Exhibit 10.1
SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (“Agreement”) is made as of this 8th day of
April, 2011 (the “Signing Date”) by and among Novelos Therapeutics, Inc., a
Delaware corporation (the “Company”) and the investors set forth on Schedule
I affixed hereto, as such Schedule may be amended from time to time in
accordance with the terms of this Agreement (each an “Investor” and collectively
the “Investors”).

Recitals:

A.           The Company desires, pursuant to this Agreement, to raise not less
than the Minimum Investment Amount (as defined below) through the issuance and
sale to the Investors (the “Private Placement”) of up to 12,000,000 units (the
“Units”) at a price of $0.75 per Unit, each Unit consisting of: (i) one share of
the Company's Common Stock, par value $0.00001 per share (the “Common Stock” and
such shares, collectively, the “Shares”), and (ii) a warrant to acquire  one
share of Common Stock at an exercise price of $0.75 per share, with an
expiration date of March 31, 2016 (collectively, the “Warrants”), the Warrants
to be in the form of Exhibit A annexed hereto and made a part hereof;

B.           The Company, the Escrow Agent (as defined below), the Placement
Agent (as defined below) and the Lead Investor (as defined below) are parties to
an Escrow Agreement (defined below) pursuant to which funds to be applied to the
purchase of Units hereunder are to be released upon the satisfaction of the
escrow conditions therein and the conditions to closing herein, and the
conditions to the release of such counterpart signature pages from escrow have
been satisfied;

C.           The Investors desire to purchase from the Company, and the Company
desires to issue and sell to the Investors, upon the terms and conditions stated
in this Agreement, such number of Units as is set forth next to each such
Investor’s name on such Investor’s signature page and Schedule I affixed hereto;

D.           The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D (“Regulation D”), as promulgated by the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder (the “1933
Act”);

E.           As more fully described in that certain Information Memorandum of
the Company dated February 16, 2011 (the “Memorandum”), concurrently with the
Closing (as defined below), the Company intends to enter into a business
combination with Cellectar, Inc., a Wisconsin corporation (“Cellectar”),
pursuant to which Cellectar will be merged with a wholly owned subsidiary of the
Company (the “Merger”), with the result that the surviving corporation of the
Merger (the “Surviving Corporation”) will be a wholly owned subsidiary of the
Company, and each outstanding share of Cellectar capital stock will be converted
into the right to receive 0.8435 shares of Common Stock;

 
 

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F.           In anticipation of the Merger and the Private Placement, the
Company has filed with the Secretary of State of the State of Delaware a
Certificate of Amendment (the “Certificate of Amendment”) in order to, among
other things, effect a reverse split of the Common Stock at a ratio of 153 to 1
and a reduction in the number of authorized shares of Common Stock from
750,000,000 to 150,000,000; and
 
G.           In connection with the Private Placement, the Company is obligated
to compensate Rodman & Renshaw, LLC (the “Placement Agent”), pursuant to the
Placement Agent Agreement (as defined below), with an aggregate cash commission
equal to seven percent (7%) of the gross proceeds resulting from the Private
Placement (or three and one-half percent (3.5%) in the case of certain
Cellectar-related Investors) (the “Placement Agent Fee”) and to issue to the
Placement Agent a warrant to purchase an aggregate number of shares of Common
Stock equal to eight percent (8%) of the aggregate number of Units sold in the
Private Placement (or two percent (2%) in the case of Units sold to certain
Cellectar-related Investors), exercisable for a period of five years, at an
exercise price equal to $0.75 per share (the “Placement Agent Warrant”).

NOW, THEREFORE, in consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

1.           Definitions.  In addition to those terms defined above and
elsewhere in this Agreement, for the purposes of this Agreement, the following
terms shall have the meanings set forth in this Section 1:
 
“1933 Act” has the meaning set forth in the Recitals.

“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

“10-K” has the meaning set forth in Section 5.6.

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly Controls, is Controlled by, or is under common Control with, such
Person.

“Agreement” has the meaning set forth in the Recitals.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

“Company Counsel Opinion” means a legal opinion from the Company Counsel, dated
as of the applicable Closing Date, in the form attached hereto as Exhibit B.

“Closing” has the meaning set forth in Section 4.1.

“Closing Date” has the meaning set forth in Section 4.1.

 
 

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“Common Stock” has the meaning set forth in the Recitals, and also includes any
securities into which the Common Stock may be reclassified.

“Company” has the meaning set forth in the Recitals.

“Company Counsel” means Foley Hoag LLP, counsel to the Company.

“Company’s Knowledge” means the actual knowledge of the officers of the Company,
after due inquiry and investigation.

“Confidential Information” means trade secrets, confidential information and
know-how (including but not limited to ideas, formulae, compositions, processes,
procedures and techniques, research and development information, computer
program code, performance specifications, support documentation, drawings,
specifications, designs, business and marketing plans, and customer and supplier
lists and related information).

“Control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.

“Cutback Comment” has the meaning set forth in Section 9.1(e).

“Disclosure Schedules” has the meaning set forth in Section 5.

“Effective Date” means the date on which the Registration Statement is declared
effective by the SEC with respect to the resale of all of the securities then
constituting Registrable Securities, or such lesser amount of Registrable
Securities with respect to which the SEC shall permit registration pursuant to
any Cutback Comment.

“Effectiveness Period” has the meaning set forth in Section 9.2(a).

“Environmental Laws” has the meaning set forth in Section 5.15.

“Escrow Agent” means Signature Bank, a New York State chartered bank.

“Escrow Agreement” means that certain Escrow Agreement dated March 3, 2011, as
amended, by and among the Company, the Escrow Agent, the Placement Agent and the
Lead Investor, pursuant to which, among other things, the Escrow Agent is
holding in escrow the Escrow Amount, a copy of which is attached hereto as
Exhibit C.

“Escrow Amount” has the meaning set forth in Section 3.1(a).

 
 

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“Escrow Termination Date” means April 1, 2011, or such later date as shall be
agreed to in a writing signed by the Company and the Lead Investor; provided,
however, the Lead Investor, on behalf of itself and the other Investors, and the
Company may jointly agree to extend the Escrow Termination Date until no later
than April 11, 2011.

“Event” has the meaning set forth in Section 9.1(d).

“Filing Date” means the date of filing of the Registration Statement, as defined
below, with the SEC.

“FINRA” means the Financial Industry Regulatory Authority.

“Holder” means a holder of Registrable Securities or any securities exercisable
for Registrable Securities.

“Intellectual Property” means all of the following: (i) patents, patent
applications, patent disclosures and inventions (whether or not patentable and
whether or not reduced to practice); (ii) trademarks, service marks, trade
dress, trade names, corporate names, logos, slogans and Internet domain names,
together with all goodwill associated with each of the foregoing; (iii)
copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; (v) trade secrets, Confidential Information
and know-how (including, but not limited to, ideas, formulae, compositions,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, business and marketing plans,
and customer and supplier lists and related information); and (vi) computer
software (including, but not limited to, data, data bases and documentation).

“Investor Questionnaire” shall mean a questionnaire in form and substance
satisfactory to the Company regarding the suitability of a prospective investor
to participate in the Private Placement.

“Lead Investor” means Venture Investors Early Stage Fund IV Limited Partnership.

“License Agreements” has the meaning set forth in Section 5.14(b).

“Material Adverse Effect” means a material adverse effect on (i) the assets and
liabilities, prospects, results of operations, condition (financial or
otherwise) or business of the Company and its Subsidiaries (including for
purposes of this definition, the Surviving Corporation) taken as a whole, or
(ii) the ability of the Company to issue and sell the Units and to perform its
obligations under the Transaction Documents; provided, however, that: (A) any
adverse effect that results from general economic, business or industry
conditions which do not disproportionately affect the Company or its
Subsidiaries, the taking by the Company of any action permitted or required by
the Agreement, or the announcement or pendency of transactions contemplated
hereunder, shall not, in and of itself, constitute a “Material Adverse Effect”
on the Company, and shall not be considered in determining whether there has
been or would be a "Material Adverse Effect" on the Company and (B) a decline in
the Company's stock price shall not, in and of itself, constitute a "Material
Adverse Effect" on the Company and shall not be considered in determining
whether there has been or would be a "Material Adverse Effect" on the Company.

 
 

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“Material Contract” means any contract of the Company or any Subsidiary
(including the Surviving Corporation) (i) that was required to be filed as an
exhibit to the SEC Filings pursuant to Item 601(b)(4) or Item 601(b)(10) of
Regulation S-K of the 1933 Act or (ii) the loss of which could reasonably be
expected to have a Material Adverse Effect.

“Minimum Investment Amount” means an amount equal to $3,500,000.

“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

“PiggybackRegistrable Securities” has the meaning set forth in Section 9.1(e).

“Placement Agent” shall mean Rodman and Renshaw, LLC.
 
“Placement Agent Agreement” means that certain letter from the Company to the
Placement Agent dated April 1, 2011.

“Placement Agent Fee” has the meaning set forth in the Recitals.

“Press Release” has the meaning set forth in Section 8.5.

“Private Placement” has the meaning set forth in the Recitals.

“Registrable Securities” shall mean (i) the Shares, (ii) the Warrant Shares, and
(iii) any shares of Common Stock that become issuable in respect of any of the
foregoing, as a result of stock splits, stock dividends or similar transactions
with respect to the Common Stock; provided, that, a security shall cease to be a
Registrable Security upon a sale pursuant to a registration statement or during
any period in which such security is saleable pursuant to Rule 144 without time,
volume or other limitations thereunder.

“Registration Statement” has the meaning set forth in Section 9.1(a).

“Regulation D” has the meaning set forth in the Recitals.
 
“Requisite Holders” means Investors holding (or, if prior to the Closing Date,
obligated to purchase) a majority of the Shares issued or to be issued pursuant
to this Agreement.

“Rule 144” has the meaning set forth in Section 8.6.

“SEC” means the United States Securities and Exchange Commission.

 
 

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“SEC Filings” has the meaning set forth in Section 5.6.

“Signing Date” has the meaning set forth in the Preamble.

“Subsidiary” has the meaning set forth in Section 5.1.

“Surviving Corporation” has the meaning set forth in the Recitals.

“Transaction Documents” means this Agreement and the Warrants.

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

“Warrants” has the meaning set forth in the Recitals.

2.           Purchase and Sale of Units.  Subject to the terms and conditions of
this Agreement, including without limitation, the conditions set forth in
Section 7, there shall be a closing at which the Company shall issue and sell,
and each Investor which has executed and delivered a signature page hereto and
is listed on Schedule I hereto, shall severally, and not jointly, purchase the
number of Units, in each case, in the respective amounts set forth opposite
their names on their signature page and Schedule I affixed hereto, in exchange
for the cash consideration set forth as the “Closing Purchase Price” opposite
their respective names on their signature page and Schedule I affixed hereto.
 
3.           Escrow.  Prior to or simultaneously with the execution and delivery
of this Agreement by each Investor, such Investor shall have caused a wire
transfer of immediately available funds (U.S. dollars) or certified check in an
amount representing the “Closing Purchase Price” on such Investor’s signature
page affixed hereto and opposite such Investor’s name thereon, to be paid to a
non-interest bearing escrow account of the Escrow Agent, which amounts are being
held as of the date hereof pursuant to the terms of the Escrow Agreement (the
aggregate amounts received being held in escrow by the Escrow Agent are referred
to herein as the “Escrow Amount”).
 
4.           Closing.
 
4.1           Place.  The closings of the transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of Foley Hoag LLP,
Seaport West, 155 Seaport Boulevard, Boston, Massachusetts  02210, or at such
other location as the Company and the Lead Investor shall mutually agree (or
remotely via the exchange of documents and signatures), on the date hereof, the
first date on which all of the conditions to closing specified herein are
satisfied or waived (if later than the date hereof), or such other date on or
before the Escrow Termination Date as the Company and the Lead Investor shall
mutually agree (the “Closing Date”).

 
 

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4.2           Closing.  Upon satisfaction of the conditions to Closing set forth
in Section 7 hereof, the Lead Investor and the Company shall instruct the Escrow
Agent to immediately release, and upon receipt of such instructions, the Escrow
Agent shall release, the Escrow Amount to the Company (the date of receipt of
such balance by the Company is hereinafter referred to as the “Closing
Date”).  On the Closing Date, the Company shall issue or cause to be issued to
each Investor a certificate or certificates, registered in such name or names as
each such Investor may designate, representing the number of shares of Common
Stock as is set forth opposite such Investor’s name on such Investor’s signature
page and Schedule I affixed hereto and shall also issue to each such Investor,
or such Investor’s respective designees, the number of Warrants as is set forth
opposite such Investor’s name on such Investor’s signature page and Schedule I
affixed hereto.

5.           Representations and Warranties of the Company.  The Company hereby
makes the following representations and warranties to the Investors on and as of
the Signing Date and on the Closing Date, knowing and intending their reliance
hereon, except as set forth in the schedules delivered on the Signing Date
(collectively, the “Disclosure Schedules”), the SEC Filings (as defined below),
the Memorandum and the Financial Statements (as defined below).  For purposes of
this Section 5, references to the Company’s Subsidiaries shall be deemed to
include the surviving corporation of the Merger, after giving effect
thereto.  The information in the Memorandum and the SEC Filings speaks as of the
date of the Memorandum or the applicable SEC Filing, as the case may be, or such
earlier date to which such information expressly relates.  In the event any
information in the Disclosure Schedules is inconsistent with information
contained in the Memorandum or the SEC Filings, the information in the
Disclosure Schedules shall control.
 
5.1.           Organization, Good Standing and Qualification.  Each of the
Company and its Subsidiaries, a complete list of which is set forth in Schedule
5.1 hereto (“Subsidiaries”), is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted and to own its properties.  Each of the Company
and its Subsidiaries is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the conduct of its
business or its ownership or its leasing of property makes such qualification or
licensing necessary, unless the failure to so qualify would not have a Material
Adverse Effect.
 
5.2.           Authorization.  The Company has full power and authority and has
taken all requisite action on the part of the Company, its officers, directors
and stockholders necessary for (i) the authorization, execution and delivery of
the Transaction Documents and the Certificate of Amendment, (ii) authorization
of the performance of all obligations of the Company hereunder or thereunder,
and (iii) the authorization, issuance (or reservation for issuance) and delivery
of the Shares, the Warrants and the Warrant Shares upon due exercise of the
Warrants (collectively, the “Securities”).  The Transaction Documents constitute
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights generally.
 
 
 

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5.3.          Capitalization.
 
(a)           Schedule 5.3 sets forth (i) the authorized capital stock of the
Company on the date hereof, (ii) the number of shares of capital stock issued
and outstanding, (iii) the number of shares of capital stock issuable pursuant
to the Company’s stock plans, and (iv) the number of shares of capital stock
issuable and reserved for issuance pursuant to securities (other than the
Securities) exercisable for, or convertible into or exchangeable for any shares
of capital stock of the Company.  All of the issued and outstanding shares of
the Company’s capital stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of pre-emptive rights and were issued in full
compliance with applicable law and any rights of third parties.  All of the
issued and outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued and are fully paid, nonassessable and free of
pre-emptive rights, were issued in full compliance with applicable law and any
rights of third parties and are owned by the Company, beneficially and of
record, and, except as described on Schedule 5.3, are subject to no lien,
encumbrance or other adverse claim.  No Person is entitled to pre-emptive or
similar statutory or contractual rights with respect to any securities of the
Company.  Except as described on Schedule 5.3, there are no outstanding
warrants, options, convertible securities or other rights, agreements or
arrangements of any character under which the Company or any of its Subsidiaries
is or may be obligated to issue any equity securities of any kind and, except as
contemplated by this Agreement, neither the Company nor any of its Subsidiaries
is currently in negotiations for the issuance of any equity securities of any
kind.  Except as described on Schedule 5.3, there are no voting agreements,
buy-sell agreements, option or right of first purchase agreements or other
agreements of any kind among the Company and any of its security holders
relating to the securities of the Company.  Except as described on Schedule 5.3,
the Company has not granted any Person the right to require the Company to
register any of its securities under the 1933 Act, whether on a demand basis or
in connection with the registration of securities of the Company for its own
account or for the account of any other Person.
 
(b)           Schedule 5.3 sets forth a true and complete table setting forth
the pro forma capitalization of the Company on a fully diluted basis giving
effect to (i) the issuance of the Units at the time of the Closing, (ii) the
issuance of the shares of Common Stock issuable pursuant to the Merger, (iii)
any adjustments in other securities resulting from the issuance of the Units at
the time of the Closing, and (iv) the exercise or conversion of all outstanding
securities. Except as described on Schedule 5.3, the issuance and sale of the
Units hereunder will not obligate the Company to issue shares of Common Stock or
other securities to any other Person (other than the Investors) and will not
result in the adjustment of the exercise, conversion, exchange or reset price of
any outstanding security.
 
(c)           Except as set forth on Schedule 5.3, the Company does not have
outstanding stockholder purchase rights or any similar arrangement in effect
giving any Person the right to purchase any equity interest in the Company upon
the occurrence of certain events.

 
 

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5.4.         Valid Issuance.  The Shares have been duly and validly authorized
and when issued to the Investors in accordance with the terms of this Agreement
will be validly issued, fully paid and nonassessable, and shall be free and
clear of all liens, claims, encumbrances and restrictions, except for
restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws.  The Warrants have been duly and validly authorized
and, upon the due exercise of the Warrants, the Warrant Shares will be validly
issued, fully paid and non-assessable, and shall be free and clear of all liens,
claims, encumbrances and restrictions, except for restrictions on transfer set
forth in the Transaction Documents or imposed by applicable securities
laws.  The Company has reserved a sufficient number of shares of Common Stock
for issuance upon exercise of the Warrants.

5.5.         Consents.   The execution, delivery and performance by the Company
of the Transaction Documents and the offer, issuance and sale of the Securities
require no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than those consents set forth on
Schedule 5.5 and filings that have been made pursuant to applicable state
securities laws and post-sale filings pursuant to applicable state and federal
securities laws which the Company undertakes to file within the applicable time
periods.  The Company has taken all action necessary to exempt (i) the issuance
and sale of the Shares and the Warrants, (ii) the issuance of the Warrant Shares
upon due exercise of the Warrants, and (iii) the other transactions contemplated
by the Transaction Documents from the provisions of any anti-takeover, business
combination or control share law or statute binding on the Company or to which
the Company or any of its assets and properties may be subject or any provision
of the Company’s Certificate of Incorporation, Bylaws or any stockholder rights
agreement that is or could become applicable to the Investors as a result of the
transactions contemplated hereby, including without limitation, the issuance of
the Securities and the ownership, disposition or voting of the Shares and the
Warrant Shares by the Investors or the exercise of any right granted to the
Investors pursuant to this Agreement or the other Transaction Documents.
 
5.6.         Delivery of SEC Filings; Business.  Copies of the Company’s most
recent Annual Report on Form 10-K for the fiscal year ended December 31, 2009
(the “10-K”), and all other reports filed by the Company pursuant to the 1934
Act since the filing of the 10-K and prior to the date hereof (collectively, the
“SEC Filings”) are available on EDGAR.  The SEC Filings are the only filings
required of the Company pursuant to the 1934 Act for such period.  As of the
dates of the SEC Filings, the Company and its then-existing Subsidiaries were
engaged only in the business described in the SEC Filings and the SEC Filings
contain a complete and accurate description in all material respects of the
business of the Company and its then-existing Subsidiaries, taken as a whole, as
of such dates.  Following the Closing, the Company intends to engage only in the
business described in the Memorandum.
 
5.7.         No Material Adverse Change.  Except as contemplated herein or as
described on Schedule 5.7, since September 30, 2010, there has not been:
 
(i)           any change in the consolidated assets, liabilities, financial
condition or operating results of the Company from that reflected in the
financial statements included in the SEC Filings, except for changes in the
ordinary course of business which have not and could not reasonably be expected
to have a Material Adverse Effect, individually or in the aggregate;

(ii)          any declaration or payment of any dividend, or any authorization
or payment of any distribution, on any of the capital stock of the Company, or
any redemption or repurchase of any securities of the Company;

 
 

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(iii)         any material damage, destruction or loss, whether or not covered
by insurance to any assets or properties of the Company or its Subsidiaries;

(iv)        any waiver, not in the ordinary course of business, by the Company
or any Subsidiary of a material right or of a material debt owed to it;

(v)         any satisfaction or discharge of any lien, claim or encumbrance or
payment of any obligation by the Company or a Subsidiary, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results, prospects or business of the Company and
its Subsidiaries taken as a whole;

(vi)        any change or amendment to the Company's Certificate of
Incorporation or Bylaws, or material change to any Material Contract or
arrangement by which the Company or any Subsidiary is bound or to which any of
their respective assets or properties is subject;

(vii)       any material labor difficulties or labor union organizing activities
with respect to employees of the Company or any Subsidiary;

(viii)      any transaction entered into by the Company or a Subsidiary other
than in the ordinary course of business;

(ix)         the loss of the services of any key employee, or material change in
the composition or duties of the senior management of the Company or any
Subsidiary;

(x)          the loss or threatened loss of any customer of the Company or any
Subsidiary which has had or could reasonably be expected to have a Material
Adverse Effect; or

(xi)         any other event or condition of any character that has had or could
reasonably be expected to have a Material Adverse Effect.

5.8.         SEC Filings.    At the time of filing thereof, the SEC Filings
complied as to form in all material respects with the requirements of the 1934
Act and did not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.  The
Company is not (with or without the lapse of time or the giving of notice, or
both) in breach or default of any Material Contract and, to the Company’s
Knowledge, no other party to any Material Contract is (with or without the lapse
of time or the giving of notice, or both) in breach or default of any Material
Contract.  Neither the Company nor any Subsidiary has received any notice of the
intention of any party to terminate any Material Contract.
 
 
 

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5.9.         No Conflict, Breach, Violation or Default.  The execution, delivery
and performance of the Transaction Documents by the Company and the issuance and
sale of the Securities will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under (i) the
Company’s Certificate of Incorporation or Bylaws, both as in effect on the date
hereof (true and accurate copies of which have been provided to the Investors
before the date hereof), or (ii)(a) any statute, rule, regulation or order of
any governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company, any Subsidiary or any of their respective assets
or properties, or (b) except as set forth on Schedule 5.9, any agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or a Subsidiary is bound or to which any of their respective assets or
properties is subject, except, in the case of clause (ii) as would not
reasonably be expected to have a Material Adverse Effect.
 
5.10.       Tax Matters.  Each of the Company and each Subsidiary has timely
prepared and filed all tax returns required to have been filed by the Company or
such Subsidiary with all appropriate governmental agencies and timely paid all
taxes shown thereon or otherwise owed by it.  The charges, accruals and reserves
on the books of the Company in respect of taxes for all fiscal periods are
adequate in all material respects, and there are no material unpaid assessments
against the Company or any Subsidiary nor, to the Company’s Knowledge, any basis
for the assessment of any additional taxes, penalties or interest for any fiscal
period or audits by any federal, state or local taxing authority except for any
assessment which is not material to the Company and its Subsidiaries, taken as a
whole.  All taxes and other assessments and levies that the Company or any
Subsidiary is required to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity or third party
when due.  There are no tax liens or claims pending or, to the Company’s
Knowledge, threatened against the Company or any Subsidiary or any of their
respective assets or properties.  Except as described on Schedule 5.10, there
are no outstanding tax sharing agreements or other such arrangements between the
Company and any Subsidiary or other corporation or entity.  Neither the Company
nor any Subsidiary is presently undergoing any audit by a taxing authority, or
has waived or extended any statute of limitations at the request of any taxing
authority.
 
5.11.       Title to Properties.  Except as set forth on Schedule 5.11, the
Company and each Subsidiary has good and marketable title to all real properties
and all other properties and assets owned by it, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or currently planned to be made thereof
by them; and the Company and each Subsidiary holds any leased real or personal
property under valid and enforceable leases with no exceptions that would
materially interfere with the use made or currently planned to be made thereof
by them.
 
5.12.        Certificates, Authorities and Permits.  Except as described on
Schedule 5.12, the Company and each Subsidiary possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by it, and neither the Company
nor any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit that, if
determined adversely to the Company or such Subsidiary, could reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate.

 
 

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5.13.       Employee Relations.
 
(a)           The Company is not a party to any collective bargaining agreement
and, to its Knowledge, its employees are not union members.  The Company
believes that its relations with its employees are good.  No executive officer
of the Company or any Subsidiary (as defined in Rule 501(f) of the 1933 Act) has
notified the Company that such officer intends to leave the Company or otherwise
terminate such officer's employment with the Company or any Subsidiary.  No
executive officer of the Company, to the Knowledge of the Company, is in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant relating to such
executive officer’s employment with the Company or any Subsidiary, and the
continued employment of each such executive officer does not, to the Knowledge
of the Company, subject the Company or any Subsidiary to any liability with
respect to any of the foregoing matters.

(b)           Each of the Company and its Subsidiaries is in compliance with all
federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of
employment and wages and hours, except where failure to be in compliance would
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

(c)           No material labor dispute with the employees of the Company or any
Subsidiary exists or, to the Company’s Knowledge, is imminent.
 
5.14.       Intellectual Property.
 
(a)           All Intellectual Property of the Company and its Subsidiaries is
currently in compliance with all legal requirements (including timely filings,
proofs and payments of fees) and is valid and enforceable.  Except as listed on
Schedule 5.14(a), no Intellectual Property of the Company or its Subsidiaries
which is necessary for the conduct of Company’s and each of its Subsidiaries’
respective businesses as currently conducted or as currently proposed to be
conducted has been or is now involved in any cancellation, dispute or
litigation, and, to the Company’s Knowledge, no such action is
threatened.  Except as listed on Schedule 5.14(a), no patent of the Company or
its Subsidiaries has been or is now involved in any interference, reissue,
re-examination or opposition proceeding.
 
(b)           All of the licenses and sublicenses and consent, royalty or other
agreements concerning Intellectual Property which are necessary for the conduct
of the Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted to which the
Company or any Subsidiary is a party or by which any of their assets are bound
(other than  generally commercially available, non-custom, off-the-shelf
software application programs having a retail acquisition price of less than
$25,000 per license) (collectively, “License Agreements”) are valid and binding
obligations of the Company or its Subsidiaries that are parties thereto and, to
the Company’s Knowledge, the other parties thereto, enforceable in accordance
with their terms, except to the extent that enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors’ rights generally, and
there exists no event or condition which will result in a material violation or
breach of or constitute (with or without due notice or lapse of time or both) a
default by the Company or any of its Subsidiaries under any such License
Agreement.

 
 

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(c)           The Company and its Subsidiaries own or have the valid right to
use all of the Intellectual Property that is necessary for the conduct of the
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted, free and clear of all liens,
encumbrances, adverse claims or obligations to license all such owned
Intellectual Property and Confidential Information, other than licenses entered
into in the ordinary course of the Company’s and its Subsidiaries’
businesses.  The Company and its Subsidiaries have a valid and enforceable right
to use all third party Intellectual Property and Confidential Information used
or held for use in the respective businesses of the Company and its Subsidiaries
as currently conducted or as currently proposed to be conducted.
 
(d)           To the Company’s Knowledge, the conduct of the Company’s and its
Subsidiaries’ businesses as currently conducted and as currently proposed to be
conducted does not and will not infringe any Intellectual Property rights of any
third party or any confidentiality obligation owed to a third party. To the
Company’s Knowledge, the Intellectual Property and Confidential Information of
the Company and its Subsidiaries which are necessary for the conduct of
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted are not being infringed by
any third party.  Except as set forth on Schedule 5.14(d), there is no
litigation or order pending or outstanding or, to the Company’s Knowledge,
threatened or imminent, that seeks to limit or challenge or that concerns the
ownership, use, validity or enforceability of any Intellectual Property or
Confidential Information of the Company and its Subsidiaries and the Company’s
and its Subsidiaries’ use of any Intellectual Property or Confidential
Information owned by a third party, and, to the Company’s Knowledge, there is no
valid basis for the same.
 
(e)           The consummation of the transactions contemplated hereby will not
result in the alteration, loss, impairment of or restriction on the Company’s or
any of its Subsidiaries’ ownership or right to use any of the Intellectual
Property or Confidential Information which is necessary for the conduct of the
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted.
 
(f)           To the Company’s Knowledge, all software owned by the Company or
any of its Subsidiaries, and, to the Company’s Knowledge, all software licensed
from third parties by the Company or any of its Subsidiaries, (i) is free from
any material defect, bug, virus, or programming, design or documentation error;
(ii) operates and runs in a reasonable and efficient business manner; and (iii)
conforms in all material respects to the specifications and purposes thereof.
 
(g)           The Company and its Subsidiaries have taken reasonable steps to
protect the Company’s and its Subsidiaries’ rights in their Intellectual
Property and Confidential Information.  Each employee, consultant and contractor
who has had access to Confidential Information which is necessary for the
conduct of Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted has executed an
agreement to maintain the confidentiality of such Confidential Information and
has executed appropriate agreements that are substantially consistent with the
Company’s standard forms therefor.  To the Company’s Knowledge, there has been
no material disclosure of any of the Company’s or its Subsidiaries’ Confidential
Information to any third party without the Company’s consent.

 
 

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5.15.       Environmental Matters.  Neither the Company nor any Subsidiary (i)
is in violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any
real property contaminated with any substance that is subject to any
Environmental Laws, (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or (iv) is subject to any claim relating to
any Environmental Laws; which violation, contamination, liability or claim has
had or could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate; and there is no pending or, to the Company’s
Knowledge, threatened investigation that might lead to such a claim.
 
5.16.       Litigation.  There are no pending actions, suits or proceedings
against or affecting the Company, its Subsidiaries or any of its or their
properties; and to the Company’s Knowledge, no such actions, suits or
proceedings are threatened or contemplated.
 
5.17.       Financial Statements.  The financial statements of the Company
included in each SEC Filing fairly present the consolidated financial position
of the Company as of the dates shown and its consolidated results of operations
and cash flows for the periods shown, and such financial statements have been
prepared in conformity with United States generally accepted accounting
principles applied on a consistent basis (“GAAP”).  The financial statements of
Cellectar referred to in the Memorandum (together with the aforesaid financial
statements of the Company, the “Financial Statements”) fairly present the
consolidated financial position of Cellectar as of the dates shown and its
consolidated results of operations and cash flows for the periods shown, subject
in the case of unaudited financial statements to customary year-end audit
adjustments which shall not be in the aggregate material, and such financial
statements have been prepared in conformity with GAAP, except that the unaudited
financial statements may not contain all of the footnotes required by
GAAP.  Except as set forth in the Financial Statements, neither the Company nor
any of its Subsidiaries has incurred any liabilities, contingent or otherwise,
except those which, individually or in the aggregate, have not had or could not
reasonably be expected to have a Material Adverse Effect.
 
5.18.       Insurance Coverage.  The Company and each Subsidiary maintains in
full force and effect insurance coverage and the Company reasonably believes
such insurance coverage is adequate.
 
5.19.       Brokers and Finders.  Except for the commission to be paid (the
“Placement Agent Fee”) to the Placement Agent pursuant to the terms of the
Placement Agent Agreement as disclosed in Schedule 5.19, or as otherwise
disclosed in Schedule 5.19, no Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company, any Subsidiary or any Investor for any commission, fee or
other compensation pursuant to any agreement, arrangement or understanding
entered into by or on behalf of the Company.
 
 
 

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5.20.       No Directed Selling Efforts or General Solicitation.  Neither the
Company nor any Affiliate, nor any Person acting on its behalf has conducted any
“general solicitation” or “general advertising” (as those terms are used in
Regulation D) in connection with the offer or sale of any of the Securities.
 
5.21.       No Integrated Offering.  Neither the Company nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any Company security or solicited any
offers to buy any security, under circumstances that would adversely affect
reliance by the Company on Section 4(2) of the 1933 Act for the exemption from
the registration requirements imposed under Section 5 of the 1933 Act for the
transactions contemplated hereby or would require such registration the 1933
Act.
 
5.22.       Private Placement.  Subject to the accuracy of the representations
and warranties of the Investors contained in Section 6 hereof, the offer and
sale of the Securities to the Investors as contemplated hereby is exempt from
the registration requirements of the 1933 Act.
 
5.23.       Questionable Payments. Neither the Company nor any of its
Subsidiaries nor, to the Company’s Knowledge, any of their respective current or
former stockholders, directors, officers, employees, agents or other Persons
acting on behalf of the Company or any Subsidiary, has on behalf of the Company
or any Subsidiary or in connection with their respective businesses: (a) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.
 
5.24.       Transactions with Affiliates.  Except as described on Schedule 5.24,
none of the officers or directors of the Company or a Subsidiary and, to the
Company’s Knowledge, none of the employees of the Company is presently a party
to any transaction with the Company or a Subsidiary or to a presently
contemplated transaction (other than for services as employees, officers and
directors) that would be required to be disclosed pursuant to Item 404 of
Regulation S-K promulgated under the 1933 Act.
 
5.25.       Trading Compliance.  The Common Stock is traded on the
Over-The-Counter Bulletin Board (the “OTCBB”) and the Company has taken no
action designed to, or which to the Company’s Knowledge is likely to have the
effect of, causing the Common Stock not to continue to be traded on the
OTCBB.  No order ceasing or suspending trading in any securities of the Company
or prohibiting the issuance and/or sale of the Securities is in effect and no
proceedings for such purpose are pending or threatened.
 
5.26.       Investment Company.  The Company is not an “investment company”
within the meaning of such term under the Investment Company Act of 1940, as
amended, and the rules and regulations of the SEC thereunder.

 
 

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5.27.       Indebtedness.    Except as set forth in Schedule 5.27, neither the
Company nor any of its Subsidiaries (i) has any outstanding Indebtedness (as
defined below), (ii) is a party to any contract, agreement or instrument
relating to any Indebtedness, the violation of which, or default under which, by
the other party(ies) to such contract, agreement or instrument could reasonably
be expected to result in a Material Adverse Effect, (iii) is in violation of any
term of or in default under any contract, agreement or instrument relating to
any Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (iv) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect.  Except as set forth in Schedule
5.27, there are no financing statements securing obligations in any material
amounts, either singly or in the aggregate, filed with respect to the Company or
any of its Subsidiaries.  For purposes of this Agreement: (x) “Indebtedness” of
any Person means, without duplication (A) all indebtedness for borrowed money,
(B) all obligations issued, undertaken or assumed as the deferred purchase price
of property or services, including (without limitation) “capital leases” in
accordance with generally accepted accounting principles (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations for which the Company can
be legally liable in respect of indebtedness or obligations of others of the
kinds referred to in clauses (A) through (G) above; and (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto.

5.28.       Solvency.  The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt).

5.29.       Transfer Taxes.  On the Closing Date, all stock transfer or other
taxes (other than income or similar taxes) which are required to be paid in
connection with the sale and transfer of the Units to be sold to each Investor
hereunder will be, or will have been, fully paid or provided for by the Company,
and all laws imposing such taxes will be or will have been complied with.

 
 

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5.30.       Disclosure.  To the Company’s Knowledge, no material event or
circumstance has occurred or information exists with respect to the Company or
any Subsidiary or their respective businesses, properties, operations or
financial conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by the Company but which has not been so
publicly announced or disclosed.  The Memorandum, the SEC Filings, the Financial
Statements, and this Agreement (including the Disclosure Schedules) do not, when
taken as a whole, include any untrue statement of a material fact or, to the
Company’s Knowledge, omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

5.31.       Shell Company.  The Company is not a “shell company” as defined in
Rule 144(i)(1) under the 1933 Act.

6.           Representations and Warranties of the Investors.  Each of the
Investors hereby severally, and not jointly, represents and warrants to the
Company on and as of the Signing Date and on the applicable Closing Date,
knowing and intending that the Company rely thereon, that:
 
6.1.         Authorization.  The execution, delivery and performance by the
Investor of the Transaction Documents to which such Investor is a party have
been duly authorized and will each constitute the valid and legally binding
obligation of the Investor, enforceable against the Investor in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally.
 
6.2.         Purchase Entirely for Own Account.  The Securities to be received
by the Investor hereunder will be acquired for the Investor’s own account, not
as nominee or agent, and not with a view to the resale or distribution of any
part thereof in violation of the 1933 Act, and the Investor has no present
intention of selling, granting any participation in, or otherwise distributing
the same in violation of the 1933 Act.  The Investor is not a registered broker
dealer or an entity engaged in the business of being a broker dealer.
 
6.3.         Investment Experience.  The Investor acknowledges that it can bear
the economic risk and complete loss of its investment in the Securities and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment contemplated
hereby.  The Investor has significant experience in making private investments,
similar to the purchase of the Securities hereunder.
 
6.4.         Disclosure of Information.  The Investor has had an opportunity to
receive all additional information related to the Company requested by it and to
ask questions of and receive answers from the Company regarding the Company, its
business and the terms and conditions of the offering of the Securities.  The
Investor acknowledges receipt of copies of and its review of the SEC Filings and
the Memorandum.  Neither such inquiries nor any other due diligence
investigation conducted by the Investor shall modify, amend or affect the
Investor’s right to rely on the Company’s representations and warranties
contained in this Agreement.
 
 
 

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6.5.         Restricted Securities.  The Investor understands that the
Securities are characterized as “restricted securities” under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
 
6.6.         Legends.
 
(a)           It is understood that, except as provided below, certificates
evidencing such Securities may bear the following or any similar legend:
 
“THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED, OR (II) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE
SECURITIES LAWS.”
 
(b)           If required by the authorities of any state in connection with the
issuance of sale of the Securities, the legend required by such state authority.
 
(c)           From and after the first anniversary of the Closing Date in the
case of the Shares and the first anniversary of the date of exercise of a
Warrant in the case of the Warrant Shares, provided, in each case, that the
Investor is not an affiliate of the Company and has not been an affiliate for a
period of ninety days, the Company shall, upon an Investor's written request,
and upon a broker’s written confirmation, in form and substance reasonably
satisfactory to the Company, that the Shares or Warrant Shares have been
disposed, promptly cause certificates evidencing such Securities to be issued
without such restrictive legends.
 
(d)           Each Investor, severally and not jointly with the other Investors,
agrees that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 6.6 is predicated upon the warranty of
such Investor to sell any Securities pursuant to either the registration
requirements of the 1933 Act, including any applicable prospectus delivery
requirements, or an exemption therefrom.

6.7.         Accredited Investor.  The Investor is an “accredited investor” as
defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.
 
6.8.         No General Solicitation.  The Investor did not learn of the
investment in the Securities as a result of any “general advertising” or
“general solicitation” as those terms are contemplated in Regulation D, as
amended, under the 1933 Act.

 
 

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6.9.         Brokers and Finders.  No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company, any Subsidiary or any other Investor for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Investor.
 
6.10        Cooperation.  The Company agrees to use commercially reasonable
efforts to cooperate with any Investor selling its Securities pursuant to Rule
144.

7.           Conditions to Closing.
 
7.1.         Conditions to the Investors’ Obligations. The obligation of the
Investors to purchase the Securities at Closing is subject to the fulfillment to
the Investors’ satisfaction, on or prior to the Closing Date, of the following
conditions, any of which may be waived in writing by the Investors:
 
(a)           The representations and warranties made by the Company in Section
5 hereof that are qualified as to materiality shall be true and correct in all
respects, and those not so qualified shall be true and correct in all material
respects, at all times prior to and on the Closing Date.  The Company shall have
performed in all material respects all obligations herein required to be
performed or observed by it on or prior to the relevant Closing Date;
 
(b)           The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary or appropriate
for consummation of the purchase and sale of the Securities then being issued
and sold, all of which shall be and remain so long as necessary in full force
and effect;
 
(c)           No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
or any order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
or self-regulatory organization enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents;
 
(d)           The Company shall have delivered a Certificate, executed on behalf
of the Company by its Chief Executive Officer or its Chief Financial Officer,
dated as of the Closing Date, certifying to the fulfillment of the conditions
specified in subsections (a) and (b) of this Section 7.1;
 
(e)           The Company shall have delivered a Certificate, executed on behalf
of the Company by its Secretary, dated as of the Closing Date, certifying the
resolutions adopted by the Board of Directors of the Company approving the
transactions contemplated by this Agreement and the other Transaction Documents
and the issuance and sale of the Securities, certifying the current versions of
the Certificate of Incorporation and Bylaws of the Company and certifying as to
the signatures and authority of persons signing the Transaction Documents and
all related documents on behalf of the Company;
 
(f)           The Investors shall have received the Company Counsel Opinion;
 
(g)           No stop order or suspension of trading shall have been imposed by
any Person with respect to public trading in the Common Stock;

 
 

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(h)           The Company shall have delivered evidence satisfactory to the
Investors of the filing of the Certificate of Amendment with the Secretary of
State of the State of Delaware and the Articles of Merger with the Department of
Financial Institutions of the State of Wisconsin; and

(i)           The Escrow Amount shall, as of the Closing, equal or exceed the
Minimum Investment Amount.

7.2.         Conditions to Obligations of the Company. The Company's obligation
to sell and issue the Securities at Closing is subject to the fulfillment to the
satisfaction by the Investors on or prior to the Closing Date of the following
conditions, any of which may be waived in writing by the Company:
 
(a)           The representations and warranties made by the Investors in
Section 6 hereof that are qualified as to materiality shall be true and correct
in all material respects, and those not so qualified shall be true and correct
in all material respects, at all times prior to and on the Closing Date.  Each
Investor shall have performed in all material respects all obligations herein
required to be performed or observed by it on or prior to the Closing Date;
 
(b)           No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
or any order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
or self-regulatory organization enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents.
 
(c)           The Articles of Merger effecting the Merger shall have been duly
executed and filed with the Department of Financial Institutions of the State of
Wisconsin.
 
(d)           No stop order or suspension of trading shall have been imposed by
any Person with respect to public trading in the Common Stock;
 
(e)           The Escrow Amount shall, as of the Closing, equal or exceed the
Minimum Investment Amount.

(f)           The Company shall have received an Investor Questionnaire from
each Investor confirming the status of such an Investor as an “accredited
investor” for purposes of Regulation D and otherwise confirming the suitability
of such Investor to participate in the Private Placement.

8.           Covenants and Agreements of the Company.
 
8.1.          Reservation of Common Stock.  The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of providing for the exercise of the Warrants,
such number of shares of Common Stock as shall from time to time equal 100% of
the number of shares sufficient to permit the exercise of the Warrants issued
pursuant to this Agreement in accordance with their respective terms.
 
 
 

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8.2.         No Conflicting Agreements.  The Company will not take any action,
enter into any agreement or make any commitment that would conflict or interfere
in any material respect with the Company’s obligations to the Investors under
the Transaction Documents.
 
8.3.         Trading.  The Company shall promptly following the date hereof
secure and maintain the quotation of the Shares and the Warrant Shares upon each
securities exchange or quotation system upon which the Common Stock is then
traded.  As of the Closing Date, the Shares and the Warrant Shares shall have
been authorized for trading on the OTCBB.

8.4.         Use of Proceeds.  The Company will use the proceeds from the sale
of the Securities for general corporate purposes.  The Company intends to use
the proceeds from the sale of the Securities as described in Schedule 8.4.

8.5.         Press Release.  On or before 9:00 a.m., New York City time, on the
first Business Day following the date of this Agreement, the Company shall issue
a press release, which shall have been reviewed and approved by the Lead
Investor, announcing the transactions contemplated by the Transaction Documents
(the “Press Release”). In addition, the Company will file a Current Report on
Form 8-K with the SEC describing the terms of the Transaction Documents (and
including as exhibits to such Current Report on Form 8-K the material
Transaction Documents (including, without limitation, this Agreement and the
forms of Warrants)). Without any such Investor’s prior consent, the Company
agrees not to disclose in the Press Release the names, addresses or any other
information about an Investor, except as required by law and to satisfy its
obligations under the Transaction Documents.
 
8.6.         Furnishing of Information.  As long as any Investor owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the 1934
Act.  As long as any Investor owns Shares, Warrants or the Warrant Shares, if
the Company is not required to file reports pursuant to such laws, it will
prepare and furnish to the Investors and make publicly available in accordance
with Rule 144(c) promulgated by the SEC pursuant to the 1933 Act, as such Rule
may be amended from time to time, such information as is required for the
Investors to sell the Shares and Warrant Shares under Rule 144 promulgated by
the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time
(“Rule 144”). The Company further covenants that it will take such further
action as any holder of Shares, Warrants or the Warrant Shares may reasonably
request, all to the extent required from time to time to enable such Person to
sell the Shares and Warrant Shares without registration under the 1933 Act
within the limitation of the exemptions provided by Rule 144.

8.7           Form D.            The Company agrees to file one or more Forms D
with respect to the Securities on a timely basis as required under Regulation D
under the 1933 Act to claim the exemption provided by Rule 506 of Regulation D
and to provide a copy thereof to the Lead Investor and its counsel promptly
after such filing.  The Company, on or before the Closing Date, shall take such
action as the Company shall reasonably determine is necessary in order to obtain
an exemption for or to qualify the Securities for sale to the Investors at the
Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the
Investors on or prior to the Closing Date.  The Company shall make all filings
and reports relating to the offer and sale of the Securities required under
applicable securities or “Blue Sky” laws of the states of the United States
following the Closing Date.

 
 

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8.8          No Integrated Sales.      The Company will not sell, offer to sell,
solicit offers to buy or otherwise negotiate in respect of any “security” (as
defined in the 1933 Act) that is or could be integrated with the sale of the
Securities in a manner that would require the registration of the Securities
under the 1933 Act.

9.           Registration Rights.
 
9.1.         Registration.

(a)          Registration Statement.  On or prior to the 180th day following the
Closing Date (the “Filing Deadline”), the Company shall file with the SEC one
Registration Statement on Form S-1 covering the resale of the Registrable
Securities (the “Registration Statement”).  Such Registration Statement also
shall cover, to the extent allowable under the 1933 Act and the rules
promulgated thereunder (including Rule 416), such indeterminate number of
additional shares of Common Stock resulting from stock splits, stock dividends
or similar transactions with respect to the Registrable Securities.  The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided in
accordance with Section 9.2(c) to the Holders and their respective counsel prior
to its filing or other submission.

(b)          Expenses.  The Company will pay all expenses associated with each
registration, including filing and printing fees, counsel and accounting fees
and expenses, costs associated with clearing the Registrable Securities for sale
under applicable state securities laws and listing fees, including the
reasonable fees and disbursements of one law firm serving as counsel to the
Holders, but excluding discounts, commissions, fees of underwriters, selling
brokers, dealer managers or similar securities industry professionals with
respect to the Registrable Securities being sold.

(c)          Effectiveness.

(i)           The Company shall use its commercially reasonable efforts to have
the Registration Statement declared effective as to the maximum number of
Registrable Securities permitted to be included therein by the SEC not later
than the earlier to occur of (x) the 240th day immediately following the date
hereof, or (y) five (5) Business Days following the Company’s receipt of a
letter from the SEC relating to the Registration Statement that it will not
review the Registration Statement or that it has no further comments with
respect to the Registration Statement; provided, however, if the Registration
Statement is not declared effective within the time period set forth above, the
Company shall continue to use its commercially reasonable efforts to have the
Registration Statement declared effective as soon as possible thereafter.

 
 

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(ii)           For not more than thirty (30) consecutive days, on not more than
two (2) occasions in any twelve (12) month period, the Company may delay the
disclosure of material non-public information concerning the Company, by
terminating or suspending effectiveness of any registration contemplated by this
Section 9, upon delivery to the Holders of a certificate signed by the Company’s
Chief Executive Officer stating that in the good faith judgment of the Company’s
Board of Directors, (i) the offering could reasonably be expected to interfere
in any material respect with any acquisition, corporate reorganization or other
material transaction of any nature under consideration by the Company or (ii)
there is some other material development relating to the operations or condition
(financial or other) of the Company that has not been disclosed to the general
public and as to which it is in the Company’s best interests not to disclose
such development (an “Allowed Delay”); provided, that the Company shall promptly
(a) notify the Holders in writing of the existence of (but in no event, without
the prior written consent of a Holder, shall the Company disclose to such Holder
any of the facts or circumstances regarding) material non-public information
giving rise to an Allowed Delay, and (b) advise the Holders in writing to cease
all sales under the Registration Statement until the end of the Allowed Delay.
 
(iii)           If any offering pursuant to a Registration Statement filed
pursuant to Section 9.1 hereof involves an underwritten offering, the Company
shall have the right to select an investment banker and manager to administer
the offering, subject to the reasonable satisfaction of the Requisite Holders.
 
(d)           Occurrence of an Event.  Upon the occurrence of an Event (as
defined below), the Company will make pro rata payments to each Holder, as
liquidated damages and not as a penalty, in an amount equal to 1.5% of the
product of (A) the aggregate amount invested by such Holder and (B) a fraction,
the numerator of which is the aggregate number of Registrable Securities then
held by, or then issuable to, such Holder (excluding any Warrant Shares issuable
upon exercise of any Long Warrants held by such Holder that, if issued pursuant
to a cashless exercise in accordance with the terms thereof, would not
constitute Registrable Securities upon such issuance), and the denominator of
which is the aggregate number of Registrable Securities held by, or issuable to,
such Holder as of immediately following the Closing, for each 30-day period or
pro rata for any portion during which such Event occurs and is continuing
(provided that such liquidated damages shall be calculated for each such 30-day
period (or any such pro rata period) after deducting from the aforesaid
numerator any securities that have ceased to constitute Registrable Securities
as of the applicable reference date of any such calculation); provided that the
maximum amount of such liquidated damages payable to any holder shall be 5.0% of
the aggregate amount invested by such Holder.  Such payments shall be in partial
compensation to the Holders, and shall not constitute the Holders’ exclusive
remedy for such events.  Such payments shall be made to each Holder in
cash.  The amounts payable as liquidated damages pursuant to this paragraph
shall be payable in lawful money of the United States, and amounts payable as
liquidated damages shall be paid within two (2) Business Days of the last day of
each such 30-day period during which the Registration Statement should have been
filed for which no Registration Statement was filed with respect to the
Registrable Securities.  For such purposes, each of the following shall
constitute an “Event”: (x) the Filing Date does not occur on or prior to the
180th day following the Closing Date or (y) the Effective Date does not occur on
or prior to (i) the 240th day following the Closing Date if the SEC does not
review the Registration Statement or (ii) the 270th day following the Closing
Date if the SEC does review the Registration Statement or (z) each violation of
the Company’s obligation not to suspend sales pursuant to the Registration
Statement longer than permitted pursuant to an Allowed Delay.

 
 

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(e)          Piggyback Registrations.

(i)           “Piggy-Back Registrable Securities” means any Registrable
Securities which are excluded from the Registration Statement as a result any
SEC comment limiting the number of shares of Common Stock that may be included
in the Registration Statement (a “Cutback Comment”) together with any securities
issued or issuable upon any stock split, dividend or other distribution,
adjustment, recapitalization or similar event with respect to the foregoing; but
excluding (i) any Piggy-Back Registrable Securities that have been publicly sold
or may be sold immediately without registration under the 1933 Act either
pursuant to Rule 144 or otherwise, (ii) any Piggy-Back Registrable Securities
sold by a Person in a transaction pursuant to a registration statement filed
under the 1933 Act, or (iii) any Piggy-Back Registrable Securities that are at
the time subject to an effective registration statement under the 1933 Act.

(ii)           If at any time during the Effectiveness Period, other than during
an Allowed Delay, there is not an effective registration statement covering all
of the Registrable Securities and the Company shall determine to prepare and
file with the SEC a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents or other registration forms relating
to equity securities to be issued in connection with any acquisition of any
entity or business or equity securities issuable in connection with stock option
or other employee benefit plans, then the Company shall send to each Investor
written notice of such determination and if, within fifteen (15) days after
receipt of such notice, any such Investor shall so request in writing, the
Company shall include in such registration statement all or any part of the
Piggy-Back Registrable Securities not already covered by an effective
registration statement such Investor requests to be registered.

(iii)           Notwithstanding anything to the contrary contained herein, this
Section 9.1(e) shall not apply to an underwritten public offering where the
managing underwriter of the offering prohibits such registration.

(f)           Impact of Cutback Comment.  In the event that, as a result of a
Cutback Comment, the Company cannot include all of the Registrable Securities in
the Registration Statement, then the Company shall include in the Registration
Statement the maximum number of Registrable Securities that can be included
therein without causing the Registration Statement to be deemed to register a
primary offering by the Company, with the number of Registrable Securities
included in the Registration Statement to be allocated among the holders thereof
in proportion to the total Registrable Securities held by each such holder on
the date that the Registration Statement is filed.  Any Registrable Securities
that are not included in the Registration Statement as a result of the
occurrence of the foregoing (collectively, the “Cutback Shares”) shall be deemed
to be Piggy-Back Registrable Securities, subject to the limitations set forth in
the definition thereof.  In addition, from and after the six-month anniversary
of the initial effective date of the Registration Statement, the Company shall
use its commercially reasonable efforts to file a subsequent registration
statement covering the resale of the Cutback Shares, which registration
statement shall be subject to the same terms and conditions set forth herein
with respect to the Registration Statement (other than Section 9.1(d) hereof).

 
 

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9.2.           Company Obligations.  The Company will use its commercially
reasonable efforts to effect the registration of the Registrable Securities in
accordance with the terms hereof, and pursuant thereto the Company will, as
expeditiously as reasonably practicable:

(a)           Use its commercially reasonable efforts to cause such Registration
Statement to become effective and to remain continuously effective for a period
that will terminate upon the earlier of (x) the date on which all Registrable
Securities covered by such Registration Statement, as amended from time to time,
have been sold and (y) the date on which all Registrable Securities can be sold
under Rule 144 without any volume limitations (the “Effectiveness Period”);
provided, that (i) the Effectiveness Period shall include any period during
which any shares of Common Stock that had ceased to be Registrable Securities
subsequently become and remain Registrable Securities because they are no longer
saleable without volume limitations under Rule 144 by virtue of the Company's
failure to be in compliance with the current public information required under
Rule 144 (including under Rule 144(c)(1) and Rule 144(i)(2)), and (ii) in the
event the Company is not able to maintain the effectiveness of the Registration
Statement following the occurrence of, and during the continuation of, such
failure, the Company will use its commercially reasonable efforts to file with
the SEC, as promptly as practicable following such occurrence, and in any event
no later than sixty (60) days thereafter, a new Registration Statement covering
all such Registrable Securities, and shall otherwise comply with all of the
provision of this Agreement with respect to such new Registration Statement
(other than Section 9.1(d) hereof); and provided further that the foregoing
requirement shall not apply if, prior to the filing of such new Registration
Statement, such shares of Common Stock again cease to be Registrable Securities;

(b)           prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement and the accompanying prospectus as may
be necessary to keep the Registration Statement effective for the period
specified in Section 9.2(a) and to comply with the provisions of the 1933 Act
and the 1934 Act with respect to the distribution of all Registrable Securities;

(c)           provide copies to and permit the Investors and their legal counsel
to review each Registration Statement and all amendments thereto no fewer than
three (3) days prior to their filing with the SEC and not file any document to
which such counsel reasonably objects within three (3) days following receipt by
such counsel of such Registration Statement and/or amendments thereto;

 
 

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(d)          furnish to the Lead Investor and its legal counsel (x) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company (but not later than two (2) Business Days after the
filing date, receipt date or sending date, as the case may be), an electronic
copy of any Registration Statement and any amendment thereto, each preliminary
prospectus and prospectus and each amendment or supplement thereto, and each
letter written by or on behalf of the Company to the SEC or the staff of the
SEC, and each item of correspondence from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion
thereof which contains information for which the Company has sought confidential
treatment), and (y) such number of copies of a prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as the Lead Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities;

(e)           in the event the Company selects an underwriter for the offering,
the Company shall enter into and perform its reasonable obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriter of such offering;

(f)           if required by the underwriter, the Company shall furnish, on the
effective date of the Registration Statement (i) an opinion, dated as of such
date, from independent legal counsel representing the Company for purposes of
such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the underwriter and (ii)
a letter, dated such date, from the Company’s independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriter and the Holders;

(g)          use its reasonable best efforts to prevent the issuance of any stop
order or other suspension of effectiveness and, if such order is issued, obtain
the withdrawal of any such order at the earliest possible moment;

(h)          prior to any public offering of Registrable Securities, use its
reasonable best efforts to register or qualify or cooperate with the Holders and
their counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions reasonably requested by the Holders and do any and all
other reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement;

(i)           cause all Registrable Securities covered by a Registration
Statement to be listed or traded on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed or traded;

(j)           immediately notify the Holders, at any time when a prospectus
relating to the Registrable Securities is required to be delivered under the
1933 Act, upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and at the
request of any such Holder, promptly prepare and furnish to such Holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and

 
 

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(k)           otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC under the 1933 Act and the 1934 Act and take such
other actions as may be reasonably necessary to facilitate the registration of
the Registrable Securities hereunder; and make available to its security
holders, as soon as reasonably practicable, but not later than the Availability
Date (as defined below), an earnings statement covering a period of at least
twelve (12) months, beginning after the effective date of each Registration
Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the 1933 Act (for the purpose of this subsection 9.2(k), “Availability
Date” means the 45th day following the end of the fourth fiscal quarter that
includes the effective date of such Registration Statement, except that, if such
fourth fiscal quarter is the last quarter of the Company’s fiscal year,
“Availability Date” means the 90th day after the end of such fourth fiscal
quarter).

9.3.         Due Diligence Review; Information.  Upon receipt of an appropriate
confidentiality agreement, the Company shall make available, during normal
business hours, for inspection and review by the Holders, advisors to and
representatives of the Holders (who may or may not be affiliated with the
Holders), and any underwriter participating in any disposition of Common Stock
on behalf of the Holders pursuant to a Registration Statement or amendments or
supplements thereto or any blue sky, FINRA or other filing, all financial and
other records, all filings with the SEC, and all other corporate documents and
properties of the Company as may be reasonably necessary for the purpose of such
review, and cause the Company’s officers, directors and employees, within a
reasonable time period, to supply all such information reasonably requested by
the Holders or any such representative, advisor or underwriter in connection
with such Registration Statement (including, without limitation, in response to
all questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of the
Registration Statement for the sole purpose of enabling the Holders and such
representatives, advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of such Registration Statement.  Notwithstanding the
foregoing, the Company shall not disclose material nonpublic information to the
Holders, or to advisors to or representatives of the Holders, unless prior to
disclosure of such information the Company identifies such information as being
material nonpublic information and provides the Holders, such advisors and
representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review.

9.4.          Obligations of the Holders.

(a)           Each Holder agrees to furnish to the Company a completed
Questionnaire in customary form reasonably satisfactory to the Company (a
“Selling Shareholder Questionnaire”) not prior to 120 days after the Closing
Date and not more than 150 days after the Closing Date.  A Holder who fails to
furnish a Selling Stockholder Questionnaire within 150 days after the Closing
Date may have its Registrable Securities excluded from the Registration
Statement, provided that the Company has provided such Holder with notice at
least 20 days prior (but no more than 60 days prior) to the expiration of such
150 day period.

 
 

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(b)          Each Holder, by its acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of a Registration Statement
hereunder, unless such Holder has notified the Company in writing of its
election to exclude all of its Registrable Securities from such Registration
Statement.

(c)           In the event the Company, at the request of the Holders,
determines to engage the services of an underwriter, each such Holder agrees to
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such offering and
take such other actions as are reasonably required in order to expedite or
facilitate the dispositions of the Registrable Securities.

(d)           Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event rendering a Registration Statement no
longer effective, such Holder will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities, until the Holder’s receipt of copies of the supplemented
or amended prospectus filed with the SEC and declared effective and, if so
directed by the Company, the Holder shall deliver to the Company (at the expense
of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in the Holder’s possession of the prospectus covering
the Registrable Securities current at the time of receipt of such notice.

(e)           No Holder may participate in any third party underwritten
registration hereunder unless it (i) agrees to sell the Registrable Securities
on the basis provided in any underwriting arrangements in usual and customary
form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions.  Notwithstanding the foregoing, no Holder shall be
required to make any representations to such underwriter, other than those with
respect to itself and the Registrable Securities owned by it, including its
right to sell the Registrable Securities, and any indemnification in favor of
the underwriter by the Holders shall be several and not joint and limited in the
case of any Holder, to the net proceeds received by such Holder from the sale of
its Registrable Securities.  The scope of any such indemnification in favor of
an underwriter shall be limited to the same extent as the indemnity provided in
Section 9.5(b) hereof.

 
 

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9.5.         Indemnification.

(a)           Indemnification by the Company.  The Company will indemnify and
hold harmless each Holder and any controlling person (as defined in Section 15
of the 1933 Act) and their respective officers, directors, members, employees
and agents, successors and assigns (the “Indemnified Persons”), against any
losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof; (ii) any blue sky application or other document executed
by the Company specifically for blue sky compliance or based upon written
information furnished by the Company filed in any state or other jurisdiction in
order to qualify any or all of the Registrable Securities under the securities
laws thereof (any such application, document or information herein called a
“Blue Sky Application”); (iii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; (iv) any violation by the Company, or its
directors, officers, employees or agents of any rule or regulation promulgated
under the 1933 Act applicable to the Company or its directors, officers,
employees or agents and relating to action or inaction required of the Company
or any of them in connection with such registration; or (v) any failure to
register or qualify the Registrable Securities included in any such Registration
Statement in any state where the Company or its agents has affirmatively
undertaken or agreed in writing that the Company will undertake such
registration or qualification on a Holder’s behalf (the undertaking of any
underwriter chosen by the Company being attributed to the Company) and will
reimburse such Holder, and each such officer, director or member and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, as incurred; provided, however, that the Company will not
be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in conformity with
information furnished in writing by such Holder or any such controlling person
specifically for use in such Registration Statement or prospectus.

(b)           Indemnification by the Holders.  In connection with any
Registration Statement pursuant to the terms of this Agreement, each Holder will
furnish to the Company in writing such information as the Company reasonably
requests concerning such Holder or the proposed manner of such Holder’s
distribution for use in connection with any Registration Statement or prospectus
and agrees, severally but not jointly, to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its Subsidiaries and its and their
respective directors, officers, employees, shareholders and each person who
controls the Company (within the meaning of the 1933 Act) against any losses,
claims, damages, liabilities and expenses (including reasonable attorney fees)
resulting from any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement or prospectus
or preliminary prospectus or amendment or supplement thereto or necessary to
make the statements therein not misleading, to the extent, but only to the
extent that such untrue statement or omission is contained in any information
furnished in writing by such Holder to the Company specifically for inclusion in
such Registration Statement or prospectus or amendment or supplement
thereto.  In no event shall the liability of a Holder be greater in amount than
the aggregate dollar amount of the proceeds (net of all expenses paid by such
Holder and the amount of any damages such Holder has otherwise been required to
pay by reason of such untrue statement or omission) received by such Holder upon
the sale of the Registrable Securities included in the Registration Statement
giving rise to such indemnification obligation.

 
 

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(c)           Conduct of Indemnification Proceedings.  Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon advice of its counsel, a conflict of interest exists between
such person and the indemnifying party with respect to such claims (in which
case, if the person notifies the indemnifying party in writing that such person
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such person); and provided, further, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation.  It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties.  No indemnifying party
will, except with the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.

(d)           Contribution.  If for any reason the indemnification provided for
in the preceding paragraphs (a) and (b) is unavailable to an indemnified party
or insufficient to hold it completely harmless, other than as expressly
specified therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect the relative fault
of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations.  No person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be
entitled to contribution from any person not guilty of such fraudulent
misrepresentation.  In no event shall the contribution obligation of a Holder be
greater in amount than the aggregate dollar amount of the proceeds (net of all
expenses paid by such holder and the amount of any damages such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.

10.          Survival.
 
10.1.           Survival.  All representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to be representations,
warranties, covenants and agreements as of the date hereof and shall survive the
Closing.
 
 
 

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11.          Miscellaneous.

 
11.1.       Successors and Assigns.  This Agreement may not be assigned by a
party hereto without the prior written consent of the Company and the Requisite
Holders; provided, however, that an Investor may assign its rights and delegate
its duties hereunder in whole or in part to an Affiliate or to a third party
acquiring some or all of its Securities in a private transaction without the
prior written consent of the Company or the other Investors, after notice duly
given by such Investor to the Company; provided, that no such assignment or
obligation shall affect the obligations of such Investor hereunder.  The
provisions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties.  Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.
 
11.2.       Counterparts; Faxes.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement may also
be executed via facsimile or .pdf, which shall be deemed an original.
 
11.3.       Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
 
11.4.       Notices.  Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three (3) Business Days after such notice is deposited in first
class mail, postage prepaid, and (iv) if given by a nationally recognized
overnight air courier, then such notice shall be deemed given one (1) Business
Day after delivery to such carrier.  All notices shall be addressed to the party
to be notified at the address as follows, or at such other address as such party
may designate by ten (10) days’ advance written notice to the other party:
 
If to the Company:

Novelos Therapeutics, Inc.
One Gateway Center, Suite 504
Newton, MA 02458
Attention:  Chief Executive Officer
Fax:  (617) 964-6331

 
 

--------------------------------------------------------------------------------

 

With a copy to:

Foley Hoag LLP
Seaport World Trade Center West
155 Seaport Boulevard
Boston, MA 02210
Attn:  Paul Bork
Fax:  (617) 832-7000

If to any of the Investors:

to the addresses set forth on Schedule I affixed hereto.

With a copy to:

Foley & Lardner LLP
Verex Plaza
150 East Gilman Street
Madison, WI 53703
Attn:  Anne E. Ross
Fax:  (608) 258-4258

11.5.       Amendments and Waivers.  Except as otherwise expressly set forth
herein, this Agreement shall not be amended and the observance of any term of
this Agreement shall not be waived (either generally or in a particular instance
and either retroactively or prospectively) without the prior written consent of
the Company and the Requisite Holders.  Any amendment or waiver effected in
accordance with this Section 11.5 shall be binding upon each holder of any
Securities purchased under this Agreement at the time outstanding, each future
holder of all such Securities, and the Company.
 
11.6.       Publicity.  Except as provided in Section 8.5, no public release or
announcement concerning the transactions contemplated hereby shall be issued by
the Company or the Investors without the prior consent of the Company (in the
case of a release or announcement by the Investors) or the Lead Investor, as
representative of the Investors (in the case of a release or announcement by the
Company) (which consents shall not be unreasonably withheld), except as such
release or announcement may be required by law or the applicable rules or
regulations of any securities exchange or securities market on which the
Securities are then listed and trading, in which case the Company or the Lead
Investor, as the case may be, shall allow the Investors or the Company, as
applicable, to the extent reasonably practicable in the circumstances,
reasonable time to comment on such release or announcement in advance of such
issuance.
 
11.7.       Severability.  Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.  To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.
 
 
 

--------------------------------------------------------------------------------

 
 
11.8.       Entire Agreement.  This Agreement, including the Exhibits and
Disclosure Schedules, and the other Transaction Documents constitute the entire
agreement among the parties hereof with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof and
thereof.  Prior drafts or versions of this Agreement shall not be used to
interpret this Agreement.
 
11.9.       Further Assurances.  The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
 
11.10.     Governing Law; Consent to Jurisdiction.  This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without regard to the choice of law principles thereof.  Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby.  Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement.  Each of the parties hereto irrevocably
consents to the jurisdiction of any such court in any such suit, action or
proceeding and to the laying of venue in such court.  Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.  THE COMPANY AND EACH OF THE INVESTORS HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO OR
ARISING OUT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
 
[signature page follows]

 
 

--------------------------------------------------------------------------------

 

Company Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

 
NOVELOS THERAPEUTICS, INC.
         
By:
/s/ Harry S. Palmin
   
Name:  Harry S. Palmin
 
Title:  President and CEO

 
 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 14, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
TRUST, ESTATE OR OTHER ENTITY:
/s/ Frank W. Allen
   
(Signature)
     
Print name of entity
Frank W. Allen
   
(Printed Name)
   
By:
         
Name:
             
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
5570 Huntingwood Way
   
Waunakee, WI 53597
             

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
$52,500.00 @ $.75 a share

Number of Units:
    70,000  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March ___, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
TRUST, ESTATE OR OTHER ENTITY:
     
(Signature)
Alpha Capital Anstalt
 
Print name of entity
     
(Printed Name)
   
By:
/s/ Kourad Ackermann
       
Name:
Kourad Ackermann
     
Title:
Director
     
Print jurisdiction of organization of entity
   
Address:
Address:
                       

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 250,000  

Number of Units:
    333,333  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 29, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Theodore J. Brombach
   
(Signature)
     
Print name of entity
Theodore J. Brombach
   
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
1603 Orrington Ave.
   
Ste. 725
   
Evanston, IL 60201
   

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 37,500  

Number of Units:
    50,000  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 28, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
     
(Signature)
BYOM Cellectar LLC
 
Print name of entity
     
(Printed Name)
   
By:
/s/ Charles F. Brei
       
Name:  Charles F. Brei
     
Title:   Member
     
Print jurisdiction of organization of entity
   
Address:
Address:
   
5013 Prairie Rose Ct.
   
Middleton, WI 53562
     

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 146,400  

Number of Units:
    195,200  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 15, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Paul Christy  /s/ Denise Christy
   
(Signature)
     
Print name of entity
Paul Christy, Denise Christy
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
17327 Valley Drive
   
Omaha, NE 68130
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 25,000.00  

Number of Units:
    33,333.333  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 31, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
     
(Signature)
Cranshire Capital, L.P.
 
Print name of entity
     
(Printed Name)
   
By:
/s/ Mitchell P. Kopin
       
Name: Mitchell P. Kopin
     
Title:   President, Downsview Capital, Inc., The General Partner
     
Print jurisdiction of organization of entity
   
Address:
Address:
   
3100 Dundee Road, Suite 703
   
Northbrook, IL 60062
     

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 100,000.50  

Number of Units:
    133,334  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 8, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Morris A. Davis
   
(Signature)
     
Print name of entity
Morris A. Davis
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
Morris A. Davis
   
3256 Brooklyn Drive
   
Stoughton, WI 53589
   

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 50,000.25  

Number of Units:
    66,667  

66,667 units at 0.75/unit for a total of $50,000.25

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 9, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
     
(Signature)
Greenway Properties Inc.
 
Print name of entity
     
(Printed Name)
   
By:
/s/ Jeff Stranbel
       
Name: Jeff Stranbel
     
Title:  President
     
Print jurisdiction of organization of entity
   
Address:
Address:
   
725 Heartland Trail
   
Suite 102
   
Madison, WI 53717

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 750,000.00  

Number of Units:
    1,000,000  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 31, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Robert K. Grogan
   
(Signature)
     
Print name of entity
Robert K. Grogan
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
1747 Minden Dr.
   
Salt Lake City, UT 84121
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 25,000.00  

Number of Units:
    33,333  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 17, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ J. Louis Hinshaw
   
(Signature)
     
Print name of entity
James Louis Hinshaw
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
4671 Signature Dr.
   
Middleton, WI 53562
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 50,000  

Number of Units:
@0.75/share = 66,667 shares

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 22, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Bradley L. Hutter
   
(Signature)
     
Print name of entity
Bradley L. Hutter
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
4710 Signature Drive
   
Middleton, WI 53562
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 120,000.00  

Number of Units:
       

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March ___, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
     
(Signature)
Iroquois Master Fund, Ltd
 
Print name of entity
     
(Printed Name)
   
By:
/s/ Joshua Silverman
       
Name: Joshua Silverman
     
Title:   Director
     
Print jurisdiction of organization of entity
   
Address:
Address:
   
641 Lexington Ave., 26th Floor
   
New York, NY 10022
     

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 50,000  

Number of Units:
    66,666  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March ___, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
     
(Signature)
JMM Trading LP
 
Print name of entity
     
(Printed Name)
   
By:
/s/ Glenn Hunt
       
Name: Glenn Hunt
     
Title:   Partner
     
Print jurisdiction of organization of entity
   
Address:
Address:
   
333 Lippicott St.
   
Toronto, Ont. M552P CANADA
     

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 150,000

Number of Units:
200,000 shares

 
200,000 warrants

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 8, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ David H. Kim
   
(Signature)
     
Print name of entity
David H. Kim
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
6938 Frank Lloyd Wright
   
Middleton, WI 53562
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
$50,000 (total) ($0.75/share)

Number of Units:
    66,666.67  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: April 4, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Kenneth Lee
   
(Signature)
     
Print name of entity
Kenneth Lee
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
6754 Phil Lewis Way
   
Middleton, WI 53562
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 25,000.00  

Number of Units:
    33,333.33  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 14, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
     
(Signature)
McAllen Properties, LLC
 
Print name of entity
     
(Printed Name)
   
By:
/s/ Claude McAllen
   
Name: Claude McAllen
     
Title:   Managing Member
     
Print jurisdiction of organization of entity
   
Address:
Address:
   
2695 Gaston Rd.
   
Cottage Grove, WI 53527
     

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 50,000  

Number of Units:
    66,667  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 7, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Michael L. McCann
   
(Signature)
     
Print name of entity
Michael L. McCann
 
(Printed Name)
   
By:
   
/s/ Joanne M. McCann
   
 (Signature)
Name:
       
Joanne M. McCann
Title:
   
(Printed Name)
       
Print jurisdiction of organization of entity
   
Address:
Address:
360 W. Washington Ave.
   
P105
   
Madison, WI 53703
   

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 50,000.25  

 
Number of Units:
66,667 shares @ $0.75/share

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 8, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
     
(Signature)
Moss Living Trust dated Aug. 24, 2009
 
Print name of entity
     
(Printed Name)
   
By:
/s/ Paul R. Moss
       
Name: Paul R. Moss
     
Title:   Trustee
     
Print jurisdiction of organization of entity
   
Address:
Address:
   
1701 Hidden Hill Dr.
   
Verona, WI 53593
     

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 50,001  

Number of Units:
    66,668  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 31, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
     
(Signature)
NEI III, LLC
 
Print name of entity
     
(Printed Name)
   
By:
/s/ Walter E. Dewey
   
Name: Walter E. Dewey
     
Title:   Manager
     
Print jurisdiction of organization of entity
   
Address:
Address:
   
P.O. Box 1632
   
Waukesha, WI 53186
     

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 250,000.00  

Number of Units:
       

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 28, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Michael G. Palm
   
(Signature)
     
Print name of entity
Michael G. Palm
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
30 N. Woodmont Circle
   
Madison, WI 53717
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 25,500  

Number of Units:
    34,000  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March ___, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Kurt L. Peterson
   
(Signature)
     
Print name of entity
Kurt L. Peterson
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
17 Autumnwood Circle
   
Madison, WI 53719
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 25,000  

Number of Units:
    33,333  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 22, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Scott W. Peterson
   
(Signature)
     
Print name of entity
Scott W. Peterson
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
5840 Thorstrand Rd.
   
Madison, WI 53705
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 120,000.00  

Number of Units:
       

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 10, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Perry J. Pickhardt
   
(Signature)
     
Print name of entity
Perry J. Pickhardt
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
146 Kensington Dr.
   
Madison, WI 53704
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 75,000.00  

Number of Units:
    100,000 shares  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 21, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Daniel L. Pophal
   
(Signature)
     
Print name of entity
Daniel L. Pophal
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
1605 Shenandoah Drive
   
Waunakee, WI 53597
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 7,500.00  

Number of Units:
    10,000  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 12, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Gregory J. Potter
   
(Signature)
     
Print name of entity
Gregory J. Potter
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
950 1st Ave South
   
Wis. Rapids, WI 54495
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 25,000  

Number of Units:
       

 
 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: April 2, 2011
     
IF AN INDIVIDUAL:
IF A CORPORATION, PARTNERSHIP,
 
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Kevin Potter POA for John Potter, Jr.
   
(Signature)
     
Print name of entity
Kevin Potter POA
 
(Printed Name)
   
By:
         
Name:
         
Title:
         
Print jurisdiction of organization of entity
   
Address:
Address:
826 Hidden Cave Road
   
Madison, WI 53717
         

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 25,000.50  

Number of Units:
    33,334  

 
 

--------------------------------------------------------------------------------

 
 
Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 10, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Kevin Potter
   
(Signature)
 
    
   
Print name of entity
Kevin Potter
     
(Printed Name)
         
By:
   
           
Name:
  
           
Title:
  
           
Print jurisdiction of organization of entity
     
Address:
 
Address:
826 Hidden Cave Road
 
  
Madison, WI 53717
        
  

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 25,000.50            
Number of Units:
    33,334  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 11, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Richard A. Prange
   
(Signature)
 
    
   
Print name of entity
Richard A. Prange
     
(Printed Name)
         
By:
  
            
Name:
  
             
Title:
  
           
Print jurisdiction of organization of entity
     
Address:
 
Address:
2102 Foggy Mountain Pass
 
  
Waunakee, WI 53597
 
  
   
  

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 0.75            
Number of Units:
    66,668  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 28, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
       
(Signature)
 
Risky Business (Partnership)
   
Print name of entity
 
     
(Printed Name)
 
By:
/s/ Arthur C. Teasdale
           
Name:
Art Teasdale
           
Title:
Partner
           
Print jurisdiction of organization of entity
     
Address:
 
Address:
   
 
Risky Business
   
 
957 Harvest Lane
   
 
Sun Prairie, WI 53590

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 64,500            
Number of Units:
    86,000  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 10, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Martin Schindler
   
(Signature)
 
    
   
Print name of entity
Martin Schindler
   
(Printed Name)
       
By:
                  
Name:
                 
Title:
                 
Print jurisdiction of organization of entity
     
Address:
 
Address:
6123 Utah Avenue, NW
 
    
Washington, DC 20015
 
   
   
   

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 50,000.25            
Number of Units:
    66,667.00  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 28, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
/s/ Gary R. Skaar
   
(Signature)
       
Print name of entity
Gary R. Skaar
   
(Printed Name)
       
By:
                 
Name:
                 
Title:
                 
Print jurisdiction of organization of entity
     
Address:
 
Address:
5854 Wagon Circle
    
Marshall, WI 53559
 
  
   
  

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 100,000            
Number of Units:
    133,333.33  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 31, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
   
   
(Signature)
 
SMC Investments LLC
   
Print name of entity
   
     
(Printed Name)
         
By:
/s/ Sean M. Cleary
   
Name:
Sean M. Cleary
           
Title:
Owner
           
Print jurisdiction of organization of entity
     
Address:
 
Address:
  
 
3938 Weatherwood Trail
  
 
Verona, WI 53593
     

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 50,000.25            
Number of Units:
    66,667  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 24, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
/s/ John F. Spence
   
(Signature)
 
  
   
Print name of entity
John F. Spence
   
(Printed Name)
       
By:
           
Name:
                 
Title:
                 
Print jurisdiction of organization of entity
     
Address:
 
Address:
1603 Orrington Ave.
 
  
Suite 725
 
  
Evanston, IL 60201
 
  

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 37,500            
Number of Units:
    50,000  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 27, 2011
         
IF AN INDIVIDUAL:
  IF A CORPORATION, PARTNERSHIP,       TRUST, ESTATE OR OTHER ENTITY:
  
   
(Signature)
  The Reeder Brittain Living Trust dated November 6, 2006     Print name of
entity
  
   
(Printed Name)
        By: The Reeder Brittain Living Trust dated November 6, 2006     /s/
Scott Reeder     Name: 
Scott Reeder
            Title:
Trustee
                    Print jurisdiction of organization of entity        
Address:
  Address:
  
  7337 Summit Ridge Rd.      Middleton, WI 53562
  
   

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 80,001.00            
Number of Units:
 
106,668 Terms per 3/24/11 SPA
 

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 8, 2011
             
IF AN INDIVIDUAL:
  IF A CORPORATION, PARTNERSHIP,       TRUST, ESTATE OR OTHER ENTITY:
  
     
(Signature)
  Venture Investors Early Stage Fund III Limited Partnership     Print name of
entity
  
     
(Printed Name)
          By:
/s/ John Neis
    Name:
John Neis
            Title:
Managing Director
                    Print jurisdiction of organization of entity        
Address:
  Address:
  
  505 S. Rosa Rd., Suite 201
  
  Madison, WI 53703
  
     

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 1,500,000.00            
Number of Units:
 
2,000,000 shares
 

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date:  March 28, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
 
   
(Signature)
 
WIP – Cellectar V, LLC
   
Print name of entity
 
   
(Printed Name)
         
By:
/s/ Steve Haugen
   
Name:
Steve Huagen
           
Title:
Accountant
           
Print jurisdiction of organization of entity
     
Address:
 
Address:
  
 
P.O. Box 45919
  
 
Madison, WI 53744
  
   

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 133,500.00            
Number of Units:
 
178,000 shares
 

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: April 4, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
  
   
(Signature)
 
XMS Capital Partners, LLC
   
Print name of entity
  
   
(Printed Name)
       
By:
/s/ John F. Spence
   
Name:
John F. Spence
           
Title:
Managing Partner
           
Print jurisdiction of organization of entity
     
Address:
 
Address:
  
 
1603 Orrington Ave.
  
 
Suite 725
  
 
Evanston, IL 60201

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 150,000            
Number of Units:
    200,000  

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: March 31, 2011
         
IF AN INDIVIDUAL:
 
IF A CORPORATION, PARTNERSHIP,
   
  TRUST, ESTATE OR OTHER ENTITY:
  
   
(Signature)
 
Zermatt Investors, LLC
   
Print name of entity
  
   
(Printed Name)
       
By:
/s/ Walter E. Dewey
   
Name:
Walter E. Dewey
           
Title:
Manager
         
Print jurisdiction of organization of entity
     
Address:
 
Address:
  
 
6018 N. Highlands Ave.
  
 
Madison, WI 53705
  
   

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 100,000.00            
Number of Units:
        

 
 

--------------------------------------------------------------------------------

 

Investor Signature Page

IN WITNESS WHEREOF, the undersigned has executed this Securities Purchase
Agreement or caused its duly authorized officers to execute this Securities
Purchase Agreement as of the date first above written.

Date: April 5, 2011
         
IF AN INDIVIDUAL:
  IF A CORPORATION, PARTNERSHIP,       TRUST, ESTATE OR OTHER ENTITY:
  
   
(Signature)
  Rodman and Renshaw, LLC     Print name of entity
  
   
(Printed Name)
        By:
/s/ David Horin
    Name:
David Horin
            Title:
Chief Financial Officer
            Print jurisdiction of organization of entity      
Address:
  Address:
  
  1251 Avenue of the Americas, 20th F.
  
  New York, NY 10020
  
   

[Aggregate dollar amount of Securities committed to be purchased pursuant to the
terms of the Agreement:]

Closing Purchase Price:
  $ 200,000.25            
Number of Units:
    266,667  

 
 

--------------------------------------------------------------------------------

 

SCHEDULE I
INVESTORS

           
Number of
   
Closing
 
Name
 
Street
 
City, State, ZIP
 
Units
   
Purchase Price
                       
Frank W. Allen
 
5570 Huntingwood Way
 
Waunakee, WI 53597
    70,000     $ 52,500.00  
Alpha Capital Anstalt
 
c/o LH Financial Inc.
150 Central Park South
 
New York, NY 10019
    333,333     $ 249,999.75  
Theodore J. Brombach
 
1603 Orrington Ave, Suite 725
 
Evanston, IL 60201
    50,000     $ 37,500.00  
BYOM Cellectar, LLC
 
5013 Prairie Rose Ct.
 
Middleton, WI 53562
    195,200     $ 146,400.00  
Paul and Denise Christy JT
TEN
 
17327 Valley Drive
 
Omaha, NE 68130
    33,333     $ 24,999.75  
Cranshire Capital, L.P.
 
3100 Dundee Road, Suite 703
 
Northbrook, IL 60062
    133,334     $ 100,000.50  
Morris Davis
 
3256 Brooklyn Drive
 
Stoughton, WI 53589
    66,667     $ 50,000.25  
Greenway Properties Inc.
 
725 Heartland Trail, Suite 102
 
Madison, WI 53717
    1,000,000     $ 750,000.00  
Robert K. Grogan
 
1747 Minden Dr.
 
Salt Lake City, UT 84121
    33,333     $ 24,999.75  
James Hinshaw
 
4671 Signature Drive
 
Middleton, WI 53562
    66,667     $ 50,000.25  
Bradley Hutter
 
4710 Signature Drive
 
Middleton, WI 53562
    160,000     $ 120,000.00  
Iroquois Master Fund Ltd.
 
641 Lexington Ave., 26th Fl.
 
New York, NY 10022
    66,666     $ 49,999.50  
JMM Trading LP
 
333 Lippicott Street
 
Toronto, Ontario M552P
CANADA
    200,000     $ 150,000.00  
David H. Kim
 
6938 Frank Lloyd Wright Ave.
 
Middleton, WI 53562
    66,666     $ 49,999.50  
Kenneth Lee
 
6754 Phil Lewis Way
 
Middleton, WI 53562
    33,333     $ 24,999.75  
McAllen Properties
 
2695 Gaston Road
 
Cottage Grove, WI 53527
    66,666     $ 49,999.50  
Michael L and JoAnne M.
McCann JT TEN
 
360 W. Washington Ave., P105
 
Madison, WI 53703
    66,667     $ 50,000.25  
Moss Living Trust Dated
August 24, 2009; Paul R.
Moss Trustee
 
1701 Hidden Hill Drive
 
Verona, WI 53593
    66,668     $ 50,001.00  
NEI III, LLC
 
P.O. Box 1632
 
Waukesha, WI 53186
    333,333     $ 249,999.75  
Michael G. Palm
 
30 N. Woodmont Circle
 
Madison, WI 53717
    34,000     $ 25,500.00  
Kurt L. Peterson
 
17 Autumnwood Circle
 
Madison, WI 53719
    33,333     $ 24,999.75  
Scott W. Peterson
 
5840 Thorstrand Road
 
Madison, WI 53705
    160,000     $ 120,000.00  
Perry Pickhardt
 
146 Kensington Drive
 
Madison, WI 53704
    100,000     $ 75,000.00  
Daniel Pophal
 
1605 Shenandoah Drive
 
Waunakee, WI 53597
    10,000     $ 7,500.00  
Gregory J. Potter
 
950 1st Avenue South
 
Wisconsin Rapids, WI
54495
    33,333     $ 24,999.75  
John Potter
 
826 Hidden Cave Road
 
Madison, WI 53717
    33,334     $ 25,000.50  
Kevin Potter
 
826 Hidden Cave Road
 
Madison, WI 53717
    46,668     $ 35,001.00  
Richard A. Prange
 
2102 Foggy Mountain Pass
 
Waunakee, WI 53597
    66,668     $ 50,001.00  
Risky Business (Partnership)
 
957 Harvest Lane
 
Sun Prairie, WI 53590
    86,000     $ 64,500.00  
Rodman & Renshaw LLC
 
1251 Avenue of the Americas,
20th Floor
 
New York, NY 10020
    266,667     $ 200,000.25  
Martin Schindler
 
6123 Utah Avenue, NW
 
Washington, DC 20015
    66,667     $ 50,000.25  
Gary R. Skaar
 
5854 Wagon Circle
 
Marshall, WI 53559
    133,333     $ 99,999.75  
SMC Investments LLC
 
3938 Weatherwood Trail
 
Verona , WI 53593
    66,667     $ 50,000.25  
John F. Spence
 
1603 Orrington Avenue, Suite
725
 
Evanston, IL 60201
    50,000     $ 37,500.00  
The Reeder Brittain Living
Trust dated November 6, 2006
 
7337 Summit Ridge Road
 
Middleton, WI 53562
    106,668     $ 80,001.00  
Venture Investors Early Stage
Fund IV Limited Partnership
 
505 South Rosa Road, Suite 201
 
Madison, WI 53703
    2,000,000     $ 1,500,000.00  
WIP - Cellectar V, LLC
 
PO Box 45919
 
Madison, WI 53744
    178,000     $ 133,500.00  
XMS Capital Partners, LLC
 
1603 Orrington Avenue, Suite
725
 
Evanston, IL 60201
    200,000     $ 150,000.00  
Zermatt Investors, LLC
 
6018 N. Highlands Avenue
 
Madison, WI 53705
    133,333     $ 99,999.75                                           6,846,537
    $ 5,134,902.75  

 
 
 

--------------------------------------------------------------------------------

 

Exhibit A

Form of Warrant

See Exhibit 4.3 to this Form 8-K.

 
 

--------------------------------------------------------------------------------

 

Exhibit B

Company Counsel Opinion

1.           The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware and has the requisite corporate power to
own its property and assets, to conduct its business as, to our knowledge, it is
currently being conducted and is proposed to be conducted as described in the
Memorandum, in the Purchase Agreement and the schedules thereto and in the SEC
Filings and to enter into and perform its obligations under the Transaction
Documents.
 
2.           The authorized capital stock of the Company consists of 150,000,000
shares of Common Stock, and 7,000 shares of preferred stock, par value $.00001
per share.
 
3.           The execution, delivery and performance by the Company of the
Transaction Documents, the issuance of the Shares and the Warrants, and the
issuance of the Warrant Shares upon due exercise of the Warrants have been duly
authorized by all requisite corporate action on the part of the Company and do
not require any further approval of its directors or stockholders.
 
4.           Each of the Transaction Documents has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
 
5.           The Shares have been duly authorized for issuance, and, when
issued, sold and delivered by the Company at the Closing against payment of the
consideration therefor in accordance with the provisions of the Purchase
Agreement, will be validly issued, fully paid and nonassessable.  The Warrant
Shares have been duly authorized and reserved for issuance, and when issued,
sold and delivered upon exercise of the Warrants in accordance with the terms of
the Warrants, including without limitation the payment of the consideration
specified therein, and the Certificate of Incorporation, the Warrant Shares will
be validly issued, fully paid and nonassessable.
 
6.           The execution and delivery by the Company of each of the
Transaction Documents, the issuance of the Shares and the Warrants, and the
issuance of the Warrant Shares upon due exercise of the Warrants and the
performance by the Company of the Transaction Documents will not (a) violate or
contravene or be in conflict with (i) any provision of the Certificate of
Incorporation or By-Laws, in each case as in effect on the date hereof; (ii) any
provision of the DGCL and any provision of any federal or Massachusetts law,
rule or regulation applicable to the Company in transactions of the nature
contemplated by the Transaction Documents; or (iii) any order, judgment or
decree of any court or other governmental agency which is known to us and to
which the Company is a party which is binding on the Company or any of its
property; or (b) conflict with or result in the material breach or termination
of, or constitute a material default under, any agreement set forth on Schedule
I hereto.

 
 

--------------------------------------------------------------------------------

 

7.           No further consents, approvals, authorizations, registrations,
declarations or filings are required to be obtained or made by the Company from
or with any federal or Massachusetts governmental authority or pursuant to the
DGCL in order for it to execute and deliver each of the Transaction Documents,
to issue the Shares and Warrants, to issue the Warrant Shares upon due exercise
of the Warrants and to perform its obligations under the Transaction Documents,
other than those consents, approvals, authorizations, registrations,
declarations or filings that have already been obtained and remain in full force
and effect and except for (a)  the filing of a Form D (the “Form D”) with the
Securities and Exchange Commission pursuant to Regulation D promulgated under
the Securities Act of 1933, as amended (the “Securities Act”) and (b) the filing
of the Form D with requisite state jurisdictions, together with such other
notice filings as may be required by such state jurisdictions in connection
therewith.
  
8.           Assuming the accuracy of the representations and warranties of the
Investors set forth in Section 6 of the Purchase Agreement, the offer, issuance
and sale to the Investors pursuant to the Purchase Agreement of the Shares and
Warrants are exempt from the registration requirements of the Securities Act.
 
9.           We are not representing the Company in any pending litigation in
which it is a named defendant, or in any litigation that is overtly threatened
in writing against it by a potential claimant, that challenges the validity or
enforceability of, or seeks to enjoin the performance of, the Transaction
Documents.
 
 
 

--------------------------------------------------------------------------------

 
 
Exhibit C

ESCROW AGREEMENT AMENDMENT
 
This Escrow Agreement Amendment (this “Amendment”) dated as of April 1, 2011 is
made by and among Novelos Therapeutics, Inc., a Delaware corporation (the
“Company”), Rodman & Renshaw, LLC, a Delaware limited liability company (the
“Placement Agent”), Venture Investors Early Stage Fund IV Limited Partnership
(the “Lead Investor”) and Signature Bank, a New York State chartered bank (the
“Escrow Agent”).
 
WHEREAS, the Company, the Placement Agent, the Lead Investor and the Escrow
Agent are parties to that certain Escrow Agreement dated as of March 3, 2011
(the “Escrow Agreement”); and
 
WHERAS, pursuant to Section 10(d) of the Escrow Agreement, the parties hereto
wish to amend certain terms of the Escrow Agreement.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth herein the parties hereby agree as follows:
 
1.           Amendment to Recital A. of Escrow Agreement.  Recital A. of the
Escrow Agreement is hereby amended and replaced in its entirety with the
following:
 
The Company desires, pursuant to the Purchase Agreement (with such changes in
form as the Company and the other parties thereto may approve), to raise at
least $3,500,000 (the “Minimum Investment Amount”), through the issuance and
sale in the Private Placement of up to 12,000,000 Units at a price per Unit of
$0.75;

2.           Amendment to Section 2(c) of Escrow Agreement.  Section 2(c) of the
Escrow Agreement is hereby amended and replaced in its entirety with the
following:

If by 3:00 p.m. (New York City time) on April 1, 2011, or such later date as
shall be agreed to in a writing signed by the Company and the Lead Investor and
delivered to the Escrow Agent (provided that such date shall in no event be
later than April 11, 2011) (the “Termination Date”), the Escrow Agent has not
received written instructions from the Company, the Placement Agent and the Lead
Investor regarding the disbursement of the Escrow Funds, then the Escrow Agent
shall promptly return the Escrow Funds to the Subscribers without interest or
offset.  The Escrow Funds returned to each Subscriber shall be free and clear of
any and all claims of the Escrow Agent.

3.           Savings.  Except as amended hereby, the terms of the Escrow
Agreement shall remain in full force and effect.

[REMAINDER OF THIS PAGE IS INTENIONALLY LEFT BLANK.]

 
 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as an
agreement under seal as of the date first written above.

 

 
NOVELOS THERAPEUTICS, INC.
   
By:
/s/ Harry S. Palmin
 
Name:  Harry S. Palmin
 
Title:  President & CEO
     
RODMAN & RENSHAW, LLC
   
By:
/s/ John Borer
 
Name:  John Borer
 
Title:  Head of Investment Banking
     
VENTURE INVESTORS EARLY STAGE
 
FUND IV LIMITED PARTNERSHIP
   
By:
/s/ John Neis
 
Name:  John Neis
 
Title:  Managing Director
     
SIGNATURE BANK
   
By:
/s/ Cliff Broder
 
Name:  Cliff Broder
 
Title:  SVP

 
 

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ESCROW AGREEMENT

This ESCROW AGREEMENT (this “Agreement”) dated as of this 3rd day of March,
2011, by and among NOVELOS THERAPEUTICS, INC., a Delaware corporation (the
“Company”), having an address at One Gateway Center, Suite 504, Newton,
Massachusetts 02458, RODMAN & RENSHAW, LLC, a Delaware limited liability company
(the “Placement Agent”), having an address at 1251 Avenue of the Americas, New
York, New York 10020, VENTURE INVESTORS EARLY STAGE FUND IV LIMITED PARTNERSHIP
(the “Lead Investor”) and SIGNATURE BANK (the “Escrow Agent”), a New York State
chartered bank, having an office at 261 Madison Avenue, New York, New York
10016.  All capitalized terms not herein defined shall have the meaning ascribed
to them in that certain Securities Purchase Agreement attached as Exhibit A
hereto (the “Purchase Agreement”).
 
Recitals:
 
A.           The Company desires, pursuant to the Purchase Agreement (with such
changes in form as the Company and the other parties thereto may approve), to
raise at least $9,000,000, or such lesser amount as shall be agreed to in a
writing signed by the Lead Investor and the Company; provided that in no event
shall the Minimum Investment Amount be less than $8,000,000 (the “Minimum
Investment Amount”), through the issuance and sale in the Private Placement of
up to 12,000,000 Units at a price per Unit of $0.75;

B.           Concurrently with the Private Placement, the Company and Cellectar
intend to consummate a business combination transaction (the “Merger”) pursuant
an Agreement and Plan of Merger substantially in the form attached as Exhibit B
hereto;

C.           The consummation of the Private Placement is contingent upon the
completion of the Merger, and the consummation of the Merger is conditioned
upon, among other things, receipt of subscription commitments for the Private
Placement at least equal to the Minimum Investment Amount;

D.           The Company, the Placement Agent and the Lead Investor desire to
engage the Escrow Agent to hold in escrow, pending the due execution and
delivery of the Purchase Agreement and the Merger Agreement, and the
satisfaction or waiver of all conditions to the consummation of the Merger and
the Private Placement, the purchase price of the Units to be purchased in
connection therewith;

NOW, THEREFORE, IT IS AGREED as follows:

 
 

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1.           Delivery of Escrow Funds.
 
(a) The Placement Agent, the Lead Investor and the Company shall instruct
Subscribers to deliver to Escrow Agent funds by wire transfer to Signature Bank,
261 Madison Avenue, New York, New York 10016, ABA No. 026013576 (Swift Code:
SIGNUS33) for credit to Novelos Therapeutics, Inc., Signature Bank as Escrow
Agent, Account No. 1501593738, in each case, with the name, address and social
security number or taxpayer identification number of the individual or entity
making payment.  In the event that any Subscriber’s address and/or social
security number or taxpayer identification number are not provided to Escrow
Agent by the Subscriber, then the Placement Agent, the Lead Investor and/or the
Company agree to promptly provide Escrow Agent with such information in
writing.  The funds shall be deposited into a non interest-bearing account at
Signature Bank entitled “Novelos Therapeutics, Inc., Signature Bank as Escrow
Agent” (the “Escrow Account”).
 
(b)           The collected funds deposited into the Escrow Account are referred
to as the “Escrow Funds.”
 
(c)           The Escrow Agent shall have no duty or responsibility to enforce
the collection or demand payment of any funds deposited into the Escrow Account.
 
2.           Release of Escrow Funds.  The Escrow Funds shall be paid by the
Escrow Agent in accordance with the following:
 
(a)           In the event that the Company, the Placement Agent and the Lead
Investor advise the Escrow Agent in writing that the Private Placement has been
terminated (the “Termination Notice”), the Escrow Agent shall promptly return
the funds paid by each Subscriber to said Subscriber without interest or offset.
 
(b)           Provided that the Escrow Agent does not receive the Termination
Notice in accordance with paragraph 2(a), the Escrow Agent shall, upon receipt
of written instructions, in the form of Exhibit C, attached hereto and made a
part hereof, or in a form and substance satisfactory to the Escrow Agent,
received from the Company, the Placement Agent and the Lead Investor, pay the
Escrow Funds in accordance with such written instructions, such payment or
payments to be made by wire transfer on the same day as receipt of such written
instructions or, if the day of receipt of such instructions is not a Business
Day, on the first Business Day following the day of receipt of such
instructions.  Such instructions must be received by the Escrow Agent no later
than 3:00 p.m. (New York City time) on a Business Day for the Escrow Agent to
process such instructions on that Business Day.
 
(c)           If by 3:00 p.m. (New York City time) on March 14, 2011, or such
later date as shall be agreed to in a writing signed by the Company and the Lead
Investor and delivered to the Escrow Agent (provided that such date shall in no
event be later than March 31, 2011) (the “Termination Date”), the Escrow Agent
has not received written instructions from the Company, the Placement Agent and
the Lead Investor regarding the disbursement of the Escrow Funds, then the
Escrow Agent shall promptly return the Escrow Funds to the Subscribers without
interest or offset.  The Escrow Funds returned to each Subscriber shall be free
and clear of any and all claims of the Escrow Agent.
 
(d)           The Escrow Agent shall not be required to pay any uncollected
funds or any funds that are not available for withdrawal.
 
(e)           If the Termination Date or any date that is a deadline under this
Agreement for giving the Escrow Agent notice or instructions or for the Escrow
Agent to take action is not a Business Day, then such date shall be the Business
Day that immediately preceding that date. A “Business Day” is any day other than
a Saturday, Sunday or a Bank holiday.

 
 

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3.           Acceptance by Escrow Agent.  The Escrow Agent hereby accepts and
agrees to perform its obligations hereunder, provided that:
  
(a)           The Escrow Agent may act in reliance upon any signature believed
by it to be genuine, and may assume that any person who has been designated by
the Placement Agent, the Lead Investor or the Company to give any written
instructions, notice or receipt, or make any statements in connection with the
provisions hereof has been duly authorized to do so.  Escrow Agent shall have no
duty to make inquiry as to the genuineness, accuracy or validity of any
statements or instructions or any signatures on statements or instructions.  The
names and true signatures of each individual authorized to act singly on behalf
of the Company, the Placement Agent and the Lead Investor are stated in Exhibit
D, which is attached hereto and made a part hereof. The Company, the Placement
Agent and the Lead Investor may each remove or add one or more of its authorized
signers stated on Exhibit D by notifying the Escrow Agent of such change in
accordance with this Agreement, which notice shall include the true signature
for any new authorized signatories.
 
(b)           The Escrow Agent may act relative hereto in reliance upon advice
of counsel in reference to any matter connected herewith.  The Escrow Agent
shall not be liable for any mistake of fact or error of judgment or law, or for
any acts or omissions of any kind, unless caused by its willful misconduct or
gross negligence.
 
(c)           The Placement Agent and the Company agree to indemnify and hold
the Escrow Agent harmless from and against any and all claims, losses, costs,
liabilities, damages, suits, demands, judgments or expenses (including but not
limited to reasonable attorney’s fees) claimed against or incurred by Escrow
Agent arising out of or related, directly or indirectly, to this Escrow
Agreement unless caused by the Escrow Agent’s gross negligence or willful
misconduct.
 
(d)           In the event that the Escrow Agent shall be uncertain as to its
duties or rights hereunder, the Escrow Agent shall be entitled to (i) refrain
from taking any action other than to keep safely the Escrow Funds until it shall
be directed otherwise by a court of competent jurisdiction, or (ii) deliver the
Escrow Funds to a court of competent jurisdiction.
 
(e)           The Escrow Agent shall have no duty, responsibility or obligation
to interpret or enforce the terms of any agreement other than Escrow Agent’s
obligations hereunder, and the Escrow Agent shall not be required to make a
request that any monies be delivered to the Escrow Account, it being agreed that
the sole duties and responsibilities of the Escrow Agent shall be to the extent
not prohibited by applicable law (i) to accept checks or other instruments for
the payment of money and wire transfers delivered to the Escrow Agent for the
Escrow Account and deposit said checks and wire transfers into the non-interest
bearing Escrow Account, and (ii) to disburse or refrain from disbursing the
Escrow Funds as stated above, provided that the checks received by the Escrow
Agent have been collected and are available for withdrawal.

 
 

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4.           Escrow Account Statements and Information. The Escrow Agent agrees
to send to the Company, the Lead Investor and/or the Placement Agent a copy of
the Escrow Account periodic statement, upon request in accordance with the
Escrow Agent’s regular practices for providing account statements to its
non-escrow clients and to also provide the Company, the Lead Investor and/or the
Placement Agent, or their designee, upon request other deposit account
information, including Escrow Account balances, by telephone or by computer
communication, to the extent practicable. The Company, the Placement Agent and
the Lead Investor agree to complete and sign all forms or agreements required by
the Escrow Agent for that purpose. The Company, the Placement Agent and the Lead
Investor each consent to the Escrow Agent’s release of such Escrow Account
information to any of the individuals designated by the Company, the Placement
Agent or the Lead Investor, which designation has been signed in accordance with
paragraph 3(a) by any of the persons in Exhibit D.  Further, the Company, the
Placement Agent and the Lead Investor have an option to receive e-mail
notification of incoming and outgoing wire transfers.  If this e-mail
notification service is requested and subsequently approved by the Escrow Agent,
the Company, the Placement Agent and the Lead Investor agree to provide a valid
e-mail address and other information necessary to set-up this service and sign
all forms and agreements required for such service.  The Company, the Placement
Agent and the Lead Investor each consent to the Escrow Agent’s release of wire
transfer information to the designated e-mail address(es).  The Escrow Agent’s
liability for failure to comply with this section shall not exceed the cost of
providing such information.

5.           Resignation and Termination of the Escrow Agent.  The Escrow Agent
may resign at any time by giving 30 days’ prior written notice of such
resignation to the Placement Agent, the Lead Investor and the Company.  Upon
providing such notice, the Escrow Agent shall have no further obligation
hereunder except to hold as depositary the Escrow Funds that it receives until
the end of such 30-day period.  In such event, the Escrow Agent shall not take
any action, other than receiving and depositing Subscribers checks and wire
transfers in accordance with this Agreement, until the Company has designated a
banking corporation, trust company, attorney or other person as successor.  Upon
receipt of such written designation signed by the Placement Agent, the Lead
Investor and the Company, the Escrow Agent shall promptly deliver the Escrow
Funds to such successor and shall thereafter have no further obligations
hereunder.  If such instructions are not received within 30 days following the
effective date of such resignation, then the Escrow Agent may deposit the Escrow
Funds held by it pursuant to this Agreement with a clerk of a court of competent
jurisdiction pending the appointment of a successor.  In either case provided
for in this paragraph, the Escrow Agent shall be relieved of all further
obligations and released from all liability thereafter arising with respect to
the Escrow Funds.
 
6.           Termination.  The Company, the Placement Agent and the Lead
Investor may terminate the appointment of the Escrow Agent hereunder upon
written notice specifying the date upon which such termination shall take
effect, which date shall be at least 30 days from the date of such notice.  In
the event of such termination, the Company, the Placement Agent and the Lead
Investor shall, within 30 days of such notice, appoint a successor escrow agent
and the Escrow Agent shall, upon receipt of written instructions signed by the
Company, the Placement Agent, and the Lead Investor turn over to such successor
escrow agent all of the Escrow Funds; provided, however, that if the Company,
the Placement Agent and the Lead Investor fail to appoint a successor escrow
agent within such 30-day period, such termination notice shall be null and void
and the Escrow Agent shall continue to be bound by all of the provisions
hereof.  Upon receipt of the Escrow Funds, the successor escrow agent shall
become the escrow agent hereunder and shall be bound by all of the provisions
hereof and the Escrow Agent shall be relieved of all further obligations and
released from all liability thereafter arising with respect to the Escrow Funds
and under this Agreement.

 
 

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7.                      Investment.  All funds received by the Escrow Agent
shall be invested only in non-interest bearing bank accounts at Signature Bank.
  
8.                      Compensation.  Escrow Agent shall be entitled, for the
duties to be performed by it hereunder, to a fee of $3,500, which fee shall be
paid by the Company upon the signing of this Agreement. In addition, the Company
shall be obligated to reimburse Escrow Agent for all fees, costs and expenses
incurred or that become due in connection with this Agreement or the Escrow
Account, including reasonable attorney’s fees.  Neither the modification,
cancellation, termination or rescission of this Agreement nor the resignation or
termination of the Escrow Agent shall affect the right of Escrow Agent to retain
the amount of any fee which has been paid, or to be reimbursed or paid any
amount which has been incurred or becomes due, prior to the effective date of
any such modification, cancellation, termination, resignation or rescission.  To
the extent the Escrow Agent has incurred any such expenses, or any such fee
becomes due, prior to any closing, the Escrow Agent shall advise the Company and
the Company shall direct all such amounts to be paid directly at any such
closing.
 
9.                      Notices.  All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if sent by hand-delivery, by
facsimile (followed by first-class mail), by nationally recognized overnight
courier service or by prepaid registered or certified mail, return receipt
requested, to the addresses set forth below:
 
If to the Placement Agent:
 
1251 Avenue of the Americas, 20th Floor
New York, New York 10020
Attention: David Horin
Fax: (212) 581-5690

 
If to the Lead Investor:
 
Venture Investors LLC
505 South Rosa Road, #201
Madison, Wisconsin 53719
Attention:  John Neis, Managing Director

 
 
 

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If to the Company:
 
One Gateway Center, Suite 504
Newton, Massachusetts 02458
Attention: Harry S. Palmin, President and Chief Executive Officer
Fax: (617) 860-1170

If to Escrow Agent:
 
Signature Bank
261 Madison Avenue
New York, New York, 10016
Attention: Cliff Broder, Group Director and Senior Vice President
Fax: (646) 822-1359
 
10.                         General.

 
(a)           This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to agreements made
and to be entirely performed within such State, without regard to choice of law
principles and any action brought hereunder shall be brought in the courts of
the State of New York, located in the County of New York.  Each party hereto
irrevocably waives any objection on the grounds of venue, forum non-conveniens
or any similar grounds and irrevocably consents to service of process by mail or
in any manner permitted by applicable law and consents to the jurisdiction of
said courts.  Each of the parties hereto hereby waives all right to trial by
jury in any action, proceeding or counterclaim arising out of the transactions
contemplated by this Agreement.

(b)           This Agreement sets forth the entire agreement and understanding
of the parties with respect to the matters contained herein and supersedes all
prior agreements, arrangements and understandings relating thereto.
 
(c)           All of the terms and conditions of this Agreement shall be binding
upon, and inure to the benefit of and be enforceable by, the parties hereto, as
well as their respective successors and assigns.
 
(d)           This Agreement may be amended, modified, superseded or canceled,
and any of the terms or conditions hereof may be waived, only by a written
instrument executed by each party hereto or, in the case of a waiver, by the
party waiving compliance.  The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same.  No waiver of any party of any condition,
or of the breach of any term contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.  No party
may assign any rights, duties or obligations hereunder unless all other parties
have given their prior written consent.
 
(e)           If any provision included in this Agreement proves to be invalid
or unenforceable, it shall not affect the validity of the remaining provisions.

 
 

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(f)           This Agreement and any modification or amendment of this Agreement
may be executed in several counterparts or by separate instruments and all of
such counterparts and instruments shall constitute one agreement, binding on all
of the parties hereto.
 
11.                          Form of Signature. The parties hereto agree to
accept a facsimile transmission copy of their respective actual signatures as
evidence of their actual signatures to this Agreement and any modification or
amendment of this Agreement; provided, however, that each party who produces a
facsimile signature agrees, by the express terms hereof, to place, promptly
after transmission of his or her signature by fax, a true and correct original
copy of his or her signature in overnight mail to the address of the other
party.

 
 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first set forth above.

NOVELOS THERAPEUTICS, INC.
 
RODMAN & RENSHAW, LLC
         
By:
/s/ Harry S. Palmin
 
By:
/s/ Gregory R. Dow
 
Name: Harry S. Palmin
   
Name:  Gregory R. Dow
 
Title: President & CEO
   
Title:  General Counsel
         
VENTURE INVESTORS EARLY STAGE
     
FUND IV LIMITED PARTNERSHIP
 
SIGNATURE BANK
         
By:
/s/ John Neis
 
By:
/s/ Cliff Broder
 
Name:  John Neis
   
Name:  Cliff Broder
 
Title: Managing Director
   
Title:  Group Director, Sr. VP

 
 

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Exhibit A

SECURITIES PURCHASE AGREEMENT
 
See this Exhibit 10.1 to this Form 8-K.

 
 

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Exhibit B

MERGER AGREEMENT

See Exhibit 2.1 to this Form 8-K.

 
 

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Exhibit C

FORM OF ESCROW RELEASE NOTICE

Date: _______ ___, 2011

Signature Bank
261 Madison Avenue,
New York, New York 10016
Attention: Cliff Broder, Group Director and Senior Vice President
Fax: (646) 822-1359

Dear Mr. Broder:

In accordance with the terms of paragraph 2(b) of the Escrow Deposit Agreement,
dated as of April ___, 2011, by and between Novelos Therapeutics, Inc. (the
"Company"), Signature Bank (the "Escrow Agent"), Rodman & Renshaw, LLC (the
"Placement Agent"), and Venture Investors Early Stage Fund IV Limited
Partnership (the “Lead Investor”) the Company, the Placement Agent and the Lead
Investor hereby notify the Escrow Agent that the closing will be held on
________ ___, 2011 for gross proceeds of $_________.

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER AS FOLLOWS (wire instructions
attached):
 
________________________:
  $              
________________________:
  $              
________________________:
  $              
Signature Bank (Escrow Fee):
  $ 3,500  

 
 

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Very truly yours,

Novelos Therapeutics, Inc.

By:
  
Name:
  
Title:
  

Rodman & Renshaw, LLC

By:
  
Name:
  
Title:
  

Venture Investors Early Stage Fund IV
Limited Partnership

By:
   
Name:
  
Title:
  

[Signature Page to NVLT Escrow Release Notice]

 
 

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Exhibit D

AUTHORIZED SIGNATORIES
 
The Escrow Agent is authorized to accept instructions signed or believed by the
Escrow Agent to be signed by any one of the following on behalf of the Company,
the Placement Agent and the Lead Investor.
 
NOVELOS THERAPEUTICS, INC.

Name
 
True Signature
     
Harry S. Palmin
 
/s/ Harry S. Palmin
     
  
 
 

 
RODMAN & RENSHAW, LLC
 
Name
 
True Signature
     
Gregory R. Dow
 
/s/ Gregory R. Dow
     
Edward Rabin
 
/s/ Edward Rabin

VENTURE INVESTORS EARLY STAGE FUND IV LIMITED PARTNERSHIP
 
Name
 
True Signature
     
John Neis, Managing Director
 
/s/ John Neis
     
   
 
   

 
 

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DISCLOSURE SCHEDULES
TO
SECURITIES PURCHASE AGREEMENT

Dated as of April 8, 2011

Among

Novelos Therapeutics, Inc. and
the investors set forth on Schedule I affixed thereto

These Disclosure Schedules, dated as of April 8, 2011, are being delivered by
Novelos Therapeutics, Inc., a Delaware corporation (the “Company” ), pursuant to
the Securities Purchase Agreement, dated as of April 8, 2011 (the “Agreement”),
by and among the Company and the investors set forth on Schedule I affixed
thereto.  Any capitalized terms used in these Disclosure Schedules but not
otherwise defined therein shall be defined as set forth in the Agreement.
 
These Disclosure Schedules are arranged in sections that correspond to the
sections of the Agreement.  With respect to any section hereof corresponding to
a section of Article V of the Agreement (i) each such section hereof qualifies
the correspondingly numbered representation or warranty to the extent specified
herein, and (ii) any disclosure set forth with respect to a particular section
of Article V shall be deemed to be disclosed in reference to such other sections
of Article V to the extent it is reasonably clear from a reading of the
disclosure that such disclosure is applicable to such other sections or
subsections.
 
The Company may, at its option, include in these Disclosure Schedules items that
are not material in order to avoid any misunderstanding, and such inclusion, or
any references to dollar amounts, shall not be deemed to be an acknowledgement
or representation that such items are material, to establish any standard of
materiality or to define further the meaning of such terms for purposes of the
Agreement.  No disclosure in these Disclosure Schedules relating to a possible
breach or violation of any Material Contract, law or order shall be construed as
an admission or indication that breach or violation exists or has actually
occurred.
 
The insertion of headings in these Disclosure Schedules is for convenience of
reference only and shall not affect or be utilized in construing or interpreting
the Agreement.  All references in these Disclosure Schedules to any “Section” or
“Article” are to the corresponding Section or Article, as applicable, of the
Agreement unless otherwise specified.

 
 

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Schedule 5.1

Subsidiaries

Pursuant to the Merger, Cellectar will be merged with and into a wholly-owned
subsidiary of the Company, with the result that the surviving corporation will
be a wholly-owned subsidiary of the Company.
 
Schedule 5.3

Capitalization

5.3(a)(i)  At the Closing Date authorized capital stock of the Company consists
of 150,000,000 shares of $.00001 par value common stock and 7,000 shares of
preferred stock.

5.3(a)(ii) Following the Merger and immediately prior to Closing there are
19,961,552 shares of common stock outstanding and no shares of preferred stock
outstanding.

5.3(a)(iii) At the Closing Date there are 49,227 shares of common stock issuable
pursuant to the Company’s stock plans.

5.3(a)(iv) Immediately prior to Closing, the following shares are reserved for
future issuance upon exercise of stock options or:

Stock Options
    49,227  
Warrants
    315,172            
Total shares reserved for future issuance
    364,399  

5.3(a)

Immediately prior to Closing, the Company has the following outstanding
warrants:

Offering
 
Outstanding
   
Exercise 
Price
 
Expiration
Date
                 
2010 registered offering warrants (1)
    105,042     $ 10.71  
July 2015
Preferred incentive warrants
    105,042     $ 16.07  
July 2015
Series E - Purdue
    60,332     $ 99.45  
December 2015
Purdue - common financing
    31,194     $ 100.98  
December 2015
Series C
    8,170     $ 191.25  
May 2012
Series E - placement agent
    5,392     $ 191.25  
May 2012
                                         
Total
    315,172            

(1) Warrants include a provision that provide for the exercise price to be
reduced to the Offering Price, as shown in the pro forma capitalization table in
Schedule 5.3(b)

 
 

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The following is a listing of the Company’s documents relating to the rights of
stockholders, or holders of securities exercisable for the Company’s common
stock as related to the Company’s outstanding common stock, stock options and
warrants described above:

   
EDGAR Reference
Description
 
Form
 
Filing Date
 
Exhibit
No.
             
2000 Stock Option and Incentive Plan
 
SB-2
 
November 16, 2005
 
10.2
             
Form of 2004 non-plan non-qualified stock option
 
SB-2
 
November 16, 2005
 
10.3
             
Form of non-plan non-qualified stock option used from February to May 2005
 
SB-2
 
November 16, 2005
 
10.4
             
Form of non-plan non-qualified stock option used after May 2005
 
SB-2
 
November 16, 2005
 
10.5
             
2006 Stock Incentive Plan, as amended
 
S-1/A
 
December 7, 2009
 
10.16
             
Form of Incentive Stock Option under Novelos Therapeutics, Inc.’s 2006 Stock
Incentive Plan*
 
8-K
 
December 15, 2006
 
10.1
             
Form of Non-Statutory Stock Option under Novelos Therapeutics, Inc.’s 2006 Stock
Incentive Plan
 
8-K
 
December 15, 2006
 
10.2
             
Form of Non-Statutory Director Stock Option under Novelos Therapeutics, Inc.’s
2006 Stock Incentive Plan*
 
8-K
 
December 15, 2006
 
10.3
             
Form of Common Stock Purchase Warrant dated May 2, 2007 issued pursuant to the
Securities Purchase Agreement dates April 12, 2007
 
10-QSB
 
May 8, 2007
 
4.1
             
Form of Common Stock Purchase Warrant dated May 2, 2007 issued pursuant to the
Agreement to Exchange and Consent dated May 2, 2007
 
10-QSB
 
May 8, 2007
 
4.2
             
Common Stock Purchase Warrant dated February 11, 2009
 
8-K
 
February 18, 2009
 
4.2
             
Securities Purchase Agreement dated August 25, 2009
 
S-1
 
September 15, 2009
 
10.41
             
Common Stock Purchase Warrant dated August 25,2009
 
S-1
 
September 15, 2009
 
10.43
             
Form of Common Stock Purchase Warrant to be issued pursuant to the Consent and
Waiver of Holders of Series C Convertible Preferred Stock and Series E
Convertible Preferred Stock dated July 6, 2010
 
S-1A
 
July 7, 2010
 
10.53
             
Form of Securities Purchase Agreement dated July 21, 2010
 
8-K
 
July 22, 2010
 
10.1

 
 

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Schedule 5.3 (continued)

5.3(b)

The following table sets forth the pro forma capitalization of the Company on a
fully diluted basis giving effect to (i) the issuance of the minimum Units at
the time of the Closing, (ii) the issuance of the shares of Common Stock
issuable pursuant to the Merger, (iii) any adjustments in other securities
resulting from the issuance of the Units at the time of the Closing, and (iv)
the exercise or conversion of all outstanding securities.

 
NVLT - Capital Structure - Pro forma
                                 
Post-Deal & Financing
       
Common Stock
   
Exer./Conv.
 
Warrant
   
Equivalents
   
Price
 
Expiration
               
Common stock outstanding
    26,808,089                            
Warrants/Options:
                                 
April 2011 PIPE - Investor
    6,846,537     $ 0.75  
March 2016
April 2011 PIPE - Placement Agent
    192,931     $ 0.75  
March 2016
Stock options
    8,118     $ 1.53  
through 2015
2010 registered offering warrants
    105,042     $ 0.75  
July 2015
Preferred incentive warrants
    105,042     $ 16.07  
July 2015
Series E - Purdue
    60,332     $ 99.45  
December 2015
Purdue - common financing
    31,194     $ 100.98  
December 2015
Stock options
    41,109     $ 120.87  
through 2019
Series C
    8,170     $ 191.25  
May 2012
Series E - placement agent
    5,392     $ 191.25  
May 2012
2006 PIPE
    -          
March 2011
                   
FULLY DILUTED
    34,211,956            

 
5.3(c) Arrangements that provide rights for any Person to purchase an equity
interest in the Company consist of the stock options and warrants, previously
disclosed in schedule 5.3(a).

 
 

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Schedule 5.5

Consents

None.

 
 

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Schedule 5.7

No Material Adverse Change
5.7(vi)
1.  On October 18, 2010 the Company’s stockholders approved an amendment to the
certificate of incorporation to increase the total number of authorized shares
of the Company’s common stock from 225,000,000 to 750,000,000.

2.  On November 30, 2010, the Company entered into an Exchange Agreement with
each of the holders of its Series E convertible preferred stock (the “Series E
Preferred Stock”) and Series C convertible preferred stock (the “Series C
Preferred Stock”) pursuant to which each such holder exchanged all of the
holder’s shares of Series E Preferred Stock or Series C Preferred Stock, as
applicable, and all rights, preferences and privileges associated therewith
(including but not limited to any accrued but unpaid dividends thereon) and any
rights of the holder to liquidated damages under agreements to register the
Company’s capital stock, for an aggregate of 340,935,801 shares of common stock,
representing 75.3% of the Company’s common stock outstanding effective
immediately following the exchange.  As a result of the exchange, all of the
liquidation preference applicable to the preferred stock, approximately
$27,337,000 as of November 30, 2010, was eliminated.  Furthermore, future
dividends totaling $2,327,000 annually were eliminated, special voting rights
applicable to the preferred stock are no longer applicable, and the former
holders of Series E Preferred Stock have released any rights to require the
registration of shares of the Company’s common stock for resale under the
Securities Act.  The effective price per share at which the common stock was
issued in connection with the exchange (based on the aggregate liquidation
preference of all of the preferred stock divided by the total number of shares
of common stock issued in exchange for such preferred stock) was approximately
$0.08.  The market price of the Company’s common stock as of the last trading
day immediately preceding the exchange was $0.04.

The exchange was accounted for as a recapitalization and the carrying value of
the Series E Preferred Stock of $13,770,000, accumulated dividends totaling
$4,476,000 and estimated liquidated damages of $819,000 for failure to timely
file a resale registration statement (see “Registration Rights” below) were
reclassified to additional paid-in-capital as of the date of the exchange.  If
the preferred stock had been converted according to its terms, the holders would
have received a total of 42,057,026 shares of common stock.  The fair market
value at the date of issuance totaling $11,955,151 of the additional 292,878,775
shares issued in the exchange has been recorded as a deemed dividend to
preferred stockholders in the year ended December 31, 2010.

3.  On December 13, 2010, Cellectar entered into an Amendment to Lease Extension
Agreement with McAllen Properties, LLC (the "Landlord") which (a) extends the
term of Cellectar's Lease for the premises at 3301 Agriculture Drive, Madison,
Wisconsin (the "Lease") to March 31, 2011, and (b) gives Cellectar the right to
further extend the term of the Lease to September 14, 2012, by notifying the
Landlord of its election to extend by March 15, 2011 and by making certain
deferred rental payments at the time of such election (see Schedule 5.27).

 
 

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5.7(ix)

On March 10, 2011, Novelos terminated the employment of Elias Nyberg, its Vice
President of Regulatory, Quality and Compliance as a cost savings measure. In
connection with his termination, Dr. Nyberg received a separation payment of
$83,196, which represented amounts owed pursuant to the Executive Retention
Agreement between Dr. Nyberg and Novelos, dated May 14, 2010.

 
 

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Schedule 5.9

No Conflict, Breach, Violation or Default

None.

 
 

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Schedule 5.10

Tax Matters

None.

 
 

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Schedule 5.11

Title to Properties

Cellectar's properties and assets are subject to the terms and provisions of a
General Business Security Agreement in favor of the Wisconsin Department of
Commerce ("DOC") securing the indebtedness evidenced by Promissory Notes held by
DOC in the original principal amounts of $250,000 and $200,000 (see Schedule
5.27). 

 
 

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Schedule 5.12

Certificates, Authorities and Permits

Following the Merger, it is anticipated that the Company will be required to
notify the issuers of the following permits and licenses held by Cellectar prior
to the Merger and may be required to seek reissuance or transfer of such
licenses or permits in the name of Novelos:

Radioactive Materials License from the Wisconsin Department of Health Services

Investigational New Drug Application issued through the U.S. Department of
Health and Human Services

Manufacturer’s License issued by the Wisconsin Department of Regulation and
Licensing.

 
 

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Schedule 5.14

Intellectual Property

5.14(a)  None.

5.14(d)  On June 28, 2010, the Company received a letter from counsel to ZAO BAM
and ZAO BAM Research Laboratories (collectively, “BAM”) alleging that the
Company modified the chemical composition of NOV-002 without prior notice to or
approval from BAM, constituting a material breach of a technology and assignment
agreement the Company had entered into with BAM on June 20, 2000 (the “June 2000
Agreement”).  The letter references the Company’s amendment, submitted to the
FDA on August 30, 2005, to its investigational new drug application dated August
1999 as the basis for BAM’s claims and demands the transfer of all intellectual
property rights concerning NOV-002 to BAM.  Mark Balazovsky, a director of
Novelos from June 1996 until November 2006 and a shareholder of Novelos through
at least June 25, 2010, is, to the Company’s Knowledge, still the general
director and principal shareholder of ZAO BAM.  The Company believes the
allegations are without merit and intends to defend vigorously against any
proceedings that BAM may initiate as to these allegations. On September 24,
2010, the Company filed a complaint in Suffolk Superior Court seeking a
declaratory judgment by the court that the June 2000 Agreement has been replaced
by a subsequent agreement between the parties dated April 1, 2005 (the “April
2005 Agreement”), that Novelos’ obligations to BAM are governed solely by the
April 2005 Agreement and that the obligations of the June 2000 agreement have
been performed and fully satisfied.  On November 29, 2010, BAM answered the
complaint, denying the material allegations, and stating its affirmative
defenses and certain counterclaims. On January 14, 2011, the Company responded
to the counterclaims, denying BAM’s material allegations and stating our
affirmative defenses.  The Company believes the counterclaims are without merit
and intend to vigorously defend against them.

5.14(g) A total of 4 former Cellectar employees and 4 consultants have not
executed standard confidentiality agreements or those agreements are not
currently available. Based on the scope of work performed by these individuals
and entities and their access to Confidential Information, the Company does not
anticipate that the absence of agreements will have a Material Adverse Affect.

 
 

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Schedule 5.16

Litigation

1.  A purported class action complaint was filed on March 5, 2010 in the United
States District Court for the District of Massachusetts by an alleged
shareholder of the Company, on behalf of himself and all others who purchased or
otherwise acquired the Company’s common stock in the period between December 14,
2009 and February 24, 2010, against the Company and its President and Chief
Executive Officer, Harry S. Palmin.  On October 1, 2010, the court appointed
lead plaintiffs (Boris Urman and Ramona McDonald) and appointed lead plaintiffs’
counsel.  On October 22, an amended complaint was filed.  The amended complaint
claims that the Company violated Section 10(b) of the Securities Exchange Act of
1934, as amended, and Rule 10b-5 promulgated thereunder in connection with
alleged disclosures related to the Phase 3 clinical trial of NOV-002 for
non-small cell lung cancer.  On December 6, 2010, the Company filed a motion to
dismiss the complaint with prejudice.  On January 20, 2011, the plaintiffs filed
their opposition to our motion and on March 3, 2011, the Company filed its
response to the opposition. Our motion to dismiss remains pending. The Company
believes the allegations are without merit and intends to defend vigorously
against the allegations.

2.  On June 28, 2010, the Company received a letter from counsel to ZAO BAM and
ZAO BAM Research Laboratories (collectively, “BAM”) alleging that the Company
modified the chemical composition of NOV-002 without prior notice to or approval
from BAM, constituting a material breach of a technology and assignment
agreement the Company had entered into with BAM on June 20, 2000 (the “June 2000
Agreement”).  The letter references the Company’s amendment, submitted to the
FDA on August 30, 2005, to its investigational new drug application dated August
1999 as the basis for BAM’s claims and demands the transfer of all intellectual
property rights concerning NOV-002 to BAM.  Mark Balazovsky, a director of
Novelos from June 1996 until November 2006 and a shareholder of Novelos through
at least June 25, 2010, is, to the Company’s knowledge, still the general
director and principal shareholder of ZAO BAM.  The Company believes the
allegations are without merit and intends to defend vigorously against any
proceedings that BAM may initiate as to these allegations. On September 24,
2010, the Company filed a complaint in Suffolk Superior Court seeking a
declaratory judgment by the court that the June 2000 Agreement has been replaced
by a subsequent agreement between the parties dated April 1, 2005 (the “April
2005 Agreement”), that Novelos’ obligations to BAM are governed solely by the
April 2005 Agreement and that the obligations of the June 2000 agreement have
been performed and fully satisfied.  On November 29, 2010, BAM answered the
complaint, denying the material allegations, and stating its affirmative
defenses and certain counterclaims. On January 14, 2011, the Company responded
to the counterclaims, denying BAM’s material allegations and stating our
affirmative defenses.  The Company believes the counterclaims are without merit
and intend to vigorously defend against them.

 
 

--------------------------------------------------------------------------------

 

Schedule 5.19

Brokers and Finders

Cellectar has engaged XMS Capital Partners (“XMS”) to provide financial advisory
services in connection with the Merger.  Cellectar is obligated to pay XMS a
success fee equal to 2% of the gross proceeds received in the Offering, subject
to a minimum fee of $200,000. Cellectar has also agreed to reimburse XMS for
reasonable expenses incurred by XMS related to the engagement.

 
 

--------------------------------------------------------------------------------

 

Schedule 5.24

Affiliate Transactions

Following the Merger and immediately prior to the Closing, Venture Investors
Early Stage Fund IV Limited Partnership and Advantage Capital Wisconsin Partners
I, Limited Partnership will own, in aggregate, 2,534,308 shares, or 12.7% of the
outstanding common stock of the Company.  VIESF IV GP LLC is the general partner
of Venture Investors Early Stage Fund IV Limited Partnership and Venture
Investors LLC is the submanager and special limited partner of Advantage Capital
Wisconsin Partners I, Limited Partnership. The investment decisions of VIESF IV
GP LLC and Venture Investors LLC are made collectively by six managers,
including John Neis, who will be a director of the Company following the Merger.

Venture Investors LLC affiliated funds has purchase an  additional 2,000,000
Units in the Offering.

Each such manager and Mr. Neis disclaim such beneficial ownership except to the
extent of his pecuniary interest therein.

 
 

--------------------------------------------------------------------------------

 

Schedule 5.27

Indebtedness

5.27(i)

Cellectar has the following indebtedness:

 1.  Promissory Notes held by the Wisconsin Department of Commerce in the
original principal amounts of $250,000 and $200,000 with interest accruing at
2%.  Balance due as of February 28, 2011, including accrued interest, totaled
$452,367.12.  Principal and interest payments commence in May 2015 and are due
in monthly installments through April 2017.
 
2.  Convertible Promissory Notes held by nine investors in the aggregate
principal amount of $2,720,985.   Balance due as of March 5, 2011, including
accrued interest, totaled $3,123,139.  It is anticipated that the balance
due will be converted into 4,957,363 shares of Cellectar's Common Stock
immediately prior to the Merger.
 
3.  Deferred rental payments due McAllen Properties, LLC as of February 28,
2011: $63,792.76 (see Schedule 5.7(vi)).

The following financing statements securing obligations in material amounts are
filed with respect to Cellectar:

1.  A UCC financing statement (filing #070004897129) was filed on April 9, 2007
(and amended on January 28, 2008 per filing #080001372013) to secure Cellectar’s
obligations to M&I Marshall & Ilsley Bank (“M&I Bank”), as described in
5.27(i)(1) above.  The financing statement expires on April 9, 2012.  Cellectar
paid its obligation in full to M&I Bank on the date hereof, and expects M&I Bank
to terminate this financing statement.

2.  A UCC financing statement (filing #100011830417) was filed on October 5,
2010 to secure Cellectar’s obligations to the Wisconsin Department of Commerce,
as described in 5.27(i)(2) above.  The financing statement expires on October 5,
2015.

 
 

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Schedule 8.4

Use of Proceeds

Since preparation and distribution of the Memorandum, we have revised our
estimated use of proceeds to be received in the Offering to reflect reduced
spending estimates.  The revised disclosure is as follows:

USE OF PROCEEDS OF OFFERING

Although we may not be successful in selling any or all of the Securities in the
Offering, we currently expect to use the proceeds we receive as follows:

 
•
to fund our research and development activities, including the further
development of our HOT and LIGHT compounds in a wide range of cancers; and

 
•
for general corporate purposes, such as general and administrative expenses,
capital expenditures, working capital, prosecution and maintenance of our
intellectual property and the potential investment in technologies or products
that complement our business.

Minimal resources will be allocated to our COLD compound until sufficient funds
are raised.

The following table summarizes the estimated quarterly spending projections of
the combined company during 2011 and 2012:

    2011      2012              Q2     Q3     Q4     Q1     Q2     Q3     Q4    
Total
 
 
                                                             
Research and Development:
                                                                               
                                             
Clinical trials
  $ 286     $ 281     $ 331     $ 460     $ 557     $ 523     $ 631     $ 3,069
 
Chemistry, manufacturing and controls data
    51       51       51       66       141       96       36       492  
Non-clinical research
    63       63       63       63       63       64       63       442  
Fixed asset purchases
    20       40       20       40       20       40       20       200  
Patent
    106       106       106       131       131       131       131       842  
Personnel, facilities and overhead
    584       580       576       663       585       583       578       4,149
                                                                   
Total Research & Development
    1,110       1,121       1,147       1,423       1,497       1,437      
1,459       9,194                                                              
     
General and administrative
    597       573       590       586       584       572       580       4,082
                                                                   
Total Estimated Costs
  $ 1,707     $ 1,694     $ 1,737     $ 2,009     $ 2,081     $ 2,009     $
2,039     $ 13,276  
Cumulative Total
  $ 1,707     $ 3,401     $ 5,138     $ 7,147     $ 9,228     $ 11,237     $
13,276          

Clinical trials – We anticipate that we will commence a Phase 1b dose-escalation
trial of HOT in mid-2011 aimed at determining the Maximum Tolerated Dose
(MTD).  In parallel, we expect to initiate Phase 2 efficacy trials of HOT in
solid tumors in 2012 as soon as a minimal efficacious dose is established.  We
may determine such an effective dose upon seeing a response in the Phase 1b
trial or calculating it from imaging trials of LIGHT in cancer patients.  We
anticipate that we will commence in the second quarter of this year multiple
investigator-sponsored trials, initially in glioma, lung and breast cancers, to
evaluate our LIGHT compound as a novel PET imaging agent.  We plan to pursue an
Investigational New Drug Application for the study of our COLD compound as an
Akt inhibitor, cancer-targeted chemotherapy, when sufficient funds become
available.

 
The estimated spending in this category consists of costs for contract research
organizations, clinical site payments, patient testing and evaluation and other
costs related to the clinical trials.

 
 

--------------------------------------------------------------------------------

 

Chemistry, manufacturing and controls data– We plan to manufacture clinical
trial materials for Phase 1b and Phase 2 trials of our HOT compound in our
Madison facility.  LIGHT is currently manufactured by our collaborator,
University of Wisconsin at Madison. We will explore scaling up production
capacity of COLD, via contract manufacturers or at our facility, to support a
future IND filing and clinical trials.

The estimated spending in this category consists of costs of contract research
and manufacturing organizations to perform various validation, stability,
release and other manufacturing studies; the cost of drug supplies for HOT
manufacturing; and laboratory conversion costs necessary to support
manufacturing initiatives.

Non-clinical research – We plan to pursue a series of non-clinical laboratory
and animal testing to further evaluate and document the mechanistic activity of
our compounds.  The estimated spending in this category consists of costs for
sponsored research with medical and educational institutions.

Fixed asset purchases – The estimated expenditures in this category include
equipment purchases and costs to make certain modifications to the Madison
facility to enable manufacturing initiatives.

Patent costs – We intend to pursue an aggressive strategy to patent our
intellectual property rights. The estimated expenditures in this category
represent patent counsel and patent filing costs.

Research and development - Personnel, facilities and overhead – The estimated
costs in this category represent salaries and related overhead costs associated
with research and development personnel (approximately 70%); facilities and
related overhead costs for the Madison headquarters and research and
manufacturing facility (approximately 20%); and the costs of certain independent
medical and scientific consultants (approximately 10%).

General and administrative- The estimated costs in this category represent
salaries and related overhead costs associated with general and administrative
employees (approximately 35%);  professional advisory costs (approximately 50%)
such as legal fees, audit fees, directors’ fees and investor relations services;
and rent and related office utility and overhead costs (approximately 15%) for
the executive and administrative office in Newton, MA.

We have no current understandings, commitments or agreements with respect to any
acquisition of or investment in any technologies or products.

Even if we raise the full amount we ultimately seek in the Offering, of which
there can be no assurance, we will still need to obtain additional financing in
the future in order to fully fund these product candidates through the
regulatory approval process.  We will seek such additional financing through
public or private equity or debt offerings or other sources, including
collaborative or other arrangements with corporate partners, and through
government grants and contracts. There can be no assurance we will be able to
obtain such additional financing on acceptable terms, or at all.

Our actual expenditures in 2011 and 2012 will depend on actual amounts raised in
the Offering. In addition, the amounts and timing of our actual expenditures
will depend upon numerous factors, including the progress of our development and
commercialization efforts, the progress of our clinical studies, whether or not
we enter into strategic collaborations or partnerships and our operating costs
and expenditures. Accordingly, our management will have significant flexibility
in applying the net proceeds of the Offering.

The costs and timing of drug development and regulatory approval, particularly
conducting clinical studies, are highly uncertain, are subject to substantial
risks and can often change. Accordingly, we may change the allocation of use of
these proceeds as a result of contingencies such as the progress and results of
our clinical studies and other development activities, the establishment of
collaborations, our manufacturing requirements and regulatory or competitive
developments.

 
 

--------------------------------------------------------------------------------

 

Pending the application of the net proceeds as described above or otherwise, we
may invest the proceeds in short-term, investment-grade, interest-bearing
securities or guaranteed obligations of the U.S. government or other securities.
 
 

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