WARRANT SUBSCRIPTION AGREEMENT
BY AND BETWEEN
BIOSYNTECH, INC.
AND
BUSINESS DEVELOPMENT BANK OF CANADA
June 26, 2002
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TABLE OF CONTENTS
Page 1
PREAMBLE.....................................................................3
Definitions..................................................................3
Subscription for Purchased Warrant...........................................5
Attributes of the Purchased Warrant..........................................5
Acknowledgements of BDC......................................................5
Representations and Warranties of BioSyntech.................................6
Representations and Warranties of the Founder...............................17
Covenants of BioSyntech, BSC, BSE and the FOUNDER...........................17
Arbitration.................................................................18
General.................................................................... 18
SIGNATURES..................................................................21
Intervention of the Founder.................................................22
INTERVENTION OF THE SUBSIDIARIES............................................23
ANNEX "A"....................................................................1
Warrant certificateSchedule "A"..............................................1
Schedule "A".................................................................2
* * *
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WARRANT SUBSCRIPTION AGREEMENT
THIS AGREEMENT is made and entered into this 26th day of June, 2002.
BY AND BETWEEN: BIOSYNTECH, INC., a corporation duly constituted
under the laws of the State of Nevada, having its
principal place of business at ▇▇▇,
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ (▇▇▇▇▇▇), ▇▇▇ ▇▇▇
(hereinafter referred to as: the "BioSyntech")
AND: BUSINESS DEVELOPMENT BANK OF CANADA, a
corporation duly constituted under the Business
Development Bank of Canada Act, having a place of
business at ▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇), ▇▇▇ ▇▇▇
(hereinafter referred to as: the "BDC")
PREAMBLE
--------
A. WHEREAS the BDC wishes to subscribe to, and BioSyntech agrees to
issue and sell to the BDC, a warrant to purchase one million
(1,000,000) Common Shares of BioSyntech on the terms and conditions
set-forth hereinafter.
DEFINITIONS
-----------
1. In this Agreement, unless the subject matter or context is
inconsistent therewith:
a) "Agreement" means this agreement including the Schedules
thereto, as amended or supplemented from time to time;
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b) "Business" means the business presently and heretofore carried
on by BioSyntech including research and development in the
field of biomaterials related to tissue engineering and
therapeutic delivery;
c) "Business Day" means a day, other than a Saturday or Sunday, on
which Canadian chartered banks are open for general banking
business in Montreal, Quebec;
d) "Closing Date" means the date hereof;
e) "Common Share(s)" means common shares in the capital of
BioSyntech as are presently traded on the NASDAQ: BB;
f) "Contracts" means those agreements to which BioSyntech is a
party set forth and described in Schedule "A" hereto;
g) "Expiration Date" means the fifth (5th) anniversary of the
Closing Date;
h) "Financial Statements" means the audited consolidated financial
statements of BioSyntech as at March 31, 2001 and the unaudited
consolidated financial statements of BioSyntech as at December
31, 2001, a copy of which are attached hereto as Schedule "B";
i) "Founder" means Dr. Amine Selmani;
j) "Intellectual Property" means all the Know-How, data,
biological materials, inventions, other proprietary information
and technology, trade secrets, copyright, service marks, trade
names, trade marks, Patents, both domestic and foreign, used in
whole or in part in or required for the proper carrying on of
the Business, as it is being carried-on at the date hereof, or
owned by or licensed to BioSyntech;
k) "Know-How" means all of the know-how of BioSyntech generally
including, without limitation, the know-how associated with the
Patents;
l) "Loan" means the two million five hundred thousand Canadian
dollar ($CAN2,500,00) loan provided by the BDC to Bio Syntech
Canada Inc. pursuant to a loan agreement dated the date hereof;
m) "Material Adverse Effect" means any effect or change that is or
would be materially adverse to the Business, operations,
assets, condition (financial or otherwise) or results of
operations of BioSyntech, Bio Syntech Canada Inc. ("BSC") and
Bio Syntech Europe S.A.R.L. ("BSE") on a consolidated basis.
n) "Patents" means the patents or patent applications listed in
Schedule "C" and all other Canadian and foreign patents, patent
applications filed or to be filed including any patents issuing
on such applications, any extensions, reissues, divisions,
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re-examinations, renewals, provisionals, continuations and
continuations-in-part thereof and equivalent or similar rights
anywhere in the world in inventions and discoveries including,
without limitation, invention disclosures;
o) "Person" means an individual, partnership, corporation,
company, business, trust, joint venture or other entity of a
similar nature;
SUBSCRIPTION FOR PURCHASED WARRANT
----------------------------------
2. The BDC hereby irrevocably subscribes for and takes up, and
BioSyntech issues and sells to the BDC a warrant to purchase one
million (1,000,000) Common Shares of BioSyntech (the "Purchased
Warrant") in consideration of the payment of one dollar ($1) and the
granting of the Loan by the BDC, the whole subject to the terms and
conditions set-forth herein.
ATTRIBUTES OF THE PURCHASED WARRANT
-----------------------------------
3. The Purchased Warrant is issued pursuant to and has the attributes
set forth in the certificate representing such Purchased Warrant in
the form set forth on Annex A, attached hereto and incorporated
herein (the "Warrant Certificate"), with such appropriate
insertions, omissions, substitutions and other variations as
required or permitted by this Agreement.
ACKNOWLEDGEMENTS OF BDC
-----------------------
4. The BDC represents that the BDC is purchasing the Purchased Warrant
as principal for the BDC's own account and not with a view to the
distribution, fractionalization or subdivision thereof.
5. The BDC acknowledges that an investment in the Purchased Warrant
must be considered speculative and is subject to a number of risk
factors, including, without limitation, those set forth in
BioSyntech's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2001. The BDC covenants and agrees to comply with
applicable securities legislation, regulations, orders or policies
concerning the purchase, holding of, and resale of the Purchased
Warrant and the Common Shares issuable upon exercise of the
Purchased Warrant.
6. The BDC acknowledges that it has not received, nor has it requested
to receive, any offering memorandum, except for the business plan of
BioSyntech, and other documents describing the business and affairs
of BioSyntech including, without limitation, BioSyntech's Annual
Report on Form 10-KSB for the fiscal year ended March 31, 2001,
BioSyntech's Quarterly Report on Form 10-QSB for the fiscal quarter
ended December 31, 2001 and BioSyntech's Proxy Statement on Schedule
14A dated June 20, 2001 which has been prepared for delivery to and
review by the BDC in order to assist it in making an investment
decision in respect of the Purchased Warrant and the Loan, and
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insofar as the BDC is aware, the offering of the Purchased Warrant
is not being made through any advertisement in the printed media of
general and regular paid circulation, radio or television or any
other form of advertisement or as part of a general solicitation.
7. The BDC has such knowledge and experience in financial and business
matters that Investor is capable of evaluating the merits and risks
of the BDC's prospective investment in BioSyntech, and has the
ability to bear the economic risks of the investment.
8. The BDC is acquiring the Purchased Warrant and the Common Shares
into which the Purchased Warrant may be converted for investment for
the BDC's own account. The BDC understands that the Purchased
Warrant and the Common Shares into which the Purchased Warrant may
be converted have not been registered under the Securities Act of
1933 (the "Securities Act") by reason of a specific exemption from
the registration provisions of the Securities Act, which depends
upon, among other things, the bona fide nature of the investment
intent as expressed herein. The BDC further represents that it does
not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to any third
person with respect to any of the Purchased Warrant and the Common
Shares into which the Purchased Warrant may be converted. The BDC
understands and acknowledges that the offering of the Purchased
Warrant and the Common Shares into which the Purchased Warrant may
be converted pursuant to this Agreement will not be registered under
the Securities Act on the ground that the sale provided for in this
Agreement and the issuance of securities hereunder is exempt from
the registration requirements of the Securities Act.
9. The BDC acknowledges that the Purchased Warrant and the Common
Shares into which the Purchased Warrant may be converted must be
held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available.
The BDC is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permit limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions.
The BDC covenants that, in the absence of an effective registration
statement covering the stock in question, the BDC will sell,
transfer, or otherwise dispose of the Purchased Warrant and the
Common Shares into which the Purchased Warrant may be converted only
in a manner consistent with the BDC's representations and covenants
set forth herein. In connection therewith, the BDC acknowledges that
BioSyntech will make a notation on its stock books regarding the
restrictions on transfers set forth herein and will transfer
securities on the books of BioSyntech only to the extent not
inconsistent therewith.
REPRESENTATIONS AND WARRANTIES OF BIOSYNTECH
--------------------------------------------
10. Each of BioSyntech, BSC and BSE hereby represents and warrants to
the BDC as follows and acknowledges that the BDC is relying upon
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such representations and warranties in connection with the purchase
by the BDC of the Purchased Warrant:
a) Due Incorporation and Qualification: BioSyntech has been
duly incorporated and organized and is validly
subsisting and in good standing under the laws of the
State of Nevada; no actions have been taken by
BioSyntech to amend or modify its amended and restated
articles of incorporation since December 1, 2000 and its
by-laws since March 28 2000; it has the corporate power
to own or lease all of its property and to carry on the
Business as now being conducted by it; it is duly
qualified as a corporation to do business and is in good
standing in each jurisdiction in which it carries-on the
Business, except those jurisdictions where the failure
to be so qualified would not have a Material Adverse
Effect;
b) Capacity and Due Authorization: Each of BioSyntech, BSC
and BSE has the corporate power and capacity to enter
into, deliver and perform its obligations under this
Agreement and all other agreements required to be
delivered hereunder. This Agreement and each of the
agreements, contracts, instruments and actions required
to be delivered or performed by each of BioSyntech, BSC
and BSE hereunder have been duly authorized by all
necessary corporate action of BioSyntech, BSC and BSE;
c) Authorized and Outstanding Capital: the authorized
capital of BioSyntech consists of one hundred million
(100,000,000) Common Shares of which twenty-nine million
two hundred twenty-two thousand two hundred fifty
(29,222,250) Common Shares are validly issued and
outstanding as fully paid at the Closing Date, and five
million (5,000,000) shares of exchangeable shares, none
of which is issued and outstanding; The authorized
capital of BSC consists of an unlimited number of Common
Shares and an unlimited number of exchangeable shares of
which 15,277,036 exchangeable shares and one million
nine hundred sixteen thousand three hundred fourteen
Common Shares are validly issued and outstanding as
fully paid at the Closing Date and are held by those
Persons and in the quantities set forth in Schedule "A";
the shares of BSE consist of five hundred (500)
partnership units, and are held by those Persons and in
the quantities set forth in Schedule "A";
d) Shareholders' Agreement: the only unanimous or other
shareholders' agreements relating to the shares of
BioSyntech, BSC or BSE;
e) Shareholder Loans: there are no shareholder loans owing
to or by BioSyntech, BSC or BSE;
f) Ownership of Securities: the Founder, directly or
indirectly (including through ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc.),
owns the outstanding securities of BioSyntech, BSC and
BSE noted in Schedule "A"; The Founder does not hold,
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either directly or indirectly, any other shares of
BioSyntech, BSC or BSE;
g) Pre-emptive Rights: except as disclosed in this
Agreement, no Person has any agreement or option or any
right or privilege, whether by law, pre-emptive or
contractual, capable of becoming an agreement or option
for the purchase from BioSyntech, BSC or BSE of any of
the undertaking, property or assets of BioSyntech, BSC
or BSE;
h) Right to Acquire Securities/Consents, etc.: except as
provided in Schedule "A", no Person has any agreement or
option or any right or privilege, whether by law,
pre-emptive or contractual, capable of becoming an
agreement or option, including, without limitation,
convertible securities, warrants, options or convertible
obligations of any nature, for the purchase,
subscription, allotment or issuance of any of the
unissued shares in the capital of BioSyntech, BSC or BSE
or of any securities of BioSyntech, BSC or BSE; no
consent, authorization, license, franchise, permit,
approval or order of any court or governmental agency or
regulatory body is required on the part of BioSyntech
for the acquisition by the BDC of the Purchased Warrant;
i) No Subsidiaries: except for BSC and BSE, BioSyntech does
not have any subsidiaries or agreements of any nature to
acquire any subsidiary or to acquire any ownership
interest in any partnership, joint venture or to acquire
or lease any other business operations; Each of BSC and
BSE has been duly incorporated and organized and is
validly subsisting and in good standing under the laws,
respectively of Canada and France, and each is duly
qualified to do business and is in good standing in each
jurisdiction in which it carries-on the Business, except
those jurisdictions where the failure to be so qualified
would not have a Material Adverse Effect;
j) No Guarantees: except as disclosed in Schedule "A", each
of BioSyntech, BSC and BSE is not a party to or bound by
any agreement of guarantee, indemnification, assumption
or endorsement or any other like commitment of the
obligations, liabilities, contingent or otherwise, or
indebtedness of any other Person;
k) Books and Records: all material financial transactions
of BioSyntech, BSC and BSE relating to the Business have
been accurately recorded in their respective books and
records;
l) Financial Statements - Operations: the Financial
Statements present accurately the financial position of
BioSyntech, BSC and BSE as at the date of such financial
statements and have been prepared in accordance with
United States generally accepted accounting principles
applied on a basis consistent with those of previous
fiscal years; the consolidated balance sheets of the
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Financial Statements present a true and complete
statement of the financial condition and assets and
liabilities (contingent or otherwise) of BioSyntech as
at the date of the Financial Statements and the
consolidated statements of operations of the Financial
Statements accurately sets forth the results of the
operations of BioSyntech throughout the period covered
by the Financial Statements;
m) Directors' and Shareholders' Minutes: the corporate
records and minute books of BioSyntech, BSC and BSE are
complete and accurate and the corporate proceedings and
actions reflected therein have been conducted or taken
in accordance with laws, and the amended and restated
articles and by-laws. The minute books contain all
written resolutions of directors and shareholders and
such resolutions were duly passed. The former and
current directors and officers were duly appointed. The
minutes of all meetings of the directors and
shareholders of BioSyntech, BSC and BSE held since their
respective incorporations are complete and accurate. The
share certificate books, registers of shareholders,
registers of transfers and registers of directors of
BioSyntech, BSC and BSE are complete and accurate and
all applicable security transfer tax payable in
connection with the transfer of any securities of each
of BioSyntech, BSC and BSE has been duly paid. The BDC
shall be provided with the right to audit, at its own
expense, the records maintained by any transfer agent
overseeing the transfer of BioSyntech securities;
n) Adverse Changes: since December 31, 2001, there has been
no material adverse change in the research and
development, business, operations, customer or supplier
relations, affairs or condition of each of BioSyntech,
BSC and BSE, financial or otherwise, or arising as a
result of any legislative or regulatory change,
revocation of any licence or right to do business, fire,
explosion, accident, casualty, labour trouble, flood,
drought, riot, storm, condemnation, act of God or
otherwise;
o) No Violation: the entering into of this Agreement and
the transactions contemplated hereby will not result in
the violation of any of the terms and provisions of the
articles of incorporation or by-laws of BioSyntech, BSC
or BSE, the Contracts or of any indenture or other
agreement, written or oral, to which BioSyntech, BSC or
BSE may be a party, except those the violation of which
would not have a Material Adverse Effect;
p) Violation of Laws: the entering into of this Agreement
and the transactions contemplated hereby will not result
in the violation of any law, regulation, order, decree,
judgment or other restriction of US, Canada, or France
or any provincial or state jurisdiction therein
applicable to BioSyntech, BSC or BSE or of any court,
except those the violation of which would not have a
Material Adverse Effect;
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q) Due Execution: this Agreement has been duly executed and
delivered by each of BioSyntech, BSC and BSE and is a
valid and binding obligation of BioSyntech enforceable
in accordance with its terms;
r) No Payments: except as set forth in Schedule "A", no
payments have been made or authorized since
incorporation by each of BioSyntech, BSC and BSE to its
officers, directors, former directors, shareholders or
employees or to any person or company not dealing at
arm's length (as such term is construed under the Income
Tax Act (Canada)) with any of the foregoing, including
by way of the repayment of a shareholder loan, except at
the regular rates to them of salary, pension, bonuses,
rents or other remuneration;
s) No Capital Expenditures: except as disclosed in Schedule
"A", no capital expenditures have been made or
authorized by BioSyntech, BSC and BSE since December 31,
2001;
t) No Employment Agreements: except as disclosed in
Schedule "A" with regard solely to its standard form
employment agreement which has been provided to the BDC,
each of BioSyntech, BSC and BSE is not a party to any
written or oral employment, incentive compensation,
severance, profit sharing, pension, benefit or similar
agreement, policy or plan;
u) No Collective Bargaining Agreements: each of BioSyntech,
BSC and BSE has not made any agreements with any labour
union or employee association nor made commitments to or
conducted negotiations with any labour union or employee
association with respect to any future agreements and
none of BioSyntech, BSC or BSE is aware of any current
attempts to organize or establish any labour union or
employee association in such entity;
v) No Outstanding Debt Instruments: except as set forth in
Schedule "A" hereto, BioSyntech, BSC and BSE do not have
outstanding any bonds, debentures, mortgages, notes or
other indebtedness other than in the normal course of
businessand are not under any agreement to create or
issue any bonds, debentures, mortgages, notes or other
indebtedness;
w) Leases: none of BioSyntech, BSC or BSE is a party to any
lease or agreement in the nature of a lease in regard to
real property, whether as lessor or lessee;
x) Real Property: except as set forth in Schedule "A"
hereto, none of BioSyntech, BSC or BSE is the owner of
or under any agreement to own any real property;
y) Title to Assets: none of BioSyntech, BSC or BSE is a
party to any conditional sales contract, hire-purchase
agreement or other title retention agreement and each of
BioSyntech, BSC and BSE owns, possesses and has a good
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and marketable title to its undertaking, property and
assets, free and clear of any and all mortgages, liens,
pledges, charges, security interests, encumbrances,
actions, claims or demands of any nature whatsoever or
howsoever arising;
z) Agreements: except for those Contracts set out and
described in Schedule "A" hereto, BioSyntech, BSC and
BSE do not have any outstanding material agreement,
contract or commitment, whether written or oral, of any
nature or kind whatsoever which provides for payments of
CDN$10,000 in any year or which cannot be cancelled upon
a ninety (90) day notice;
aa) Litigation: there are no actions, suits or proceedings
(whether or not purportedly on behalf of BioSyntech, BSC
or BSE) or other claims, pending or threatened against
or affecting BioSyntech, at law or in equity, or before
or by any federal, provincial, state, municipal or other
governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign which if
adversely determined would result in a Material Adverse
Effect;
bb) Breaches of Agreements: none of BioSyntech, BSC or BSE
is in default or breach of any contracts, agreements,
written or oral, indentures or other instruments to
which it is a party except for those where such default
or breach would not have a Material Adverse Effect, and
there exists no state of facts which after notice or
lapse of time or both would constitute such a default or
breach, and all such contracts, agreements, indentures
or other instruments are now in good standing and
BioSyntech is entitled to all benefits thereunder,
except for those where such default or breach would not
have a Material Adverse Effect;
cc) Intellectual Property:
---------------------
i. The Intellectual Property is validly and
beneficially owned by or licensed to BSC with the
exclusive right to use the same and is in good
standing and duly registered, whenever required, in
all appropriate offices to preserve the right
thereof and thereto; the Intellectual Property is
free and clear of any liens, charges and
encumbrances, and no other person or entity has any
claim of ownership with respect to such
Intellectual Property whatsoever;
ii. (a) none of BioSyntech, BSC or BSE has licensed,
conveyed, assigned or encumbered any of its rights
to the Intellectual Property; (b) the Intellectual
Property is all the intellectual property necessary
to carry on the Business of BioSyntech; (c) the
conduct of BioSyntech, BSC and BSE and the
Intellectual Property do not infringe upon the
trade marks, trade names, patents or copyrights, or
any other intellectual property, domestic or
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foreign, owned or used by, any other Person; (d)
the Intellectual Property is validly subsisting, is
in full force and effect and has not been used or
enforced in a manner that would result in the
abandonment, cancellation or unenforceability of
any of the Intellectual Property; (e) the
Intellectual Property which is not owned by
BioSyntech, BSC or BSE is being used for commercial
purposes by BioSyntech, BSC or BSE only with a
written license from the rightful owner thereof and
all such licenses are in full force and effect; (f)
there does not exist any claim of adverse
ownership, invalidity or other opposition to or
conflict with any Intellectual Property nor any
pending or threatened suit, proceeding, claim,
demand, action or investigation of any nature or
kind against BioSyntech, BSC or BSE relating to the
Intellectual Property; (g) there is no activity in
which BioSyntech, BSC or BSE is engaged in or use
by BioSyntech, BSC or BSE of any of the
Intellectual Property which breaches, violates,
infringes or interferes with any rights of any
third party or requires payment for the use of any
patent, trade name, trade secret, trade ▇▇▇▇,
copyright or other intellectual property or
technology of any other Person; and (h) each of
BioSyntech, BSC and BSE has taken all appropriate
measures and precautions to protect and maintain
fully the confidentiality, secrecy and value of its
trade secrets and the Know-How in order to ensure
that any rights thereto are and shall be
enforceable to the fullest extent by BioSyntech,
BSC and BSE. Without limiting the generality of the
foregoing, the trade secrets of BioSyntech have not
been divulged to any Person except pursuant to the
appropriate confidentiality agreements. Each of
BioSyntech, BSc and BSE has obtained all necessary
assignments with respect to all Patents or
copyright of BioSyntech, BSC or BSE. All current
and former employees, consultants and independent
contractors of BioSyntech, BSC or BSE (including
predecessors in title) have executed and delivered
to BioSyntech, BSC or BSE a valid and irrevocable
assignment agreement sufficient to irrevocably
transfer all rights in the Intellectual Property to
BioSyntech, BSC or BSE and such assignments have
been recorded with the relevant governmental
entity; such current and former employees,
consultants and independent contractors have
irrevocably waived in writing their moral rights to
their work which is subject to copyright; all
developments made by BioSyntech, BSC or BSE,
whether as an improvement or not, form part of the
Know-How of BioSyntech, BSC or BSE and all the
rights, titles and interests in and to such
developments or improvements are owned exclusively
by BioSyntech, BSC or BSE;
iii. The names which appear as the inventors on all the
patent applications and issued patents developed by
any of BioSyntech, BSC and BSE are the names of the
true and proper inventors thereof;
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dd) Compliance with Laws: Each of BioSyntech, BSC and BSE is
conducting its business in compliance with all
applicable laws, rules and regulations, except for those
the non-compliance with or breach of would not result in
a Material Adverse Effect, of each jurisdiction in which
the Business is carried on, is not in breach of any such
laws, rules or regulations and is duly licensed,
registered or qualified in each jurisdiction in which it
owns or leases property or carries on the Business, to
enable the Business to be carried on as now conducted
and its property and assets to be owned, leased and
operated, except for those the non-compliance with or
breach of would not result in a Material Adverse Effect,
and all such licenses, registrations and qualifications
are valid and subsisting and in good standing and none
of the same contains any burdensome term, provision,
condition or limitation which has or may have a Material
Adverse Effect;
ee) Taxes: Each of BioSyntech, BSC and BSE has duly and
timely filed all returns, elections, filings and reports
in respect of income and other taxes required to be
filed by it under applicable law and all such returns,
elections, filings and reports are true, complete and
correct in all material respects; there are not any
current or past tax liabilities or obligations or tax
arrears, including, without limitation, income tax,
P.S.T., G.S.T., employee withholdings, or property tax
nor any related interest or penalties owing to any
foreign, federal, provincial, state, territorial or
municipal tax authorities; all taxes have been accrued
in accordance with generally accepted accounting
principles consistently applied; there are no
agreements, waivers, or other arrangements with any
taxation authority providing for an extension of time
with respect to the filing of any tax return, election
or payment of any tax, governmental charge, penalty,
interest or fine, by BioSyntech, BSC or BSE; there are
no actions, suits, proceedings, investigations or claims
now threatened or pending against or affecting
BioSyntech, BSC or BSE in respect of taxes governmental
charges, penalties, interest or fines, or any matters
under discussion with any governmental authority
relating to taxes, governmental charges, penalties,
interest or fines asserted by any such authority; and
BioSyntech has withheld from all payments made to any of
its officers, directors, employees and non-residents of
Canada and other people with respect to whom it is
required by law to withhold any payments pursuant to the
Interest Tax Act (Canada), or in respect of P.S.T. or
G.S.T., the amount of all taxes, including but not
limited to income tax, Canada Pension Plan
contributions, Employment Insurance Commission Premiums,
premiums payable under worker's compensatory legislation
and other deductions required to be withheld therefrom
and has paid the same to the proper tax or other
receiving officers within the time required under any
applicable tax legislation;
ff) Facilities and Equipment: all facilities and equipment
owned or leased by each of BioSyntech, BSc or BSE in
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connection with the Business are in good operating
condition and are in a state of good repair and
maintenance, subject to ordinary wear and tear;
gg) Loans and Indebtedness: each of BioSyntech, BSC or BSE
has no loans or indebtedness outstanding which have been
made to directors, former directors, officers,
shareholders and/or employees or to any person or
corporation not dealing at arm's length (as such term is
construed under the Income Tax Act (Canada)):
hh) Receivables: all receivables recorded on the books of
BioSyntech, BSC or BSE are, bona fide, good and, to the
knowledge of BioSyntech, BSC and BSE, are not subject to
any set off or counterclaim;
ii) Liabilities for Employees: all vacation pay, bonuses,
commissions and other emoluments are reflected and have
been accrued in the books of account of BioSyntech, BSC
or BSE;
jj) Other Liabilities: there are no material liabilities of
BioSyntech, BSC or BSE of any kind whatsoever, whether
or not accrued, whether or not determined or
determinable, and whether or not contingent in respect
of which BioSyntech, BSC, BSE or the BDC may become
liable on or after the consummation of the transaction
contemplated by this Agreement, including, without
limitation, product or patent liabilities, product
warranties and other liabilities and obligations
respecting products manufactured or sold by BioSyntech,
BSC or BSE, other than:
i. liabilities disclosed on, reflected in or provided
for in the Financial Statements;
ii. liabilities specifically disclosed or referred to
in this Agreement or in the Schedules attached
hereto; or
iii. liabilities incurred in the ordinary course of
business and attributable to the period since
incorporation none of which has been materially
adverse to the nature of the Business, results of
operations, assets, financial condition or manner
of conducting the Business, and which do not exceed
in the aggregate the sum of $150,000;
kk) Full Disclosure: each of BioSyntech, BSC and BSE has
fully provided the BDC with all of the information that
the BDC has requested for deciding whether to subscribe
to the Purchased Warrant and has not omitted to provide
any information which may have a Material Adverse
Effect. Neither this Agreement nor any of the documents
related hereto nor any other statements or certificates
made or delivered in connection herewith or therewith
when taken together contains any untrue statement of a
material fact;
-15-
ll) Absence of Unusual Transactions: except as disclosed in
Schedule "A", since December 31, 2001, each of
BioSyntech, BSC and BSE has not:
i. transferred, assigned, sold or otherwise disposed
of any of the Intellectual Property;
ii. issued or sold any shares in its capital or any
warrants, bonds, debentures or other corporate
securities of BioSyntech, BSC or BSE or issued,
granted or delivered any right, option or other
commitment for the issuance of any such securities;
iii. declared or made any payment of any dividend or
other distribution in respect of any shares in its
capital or purchased, redeemed any such shares
thereof or effected any subdivision, consolidation
or reclassification of any such shares;
iv. waived or omitted to take any action in respect of
any rights of substantial value, or entered into
any commitment or transaction not in the ordinary
and usual course of business where such loss,
rights, commitment or transaction is or would be
material in relation to BioSyntech;
v. mortgaged, pledged, subjected to lien, granted a
security interest in or otherwise encumbered any of
its assets or property, whether tangible or
intangible;
vi. incurred any liability, obligation or expenditure
of any nature (whether accrued, absolute,
contingent or otherwise) or committed to make or
perform any capital expenditures or maintenance or
repair projects, except in the ordinary course of
business;
vii. drawn down on any operating line, increased its
indebtedness for borrowed money or made any loan to
any Person;
viii. written off as uncollectable any notes or accounts
receivable exceeding $5,000 in the aggregate;
ix. cancelled or waived any claims or rights of
BioSyntech, BSC or BSE having a value in the
aggregate greater than $5,000;
x. granted any increase in the rate of wages,
salaries, bonuses or other remuneration to any
executive or other employee except as provided for
in any budget prepared for BioSyntech as part of an
annual business plan and totalling no greater than
five percent (5%);
xi. entered into any transaction with a person not
dealing at arm's length with BioSyntech, BSC or BSE
within the meaning of the Income Tax Act (Canada);
-6-
or made any change to any method of accounting or
auditing practice;
xii. authorized, agreed or otherwise become committed to
do any of the foregoing;
mm) Loan Agreements: except for the Loan and as set out in
Schedule "A", each of BioSyntech, BSC and BSE has not
created, incurred, assumed or guaranteed any
indebtedness or liabilities whatsoever, or any
capitalized lease obligation which provides for payments
of CDN$10,000 in any year or which cannot be cancelled
upon a ninety (90) day notice;
nn) Royalties and Licenses: except as set forth in Schedule
"A", each BioSyntech, BSC or BSE is not a party to or
bound by any contract or commitment to pay any royalty,
license fee or management fee;
oo) Purchased Warrant: the Purchased Warrant to be issued to
the BDC will be validly issued and outstanding;
pp) Environmental Matters: each of BioSyntech, BSC and BSE
has utilized or delivered for disposal, disposed of and
transported all wastes, whether hazardous or not, in
full compliance with all local, provincial, state and
federal laws, guidelines and regulations pertaining to
environmental matters and so as not to give rise to any
liability, remediation or clean up obligation under any
law, guideline or regulation; each of BioSyntech, BSC
and BSE is, and at all times has been, in full
compliance with, and has not been and is not in
violation of or liable under, any environmental law;
There are no hazardous materials present on or in the
environment of the immoveable property owned or leased
by BioSyntech, BSC or BSE, including any hazardous
materials contained in barrels, above or underground
storage tanks, landfills, land deposits, dumps,
equipment (whether moveable or fixed) or other
containers, either temporary or permanent, and deposited
or located in land, water, sumps, or any other part of
the properties or incorporated into any structure
therein or thereon; There has been no release of any
hazardous materials at or from BioSyntech, BSC or BSE's
facilities or at any other locations where any hazardous
materials were generated, manufactured, refined,
transferred, produced, imported, used, or processed from
or by BioSyntech, BSC or BSE in which same has or had an
interest; each of BioSyntech, BSC and BSE has delivered
to the BDC true and complete copies and results of any
reports, studies, analyses, tests, or monitoring
possessed or accessible to each of BioSyntech, BSC and
BSE pertaining to hazardous materials in, on, or under
BioSyntech, BSC or BSE's facilities, or concerning
compliance by BioSyntech, BSC and BSE with environmental
laws;
qq) Outstanding Violations: there are no outstanding orders,
notices or similar requirements relating to BioSyntech,
BSC or BSE issued by any building, environmental, fire,
-17-
health, labour or police authorities or from any other
federal, provincial, state, or municipal authority with
which BioSyntech, BSC or BSE is not in material
compliance and there are no matters under discussion
with any such authorities relating to orders, notices or
similar requirements;
rr) Customers and Suppliers: BioSyntech, BSC or BSE does not
have any information nor is it aware of any facts
indicating that any of their current customers or
suppliers intend to cease doing business with them;
ss) Fees: no fees, commissions or other similar payments
will be paid or payable to any third party by
BioSyntech, BSC or BSE in connection with the
transactions contemplated herein.
REPRESENTATIONS AND WARRANTIES OF THE FOUNDER
11. The Founder has taken all appropriate measures and precautions to
protect and maintain fully the confidentiality, secrecy and value of
BioSyntech, BSC and BSE's trade secrets and the Know-How in order to
ensure that any rights thereto are and shall be enforceable to the
fullest extent by BioSyntech, BSC and BSE. Without limiting the
generality of the foregoing, to the knowledge of the Founder:
a. the trade secrets of BioSyntech have not been divulged to any
Person except pursuant to the appropriate confidentiality
agreements;
b. each of BioSyntech, BSC and BSE has obtained all necessary
assignments with respect to all Intellectual Property;
c. all current and former employees, consultants and independent
contractors of BioSyntech, BSC or BSE have executed and
delivered to BioSyntech, BSC or BSE a valid and irrevocable
assignment agreement sufficient to irrevocably transfer all
rights in the Intellectual Property to BioSyntech, BSc or BSE
and such assignments have been recorded with the relevant
governmental entity; such current and former employees,
consultants and independent contractors have irrevocably waived
in writing their moral rights to their work which is subject to
copyright;
d. the names which appear as the inventors on all the patent
applications and issued patents developed by any of BioSyntech,
BSC and BSE are the names of the true and proper inventors
thereof.
COVENANTS OF BIOSYNTECH, BSC, BSE AND THE FOUNDER
-------------------------------------------------
12. BioSyntech, BSC and BSE hereby covenant with the BDC that if and
when the BDC chooses to exercise the Purchased Warrant, or any
portion thereof, BioSyntech will take all corporate action required
to perform fully their obligations hereunder and those of BioSyntech
set forth in the Warrant Certificate. The Founder hereby covenants
-18-
with the BDC that if and when the BDC chooses to exercise the
Purchased Warrant, or any portion thereof, the Founder will vote the
shares he holds, both directly or indirectly, to cause BioSyntech to
take all corporate action required to perform fully its obligations
hereunder and set forth in the Warrant Certificate.
ARBITRATION
-----------
13. Any dispute which shall arise between BioSyntech and the BDC
concerning the construction or application of this Agreement, or the
rights, duties or obligations of either of them in connection with
this Agreement, shall be referred to arbitration to the exclusion of
any courts in accordance with the procedures set out in the Code of
Civil Procedure of the Province of Quebec and such decision shall be
final and binding upon BioSyntech and the BDC.
GENERAL
-------
14. This Agreement is binding upon and shall inure to the benefit of the
BDC and the BDC's executors, personal representatives, successors
and assigns and BioSyntech and its successors and permitted assigns;
the rights granted to the BDC pursuant to this Agreement shall be
assignable at the BDC's sole discretion.
15. All of the representations, warranties and covenants of BioSyntech,
BSC, BSE and the Founder contained herein shall survive until the
Expiration Date, except for Intellectual Property (Section 10 cc))
and Taxes (Section 10 ee), which representations and warranties
shall survive for respective periods equal to the periods during
which BioSyntech, BSC, BSE or the BDC may suffer liability as a
result of any breach thereof. Notwithstanding the limitations set
out in this Section, any claim which is based on intentional
misrepresentation or fraud may be brought at any time.
16. BioSyntech and the BDC shall be entitled to rely on delivery of a
facsimile copy of this Agreement, and such facsimile copy shall
create a valid and binding agreement between the BDC and BioSyntech
in accordance with the terms hereof.
17. All notices which are permitted or required to be given hereunder
shall be validly given if actually delivered or if transmitted by
electronic means to the addresses hereinafter set forth, until
notice of a change is given in accordance with the foregoing, and
shall be effective on the date of such delivery or transmission.
-19-
Notice to the BDC shall be addressed to:
----------------------------------------
BUSINESS DEVELOPMENT BANK OF CANADA
5 Place Ville ▇▇▇▇▇, suite 1450
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇ ▇▇▇▇
Notice to BioSyntech shall be addressed to:
-------------------------------------------
BIOSYNTECH, INC.
▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Dr. Amine Selmani
Telecopier No.: (▇▇▇) ▇▇▇ ▇▇▇▇
Notice to the Founder shall be addressed to:
--------------------------------------------
BIOSYNTECH, INC.
▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Dr. Amine Selmani
Telecopier No.: (▇▇▇) ▇▇▇ ▇▇▇▇
18. Each party shall from time to time do such further acts and execute
and deliver such further documents as shall be reasonably required
in order to fully perform and carry out the terms of this Agreement.
19. The headings of the sections of this Agreement are inserted for
convenience of reference only and shall not affect the meaning or
construction hereof.
20. The terms of this Agreement express and constitute the entire
agreement between the parties hereto as to the subject matter
hereof, and no implied term of any kind shall arise by reason of
anything contained in this Agreement.
21. Time is of the essence of this Agreement.
22. This Agreement shall be governed by and construed in accordance with
the laws of the Province of Quebec and the laws of Canada applicable
therein.
-20-
23. In this Agreement, words importing the singular include the plural
and vice versa and words importing persons include firms or
corporations.
24. BDC and BioSyntech have expressly agreed that this Agreement, and
all documents and notices related hereto, be in English.
(signatures on following page)
-21-
SIGNATURES
----------
IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of the
date first above written.
(BioSyntech) BIOSYNTECH, INC.
Per:
/s/ Amine Selmani
--------------------------------
Name: Amine Selmani
Title: President
(BDC) BUSINESS DEVELOPMENT BANK OF CANADA
Per:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
[Signature page to the Warrant Subscription Agreement]
-22-
INTERVENTION OF THE FOUNDER
---------------------------
The Founder hereby intervenes to make the representations and warranties set out
in Section 11 of the present Agreement.
/s/ Amine Selmani
---------------------------------
Dr. Amine Selmani
-23-
INTERVENTION OF THE SUBSIDIARIES
--------------------------------
Each of BSC and BSE hereby intervene to make the representations, warranties and
covenants set out in Sections 10 and 12 of the present Warrant Subscription
Agreement.
BIO SYNTECH CANADA INC.
/s/ Amine Selmani
------------------------------
Name: Amine Selmani
Title: President
BIO SYNTECH EUROPE S.A.R.L.
/s/ Amine Selmani
------------------------------
Name: Amine Selmani
Title: President
ANNEX "A"
WARRANT CERTIFICATE
SCHEDULE "A"
SCHEDULE A TO WARRANT SUBSCRIPTION AGREEMENT
--------------------------------------------
Paragraph 10c) - Authorized and Outstanding Capital
---------------------------------------------------
1. Table of the shareholders of Common Shares and Exchangeable Shares of BSC
Shareholder Common Shares Exchangeable Shares
BioSyntech 1,916,314 7,508,704
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc. 7,640,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 6,666
▇▇▇▇▇ ▇▇▇▇▇▇ 15,000
Compensation BNC Inc. 6,666
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100,000
TOTAL 1,916,314 15,277,036
2. Table of the units held by partners of BSE
Partners Units
BioSyntech 480
▇▇▇▇ ▇▇▇▇▇▇▇▇ 20
TOTAL 500
Paragraph 10d) - Shareholders' Agreement
----------------------------------------
- Amended and restated technology assignment agreement executed between
Polyvalor limited partnership (hereinafter "Polyvalor"), BSC and
BioSyntech on March 15th, 2000.
Paragraph 10f) - Ownership of Securities
----------------------------------------
1. ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, holds 885 000 common shares
of BioSyntech and 200 000 stock options of BioSyntech;
2. Dr. Amine Selmani, directly or indirectly, holds 7 640 000
exchangeable preferred shares of BSC and 412 500 stock options of
BioSyntech;
Paragraph 10h) - Right to Acquire Securities/Consents, etc
----------------------------------------------------------
1. See Lists nos 1 to 7 of Participants in the Stock Option Plans of
BioSyntech and BSC attached.
2. Amalgation agreement made December 2, 1999, as amended and restated
on February 15, 2000, among BioSyntech Inc., Bio Syntech Ltd, and
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc.
3. Exchange and Voting Agreement made February 16, 2000 among
BioSyntech, ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Bio Syntech
Ltd.
4. Support Agreement made February 15, 2000 among BioSyntech, ▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Inc., and Bio Syntech Ltd.
5. Table of the issuance of warrants and options of BioSyntech since
December 31, 2001
Holder Number of warrants Number of options
Business
Development Bank
of Canada 1,000,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 20,000
RCG capital Markets Group 200,000
Paragraph 10j) - No Guarantees
------------------------------
1. Engagement Letter Agreement (dated January 10, 2002) between
BioSyntech and RCG Capital Markets Group, Inc.
2. Retainer Agreement (dated August 21, 2001) between BioSyntech and
▇▇▇▇▇▇ & Oxford Associates.
3. Amended and Restated Technology Assignment Agreement executed
between Polyvalor Limited Partnership (hereinafter "Polyvalor"), BSC
and BioSyntech on March 15th, 2000.
Paragraph 10r) - No Payments
----------------------------
1. On February 7th, 2002, BioSyntech has made a loan to one of it
employee, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, in the amount of two thousand four hundred
dollars ($2,400). The balance remaining on this loan is of a value
of nine hundred dollars ($900).
2. BioSyntech owes to Polyvalor the sum of ten thousand dollars
($10,000).
Paragraph 10s) - No Capital Expenditures
----------------------------------------
- See list of capital expenditures between 2002-01-01 to 2002-03-31
attached.
Paragraph 10t) - Employment Agreement
-------------------------------------
1. BioSyntech Stock Option Incentive Plan - for period ended December
31, 1999 and filed with the Securities and Exchange Commission on
March 30, 2000.
2. BSC Stock Option Incentive Plan - for period ended December 31, 1999
and filed with the Securities and Exchange Commission on March 30,
2000.
3. Group insurance policy.
4. Agreement with Alain Geachan
5. Engagement Letter Agreement (dated January 10, 2002) between
BioSyntech and RCG Capital Markets Group, Inc.
6. Retainer Agreement (dated August 21, 2001) between BioSyntech and
▇▇▇▇▇▇ & Oxford Associates.
Paragraph 10x) - Real Property
------------------------------
- Deed of sale by ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ inc. to BSC received before Mtre ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, notary, on July 4th 2000, for lot 161523 cadaster of Quebec,
Registry Office of Laval, with a building bearing civic number ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇, a copy is published at the registry office of Laval on
July 5th 2000, under number 991277.
Paragraph 10v) - No Outstanding Debt Instruments
------------------------------------------------
1. Financing Offer by the National Bank of Canada in favour of BSC,
signed by BSC on May 5th, 2002, for a total amount of five hundred
and twenty-three thousand three hundred and thirty-three dollars
($523,333).
2. Hypothecs published at the RPMRR (Register of Personal and Movable
Real Rights)
a) Conventional Hypothec without delivery in favour of National
Bank of Canada affecting all claims, for the amount of 900
000$, including an additional hypothec of 150 000$ published on
November 17, 1998 under number ▇▇-▇▇▇▇▇▇▇-▇▇▇▇;
b) Conventional Hypothec without delivery in favour of National
Bank of Canada affecting all claims and stock, for the amount
of 60 000$, including an additional hypothec of 10 000$,
published on November 17 1998 under number ▇▇-▇▇▇▇▇▇▇-▇▇▇▇, and
rectified by the inscription number ▇▇-▇▇▇▇▇▇▇-▇▇▇▇;
c) Conventional Hypothec without delivery in favour of National
Bank of Canada affecting all movable, for the amount of 240
000$, including an additional hypothec of 40 000$, published on
July 8 1998 under number ▇▇-▇▇▇▇▇▇▇-▇▇▇▇;
d) Conventional Hypothec without delivery in favour of National
Bank of Canada affecting sums in a specific account (no.
559017684329 at National Bank) for the amount of 75 000$,
published on July 28, 1999 under number ▇▇-▇▇▇▇▇▇▇-▇▇▇▇;
e) Conventional Hypothec without delivery in favour of National
Bank of Canada affecting 880 000 shares in ▇▇▇▇ Disney US for
the amount of 300 000$, published on May 7th, 2002under number
▇▇-▇▇▇▇▇▇▇-▇▇▇▇;
f) Three (3) Conventional Hypothec without delivery in favour of
Compaq Financial Services for equipment listed in schedules in
the leases between the parties for the respective amounts of 49
083,45$, 41 574,95$ and 10 411,75$ published on October 19 2001
under numbers ▇▇-▇▇▇▇▇▇▇-▇▇▇▇, ▇▇-▇▇▇▇▇▇▇-▇▇▇▇ and
▇▇-▇▇▇▇▇▇▇-▇▇▇▇;
g) Conventional Hypothec without delivery in favour of Multivesco
Inc. granted by SURFACE TECH INC. affecting certain common
shares of Lumenon Innovative Lightwave Tehcnologie Inc. for the
amount of 750 000$, including an additional hypothec of 125
000$ published on June 9, 1999 under number ▇▇-▇▇▇▇▇▇▇-▇▇▇▇;
3. Charges published against the property bearing no. ▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ At the Registry Office of Laval
- A right of first refusal in favour of the City of Laval for any
part of vacant land forming part of the property (in conformity
with the law " Loi sur les immeubles industriels"). This right
of first refusal does not apply in the event of the sale of the
whole property (land and buildings). This right is contained in
deed of sale by Ville de Laval unto ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ inc.
received before Mtre Martial --- ▇▇▇▇▇▇▇▇, notary, on February
3, 1999, and published at the Land Registry Office of Laval
under number 0955967.
4. Assets on lease hold
Assets on lease hold Supplier Term
Lab equipment Agilent Financial Services August 2002
Lab equipment Agilent Financial Services July 2002
Lab equipment Agilent Financial Services April 2004
Lab equipment Citicorp Vendor Finance July 2005
Lab equipment Citicorp Vendor Finance December 2004
Copier Pitney ▇▇▇▇▇ Leasing October 2004
Computers Services Financiers Compaq July 2003
Computers Services Financiers Compaq October 2003
Furniture National Leasing Group April 2004
Published at RPMRR
No. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇
Expiration: March 21, 2005
Purification System Fidelity Leasing Group Published at RPMRR
No. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇
Expiration : August 30, 2005
Telephone System Citicorp Vendor Finance Ltd Published at RPMRR
No. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇
Expiration January 3, 2005
Car Daimlerchrysler (Debis) Canada Published at RPMRR
No. 00-02024474-0002
Expiration July 19, 2004
Lab Services Financiers Image Inc. Published at RPMRR
No. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇
Expiration March 23, 2004
Equipment Hewlett-Packard (Canada) Ltd Published at RPMRR
No. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇
Expiration August 1, 2004
Equipment Hewlett-Packard (Canada) Ltd Published at RPMRR
No. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇
Expiration August 1, 2004
Equipment Hewlett-Packard (Canada) Ltd Published at RPMRR
No. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇
Expiration June 29, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ 10z) - Agreements
---------------------------
1. Engagement Letter Agreement (dated January 10, 2002) between
BioSyntech and RCG Capital Markets Group, Inc.
2. Retainer Agreement (dated August 21, 2001) between BioSyntech and
▇▇▇▇▇▇ & Oxford Associates.
Paragraph 10gg) - Loans and Indebtedness
----------------------------------------
1. BioSyntech owes to Polyvalor the sum of ten thousand dollars
($10,000).
2. On February 7th, 2002, BioSyntech has made a loan to one of its
employees, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, in the amount of two thousand four
hundred dollars ($2,400). The balance remaining on this loan is of a
value of nine hundred dollars ($900).
Paragraph 10ll)ii) - Absence of Unusual Transactions
----------------------------------------------------
1. See Lists nos 1 to 7 of Participants in the Stock Option Plans of
BioSyntech and BSC attached.
2. Amalgation agreement made December 2, 1999, as amended and restated
on February 15, 2000, among BioSyntech, Bio Syntech Ltd, and
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc.
3. Exchange and Voting Agreement made February 16, 2000 among
BioSyntech, ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Bio Syntech
Ltd.
4. Support Agreement made February 15, 2000 among BioSyntech, ▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Inc., and Bio Syntech Ltd.
5. Table of the issuance of shares, warrants and options of BioSyntech
since December 31, 2001
Holder Number Number of Number of
of shares warrants options
--------------------------------------------------------------------
Business
Development Bank
of Canada 1,000,000
Clearly & Oxford
Associates 40,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 20,000
RCG capital Markets Group 35,000 200,000
Paragraph 10ll)vii - Absence of Unusual Transactions
-----------------------------------------------------
1. On February 7th, 2002, BioSyntech has made a loan to one of it employee,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, in the amount of two thousand four hundred dollars
($2,400). The balance remaining on this loan is of a value of nine hundred
dollars ($900).
2. BioSyntech owes to Polyvalor the sum of ten thousand dollars ($10,000).
Paragraph 10 nn) - Royalties and Licenses
-----------------------------------------
In consideration of the Amended and Restated Technology Assignment
Agreement executed on March 15th, 2000, between Polyvalor Limited
Partnership (hereinafter "Polyvalor"), BSC, and BioSyntech, BSC has
agreed to pay to Polyvalor a five percent (5%) royalty calculated on
the gross sale of BSC, including all gross sales of all products and
services, sold or offered, by or on behalf of BSC (hereinafter the
"Royalties"), said Royalties to be payable up to a cumulative
maximum of three million canadian dollars ($CAD 3,000,000).