EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT, dated as of August 21,
2009 (this “ Agreement ”) is entered into by and
between Novelos Therapeutics, Inc., a Delaware corporation (the
“ Company ”) and the holder (the “
Warrant Holder ”) of that certain Warrant (the “
Warrant ”) issued by the Company to the Warrant Holder
on March 7, 2006 by, for the purchase of up to ________ shares (the
“ Warrant Shares ”) of the Common Stock, $0.0001
par value per share, of the Company (the “ Common
Stock ”).
WHEREAS, the Company issued certain Common Stock
Purchase Warrants, including the Warrant, on March 7, 2006
(collectively, the “ 2006 Warrants ”) in
connection with a private placement of shares of Common Stock, and
the 2006 Warrants were initially exercisable for an aggregate of
8,365,542 shares of Common Stock at an exercise price of $2.50 per
share;
WHEREAS, the 2006 Warrants provide for
weighted-average anti-dilution protection, subsequent issuances of
equity securities by the Company have triggered such adjustments,
and as a result, the 2006 Warrants are now exercisable for an
aggregate of 12,379,848 shares of Common Stock at an exercise price
of $1.82 per share;
WHEREAS, the holders of the 2006 Warrants were
entitled to registration rights with respect to the shares of
Common Stock underlying such warrants, and the Company registered
the resale of such shares under a Registration Statement on Form
SB-2 (File No. 333-133043) file with the Securities and Exchange
Commission on April 7, 2006, which Registration Statement was
declared effective on April 19, 2006;
WHEREAS, the Company is no longer under the
obligation to maintain the effectiveness of such registration, and
accordingly, on May 22, 2008, the Company deregistered the shares
of Common Stock underlying the 2006 Warrants;
WHEREAS, the Company has invited the holders of
the 2006 Warrants, including the Warrant Holder, to tender such
warrants to the Company in exchange for a number of shares of
Common Stock equal to 30% (the “ Exchange Ratio
”) of the number of shares issuable upon exercise of such
warrants (the “ Exchange ”), such Exchange to
occur at 6:00 p.m. Eastern time on August 21, 2009 (the “
Exchange Effective Time ”); and
WHEREAS, in connection with the Exchange, the
Company is entering into this Agreement with the Warrant Holder,
and a series of other agreements of like tenor with other holders
of 2006 Warrants;
NOW, THEREFORE, in consideration of the mutual
covenants contained in this Agreement and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, intending to be legally bound hereby, the
parties hereto agree as follows:
1.
Exchange .
(a)
The Warrant Holder has tendered an executed copy of this Agreement,
together with the Warrant, to the Company. Pursuant to
the terms and conditions of the invitation to tender 2006 Warrants
set forth in the Company’s Invitation to Tender Warrants
dated July 13, 2009 to holders of 2006 Warrants (the
“Invitation to Tender”).
(b) On
or before 9:00 a.m. on the first business day following the
Exchange Effective Time, the Company shall notify the Warrant
Holder of the Company’s acceptance of the tender of the
Warrant and of a number of shares of Common Stock equal to the
number of Warrant Shares multiplied by the Exchange Percentage,
rounded down to the nearest whole share (the “ Exchange
Shares ”) to be issued to the Warrant Holder in the
Exchange. Upon the Exchange Effective Time, and without
any further action on the part of the Company or the Warrant
Holder, the right to acquire the Common Stock issuable upon
exercise of the Warrant, and all other rights, including rights to
notice, granted to the Warrant Holder under the terms of such
Warrant, shall be deemed surrendered and terminated in all
respects. The Company shall deliver the Exchange Shares
to the Warrant Holder at the address provided on the signature page
hereto on the fifth business day following the Exchange Effective
Time.
2.
Representations of the Company . The Company
represents and warrants to the Warrant Holder as
follows:
(a)
Organization . The Company is a corporation duly
incorporated, validly existing and in good standing under the laws
of Delaware, with the requisite power and authority to own and use
its properties and assets and to carry on its business as currently
conducted.
(b)
Authority . The Company has the corporate power
and authority to enter into and perform this Agreement, and all
corporate action necessary to authorize the execution, delivery and
performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby by the Company has been
duly and validly taken. This Agreement has been duly and
validly executed and delivered by the Company. This
Agreement constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the rights of creditors, to principles
of public policy and to general principles of equity.
(c)
Issuance of Securities . The Exchange Shares have
been duly authorized and, when issued in accordance with this
Agreement, will be validly issued, fully paid and
nonassessable. Attached as Exhibit A hereto is a
table setting forth the capitalization of the Company on a pro
forma basis giving effect to an Exchange of all of the 2006
Warrants.
3.
Representations of the Warrant Holder . The
Warrant Holder represents and warrants to the Company as
follows:
(a)
Organization . If the Warrant Holder is not a
natural person, the Warrant Holder is an entity duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization, with the requisite power and
authority to own and use its properties and assets and to carry on
its business as currently conducted.
(b)
Authority . The Warrant Holder has the requisite
power and authority to enter into and perform this Agreement, and
all action necessary to authorize the execution, delivery and
performance of this Agreement by the Warrant Holde
