Form of Share Escrow Agreement

Exhibit 10.3 SHARE ESCROW AGREEMENT This Agreement is dated as of the [ ] day of [ ], 2005 among MargieChassman (the "Guarantor"), [ ] (each a "Purchaser" and collectively"Purchasers"), and Grushko & Mittman, P.C. (the "Escrow Agent"): W I T N E S S E T H: - - - - - - - - - - WHEREAS, Purchasers and Guarantor have or will enter into an agreementwhereunder Purchasers shall purchase on [ ], 2005, in the aggregage,$[ ] of Stated Value of Class A Preferred Stock (the "Preferred Stock"), ofNovelos Therapeutics, Inc., a Delaware corporation ("Novelos") convertible intoCommon Stock of Novelos; and WHEREAS, it is beneficial to Guarantor that Purchaser acquire the PreferredStock and as an inducement to Purchaser to acquire the Preferred Stock,Guarantor is assuring that Purchaser will receive a guaranteed return of notless than twenty percent (20%) per year, compounded annually on the purchaseprice of the Preferred Stock, calculated in accordance with the Escrow Demandannexed hereto and incorporated herein by reference ("Guaranteed Return"); and WHEREAS, the Purchasers require the Guarantor to deliver [ ] shares ofrestricted, legended common stock together with medallion signature guaranteedstock powers (collectively "Escrow Shares") to be held in escrow by the EscrowAgent with such Escrow Shares serving as the source of payment of the GuaranteedReturn, and which will be released by the Escrow Agent in accordance with theterms and conditions of this Agreement; and WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant tothe terms and conditions of this Agreement; NOW THEREFORE, the parties for the mutual promises herein recited and othergood and valuable consideration receipt of which is acknowledged, agree asfollows: ARTICLE I INTERPRETATION 1.1. Definitions. Whenever used in this Agreement, the following termsshall have the following respective meanings: (a) "Agreement" means this Agreement and all amendments made heretoand thereto by written agreement between the parties; (b) "Escrow Share" means the $0.00001 par value Common stock issuableby Novelos upon conversion of the Preferred Stock. 1 (c) "End Date" means the first anniversary of the date of thisAgreement, or if not a day the New York Stock Exchange is open for trading, thenthe first such trading day thereafter. (d) "Escrow Demand" has the meaning set forth above. (e) "Guaranteed Return" has the meaning set forth above. (f) "Preferred Stock" has the meaning set forth above. 1.2. Entire Agreement. This Agreement constitutes the entire agreementbetween the parties hereto pertaining to the Preferred Stock and Escrow Shareand supersedes all prior agreements, understandings, negotiations anddiscussions, whether oral or written, of the parties. There are no warranties,representations and other agreements made by the parties in connection with thesubject matter hereof except as specifically set forth in this Agreement. 1.3. Extended Meanings. In this Agreement words importing the singularnumber include the plural and vice versa; words importing the masculine genderinclude the feminine and neuter genders. The word "person" includes anindividual, body corporate, partnership, trustee or trust or unincorporatedassociation, executor, administrator or legal representative. 1.4. Waivers and Amendments. This Agreement may be amended, modified,superseded, cancelled, renewed or extended, and the terms and conditions hereofmay be waived, only by a written instrument signed by all parties, or, in thecase of a waiver, by the party waiving compliance. Except as expressly statedherein, no delay on the part of any party in exercising any right, power orprivilege hereunder shall operate as a waiver thereof, nor shall any waiver onthe part of any party of any right, power or privilege hereunder preclude anyother or future exercise of any other right, power or privilege hereunder. 1.5. Headings. The division of this Agreement into articles, sections,subsections and paragraphs and the insertion of headings are for convenience ofreference only and shall not affect the construction or interpretation of thisAgreement. 1.6. Law Governing this Agreement. This Agreement shall be governed by andconstrued in accordance with the laws of the State of New York without regard toprinciples of conflicts of laws. Subject to Section 4.2, any action brought byeither party against the other concerning the transactions contemplated by thisAgreement shall be brought only in the state courts of New York or in thefederal courts located in the state of New York. All parties and the individualsexecuting this Agreement and other agreements on behalf of the parties agree tosubmit to the jurisdiction of such courts and waive trial by jury. Theprevailing party (which shall be the party which receives an award most closelyresembling the remedy or action sought) shall be entitled to recover from theother party its reasonable attorney's fees and costs. In the event that anyprovision of this Agreement or any other agreement delivered in connectionherewith is invalid or unenforceable under any applicable statute or rule oflaw, then such provision shall be deemed inoperative to the extent that it mayconflict therewith and shall be deemed modified to conform with such statute orrule of law. Any such provision which may prove invalid or unenforceable underany law shall not affect the validity or enforceability of any other provisionof any agreement. 2 ARTICLE II DELIVERIES TO THE ESCROW AGENT 2.1. Delivery of Preferred Stock to Escrow Agent. On or before the date ofthis Agreement, the Guarantor shall deliver the Escrow Shares to the EscrowAgent. 2.2 Intention to Create Escrow Over Preferred Stock and Escrow Shares. TheGuarantor and Purchaser intend that the Escrow Shares shall be held in escrow bythe Escrow Agent pursuant to this Agreement for their benefit as set forthherein. 2.4. Escrow Agent to Deliver Escrow Shares. The Escrow Shares will be heldon behalf of Purchasers in proportion to their relative amounts of PreferredStock purchased from Novelos on September 30, 2005. The Escrow Agent shall holdand release the Escrow Shares only in accordance with the terms and conditionsof this Agreement. ARTICLE III RELEASE OF PREFERRED STOCK AND ESCROW SHARE 3.1. Release of Escrow. Subject to the provisions of Section 4.2, theEscrow Agent shall release the Escrow Shares as follows: (a) Upon receipt by the Escrow Agent of an Escrow Demand from aPurchaser in the form annexed hereto as Exhibit A, together with supportingcalculations, and attachments referred to in the Escrow Demand, the Escrow Agentwill deliver copies of the Escrow Demand and attachments to Guarantor, and notsooner than two business days nor later than four business days thereafter,deliver or cause to be delivered to Purchasers the number of Escrow Sharesrequired to be delivered pursuant to the Escrow Demand. Escrow Agent isauthorized to deliver any share certificate representing the Escrow Shares, toNovelos transfer agent to be reissued in the names of the Purchasers theproportionate shares of the Purchasers and as necessary to satisfy an EscrowDemand. Upon receipt of the reissued Escrow Shares, the Escrow Agent willdeliver the such reissued Escrow Shares to the Purchasers. (b) All deliveries to the Guarantor shall be made to the address setforth in Section 5.2. (c) All deliveries to the Purchaser shall be made to the address setforth in Section 5.2 of this Agreement. (d) Purchasers may g ...