RODMAN & RENSHAW LETTERHEAD]
[▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LETTERHEAD]
February
12, 2007
STRICTLY
CONFIDENTIAL
▇▇▇▇▇
▇▇▇▇▇▇
Chief
Executive Officer & President
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Newton,
MA 02458
Dear
▇▇.
▇▇▇▇▇▇:
This
letter (the “Agreement”) constitutes the agreement between Novelos Therapeutics,
Inc. (the “Company”) and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC (“▇▇▇▇▇▇”) that ▇▇▇▇▇▇ shall
serve as the lead placement agent (the “Services”) for the Company, on a “best
efforts” basis, in connection with the proposed offer and placement (the
“Offering”) by the Company of securities of the Company (the “Securities”).
▇▇▇▇▇▇ shall be authorized to utilize sub-placement agents with the prior
consent of the Company, provided that the use of any sub-placement agent by
▇▇▇▇▇▇ shall not increase any fees (including cash or warrants) or expenses
payable by the Company under this Agreement. The terms of the Offering and
the
Securities shall be mutually agreed upon by the Company and the investors and
nothing herein implies that ▇▇▇▇▇▇ would have the power or authority to bind
the
Company or create an obligation for the Company to issue any Securities or
complete the Offering. The Company expressly acknowledges and agrees that
▇▇▇▇▇▇’▇ obligations hereunder are on a reasonable best efforts basis only and
that the execution of this Agreement does not constitute a commitment by ▇▇▇▇▇▇
to purchase the Securities and does not ensure the successful placement of
the
Securities or any portion thereof or the success of ▇▇▇▇▇▇ with respect to
securing any other financing on behalf of the Company.
A. Fees
and Expenses.
In
connection with the Services described above, the Company shall pay to ▇▇▇▇▇▇
the following compensation:
1. Placement
Agent’s Fee.
The
Company shall pay to Rodman a cash placement fee (the “Placement Agent’s Fee”)
equal to 7% of the aggregate purchase price paid by each purchaser of Securities
that are placed in the Offering.
2. Warrants.
As
additional compensation for the Services the Company shall issue to ▇▇▇▇▇▇
or
its designees at the closing of the Offering (the “Closing”), warrants (the
“▇▇▇▇▇▇ Warrants”) to purchase that number of shares of common stock of the
Company (“Shares”) equal to 6% of the aggregate number of Shares placed in the
Offering, plus any shares underlying any convertible Securities sold in the
Offering. The ▇▇▇▇▇▇ Warrants shall have the same terms, including exercise
price and registration rights as the warrants issued to investors (“Investors”)
in the Offering.
3. Expenses.
In
addition to any fees payable to ▇▇▇▇▇▇ hereunder, but only if an Offering is
consummated, the Company hereby agrees to reimburse ▇▇▇▇▇▇ for all reasonable
and documented travel and other out-of-pocket expenses incurred in connection
with ▇▇▇▇▇▇’▇ engagement, including the reasonable fees and expenses of ▇▇▇▇▇▇’▇
counsel. Such reimbursement shall be limited to $25,000 without prior written
approval by the Company.
▇. ▇▇▇▇
and Termination of Engagement.
The
term (the “Term”) of ▇▇▇▇▇▇’▇ engagement will begin on the date hereof and end
on the earlier of the consummation of the Offering or 15 days after the receipt
by either party hereto of written notice of termination; provided that no such
notice may be given by the Company for a period of 30 days after the date
hereof. Notwithstanding anything to the contrary contained herein, the
provisions concerning confidentiality, indemnification, contribution and the
Company’s obligations to pay fees and reimburse expenses contained herein will
survive any expiration or termination of this Agreement.
C. Fee
Tail.
▇▇▇▇▇▇
shall be entitled to a Placement Agent’s Fee and ▇▇▇▇▇▇ Warrants, calculated in
the manner provided in Paragraph A, with respect to any subsequent public or
private offering or other financing or capital-raising transaction of any kind
(“Subsequent Financing”) to the extent that such financing or capital is
provided to the Company by investors whom ▇▇▇▇▇▇ had introduced to the Company
during the Term, excluding existing stockholders of the Company, if such
Subsequent Financing is consummated at any time within the 12-month period
following the expiration or termination of this Agreement (the “Tail Period”).
Promptly following the Closing or termination of this agreement, ▇▇▇▇▇▇ will
provide Company with written notice of the parties introduced to the Company
by
▇▇▇▇▇▇.
D. Use
of
Information.
The
Company will furnish Rodman such written information as ▇▇▇▇▇▇ reasonably
requests in connection with the performance of its services hereunder. The
Company understands, acknowledges and agrees that, in performing its services
hereunder, ▇▇▇▇▇▇ will use and rely entirely upon such information as well
as
publicly available information regarding the Company and that ▇▇▇▇▇▇ does not
assume responsibility for independent verification of the accuracy or
completeness of any information, whether publicly available or otherwise
furnished to it, concerning the Company including, without limitation, any
financial information, forecasts or projections considered by ▇▇▇▇▇▇ in
connection with the provision of its services.
E. Confidentiality.
In the
event of the consummation or public announcement of any Offering, ▇▇▇▇▇▇ shall
have the right to disclose its participation in such Offering, including,
without limitation, the placement at its cost of “tombstone” advertisements in
financial and other newspapers and journals. ▇▇▇▇▇▇ agrees not to use any
confidential information concerning the Company provided to ▇▇▇▇▇▇ by the
Company for any purposes other than those contemplated under this
Agreement.
F. Securities
Matters.
The
Company shall be responsible for any and all compliance with the securities
laws
applicable to it, including Regulation D and the Securities Act of 1933, and
Rule 506 promulgated thereunder, and unless otherwise agreed in writing, all
state securities (“blue sky”) laws. ▇▇▇▇▇▇ agrees to cooperate with counsel to
the Company in that regard.
▇.
▇▇▇▇▇▇
Representations and Warranties.
▇▇▇▇▇▇
represents and warrants that: (i) it is duly registered as a broker-dealer
pursuant to the Securities and Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder and is a member in good standing of
the
NASD, (ii) during the course of the Offering, it will not make any untrue
statement of a material fact, or omit to state a material fact required to
be
stated by it or necessary to make any statement made by it not misleading,
concerning the Offering or any matters set forth in or contemplated by the
Offering materials (it being understood that the statements made in such
materials are deemed to be made by the Company and not by ▇▇▇▇▇▇), (iii) ▇▇▇▇▇▇
will not offer, offer to sell or sell any Shares or Warrants on the basis of
any
written communications or documents relating to the Company or its business
other than the Offering materials, (iv) ▇▇▇▇▇▇ will not engage in any form
of
general solicitation or general advertising which is prohibited by Regulation
D
in connection with the Offering, (v) ▇▇▇▇▇▇ will not offer to sell or sell
any
Shares or Warrants to any investor unless ▇▇▇▇▇▇ believes and has reason to
believe, based on such investigation believed by it to be appropriate, that
such
investor is an “accredited investor” as defined in Regulation D, Rules 501, of
the Act, and (vi) ▇▇▇▇▇▇ will cooperate fully with the Company and its counsel
with respect to compliance with all applicable federal, state and foreign
securities and “blue sky” laws applicable to the Offering.
▇. ▇▇▇▇▇▇▇▇▇.
1. In
connection with the Company’s engagement of ▇▇▇▇▇▇ as placement agent, the
Company hereby agrees to indemnify and hold harmless ▇▇▇▇▇▇ and its controlling
persons and the respective directors, officers, shareholders, agents and
employees of any of the foregoing (collectively the “Indemnified Persons”), from
and against any and all claims, actions, suits, proceedings (including those
of
shareholders), damages, liabilities and expenses incurred by any of them
(including the reasonable fees and expenses of counsel), (collectively a
“Claim”), which are (A) related to or arise out of (i) any actions taken or
omitted to be taken (including any untrue statements made or any statements
omitted to be made) by the Company, or (ii) any actions taken or omitted to
be
taken by any Indemnified Person in connection with the Company’s engagement of
▇▇▇▇▇▇, or (B) otherwise relate to or arise out of ▇▇▇▇▇▇’▇ activities on the
Company’s behalf under ▇▇▇▇▇▇’▇ engagement, and the Company shall reimburse any
Indemnified Person for all expenses (including the reasonable fees and expenses
of counsel) incurred by such Indemnified Person in connection with
investigating, preparing or defending any such claim, action, suit or
proceeding, whether or not in connection with pending or threatened litigation
in which any Indemnified Person is a party. The Company will not, however,
be
responsible for any Claim, which is finally judicially determined to have
resulted from the recklessness, gross negligence or willful misconduct of any
person seeking indemnification for such Claim. The Company further agrees that
no Indemnified Person shall have any liability to the Company for or in
connection with the Company’s engagement of ▇▇▇▇▇▇ except for any Claim incurred
by the Company as a result of such Indemnified Person’s recklessness, gross
negligence or willful misconduct.
2. The
Company further agrees that it will not, without the prior written consent
of
▇▇▇▇▇▇, settle, compromise or consent to the entry of any judgment in any
pending or threatened Claim in respect of which indemnification may be sought
hereunder (whether or not any Indemnified Person is an actual or potential
party
to such Claim), unless such settlement, compromise or consent includes an
unconditional, irrevocable release of each Indemnified Person from any and
all
liability arising out of such Claim.
3. Promptly
upon receipt by an Indemnified Person of notice of any complaint or the
assertion or institution of any Claim with respect to which indemnification
is
being sought hereunder, such Indemnified Person shall notify the Company in
writing of such complaint or of such assertion or institution but failure to
so
notify the Company shall not relieve the Company from any obligation it may
have
hereunder, except and only to the extent such failure results in the forfeiture
by the Company of substantial rights and defenses. If the Company so elects
or
is requested by such Indemnified Person, the Company will assume the defense
of
such Claim, including the employment of counsel reasonably satisfactory to
such
Indemnified Person and the payment of the fees and expenses of such counsel.
In
the event, however, that legal counsel to such Indemnified Person reasonably
determines that having common counsel would present such counsel with a conflict
of interest or if the defendant in, or target of, any such Claim, includes
an
Indemnified Person and the Company, and legal counsel to such Indemnified Person
reasonably concludes that there may be legal defenses available to it or other
Indemnified Persons different from or in addition to those available to the
Company, then such Indemnified Person may employ its own separate counsel,
reasonably satisfactory to the Company, to represent or defend him, her or
it in
any such Claim and the Company shall pay the reasonable fees and expenses of
such counsel. Notwithstanding anything herein to the contrary, if the Company
fails timely or diligently to defend, contest, or otherwise protect against
any
Claim, the relevant Indemnified Party shall have the right, but not the
obligation, to defend, contest, compromise, settle, assert crossclaims, or
counterclaims or otherwise protect against the same, and shall be fully
indemnified by the Company therefor, including without limitation, for the
reasonable fees and expenses of its counsel and all amounts paid as a result
of
such Claim or the compromise or settlement thereof. In addition, with respect
to
any Claim in which the Company assumes the defense, the Indemnified Person
shall
have the right to participate in such Claim and to retain his, her or its own
counsel therefor at his, her or its own expense.
4. The
Company agrees that if any indemnity sought by an Indemnified Person hereunder
is held by a court to be unavailable for any reason then (whether or not ▇▇▇▇▇▇
is the Indemnified Person), the Company and ▇▇▇▇▇▇ shall contribute to the
Claim
for which such indemnity is held unavailable in such proportion as is
appropriate to reflect the relative benefits to the Company, on the one hand,
and ▇▇▇▇▇▇ on the other, in connection with ▇▇▇▇▇▇’▇ engagement referred to
above, subject to the limitation that in no event shall the amount of ▇▇▇▇▇▇’▇
contribution to such Claim exceed the amount of fees actually received by ▇▇▇▇▇▇
from the Company pursuant to ▇▇▇▇▇▇’▇ engagement. The Company hereby agrees that
the relative benefits to the Company, on the one hand, and ▇▇▇▇▇▇ on the other,
with respect to ▇▇▇▇▇▇’▇ engagement shall be deemed to be in the same proportion
as (a) the total value paid or proposed to be paid or received by the Company
or
its stockholders as the case may be, pursuant to the Offering (whether or not
consummated) for which ▇▇▇▇▇▇ is engaged to render services bears to (b) the
fee
paid or proposed to be paid to ▇▇▇▇▇▇ in connection with such
engagement.
5. The
Company’s indemnity, reimbursement and contribution obligations under this
Agreement (a) shall be in addition to, and shall in no way limit or otherwise
adversely affect any rights that any Indemnified Party may have at law or at
equity and (b) shall be effective whether or not the Company is at fault in
any
way.
I. Limitation
of Engagement to the Company.
The
Company acknowledges that ▇▇▇▇▇▇ has been retained only by the Company, that
▇▇▇▇▇▇ is providing services hereunder as an independent contractor (and not
in
any fiduciary or agency capacity) and that the Company’s engagement of ▇▇▇▇▇▇ is
not deemed to be on behalf of, and is not intended to confer rights upon, any
shareholder, owner or partner of the Company or any other person not a party
hereto as against ▇▇▇▇▇▇ or any of its affiliates, or any of its or their
respective officers, directors, controlling persons (within the meaning of
Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934),
employees or agents. Unless otherwise expressly agreed in writing by ▇▇▇▇▇▇,
no
one other than the Company is authorized to rely upon this Agreement or any
other statements or conduct of ▇▇▇▇▇▇, and no one other than the Company is
intended to be a beneficiary of this Agreement. The Company acknowledges that
any recommendation or advice, written or oral, given by ▇▇▇▇▇▇ to the Company
in
connection with ▇▇▇▇▇▇’▇ engagement is intended solely for the benefit and use
of the Company’s management and directors in considering a possible Offering,
and any such recommendation or advice is not on behalf of, and shall not confer
any rights or remedies upon, any other person or be used or relied upon for
any
other purpose. ▇▇▇▇▇▇ shall not have the authority to make any commitment
binding on the Company. The Company, in its sole discretion, shall have the
right to reject any investor introduced to it by ▇▇▇▇▇▇. ▇▇▇▇▇▇ will be entitled
to rely on the representations and warranties of the Company contained in the
purchase agreement and related transaction documents as if the representations
and warranties were made directly to ▇▇▇▇▇▇ by the Company.
J. Limitation
of ▇▇▇▇▇▇’▇ Liability to the Company.
▇▇▇▇▇▇
and the Company further agree that neither ▇▇▇▇▇▇ nor any of its controlling
persons (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act of 1934), nor their respective officers, directors, employees
or
agents shall have any liability to the Company, its security holders or
creditors, or any person asserting claims on behalf of or in the right of the
Company (whether direct or indirect, in contract, tort, for an act of negligence
or otherwise) for any losses, fees, damages, liabilities, costs, expenses or
equitable relief arising out of or relating to this Agreement or the Services
rendered hereunder, except for losses, fees, damages, liabilities, costs or
expenses that arise out of or are based on any action of or failure to act
by
▇▇▇▇▇▇ and that are finally judicially determined to have resulted solely from
the recklessness, gross negligence or willful misconduct of ▇▇▇▇▇▇.
K. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York applicable to agreements made and to be fully performed
therein. Any disputes which arise under this Agreement, even after the
termination of this Agreement, will be heard only in the state or federal courts
located in the City of New York, State of New York. The parties hereto expressly
agree to submit themselves to the jurisdiction of the foregoing courts in the
City of New York, State of New York. The parties hereto expressly waive any
rights they may have to contest the jurisdiction, venue or authority of any
court sitting in the City and State of New York. Any
rights to trial by jury with respect to any such action, proceeding or suit
are
hereby waived by ▇▇▇▇▇▇ and the Company.
L. Notices.
All
notices hereunder will be in writing and sent by certified mail, hand delivery,
overnight delivery or telefax, if sent to ▇▇▇▇▇▇, to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Telefax number
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, and if sent to the Company, to Novelos
Therapeutics, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telefax
number ▇▇▇-▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ with a copy to ▇▇▇▇▇ ▇▇▇▇
LLP,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇, Esq., Telefax
number ▇▇▇-▇▇▇-▇▇▇▇. Notices sent by certified mail shall be deemed received
five days thereafter, notices sent by hand delivery or overnight delivery shall
be deemed received on the date of the relevant written record of receipt, and
notices delivered by telefax shall be deemed received as of the date and time
printed thereon by the telefax machine.
M. Miscellaneous.
This
Agreement shall not be modified or amended except in writing signed by ▇▇▇▇▇▇
and the Company. This Agreement shall be binding upon and inure to the benefit
of both ▇▇▇▇▇▇ and the Company and their respective assigns, successors, and
legal representatives. This Agreement constitutes the entire agreement of ▇▇▇▇▇▇
and the Company with respect to the subject matter hereof and supersedes any
prior agreements. If any provision of this Agreement is determined to be invalid
or unenforceable in any respect, such determination will not affect such
provision in any other respect, and the remainder of the Agreement shall remain
in full force and effect. This Agreement may be executed in counterparts
(including facsimile counterparts), each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
In
acknowledgment that the foregoing correctly sets forth the understanding reached
by ▇▇▇▇▇▇ and the Company, please sign in the space provided below, whereupon
this letter shall constitute a binding Agreement as of the date indicated
above.
|
Very
truly yours,
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
|
||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇
▇. ▇▇▇▇▇
Title:
Chief
Financial Officer
|
||
|
Accepted
and Agreed:
|
||
|
By
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: President
& CEO
|
||