Unassociated Document


     

    NOVELOS
THERAPEUTICS, INC.

    


    SERIES
D PREFERRED STOCK

    CONSENT
AND AGREEMENT TO EXCHANGE

     

    This
CONSENT AND AGREEMENT TO EXCHANGE (the “Agreement”) dated as
of February 10, 2009, 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 “Series D Investors”)
(the Company and Series D Investors are sometimes referred to herein
individually as a “Party” and
collectively as the “Parties”).

     

    WHEREAS,
the Series D Investors hold an aggregate of 413.5 shares of the Company’s Series
D Convertible Preferred Stock, $0.00001 par value per share (the “Series D Preferred
Stock”);

     

    WHEREAS,
the Certificate of Designations, Preferences and Rights of Series D Convertible
Preferred Stock of Novelos Therapeutics, Inc. (the “Series D Certificate of
Designations”) contains certain prohibitions on amendments to the
Company’s Certificate of Incorporation, the creation or issuance of any equity
security unless the per share price of such securities exceeds $0.65 in cash and
said securities rank junior to the Series D Preferred Stock, and the sale,
lease, conveyance or licensing of any material intellectual property by the
Company without the prior written consent of the Series D
Investors;

     

    WHEREAS, effective immediately
following the execution of this Agreement, the Company is executing and
delivering a securities purchase agreement (the “Purdue Securities Purchase
Agreement”) in the form attached hereto as Exhibit A, pursuant
to which the Company is issuing and selling 200 shares of a newly created series
of the Company’s preferred stock, designated Series E Convertible Preferred
Stock, par value $0.00001 per share (the “Series E Preferred
Stock”) and a warrant to acquire up to 9,230,769 shares of Common Stock
(as defined below) with an exercise price of $0.65 per share (the “Series E Warrant”) to
Purdue Pharma L.P., a Delaware limited partnership (“Purdue”), which
Series E Preferred Stock shall have the relative rights, privileges and
preferences set forth in the Certificate of Designations, Rights and Preferences
of the Series E Convertible Preferred Stock of Novelos Therapeutics, Inc., in
the form attached hereto as Exhibit B (the “Series E Certificate of
Designations”) (collectively, the “Purdue Financing”)
and this Agreement is a condition to closing as stated in the Purdue Securities
Purchase Agreement;

     

    WHEREAS, simultaneously with the
completion of the Purdue Financing, the Company is entering into a Collaboration
Agreement with Mundipharma International Corporation Limited (the “Mundi Collaboration
Agreement”) in the form attached hereto as Exhibit C
(collectively with the Purdue Financing, the “Transactions”);

     

    WHEREAS, the Company and the Series D
Investors desire to exchange each outstanding share (and any fraction thereof)
of Series D Preferred Stock, together with all accrued but unpaid dividends
thereon, for 1.07725 shares of Series E  Preferred Stock (or a pro
rata portion thereof for any fraction of a share of Series D Preferred Stock),
as set forth on Schedule A hereto
effective as of the consummation of the Transactions (the “Series D
Exchange”);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS, simultaneously with the
execution of this Agreement, the holders of the Company’s Series C Convertible
Preferred Stock, $0.00001 par value per share (the “Series C Preferred
Stock”) are executing a Consent and Agreement of Holders of Series C
Preferred Stock in the form attached hereto as Exhibit D (the “Series C Consent”)
pursuant to which such holders will consent to the Transactions and the
consummation of the Series D Exchange;

     

    WHEREAS, the Series D Preferred Stock
was senior with respect to the payment of a liquidation preference to all shares
of the Company’s capital stock, including, without limitation the Series C
Preferred Stock and accordingly, pursuant to the Series E Certificate of
Designations, the Series E Preferred Stock shall be entitled to seniority with
respect to the payment of any liquidation preference in relation to the Series C
Preferred Stock;

     

    WHEREAS, in connection with the
transactions contemplated by the Series D Exchange, in order to make certain
conforming changes therein the Company desires to amend the (i) Registration
Rights Agreement, dated May 2, 2007, as amended by that certain Amendment to
Registration Rights Agreement, dated April 11, 2008, by entering into that
certain Amendment No. 2 to Registration Rights Agreement, in the form attached
as Exhibit E
hereto (the “2007 Reg
Rights Amendment”) and (ii) desires to terminate the Registration Rights
Agreement, dated April 11, 2008, and enter into a new  Registration
Rights Agreement, in the form attached as Exhibit F hereto (the
“2009 Reg Rights
Agreement”); and

     

    WHEREAS, the Series D Investors hold
7,500,000 warrants to purchase the Company’s common stock issued on May 2, 2007,
amended on April 11, 2008 (the “Series B Warrants”)
and hold 4,365,381 warrants to purchase the Company’s common stock issued on
April 11, 2008 (the “Series D Warrants”);
and in order to conform certain of the terms of the Series B Warrants and the
Series D Warrants to the terms of the warrants to be issued to Purdue in
connection with the Purdue Securities Purchase Agreement the Series D Investors
and the Company desire to amend (i) the Series B Warrants by entering into a
Warrant Amendment Agreement, in the form attached as Exhibit G hereto (the
“Series B Warrant
Amendment”) and (ii) the Series D Warrants by entering into a Warrant
Amendment Agreement, in the form attached as Exhibit H hereto (the
“Series D Warrant
Amendment”) (collectively, the “Warrant
Amendments”);

     

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

     

    
      
        
        

      

      
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    1.           Consent.

     

    (a)           Each
of the Series D Investors hereby consents (i) to the filing of the Series E
Certificate of Designations and (ii) to the Transactions.

     

    (b)           Each
of the Series D Investors hereby consents to the filing, with the Secretary of
State of the State of Delaware, of a Certificate of Elimination pursuant to
which all matters set forth in the Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred Stock of Novelos Therapeutics, Inc.
with respect to the Company’s Series B Convertible Preferred Stock, $0.00001
(the “Series B
Preferred Stock”) will be eliminated from the Company’s Certificate of
Incorporation and the shares that were designated as Series B Preferred Stock
will be returned to the status of authorized but unissued shares of preferred
stock of the Company, without designation as to series, in the form attached
hereto as Exhibit
I (the “Series
B Certificate of Elimination”).

     

    (c)           Each
of the Series D Investors hereby consents to the filing with the Secretary of
State of the State of Delaware, following the issuance of the Series E Preferred
Stock pursuant to this Agreement, of a Certificate of Elimination, pursuant to
which all matters set forth in the Series D Certificate of Designations with
respect to the Series D Preferred Stock will be eliminated from the Company’s
Certificate of Incorporation and the shares that were designated as Series D
Preferred Stock will be returned to the status of authorized but unissued shares
of preferred stock of the Company, without designation as to series, in the form
attached hereto as Exhibit J (the “Series D Certificate of
Elimination”).

     

    2.           Exchange.

     

    (a)           Subject
to the terms and conditions set forth herein, each of the Series D Investors
hereby, severally and not jointly, agrees to exchange all shares of Series D
Preferred Stock owned by such Series D Investor, and all rights, preferences and
privileges associated therewith (including but not limited to any accrued but
unpaid dividends thereon) for the number of shares of Series E Preferred Stock
set forth on Schedule
A hereto as of the Effective Time.  The Series D Exchange shall
be automatically effective, without any further action on the part of any Series
D Investor, immediately upon the satisfaction (or waiver) of the conditions set
forth in Section
7 hereof (the “Effective
Time”).  Promptly following the Effective Time, the Company
will provide written notice to each Series D Investor confirming that the
Effective Time has occurred.

     

    (b)           No
later than three business days after the Effective Time, each Series D Investor
shall surrender to the Company certificates that formerly represented all of the
issued and outstanding shares of Series D Preferred Stock held by such Series D
Investor (or provide to the Company such evidence as is reasonably satisfactory
to the Company that such certificate representing shares of Series D Preferred
Stock is lost or destroyed) and upon receipt thereof, the Company shall within
three business days issue new stock certificates for shares of Series E
Preferred Stock as set forth in Schedule A hereto and
deliver such stock certificates for shares of Series E Preferred Stock to the
applicable Series D Investors at the address set forth on the signature page
hereto.

     

    
      
        
        

      

      
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    3.           Waiver of Liquidated
Damages.  Each of the Series D Investors is a party to a
Registration Rights Agreement  dated April 11, 2008 (the “2008 Registration
Agreement”) which provides for registration rights with respect to the
shares of Common Stock issuable (i) upon the conversion of Series D Preferred
Stock (excluding 12,000,000 shares of Common Stock issuable upon conversion of
the Preferred Stock which are registered pursuant to the Prior Registration
Statement as defined in the 2008 Registration Agreement).  Pursuant to
Section 8(a) of the 2008 Registration Agreement, each of the Series D Investors
hereby waives, effective as of the Effective Time, any and all liquidated
damages arising under Section 3 of the 2008 Registration Agreement during the
period from October 1, 2008 through the Effective Time as a result of the
Company’s failure to file the registration statement by the Filing Deadline (as
defined in the 2008 Registration Agreement).

     

    4.           Representations of the
Company.  The Company represents and warrants to and agrees
with each Series D Investor that:

     

    (a)           After
the Series D Exchange, the holding period of the Series E Preferred Stock and
the Company’s common stock, $0.00001 par value per share (“Common Stock”)
issuable upon conversion of the Series E Preferred Stock (the “Conversion Shares”)
for purposes of Rule 144 under the Securities Act of 1933, as amended (the
“1933 Act”)
shall have commenced on the same date as the holding period of the Series D
Preferred Stock.  In addition, no holder of the Series B Warrants or
the Series D Warrants will be required to re-start a holding period for purposes
of Rule 144 under the 1933 Act as a result of the Warrant Amendments and the
other transactions contemplated hereby.

     

    (b)           The
registration statement filed with the Securities Exchange Commission (the “SEC”) under
Registration No. 333-143263, as amended (the “Registration
Statement”), will be supplemented by the Company on or prior to the
fourth business day following the Series D Exchange, to reflect the transactions
described in this Agreement (the “Prospectus
Supplement”), the issuance of the Series E Preferred Stock and all other
matters so that upon the filing of such Prospectus Supplement with the SEC, the
Registration Statement will be current and effective with regard to the public
resale of the securities covered by the Registration Statement.  A
copy of the Prospectus Supplement shall be provided to each of the Lead Series E
Preferred Investors (as defined in the Series E Certificate of Designations) at
least two business days prior to its filing with the SEC.

     

    (c)           Each
of this Agreement, the Series C Consent, the 2007 Reg Rights Amendment, the 2009
Reg Rights Agreement and the Warrant Amendments (collectively, the “Transaction
Documents”), and the Series B Certificate of Elimination and the Series D
Certificate of Elimination has been duly authorized, executed and delivered by
the Company and is a valid and binding document enforceable against the Company
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights generally, principles of equity and
principles of public policy.  The Company has full corporate power and
authority necessary to enter into and deliver each of the Transaction Documents,
the Series B Certificate of Elimination and the Series D Certificate of
Elimination and to perform its obligations hereunder and
thereunder.

     

    
      
        
        

      

      
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    (d)           No
consent, approval, authorization or order of any court or governmental authority
having jurisdiction over the Company nor the Company's shareholders is required
for the execution, delivery and performance by the Company of the Transaction
Documents, the Purdue Securities Purchase Agreement, the Mundi Collaboration
Agreement, the Warrant Amendments and the filing of the Series E Certificate of
Designations, including, without limitation, the issuance of the Series E
Preferred Stock or the issuance of the Conversion Shares, collectively referred
to as the “Securities”.

     

    (e)           Assuming
the representations and warranties of the Series D Investors in Section 4 are true
and correct, neither the issuance of the Securities nor the performance of the
Company's obligations under the Transaction Documents, the Purdue Securities
Purchase Agreement, the Mundi Collaboration Agreement, the Warrant Amendments or
the Series E Certificate of Designations by the Company will:

     

    (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;

     

    (ii)  result in the creation
or imposition of any lien, charge or encumbrance upon the Securities or any of
the properties or assets of the Company; or

     

    (iii) result in the activation of any
anti-dilution rights or a reset or repricing of any debt or security instrument
of any other creditor or equity holder of the Company, nor result in the
acceleration of the due date of any obligation of the Company, except for the
issuance of additional warrants to purchase approximately 1,112,400 shares of
Common Stock at approximately $1.82 to certain investors and a reduction in the
exercise price of 11,267,480 warrants to purchase shares of Common Stock from
$2.00 to approximately $1.82.

    
       

      (f)           Upon
issuance, the Series E Preferred Stock or the Conversion Shares:

       

    

    
      
        
        

      

      
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    (i) are, or will be, free and clear of
any security interests, liens, claims or other encumbrances, subject to
restrictions upon transfer under the1933 Act and any applicable state securities
laws;

     

    (ii)  have been, or will be,
duly and validly authorized and on the date of issuance of the Conversion Shares
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.

     

    5.           Representations of the
Series D Investors.  Each Series D Investor hereby, severally
and not jointly, represents and warrants to and agrees with the Company only as
to each Series D Investor that:

     

    (a) The Series D Investor is, and will
be at the time of the issuance of the Conversion Shares, 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 Series D Investor 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.

     

    (b)           The
Series D Investor owns the Series D Preferred Stock set forth on Schedule A free and
clear of any liens and encumbrances of third parties.

     

    (c)           The
Series D Investor understands and agrees that the shares of Series E Preferred
Stock 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 Series D Investors contained herein), and that
such Securities 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.

     

    (d)  The shares of Series E
Preferred Stock and any Conversion Shares issuable in respect thereof 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.”

     

    
      
        
        

      

      
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    6.           Securities Purchase
Agreements

     

    (a)           Each
of the Parties hereby acknowledges and agrees that for purposes of the
Securities Purchase Agreement, dated March 26, 2008, among the Company and the
investors set forth on Schedule I thereto (the “2008 Purchase
Agreement”), that following the consummation of the Series D Exchange,
(i) the term “Preferred Stock” as defined therein shall include shares of Series
E Preferred Stock and (ii) the Series D Exchange shall constitute a
reclassification or other recapitalization as contemplated in the definition of
“Requisite Holders” as contained therein.

     

    (b)           Each
of the Parties hereby acknowledges and agrees that for purposes of the
Securities Purchase Agreement, dated April 12, 2007, as amended, among the
Company and the investors set forth on Schedule I thereto (the “2007 Purchase
Agreement”), that following the consummation of the Series D Exchange,
(i) the term “Preferred Stock” as defined therein shall include shares of Series
E Preferred Stock and (ii) the Series D Exchange shall constitute a
reclassification or other recapitalization as contemplated in the definition of
“Requisite Holders” as contained therein.

     

    7.           Conditions to Effectiveness
of Series D Exchange.  The Effective Time shall occur only upon
the satisfaction (or waiver by the holders of a majority of the then outstanding
shares of Series D Preferred Stock, but only if such majority shall include
Xmark LP, Xmark Ltd., Xmark LLC, Caduceus Master, Caduceus Capital, Summer
Street, UBS Eucalyptus and PW Eucalyptus (such majority collectively, the “Requisite Holders”))
of each of the following conditions:

     

    (i)           This
Agreement shall have been duly executed and delivered by each of the holders of
outstanding shares of Series D Preferred Stock;

     

    (ii)           The
Company and the Requisite Holders shall have received evidence of the acceptance
of the filing of the Series E Certificate of Designations from the Secretary of
State of the State of Delaware;

     

    (iii)           The
2007 Reg Rights Amendment shall have been duly executed by and delivered to the
Company and the Requisite Holders (as defined therein);

     

    (iv)           The
2009 Reg Rights Agreement shall have been duly executed by and delivered to the
Company and the Holders (as defined therein);

     

    (v)           The
Series C Consent shall have been duly executed and delivered by the Company to
the Requisite Holders;

     

    
      
        
        

      

      
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    (vi)           The
Purdue Securities Purchase Agreement and the Mundi Collaboration Agreement shall
have been duly executed and delivered to Novelos; and

     

    (vii)           The
Series B Warrant Amendment and the Series D Warrant Amendment shall have been
duly executed by and delivered to the Company and the Requisite Holders (as
defined in the Series B Warrant and Series D Warrant,
respectively).

     

    8.           Expiration.  This
Agreement shall be null and void and of no further force and effect if the
Effective Time does not occur on or before 5:00 p.m., New York time, on February
13, 2009.

     

    9.           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, the other Transaction Documents, the
Series D Exchange and the consummation of the transactions contemplated hereby
and thereby.

     

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

     

    
      
        
        

      

      
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    11.           Counsel.  Lowenstein
Sandler PC has acted solely as legal counsel to each of Xmark LP, Xmark Ltd.,
Xmark LLC,  in connection with this Agreement and the other
Transaction Documents.  Each of the Company and the other Series D
Investors has consulted with its own counsel to the extent they deemed
necessary, and has entered into this Agreement, the Transaction Documents and
any other documents contemplated hereunder to which it is a party after being
satisfied with such advice.

    


    12.           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 conflicts 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 civil or 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 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.

     

    
      
        
        

      

      
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    13.           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 Series D
Investors:

     

    To the addresses set forth on the
signature page hereto.

     

    With a copy to:

     

    Lowenstein Sandler PC

    1251 Avenue of the
Americas

    New York, NY 10020

    Attn:  Steven E. Siesser,
Esq.

    Fax:  (973)
597-2507

     

    
      
        
        

      

      
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    14.           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.

     

    15.           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 the Requisite Holders.  Any amendment or
waiver effected in accordance with this Section 15 shall be
binding upon each Series D Investor and the Company.

     


    
      
         


      

      
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    IN
WITNESS WHEREOF the undersigned have executed this Consent and Agreement to
Exchange as of the date first above written.

     

    
      
        
          
            
              
                
                  	
                          NOVELOS
      THERAPEUTICS, INC.

                        
	 
      	 
      	 
	
                          By:

                        	
                          /s/ Harry S. Palmin

                        	 
	
                          Name: 
      Harry S. Palmin

                        
	
                          Title:   
      President and
CEO

                        


                

              

            

          

        

      

    

    


    
      
        	
                SERIES
      D INVESTORS:

              	 	 
      	 
      
	 
      	 
      	 	 
      	 
      
	
                Xmark
      Opportunity Fund, Ltd.

              	 	
                Caduceus
      Capital Master Fund Limited

              
	
                Xmark
      Opportunity Fund, L.P.

              	 	
                Caduceus
      Capital II, L.P.

              
	
                Xmark
      JV Investment Partners, LLC

              	 	
                UBS
      Eucalyptus Fund, L.L.C.

              
	 
      	 
      	 	
                PW
      Eucalyptus Fund, Ltd.

              
	 
      	 
      	 	
                Summer
      Street Life Sciences Hedge Fund Investors LLC

              
	 
      	 
      	 	 
      	 
      
	
                By:

              	
                /s/ Mitchell D. Kaye

              	 	
                By:

              	
                /s/ Samuel D. Isaly

              
	
                Name:  Mitchell D. Kaye

              	 	
                Name:  Samuel D.
  Isaly

              
	
                Title:   
      Authorized
      Signatory

              	 	
                Title:
      Managing Partner, Orbimed
      Advisors

              
	
                Address:
      90 Grove Street

              	 	
                Address:
      c/o OrbiMed Advisors LLC

              
	
                Ridgefield,
      CT 06877

              	 	
                767
      Third Avenue, 30th Floor

              
	
                Attn:
      Mitchell D. Kaye

              	 	
                New
      York, NY  10017

              
	 
      	 
      	 	 
      	 
      
	
                Knoll
      Special Opportunities Fund  II Master

              	 	 
      	 
      
	
                Fund
      Ltd. (1)

              	 	
                Hunt-BioVentures,
      L.P.

              
	
                Europa
      International, Inc.

              	 	
                By
      :  HBV GP, L.L.C, its General Partner

              
	 
      	 
      	 	 
      	 
      
	
                By:

              	
                /s/ Fred Knoll

              	 	
                By:

              	
                /s/ J. Fulton Murray,
III

              
	
                Name:  Fred Knoll

              	 	
                Name:  J. Fulton Murray,
      III

              
	
                Title:   
      Portfolio
      Manager

              	 	
                Title:
      Manager

              
	
                Address:
      c/o Knoll Capital Management

              	 	
                Address:
      Hunt Investments

              
	
                666
      Fifth Avenue, Suite 3702,

              	 	
                1900
      N. Akard

              
	
                New
      York, NY  10103

              	 	
                Dallas,  TX  75201

              
	 
      	 
      	 	
                III
      and Benjamin D. Nelson

              
	 
      	 
      	 	
                Attn:
      Michael T. Bierman, J. Fulton
Murray,

              


      

    

     

    (1) Formerly Knoll Capital Fund II
Master Fund Ltd.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Exhibit
A

    


    Form of
Securities Purchase Agreement between the Company and Purdue Pharma,
L.P.

    [See
Exhibit 10.1 to this filing]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Exhibit
B

    


    Form of
Certificate of Designations, Rights and Preferences of Series E Convertible
Preferred Stock of Novelos Therapeutics, Inc.

    


    [See
Exhibit 4.1 to this filing]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Exhibit
C

    


    Form of
Collaboration Agreement between the Company and Mundipharma International
Corporation Limited

     

    [To be filed]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Exhibit
D

    


    Form of
Consent and Agreement of Holders of Series C Preferred Stock

    


    NOVELOS
THERAPEUTICS, INC.

    


    CONSENT
AND AGREEMENT OF HOLDERS OF SERIES C PREFERRED STOCK

     

    This
Consent and Agreement (the “Agreement”), dated as
of February 10, 2009, is entered into by and among Novelos Therapeutics, Inc., a
Delaware corporation (the “Company”), and each
of the signatories hereto (collectively, the “Series C Investors”)
(the Company and Series C Investors are sometimes referred to herein
individually as “Party” and collectively as the “Parties”).

     

    WHEREAS,
each of the Series C Investors is the holder of shares of the Company’s Series C
8% Cumulative Convertible Preferred Stock, $.00001 par value per share (the
“Series C Preferred
Stock”);

     

    WHEREAS,
the Series C Preferred Stock’s Certificate of Designations (“Series C Certificate of
Designations”) provides that it is senior with respect to the payment of
dividends and liquidation preference to all shares of the Company’s capital
stock other than the Company’s Series B Convertible Preferred Stock, $.00001 par
value per share (the “Series B Preferred
Stock”), entitled to seniority as to the payment of dividends or
liquidation preference in relation to the Series C Preferred Stock;

     

    WHEREAS,
the Company previously exchanged all of the issued and outstanding shares of
Series B Preferred Stock for shares of the Company’s Series D Convertible
Preferred Stock, par value $0.00001 per share (the “Series D Preferred
Stock”);

     

    WHEREAS,
the Series C Investors have previously consented and agreed that the Series D
Preferred Stock would be senior to the Series C Preferred Stock with respect to
the payment of dividends and liquidation preferences;

     

    WHEREAS,
pursuant to a securities purchase agreement (the “Purdue Securities Purchase
Agreement”) substantially in the form attached hereto as Exhibit A, the
Company expects to issue and sell 200 shares of a newly created series of the
Company’s preferred stock, designated Series E Convertible Preferred Stock, par
value $0.00001 per share (the “Series E Preferred
Stock”) to Purdue Pharma L.P., (“Purdue”), which
Series E Preferred Stock shall have the relative rights, privileges and
preferences set forth in the Certificate of Designations, Rights and Preferences
of the Series E Convertible Preferred Stock of Novelos Therapeutics, Inc., in
the form attached hereto as Exhibit B (the “Series E Certificate of
Designations”) and this Agreement is a condition to closing as stated in
the Purdue Securities Purchase Agreement; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
as a condition to closing the Purdue Securities Purchase Agreement, the Company
and the holders of Series D Preferred Stock (the “Series D Investors”)
are entering into a Series D Preferred Stock Consent and Agreement to Exchange
pursuant to which each outstanding share of Series D Preferred Stock and
accumulated dividends thereon will be exchanged (the “Series D Exchange”)
for no more than 1.083 shares of Series E Preferred Stock and as a condition of
consummating the Series D Exchange, the Series D Investors have required that
the Company enter into this Agreement;

     

    NOW, THEREFORE, in consideration of the
promises referred to below, the Series C Investors, hereby agree with the
Company, severally and not jointly, as follows:

     

    1.           Consent
and Acknowledgement.

     

    (a)           Each
of the Series C Investors hereby consents to the filing of the Series E
Certificate of Designations, the execution of the Series D Preferred Stock
Consent Exchange Agreement substantially in the form attached hereto as Exhibit C (the “Series D Exchange
Agreement”), the execution of the Purdue Securities Purchase Agreement
and the consummation of the Series D Exchange.

     

    (b)           Each
of the Series C Investors hereby consents to the filing, with the Secretary of
State of the State of Delaware, of a Certificate of Elimination pursuant to
which all matters set forth in the Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred Stock of Novelos Therapeutics, Inc.
with respect to the Company’s Series B Convertible Preferred Stock, $0.00001
(the “Series B
Preferred Stock”) will be eliminated from the Company’s Certificate of
Incorporation and the shares that were designated as Series B Preferred Stock
will be returned to the status of authorized but unissued shares of preferred
stock of the Company, without designation as to series, in the form attached
hereto as Exhibit
D (the “Series
B Certificate of Elimination”).

     

     (c)           Each
of the Series C Investors hereby consents to the filing, with the Secretary of
State of the State of Delaware, following consummation of the Series D Exchange,
of a Certificate of Elimination pursuant to which all matters set forth in the
Series D Certificate of Designations with respect to the Series D Preferred
Stock will be eliminated from the Company’s Certificate of Incorporation and the
shares that were designated as Series D Preferred Stock will be returned to the
status of authorized but unissued shares of preferred stock of the Company,
without designation as to series, in the form attached hereto as Exhibit E (the “Series D Certificate of
Elimination”).

     

    (e)           Each
of the Series C Investors hereby acknowledges and agrees that it will not be
entitled to an adjustment to either the conversion price of the shares of Series
C Preferred Stock or an adjustment to the exercise price of warrants issued to
it in connection with the sale of Series A Preferred Stock, as a result of the
Series D Exchange or the sale of Series E Preferred Stock to
Purdue.  For the avoidance of doubt, this acknowledgement is limited
to the transactions contemplated hereby and does not affect the rights,
privileges and preferences of the Series C Preferred Stock, except as expressly
provided herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.           Seniority of Series E
Preferred Stock.  Each of the Series C Investors hereby agree
that the Series E Preferred Stock will be entitled to seniority as to the
payment of dividends and liquidation preference in relation to the Series C
Preferred Stock and that all references to Series B Preferred Stock in the
Series C Certificate of Designations shall be deemed to be references to the
Series E Preferred Stock.

     

    3.           Transferees.  Each
of the Series C Investors hereby agree that any transferees of any Series C
Preferred Stock, other than a transferee who is already a Party, shall be
required as a condition of such transfer to agree in writing that they will
receive and hold such shares of Series C Preferred Stock subject to the
provisions of this Agreement.

     

    4.           Representations and
Warranties of Company.  The Company represents and warrants to
and agrees with each Series C Investor that:

     

    (a)           after
the issuance of the Series E Preferred Stock and the filing of the Series E
Certificate of Designations, the Series C Preferred Stock shall rank junior to
the Series E Preferred Stock but shall rank senior to any and all other
outstanding preferred stock or equity securities of the Company;

     

    (b)           Following
the Series D Exchange, the Company will not reissue any shares of Series B
Preferred Stock or Series D Preferred Stock.

     

    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 and the consummation of the
transactions contemplated hereby and thereby.

     

    6.           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 conflicts 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 civil or 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 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.           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 Series C
Investors:

     

    To the addresses set forth on the
signature page hereto.

     

    With a copy to:

     

    Grushko & Mittman,
P.C.

    551 Fifth Avenue, Suite
1601

    New York, NY 10176

    Attn:  Edward Grushko,
Esq.

    Fax:  (212)
697-3575

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.           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.

     

    9.           This
Agreement shall be null and void and of no further force and effect if the
filing of the Series E Certificate of Designations, the execution of the Series
D Exchange Agreement, the execution of the Purdue Securities Purchase Agreement
and the consummation of the Series D Exchange do not occur on or before 5:00
p.m., New York time, on February 27, 2009.

     


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


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

     

    
      
        
          
            
              
                
                  
                    	
                            NOVELOS
      THERAPEUTICS, INC.

                          
	 
      	 
      	 
	
                            By:

                          	 
      	 
	
                            Name:

                          	
                            Harry S. Palmin

                          
	 
      	
                            Title:
      President and Chief Executive
Officer

                          


                  

                

              

            

          

        

      

    

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        LONGVIEW FUND, LP

                                      	 	
                                        LONGVIEW
      EQUITY FUND, LP

                                      
	 
      	 
      	 	 
      	 
      
	
                                        By:

                                      	 
      	 	
                                        By:

                                      	 
      
	
                                        Name:

                                      	 
      	 	
                                        Name:

                                      	 
      
	
                                        Title:

                                      	 
      	 	
                                        Title:

                                      	 
      
	
                                        Address:

                                      	 	
                                        Address:

                                      
	 
      	 
      	 	 
      	 
      
	
                                        SUNRISE
      EQUITY PARTNERS, LP

                                      	 	
                                        LONGVIEW
      INTERNATIONAL EQUITY

                                        FUND,
      LP

                                      
	 
      	 
      	 	 
      	 
      
	
                                        By:

                                      	 
      	 	
                                        By:

                                      	 
      
	
                                        Name:

                                      	 
      	 	
                                        Name:

                                      	 
      
	
                                        Title:

                                      	 
      	 	
                                        Title:

                                      	 
      
	
                                        Address:

                                      	 	
                                        Address:

                                      


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Exhibit
E

    


    Form of
2007 Reg Rights Amendment

    


    [See
Exhibit 10.5 to this filing]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Exhibit
F

    


    Form of
2009 Reg Rights Agreement

    


    [See
Exhibit 10.2 to this filing]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Exhibit
G

    


    Form of
Series B Warrant Amendment

    


    [See
Exhibit 10.4 to this filing]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Exhibit
H

    


    Form of
Series D Warrant Amendment

    


    [See
Exhibit 10.4 to this filing]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    Exhibit
I

    


    Form of
Certificate of Elimination of Series B Convertible Preferred Stock

    


    [See
Exhibit 4.3 to this filing]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


     Exhibit
J

    


    Form of
Certificate of Elimination of Series D Convertible Preferred Stock

    


    [See
Exhibit 4.4 to this filing]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Schedule
A

    


    Series D
Preferred Stock Exchanged for Series E Preferred Stock

    


    
      
        
          	 
      	 	
                  Series D

                	 	 	
                	 	 	
                  Series E

                	 
	 
      	 	
                  Shares

                	 	 	

                  Dividend

                	 	 	
                  Shares

                	 
	 
      	 	
                  Before

                	 	 	
                  Accrued

                	 	 	
                  After

                	 
	
                  Investor group 

                	 	
                  Exchange

                	 	 	
                  4/1/08-2/9/09

                	 	 	
                  Exchange

                	 
	 
      	 	 	 	 	 	 	 	 	 
	
                  Xmark
      Opportunity Fund, Ltd.

                	 	 	54.80	 	 	 	211,665.00	 	 	 	59.033300	 
	
                  Xmark
      Opportunity Fund, L.P.

                	 	 	27.40	 	 	 	105,832.50	 	 	 	29.516650	 
	
                  Xmark
      JV Investment Partners, LLC

                	 	 	27.40	 	 	 	105,832.50	 	 	 	29.516650	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Total
      Xmark

                	 	 	109.60	 	 	 	423,330.00	 	 	 	118.066600	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Caduceus
      Capital Master Fund Limited

                	 	 	51.80	 	 	 	200,077.50	 	 	 	55.801550	 
	
                  Caduceus
      Capital II, L.P.

                	 	 	39.17	 	 	 	151,294.13	 	 	 	42.19588250	 
	
                  Summer
      Street Life Sciences Investors

                	 	 	10.00	 	 	 	38,625.00	 	 	 	10.772500	 
	
                  UBS
      Eucalyptus Fund, L.L.C.

                	 	 	27.170	 	 	 	104,944.13	 	 	 	29.26888250	 
	
                  PW
      Eucalyptus Fund, Ltd.

                	 	 	3.1350	 	 	 	12,108.94	 	 	 	3.377178750	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Total
      Orbimed

                	 	 	131.2750	 	 	 	507,049.69	 	 	 	141.415994	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Knoll
      Special Opportunities Fund II Master Fund, Ltd.

                	 	 	49.80	 	 	 	192,352.50	 	 	 	53.647050	 
	
                  Europa
      International, Inc.

                	 	 	61.80	 	 	 	238,702.50	 	 	 	66.574050	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Total
      Knoll

                	 	 	111.60	 	 	 	431,055.00	 	 	 	120.221100	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Hunt
      BioVentures LP

                	 	 	61.03	 	 	 	235,709.06	 	 	 	65.739181250	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Total

                	 	 	413.50	 	 	$	1,597,143.75	 	 	 	445.442875	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	
                  D/E Exchange

                  Ratio

                	 	 	 	1.0772500