NOVELOS
THERAPEUTICS, INC.

    


    EXCHANGE
AGREEMENT

    


     

    This
EXCHANGE AGREEMENT (the “Agreement”) dated as
of November 30, 2010, is entered into by and among Novelos Therapeutics, Inc., a
Delaware corporation (the “Company”), and the
entities listed on the signature pages hereto (collectively, the “Preferred
Stockholders”) (the Company and Preferred Stockholders are sometimes
referred to herein individually as a “Party” and
collectively as the “Parties”).

     

    WHEREAS,
the Preferred Stockholders hold an aggregate of 408.264045 shares of the
Company’s Series E Convertible Preferred Stock, $0.00001 par value per share
(the “Series E
Preferred Stock”) and 204 shares of the Company’s Series C Convertible
Preferred Stock (the “Series C Preferred
Stock”; together with the Series E Preferred Stock, the “Preferred
Stock”);

     

    WHEREAS,
the Preferred Stock represented an aggregate liquidation preference of
$27,143,169 as of October 31, 2010, accrues dividends, in the case of the Series
E Preferred Stock, at a rate of 9% per annum, and in the case of the Series C
Preferred Stock, and 20% per annum, and has as conversion price of $0.65 per
share;

     

    WHEREAS,
the Company’s net worth as of September 30, 2010 was $(3,315,480) and its market
capitalization as of the close of business on October 29, 2010 was $7,684,495,
based on a closing price of $.05 on such date and assuming all Preferred Stock
had been converted as of that date; and

     

    WHEREAS,
the Company and each Preferred Stockholder desires to exchange each outstanding
share (and any fraction thereof) of Preferred Stock held by such Preferred
Stockholder, together with all accrued but unpaid dividends thereon, for the
number of shares of the Company’s Common Stock, par value $.00001 per share (the
“Common Stock”)
set forth on Schedule
A hereto effective upon the execution and delivery of the Agreement by
all Parties (the “Effective
Time”);

     

    NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the Parties hereto agree as
follows:

     

    1.           Exchange.

     

    (a)           Subject
to the terms and conditions set forth herein, each of the Preferred Stockholders
hereby, severally and not jointly, agrees to exchange all shares of Preferred
Stock owned by such Preferred Stockholder, and all rights, preferences and
privileges associated therewith (including but not limited to any accrued but
unpaid dividends thereon) and all rights to liquidated damages under agreements
to register capital stock of any kind of the Company under the Securities Act of
1933, as amended (the “1933 Act”), for the number of shares of Common Stock set
forth on Schedule
A hereto as of the Effective Time (the “Exchange”).  The
Exchange shall be automatically effective, without any further action on the
part of any Preferred Stockholder, immediately upon Effective Time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)           No
later than three business days after the Effective Time, each Preferred
Stockholder shall surrender to the Company any and all certificates that
formerly represented shares of Preferred Stock held by such Preferred
Stockholder (or provide to the Company such evidence as is reasonably
satisfactory to the Company that such certificate representing shares of
Preferred Stock is lost or destroyed), and upon receipt thereof, the Company
shall, within three business days, issue new stock certificates for shares of
Common Stock as set forth in Schedule A hereto and
deliver such stock certificates for shares of Common Stock to the Preferred
Stockholders at the applicable addresses set forth on the signature pages hereto
or otherwise in accordance with the reasonable delivery instructions of such
Preferred Stockholder.

     

    (c)           To
the extent that each and every Preferred Stockholder has not delivered to the
Company an executed Agreement with respect to such Preferred Stockholder’s
respective shares of Preferred Stock (as set forth on Schedule A annexed to
this Agreement) by November 30, 2010, then any executed Agreement previously
delivered to the Company by any other Preferred Stockholders shall be deemed,
and will be, null, void and of no further force or effect.

     

    2.           Termination of Registration
Rights.  That certain Registration Rights Agreement among the
Company and the holders of Series E Preferred Stock dated as of February 11,
2009, as amended by that certain Consent and Amendment Agreement dated as of
January 21, 2010 (the “Consent and Amendment
Agreement”), and the Consent and Amendment Agreement are hereby
terminated and of no further force or effect.  That certain
Registration Rights Agreement among the Company and certain of the Parties
hereto dated August 9, 2009 is hereby terminated and of no further force or
effect.  Each of the Preferred Stockholders releases, effective as of
the Effective Time, any and all claims for liquidated damages arising under any
such agreements.

     

    3.           Representations of the
Company.  The Company represents and warrants to each Preferred
Stockholder that:

     

    (a)           The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder.  The execution and delivery of
this Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders in connection
herewith.

     

    (b)           After
the Exchange, the holding period of the Common Stock issued pursuant to the
Exchange for purposes of Rule 144 under the 1933 Act, shall be
deemed to have commenced on the same date as the holding period of the Preferred
Stock in respect of which such shares of Common Stock were issued.

     

    (c)           No
consent, approval, authorization or order of any court or governmental authority
having jurisdiction over the Company or the Company’s stockholders is required
for the execution, delivery and performance by the Company of the
Agreement.

     

    (d)           Assuming
the representations and warranties of the Preferred Stockholders in Section 4 are true
and correct, the issuance of shares of Common Stock pursuant to the Exchange
will not:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)  violate, conflict with,
result in a breach of, or constitute a default of a material nature under (A)
the certificate of incorporation or bylaws of the Company as in effect on the
date hereof, (B) any decree, judgment, order, law, treaty, rule or regulation
applicable to the Company or any of the Company’s properties or assets of any
court or governmental authority having jurisdiction over the Company or over the
properties or assets of the Company, or (C) the terms of any bond, debenture,
note or any other evidence of indebtedness for borrowed money, or any material
agreement, stock option or other similar plan, indenture, lease, mortgage, deed
of trust or other instrument to which the Company is a party, or by which it is
bound, or to which any of the properties or assets of the Company is subject;
or

     

    (ii)  result in the creation
or imposition of any lien, charge or encumbrance upon the shares of Common Stock
issuable hereunder or any of the properties or assets of the
Company.

     

    (e)           Upon
issuance, the shares of Common Stock issuable pursuant to the
Exchange:

     

    (i) will be, free and clear of any
security interests, liens, claims or other encumbrances, subject to restrictions
upon transfer under the 1933 Act and any applicable state securities
laws;

     

    (ii) will be, duly and validly issued,
fully paid and nonassessable;

     

    (iii) will not have been issued or sold
in violation of any preemptive, right of first refusal or other similar rights
of the holders of any securities of the Company; and

     

    (iv) will not result in a violation of
Section 5 under the 1933 Act.

     

    4.           Representations of the
Preferred Stockholders.  Each Preferred Stockholder hereby,
severally and not jointly, represents and warrants to and agrees with the
Company only as to each Preferred Stockholder that:

     

    (a)           The
Preferred Stockholder has the requisite power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder.  The execution and delivery of
this Agreement by the Preferred Stockholder and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Preferred Stockholder and no further action
is required by the Preferred Stockholder in connection herewith.

     

    (b)           The
Preferred Stockholder is an “accredited investor,” as such term is defined in
Regulation D promulgated by the SEC under the 1933 Act, is experienced in
investments and business matters, has made investments of a speculative nature
and has purchased securities of United States publicly owned companies in
private placements in the past and, with its representatives, has such knowledge
and experience in financial, tax and other business matters as to enable the
Preferred Stockholder to utilize the information made available by the Company
to evaluate the merits and risks of and to make an informed investment decision
with respect to the proposed transaction, which represents a speculative
investment.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           The
Preferred Stockholder owns the Preferred Stock set forth on Schedule A and is
capable of transferring such Preferred Stock in accordance with the terms and
provisions of this Agreement free and clear of any liens and encumbrances of
third parties.

     

    (d)           The
Preferred Stockholder understands and agrees that the shares of Common Stock to
be issued to such Preferred Stockholder in the Exchange have not been registered
under the 1933 Act or any applicable state securities laws, by reason of their
issuance in a transaction that does not require registration under the 1933 Act
(based in part on the accuracy of the representations and warranties of the
Preferred Stockholders contained herein), and that such shares must be held
indefinitely unless a subsequent disposition is registered under the 1933 Act or
any applicable state securities laws or is exempt from such registration
requirements.

     

    (e)  Each certificate
evidencing shares of Common Stock issued hereunder shall bear the following or
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 SATISFACTORY TO
IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR QUALIFICATION UNDER APPLICABLE STATE
SECURITIES LAWS.”

     

    5.           Further
Assurances.  Each Party hereto shall do and perform or cause to
be done and performed all such further acts and shall execute and deliver all
such other agreements, certificates, instruments and documents as any other
Party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement.

     

    6.           Independent Nature of
Preferred Stockholders Obligations and Rights.  The obligations
of each Preferred Stockholder under this Agreement are several and not joint
with the obligations of any other Preferred Stockholder, and no Preferred
Stockholder shall be responsible in any way for the performance of the
obligations of any other Preferred Stockholder.  The decision of each
Preferred Stockholder to consummate the transactions contemplated herein has
been made by such Preferred Stockholder independently of any other Preferred
Stockholder and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company or any of its subsidiaries which may have been made or
given by any other Preferred Stockholder by any agent or employee of any other
Preferred Stockholder, and no Preferred Stockholder and any of its agents or
employees shall have any liability to any other Preferred Stockholder (or any
other individual or entity) relating to or arising from any such information,
materials, statement or opinions.  Nothing contained herein, and no
action taken by any Preferred Stockholder pursuant thereto, shall be deemed to
constitute the Preferred Stockholders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Preferred
Stockholders are in any way acting in concert or as a group with respect to such
obligations or the transactions herein.  Each Preferred Stockholder
acknowledges that no other Preferred Stockholder has acted as agent for such
Preferred Stockholder in connection with it entering into this Agreement and
that no Preferred Stockholder will be acting as agent of such Preferred
Stockholder in connection with monitoring its investment in the Common Stock
issuable hereunder or enforcing its rights hereunder.  Each Preferred
Stockholder shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and it
shall not be necessary for any other Preferred Stockholder to be joined as an
additional party in any proceeding for such purpose.  The Company
acknowledges that each Preferred Stockholder has been provided with the same
Agreement for the purpose of closing a transaction with multiple Preferred
Stockholders and not because it was required or requested to do so by any
Preferred Stockholder. The Company’s obligations to each Preferred Stockholder
under this Agreement are identical to its obligations to each other Preferred
Stockholder other than such differences resulting solely from the number of
shares of Preferred Stock to be exchanged for Common Stock by such Preferred
Stockholder, but regardless of whether such obligations are memorialized herein
or in another agreement between the Company and a Preferred
Stockholder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    7.           Choice of
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflict of
laws principles that would result in the application of the substantive laws of
another jurisdiction. Any action brought by either Party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in New York
County. THE PARTIES AND THE INDIVIDUALS EXECUTING THIS AGREEMENT AND OTHER
AGREEMENTS REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH ON BEHALF OF
THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS AND WAIVE TRIAL
BY JURY. The prevailing Party in a lawsuit regarding or arising from the terms
and provisions of this Agreement shall be entitled to recover from the other
Party its reasonable attorney's fees and costs. In the event that any provision
of this Agreement or any other agreement delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of any
agreement.

     

    8.           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 facsimile transmission, 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 Preferred
Stockholders:

     

    To the addresses set forth on the
signature page hereto.

     

    9.           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which taken together shall constitute one and the
same Agreement.  Counterpart signature pages to this Agreement
transmitted by facsimile transmission, by electronic mail in “portable document
format” (“.pdf”) form, or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, will have the same
effect as physical delivery of the paper document bearing an original
signature.

     

    10.         Amendments and
Waivers. 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 each of the Preferred Stockholders.  Any
amendment or waiver effected in accordance with this Section 10 shall be
binding upon each Preferred Stockholder and
the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

     

    
      
        
          
            	 
      	
                    NOVELOS
      THERAPEUTICS, INC.

                  	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                    By:

                  	
                    /s/
      Harry S. Palmin

                  	 
	 
      	
                    Name:

                  	
                    Harry
      S. Palmin

                  	 
	 
      	
                    Title:

                  	
                    President
      and CEO

                  	 


          

        

      

    

    


    


    


    


    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                Beacon
      Company

              


      

    

    


    
      
        
          
            	
                    By:

                  	
                    Stanhope
      Gate Corp., its managing general
partner

                  


          

        

      

    

    


    Signature
of Authorized

    
      
        	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Steven A Meiklejohn

              


      

    

    


    
      
        	
                Name
      of Authorized Signatory:

              	
                Steven
      A. Meiklejohn

              


      

    

    


    
      
        	
                Title
      of Authorized Signatory:

              	
                Director

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    Beacon
Company

    c/o Ogier
Fiduciary Services

    Ogier
House

    The
Esplanade

    St.
Helier

    Jersey

    JE49WG

    Channel
Islands

    Attention:
Jonathan G. White

    


    


    With
a copy to:

    


    Chadbourne
& Parke LLP

    30
Rockefeller Plaza

    
      
        	
                New
      York, NY 10112

              


      

    

    
      
        	
                USA

              


      

    

    
      
        	
                Telefacsimile
      (212) 541-5369

              


      

    

    
      
        	
                Attention:
      Stuart D. Baker

              


      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                Rosebay
      Medical Company, L.P.

              


      

    

    


    
      
        	
                By:

              	
                Rosebay
      Medical Company, Inc., its general
partner

              


      

    

    


    Signature
of Authorized

    
      
        	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Stephen A. Ives

              


      

    

    


    
      
        	
                Name
      of Authorized Signatory:

              	
                Stephen
      A. Ives

              


      

    

    


    
      
        	
                Title
      of Authorized Signatory:

              	
                Vice
      President

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    Rosebay
Medical Company, L.P.

    c/o North
Bay Associates

    14000
Quail Springs Parkway #2200

    Oklahoma
City, Oklahoma

    Attention:
Stephen A. Ives

    


    


    With
a copy to:

    


    Chadbourne
& Parke LLP

    30
Rockefeller Plaza

    
      
        	
                New
      York, NY 10112

              


      

    

    
      
        	
                USA

              


      

    

    
      
        	
                Telefacsimile
      (212) 541-5369

              


      

    

    
      
        	
                Attention:
      Stuart D. Baker

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                Knoll
      Special Opportunities, Fund II Master Fund
Ltd.

              


      

    

    


    Signature
of Authorized

    
      
        	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Fred Knoll

              


      

    

    


    
      
        	
                Name
      of Authorized Signatory:

              	
                Fred
      Knoll

              


      

    

    


    
      
        	
                Title
      of Authorized Signatory:

              	
                Investment
      Manager

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o KOM
Capital Management LLC

    1114
Avenue of the Americas, 45th
Floor

    New York,
NY 10036

    


    


    With
a copy to (if applicable):

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                Europa
      International, Inc.

              


      

    

    


    Signature
of Authorized

    
      
        	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Fred Knoll

              


      

    

    


    
      
        	
                Name
      of Authorized Signatory:

              	
                Fred
      Knoll

              


      

    

    


    
      
        	
                Title
      of Authorized Signatory:

              	
                Investment
      Manager

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o KOM
Capital Management LLC

    1114
Avenue of the Americas, 45th
Floor

    New York,
NY 10036

    


    


    With
a copy to (if applicable):

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                Xmark
      Opportunity Fund, Ltd.

              


      

    

    


    Signature
of Authorized

    
      
        	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Mitchell D. Kaye

              


      

    

    


    
      
        	
                Name
      of Authorized Signatory:

              	
                Mitchell
      D. Kaye

              


      

    

    


    
      
        	
                Title
      of Authorized Signatory:

              	
                Authorized
      Signatory

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o Xmark
Opportunity Partners, LLC

    90 Grove
Street, Suite 201

    Ridgefield,
CT 06877

    


    


    With
a copy to (if applicable):

     

    Lowenstein
Sandler PC

    1251
Avenue of the Americas, 18th
Floor

    New York,
NY 10020

    Attention:  Peter
D. Greene, Esq.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                Xmark
      Opportunity Fund, L.P.

              


      

    

    


    Signature
of Authorized

    
      
        	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Mitchell D. Kaye

              


      

    

    


    
      
        	
                Name
      of Authorized Signatory:

              	
                Mitchell
      D. Kaye

              


      

    

    


    
      
        	
                Title
      of Authorized Signatory:

              	
                Authorized
      Signatory

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o Xmark
Opportunity Partners, LLC

    90 Grove
Street, Suite 201

    Ridgefield,
CT 06877

    


    


    With
a copy to (if applicable):

    


    Lowenstein
Sandler PC

    1251
Avenue of the Americas, 18th
Floor

    New York,
NY 10020

    Attention:  Peter
D. Greene, Esq.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                Xmark
      JV Investment Partners, LLC

              


      

    

    


    Signature
of Authorized

    
      
        	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Mitchell D. Kaye

              


      

    

    


    
      
        	
                Name
      of Authorized Signatory:

              	
                Mitchell
      D. Kaye

              


      

    

    


    
      
        	
                Title
      of Authorized Signatory:

              	
                Authorized
      Signatory

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o Xmark
Opportunity Partners, LLC

    90 Grove
Street, Suite 201

    Ridgefield,
CT 06877

    


    


    With
a copy to (if applicable):

    


    Lowenstein
Sandler PC

    1251
Avenue of the Americas, 18th
Floor

    New York,
NY 10020

    Attention:  Peter
D. Greene, Esq.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

     Preferred Stockholder Signature Page
to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Name
      of Preferred Stockholder:

                              	
                                Caduceus
      Capital Master Fund Limited

                              
	 
      	 
      
	
                                Signature
      of Authorized

                              	 
      
	
                                Signatory
      of Preferred Stockholder:

                              	
                                /s/
      Samuel D. Isaly

                              
	 
      	 
      
	
                                Name
      of Authorized Signatory:

                              	
                                Samuel
      D. Isaly

                              
	 
      	 
      
	
                                Title
      of Authorized Signatory:

                              	
                                Managing
      Member of Orbimed Advisors LLC, solely in its capacity as Investment
      Advisor to Caduceus Capital Master Fund
Limited

                              


                      

                    

                  

                

              

            

          

        

      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o
OrbiMed Advisors LLC

    767 Third
Avenue, 30th
Floor

    New York,
NY 10017

    


    


    


    With
a copy to (if applicable):

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                Caduceus
      Capital II, L.P.

              
	 
      	 
      
	
                Signature
      of Authorized

              	 
      
	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Samuel D. Isaly

              
	 
      	 
      
	
                Name
      of Authorized Signatory:

              	
                Samuel
      D. Isaly

              
	 
      	 
      
	
                Title
      of Authorized Signatory:

              	
                Managing
      Member of Orbimed Advisors LLC, solely in its capacity as General Partner
      of Caduceus Capital II, L.P.

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o
OrbiMed Advisors LLC

    767 Third
Avenue, 30th
Floor

    New York,
NY 10017

    


    


    


    With
a copy to (if applicable):

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                Summer
      Street Life Sciences Hedge Fund Investors LLC

              
	 
      	 
      
	
                Signature
      of Authorized

              	 
      
	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Samuel D. Isaly

              
	 
      	 
      
	
                Name
      of Authorized Signatory:

              	
                Samuel
      D. Isaly

              
	 
      	 
      
	
                Title
      of Authorized Signatory:

              	
                Managing
      Member of Orbimed Advisors LLC, solely in its capacity as Investment
      Manager of Summer Street Life Sciences Hedge Fund Investors
      LLC

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o
OrbiMed Advisors LLC

    767 Third
Avenue, 30th
Floor

    New York,
NY 10017

    


    


    With
a copy to (if applicable):

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        
          
            
              
                
                  
                    	
                            Name
      of Preferred Stockholder:

                          	
                            UBS
      Eucalyptus Fund, L.L.C.

                          
	 
      	 
      
	
                            Signature
      of Authorized

                          	 
      
	
                            Signatory
      of Preferred Stockholder:

                          	
                            /s/
      Samuel D. Isaly

                          
	 
      	 
      
	
                            Name
      of Authorized Signatory:

                          	
                            Samuel
      D. Isaly

                          
	 
      	 
      
	
                            Title
      of Authorized Signatory:

                          	
                            Managing
      Member of Orbimed Advisors LLC, solely as member of UBS Eucalyptus
      Management, L.L.C., as investment adviser to UBS Eucalyptus Fund,
      L.L.C.

                          


                  

                

              

            

          

        

      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o
OrbiMed Advisors LLC

    767 Third
Avenue, 30th
Floor

    New York,
NY 10017

    


    


    With
a copy to (if applicable):

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      
        	
                Name
      of Preferred Stockholder:

              	
                PW
      Eucalyptus Fund, Ltd.

              
	 
      	 
      
	
                Signature
      of Authorized

              	 
      
	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      Samuel D. Isaly

              
	 
      	 
      
	
                Name
      of Authorized Signatory:

              	
                Samuel
      D. Isaly

              
	 
      	 
      
	
                Title
      of Authorized Signatory:

              	
                Managing
      Member of Orbimed Advisors LLC, solely as member of UBS Eucalyptus
      Management, L.L.C., as investment adviser to PW Eucalyptus Fund,
      Ltd.

              


      

    

    


    Address
for Notice to Preferred Stockholder:

    


    c/o
OrbiMed Advisors LLC

    767 Third
Avenue, 30th
Floor

    New York,
NY 10017

    


    


    


    With
a copy to (if applicable):

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Preferred
Stockholder Signature Page to Exchange Agreement

    


    IN
WITNESS WHEREOF, the undersigned has executed this Exchange Agreement as of the
date first above written.

    


    


    


    
      	
              Name
      of Preferred Stockholder:

            	
              Longview
      Fund, LP, Longview Equity Fund, LP, Longview International Equity Fund,
      LP

            


    

    


    Signature
of Authorized

    
      
        	
                Signatory
      of Preferred Stockholder:

              	
                /s/
      S. Michael Rudolph

              


      

    

    


    
      	
              Name
      of Authorized Signatory:

            	
              S.
      Michael Rudolph

            
	 
      	 
      
	
              Title
      of Authorized Signatory:

            	
              CFO,
      Viking Asset Management, as Investment
Advisor

            


    

    


    Address
for Notice to Preferred Stockholder:

    


    505
Sansome Street, Suite 1275

    San
Francisco, CA 94111

    


    


    With
a copy to (if applicable):

    


     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
A

    


    Preferred
Stock Exchanged for Common Stock

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  	 
      	 	
                                                                                                          Shares of
      Preferred

                                                                                                        	 	 	
                                                                                                          Shares of
      Common

                                                                                                        	 
	
                                                                                                          Holder of
      Series E Preferred Stock 

                                                                                                        	 	
                                                                                                          Stock
      Exchanged

                                                                                                        	 	 	
                                                                                                          Stock
      Received

                                                                                                        	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Beacon
      Company 

                                                                                                        	 	 	100.0	 	 	 	78,309,693	 
	
                                                                                                          Rosebay Medical Company
      L.P. 

                                                                                                        	 	 	100.0	 	 	 	78,309,693	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Total
      Purdue Pharma L.P. 

                                                                                                        	 	 	200.0	 	 	 	156,619,386	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Knoll Special Opportunities Fund
      II Master Fund, Ltd. 

                                                                                                        	 	 	53.64705	 	 	 	36,620,770	 
	
                                                                                                          Europa International,
      Inc. 

                                                                                                        	 	 	66.57405	 	 	 	45,445,052	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Total
      Knoll funds 

                                                                                                        	 	 	120.2211	 	 	 	82,065,822	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Xmark Opportunity Fund,
      Ltd. 

                                                                                                        	 	 	21.5547	 	 	 	14,713,758	 
	
                                                                                                          Xmark Opportunity Fund,
      L.P. 

                                                                                                        	 	 	11.10665	 	 	 	7,581,667	 
	
                                                                                                          Xmark JV Investment Partners,
      LLC 

                                                                                                        	 	 	14.81665	 	 	 	10,114,203	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Total
      Xmark funds 

                                                                                                        	 	 	47.478	 	 	 	32,409,628	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Caduceus Capital Master Fund
      Limited 

                                                                                                        	 	 	15.166943	 	 	 	10,353,321	 
	
                                                                                                          Caduceus Capital II,
      L.P. 

                                                                                                        	 	 	9.2215	 	 	 	6,294,818	 
	
                                                                                                          Summer Street Life Sciences Hedge
      Fund Investors LLC 

                                                                                                        	 	 	5.671235	 	 	 	3,871,322	 
	
                                                                                                          UBS Eucalyptus Fund,
      L.L.C. 

                                                                                                        	 	 	9.733066	 	 	 	6,644,026	 
	
                                                                                                          PW Eucalyptus Fund,
      Ltd. 

                                                                                                        	 	 	0.772201	 	 	 	527,123	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Total
      Orbimed funds 

                                                                                                        	 	 	40.564945	 	 	 	27,690,610	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Subtotal
      Series E 

                                                                                                        	 	 	408.264045	 	 	 	298,785,446	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Holder of
      Series C Preferred Stock 

                                                                                                        	 	 	 	 	 	 	 	 
	
                                                                                                           

                                                                                                        	 	 	 	 	 	 	 	 
	
                                                                                                          Longview Fund
      LP 

                                                                                                        	 	 	119.00	 	 	 	24,587,707	 
	
                                                                                                          Longview Equity Fund
      LP 

                                                                                                        	 	 	55.25	 	 	 	11,415,721	 
	
                                                                                                          Longview Int'l Equity Fund
      LP 

                                                                                                        	 	 	29.75	 	 	 	6,146,927	 
	 	 	 	 	 	 	 	 	 
	
                                                                                                          Subtotal
      Series C 

                                                                                                        	 	 	204.00	 	 	 	42,150,355	 
	 	 
	
                                                                                                          GRAND TOTAL
      COMMON SHARES 

                                                                                                        	 	 	 	 	 	 	340,935,801