SUBSCRIPTION AGREEMENT
TO: SYNTHEMED,
INC.
AND
TO: XXXXX
CAPITAL LIMITED
RE: SUBSCRIPTION
FOR SHARES
1. Subscription
The
undersigned (the “Purchaser”) hereby subscribes for on and subject to the terms
and conditions set forth herein, from SyntheMed, Inc., a Delaware corporation
(the “Corporation”), the number of shares of common stock, par value of
$0.001 per share (“Common Stock), set forth on the signature page hereof (the
“Purchased Shares”). The Purchased Shares are being sold to the Purchaser in
consideration for $1.00 (US) per share (the “Subscription Price”), and as part
of an offering (the “Offering”) of up to 6,000,000 shares of Common Stock (the
“Shares”). If the maximum number of Shares offered is sold, the Corporation will
receive gross proceeds of $6,000,000 (US). There is no minimum number of Shares
being offered, and the Corporation reserves the right to accept subscriptions
as
and when received. Xxxxx 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 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.
3. Documents
to be provided by the Purchaser
The
Purchaser must complete, sign and return (i) two executed copies of this
Subscription Agreement and the Investor Rights Agreement, a copy of which is
appended as Annex A-1 hereto and (ii) one executed copy of the Selling
Securityholder Questionnaire, a copy of which is appended as Annex A-2 hereto
and the aggregate
Subscription Price must be paid in U.S. dollars by wire transfer to the
following account:
-1-
Bank
of
America NT & SA
000
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
XX 00000-0000
Swiftcode:
XXXXXX0X
ABA
No.
000000000
For
Further Credit to:
Canadian
Imperial Bank of Commerce
Xxxx
Xxxxxx, Xxxxxxxx Xxxxx Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Swiftcode:
XXXXXXXX
Transit
No. 00002
Final
Beneficiary: Xxxxx Xxxxxxx & Xxxxxxx LLP
Account
No. 000020244414
Reference:
65283/14 - XXXX
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 Shares subject to
such Closing will be released to the Corporation by Blake, Xxxxxxx & Xxxxxxx
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 Shares 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 (the
“Closing Date”). The Final Closing (as defined below) is expected to occur on or
about June 30, 2007. 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.
Certificate(s)
representing the Purchased Shares will be delivered at Closing against delivery
by the Purchaser of the requisite funds by wire transfer.
To avoid the need to deliver legended Share certificate(s) prior to
effectiveness of the planned resale registration contemplated by the Investor
Rights Agreement, the Purchaser agrees that delivery of the Share certificate(s)
may be made to counsel for the Agent, who shall hold such Share certificate(s)
on behalf of the Purchaser and who shall, upon effectiveness of the registration
of the resale of the Shares, deliver the Share certificate(s) without legend
in
accordance with the delivery instructions of the Purchaser set forth on the
signature page hereto.
Notwithstanding the foregoing, the Purchaser may at any time request physical
delivery of a certificate for Purchased Shares by notice in writing to the
Agent, provided that any such certificate delivered prior to effectiveness
of
the resale registration statement will bear a restrictive legend as set out
in
Section 5(g) below. Moreover, if the resale registration statement is not
declared
-2-
effective
within 90 days of the date of the Final Closing (or 120 days if reviewed by
the
Securities and Exchange Commission (the “SEC”)), counsel for the Agent shall, at
the Agent’s option and in accordance with the Agent’s written instructions,
cause the Share certificate(s) in its possession and registered in the
Purchaser’s name to be endorsed with such restrictive legend and delivered to
the Purchaser. 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 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 Shares,
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 Shares 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:
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(a)
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it
(or others for whom it is contracting hereunder) has not been provided
with a prospectus or an offering memorandum or any similar document
in
connection with its purchase of
Shares;
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(b)
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its
decision to execute this Subscription Agreement and to subscribe
for the
Purchased Shares (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
upon publicly available information concerning the Corporation (any
such
information having been delivered to the Purchaser without independent
investigation or verification by the
Agent);
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(c)
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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;
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(d)
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as
at the Closing Date, the Shares have not been registered under the
U.S.
Securities
Act of 1933,
as amended (the “Securities Act”), with the result that the Purchased
Shares 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
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-3-
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;
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(e)
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[intentionally
omitted];
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(f)
|
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;
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(g)
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the
Purchaser understands and agrees that, except as provided below in
this
paragraph (g), each certificate representing the Purchased Shares
shall
bear a legend in substantially the following form (in addition to
any
legend required under applicable state securities
laws):
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“THE
SECURITIES REPRESENTED HEREBY WERE ORIGINALLY ISSUED WITHOUT REGISTRATION UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) AND MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION ONLY (A) TO 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 Shares shall not be required to contain the foregoing
legend (i) while the registration statement contemplated by the Investor Rights
Agreement is effective under the Securities Act, (ii) following any sale of
such
shares pursuant to Rule 144 if the Purchaser provides the Corporation with
a
legal opinion (and the documents upon which the legal opinion is based)
reasonably acceptable to the Corporation to the effect that the shares can
be
sold under Rule 144, (iii) if and for so long as the Purchased Shares are
eligible for sale under Rule 144(k), (iv) if the holder provides the Corporation
with a legal opinion (and the documents upon which the legal opinion is based)
reasonably acceptable to the Corporation to the effect that the legend
is
-4-
not
required under applicable requirements of the Securities Act or (v) to the
extent held by counsel to the Agent in accordance with Section 4 above.
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:
| (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;
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| (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;
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(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;
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(d)
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the
audited financial statements of the Corporation as at and for the
year
ended December 31, 2006 and the interim financial statements of the
Corporation as at and for the three-month period ended March 31,
2007
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, 2006 in the case of the audited financial
statements and 3-month period ended March 31, 2007 in the case of
the
interim financial statements, all in accordance with generally accepted
accounting principles, and, since March 31, 2007, 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;
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(e)
|
the
Corporation has all requisite power and authority to carry out its
obligations under this Subscription
Agreement;
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(f)
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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 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;
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-5-
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(g)
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the
Shares are or on the Closing Date will be duly and validly authorized
and,
when issued and delivered against payment therefor, will be duly
and
validly issued, fully paid and non-assessable shares in the capital
stock
of the Corporation;
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(h)
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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, 500,000 shares have been designated
as
Series A Convertible Preferred Stock, 1,116,500 shares have been
designated as Series B Convertible Preferred Stock and 663,000 shares
have
been designated as Series C Convertible Preferred Stock. As of March
31,
2007 there were 83,761,185 shares of Common Stock and no shares of
preferred stock outstanding. In addition, as of that date, the Corporation
had an aggregate of 15,562,602 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
14,087,602 shares of Common Stock and (iii) warrants issued to the
Agent
or its designees to purchase an aggregate of 1,475,000 shares of
Common
Stock;
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(i)
|
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 Shares, 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;
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(j)
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the
issue and sale of the Purchased Shares 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;
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(k)
|
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
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-6-
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;
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(l)
|
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 March 31, 2007 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;
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(m)
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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 xxxx, service xxxx, 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;
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(n)
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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;
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(o)
|
the
Corporation has filed all necessary federal, state and municipal
property,
income and franchise tax returns and has paid all taxes shown as
due
thereon or otherwise owed by it to any taxing authority except those
contested in good faith and for which appropriate amounts have been
reserved in accordance with generally accepted accounting principles;
there is no tax deficiency which has been, or to the best of the
knowledge, information and belief of the Corporation might be, asserted
against the Corporation which would materially affect the business
or
operations of the Corporation; the Corporation has paid all applicable
federal and state payroll and withholding
taxes;
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-7-
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(p)
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there
is no collective bargaining or other union agreement to which the
Corporation is a party or by which it is bound, or which is currently
being negotiated; the Corporation does not sponsor, maintain or contribute
to any pension, retirement, profit sharing, incentive compensation,
bonus
or other employee benefit plan, including without limitation any
employee
benefit plan covered by Title 4 of the Employee
Retirement Income Security Act of 1974
(“ERISA”) or any “multi-employer plan” as defined in Section 4001(a)(3) of
ERISA, or any other employee benefit plan; to the best of the knowledge,
information and belief of the Corporation, (i) no employee of the
Corporation is a party to or bound by any agreement, contract or
commitment, or subject to any restrictions, particularly but without
limitation in connection with any previous employment of any such
person,
which would result in a material adverse change to the Corporation
or its
business, and (ii) no senior officer has any present intention of
terminating his employment with the Corporation, and the Corporation
has
no present intention of terminating any such employment;
and
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(q)
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there
is no adverse claim, action, proceeding or investigation pending
or, to
the knowledge, information and belief of the Corporation, threatened,
which questions the validity of the issue or sale of the Shares 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.
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7. Representations,
Warranties and Covenants of the Purchaser
The
Purchaser hereby represents, warrants and covenants to the Agent and the
Corporation (which representations, warranties and covenants shall survive
the
Closing) that:
| (a) |
in
the case of the subscription by the Purchaser for Shares as principal
for
its own account and not for the benefit of any other person, the
Purchaser
is purchasing the Purchased Shares 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;
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(b)
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in
the case of the subscription by the Purchaser for Shares as agent
for a
disclosed principal, each beneficial purchaser of the Purchased Shares
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 Shares on behalf of the beneficial purchaser and this
Subscription 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;
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(c)
|
in
the case of the subscription by the Purchaser of Shares 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;
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(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;
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(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;
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(f)
|
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.
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(g)
|
If
the Purchaser is not a US Person within the meaning of Rule 902(o)
of
Regulation S promulgated under the Securities Act of 1933 ("US Person"),
the Purchaser makes the representations and warranties set forth
on
Schedule 2 hereto.
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(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 Shares as may be reasonably
required;
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(i)
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[intentionally
omitted];
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(j)
|
the
Purchaser has had access to the Corporation’s public filings with the SEC
(which are accessible via the SEC’s XXXXX Archives located on the internet
at xxx.xxx.xxx)
and has had an opportunity to ask questions of the Corporation’s
management;
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(k)
|
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
Shares
involves a high degree of risk in that: (i) the Corporation has
incurred losses since inception; at March 31, 2007, the Corporation
had an
accumulated deficit of approximately $49,286,000 (unaudited); and
the
Corporation may require substantial funds in addition to the proceeds
of
this Offering to continue its plan of operations;
(ii) an
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-9-
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 Shares; (iii) the Purchaser may not be able to liquidate the
Purchaser’s investment; and (iv) transferability of the securities
comprising the Purchased Shares is extremely limited. The Purchaser has read
the
Risk Factors section of the Corporation’s Annual Report on Form 10-KSB for the
year ended December 31, 2006;
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(l)
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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
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(m)
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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
Corporation promptly upon its receipt of notice of judicial process
compelling such disclosure.
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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 Shares. The Purchaser further agrees that by accepting the Purchased
Shares, 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
Shares and shall continue in full force and effect notwithstanding any
subsequent disposition by it of any Purchased Shares.
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 and in Common Stock (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 an
exercise price of $1.10 (US)
-10-
per
share, that number of shares of Common Stock equal to 7% of the number of
Purchased Shares 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 Shares. 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 Shares 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:
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|
(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 behalf and on behalf of the purchasers of Shares,
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
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|
(b)
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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.
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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.
-11-
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 two years
following the completion of the Offering by the Corporation, notwithstanding
the
completion of the subscription for the Purchased Shares by the Purchaser
pursuant hereto, and any subsequent disposition by the Purchaser of any
Purchased Shares.
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]
-12-
16. Subscription
Particulars
The
aggregate number of Shares subscribed for is .
The
Shares are to be registered in the name of:
(if
space
is insufficient, attach a list)
The
certificate(s) representing the Shares are to be delivered to:
at
its
office at:
Contact
Name and Number:
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
,
2007.
Name
of
Purchaser (please type or print)
By:
(Signature
of Authorized Representative)
(Name
of
Person Signing)
Office
or
Title
Address
of Purchaser
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ACCEPTANCE
This
Subscription Agreement is hereby accepted and agreed to by SyntheMed,
Inc.
DATED
at
Iselin, New Jersey, the ____ day of _____________ 2007.
By:
Authorized
Signing Officer
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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 Preferred Stock 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;
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2.
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A
private business development company as defined in Section 202(a)(22)
of
the Investment Advisers Act of
1940;
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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;
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4.
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A
director or executive officer of the
Corporation;
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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;
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6.
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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;
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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
|
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8.
|
An
entity in which all of the equity owners are "accredited investors"
under
one or more of the foregoing
categories.
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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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