Document:

Stipulation of Settlement

 
 

 

 

 Exhibit 10.1 

 

	
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 The Honorable Marsha J. Pechman 

 
 UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF WASHINGTON 
 AT SEATTLE 
  

					
	 	 	 )
	    	
	 In re CELL THERAPEUTICS, INC.,
	 	 )
	    	 Master Docket No. C 10-564 MJP

	 DERIVATIVE LITIGATION
	 	 )
	    	
	 	 	 )
	    	
		 	 )
	    	 STIPULATION OF SETTLEMENT 

	 This Document Relates To:
	 	 )
	    	
		 	 )
	    	
	 ALL ACTIONS
	 	 )
	    	
	 	 	 )
	    	

 

 

 

 

 

	
	

 

					
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 This Stipulation of Settlement, dated November 6, 2012 (the
“Stipulation”), is made and entered into by and among the following Settling Parties,1 each by and through their respective counsel: (i) plaintiffs Joseph Shackleton, Terry Marbury, Paul Cyrek, Brandon Bohland, and Lawrence J. Alexander (collectively, “Plaintiffs”), on
behalf of themselves and derivatively on behalf of Cell Therapeutics, Inc. (“CTI” or the
“Company”);2 (ii) defendants John H. Bauer,
James A. Bianco, Vartan Gregorian, Richard L. Love, Mary O’Neil Mundinger, Phillip M. Nudelman, Jack W. Singer, and Frederick W. Telling (the “Individual Defendants”) and nominal defendant CTI (collectively, “Defendants”).
The Stipulation is intended by the Settling Parties to fully, finally, and forever resolve, discharge, and settle the Released Claims, upon and subject to the terms and conditions hereof (the “Settlement”). 

 

	 I.
	 INTRODUCTION AND PROCEDURAL OVERVIEW 

A.         The Derivative Action 

On April 1, 2010, plaintiff Joseph Shackleton filed a complaint against the Individual Defendants and nominal
defendant CTI in the U.S. District Court for the Western District of Washington, captioned Shackleton v. Bauer, Case No. C 2:10-cv-00564-MJP (the “Shackleton Complaint”). The Shackleton Complaint asserted claims on behalf of CTI,
alleging that the CTI Board of Directors (“Board”), among other things, failed to adequately supervise or exercise oversight as to the Company’s disclosures related to pixantrone, a treatment for non-Hodgkin’s lymphoma, and the
Company’s disclosures related to communications with the U.S. Food and Drug Administration (“FDA”) about the FDA approval process for pixantrone. Specifically, the Shackleton Complaint alleged that the Company failed to disclose that:
(i) a Special Protocol 
  
  

1
 All capitalized terms are defined in Section IV.1 below, unless otherwise noted. 
 2 Plaintiffs
Joseph Shackleton and Paul Cyrek continue to hold their shares of CTI stock. Plaintiffs Terry Marbury, Brandon Bohland, and Lawrence J. Alexander no longer own CTI stock. 

 

 

 

 

 

	
	

 

					
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Assessment with the FDA for a pixantrone clinical trial, PIX301, was allegedly invalidated in March 2008; (ii) PIX301 allegedly enrolled a large number of patients who did not suffer from
aggressive non-Hodgkin’s lymphoma; and (iii) the results from PIX301 allegedly demonstrated that pixantrone was cardiotoxic. The Shackleton Complaint also alleged that, as a result of the foregoing, the Company lacked a reasonable basis
for positive statements about pixantrone and its prospects. Defendants deny all of the allegations made in the Complaint. 
 Plaintiffs Terry Marbury and Paul Cyrek thereafter filed substantially similar complaints: Marbury v. Bianco, No. 2:10-cv-00578-MJP was filed with the Court on April 5, 2010, and Cyrek
v. Bauer, No. 2:10-cv-00625-TSZ was filed with the Court on April 13, 2010. By order dated May 10, 2010 (Dkt. No. 11), the Court consolidated these three derivative complaints as In re Cell Therapeutics, Inc. Derivative
Litigation, Master Docket No. C 10-564 MJP (the “Action” or “Derivative Action”), and appointed Robbins Umeda LLP and Federman & Sherwood as Co-Lead Counsel for plaintiffs. The May 10, 2010 order also provided
that Defendants did not need to respond to the complaints filed in the Action, and that the parties would confer upon a proposed schedule for the filing of an amended complaint and briefing on any motion to dismiss the amended complaint. 

Three additional complaints were thereafter filed and consolidated into the Action. On June 1, 2010, plaintiff Carey
Souda filed a complaint in this Court captioned Souda v. Bauer, Case No. 2:10-cv-00905-MJP, which was consolidated with the Action in an order dated July 19, 2010 (Dkt. No. 26); and on July 27, 2010, plaintiff Brandon
Bohland filed a complaint in this Court captioned Bohland v. Bauer, Case No. 2:10-cv-00564-JCC, which was consolidated into the Action in an order dated November 16, 2010 (Dkt. No. 43). On October 4, 2010, plaintiff
Lawrence J. Alexander filed a substantially similar derivative complaint captioned Alexander v. Bianco, No. 10-2-34849-2 SEA, in the Superior Court of Washington, King County, which was removed to this Court on October 5, 2010, and
assigned as Case No. 2:10-cv-01597-MJP, and thereafter consolidated into the Action in an order dated March 1, 2011 (Dkt. No. 52). 

 

 

 

 

 

	
	

 

					
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 B.         The Securities
Class Action 
 Preceding the filing of any of the complaints in this Action, several federal securities
class action complaints were filed against CTI and certain of its current officers, beginning in March 2010. Those actions were consolidated by this Court under the caption In re Cell Therapeutics, Inc. Class Action Litigation, Master Docket
No. C10-414MJP (the “Securities Class Action”). Plaintiffs in the Securities Class Action brought claims under sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934 and U.S. Securities and Exchange Commission
(“SEC”) Rule 10b-5, alleging that between March 25, 2008, and March 22, 2010, CTI and three of its executive officers made, or allowed to be made, false or misleading disclosures related to communications with the FDA regarding
pixantrone. On October 27, 2010, defendants moved to dismiss the Securities Class Action. On February 4, 2011, the Court denied in large part defendants’ motion to dismiss. By order dated March 30, 2011, the Court set a
litigation schedule for the Securities Class Action, with discovery scheduled to conclude on January 27, 2012. On February 14, 2012, lead plaintiff in the Securities Class Action filed a motion for preliminary approval of a proposed class
action settlement. The Court granted the motion for preliminary approval on March 16, 2012. On July 20, 2012, the Court approved the settlement. On July 25, 2012, the Court entered a final judgment and order dismissing the Securities
Class Action with prejudice. 
 C.         Stay of Derivative
Action 
 On November 23, 2010, the parties in the Derivative Action filed a stipulation asking the
Court to postpone all deadlines in the Action pending the Court’s ruling on defendants’ motion to dismiss the Securities Class Action (Dkt. No. 44). This stipulation also provided that in the event that the motion to dismiss the
Securities Class Action was denied, the derivative Plaintiffs would receive copies of all discovery produced in the Securities Class Action, and would file and serve a consolidated complaint within forty-five days of the close of discovery in the
Securities Class Action. On November 30, 2010, the Court approved this stipulation (Dkt. No. 45). On 

 

 

 

 

 

	
	

 

					
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February 4, 2011, following the denial in large part of defendants’ motion to dismiss the Securities Class Action, this Court lifted the stay in the Derivative Action (Dkt.
No. 46). 
 After the stay of the Derivative Action was lifted, Plaintiffs received the discovery produced
in the Securities Class Action contemporaneously as it was produced in that action. To date, Plaintiffs have reviewed and analyzed approximately 231,000 pages of documents produced by Defendants and third parties. 

 

	 	 D.
	 Settlement Negotiations 

 In the fall of 2011, the parties to the Securities Class Action invited the parties in the Derivative Action to participate in a mediation. In preparation for the mediation, the Plaintiffs in the
Derivative Action prepared a damages analysis and report, and made a settlement demand proposing, inter alia, corporate governance reforms. 
 The parties to the Derivative Action and Securities Class Action participated in a day-long mediation with the late Honorable Nicholas H. Politan (Ret.) on October 26, 2011. The Securities Class
Action ultimately settled for $19 million to the class, the proceeds of which were funded entirely by the Company’s insurers. 
 Following the October 26, 2011 mediation, the parties to the Derivative Action continued to engage in arm’s-length settlement negotiations. Plaintiffs in the Derivative Action prepared and
delivered a second, supplemental settlement demand letter to the Company on January 18, 2012, proposing additional corporate governance measures. 
 On April 17, 2012, the parties to the Derivative Action participated in a second day-long mediation session with the Honorable Howard B. Wiener (Ret.) (“Judge Wiener”). With assistance from
Judge Wiener, the Settling Parties were able to reach agreement on the majority of the material settlement terms herein. 
  

	 II.
	 CLAIMS OF THE PLAINTIFFS AND BENEFITS OF SETTLEMENT 

Plaintiffs believe that the claims asserted in this Action have merit and that their investigation supports the claims
asserted. Without conceding the merit of any of the Individual 

 

 

 

 

 

	
	

 

					
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Defendants’ defenses or lack of merit of any of their allegations, however, Plaintiffs recognize the expense and length of continued proceedings necessary to prosecute the Action against the
Individual Defendants through trial and through appeals. Plaintiffs have also taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as the Derivative Action, as well as the difficulties and
delays inherent in such litigation. Plaintiffs are also mindful of the inherent problems of proof and possible defenses to the claims asserted in the Action. Plaintiffs believe that the Settlement set forth in the Stipulation confers substantial
benefits upon CTI and its shareholders. Based on their evaluation, Plaintiffs believe that the Settlement set forth in this Stipulation is in the best interests of CTI and its shareholders. 

 

	 III.
	 THE INDIVIDUAL DEFENDANTS’ DENIAL OF WRONGDOING AND LIABILITY 

The Individual Defendants deny each and all of the claims and contentions alleged by Plaintiffs in this Action. The
Individual Defendants deny all claims of wrongdoing or liability against them arising out of any of the conduct, statements, acts, or omissions alleged, or that could have been alleged, in the Action. The Individual Defendants also deny, among other
things, the allegations that Plaintiffs, CTI, or its shareholders have suffered damage, or that Plaintiffs, CTI, or its shareholders were harmed by the conduct alleged in the Action. The Individual Defendants further assert that at all relevant
times, they acted in good faith and in a manner they reasonably believed to be in the best interests of CTI and its shareholders. 
 Nonetheless, the Individual Defendants have concluded that further conduct of the Action would be protracted and expensive, and that it is desirable that the Action be fully and finally settled in the
manner and upon the terms and conditions set forth in this Stipulation. The Individual Defendants agree to the proposed Settlement without admitting any wrongdoing or liability. 

 

 

 

 

 

	
	

 

					
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	 IV.
	 TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT 

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among Plaintiffs (for themselves and derivatively on behalf of
CTI), the Individual Defendants, and CTI, by and through their respective counsel or attorneys of record: 

1.        Definitions 

As used in the Stipulation the following terms have the meanings specified below: 

1.1      “Action” or “Derivative Action” means the consolidated
derivative action In re Cell Therapeutics, Inc. Derivative Litigation, Master Docket No. C 10-564 MJP, and any and all actions that have been consolidated under that docket number. 

1.2      “Board” means the CTI Board of Directors. 

1.3      “CTI” or “the Company” means Cell Therapeutics, Inc.

 1.4      “Co-Lead Counsel” means the law firms of Federman &
Sherwood and Robbins Umeda LLP. 
 1.5      “Complaint” means any and
all shareholder derivative complaints filed in the Action or in any of the actions consolidated into the Action. 
 1.6      “Court” means the U.S. District Court for the Western District of Washington. 

1.7      “Current CTI Shareholder” means any Person who owns CTI common stock as
of the date of the execution of this Stipulation and who continue to hold CTI common stock as of the date of the Settlement Hearing, excluding the Individual Defendants, the officers and directors of CTI, members of their immediate families, and
their legal representatives, heirs, successors, or assigns, and any entity in which any of the Individual Defendants has or had a controlling interest. 
 1.8      “Defendants” means nominal defendant CTI and the Individual Defendants. 

1.9      “Effective Date” means the first date by which all of the events and
conditions specified in paragraph 6.1 have been met and have occurred. 

 

 

 

 

 

	
	

 

					
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 1.10      “Final” means the time
when a judgment or order has not been reversed, vacated, or modified in any way and is no longer subject to appellate review, either because of disposition on appeal and conclusion of the appellate process or because of passage, without action, of
time for seeking appellate review. Specifically, a judgment becomes Final when: (i) either no appeal has been filed and the time has passed for any notice of appeal to be timely filed in the Action; or (ii) an appeal has been filed and any
court of appeal has either affirmed the judgment and/or dismissal, or dismissed that appeal and the time for any reconsideration or further appellate review has passed; or (iii) if a higher court has granted further appellate review, when that
court has either affirmed the underlying judgment and/or dismissal, or affirmed the court of appeals’ decision affirming the judgment and /or dismissal, or dismissed the appeal. 

1.11      “Individual Defendants” means John H. Bauer, James A. Bianco, Vartan
Gregorian, Richard L. Love, Mary O’Neil Mundinger, Phillip M. Nudelman, Jack W. Singer, and Frederick W. Telling. 
 1.12      “Judgment” means the judgment to be rendered by the Court, substantially in the form attached hereto as Exhibit E. 

1.13      “Person” means an individual, corporation, limited liability
corporation, professional corporation, partnership, limited partnership, limited liability partnership, association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or
agency thereof, and any business or legal entity and their spouses, heirs, predecessors, successors, representatives, or assignees. 
 1.14      “Plaintiffs” means Joseph Shackleton, Terry Marbury, Paul Cyrek, Brandon Bohland, and Lawrence J. Alexander, together with any of their respective agents,
heirs, assigns, predecessors, and/or successors. 

1.15      “Plaintiffs’ Counsel” means the law firms of Federman &
Sherwood, Robbins Umeda LLP, Bottini & Bottini, Inc., the Law Offices of Clifford A. Cantor, P.C., the Law Offices of Marc Henzel, and The Kendall Law Group, LLP. 

 

 

 

 

 

	
	

 

					
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 1.16      “Related Persons” means
(i) the Individual Defendants’ respective spouses, marital communities, heirs, successors, executors, estates, or administrators; any entity in which an Individual Defendant and/or member(s) of his or her family has or had a controlling
interest; any members of an Individual Defendant’s immediate family; or any trust of which any Individual Defendant is or was the settlor or which is or was for the benefit of any Individual Defendant and/or member(s) of his or her family;
(ii) each of the Individual Defendant’s present and former attorneys, legal representatives, insurers, and assigns in connection with the Action; and (iii) all of CTI’s past and present directors, officers, partners, controlling
shareholders, accountants or auditors, advisors, employees, affiliates, predecessors, successors, parents, subsidiaries, divisions, joint ventures, and related or affiliated entities. 

1.17       “Released Claims” shall collectively mean all claims (including
“Unknown Claims”) debts, demands, rights, liabilities, and causes of action of every nature and description whatsoever, known or unknown, whether or not concealed or hidden, asserted or that could have been asserted by any derivative
plaintiff on behalf of CTI or its predecessors, successors, subsidiaries, affiliates, divisions, and assigns, or by CTI or its predecessors, successors, subsidiaries, affiliates, divisions, and assigns, against each and every Released Person
(including, without limitation, claims for damages, interest, attorneys’ fees, expert or consulting fees and any other costs, expenses or liability, negligence, negligent supervision, gross negligence, intentional conduct, indemnification,
breach of duty of care and/or breach of duty of loyalty or good faith, fraud, misrepresentation, unjust enrichment, constructive trust, breach of fiduciary duty, negligent misrepresentation, unfair competition, insider trading, professional
negligence, mismanagement, corporate waste, breach of contract, or violations of any state or federal statutes, rules, or regulations) that were alleged in the Action, or that arise from or relate to the matters or occurrences that were alleged in
the Action, or that could have been asserted with respect to the matters or occurrences that were alleged in the Action, for conduct occurring through, and including the date on which, this Stipulation is fully executed by all signatories.

 

 

 

 

 

	
	

 

					
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 1.18      “Settlement” means the
resolution of the Action as set forth herein. 
 1.19      “Settlement
Hearing” means the hearing at which the Court will review the adequacy, fairness, and reasonableness of the Settlement. 
 1.20      “Released Persons” means each and all of the Individual Defendants and the Related Persons. 

1.21      “Settling Parties” means, collectively, each of the Individual
Defendants, Plaintiffs (on behalf of themselves and derivatively on behalf of CTI), and CTI. 

1.22      “Unknown Claims” means any of the Released Claims which any of the
Plaintiffs, CTI, the Related Persons, or CTI shareholders do not know or suspect to exist in his, her, or its favor at the time of the release of the Released Persons, including claims which, if known by him, her, or it, might have affected his,
her, or its settlement with and release of the Released Persons, or might have affected his, her, or its decision not to object to this Settlement. With respect to any and all Released Claims, the Settling Parties stipulate and agree that, upon the
Effective Date, the Plaintiffs, Individual Defendants, CTI, and the Related Persons shall expressly waive, and each of the CTI shareholders shall be deemed to have, and by operation of the Judgment shall have, expressly waived, the provisions,
rights and benefits of section 1542 of the California Civil Code, which provides: 
 A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR. 
 Upon the Effective Date, Plaintiffs, Individual Defendants, CTI, and the Related Persons shall expressly waive,
and each of the CTI shareholders shall be deemed to have, and by operation of the Judgment shall have, expressly waived any and all provisions, rights, and benefits conferred by any law of any jurisdiction or any state or territory of the United
States, or principle of common law, which is similar, comparable, or equivalent to section 1542 of the California Civil Code. Plaintiffs, Individual Defendants, CTI, Related Persons, and CTI shareholders may 

 

 

 

 

 

	
	

 

					
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hereafter discover facts in addition to or different from those which he, she, or it now knows or believes to be true with respect to the subject matter of the Released Claims, but, upon the
Effective Date, each Plaintiff, Released Person, and CTI shall expressly settle and release, and each CTI shareholder shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever settled and released, any and all
Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed upon any theory of law or equity now existing or coming into existence in the
future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law, or rule, without regard to the subsequent discovery or existence of such different or additional facts. The
Settling Parties acknowledge, and the CTI shareholders shall be deemed by operation of the Judgment to have acknowledged, that the foregoing waiver was separately bargained for and is a key element of the Settlement of which this release is a part.

 2.        Corporate Governance Measures 

2.1      In connection with the prosecution and settlement of the Action, CTI has agreed to
implement the Corporate Governance Measures set forth below. The Corporate Governance Measures shall be adopted by the Board within ninety days after the Effective Date of the Settlement and maintained for a minimum of four years from the Effective
Date, subject to revisions that may be required by changes in applicable laws and/or regulations, except that this obligation will terminate if and when there is a change of control of the Company. Defendants acknowledge that the filing,
prosecution, and settlement of this Action was a material and substantial contributing factor in bringing about the following changes to the Company’s corporate governance structure that were made after the filing of this Action. 

BOARD SEATS 
 2.2      On September 20, 2011, CTI appointed Dr. Reed V. Tuckson to the Board, increasing the size of the Board to nine directors. Dr. Tuckson is the
Executive Vice President 

 

 

 

 

 

	
	

 

					
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and Chief of Medical Affairs at UnitedHealth Group and oversees the clinically-related programs of that company’s six operating businesses. He has extensive experience and expertise in
overseeing clinical programs, as well as in other aspects of the Company’s operations, such as the development and commercialization of drug products. 
 2.3        The Board has fixed the number of directors at twelve, and the Board’s Nominating and Governance Committee (“Governance Committee”) will
continue to evaluate potential candidates to find directors with the necessary experience and expertise to fill remaining vacancies on the Board. 
 SCIENTIFIC REVIEW AND OVERSIGHT COMMITTEE 

2.4        The Board will adopt a resolution stating that if the Company becomes
engaged in significant research and development activities related to potential drug products involving more than 35% of the Company’s prior year’s total operating expenses based on audited financial statements, the Board shall consider
the formation of a Scientific Review and Oversight Committee to oversee these activities. The Board will form such a committee if, in the Board’s judgment, it would be an efficient, effective, and appropriate addition to the Company’s
controls and procedures. If the Board decides to form such a committee, it will have discretion as to the nature of its composition, authority, and responsibilities. 
 DISCLOSURE COMMITTEE 

2.5        As part of this Settlement, the Board will adopt the charter for the
Disclosure Committee attached hereto as Exhibit A, and CTI will make changes to the composition, authority, and responsibilities of the Disclosure Committee in accordance with the terms of that charter. 

MANAGEMENT ASSESSMENT OF DISCLOSURE CONTROLS 

2.6        The Chief Executive Officer (“CEO”), the Chief Financial
Officer (“CFO”), and the President (collectively, the “Senior Officers”) will assess the adequacy of the Company’s disclosure controls annually, and at any other such time as the Senior Officers deem appropriate. 

 

 

 

 

 

	
	

 

					
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Should the Senior Officers identify any material weaknesses with regard to these controls, they shall take corrective action, or as they deem appropriate, recommend that the Board take corrective
action. This assessment shall include evaluation of the process of reviewing disclosures and examination of the effectiveness of internal communications regarding the status of the Company’s products and the Company’s interactions with the
FDA. 
 CHIEF COMPLIANCE AND GOVERNANCE OFFICERS 

2.7        CTI has a Chief Compliance Officer for the purpose of overseeing its
Corporate Integrity Agreement, and will maintain this position. The Board will adopt a resolution stating that the Chief Compliance Officer will monitor the Code of Business Conduct and Ethics, and work with the head of CTI’s regulatory
department to maintain compliance with applicable regulations promulgated by the FDA. The Chief Compliance Officer will also work to ensure that all material communications with the FDA regarding compliance are appropriately communicated to senior
management, the Disclosure Committee, and the Board. The Chief Compliance Officer will provide written, quarterly reports to the Board that include updates on significant developments related to the Company’s clinical programs. 

2.8        In addition, as part of this Settlement, the Board will adopt a
resolution establishing the position of Chief Governance Officer, who will be a member of the Disclosure Committee and will report to the Board’s Governance Committee. The Governance Committee will continue to consist of a minimum of three
directors of the Board who are “independent” according to the definition in Section 4200(a)(15) of the rules for the NASDAQ stock exchange (and/or any other exchange on which CTI securities is actively traded). 

2.9        The Chief Governance Officer will monitor the Corporate Governance
Guidelines and the Code of Ethics for Senior Officers. The Chief Governance Officer will maintain and monitor the system for reporting and investigating compliance and ethics concerns and will promote awareness of, and provide for training
regarding, issues related to compliance and ethics, as he or she determines is necessary and appropriate. 

 

 

 

 

 

	
	

 

					
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 2.10      The Chief Governance Officer will
provide a written report to the Governance Committee at least once a year, and will immediately report in writing to the Governance Committee any allegations of compliance or ethics violations. The Chief Governance Officer will recommend to the
Governance Committee any proposed changes to the Company’s system for reporting and investigating compliance and ethics concerns, and the Governance Committee will then consider these recommendations and submit any changes that it recommends to
the Board for approval. 
 CROSS-FUNCTIONAL TRAINING OF THE BOARD 

2.11      The Chief Compliance Officer will provide for training to be given to the Board
at least once a year that is focused on the Company’s interactions with the FDA, and which may include an update on relevant FDA practices, policies, and regulations; information regarding appropriate interactions with the FDA; and guidance
related to the disclosure of communications with the FDA. The Chief Compliance Officer will provide an annual written report to the Board on this training. 
 INSIDER TRADING POLICY 

2.12      The Board has appointed the Company’s CFO to serve as the Company’s
Trading Compliance Officer, and a senior CTI officer will continue to serve in this position. The Trading Compliance Officer will evaluate CTI’s current Insider Trading Policy and make any recommendations for improvement to the Board within six
months of the Effective Date of the Settlement. As part of this evaluation, the Trading Compliance Officer will develop potential amendments to that policy as appropriate to ensure compliance with insider trading regulations and present any such
proposed amendments to the Board for approval. The Trading Compliance Officer will ensure that the Insider Trading Program includes a process to review and approve all stock sales by Section 16 officers and directors before those trades are
made, unless the trades are made pursuant to a trading plan established under SEC Rule 10b5-1. 

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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 2.13      The Trading Compliance Officer will
be responsible for monitoring the Insider Trading Policy in accordance with the terms of the policy, including reviewing the trades and/or potential trades in CTI securities by CTI’s section 16 officers and directors. 

2.14      The Trading Compliance Officer will be available to meet directly with the
Board’s independent directors upon their request, outside the presence of any other senior executives. The Trading Compliance Officer will make a written report to the Board at least once a year regarding his or her monitoring of the Insider
Trading Program, and any violations of the Insider Trading Policy, including appropriate actions taken in response to non-compliance. 
 DIRECTOR INDEPENDENCE 

2.15      The Board currently consists of nine directors, seven of whom are
“independent” according to the definition in section 4200(a)(15) of the rules for the NASDAQ stock exchange. CTI will continue to maintain a majority of directors on the Board who are independent according to the NASDAQ definition, as
consistent with CTI’s director independence policy. 
 MEETINGS IN EXECUTIVE SESSION 

2.16      The Board will adopt a resolution stating that the independent directors on the
Board shall meet in executive session at least four times a year, in person or by teleconference, outside the presence of the officer directors. 
 CHAIRMAN OF THE BOARD 

2.17      The Board will adopt a resolution stating that the positions of CEO and Chairman
of the Board shall continue to be separated, and the Chairman shall continue to be an independent director. The Chairman shall continue to be subject to election by the shareholders as a member of the Board every three years. 

WHISTLEBLOWER POLICY 
 2.18      The Company shall continue to engage an independent, third-party supplier to provide and monitor one or more whistleblower hotlines for CTI employees and other
stakeholders. The contact information for a whistleblower hotline will be posted by the 

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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Company in a prominent position on its public website, so as to be available not only to employees, but to customers, vendors, and other third parties. The hotline(s) shall provide a
communication channel through which employees and other stakeholders may report, anonymously if they choose, concerns regarding the integrity of CTI’s internal financial controls, the accuracy or completeness of CTI’s financial statements
and other public disclosures, and other concerns about ethics, compliance, and/or the professional conduct of CTI’s officers. The Corporate Governance Officer shall ensure that any complaints made through the hotline(s) shall be provided to the
chair of the Audit Committee within three business days, and the Board shall ensure that all whistleblower complaints are promptly and thoroughly investigated by an appropriate entity, in consultation with the independent members of the Board.

 DIRECTOR COMPENSATION 
 2.19     The Board shall adopt a resolution stating that if the Board renews eligibility for the equity-based incentive awards for Board directors that are triggered by the
regulatory approval of pixantrone, it shall not extend the deadline for the achievement of this goal past December 31, 2017. 
 2.20     The Board shall adopt a resolution stating that a “Say on Pay” shareholder vote, conducted pursuant to section 14A(a)(1) of the Securities and Exchange Act,
shall be held annually, rather than every three years, and the Senior Officers shall abstain from such vote. 

3.         Procedure for Implementing the Settlement 

3.1       Promptly after execution of this Stipulation, Plaintiffs shall submit the
Stipulation and its exhibits to the Court and shall apply for an order substantially in the form of Exhibit B hereto, requesting the preliminary approval of the Settlement set forth in this Stipulation (the “Preliminary Approval Order”),
and approval for the publication of a notice of settlement (“Notice of Settlement”) substantially in the form of Exhibit C hereto, which shall include the terms of the Settlement set forth in this Stipulation, any fees and expenses
requested by Plaintiffs’ Counsel, any incentive fee awards requested by Plaintiffs, and the date of the 

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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Settlement Hearing. Within ten calendar days of the issuance of the Preliminary Approval Order, CTI shall cause the Notice of Settlement and Stipulation to be filed with the SEC via a
Form 8-K, publish the short-form Notice of Settlement for one day in Investor’s Business Daily (“Summary Notice”) substantially in the form of Exhibit D hereto, and post the Notice of Settlement and Stipulation on
CTI’s website such that visitors to the “Investors” section of the website will find hyperlinks to the Form 8-K. All costs in providing notice will be paid by CTI. 

3.2       Plaintiffs will request that after the notice is given, the Court hold a
hearing (the “Settlement Hearing”) and approve the Settlement of the Action as set forth herein, consider the Plaintiffs’ request for approval of attorneys’ fees, expenses, and incentive fee awards to Plaintiffs, and enter the
Judgment dismissing the Action with prejudice. 

4.         Releases 

4.1       Upon the Effective Date, Plaintiffs (acting on their own behalf and
derivatively on behalf of CTI); CTI, its predecessors, successors, subsidiaries, affiliates, divisions, and assigns; and each of CTI’s shareholders (solely in their capacity as CTI shareholders) shall be deemed to have, and by operation of the
Judgment shall have, fully, finally, and forever released, relinquished, and discharged the Released Claims against the Released Persons and any and all claims (including Unknown Claims) arising out of, relating to, or in connection with the
defense, settlement, or resolution of the Action against the Released Persons, provided that nothing herein shall in any way impair or restrict the rights of any Settling Party to enforce the terms of the Stipulation or the Judgment. 

4.2       Upon the Effective Date, Plaintiffs (acting on their own behalf and,
derivatively on behalf of CTI); CTI, its predecessors, successors, subsidiaries, affiliates, divisions, and assigns; and each of CTI’s shareholders (solely in their capacity as CTI shareholders) will be forever barred and enjoined from
commencing, instituting, or prosecuting any of the Released Claims or any action or other proceeding against any of the Released Persons based on the Released Claims or any action or proceeding, arising out of, related to, or in connection with the

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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Settlement or resolution of the action, provided, that nothing herein shall in any way impair or restrict the rights of any Settling Party to enforce the terms of the Stipulation or Judgment.

 4.3       Upon the Effective Date, each of the Released Persons shall be
deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged each and all of the Plaintiffs, Plaintiffs’ Counsel, CTI, the Related Persons, and all CTI shareholders (solely in
their capacity as CTI shareholders) from all claims (including Unknown Claims), arising out of, relating to, or in connection with the institution, prosecution, assertion, settlement, or resolution of the Action or the Released Claims. Nothing
herein shall in any way impair or restrict the rights of any Settling Party to enforce the terms of the Stipulation or Judgment. 
 5.          Attorneys’ Fees and Expenses 
 5.1       Plaintiffs and Co-Lead Counsel intend to petition the Court for an award of fees and expenses in connection with the Action (the “Fee and Expense
Application”). The Settling Parties agree that Plaintiffs are entitled to an award of reasonable attorneys’ fees reflecting, among other factors, the substantial benefits conferred by the Settlement and the risks undertaken in pursuing the
Action, as well as compensation for reasonable expenses incurred in prosecuting the Action. The Settling Parties do not agree on the amount of attorneys’ fees and expenses that should be awarded in the Action, however, and have agreed to
present this matter to the Court for resolution. 
 5.2       The Fee and
Expense Application shall be Plaintiffs’ and/or Co-Lead Counsel’s sole application for an award of fees or expenses in connection with this Action. Final resolution by the Court of the Fee and Expense Application shall not be a
precondition to the dismissal of the Action in accordance with this Stipulation, and the Settling Parties agree that the Fee and Expense Application may be considered separately from the proposed Settlement. 

5.3       Co-Lead Counsel intend to seek Court approval for an award in the amount of
$1,500.00 for Plaintiff Shackleton (the “Incentive Award”). The Individual Defendants and CTI 

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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agree not to object to a request for Court approval of the Incentive Award. The Incentive Award will be funded by any fee amount awarded in the Fee and Expense Application. 

5.4     Any fee amount shall be allocated among Plaintiffs’ Counsel by Co-Lead Counsel in
the manner Co-Lead Counsel believe reflects each of Plaintiffs’ Counsel’s relative contributions to the initiation, prosecution, and successful resolution of the Action. CTI and the Individual Defendants shall have no liability whatsoever
with respect to the allocation of the fee amount among Plaintiffs’ Counsel. 

5.5     The Settling Parties acknowledge and agree that the Individual Defendants and/or CTI (or
its insurer(s)) shall pay, or cause to be paid on behalf of the Individual Defendants and CTI, any fees and expenses awarded by the Court to Federman & Sherwood, as receiving agent for Plaintiffs’ Counsel, within twenty business days
of the date on which an order awarding such fees and expenses becomes Final. 
  

	 	  6.
	 Conditions of Settlement, Effect of Disapproval, Cancellation, or Termination 

6.1     The Effective Date is conditioned on the occurrence of all of the following events and
is the first date by which all of the following events and conditions have been met and have occurred: 

(a)      approval of the Settlement by the Board, including the Corporate Governance
Measures; 
 (b)      entry by the Court of the Judgment dismissing the Action
with prejudice, and an order approving the Settlement; and 
 (c)      the
Judgment has become Final. 
 6.2     If the Effective Date does not occur because any
of the conditions specified in paragraph 6.1 have not been met, and it appears that they will not be met, then the Stipulation shall be canceled and terminated subject to paragraph 6.3, unless the Settling Parties agree in writing to proceed with
the Stipulation. 

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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 6.3       If for any reason the
Effective Date of the Stipulation does not occur, then any payment that has been made to Co-Lead Counsel of attorneys’ fees and expenses, and any and all interest accrued thereon since payment, shall be returned to CTI within twenty
(20) business days of said event. The return obligation set forth in this paragraph is the several obligation of all Plaintiffs’ Counsel who have received a payment in the Action. Co-Lead Counsel shall have the right to seek contribution
from any Plaintiffs’ Counsel that receives any part of the fee amount for the purposes of satisfying its repayment obligation. 
 7.         Miscellaneous Provisions 
 7.1       The Settling Parties: (a) acknowledge that it is their intent to consummate this Stipulation; and (b) agree to cooperate to the extent reasonably
necessary to effectuate and implement all terms and conditions of the Stipulation and to exercise their best efforts to accomplish the foregoing terms and conditions of the Stipulation. 

7.2       The Settling Parties agree that in the event of a planned, proposed, or
actual change-in-control of CTI they will continue to seek final approval of this Stipulation expeditiously, including, but not limited to, adhering to the schedule set forth in the Preliminary Approval Order if it has been entered, subject to
paragraph 6.1. 
 7.3       Pending the Effective Date of this Stipulation,
or the termination of the Stipulation according to its terms, Plaintiffs are barred and enjoined from commencing, prosecuting, instigating, or in any way participating in the commencement or prosecution of any action asserting any Released Claims
against any Released Person. 
 7.4       The Settling Parties intend this
Stipulation to be a final and complete resolution of all disputes between the Settling Parties with respect to the Action. The Stipulation compromises claims that are contested and shall not be deemed an admission by any Settling Party as to the
merits of any claim, allegation, or defense. The Settling Parties agree that the claims are being settled voluntarily after consultation with competent legal counsel. The Settling Parties will jointly request that the Judgment contain a finding that
during the course of the 

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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litigation, the Settling Parties and their respective counsel at all times complied with the requirements of Federal Rule of Civil Procedure 11 and all other similar laws. 

7.5        Neither the Stipulation (including any exhibits attached hereto) nor
the Settlement, nor any act performed or document executed pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or may be deemed to be, or may be offered, attempted to be offered, or used in any way by the Settling Parties
as a presumption, a concession, or an admission of, or evidence of, any fault, wrongdoing, or liability of the Settling Parties or of the validity of any Released Claims; or (b) is intended by the Settling Parties to be offered or received as
evidence or used by any other person in any other actions or proceedings, whether civil, criminal, or administrative. The Released Persons may file the Stipulation and/or the Judgment in any action that may be brought against them in order to
support a defense or counterclaim based on principles of res judicata, collateral estoppel, full faith and credit, release, standing, good faith settlement, judgment bar or reduction, or any other theory of claim preclusion or issue
preclusion or similar defense or counterclaim, and any of the Settling Parties may file the Stipulation and documents executed pursuant and in furtherance thereto in any action to enforce the Settlement. 

7.6        The exhibits to this Stipulation are material and integral parts
hereof and are fully incorporated herein by this reference. 

7.7        The Stipulation may be amended or modified only by a written
instrument signed by or on behalf of all Settling Parties or their respective successors-in-interest. 

7.8        This Stipulation and the exhibits attached hereto constitute the
entire agreement among the Settling Parties and no representations, warranties, or inducements have been made to any Settling Party concerning the Stipulation or any of its exhibits other than the representations, warranties, and covenants contained
and memorialized in such documents. Except as otherwise provided herein, each Settling Party shall bear its own costs. 

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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 7.9      Counsel for the Settling Parties are
expressly authorized by their respective clients to take all appropriate action required or permitted to be taken pursuant to the Stipulation to effectuate its terms and also are expressly authorized by their respective clients to enter into any
modifications or amendments to the Stipulation which they deem appropriate on behalf of their respective clients. 
 7.10    The Stipulation may be executed in one or more counterparts. A faxed signature or electronically scanned signature shall be deemed an original signature for the purposes of
this Stipulation. All executed counterparts and each of them shall be deemed to be one and the same instrument. A complete set of counterparts, either originally executed or copies thereof, shall be filed with the Court. 

7.11    The Stipulation and the Settlement shall be binding upon, and inure to the benefit of, the
successors and assigns of the Settling Parties and the Released Persons. 
 7.12    The
Settling Parties agree that if any disputes arise related to the implementation and enforcement of the terms of the Stipulation, said disputes are to be resolved by Judge Wiener first by way of mediation, and, if mediation is unsuccessful, then by
way of binding non-appealable arbitration. If for any reason Judge Wiener is unavailable or has a conflict, the Settling Parties will agree on a substitute neutral so that this clause may be enforced without returning to court. If the Settling
Parties cannot agree upon a substitute neutral, they will jointly petition Judge Wiener to select a neutral for them to enforce this clause. 
 7.13    This Stipulation and the exhibits attached hereto shall be considered to have been negotiated, executed, and delivered, and to be wholly performed, in the State of Washington,
and the rights and obligations of the parties to the Stipulation shall be construed and enforced in accordance with, and governed by, the internal, substantive laws of the State of Washington without giving effect to that State’s choice of law
principles. 

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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 7.14    The Settling Parties hereby represent and
warrant that they have not assigned any rights, claims, or causes of action that were asserted or could have been asserted in connection with, under, or arising out of the Released Claims. 

7.15    Without further order of the Court, the Settling Parties may agree to reasonable extensions
of time to carry out any of the provisions of this Stipulation. 
 IN WITNESS WHEREOF, the Settling Parties have
caused the Stipulation to be executed by their duly authorized attorneys and dated November 6, 2012. 
 DATED:
November 6, 2012 
  
  

					
		 		 	 /s/ Barry M. Kaplan

		 		 	 Barry M. Kaplan, WSBA #8661

		 		 	 Claire Loebs Davis, WSBA #39812

		 		 	 WILSON SONSINI GOODRICH & ROSATI

		 		 	 Professional Corporation

		 		 	 701 Fifth Avenue, Suite 5100

		 		 	 Seattle, WA 98104-7036

		 		 	 Telephone:  (206) 883-2500

		 		 	 Facsimile:   (206) 883-2699

		 		 	 Email:  bkaplan@wsgr.com

		 		 	 Email: cldavis@wsgr.com

		 		 	  
 Douglas J. Clark, admitted pro hac
vice

		 		 	 WILSON SONSINI GOODRICH & ROSATI

		 		 	 Professional Corporation

		 		 	 650 Page Mill Road

		 		 	 Palo Alto, CA 94304

		 		 	  
 Telephone:  (650)
493-9300

		 		 	 Facsimile:   (650) 493-6811

		 		 	 Email:  dclark@wsgr.com

		 		 	  
 Attorneys for Individual Defendants
and

		 		 	 Nominal Defendant Cell Therapeutics, Inc.

	  
 DATED: November 6, 2012
	 		 	
		 		 	  
  

		 		 	 Brian J. Robbins

		 		 	 Craig W. Smith (pro hac vice)

		 		 	 Shane P. Sanders (pro hac vice)

		 		 	 ROBBINS UMEDA LLP

		 		 	 600 B Street, Suite 1900

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

	 STIPULATION OF SETTLEMENT
	  		  
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 7.14    The Settling Parties hereby represent and
warrant that they have not assigned any rights, claims, or causes of action that were asserted or could have been asserted in connection with, under, or arising out of the Released Claims. 

7.15    Without further order of the Court, the Settling Parties may agree to reasonable extensions
of time to carry out any of the provisions of this Stipulation. 
 IN WITNESS WHEREOF, the Settling Parties have
caused the Stipulation to be executed by their duly authorized attorneys and dated November 6, 2012. 
 DATED:
November 6, 2012 
  
  

					
		 		 	  

		 		 	 Barry M. Kaplan, WSBA #8661

		 		 	 Claire Loebs Davis, WSBA #39812

		 		 	 WILSON SONSINI GOODRICH & ROSATI

		 		 	 Professional Corporation

		 		 	 701 Fifth Avenue, Suite 5100

		 		 	 Seattle, WA 98104-7036

		 		 	 Telephone:  (206) 883-2500

		 		 	 Facsimile:   (206) 883-2699

		 		 	 Email:  bkaplan@wsgr.com

		 		 	 Email: cldavis@wsgr.com

		 		 	  
 Douglas J. Clark, admitted pro hac
vice

		 		 	 WILSON SONSINI GOODRICH & ROSATI

		 		 	 Professional Corporation

		 		 	 650 Page Mill Road

		 		 	 Palo Alto, CA 94304

		 		 	  
 Telephone:  (650)
493-9300

		 		 	 Facsimile:   (650) 493-6811

		 		 	 Email:  dclark@wsgr.com

		 		 	  
 Attorneys for Individual Defendants
and

		 		 	 Nominal Defendant Cell Therapeutics, Inc.

	  
 DATED: November 6, 2012
	 		 	
		 		 	  
  

/s/ Brian J. Robbins

		 		 	 Brian J. Robbins

		 		 	 Craig W. Smith (pro hac vice)

		 		 	 Shane P. Sanders (pro hac vice)

		 		 	 ROBBINS UMEDA LLP

		 		 	 600 B Street, Suite 1900

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

	 STIPULATION OF SETTLEMENT
	  		  
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		 		 	 San Diego, CA 92101

		 		 	 Telephone: (619) 525-3990

		 		 	 Facsimile:  (619) 525-3991

		 		 	  
 Co-Lead Counsel for
Plaintiffs

	  
 DATED: November 6, 2012
	 		 	
		 		 	  
 /s/ William B.
Federman

		 		 	 William B. Federman

		 		 	 FEDERMAN & SHERWOOD

		 		 	 10205 N. Pennsylvania Ave.

		 		 	 Oklahoma City, OK 73120

		 		 	 Telephone: (405) 235-1560

		 		 	 Facsimile: (405) 239-2112

		 		 	  
 Co-Lead Counsel for
Plaintiffs

		 		 	  
 Clifford Cantor, WSBA
#17893

		 		 	 LAW OFFICES OF CLIFFORD A. CANTOR, P.C.

		 		 	 627 208th Ave. SE

		 		 	 Sammanish, WA 98074

		 		 	 Telephone: (425) 868-7813

		 		 	 Facsimile: (425) 868-7870

		 		 	  
 Additional Counsel for Plaintiffs
Joseph

		 		 	 Shackleton, Terry Marbury, Paul Cyrek,

		 		 	 Brandon Bohland, and Lawrence J. Alexander

		 		 	  
 Mark S. Henzel

		 		 	 LAW OFFICES OF MARC HENZEL

		 		 	 273 Montogmery Ave., Suite 202

		 		 	 Bala Cynwyd, PA 19004

		 		 	 Telephone: (610) 660-8000

		 		 	 Facsimile: (610) 660-8080

			
		 		 	 Additional Counsel for Plaintiff Paul Cyrek

		 		 	  
 Joe Kendall

		 		 	 Jamie J. McKey

		 		 	 THE KENDALL LAW GROUP, LLP

		 		 	 3232 McKinney, Suite 700

		 		 	 Dallas, TX 75204

		 		 	 Telephone: (214) 744-3000

		 		 	 Facsimile: (214) 744-3015

			
		 		 	 Additional Counsel for Plaintiff Brandon

		 		 	 Bohland

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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		 		 	   Frank Bottini

		 		 	   BOTTINI & BOTTINI INC.

		 		 	   7817 Ivanhoe Avenue, Suite 102

		 		 	   La Jolla, CA 92037

		 		 	   Telephone: (858) 914-2001

		 		 	   Facsimile: (858) 914-2002

		 		 	  
 Additional Counsel for Plaintiff Lawrence
J.

		 		 	 Alexander

 748239 

 

 

 

 

 

	
	

 

					
		  		  	 ROBBINS UMEDA LLP
 600 B Street, Suite 1900
 San Diego, CA 92101

Tel: (619) 525-3990 — Fax: (619) 525-3991

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Exhibit A 

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Exhibit A 

CHARTER OF THE DISCLOSURE COMMITTEE 
 of Cell Therapeutics, Inc. 
 This Disclosure Committee
Charter (“Charter”) has been adopted by the Disclosure Committee (“Committee”) of Cell Therapeutics, Inc. (“Company”) and approved by the Company’s Board of Directors (“Board”). The Committee shall review
and reassess this Charter periodically and recommend any proposed changes for approval by the Board. 
  

	 I.
	 PURPOSE 

 It is the Company’s policy that all disclosures made by the Company to its shareholders or the investment community should be accurate and complete, and fairly present the Company’s financial
condition and results of operations in all material respects, and should be made on a timely basis as required by applicable laws and stock exchange requirements. The Committee has been established pursuant to the authority of the Chief Executive
Officer and Chief Financial Officer and is intended to follow the suggestion of the Securities and Exchange Commission (“SEC”) that is contained in SEC Release No. 33-8124, 34-46427 “Certification of Disclosure in Companies’
Quarterly and Annual Reports” to establish a disclosure committee. 
  

	 II.
	 RESPONSIBILITIES 

 The Committee shall assist the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), and President (collectively, “Senior Officers”) in fulfilling their
responsibility for oversight of the accuracy and timeliness of the disclosures made by the Company, by being responsible for the following tasks, subject to the supervision and oversight of the Senior Officers: 

 

	 	 —
	 	 Evaluate and monitor the integrity and effectiveness of controls and procedures (“Disclosure Controls”) that are designed to ensure:
(1) the accurate and timely disclosure of information required to be disclosed by the SEC; (2) the accuracy of other written disclosures that the Company issues to the investment community, including, without limitation, disclosures
related to the Company’s financial condition, products, product approval efforts, and interactions with federal agencies, including the Food and Drug Administration (“FDA”); and (3) the accurate communication of information to
management, including the Senior Officers, as appropriate to allow timely decisions regarding disclosures. 

  

	 	 —
	 	 Through the chair of the Committee, provide an annual written report to the Audit Committee of the Board regarding the integrity and effectiveness
of the Disclosure Controls. The Committee shall provide additional information regarding the Disclosure Controls, and the meetings and other activities of the Committee, at the request of the Audit Committee. 

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	 	 —
	 	 Evaluate and monitor the existing lines of communication across the Company’s operations and business units, for their effectiveness in
collecting relevant information on a timely basis for use by the Committee and Senior Officers in making disclosure decisions. 

  

	 	 —
	 	 As a member of the Committee, the Chief Medical Officer will ensure that the members of the Committee are kept apprised of potentially material oral
and/or written communications to or from the FDA. The Chief Medical Officer will also ensure that the Board is kept regularly apprised of all potentially material oral and/or written communications to or from the FDA. 

 

	 	 —
	 	 Report problems with the Disclosure Controls to the Senior Officers, and propose any necessary and appropriate changes to such controls, and to the
lines of communication within the Company. When the majority of the Committee deems it to be appropriate, problems and proposed changes may be reported directly to the Board. 

 

	 	 —
	 	 Review the Company’s Forms 10-Q, Forms 10-K, proxy statements, and annual reports prior to issuance, to ensure the adequacy and accuracy of the
disclosures included therein. The Committee will then pass such disclosures on for review by the Audit Committee of the Board, accompanied by a letter describing the activities of the Committee in regard to such disclosures and including its
recommendation regarding those disclosures. 

  

	 	 —
	 	 By a majority vote, advise the CEO and the CFO of the Company with respect to the certifications they provide in connection with the Company’s
quarterly and annual reports. 

  

	 	 —
	 	 Review the Company’s quarterly earnings press releases and related materials, prior to submission to the Audit Committee, to ensure the
adequacy and accuracy of the disclosures included therein. 

  

	 	 —
	 	 Hold ad hoc meetings upon the occurrence of events that may require the filing of a Form 8-K, to discuss whether such disclosure should
be made, and the form and content of any such disclosure. Such meetings may be called by one of the Senior Officers, if, in his or her judgment, there has been a potentially material development that requires review by the Committee.

  

	 	 —
	 	 Review in advance the Company’s press releases, scripts developed for analyst conference calls, and related documents, such as Forms 8-K.

  

	 	 —
	 	 Consult as appropriate with other Company personnel in connection with the review of disclosures or potentially material information, and request
input from advisors including outside counsel and outside auditors. 

  
 2 

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	 	 —
	 	 Undertake any other duties or responsibilities that the Company’s Chief Financial Officer, President, General Counsel and Audit Committee
together determine are necessary or desirable. 

  

	 III.
	 MEMBERSHIP 

 The membership of the Committee shall consist of the following: 
  

	 	 —
	 	 President 

  

	 	 —
	 	 Chief Financial Officer 

  

	 	 —
	 	 Chief Medical Officer or the head(s) of the clinical and regulatory departments 

 

	 	 —
	 	 General Counsel or the head of the legal department 

 

	 	 —
	 	 Chief Compliance Officer 

  

	 	 —
	 	 Chief Governance Officer 

  

	 	 —
	 	 Head of the corporate communications department 

Such members may be replaced, or new members added, at any time by the Board. The Chief Financial Officer shall serve as
the head of the Committee, unless another member is selected by the Board. 
 The Committee may invite other
Company personnel, outside auditors, outside counsel, or other outside advisors to attend its meetings, as it deems necessary and appropriate to perform its duties and responsibilities. A representative of each major department in the Company,
including clinical, regulatory, quality, legal, finance, manufacturing, human resources, corporate communications, and marketing, shall be invited to participate in the meetings held to review the Forms 10-Q and 10-K. 

 

	 IV.
	 OPERATIONS 

 The Committee shall meet at least quarterly, but may meet more frequently as circumstances dictate, or at the request of the Senior Officers. Meetings may occur in person or via conference call. When
meetings are not practicable or appropriate, the Committee may be consulted via electronic mail, copied to all members of the Committee, in lieu of a meeting. 
 The occurrence of each meeting of the Committee shall be recorded, and minutes shall be kept of each meeting that is held to review Forms 10-Q, Forms 10-K, proxy statements, and annual reports.

 The Committee shall solicit the input of department representatives as necessary to review the accuracy of
disclosures related to issues within their expertise, including, but not limited to: (1) financial reporting; (2) the Company’s ongoing relationships and communications 

  
 3 

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with regulators, including, but not limited to, the FDA, SEC, NASDAQ, and foreign equivalents; (3) the status of the Company’s clinical trials; and (4) the status of the
Company’s manufacturing activities. 
 In helping the Committee to discharge its duties, the Senior
Officers shall have full access to all Company books, records, facilities, and personnel. 
 The Committee shall
solicit advice and counsel on the accuracy and materiality of disclosures, whenever it deems it to be necessary and appropriate, from the Company’s outside auditors, outside counsel, regulatory advisors, and other independent advisors. The
Committee may ask independent advisors to assist it in evaluating the adequacy of the Disclosure Controls, if it deems it necessary and appropriate to do so. 
 The head of the Committee shall have the authority to retain separate and independent advisors at the Company’s expense, to provide advice and counsel on material risk issues and the appropriate
disclosure of such issues, including, but not limited to, the Company’s clinical trials and its communications with regulators. 

  
 4 

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Exhibit B 

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 The Honorable Marsha
J. Pechman 
  
 UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF WASHINGTON 
 AT SEATTLE 
  

					
	  	 	 )
	    	 
	 In re CELL THERAPEUTICS, INC.,    
	 	 )
	    	 Master Docket No. C 10-564 MJP

	 DERIVATIVE LITIGATION
	 	 )
	    	
	 	 	 )
	    	 [PROPOSED] ORDER PRELIMINARILY

APPROVING SETTLEMENT AND PROVIDING FOR NOTICE

		 	 )
	    
	 This Document Relates To:
	 	 )
	    
		 	 )
	    
	 ALL ACTIONS
	 	 )
	    	
	 	 	 )
	    	

 

 

 

 

 

	
	

 

					
	 [PROPOSED] ORDER PRELIMINARILY

APPROVING SETTLEMENT
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  		  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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 Plaintiffs, the Individual Defendants and nominal party Cell Therapeutics,
Inc. (“CTI”) have made application, pursuant to Federal Rule of Civil Procedure 23.1 (“Rule 23.1”), for an order: (i) preliminarily approving the Settlement of the above-captioned Action, in accordance with the Stipulation
of Settlement dated November 6, 2012 (the “Stipulation”), which, together with the exhibits annexed thereto, sets forth the terms and conditions for the proposed settlement of the Action and dismissal of the Action with prejudice; and
(ii) approving the form and content of the Summary Notice of Pendency and Proposed Settlement of Action (“Summary Notice”) for publication and the Notice of Pendency and Proposed Settlement of Action (“Notice”) for filing by
CTI with the U.S. Securities and Exchange Commission (“SEC”) and posting, along with the Stipulation, on CTI’s website. 
 After review and consideration of the Stipulation filed with the Court and the exhibits annexed thereto, and after due deliberation, 

IT IS HEREBY ORDERED that: 
 1.          The Court, for purposes of this order, adopts all defined terms as set forth in the Stipulation. 

2.          The Court hereby preliminarily approves, subject to further
consideration at the Settlement Hearing described below, the Stipulation and the Settlement set forth therein, including the terms and conditions for settlement and dismissal with prejudice of the Action. 

3.          A hearing (the “Settlement Hearing”) shall be
held before this Court on                     , 2012, at
                         .m. to determine: (i) whether the Settlement of the Action on the terms and
conditions provided for in the Stipulation is fair, reasonable, and adequate to CTI and Current CTI Shareholders, and should be finally approved by the Court; (ii) whether the Notice fully satisfied the requirements of Rule 23.1 and the
requirements of due process; (iii) whether a Judgment as provided in, and attached as Exhibit E to the Stipulation should be entered, dismissing the Action with prejudice; (iv) whether all Released Claims against the Released Persons
should be fully and finally released; (v) the amount of attorneys’ fees and 

 

 

 

 

 

	
	

 

					
	 [PROPOSED] ORDER PRELIMINARILY

APPROVING SETTLEMENT
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 1 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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expenses to be paid to Plaintiffs’ Counsel for their efforts in connection with the litigation; (vi) whether, and in what amount, the Plaintiffs are entitled to incentive awards for
their efforts in connection with the litigation; and (vii) to rule upon such other matters as the Court may deem appropriate. 
 4.          The Court approves, as to form and content, the Summary Notice and the Notice attached as exhibits to the Stipulation and finds that the
publication of the Summary Notice and the filing and posting of the Notice, substantially in the manner and form set forth in this order, constitutes adequate and reasonable notice to Current CTI Shareholders pursuant to Rule 23.1 and the
requirements of due process. Non-material changes to the form of Notice and Summary Notice may be made without further approval of the Court. 
 5.          If for any reason the Effective Date of the Settlement, as defined in paragraph 6.1 of the Stipulation, does not occur, the Stipulation,
including any amendment(s) thereof, shall, without the need for further action by the Court or any of the Settling Parties, be null and void, of no further force or effect, and without prejudice to any party, and may not be introduced as evidence or
referred to in any actions or proceedings by any person or entity. Each party shall be restored to his, her, or its respective position as it existed as of November 6, 2012. 

6.          No later than ten calendar days following entry of this
order, CTI shall cause the Summary Notice, substantially in the form annexed as Exhibit D to the Stipulation, to be published once in Investor’s Business Daily, and shall cause a copy of the Notice, substantially in the form annexed as
Exhibit C to the Stipulation, to be filed with the SEC via Form 8-K. 

7.          No later than ten calendar days following entry of this
order, CTI shall cause the Notice and the Stipulation to be posted on the “Investors” section of CTI’s website. 
 8.          No later than fourteen calendar days before the Objection Deadline described in ¶11 below, Plaintiffs and Plaintiffs’ Counsel shall
file and serve (1) their motion in support of final approval of the Settlement, and (2) their application for an award of fees and reimbursement of expenses in connection with the Action (the “Fee and Expense Application”).

 

 

 

 

 

	
	

 

					
	 [PROPOSED] ORDER PRELIMINARILY

APPROVING SETTLEMENT
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 2 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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 9.          No later than
the Objection Deadline, Defendants shall file and serve their opposition papers, if any, to the Fee and Expense Application. 
 10.        Any Current CTI Shareholder may object and/or appear and show cause, if he, she or it has any concern as to why the Settlement of the Action should not
be approved as fair, reasonable, and adequate, why the Judgment should not be entered thereon, or as to the amount of compensation and reimbursement to Plaintiffs’ Counsel. 

11.        Unless otherwise ordered by the Court, no Current CTI Shareholder
shall be heard or entitled to contest the approval of the terms and conditions of the Settlement, or, if approved, the Judgment to be entered thereon approving the same, or Plaintiffs’ Fee and Expense Application, unless that shareholder has,
at least twenty-one calendar days prior to the Settlement Hearing (the “Objection Deadline”): (i) filed with the Clerk of the Court for the U.S. District Court for the Western District of Washington, 700
Stewart Street, Seattle, Washington 98101, a written objection to the Settlement or any of its terms, including the Fee and Expense Application, setting forth: (a) the nature of the objection; (b) proof of current ownership of CTI common
stock, including the number of shares of CTI common stock and the date of purchase; and (c) any documentation in support of such objection; and (ii) if a Current CTI Shareholder intends to appear and requests to be heard at the Settlement
Hearing, such shareholder must have, in addition to the requirements of (i) above, filed with the Clerk of the Court: (a) written notice of such shareholder’s intention to appear; (b) a statement that indicates the basis for such
appearance; and (c) the identities of any witnesses the shareholder intends to call or evidence the shareholder intends to present at the Settlement Hearing and the subjects of their testimony. If a Current CTI Shareholder files a written
objection and/or written notice of intent to appear, such shareholder must also simultaneously serve copies of such notice, proof, statement, and documentation, together with copies of any other papers or briefs such shareholder files with the Court
(either by hand delivery or by first class mail) upon each of the following thereof: 

 

 

 

 

 

	
	

 

					
	 [PROPOSED] ORDER PRELIMINARILY

APPROVING SETTLEMENT
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 3 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

 

	
	

 
 

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		 	 ROBBINS UMEDA LLP
	  		  	 WILSON SONSINI

		 	 Attn: Craig W. Smith
	  		  	   GOODRICH & ROSATI

		 	 600 B Street, Suite 1900
	  		  	 Attn: Barry M. Kaplan

		 	 San Diego, CA 92101
	  		  	 701 Fifth Avenue, Suite 5100

		 		  		  	 Seattle, WA 98104

		 	 FEDERMAN & SHERWOOD
	  		  	
		 	 Attn: Sara E. Collier
	  		  	 Counsel for CTI and the Individual

		 	 10205 North Pennsylvania Avenue
	  		  	 Defendants

		 	 Oklahoma City, OK 73120
	  		  	
				
		 	 Co-Lead Counsel for Plaintiffs
	  		  	

 Any Current CTI Shareholder who does not make his, her, or its objection in the manner provided herein
shall be deemed to have waived such objection and shall forever be foreclosed from making any objection to the fairness, reasonableness, or adequacy of the Settlement and/or the Fee and Expense Application, unless otherwise ordered by the Court, and
shall otherwise be bound by the Judgment to be entered and the releases to be given. 

12.        No later than seven calendar days prior to the Settlement Hearing, CTI
shall serve on all counsel and file with the Court proof, by affidavit or declaration, of the publication of the Summary Notice in Investor’s Business Daily, the filing of the Notice on Form 8-K with the SEC, and the posting of the
Notice and Stipulation on its website. 
 13.        No later than seven
calendar days prior to the Settlement Hearing, the Settling Parties shall file and serve their responses to objections, if any, from Current CTI Shareholders, and Plaintiffs shall file and serve their reply, if any, in further support of their Fee
and Expense Application and motion in support of final approval of the Settlement. 

14.        Neither the Stipulation nor the Settlement, nor any act performed or
document executed pursuant to or in furtherance of the Stipulation or the Settlement: (i) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claim, or of any wrongdoing or liability of the
Individual Defendants and/or the Related Persons; or (ii) is or may be deemed to be or may be used as an admission of, or evidence of, any fault or omission of any of the Individual Defendants and/or the Related Persons in any civil, criminal,
or administrative proceeding in any court, administrative agency, or other tribunal. 

 

 

 

 

 

	
	

 

					
	 [PROPOSED] ORDER PRELIMINARILY

APPROVING SETTLEMENT
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 4 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

 

	
	

 
 

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CTI, the Individual Defendants, and/or the Related Persons may file the Stipulation and/or the Judgment in any action that may be brought against them in order to support a defense or
counterclaim based on principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction, or any other theory of claim preclusion or issue preclusion or similar defense or counterclaim. 

15.        This order, the Settlement, and any of their terms, and all
negotiations, discussions and proceedings in connection with this order and the Settlement, shall not be offered or received in evidence or used for any other purpose in this or any other proceeding in any court, administrative agency, arbitration
tribunal, or other forum of any kind or character in the United States or any other country except as necessary to enforce the terms of this order and/or the Settlement. 

16.        The Court reserves the right to adjourn the date of the Settlement
Hearing or modify any other dates set forth herein without further notice to the Current CTI Shareholders, and retains jurisdiction to consider all further applications arising out of or connected with the Settlement. 

 

							
	 IT IS SO ORDERED.

				
	 DATED:
	 	  
	 		  	  

		 		 		  	   HONORABLE MARSHA J. PECHMAN

		 		 		  	   UNITED STATES DISTRICT JUDGE

 

 

 

 

 

	
	

 

 781429 
  

					
	 [PROPOSED] ORDER PRELIMINARILY

APPROVING SETTLEMENT
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 5 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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Exhibit C 

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 The Honorable Marsha
J. Pechman 
  
 UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF WASHINGTON 
 AT SEATTLE 
  

					
	  
	 		 	
		 	 )
	 	
	 In re CELL THERAPEUTICS, INC.,    
	 	 )
	 	     Master Docket No. C 10-564 MJP

	 DERIVATIVE LITIGATION
	 	 )
	 	
	  
	 	 )
	 	
		 	 )
	 	     NOTICE OF PENDENCY AND

	 This Document Relates To:
	 	 )
	 	     PROPOSED SETTLEMENT OF ACTION

		 	 )
	 	
	 ALL ACTIONS
	 	 )
	 	
	  
	 	 )
	 	

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  		  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

 

	
	

 
 

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	 TO:
	 ALL OWNERS OF CELL THERAPEUTICS, INC. (“CTI” OR THE “COMPANY”) COMMON STOCK AS OF NOVEMBER 6, 2012 WHO CONTINUE TO HOLD SUCH
SHARES (“CURRENT CTI SHAREHOLDERS”) 

  

	   
	 PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. . THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL OF THE ABOVE-CAPTIONED
SHAREHOLDERS’ DERIVATIVE ACTION. YOUR RIGHTS MAY BE AFFECTED BY THESE LEGAL PROCEEDINGS. IF THE COURT APPROVES THE SETTLEMENT, YOU WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND FROM PURSUING THE RELEASED
CLAIMS. 

  

	   
	 THE COURT HAS MADE NO FINDINGS OR DETERMINATIONS CONCERNING THE MERITS OF THE ACTIONS. THE RECITATION OF THE BACKGROUND AND CIRCUMSTANCES OF THE
SETTLEMENT CONTAINED HEREIN DOES NOT CONSTITUTE THE FINDINGS OF THE COURT. IT IS BASED ON REPRESENTATIONS MADE TO THE COURT BY COUNSEL FOR THE PARTIES. 

YOU ARE HEREBY NOTIFIED of the proposed settlement (the “Settlement”) of the above-captioned shareholder
derivative action. This notice (the “Notice”) is being provided pursuant to an order of the U.S. District Court in the Western District of Washington (the “Court”). This Notice is not intended to be and should not be construed as
an expression of any opinion by the Court with respect to the merits of the claims made in the Action, but is merely to advise you of the pendency of Settlement of the Action and your rights as a CTI shareholder. This notice should be read in
conjunction with, and is qualified in its entirety by reference to, the text of the Stipulation of Settlement dated November 6, 2012 (the “Stipulation”), which is available on CTI’s website at
http://investors.celltherapeutics.com.1 

 
  
 1 The
Stipulation may also be inspected at the Office of the Clerk of the U.S. District Court in the Western District of Washington located at 700 Stewart Street, Seattle, Washington 98101, during regular business hours of each business day. The
capitalized terms used in this Notice, and not otherwise defined, are defined in the Stipulation. 

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 1 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

 

	
	

 
 

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 Please be advised that pursuant to an order of the Court, a hearing (the
“Settlement Hearing”) will be held on                     , 2012 at   :    
  .m., before the Honorable Marsha J. Pechman for the purpose of determining: (a) whether the Settlement of the Action on the terms and conditions provided for in the Stipulation is fair, reasonable, and adequate to CTI
and Current CTI Shareholders, and should be finally approved by the Court; (b) whether this Notice fully satisfied the requirements of Rule 23.1 and the requirements of due process; (c) whether a Judgment as provided in, and attached as
Exhibit E to the Stipulation should be entered, dismissing the Action with prejudice; (d) whether all Released Claims against the Released Persons should be fully and finally released; (e) the amount of attorneys’ fees and expenses to
be paid to Plaintiffs’ Counsel for their efforts in connection with the litigation; (f) whether, and in what amount, Plaintiffs are entitled to incentive awards for their efforts in connection with the litigation; and (g) to rule upon
such other matters as the Court may deem appropriate. 
 The Settling Parties do not agree on the amount of
attorneys’ fees and expenses that should be awarded in the Action, and have agreed to present this matter to the Court for resolution. Plaintiffs and Plaintiffs’ Counsel intend to petition the Court for no more than $1.3 million in
attorneys’ fees and $75,000 in reimbursement of expenses (the “Fee and Expense Application”), as well as for an incentive award in the amount of $1,500 for plaintiff Joseph Shackleton (the “Incentive Award”). 

The Settlement will fully resolve the Action on the terms set forth in the Stipulation and summarized in this Notice,
including the dismissal of the Action with prejudice. As detailed below, the Settling Parties believe that the proposed Settlement provides substantial benefits to the Company, and is in the best interests of the Company and its shareholders. The
Stipulation is intended by the Settling Parties to fully, finally and forever resolve, discharge and settle the Released Claims (as defined in ¶1.17 of the Stipulation and set forth herein), upon and subject to the terms and conditions hereof.

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 2 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

 

	
	

 

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 You may have the right to object to the Settlement, including to the amount
of attorneys’ fees and unreimbursed expenses that should be awarded to Plaintiffs’ Counsel and the Incentive Award, in the manner provided herein. If you fail to object in the manner provided herein at least twenty-one calendar days prior
to the Settlement Hearing, you will be deemed to have waived your objections and will be bound by the Judgment to be entered and the release of claims to be given, unless otherwise ordered by the Court. 

There Is No Claims Procedure. This Action was brought as a derivative action on behalf of and to protect the
interests of CTI and its shareholders. This Action is not a class action and, as such, there is no claims procedure. The Settlement of this Action will result in certain commitments and changes regarding the Company’s corporate governance, not
in payments to CTI shareholders. In a factually related securities class action captioned In re Cell Therapeutics, Inc. Class Action Litigation, Master Docket No. C10-414MJP (the “Securities Class Action”), the parties reached a
settlement that created a fund in the amount of $19 million that will provide payments, consistent with the court-approved claims administration procedure, to Persons (as that term is defined in the Securities Class Action settlement) who purchased
or otherwise acquired CTI common stock between March 25, 2008 and March 22, 2010, inclusive. 
  

	 I.
	 THE ACTION 

 On April 1, 2010, plaintiff Joseph Shackleton filed a complaint against the Individual Defendants and nominal defendant CTI in the U.S. District Court for the Western District of Washington,
captioned Shackleton v. Bauer, Case No. C 2:10-cv-00564-MJP (the “Shackleton Complaint”). The Shackleton Complaint asserted claims on behalf of CTI, alleging that the CTI Board of Directors (“Board”), among other things,
failed to adequately supervise or exercise oversight as to the Company’s disclosures related to pixantrone, a treatment for non-Hodgkin’s lymphoma, and the Company’s disclosures related to communications with the U.S. Food and Drug
Administration (“FDA”) about the FDA approval process for pixantrone. Specifically, the Shackleton Complaint alleged that the Company failed to disclose that: (i) a Special Protocol 

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 3 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

 

	
	

 

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Assessment with the FDA for a pixantrone clinical trial, PIX301, was allegedly invalidated in March 2008; (ii) PIX301 allegedly enrolled a large number of patients who did not suffer from
aggressive non-Hodgkin’s lymphoma; and (iii) the results from PIX301 allegedly demonstrated that pixantrone was cardiotoxic. The Shackleton Complaint also alleged that, as a result of the foregoing, the Company lacked a reasonable basis
for positive statements about pixantrone and its prospects. Defendants deny all of the allegations made in the Complaint. 
 Plaintiffs Terry Marbury and Paul Cyrek thereafter filed substantially similar complaints: Marbury v. Bianco, No. 2:10-cv-00578-MJP was filed with the Court on April 5, 2010, and Cyrek
v. Bauer, No. 2:10-cv-00625-TSZ was filed with the Court on April 13, 2010. By order dated May 10, 2010, the Court consolidated these three derivative complaints as In re Cell Therapeutics, Inc. Derivative Litigation,
Master Docket No. C 10-564 MJP (the “Action” or “Derivative Action”), and appointed Robbins Umeda LLP and Federman & Sherwood as Co-Lead Counsel for plaintiffs. The May 10, 2010 order also provided that Defendants
did not need to respond to the complaints filed in the Action, and that the parties would confer upon a proposed schedule for the filing of an amended complaint and briefing on any motion to dismiss the amended complaint. 

Three additional complaints were thereafter filed and consolidated into the Action. On June 1, 2010, plaintiff Carey
Souda filed a complaint in this Court captioned Souda v. Bauer, Case No. 2:10-cv-00905-MJP, which was consolidated with the Action in an order dated July 19, 2010; and on July 27, 2010, plaintiff Brandon Bohland filed a
complaint in this Court captioned Bohland v. Bauer et al., Case No. 2:10-cv-00564-JCC, which was consolidated into the Action in an order dated November 16, 2010. On October 4, 2010, plaintiff Lawrence J. Alexander filed a
substantially similar derivative complaint captioned Alexander v. Bianco, No. 10-2-34849-2 SEA, in the Superior Court of Washington, King County, which was removed to this Court on October 5, 2010, and assigned as Case
No. 2:10-cv-01597-MJP, and thereafter consolidated into the Action in an order dated March 1, 2011. 

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 4 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

 

	
	

 

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 On November 23, 2010, the parties in the Derivative Action filed a
stipulation asking the Court to postpone all deadlines in the Action pending the Court’s ruling on defendants’ motion to dismiss the Securities Class Action. This stipulation also provided that in the event that the motion to dismiss the
Securities Class Action was denied, the derivative Plaintiffs would receive copies of all discovery produced in the Securities Class Action, and would file and serve a consolidated complaint within forty-five days of the close of discovery in the
Securities Class Action. On November 30, 2010, the Court approved this stipulation. On February 4, 2011, following the denial in large part of defendants’ motion to dismiss the Securities Class Action, this Court lifted the stay in
the Derivative Action. 
 After the stay of the Derivative Action was lifted, Plaintiffs received the discovery
produced in the Securities Class Action contemporaneously as it was produced in that action. To date, Plaintiffs have reviewed and analyzed approximately 231,000 pages of documents produced by Defendants and third parties. 

The parties to the Derivative Action and Securities Class Action participated in a day-long mediation with the late
Honorable Nicholas H. Politan (Ret.) on October 26, 2011. In preparation for the mediation, the Plaintiffs in the Derivative Action prepared a damages analysis and report, and made a settlement demand proposing, among other things, corporate
governance reforms intended to address the alleged wrongdoing. 
 The Securities Class Action ultimately settled
for $19 million to the class, the proceeds of which were funded entirely by the Company’s insurers. 

Following the October 26, 2011 mediation, the parties to the Derivative Action continued to engage in
arm’s-length settlement negotiations. Plaintiffs in the Derivative Action prepared and delivered a second, supplemental settlement demand letter to the Company on January 18, 2012, proposing additional corporate governance measures.

 On April 17, 2012, the parties to the Derivative Action participated in a second day-long mediation
session with the Honorable Howard B. Wiener (Ret.) (“Judge Wiener”). With 

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 5 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

 

	
	

 

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assistance from Judge Wiener, the Settling Parties were able to reach agreement on the majority of the material settlement terms herein. 

 

	 II.
	 TERMS OF THE SETTLEMENT 

 The terms and conditions of the proposed Settlement are set forth in the Stipulation. The Stipulation has been filed with the Court and is also available for viewing on the website of CTI at
http://investors.celltherapeutics.com. The following is only a summary of its terms. 
 In connection with the
prosecution and settlement of the Action, CTI has agreed to implement the corporate governance measures (“Corporate Governance Measures”) set forth in the Stipulation within ninety days after the Effective Date of the Settlement. The
Corporate Governance Measures include procedures for enhanced Board oversight of disclosures, including the Board’s adoption of a charter for the Disclosure Committee. The Corporate Governance Measures also include provisions regarding the
composition of the Board, procedures to be utilized by the Board, and the compensation paid to the Board, as well as measures relating to the Company’s oversight of its Code of Business Conduct and Ethics, Corporate Governance Guidelines, Code
of Ethics for Senior Officers, Insider Trading Policy and whistleblower hotline. 
 The Board will keep such
measures in force and effect for a period of no less than four years, subject to revisions that may be required by changes in applicable laws and/or regulations, except that this obligation will terminate if and when there is a change of control of
the Company. 
 Defendants acknowledge that the filing, prosecution, and settlement of this Action was a
material and substantial contributing factor in bringing about the foregoing changes to the Company’s corporate governance structure that were made after the filing of this Action. CTI acknowledges that the Settlement is fair, reasonable,
adequate, and in the best interests of CTI and its shareholders. 
  

	 III.
	 DISMISSAL AND RELEASES 

 The Settlement is conditioned, among other things, upon entry of an order by the Court approving the Settlement and dismissing the Action with prejudice. The Settlement will not 

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 6 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

 

	
	

 

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become effective until such dismissal has been entered and has become Final and non-appealable (the “Effective Date”). 

Upon the Effective Date, Plaintiffs (acting on their own behalf and derivatively on behalf of CTI); CTI, its
predecessors, successors, subsidiaries, affiliates, divisions, and assigns; and each of CTI’s shareholders (solely in their capacity as CTI shareholders) shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and
forever released, relinquished, and discharged the Released Claims against the Released Persons and any and all claims (including Unknown Claims) arising out of, relating to, or in connection with the defense, settlement, or resolution of the Action
against the Released Persons, provided that nothing herein shall in any way impair or restrict the rights of any Settling Party to enforce the terms of the Stipulation or the Judgment. 

Upon the Effective Date, Plaintiffs (acting on their own behalf and, derivatively on behalf of CTI); CTI, its
predecessors, successors, subsidiaries, affiliates, divisions, and assigns; and each of CTI’s shareholders (solely in their capacity as CTI shareholders) will be forever barred and enjoined from commencing, instituting, or prosecuting any of
the Released Claims or any action or other proceeding against any of the Released Persons based on the Released Claims or any action or proceeding, arising out of, related to, or in connection with the Settlement or resolution of the action,
provided, that nothing herein shall in any way impair or restrict the rights of any Settling Party to enforce the terms of the Stipulation or Judgment. 
 Upon the Effective Date, each of the Released Persons shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged each and all
of the Plaintiffs, Plaintiffs’ Counsel, CTI, the Related Persons, and all CTI shareholders (solely in their capacity as CTI shareholders) from all claims (including Unknown Claims), arising out of, relating to, or in connection with the
institution, prosecution, assertion, settlement, or resolution of the Action or the Released Claims. Nothing herein shall in any way 

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 7 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

 

	
	

 

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impair or restrict the rights of any Settling Party to enforce the terms of the Stipulation or Judgment. 
  

	 IV.
	 PLAINTIFFS’ CLAIMS AND THE BENEFITS OF SETTLEMENT 

Plaintiffs believe that the claims asserted in this Action have merit and that their investigation supports the claims
asserted. Without conceding the merit of any of the Individual Defendants’ defenses or lack of merit of any of their allegations, however, Plaintiffs recognize the expense and length of continued proceedings necessary to prosecute the Action
against the Individual Defendants through trial and through appeals. Plaintiffs have also taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as the Derivative Action, as well as the
difficulties and delays inherent in such litigation. Plaintiffs are also mindful of the inherent problems of proof and possible defenses to the claims asserted in the Action. Plaintiffs believe that the settlement set forth in the Stipulation
confers substantial benefits upon CTI and its shareholders. Based on their evaluation, Plaintiffs believe that the settlement set forth in this Stipulation is in the best interests of CTI and its shareholders. 

 

	 V.
	 THE INDIVIDUAL DEFENDANTS’ DENIALS OF WRONGDOING AND LIABILITY 

The Individual Defendants deny each and all of the claims and contentions alleged by Plaintiffs in this Action. The
Individual Defendants deny all claims of wrongdoing or liability against them arising out of any of the conduct, statements, acts, or omissions alleged, or that could have been alleged, in the Action. The Individual Defendants also deny, inter alia,
the allegations that Plaintiffs, CTI, or its shareholders have suffered damage, or that Plaintiffs, CTI, or its shareholders were harmed by the conduct alleged in the Action. The Individual Defendants further assert that at all relevant times, they
acted in good faith and in a manner they reasonably believed to be in the best interests of CTI and its shareholders. 
 Nonetheless, the Individual Defendants have concluded that further conduct of the Action would be protracted and expensive, and that it is desirable that the Action be fully and finally settled in the
manner and upon the terms and conditions set forth in this Stipulation. The 

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 8 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

 

	
	

 

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Individual Defendants agree to the proposed settlement without admitting any wrongdoing or liability. 
  

	 VI.
	 PLAINTIFFS’ ATTORNEYS’ FEES AND EXPENSES 

The Settling Parties do not agree on the amount of attorneys’ fees and expenses that should be awarded in the
Action, and have agreed to present this matter to the Court for resolution. Plaintiffs and Co-Lead Counsel intend to petition the Court for an award of fees and reimbursement of expenses in connection with the Action of no more than $1.3 million in
attorneys’ fees and $75,000 in reimbursement of expenses. All Settling Parties agree that Plaintiffs are entitled to an award of reasonable attorneys’ fees reflecting, among other factors, the benefits conferred by the Settlement and the
risks undertaken in pursuing the Action, as well as compensation for reasonable expenses incurred in prosecuting the Action. 
 The Fee and Expense Application shall be Plaintiff” and/or Plaintiffs’ Counsel’s sole application for an award of fees or expenses in connection with this Action. Final resolution by the
Court of the Fee and Expense Application shall not be a precondition to the dismissal of the Action in accordance with this Stipulation, and the Settling Parties agree that the Fee and Expense Application may be considered separately from the
proposed Settlement. Any order or proceeding relating to the Fee and Expense Application, or any appeal from any order relating thereto or reversal or modification thereof, shall not operate to terminate or cancel the Stipulation, or affect or delay
the finality of the Judgment approving the Stipulation and the Settlement of the Action set forth therein. To date, Plaintiffs’ Counsel have neither received any payment for their services in conducting the Action, nor have Plaintiffs’
Counsel been reimbursed for their out-of-pocket litigation expenses. 
 Co-Lead Counsel also intend to seek
Court approval for an Incentive Award in the amount of $1,500 for plaintiff Shackleton. The Individual Defendants and CTI agree not to object to a request for Court approval of the Incentive Award. The Incentive Award will be funded by any fee
amount awarded in the Fee and Expense Application. 

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 9 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

 

	
	

 

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	 VII.
	 THE RIGHT TO OBJECT AND/OR BE HEARD AT THE HEARING 

YOU ARE NOT REQUIRED TO PARTICIPATE IN OR ATTEND THE SETTLEMENT HEARING, BUT MAY DO SO IF YOU WISH. Any Current
CTI Shareholder who continues to hold shares of CTI common stock as of the date of the Settlement Hearing may object and/or appear and show cause, if he, she, or it has any concern why the Settlement should not be approved as fair, reasonable, and
adequate, or why the Judgment should not be entered thereon, or as to how much to compensate and reimburse Plaintiffs’ Counsel; provided that, however, unless otherwise ordered by the Court, no Current CTI Shareholder shall be heard or entitled
to contest the approval of the terms and conditions of the Settlement, or, if approved, the Judgment to be entered thereon approving the same, or the Fee and Expense Application, unless that shareholder has, at least twenty-one calendar days
prior to the Settlement Hearing, filed with the Clerk of the Court, U.S. District Court in the Western District of Washington, 700 Stewart Street, Seattle, Washington 98101, a written objection to the Settlement or any of its terms,
including the Fee and Expense Application, setting forth: (a) the nature of the objection; (b) proof of current ownership of CTI common stock, including the number of shares of CTI common stock held and the date of purchase; and
(c) any documentation in support of such objection 
 If a Current CTI Shareholder intends to appear and
requests to be heard at the Settlement Hearing, such shareholder must have, in addition to the requirements above, filed with the Clerk of the Court: (a) a written notice of such shareholder’s intention to appear; (b) a statement that
indicates the basis for such appearance; and (c) the identities of any witnesses the shareholder intends to call or evidence the shareholder intends to present at the Settlement Hearing and the subjects of their testimony. If a Current CTI
Shareholder files a written objection and/or written notice of intent to appear, such shareholder must also simultaneously serve copies of such notice, proof, statement, and documentation, together with copies of any other papers or briefs such

 

 

 

 

 

	
	

 

					
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 10 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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shareholder files with the Court (either by hand delivery or by first class mail) upon each of the following: 
  

			
	 ROBBINS UMEDA LLP
	  	 WILSON SONSINI

	 Attn: Craig W. Smith
	  	   GOODRICH & ROSATI

	 600 B Street, Suite 1900
	  	 Attn: Barry M. Kaplan

	 San Diego, CA 92101
	  	 701 Fifth Avenue, Suite 5100

		  	 Seattle, WA 98104

	 FEDERMAN & SHERWOOD
	  	
	 Attn: Sara E. Collier
	  	 Counsel for CTI and the

	 10205 North Pennsylvania
	  	 Individual Defendants

	 Avenue
	  	
	 Oklahoma City, OK 73120
	  	
		
	 Co -Lead Counsel for Plaintiffs
	  	

 Any Current CTI Shareholder who does not make his, her, or its objection in the manner
provided herein shall be deemed to have waived such objection and shall forever be foreclosed from making any objection to the fairness, reasonableness, or adequacy of the proposed Settlement as incorporated in the Stipulation, and/or the Fee and
Expense Application, unless otherwise ordered by the Court, but shall otherwise be bound by the Judgment to be entered and the releases to be given. 
  

	 XI.
	 EXAMINATION OF PAPERS AND INQUIRIES 

This Notice contains only a summary of the terms of the Settlement. For a more detailed statement of the matters involved
in the Action, the Settlement and the terms discussed in this Notice, the Stipulation may be viewed on the website of CTI at http://investors.celltherapeutics.com. 

For more information concerning the Settlement, you may also call or write to: Robbins Umeda LLP, c/o Craig W. Smith, 600
B Street, Suite 1900, San Diego, CA 92101, Telephone: (619) 525-3990. 
 PLEASE DO NOT TELEPHONE THE COURT OR CTI

 REGARDING THIS NOTICE. 

 

 

 

 

 

	
	

 

					
	 781428

 
	  		  	
	 NOTICE OF PENDENCY AND PROPOSED

SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 11 -	  	San Diego, CA 92111
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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 Exhibit D 

  Case 2:10-cv-00564-MJP    Document
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 The Honorable Marsha J. Pechman 

 
 UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF WASHINGTON 
 AT SEATTLE 
  

					
	 	 	 )
	    	
	 In re CELL THERAPEUTICS, INC.,
	 	 )
	    	 Master Docket No. C 10-564 MJP

	 DERIVATIVE LITIGATION
	 	 )
	    	
	 	 	 )
	    	
		 	 )
	    	 SUMMARY NOTICE OF PENDENCY

	 This Document Relates To:
	 	 )
	    	 AND PROPOSED SETTLEMENT OF

		 	 )
	    	 ACTION

	 ALL ACTIONS
	 	 )
	    	
	 	 	 )
	    	

 

 

 

 

 

	
	

 

					
	 SUMMARY NOTICE OF PENDENCY AND

PROPOSED SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  		  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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	 TO:
	 ALL OWNERS OF CELL THERAPEUTICS, INC. (“CTI”) COMMON STOCK AS OF NOVEMBER 6, 2012 WHO CONTINUE TO HOLD SUCH SHARES (“CURRENT CTI
SHAREHOLDERS”) 

 YOU ARE HEREBY NOTIFIED that the parties to the above-captioned
shareholder derivative action (the “Action”) have entered into a Stipulation of Settlement dated November 6, 2012 (the “Stipulation”), to resolve the claims raised by the Action. This notice should be read in conjunction
with, and is qualified in its entirety by reference to, the text of the Stipulation, which is available on CTI’s website at http://investors.celltherapeutics.com.1 
 PLEASE BE FURTHER ADVISED that pursuant to an Order of the U.S. District Court for the Western District of Washington (the “Court”), a hearing (the “Settlement Hearing”) will be held
on                     , 2012, at   :       .m., before the Honorable Marsha J.
Pechman for the purpose of determining, among other things: (i) whether the settlement of the Action by way of the adoption of certain corporate governance provisions (as set forth in more detail in the Stipulation on file with the Court)
should be finally approved by the Court as fair, reasonable, and adequate to CTI and Current CTI Shareholders; (ii) whether the Action should be dismissed with prejudice; and (iii) the amount of attorneys’ fees and expenses to be paid
to Plaintiffs’ Counsel for their efforts in connection with the litigation of the Action. 
 The Settling
Parties do not agree on the amount of attorneys’ fees and expenses that should be awarded in the Action, and have agreed to present this matter to the Court for resolution. Plaintiffs and Plaintiffs’ Counsel intend to petition the Court
for no more than $1.3 million in attorneys’ fees and $75,000 in reimbursement of expenses (the “Fee and Expense Application”), as well as for an incentive award in the amount of $1,500 for plaintiff Joseph Shackleton (the
“Incentive Award”). 
  
  

1
 The Stipulation may also be inspected at the Office of the Clerk of the U.S. District Court in the Western District of Washington located at 700 Stewart Street, Seattle, Washington 98101, during
regular business hours of each business day. The capitalized terms used in this Notice, and not otherwise defined, are defined in the Stipulation. 

 

 

 

 

 

	
	

 

					
	 SUMMARY NOTICE OF PENDENCY AND

PROPOSED SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 1 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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 This Action was brought as a derivative action on behalf of and to protect
the interests of CTI and its shareholders. This Action is not a class action and, as such, there is no claims procedure. The settlement of this Action will result in certain commitments and changes regarding the Company’s corporate governance,
not in payments to CTI shareholders. In a factually related securities class action captioned In re Cell Therapeutics, Inc. Class Action Litigation, Lead Case No. 10-cv-414-MJP (the “Securities Class Action”), also pending in
the Court, the parties reached a settlement that created a fund in the amount of $19 million that will provide payments, consistent with the Court-approved claims administration procedure, to Persons (as that term is defined in the Securities Class
Action settlement) who purchased or otherwise acquired CTI securities between March 25, 2008, and March 22, 2010. 
 In addition to the Stipulation, a detailed Notice of Pendency and Proposed Settlement of Action (the “Notice”) describing this Action, the proposed settlement, and the rights of Current CTI
Shareholders with regard to the settlement may be viewed on CTI’s website at http://investors.celltherapeutics.com. CTI has also filed copies of the Notice and the Stipulation with the U.S. Securities and Exchange Commission (“SEC”)
in a Form 8-K, which may be accessed through the SEC’s website at www.sec.gov. 
 Any Current CTI
Shareholder wishing to assert an objection to the settlement or Plaintiff” Fee and Expense Application and who continues to hold shares of CTI common stock as of the date of the Settlement Hearing must, no later than twenty-one calendar
days prior to the Settlement Hearing, file with the Clerk of the Court, U.S. District Court for the Western District of Washington, 700 Stewart Street, Seattle, Washington 98101, a written objection to the settlement or any of its terms,
including the Fee and Expense Application, setting forth: (i) the nature of the objection; (ii) proof of current ownership of CTI common stock, including number of shares of CTI common stock and the date of purchase; and (iii) any
documentation in support of such objection. 

 

 

 

 

 

	
	

 

					
	 SUMMARY NOTICE OF PENDENCY AND

PROPOSED SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 2 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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 If a Current CTI Shareholder intends to appear and requests to be heard at
the Settlement Hearing, such shareholder must, in addition to the requirements set forth above, file with the Clerk of the Court: (i) a written notice of such shareholder’s intention to appear; (ii) a statement that indicates the
basis for such appearance; and (iii) the identities of any witnesses the shareholder intends to call at the Settlement Hearing and the subjects of their testimony. If a Current CTI Shareholder files a written objection and/or written notice of
intent to appear, such shareholder must also simultaneously serve copies of such notice, proof, statement, and documentation, together with copies of any other papers or briefs such shareholder files with the Court (either by hand delivery or by
first class mail) upon each of the following: 
  

			
	 ROBBINS UMEDA LLP
	  	 WILSON SONSINI

	 Attn: Craig W. Smith
	  	   GOODRICH & ROSATI

	 600 B Street, Suite 1900
	  	 Attn: Barry M. Kaplan

	 San Diego, CA 92101
	  	 701 Fifth Avenue, Suite 5100

		  	 Seattle, WA 98104

	 FEDERMAN & SHERWOOD
	  	
	 Attn: Sara E. Collier
	  	 Counsel for CTI and the

	 10205 North Pennsylvania
	  	 Individual Defendants

	 Avenue
	  	
	 Oklahoma City, OK 73120
	  	
		
	 Co -Lead Counsel for Plaintiffs
	  	

 Any Current CTI Shareholder who does not timely make his, her, or its objection in the
manner provided herein shall be deemed to have waived such objection and shall forever be foreclosed from making any objection to the fairness, reasonableness, or adequacy of the proposed settlement as incorporated in the Stipulation, and/or the Fee
and Expense Application, unless otherwise ordered by the Court, but shall otherwise be bound by the judgment to be entered and the releases to be given. 

 

 

 

 

 

	
	

 

					
	 SUMMARY NOTICE OF PENDENCY AND

PROPOSED SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 3 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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 For more information concerning the Settlement, you may also call or write
to: Robbins Umeda LLP, c/o Craig W. Smith, 600 B Street, Suite 1900, San Diego, CA 92101, Telephone: (619) 525-3990. 

PLEASE DO NOT TELEPHONE THE COURT OR CTI 
 REGARDING THIS NOTICE 

 

 

 

 

 

	
	

 

					
	 781426

 
	  		  	
	 SUMMARY NOTICE OF PENDENCY AND

PROPOSED SETTLEMENT OF ACTION
 Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 4 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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 Exhibit E 

  Case 2:10-cv-00564-MJP    Document
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 of 63 

 

 

 

 

 The Honorable Marsha J. Pechman 

 
 UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF WASHINGTON 
 AT SEATTLE 
  

					
	 	 	 )
	    	
	 In re CELL THERAPEUTICS, INC.,
	 	 )
	    	 Master Docket No. C 10-564 MJP

	 DERIVATIVE LITIGATION
	 	 )
	    	
	 	 	 )
	    	
		 	 )
	    	 [PROPOSED] FINAL JUDGMENT AND

	 This Document Relates To:
	 	 )
	    	 ORDER OF DISMISSAL

		 	 )
	    	
	 ALL ACTIONS
	 	 )
	    	
	 	 	 )
	    	

 

 

 

 

 

	
	

 

					
	 [PROPOSED] FINAL JUDGMENT AND ORDER

OF DISMISSAL

Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  		  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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 This matter came before the Court for hearing pursuant to the Order
Preliminarily Approving Settlement and Providing for Notice of this Court, dated                         , 2012
(“Preliminary Approval Order”), on the application of the Settling Parties for approval of the Settlement set forth in the Stipulation of Settlement dated November 6, 2012 (the “Stipulation”). Due and adequate notice having
been provided to Current CTI Shareholders as required in the Preliminary Approval Order, and the Court having considered all papers filed and proceedings had herein and otherwise being fully informed in the premises and good cause appearing
therefore, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that: 

1.        This Judgment incorporates by reference the definitions in the
Stipulation, and all capitalized terms used herein shall have the same meanings as set forth in the Stipulation. 
 2.        This Court has jurisdiction over the subject matter of the Action, including all matters necessary to effectuate the Settlement. 

3.        The Court finds that the Settlement provides substantial benefits to
CTI and is fair, reasonable, and adequate as to each of the Settling Parties, and hereby finally approves the Settlement in all respects. The Court orders the Settling Parties to perform the Settlement’s terms to the extent the Settling Parties
have not already done so. 
 4.        The Action and all claims
contained therein, as well as all of the Released Claims, are dismissed with prejudice against each and all Released Persons. As between Plaintiffs, CTI, and the Individual Defendants, the Settling Parties are to bear their own costs, except as
otherwise provided in the Stipulation and this Judgment. 

5.        Upon the Effective Date, Plaintiffs (acting on their own behalf and
derivatively on behalf of CTI); CTI, its predecessors, successors, subsidiaries, affiliates, divisions, and assigns; and each of CTI’s shareholders (solely in their capacity as CTI shareholders) shall be deemed to have, and by operation of the
Judgment shall have, fully, finally, and forever released, relinquished, and discharged the Released Claims against the Released Persons and any and all claims (including Unknown Claims) arising out of, relating to, or in connection with the
defense, 

 

 

 

 

 

	
	

 

					
	 [PROPOSED] FINAL JUDGMENT AND ORDER

OF DISMISSAL

Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 1 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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settlement, or resolution of the Action against the Released Persons, provided that nothing herein shall in any way impair or restrict the rights of any Settling Party to enforce the terms of the
Stipulation or the Judgment. 
 6.        Upon the Effective Date, each
of the Released Persons shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged each and all of the Plaintiffs, Plaintiffs’ Counsel, CTI, the Related Persons, and
all CTI shareholders (solely in their capacity as CTI shareholders) from all claims (including Unknown Claims), arising out of, relating to, or in connection with the institution, prosecution, assertion, settlement, or resolution of the Action or
the Released Claims. Nothing herein shall in any way impair or restrict the rights of any Settling Party to enforce the terms of the Stipulation or Judgment. 
 7.        The Court finds that the Summary Notice of Pendency and Proposed Settlement of Action published in Investor’s Business Daily, and the Notice
of Pendency and Proposed Settlement of Action posted on the website of CTI and filed with the U.S. Securities and Exchange Commission by CTI in a Form 8-K, provided the best notice practicable under the circumstances of these proceedings and of the
matters set forth therein, including the Settlement set forth in the Stipulation, to all Persons entitled to such notice, and said notices fully satisfied the requirements of Rule 23.1 of the Federal Rules of Civil Procedure and the requirements of
due process. 
 8.        The Court finds that during the course of the
Action, the Settling Parties and their counsel at all times complied with Rule 11 of the Federal Rules of Civil Procedure and all other similar rules and law. 
 9.        The Court has considered the Fee and Expense Application and finds that Co-Lead Counsel for Plaintiffs are entitled to
$                         in attorneys’ fees and
$                         in reimbursement of expenses. 
  

 

 

 

 

	
	

 

					
	 [PROPOSED] FINAL JUDGMENT AND ORDER

OF DISMISSAL

Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 2 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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 10.      The Court hereby approves the
Incentive Award of $1,500 for plaintiff Joseph Shackleton, to be paid from the amount awarded in the Fee and Expense Application, in recognition of his participation and effort in the prosecution of the Action. 

11.      Neither the Stipulation (including any exhibits attached thereto) nor the
Settlement, nor any act performed or document executed pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or may be deemed to be, or may be offered, attempted to be offered, or used in any way by the Settling Parties as
a presumption, a concession, or an admission of, or evidence of, any fault, wrongdoing, or liability of the Settling Parties or of the validity of any Released Claims; or (b) is intended by the Settling Parties to be offered or received as
evidence or used by any other person in any other actions or proceedings, whether civil, criminal, or administrative. The Released Persons may file the Stipulation and/or the Judgment in any action that may be brought against them in order to
support a defense or counterclaim based on principles of res judicata, collateral estoppel, full faith and credit, release, standing, good faith settlement, judgment bar or reduction, or any other theory of claim preclusion or issue
preclusion or similar defense or counterclaim, and any of the Settling Parties may file the Stipulation and documents executed pursuant and in furtherance thereto in any action to enforce the Settlement. 

12.      Without affecting the finality of this Judgment in any way, this Court hereby
retains continuing jurisdiction over: (i) implementation of the Settlement; and (ii) the Settling Parties for the purpose of construing, enforcing, and administering the Stipulation and the Settlement, including, if necessary, setting
aside and vacating this Judgment, on motion of a party, to the extent consistent with and in accordance with the Stipulation if the Effective Date fails to occur in accordance with the Stipulation. 

13.      No action in regard to Plaintiffs’ Fee and Expense Application—including
any order of this Court or any potential appellate review of such order—shall affect the finality of any other portion of this Judgment or delay the Effective Date of the Stipulation. The Fee and 

 

 

 

 

 

	
	

 

					
	 [PROPOSED] FINAL JUDGMENT AND ORDER

OF DISMISSAL

Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 3 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991

  

	
	

 
 

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Expense Application shall be considered separate for the purposes of appellate review of this Judgment. 
 14.      Without further order of the Court, the Settling Parties may agree to reasonable extensions of time to carry out any of the provisions of the Stipulation.

 15.      This Judgment is a final, appealable judgment and should be entered
forthwith by the Clerk in accordance with Rule 58 of the Federal Rules of Civil Procedure. 
 IT IS SO ORDERED.

  
  

							
	 DATED:
	 	  
	 		 	  

		 		 		 	   HONORABLE MARSHA J. PECHMAN

		 		 		 	   UNITED STATES DISTRICT JUDGE

 

 

 

 

 

	
	

 

					
	 781431

 
	  		  	
	 [PROPOSED] FINAL JUDGMENT AND ORDER

OF DISMISSAL

Master Docket No. C 10-564 MJP
	  		  	ROBBINS UMEDA LLP
	  		  	600 B Street, Suite 1900
	  	- 4 -	  	San Diego, CA 92101
	  	  	Tel: (619) 525-3990 — Fax: (619) 525-3991Fourth Supplemental Indenture

 Exhibit 4.5 
 FOURTH SUPPLEMENTAL INDENTURE 
 THIS FOURTH SUPPLEMENTAL INDENTURE (this
“Supplemental Indenture”), dated as of October 12, 2012, among BWAY Holding Company, a Delaware corporation (the “Company”), the Guarantors (as defined in the Indenture referred to herein) and The Bank of New
York Mellon Trust Company, N.A., as trustee under the Indenture referred to below (the “Trustee”). 
 WITNESSETH

 WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (as supplemented, the
“Indenture”), dated as of June 16, 2010, providing for the issuance of 10% Senior Notes due 2018 (the “Notes”), as amended by (i) that First Supplemental Indenture dated as of June 16, 2010, by and
among the Company, the Guarantors party thereto and the Trustee, (ii) that Second Supplemental Indenture dated as of November 1, 2010, by and among the Company, the Guarantors party thereto and the Trustee and (iii) that Third
Supplemental Indenture dated as of January 6, 2011, by and among the Company, the Guarantors party thereto and the Trustee; 
 WHEREAS, Section 9.02 of the Indenture provides that the Company, the Guarantors and the Trustee may, with the consent of the Holders (as defined in the Indenture) of at least a majority in principal
amount of the Notes then outstanding (the “Requisite Consents”), amend or supplement the Indenture, the Notes and the Guarantees (as defined in the Indenture); 

WHEREAS, BOE Intermediate Holding Corporation, a Delaware corporation (the “Buyer”), has entered into an Agreement and
Plan of Merger, dated as of October 2, 2012 (the “Merger Agreement”), with BOE Merger Corporation, a Delaware corporation and wholly owned subsidiary of the Buyer (“Merger Sub”), BWAY Parent Company, Inc., a
Delaware corporation and the Company’s indirect parent (“BWAY Parent”), and Madison Dearborn Capital Partners VI-A, L.P., a Delaware limited partnership solely in its capacity as representative set forth therein, pursuant to
which the Buyer has agreed to acquire all of the outstanding shares of common stock, par value $0.01 per share (the “Common Stock”), of BWAY Parent upon the terms and subject to the conditions set forth in the Merger Agreement,
pursuant to a merger of Merger Sub with and into BWAY Parent (the “Merger”) with BWAY Parent surviving the Merger as a direct wholly-owned subsidiary of Buyer, and an indirect wholly-owned subsidiary of BOE Holding Corporation, a
Delaware corporation; 
 WHEREAS, in connection with the Merger, the Company has solicited consents (the “Consent
Solicitation”) to: (a) amend the defined term “Change of Control” to provide that the Merger will not constitute a “Change of Control,” (b) provide that Platinum Equity, LLC and certain of its Affiliates (as
defined in the Indenture) will each be “Sponsors” under the Indenture and (c) add to, amend, supplement or change certain other defined terms contained in the Indenture related to the foregoing (collectively, the “Proposed COC
Amendments”); 

 WHEREAS, in connection with the Consent Solicitation, the Company will, upon satisfaction of
certain conditions set forth in a consent solicitation statement of the Company, dated as of October 5, 2012 (the “Consent Solicitation Statement”), pay an aggregate cash payment equal to $2.50 per $1,000 principal amount of
Notes for which consents to the Proposed COC Amendments are validly delivered and unrevoked (the “Consent Fee”) to Global Bondholder Services Corporation (the “Depositary”) on behalf of the Holders who delivered
such valid and unrevoked consents to the Proposed COC Amendments on or prior to the 5:00 P.M., New York City time, on October 12, 2012 (the “Expiration Date”); 

WHEREAS, the Consent Solicitation is conditioned upon, among other things, the Proposed COC Amendments to the Indenture set forth herein
having been approved by Holders of at least a majority in aggregate principal amount of the Notes outstanding (and this Supplemental Indenture in respect thereof having been executed and delivered), with such Proposed COC Amendments becoming
operative with respect to the Indenture immediately prior to the effective time of the Merger (the “Operative Time”) and such Proposed COC Amendments shall cease to be operative if the Merger is not consummated or Merger Sub does
not pay the Consent Fee to the Depositary on behalf of the Holders (the “Termination”); 
 WHEREAS, the Company
has received the Requisite Consents to effect the Proposed COC Amendments (based on certifications made by Global Bondholder Services Corporation, as information, tabulation and payment agent in the Consent Solicitation), and has provided the
Trustee with an Officers’ Certificate, pursuant to Section 9.04 of the Indenture, certifying as to the same; 

WHEREAS, the Company and each of the Guarantors has been authorized by a resolution of their respective Board of Directors or managing
member, as the case may be, to enter into this Supplemental Indenture; 
 WHEREAS, pursuant to Section 9.02 of the
Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture; and 
 WHEREAS, all things necessary to
make this Supplemental Indenture a valid indenture and agreement according to its terms have been done. 
 NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of
the Notes as follows: 
 1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned
to them in the Indenture. 
 2. AMENDMENTS TO THE INDENTURE. 

Amendment of Section 1.01. Section 1.01 of the Indenture is amended as indicated below: 

(i) The definitions of “Advisory Agreement,” “Management Investor” and “Sponsor” are replaced in their
entirety by the following: 

 “Advisory Agreement” means the management services agreement by and among
the Company, an affiliate of Madison Dearborn and Parent as of the date of this Indenture, as amended, restated, modified, or replaced and also refers to and means in all cases hereunder the New Advisory Agreement (including in Section 4.11(7)
and clause 8 of the definition of “Consolidated EBITDA” contained in Section 1.01) notwithstanding the fact that the New Advisory Agreement was not in effect on the date of this Indenture. 

“Management Investor” means any Person who is an officer or otherwise a member of management of the Company, any of its
Subsidiaries or any of its direct or indirect parent companies on the date of the Subsequent Merger. 

“Sponsor” means (a) prior to the effective time of the Subsequent Merger, Madison Dearborn Partners, LLC and its
Affiliates, and (b) immediately upon and following the effective time of the Subsequent Merger, Platinum Equity, LLC and certain of its Affiliates (but, however, not including any operating portfolio company thereof). 

(ii) The definition of “Change of Control” is amended by appending the following language to the end of the definition:

 ; provided that in no event shall the Subsequent Merger constitute a Change of Control hereunder. 

(iii) The following definitions are added: 
 “Merger Sub II” means BOE Merger Corporation, a Delaware Corporation. 
 “New Advisory Agreement” means the corporate advisory services agreement between BWAY Parent Company, Inc. or one of its affiliates and an affiliate of Platinum Equity, LLC, as in effect
on the date of consummation of the Subsequent Merger, as amended, restated or replaced. 
 “Subsequent Merger”
means the merger of Merger Sub II with and into BWAY Parent Company, Inc. pursuant to the Subsequent Merger Agreement. 

“Subsequent Merger Agreement” means that Agreement and Plan of Merger dated as of October 2, 2012, by and among
Merger Sub II, BOE Intermediate Holding Corporation, BWAY Parent Company, Inc. and Madison Dearborn Capital Partners VI-A, L.P. 

3. EFFECTIVENESS OF THIS SUPPLEMENTAL INDENTURE. Upon the execution of this Supplemental Indenture by the Company, the Guarantors and the
Trustee, the Indenture shall be amended and supplemented in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes and each Holder shall be bound thereby; provided, however, that the
amendments to the Indenture referred to in Section 2 above will not become operative until the Operative Time. The Company shall give the Trustee prompt written notice of the occurrence of the Operative Time. In the event of the Termination,
the Company shall give the Trustee prompt written notice of the occurrence of the Termination and the Supplemental Indenture shall cease to be effective. 

 4. RATIFICATION OF INDENTURE; SUPPLEMENTAL INDENTURES PART OF INDENTURE. Except as expressly
amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and
every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. 
 5. NEW YORK LAW TO GOVERN.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY. 
 6. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each
signed copy shall be an original, but all of them together represent the same agreement. 
 7. EFFECT OF HEADINGS. The Section
headings herein are for convenience only and shall not affect the construction hereof. 
 8. THE TRUSTEE. The Trustee shall not
be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company and the Guarantors.

 9. SUCCESSORS. All agreements of the Company and each of the Guarantors in this Supplemental Indenture shall bind its
successors, except as otherwise provided in the Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors. 

 IN WITHNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be
duly executed and attested, all as of the date first above written. 
  

			
	BWAY HOLDING COMPANY
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Treasurer & Secretary
	
	BWAY INTERMEDIATE COMPANY, INC.
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Treasurer & Secretary
	
	BWAY CORPORATION
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Treasurer & Secretary
	
	ARMSTRONG CONTAINERS, INC.
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Secretary

 Signature Page to Fourth Supplemental Indenture 

 
			
	NORTH AMERICA PACKAGING CORPORATION
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Secretary
	
	NORTH AMERICA PACKAGING CORPORATION OF PUERTO RICO, INC.
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Secretary
	
	SC PLASTICS, LLC
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Secretary
	
	CENTRAL CAN COMPANY, INC.
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Secretary

 Signature Page to Fourth Supplemental Indenture 

 
			
	BWAY-KILBOURN, INC.
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Secretary
	
	PLASTICAN, INC.
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Secretary
	
	PHOENIX CONTAINER, INC.
		
	By:	 	 /s/ Jeffrey M. O’Connell

	Name:	 	Jeffrey M. O’Connell
	Title:	 	VP, Secretary

 Signature Page to Fourth Supplemental Indenture 

 
			
	 THE BANK OF NEW YORK MELLON
 TRUST COMPANY, N.A., as the Trustee

		
	By:	 	 /s/ Linda Garcia

	Name:	 	Linda Garcia
	Title:	 	Vice President

 Signature Page to Fourth Supplemental Indenture

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