gov)
      and has had an opportunity to conduct due diligence and to ask and have
      answered questions of the Corporation’s management. The Purchaser
      acknowledges the existence of the

              

      

       

      
        
          
            9005644.9

          

           

        

        
          
          

          
            

          

        

        
          11 

        

      

      
        	
                 
      

              	
                Rights
      Plan, as described in detail in the Corporation’s Current Report on Form
      8-K filed with the SEC on May 27, 2008, which includes a 15% trigger level
      for determining a shareholder’s status as an “Acquiring Person,” and the
      potential for significant dilution to the Purchaser’s equity stake in the
      Corporation should the Purchaser be deemed an “Acquiring
      Person”;

              

      

       

      
        	
                (j)

              	
                the
      Purchaser is capable of assessing the proposed investment as a result of
      the Purchaser’s financial or investment experience or as a result of
      advice received from a registered person other than the Corporation or an
      affiliate thereof, and is able to bear the economic loss of its
      investment.  The Purchaser recognizes that its purchase of
      Purchased Units involves a high degree of risk in that: (i) the
      Corporation has incurred losses since inception; at June 30, 2008, the
      Corporation had an accumulated deficit of approximately $55,257,000
      (unaudited); and the Corporation may require substantial funds in addition
      to the proceeds of this Offering to continue its plan of operations;
      (ii) an investment in the Corporation is highly speculative and only
      investors who can afford the loss of their entire investment should
      consider investing in the Corporation and the Purchased Units (and the
      underlying securities); (iii) the Purchaser may not be able to
      liquidate the Purchaser’s investment; and (iv) transferability of the
      securities comprising the Purchased Units (and the underlying securities
      including any shares of Common Stock issued on, or resulting from, the
      exercise of the Warrants) is extremely limited.  The Purchaser
      has read, or has had an opportunity to read, the Risk Factors section of
      the Corporation’s Annual Report on Form 10-KSB for the year ended December
      31, 2007;

              

      

       

      
        	
                (k)

              	
                the
      Purchaser is aware of the restrictions with respect to trading in the
      Units (and the underlying securities including any shares of Common Stock
      issued on, or resulting from, the exercise of the Warrants) imposed by
      applicable securities laws and confirms that no representation has been
      made respecting the restrictions with respect to trading the Units and the
      Purchaser further covenants that it will not resell the Units (or the
      underlying securities) except in accordance with provisions of applicable
      securities laws;

              

      

       

      
        	
                (l)

              	
                the
      address of the Purchaser (or others for whom the Purchaser is contracting
      hereunder) furnished by the Purchaser on the Purchaser’s signature page of
      this Subscription Agreement is such person’s principal residence if such
      person is an individual or its principal business address if it is a
      corporation or other entity; and

              

      

       

      
        	
                (m)

              	
                the
      Purchaser (or others for whom the Purchaser is contracting hereunder)
      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 Subscription 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 Subscription Agreement,
      (ii) that such information was properly within the Purchaser’s
      possession prior to being furnished by the Corporation, (iii) that
      such information becomes available to the Purchaser on a non-confidential
      basis, such as through disclosure by third parties who have the right to
      disclose the information, and (iv) that disclosure of such
      information is compelled by judicial process, provided that in the event
      of compulsion by judicial process the Purchaser will inform
      the

              

      

       

      
        
          
            9005644.9

          

           

        

        
          
          

          
            

          

        

        
          12 

        

      

      
        	
                 
      

              	
                Corporation
      promptly upon its receipt of notice of judicial process compelling such
      disclosure.

              

      

       

      8.           Reliance Upon
Representations, Warranties and Covenants

       

      The
Purchaser acknowledges that the representations, warranties and covenants
contained in this Subscription Agreement are made with the intent that they may
be relied upon by the Agent and by the Corporation to, among other things,
determine the Purchaser’s eligibility or (if applicable) the eligibility of
others on whose behalf it is contracting hereunder to subscribe for the
Purchased Units.  The Purchaser further agrees that by accepting the
Purchased Units (and the underlying securities), the Purchaser shall be
representing and warranting that the foregoing representations and warranties
are true as at the Closing Time with the same force and effect as if they had
been made by the Purchaser at the Closing Time and that they shall survive the
purchase by the Purchaser of the Purchased Units and shall continue in full
force and effect notwithstanding any subsequent disposition by it of any
Purchased Units (or underlying securities).

       

      9.           Agent’s Commission, Fees and
Expenses

       

      The
Purchaser understands that on the Closing Date, the Agent will receive from the
Corporation a commission equal to 7% of the gross proceeds raised by the Agent
(payable in cash or in Units, or a combination thereof (at the issue price
thereof), the allocation of which to be designated by the Agent, in its sole
discretion, at the Closing Date) and broker warrants (the “Broker Warrants”) to
purchase, at any time up and until 5:00 p.m. (Eastern Standard Time) on
September 30, 2012 at an exercise price of $0.50 (US) per share (subject to
adjustment as provided in the Broker Warrants Certificates), that number of
shares of Common Stock equal to 7% of the number of Purchased Units issued in
respect of proceeds raised by the Agent, as more particularly described and
subject to the exclusions contained in the Agency Agreement. No other fee or
commission is payable by the Corporation in connection with the sale of the
Purchased Units.  However, the Corporation will also pay on the
Closing Date reasonable legal fees and expenses of the Agent’s counsel as
stipulated in the Agency Agreement.  The Purchaser understands and
acknowledges that a director of the Corporation also serves as a director and
officer of the Agent.

       

      10.           Costs

       

      The
Purchaser acknowledges and agrees that all costs and expenses incurred by the
Purchaser (including any fees and disbursements of any counsel retained by the
Purchaser) relating to the purchase of the Purchased Units shall be borne by the
Purchaser.

       

      11.           Appointment of
Agent

       

      The
Purchaser, on its own behalf and (if applicable) on behalf of others for whom
the Purchaser is contracting hereunder, hereby:

       

      
        	
                (a)

              	
                irrevocably
      authorizes the Agent to negotiate and settle the form of any agreement to
      be entered into in connection with this Subscription Agreement and to
      waive on its own

              

      

       

      
        
          
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          13 

        

      

      
        	
                 
      

              	
                behalf
      and on behalf of the purchasers of Units, in whole or in part, or extend
      the time for compliance with, any of the closing conditions in such manner
      and on such terms and conditions as the Agent may determine, acting
      reasonably, without in any way affecting materially the Purchaser’s
      obligations or the obligations of such others hereunder;
    and

              

      

       

      
        	
                (b)

              	
                acknowledges
      and agrees that the Agent and the Corporation may vary, amend, alter or
      waive, in whole or in part, one or more of the conditions set forth in the
      Agency Agreement in such manner and on such terms and conditions as they
      may determine, acting reasonably, without in any way affecting materially
      the Purchaser’s obligations or the obligations of such others
      hereunder.

              

      

       

      12.           Governing
Law

       

      This
Subscription Agreement shall be governed by the laws of the State of New York
without reference to its rules as to conflicts of laws.

       

      13.           Third Party
Beneficiaries

       

      Except
for the limitation of liability provisions in Section 4 above, nothing herein,
express or implied, is intended to nor shall it, confer in any other Person any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Subscription Agreement.

       

      14.           Survival

       

      This
Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the Purchaser for a period of six months
following the completion of the Offering by the Corporation, notwithstanding the
completion of the subscription for the Purchased Units by the Purchaser pursuant
hereto, and any subsequent disposition by the Purchaser of any Purchased
Units.

       

      15.           Assignment

       

      This
Subscription Agreement is not transferable or assignable by the parties
hereto.

       

      16.           Counterparts

       

      This
Subscription Agreement may be executed in counterparts, each of which shall be
deemed to be an original and all of which shall constitute one and the same
document.  The Corporation and the Agent shall be entitled to rely
upon delivery by facsimile of an executed copy of this Subscription Agreement
and acceptance by the Corporation of such facsimile copies will be legally
effective to create a valid and binding agreement between the Purchaser and the
Corporation in accordance with the terms hereof.

       

      [Remainder of page
intentionally left blank]

       

      
        
          
            9005644.9

          

           

        

        
          
          

          
            

          

        

        
          14 

        

      

      17.           Subscription
Particulars

       

      The
aggregate number of Units subscribed for is                                                                                                             for an
aggregate subscription price of ___________.

       

      The
Purchased Units (and underlying securities) are to be registered in the name
of:

       

      
        	 
      
	
                (if
      space is insufficient, attach a
list)

              

      

      

      The
certificates representing the Purchased Units (and/or underlying securities) are
to be delivered to:

       

      
        	 
      
	 
      

      

      

      at its
office at:

       

      
        	 
      
	 
      
	 
      

      

      

      Contact
Name, Number and E-mail:

       

      
        	 
      

      

      

      If the
Purchaser is signing as agent for a principal and not as agent for a fully
managed account, the name and address of the beneficial purchaser
is:

       

      
        	 
      
	 
      
	 
      
	
                (if
      space is insufficient, attach a
list)

              

      

      

      DATED
at                                           
this                      
day
of                                ,
2008.

       

      
        	 
      	 
      
	 
      	
                Name
      of Purchaser (please type or print)

              
	 
      	
                By:

              	 
      
	 
      	 
      	
                (Signature
      of Authorized Representative)

              
	 
      	 
      	 
      
	 
      	 
      	
                (Name
      of Person Signing)

              
	 
      	 
      	 
      
	 
      	 
      	
                Office
      or Title

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Address
      of Purchaser

              	 
      	 
      

      

      
        
          
            9005644.9

          

           

        

        
          
          

          
            

          

        

        
           

        

      

      ACCEPTANCE

       

      This
Subscription Agreement is hereby accepted and agreed to by SyntheMed,
Inc.

       

      DATED at Iselin, New Jersey,
the 30th day of
September 2008.

       

      

       

      
        	
                SYNTHEMED,
      INC.

              
	
                By:

              	 
      
	 
      	
                Authorized
      Signing Officer

              

      

       

       

       

      
        
          9005644.9

             

          

        

      

      
        

         

      

      Schedule
1

       

      ACCREDITED
INVESTOR

       

      An
“accredited investor” is defined as:

       

      
        	
                1.

              	
                A
      bank as defined in Section 3(a)(2) of the Securities Act, or a savings and
      loan association or other institution as defined in Section 3(a)(5)(A) of
      the Securities Act, whether acting in its individual or fiduciary
      capacity; a broker or dealer registered pursuant to Section 15 of the
      Securities Exchange Act of 1934; an insurance company as defined in
      Section 2(13) of the Securities Act; an investment company registered
      under the Investment Company Act of 1940 or a business development company
      as defined in Section 2(a)(48) of that Act; a Small Business Investment
      Company licensed by the United States Small Business Administration under
      Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan
      established and maintained by a state, its political subdivisions, or any
      agency or instrumentality of a state or its political subdivisions, for
      the benefit of its employees, if such plan has total assets in excess of
      $5,000,000; an employee benefit plan within the meaning of the Employee
      Retirement Income Security Act of 1974 (“ERISA”), if the investment
      decision is made by a plan fiduciary, as defined in Section 3(21) of
      ERISA, which is either a bank, savings and loan association, insurance
      company, or registered investment advisor, or if the employee benefit plan
      has total assets in excess of $5,000,000 or, is a self-directed plan, with
      the investment decisions made solely by persons that are accredited
      investors;

              

      

       

      
        	
                2.

              	
                A
      private business development company as defined in Section 202(a)(22) of
      the Investment Advisers Act of
1940;

              

      

       

      
        	
                3.

              	
                An
      organization described in Section 501(c)(3) of the Internal Revenue Code,
      corporation, Massachusetts or similar business trust, or partnership, not
      formed for the specific purpose of acquiring the securities, with total
      assets in excess of $5,000,000;

              

      

       

      
        	
                4.

              	
                A
      director or executive officer of the
  Corporation;

              

      

       

      
        	
                5.

              	
                A
      natural person whose individual net worth, or joint net worth with that
      person’s spouse, at the time of such person’s investment exceeds
      $1,000,000;

              

      

       

      
        	
                6.

              	
                A
      natural person who had an individual income in excess of $200,000 in each
      of the two most recent years or joint income with that person’s spouse in
      excess of $300,000 in each of those years and which has a reasonable
      expectation of reaching the same income level in the current
      year;

              

      

       

      
        	
                7.

              	
                A
      trust with total assets in excess of $5,000,000, not formed for the
      specific purpose of acquiring the securities, whose purchase is directed
      by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation
      D; or

              

      

       

      
        	
                8.

              	
                An
      entity in which all of the equity owners are “accredited investors” under
      one or more of the foregoing
categories.

              

      

       

      
        
          
            9005644.9

          

           

        

        
           

          
            

          

        

        
           

        

      

      Schedule
2

       

      NON
US PERSON REPRESENTATIONS

       

      Each
Purchaser who is not a US Person represents and warrants to the Corporation
that:

       

      
        	
                1.

              	
                Purchaser
      is neither a U.S. Person (as defined in Rule 902(o) of Regulation S
      promulgated under the Securities Act) nor is Purchaser committing to
      purchase securities for the account of a U.S. Person or for resale in the
      United States and the undersigned confirms that the securities have not
      been offered to the Purchaser in the United
  States.

              

      

       

      
        	
                2.

              	
                Purchaser:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                is
      not a “distributor” of securities as such term is defined in Regulation S
      nor a dealer in securities, and

              

      

       

      
        	
                 
      

              	
                (b)

              	
                acknowledges
      that it has not engaged, and agrees that it will not engage during any
      period in which US securities laws prohibit such activity, in any hedging
      transactions with regard to the Corporation’s Common
  Stock.

              

      

       

      
        	
                3.

              	
                The
      investment commitment by the Purchaser does not contravene any of the
      applicable securities legislation in the jurisdiction in which the
      Purchaser is resident and does not
trigger:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                any
      obligation to prepare and file a prospectus or similar document, or any
      other report with respect to such purchase,
and

              

      

       

      
        	
                 
      

              	
                (b)

              	
                any
      registration or other obligation on the part of Purchaser, the Corporation
      or the Agent.

              

      

       

      

       

      
        
          
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      APPENDIX
1

       

       

      Investor
Warrant No:

       

      THIS
WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), STATE SECURITIES LAWS IN THE UNITED STATES OR THE SECURITIES LAW OF ANY
OTHER COUNTRY AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS (A) SUCH TRANSACTION OCCURS OUTSIDE THE UNITED
STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S
UNDER THE ACT (OR SUCH SUCCESSOR RULE OR REGULATION THEN IN EFFECT), IF
APPLICABLE, AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, (B) THIS
WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT ARE REGISTERED
UNDER THE ACT OR (C) SUCH TRANSACTION CONSTITUTES A TRANSACTION THAT OTHERWISE
DOES NOT REQUIRE REGISTRATION UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES
LAWS, AND THE HOLDER PRIOR TO SUCH TRANSACTION HAS FURNISHED TO THE CORPORATION
AN OPINION OF COUNSEL OF RECOGNIZED STANDING TO THAT EFFECT REASONABLY
SATISFACTORY TO THE CORPORATION, SUBJECT IN EACH CASE TO ANY APPLICABLE UNITED
STATES FEDERAL OR STATE OR FOREIGN SECURITIES LAW RESTRICTIONS APPLICABLE TO THE
RESALE OF THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT.

       

      THIS
WARRANT MAY NOT BE EXERCISED BY OR ON BEHALF OF A U.S. PERSON AND NO SECURITIES
MAY BE DELIVERED IN THE UNITED STATES UPON EXERCISE OF THIS WARRANT UNLESS THE
EXERCISE IS REGISTERED UNDER THE ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.  ANY PERSON EXERCISING THIS WARRANT WILL BE REQUIRED TO
PROVIDE (1) WRITTEN CERTIFICATION THAT IT IS NOT A U.S. PERSON WITHIN THE
MEANING OF REGULATION S OF THE ACT AND THAT THIS WARRANT IS NOT BEING EXERCISED
WITHIN THE UNITED STATES OR ON BEHALF OF, OR FOR THE ACCOUNT OR BENEFIT OF, A
U.S. PERSON OR A PERSON IN THE UNITED STATES, OR (2) A WRITTEN OPINION OF
COUNSEL OF RECOGNIZED STANDING TO THE EFFECT THAT THIS WARRANT AND THE SHARES
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE ACT AND
UNDER ANY APPLICABLE U.S. STATE SECURITIES LAWS OR ARE EXEMPT FROM REGISTRATION
THEREUNDER.  HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

       

      WARRANT
TO PURCHASE COMMON STOCK

       

      ___________
Shares of Common Stock

       

      SYNTHEMED,
INC.

       

      THIS
CERTIFIES THAT, for good and valuable consideration, the receipt of which is
hereby acknowledged, [insert
name] (the “Warrantholder”) with an address at [insert address],is the
registered holder of this Warrant and is entitled to subscribe for and purchase
from SyntheMed, Inc., a
Delaware corporation (the “Corporation”), at any time after the date hereof and
before 5:00 p.m. (Eastern

       

      
        
          
            9005644.9

          

           

        

        
           

          
            

          

        

        
           

          
            - 2 -

          

        

      

      Standard
Time) on, September 30, 2011 (the “Time of Expiry”), up to _______________ fully
paid and non-assessable shares of common stock, par value .001 (US) per Share, of the
Corporation (“Shares”) at an exercise price of $0.50 (US) per Share, subject to
adjustment as provided below (collectively the “Exercise Price”).

       

      This
Warrant is subject to the provisions of a subscription agreement entered into
with the original warrantholder in connection with the offering referred to in
Section 1 below (the “Subscription Agreement”), and the following provisions,
terms and conditions:

       

      
        	
                1.

              	
                Designation

              

      

       

      This
warrant certificate is one of a series of warrant certificates (collectively,
the “Warrants”) issued pursuant to an offering by the Corporation of up to
15,000,000 units, each consisting of one Share and one Warrant to purchase one
Share for US$0.50.  As of the date of issuance of this Warrant, an
aggregate of _______ units have been sold in the offering.

       

      
        	
                2.

              	
                Exercise
      of Warrant

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Election to
      Purchase.  This Warrant may be exercised by the
      Warrantholder prior to the Time of Expiry in whole or in part and in
      accordance with the provisions hereof by delivery of an Election to
      Purchase in a form substantially the same as that attached hereto as Annex
      “A”, properly completed and executed, together with this Warrant and
      payment of the Exercise Price multiplied by the number of Shares specified
      in the Election to Purchase to the Corporation at 200 Middlesex Essex
      Turnpike, Suite 210, Iselin, New Jersey 08830, U.S.A.,
      Attention:  Robert P. Hickey, or such other address as may be
      notified in writing by the Corporation. Payment shall be made in U.S.
      dollars by certified or bank cashier’s cheque payable to the order of the
      Corporation.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Exercise.  The
      Corporation shall, promptly following the date it receives a duly executed
      Election to Purchase, this Warrant and payment of the Exercise Price for
      the number of Shares specified in the Election to Purchase (the “Exercise
      Date”), issue or cause to be issued that number of Shares specified in the
      Election to Purchase as fully paid and non-assessable
      Shares.  Such duly executed Election to Purchase shall
      constitute the Warrantholder’s acknowledgement of and undertaking to
      comply to the reasonable satisfaction of the Corporation and its counsel,
      with all applicable laws, rules, regulations and policies of every stock
      exchange upon which the Shares of the Corporation may from time to time be
      listed or traded, and any other applicable governmental or regulatory
      authorities.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Share
      Certificates.  As promptly as practicable after the
      Exercise Date (and in any event not later than 10 days after the Exercise
      Date), the Corporation shall send to the Warrantholder, registered in such
      name or names as the Warrantholder may direct or if no such direction has
      been given, in the name of the Warrantholder, a certificate or
      certificates for the number of Shares specified in the Election to
      Purchase. To the extent permitted by law, such exercise shall be deemed to
      have been effected as of the close of business on the Exercise Date, and
      at such time the rights of the Warrantholder with respect to the portion
      of the Warrant exercised shall cease, and the person or persons in whose
      name or names any certificate or certificates for Shares shall then be
      issuable upon such exercise shall be deemed to have become the holder or
      holders of record of the Shares represented
  thereby.

              

      

       

      
        
          
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            - 3 -

          

        

      

      
        	
                 
      

              	
                (d)

              	
                Fractional
      Shares.  No fractional Shares shall be issued upon
      exercise of this Warrant and no payments or adjustment shall be made upon
      any exercise on account of any cash dividends on the Shares issued upon
      such exercise.  If any fractional interest in a Share would,
      except for the provisions of the first sentence of this subsection 2(d),
      be deliverable upon the exercise of this Warrant, the number of Shares to
      be issued to the Warrantholder upon the exercise of this Warrant shall be
      rounded to the nearest whole
number.

              

      

       

      
        	
                 
      

              	
                (e)

              	
                Subscription for Less
      than Entitlement.  The Warrantholder may from time to
      time subscribe for and purchase a number of Shares less than the aggregate
      number which the holder is entitled to purchase pursuant to this
      Warrant.  In the event of a purchase of a number of Shares less
      than the aggregate number which may be purchased pursuant to this Warrant,
      the holder thereof shall be entitled to receive, without charge, a new
      Warrant certificate in respect of the balance of the Shares subject to
      this Warrant which were not purchased by the
  Warrantholder.

              

      

       

      
        	
                 
      

              	
                (f)

              	
                Corporate
      Changes.  If the Corporation shall be a party to any
      reorganization, merger, dissolution or sale of all or substantially all of
      its assets (the “Event”), (other than a reorganization or merger in which
      the Corporation is the surviving entity) then the securities purchasable
      hereunder shall be the securities (the “Event Securities”) which the
      Warrantholder would have received or been entitled to receive in such
      Event if such Warrantholder had fully exercised this Warrant prior to the
      record date (or if there was no record date, then prior to the effective
      date) of such Event, and the Exercise Price shall be adjusted to be the
      amount determined by multiplying the Exercise Price in effect immediately
      prior to the Event by the number of Shares as to which this Warrant was
      unexercised immediately prior to the Event, and dividing the product
      thereof by the number of Event Securities; provided however, that the
      Event shall not be carried into effect unless all necessary steps have
      been taken to ensure that any surviving entity is subject to the terms of
      this Warrant as adjusted.

              

      

       

      Notwithstanding
anything to the contrary contained in the immediately preceding paragraph, in
the event of a transaction contemplated by such paragraph in which the surviving
or purchasing corporation demands that all outstanding Warrants be extinguished
prior to the closing date of the contemplated transaction, the Corporation shall
give prior notice (the “Merger Notice”) thereof to the Warrantholders advising
them of such transaction. The Warrantholders shall have 10 days after the date
of the Merger Notice to elect to (i) exercise the Warrants in the manner
provided herein, or (ii) receive from the surviving or purchasing corporation
the same consideration receivable by a holder of the number of Shares for which
this Warrant might have been exercised immediately prior to such consolidation,
merger, sale, or purchase reduced by such amount of the consideration as has a
market value equal to the Exercise Price, as determined by the board of
directors of the Corporation in accordance with the terms of the Warrants. If
any Warrantholder fails to timely notify the Corporation of its election, the
Warrantholder shall be deemed for all purposes to have elected the option set
forth in (ii) above. Any amounts receivable by a Warrantholder who has elected
the option set forth in (ii) above shall be payable at the same time as amounts
payable to stockholders in connection with any such transaction.

       

      
        
          
            9005644.9

          

           

        

        
           

          
            

          

        

        
           

          
            -
4 -

          

        

      

      (g)           Subdivision or Consolidation
of Shares

       

      
        	
                 
      

              	
                (i)

              	
                In
      the event the Corporation shall subdivide its outstanding Shares into a
      greater number of Shares, the Exercise Price in effect immediately prior
      to such subdivision shall be proportionately reduced, and conversely, in
      the event the outstanding Shares of the Corporation shall be consolidated
      into a smaller number of Shares, the Exercise Price in effect immediately
      prior to such consolidation shall be proportionately
      increased.

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                Upon
      each adjustment of the Exercise Price as provided herein, the
      Warrantholder shall thereafter be entitled to acquire, at the Exercise
      Price resulting from such adjustment, the number of Shares (calculated to
      the nearest tenth of a Share) obtained by multiplying the Exercise Price
      in effect immediately prior to such adjustment by the number of Shares
      which may be acquired hereunder immediately prior to such adjustment and
      dividing the product thereof by the Exercise Price resulting from such
      adjustment.

              

      

       

      
        	
                 
      

              	
                (h)

              	
                Change or
      Reclassification of Shares.  In the event the Corporation
      shall change or reclassify its outstanding Shares into a different class
      of securities, this Warrant shall be adjusted as follows so as to apply to
      the successor class of securities:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      number and kind of the successor class of securities which the
      Warrantholder shall be entitled to acquire shall be the aggregate number
      and kind of securities which, if this Warrant had been exercised
      immediately prior to such change or reclassification, the Warrantholder
      would have been entitled to receive by reason of such change or
      reclassification; and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      Exercise Price shall be determined by multiplying the Exercise Price in
      effect immediately prior to the change or reclassification by the number
      of Shares as to which this Warrant was unexercised immediately prior to
      the change or reclassification, and dividing the product thereof by the
      number of the successor class of securities determined in paragraph
      2(h)(i) hereof.

              

      

       

      
        	
                 
      

              	
                (i)

              	
                Distribution to
      Shareholders.  If and whenever at any time prior to the
      Time of Expiry the Corporation shall fix a record date or if a date is
      otherwise established (any such date being hereinafter referred to in this
      subsection 2(i) as the “record date”) for the issuance of rights, options
      or warrants to all or substantially all the holders of the outstanding
      Shares of the Corporation entitling them, for a period expiring not more
      than 45 days after such record date, to subscribe for or purchase Shares
      of the Corporation or securities convertible into or exchangeable for
      Shares at a price per share or, as the case may be, having a conversion or
      exchange price per share less than 95% of the Fair Market Value (as
      hereinafter defined) on such record date, the Exercise Price shall be
      adjusted immediately after such record date so that it shall equal the
      price determined by multiplying the Exercise Price in effect on such
      record date by a fraction, of which the numerator shall be the total
      number of Shares outstanding on such record date plus a number equal to
      the number arrived at by dividing the aggregate price of the total number
      of additional Shares offered for subscription or purchase or, as the case
      may be, the aggregate conversion or exchange price of the convertible or
      exchangeable securities so offered by the Fair Market Value, and of which
      the denominator shall be the total number of Shares outstanding on such
      record date plus the total number of additional Shares
  so

              

      

       

      
        
          
            9005644.9

          

           

        

        
           

          
            

          

        

        
           

          
            - 5 -

          

        

      

      offered
(or into which the convertible or exchangeable securities so offered are
convertible or exchangeable); Shares owned by or held for the account of the
Corporation or any subsidiary of the Corporation shall be deemed not to be
outstanding for the purpose of any such computation; such adjustment shall be
made successively whenever such a record date is fixed; to the extent that any
rights or warrants are not so issued or any such rights or warrants are not
exercised prior to the expiration thereof, the Exercise Price shall then be
readjusted to the Exercise Price which would then be in effect if such record
date had not been fixed or to the Exercise Price which would then be in effect
based upon the number of Shares or conversion or exchange rights contained in
convertible or exchangeable securities actually issued upon the exercise of such
rights or warrants, as the case may be.

       

      
        	
                 
      

              	
                (j)

              	
                Additional
      Subscriptions.  If at any time the Corporation grants to
      its shareholders the right to subscribe for and purchase pro rata
      additional securities of the Corporation (other than securities described
      in subsection (2)(i) hereof) or of any other corporation or entity, there
      shall be no adjustments made to the number of Shares or other securities
      subject to this Warrant or to the Exercise Price in consequence thereof
      and this Warrant shall remain
unaffected.

              

      

       

      
        	
                 
      

              	
                (k)

              	
                Carry Over of
      Adjustments.  No adjustment of the Exercise Price shall
      be made if the amount of such adjustment shall be less than 1% of the
      Exercise Price in effect immediately prior to the event giving rise to the
      adjustment, provided however, that in such case any adjustment that would
      otherwise be required then to be made shall be carried forward and shall
      be made at the time of and together with the next subsequent adjustment
      which, together with any adjustment so carried forward, shall amount to at
      least 1% of the Exercise Price in effect prior to such
      adjustment.

              

      

       

      
        	
                 
      

              	
                (l)

              	
                Notice of
      Adjustment.  Upon any adjustment of the number of Shares
      and upon any adjustment of the Exercise Price, then and in each such case
      the Corporation shall give written notice thereof to the Warrantholder,
      which notice shall state the Exercise Price and the number of Shares or
      other securities into which each Warrant is exercisable resulting from
      such adjustment, and shall set forth in reasonable detail the method of
      calculation and the facts upon which such calculation is
      based.  Upon the request of a Warrantholder there shall be
      transmitted promptly to all Warrantholders a statement prepared by the
      firm of independent certified public accountants retained to audit the
      financial statements of the Corporation to the effect that such firm
      concurs in the Corporation’s calculation of the
  change.

              

      

       

      
        	
                 
      

              	
                (m)

              	
                Other
      Notices.  If at any
time:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      Corporation shall declare any dividend upon its
  Shares;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      Corporation shall offer for subscription pro rata to the holders of its
      Shares any additional shares of any class or other
  rights;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                there
      shall be any capital reorganization or reclassification of the capital
      stock of the Corporation, or consolidation, amalgamation or merger of the
      Corporation with, or sale of all or substantially all of its assets to,
      another corporation; or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
            -6-

             

          

        

      

      
        	
                 
      

              	
                (iv)

              	
                there
      shall be a voluntary or involuntary dissolution, liquidation or winding-up
      of the Corporation,

              

      

       

      
        	
                
                

              	
                (iv)

              	
                there
      shall be a voluntary or involuntary dissolution, liquidation or winding-up
      of the Corporation,

              

      

       

      then, in
any one or more of such cases, the Corporation shall give to the Warrantholder
(A) at least 20 days’ prior written notice of the date on which a record shall
be taken for such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, amalgamation, sale, dissolution,
liquidation or winding-up and (B) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, at least 20 days’ prior written notice of the date when the same
shall take place.  Such notice in accordance with the foregoing clause
shall also specify (1) in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Shares shall be entitled
thereto, and (2) in the case of any transaction described in the foregoing
clauses (iii) and (iv), the date on which the holders of Shares are to be
entitled to exchange their Shares for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, amalgamation,
sale, dissolution, liquidation or winding-up, as the case may be.

       

      
        	
                 
      

              	
                (n)

              	
                Shares to be
      Reserved.  The Corporation will at all times keep
      available and reserve out of its authorized Shares, solely for the purpose
      of issue upon the exercise of this Warrant, such number of Shares as shall
      then be issuable upon the exercise of this Warrant.  The
      Corporation covenants and agrees that all Shares which shall be so
      issuable will, upon issuance, be duly authorized and issued, fully paid
      and non-assessable.  The Corporation will take all such action
      as may be necessary to assure that all such Shares may be so issued
      without violation of any applicable requirements of any stock exchange
      upon which the Shares of the Corporation may be listed or in respect of
      which the Shares are qualified for unlisted trading
      privileges.  The Corporation will take all such action as is
      within its power to assure that all such Shares may be so issued without
      violation of any applicable law.

              

      

       

      
        	
                 
      

              	
                (o)

              	
                Issue
      Tax.  The issuance of certificates for Shares upon the
      exercise of this Warrant shall be made without charge to the Warrantholder
      for any issuance tax in respect thereto, provided that the Corporation
      shall not be required to pay any tax which may be payable in respect of
      any transfer involved in the issuance and delivery of any certificate in a
      name other than that of the
Warrantholder.

              

      

       

      
        	
                 
      

              	
                (p)

              	
                Fair Market
      Value.  For the purposes of any computation hereunder,
      unless otherwise specified, the “Fair Market Value” at any date shall be:
      (i) if the Shares are listed on a stock exchange or quoted on a similar
      securities market, the weighted average sale price per share for the
      Shares for any 20 consecutive trading days (selected by the Corporation)
      commencing not more than 25 trading days before such date on the principal
      stock exchange or similar securities market upon which the Shares are
      listed or quoted, as the case may be; or (ii) if the computation is being
      made in connection with a public offering of Shares, the gross
      distribution price per Share under the offering; or (iii) in all other
      cases, the Fair Market Value shall be determined by the Board of Directors
      in good faith, which determination shall be conclusive.  The
      weighted average sale price shall be determined by dividing the aggregate
      sale price of all Shares sold on the said exchange or market during the
      said 20 consecutive trading days by the total number of Shares so
      sold.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
            -7-

          

        

      

       

      
        	
                 
      

              	
                (q)

              	
                The
      Shares issued upon exercise of this Warrant shall be subject to a stop
      transfer order and the certificate or certificates evidencing such Shares
      shall bear the following legend:

              

      

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), STATE SECURITIES
LAWS IN THE UNITED STATES OR THE SECURITIES LAWS OF ANY OTHER COUNTRY, AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS
(A) SUCH TRANSACTION OCCURS OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE ACT (OR SUCH SUCCESSOR
RULE OR REGULATION THEN IN EFFECT), IF APPLICABLE, AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS, (B) THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE REGISTERED UNDER THE ACT OR (C) SUCH TRANSACTION CONSTITUTES A
TRANSACTION THAT OTHERWISE DOES NOT REQUIRE REGISTRATION UNDER THE ACT OR ANY
APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER PRIOR TO SUCH TRANSACTION HAS
FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING TO
THAT EFFECT REASONABLY SATISFACTORY TO THE CORPORATION, SUBJECT IN EACH CASE TO
ANY APPLICABLE UNITED STATES FEDERAL, STATE OR FOREIGN SECURITIES LAW
RESTRICTIONS APPLICABLE TO THE RESALE OF THIS WARRANT AND THE SHARES ISSUABLE
UPON EXERCISE OF THIS WARRANT.

       

      
        	
                3.

              	
                Transfer

              

      

       

      Subject
to compliance by the Warrantholder with any applicable resale restrictions, the
Corporation acknowledges and agrees that this Warrant may be assigned or
transferred by the Warrantholder at the Warrantholder’s option. It is the sole
responsibility of the Warrantholder to ensure that all such restrictions have
been observed.  Upon any permitted assignment or transfer, the
Warrantholder shall furnish the Corporation with such information including a
properly completed and executed form substantially the same as that attached
hereto as Annex “B”, regarding the transferee as the Corporation may reasonably
require to register this Warrant in the name of the transferee.  The
Corporation shall be obligated to refuse to register any proposed transfer of
this Warrant or underlying Shares unless made in accordance with the provisions
of Regulations S, pursuant to registration under the Act or pursuant to an
available exemption from registration.

       

      
        	
                4.

              	
                Replacement

              

      

       

      Upon
receipt of evidence satisfactory to the Corporation of the loss, theft,
destruction or mutilation of this Warrant and, if requested by the Corporation,
upon delivery of a bond of indemnity satisfactory to the Corporation (or, in the
case of mutilation, upon surrender of this Warrant), the Corporation will issue
to the Warrantholder a replacement Warrant (containing the same terms and
conditions as this Warrant).

       

      
        	
                5.

              	
                Expiry
      Date

              

      

       

      This
Warrant shall expire and all rights to purchase Shares hereunder shall cease and
become null and void at 5:00 p.m. (Eastern Standard Time) on September 30,
2011.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
            -8-

          

        

      

       

      
        	
                6.

              	
                Amendment

              

      

       

      Neither
this Warrant nor any term hereof may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought.

       

      
        	
                7.

              	
                Governing
      Law

              

      

       

      The laws
of the State of New York and applicable federal laws of the United States shall
govern this Warrant.

       

      
        	
                8.

              	
                Successors

              

      

       

      This
Warrant shall enure to the benefit of and shall be binding upon the
Warrantholder and the Corporation and their respective successors.

       

      [signature
page follows]

       

      IN
WITNESS WHEREOF the Corporation has caused this Warrant to be signed by its duly
authorised officer and its corporate seal hereto affixed.

       

      DATED:  September
___, 2008.

       

      SYNTHEMED,
INC.

       

      By:

      
        
          
            9005644.9

          

           

        

        
           

          
            

          

        

        
           

        

      

      Annex
“A” to Warrant

       

      Election
to Purchase

       

      The
undersigned Warrantholder hereby irrevocably elects to exercise the Warrant
issued by SyntheMed, Inc. dated _____________, 2008 for the number of shares of
common stock (or other property or securities subject thereto) (“Shares”) par
value $.001 per Share as set forth below:

       

      Number of
Shares to be Acquired:

       

      (a)           Number
of Shares to be
Acquired:                                 ______________

       

      (b)           Exercise
Price per
Share:                                               $
_____________

       

      (c)           Aggregate
Purchase Prices [(a) multiplied by (b)]:  $ _____________

       

      and
hereby tenders a certified or cashier’s cheque or bank draft for such aggregate
purchase price, and directs such Shares to be registered and a certificate
therefor to be issued as directed below.

       

      DATED
this                                                      day
of                                           ,           .

       

      

      

       

      Witness                                                                                     Signature

       

      Direction as to
Registration

       

      Name of
Registered
Holder:                                                                

       

      Address
of Registered
Holder:                                                                

       

      

       

      

       

      

      

      
        
          
            9005644.9

          

           

        

        
           

          
            

          

        

        
           

        

      

      Annex
“B”

       

      TO:                      SYNTHEMED,
INC.

       

      FOR VALUE
RECEIVED, the undersigned hereby sells, transfers and assigns untothe within
warrant (herein called the “Warrant”).  The undersigned hereby
irrevocably instructs you to transfer the Warrant on your books of registration
and to issue in substitution therefor a new warrant exercisable for the same
number of shares or other securities or property as the Warrant.

       

      DATED
the                                           day
of                                           ,           .

       

      Signature
of Transferor is

       

      hereby
guaranteed:

       

      

       

      Note:                      The
signature to this Warrant transfer must correspond with the name as set forth on
the face of the Warrant in every particular without alteration or enlargement or
any change whatsoever, and must be guaranteed by a bank or other financial
institution acceptable to the Corporation.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.

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