Document:

ex10-2.htm

    EXHIBIT 10.2

    

    

    DATED 
NOVEMBER 5,
2008

    

    

    

    

    

    

    

    

    

    

    

    (1) LIMITED LIABILITY COMPANY
NEFTEBITUM

    

    and

    

    (2)  SIBERIAN ENERGY GROUP
INC.

    

    and

    

    (3)  LIMITED LIABILITY COMPANY
KONDANEFTEGAZ

    

    

    

    

    

    

    OPERATING
AGREEMENT

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THIS AGREEMENT is made on
November 5, 2008.

     

    BETWEEN:

     

    
      	
              (1)

            	
              LIMITED LIABILITY COMPANY
      NEFTEBITUM, a company incorporated in Russian Federation and
      registered by the Federal tax inspectionunder primary state registration
      number 1077203022160 and whose registered office is at 625049, Russian
      Federation, Tuimen City, 133 Moskovsky Trakt St.  (“Neftebitum”)

            

    

     

    
      	
              (2)

            	
              SIBERIAN ENERGY GROUP
      INC., a corporation incorporated under the laws of the State of
      Nevada, United States and whose principal place of business is at 275
      Madison Avenue, 6th
      Floor, New York, NY 10016, United States (“SEG”);
    and

            

    

     

    
      	
              (3)

            	
              LIMITED LIABILITY COMPANY
      KONDANEFTEGAZ, a company registered in Russia under primary state
      registration number 1048600002901 and whose registered office is at
      628011, Russian Federation, 63 Komsomolskaya St., Khanty-Mansiysk,
      Khanty-Mansi Autonomous Area (the “Company”, “KNG”), together “Parties”.

            

    

     

     

    RECITALS

     

    
      	
              (A)

            	
              The
      Parties enter into this agreement in connection with item 7 of the
      Agreement of Purchase and Sale of a share in the registered capital of LLC
      Kondaneftegaz between SEG, Neftebitum, Prokopiev S.V and Shelepov O.G.
      (“Purchase
      Agreement”)and with the purpose to specify the methods of
      day-to-day operation of
Kondaneftegaz.

            

    

     

    
      	
              (B)

            	
              The
      Purchase agreement mentioned in (A) transfers the controlling stake of 51%
      of KNG to Neftebitum, and charges Neftebitum with certain responsibilities
      in respect of management and providing financing to
  KNG.

            

    

     

    IT IS AGREED as
follows:

     

    
      	
              1.

            	
              OPERATOR CONDITIONS
      

            

    

     

    
      	
              1.1

            	
              Designation of
      Operator

            

    

     

    Neftebitum
is hereby designated as and accepts to act as an exclusive Operator for KNG and
in relation to the blocks contained in all its current and potential future
Licence Areas under the terms hereof.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      	
              2.2

            	
              Senior Management of
      KNG

            

    

     

    
      	
               
      

            	
              Neftebitum
      shall at all times under the terms of this agreement be entitled to
      appoint persons to the following positions or roles within
      KNG:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      General Director

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Finance Controller;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Reservoir Engineer;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Drilling Supervisor; and

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      Logistic and Procurement
Supervisor.

            

    

     

    
      	
              1.3

            	
              Commencement Date and
      Term

            

    

     

    The
agreement hereunder shall commence upon the execution hereof and shall continue
until Neftebitum, SEG and KNG enter into a full form operating agreement upon
the discovery of any Proven Reserves of hydrocarbons at the KNG’s licence
areas.

     

    
      	
              2.

            	
              OPERATOR
      ROLE

            

    

    
       

      
        	
                2.1

              	Role and
      Functions of the Operator

      

       

    

    
      	
              2.1.1

            	
              The
      Operator shall have the exclusive discretionary charge of and management
      and conduct of all technical, management and operational and all
      associated matters involving KNG and the Karabashski-61, Karabashski-67
      and potential hydrocarbon exploration and production licences (“Operations”).  The
      Operator shall manage and conduct Operations on behalf of the parties by
      itself, its agents, independent contractors and/or servants in accordance
      with the provisions of this Agreement in general accordance with standard
      oil and gas field practices.

            

    

    

    In particular, but without prejudice to
the generality of the foregoing, the Operatorshall use all reasonable endeavours
to:

    

    (a)  prepare annual programmes and budgets
pursuant to the provisions of thisAgreement and in accordance with the
requirements of the KNG’s licensingagreements for Karabashsky 61 and
Karabashsky 67 parcels, which as a minimum will include (unless the
updated license agreements say differently): 

     

    
      	
               
      

            	
              -

            	
              prepare
      and coordinate, and get approval of the “Program of exploration works on
      the Karabashsky-61 and Karabashsky-67 license areas” within 12 months from
      the date of the state registration of the license on October 22,
      2007;

            
	 	 	 

    

    
      	
               
      

            	
              -

            	
              begin
      2D seismic works during the 2008-2010 fieldwork season and to perform not
      less than 176.26 linear kilometres of seismic profiles on Karabashky-61
      and 158 linear kilometres on Karabashky-67 (minimal density of the profile
      not less than 1 linear kilometre per 1 square kilometre of license area);
      and

            
	 	 	 

    

    
      	
               
      

            	
              -

            	
              No
      later than 2011, to start drilling an exploratory well and to complete not
      less than 2 exploratory wells by April 1,
  2012.

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (b) 
provide financing to the Company via loans and advances or by employing its own
resources and equipment, which will enable KNG to carry out the planned
activities;

     

    
      (c) 
Supervise
implementation all programmes and budgets and provide written progress reports
for the Parties on a quarterly basis;

    

    
    

     

    
      	
              2.1.2

            	
              The
      Operator is authorised to enter on behalf of the Parties and KNG into such
      contracts as may be required for the implementation of the Operations, to
      supervise the implementation of such contracts and to make all payments
      thereunder on behalf of the Parties and KNG (and upon the receiving the
      same from KNG so that the Operator has no obligation to make any payment
      itself).

            
	 	 

    

    
      	
              2.1.3

            	
              The
      Operator will oversee KNG in the process of negotiating of service
      contracts to ensure that the contracts are signed in the best interests of
      KNG. When the sum of such contract is over $300,000 the Operator must
      search for the best possible contractor and get price quotes from at least
      two potential contractors and should be able to provide the backup for the
      chosen variant. If in the process of the annual review the parties
      discover that KNG and the Operator were not acting in good faith, then the
      party at loss may request compensation of undergone
    profits.

            
	 	 

    

    
      	
              2.1.4

            	
              Operator
      oversees that KNG establishes price policy on its hydrocarbon products
      with the view of the best available market prices for similar products in
      the region at the current time.

            
	 	 

    

    
      	
              2.1.5

            	
              The
      Operator shall use all reasonable endeavours
to:

            

    

    

    

    
      	
               
      

            	
              (a)

            	
              provide
      each Party with copies of all engineering, geographical, geophysical,
      technical data, information and interpretations relating to the Operations
      as the Operator shall reasonably
decide;

            

    

    

    
      	
               
      

            	
              (b)

            	
              permit
      the authorised representatives of any of the Parties at such Party’s sole
      risk and expense to have access to the area where the Operations are being
      carried out  at all reasonable times and upon giving 48 hours
      notice;

            

    

    

    (c)           arrange
payment of all costs, expenses and other liabilities incurred inconnection with
the Operations by the Operator hereunder;

    

    
      	
               
      

            	
              (d)

            	
              represent
      the Parties in all dealings with the relevant authorities
      and   regulatory bodies, file all necessary reports and
      furnish copies of such reports to the Parties upon
  request;

            

    

    
      

      
        	
                 
      

              	
                (e)

              	Provide annual audited reports and quarterly unaudited
      financialreports for theCompany and updates on contracts entered into by
      theCompany during the term of this
Agreement.

      

       

    

    
      	
              2.1.6

            	
              The
      Operator may employ its own tools and equipment in drilling wells and in
      performing any other work within the scope of this Agreement or purchase
      it from third parties

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
       

      
        	
                2.1.7

              	The Operator shall be in exclusive charge of
      obtaining and selection of all manpower and materials used in the
      Operations by KNG and all statistical, accounting, technical, data and
      other functions.

      

       

    

    
      	
              2.2

            	
              Costs
      reimbursement

            

    

    

    
      	
              2.2.1

            	
              The
      Operator, being the major participant of KNG controls financial position
      of KNG while signing contracts, including compensation of employees and
      amounts that would be payable to subcontractors of KNG. In this relation
      the Operator will guarantee payment under such contracts in case KNG
      becomes insolvent. Other participants of KNG are not financially
      responsible for the contract liabilities entered into by KNG under control
      of the Operator.

            
	 	 

    

    
      	
              2.2.2

            	
              Expenses
      incurred by the Operator itself in the process of executing of its
      functions as an Operator may be summarized and billed to KNG for
      reimbursement. At the discretion of the Operator, if part of such expenses
      relating to execution of operator’s function was not charged to KNG due to
      its poor financial condition, then those expenses can accounted for at the
      time of distribution of profits between participants
      of  KNG.

            
	 	 

    

    
      	
              2.2.3

            	
              The
      parties acknowledge that Neftebitum possesses adequate professional
      resources with extensive experience in oil and gas industry, which it will
      utilize as the operator. However Neftebitum hereby agrees not to charge
      operator’s management fees in connection with its role of the Operator
      until such time as the parties further agree.

            
	 	 

    

    
      	
              2.2.4

            	
              The
      parties acknowledge the initial contribution by SEG by the way of
      providing to the Operator and KNG the geological information on
      Karabashski zone of Khanty-Mansi  Autonomous area (Tuymen region
      of Russian Federation) (“Geological Data”), which will be used in KNG’s
      research activities. However SEG agrees not to charge fees for the use of
      Geological Data until such time as the parties further
    agree.

            

    

     

    
      	
              3.

            	
              PUBLIC
      ANNOUNCEMENTS

            

    

     

    
      	
              3.1

            	
              Parties  approval

            

    

     

    None of
the parties shall make any public announcement or issue any circular relating to
this Agreement or any matters or information provided pursuant hereto without
the prior approval of the other Parties. This does not affect any announcement
or circular required by law or any regulatory body or the rules of any
recognised stock exchange), but the Party with an obligation to make an
announcement or issue a circular shall consult with the other Party/Parties so
far as is reasonably practicable before complying with such
obligation.

     

    
      	
              3.2

            	
              Oral
      statements

            

    

     

    The
Parties intend that any oral statements made or replies to questions given by
either Parties relating to the Group shall be consistent with any such public
announcements or circulars.

     

    
      	
              4.

            	
              INFORMATION AND
      INSURANCE

            

    

     

    
      	
              4.1

            	
              Insurance

            

    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              The
      Operator shall use their reasonable endeavours to procure that KNG
      maintains with a well established insurer prudent insurance in accordance
      with current industry practice from time to time (subject to the same
      being available on reasonable commercial terms) against all risks usually
      insured against by companies carrying on the same or similar
      business.

            

    

     

    
      	
              4.2

            	
              Confidential
      Information

            

    

     

    The
parties shall use all reasonable endeavours to keep confidential and to ensure
that their respective associated companies and their respective officers,
employees, agents and professional and other advisers keep confidential any
information relating to the customers, business, assets or affairs of the
Company or its associated companies.

     

    Each
party shall inform any shareholder, officer, employee or agent or any
professional or other adviser consulting it in relation to matters relating to
this agreement, or to whom it provides confidential information, that such
information is confidential and should be kept confidential and not be disclosed
to any third party (other than those persons to whom it has already been or may
be disclosed in accordance with the terms of this clause).

     

    
      	
              5.

            	
              NOTICES

            

    

     

    
      	
              5.1

            	
              Addresses

            

    

     

    Any
notice, claim or demand in connection with this Agreement shall be in writing in
English or Russian and shall be sufficiently given if delivered or sent to the
recipient at its fax number, telex number or address set out in the Schedule or
any other fax number, telex number or address notified to the sender by the
recipient for the purposes of this Agreement.

     

    
      	
              5.2

            	
              Form

            

    

     

    Any
Notice shall be in writing in English or Russian and may be sent by courier,
telegram, telex, fax or prepaid first class mail. Any Notice shall be deemed to
have been received on the next working day in the place to which it is sent, if
sent by telegram, telex or fax, or 60 hours from the time of posting, if sent by
post.

     

    
      	
              6.

            	
              WHOLE AGREEMENT
      

            

    

     

    This
Agreement contains the entire agreement of the parties and there are no other
promises or conditions in any other agreement whether oral or
written.  This Agreement supersedes any prior written or oral
arrangements between the parties. Remedies

     

    
      	
              7.

            	
              INDEMNIFICATION.

            

    

     

    Each
party (‘first party”) agrees to indemnify and hold harmless the other party from
all claims, losses, expenses, fees including attorney fees, costs, and judgments
that may be asserted against the other party that result from the acts or
omissions of the First party.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    
       

      
        	
                8.

              	AMENDMENT.

      

       

    

    This
Agreement may be modified or amended if the amendment is made in writing and is
signed by both parties.

    

    
      	
              9.

            	
              SEVERABILITY.

            

    

     

    If any
provision of this Agreement shall be held to be invalid or unenforceable for any
reason, the remaining provisions shall continue to be valid and
enforceable.  If a court finds that any provision of this Agreement is
invalid or unenforceable, but that by limiting such provision it would become
valid and enforceable, then such provision shall be deemed to be written,
construed, and enforced as so limited.

     

    
      	
              10.

            	
              ASSIGNMENT.

            

    

     

    The
Operators 's responsibilities under this Agreement may not be assigned or
transferred to any other person, firm, or corporation without the prior written
consent of all the parties.

    

    
      	
              11.

            	
              APPLICABLE LAW
      AND JURISDICTION.

            

    

     

    This
Agreement shall be governed by the laws of the State of New York. All the
parties irrevocably agree that the courts of the State of New York are to have
exclusive jurisdiction to settle any dispute which may arise out of or in
connection with this agreement.

    

     

    
      	
              12.

            	
              COUNTERPARTS

            

    

     

    This
Agreement may be entered into in any number of counterparts, all of which taken
together shall constitute one and the same instrument. Any party may enter into
this Agreement by executing any such counterpart.

     

    
      	
              13.

            	
              LANGUAGE

            

    

     

    This deed
may be executed in English and in Russian.  In case of any conflict
between the English and Russian versions, the terms of the English version shall
prevail

     

    
 

     

    IN
WITNESS WHEREOF, the parties have executed this Agreement to be effective as of
the date first written above.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

       SCHEDULE
1

     

    Parties’
details

     

    

     

    
      	
              Neftebitum

              address:
      625049, Russian Federation, Tuimen City, 133 Moskovsky Trakt
      St.

            	
               

              Attn:
      Shadrin Nikolai Nelmanovich

            	
              Fax:

              +____________

            
	
              SEG

              275
      Madison Avenue

              6th
      floor

              New
      York, NY 10016

              USA

            	
               

              Attn:David
      Zaikin

            	
              Fax:

              +1
      (905) 771-9198

            
	
              The
      Company

              628011,
      Russian Federation, 63 Komsomolskaya St., Khanty-Mansiysk, Khanty-Mansi
      Autonomous Area.

               

            	
               

              Attn:
      Company Secretary

            	
              Fax:

              +______________

            

    

    

     

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    
      	
              EXECUTED as a DEED by

            	
              )

            
	
              Limited Liability
      Company Neftebitum

            	
              )

            
	
              Director

            	
              )

            
	
              Gainulin
      Rinat Gadulzhanovich

            	)
	 
      	
              /s/ Gainulin
      Rinat
      Gadulzhanovich

            
	 
      	
              Signature

            

    

     

    
      	
              EXECUTED as a DEED by

            	
              )

            
	
              Siberian
      Energy Group Inc.

            	
              )

            
	
              Chairman
      and CEO

            	
              )

            
	
              David
      Zaikin

            	
              )

            
	 
      	
              /s/
      David
    Zaikin

            
	 
      	
              Signature

            

    

     

    
      	
              EXECUTED on behalf
      of

            	
              )

            
	
              LLC
      Kondaneftegaz

            	
              )

            
	
              Director

            	
              )

            
	
              Gainulin
      Rinat Gadulzhanovich

            	
              )

            
	 
      	
              /s/ Gainulin Rinat
      Gadulzhanovich

            
	 
      	
              Signature

            

    

    

     

    
      
        
        

      

      
        -9-exhibit10_1.htm

     

    

    SYNTHEMED, INC.

    

    CONSULTING
AGREEMENT

    

    

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

    

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

    

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

    

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

    

            1.    Consulting
Relationship.    During the term of this Agreement,
Consultant will serve as Executive Chairman of the Company, which shall be an
executive officer position, and in that capacity Consultant shall have the
rights, powers, authority, functions, duties and responsibilities customarily
associated with the position of an executive chairman, and such additional
rights, powers, authority, functions and responsibilities as the Board of
Directors may assign to Consultant from time to time that are commensurate with
Consultant’s status as Executive Chairman.  Without limiting the
foregoing, Consultant will be actively engaged in, and have responsibility,
working with the Board of Directors and the President and Chief Executive
Officer of the Company, for (i) the overall leadership and strategic direction
of the Company, (ii) providing guidance and support to senior management of the
Company, (iii) the coordination of the activities of the Board of Directors and
(iv) communication with shareholders and other important
constituencies.  Consultant shall be responsible to and shall report
to the Board of Directors.  Consultant shall devote such time and
attention to the business of the Company as is reasonably necessary to fulfill
Consultant’s responsibilities as Executive Chairman.

     

      2.    Compensation.    As
full compensation for the services to be rendered by Consultant in all
capacities to the Company, the Company shall pay Consultant the compensation set
forth on Exhibit A
hereto, together with such additional cash (but not equity-based) compensation
as the Board of Directors may from time to time establish for the services of
its members generally.

     

           
3.    Expense
Reimbursement.    Consultant shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred by
Consultant in the performance of services rendered hereunder following
submission of written expense statements and other supporting documentation in
accordance with the policy and practice of the Company.

    

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

     

            5.    Independent
Contractor.    Consultant's relationship with the
Company will be that of an independent contractor and not that of an
employee.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

    

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

    

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

    

            6.    [Intentionally
omitted]

    

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

    

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

    

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

     

            10.    Miscellaneous.    

    

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

    

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

    

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

    

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

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

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

    

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

    

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

    

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

    

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

    

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

    

    

    SYNTHEMED,
INC.

    

    By:_s/Robert P.
Hickey

                        Name:  R.
P. Hickey

    Title:  President/CEO

    Date:  10/1/08

    

    

    RICHARD
L. FRANKLIN, MD

    

    s/Richard L.
Franklin

    Date:  [not
dated]

     

    
      
         

      

      
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    EXHIBIT A

    

    COMPENSATION

    

    

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    EXHIBIT
B

    

    CONFIDENTIALITY,
NON-SOLICITATION AND

     NON-COMPETITION
AGREEMENT

    

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

    

    1.
Non-Compete; Non-Solicitation.

    

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

    

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

    

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

    

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

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

    

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

    

    2.
Confidential Information.

    

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

    

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

    
      
         

      

      
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    3.
Invention and Patents.

    

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

    

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

    

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

    

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

    

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

    

    

    

    
      
         

      

      
        3

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