Document:

f8k122812a1ex10iii_cactus.htm

Exhibit 10.3

 

FIRST AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

 

AMONG

 

ACTINIUM PHARMACEUTICALS, INC.,

 

ACTINIUM HOLDINGS LIMITED (FORMERLY GENERAL ATLANTIC INVESTMENTS LIMITED),

 

N.V. ORGANON

 

AND

 

THE STOCKHOLDERS LISTED ON SCHEDULE A HERETO

 

Dated: October 5, 2011

 

  

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AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

 

AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement"), dated October 5, 2011, among ACTINIUM PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), ACTINIUM HOLDINGS LIMITED (formerly named General Atlantic Investments Limited), a Bermuda corporation ("AHL"), N.V. ORGANON, a Netherlands corporation ("Organon" and together with AHL, the "Initial Investors") and the other stockholders of the Company listed on Schedule A hereto (collectively, the "Existing Stockholders"). The Initial Investors, the Existing Stockholders and any other stockholder of the Company who agrees in writing to become bound by the terms and conditions of this Agreement are herein referred to collectively as the "Stockholders" and each individually as a "Stockholder".

 

RECITALS

 

WHEREAS, the Company, Actinium Pharmaceuticals, Ltd., a Bermuda corporation (the "Actinium Bermuda"), and the Existing Stockholders are parties to that certain Stockholders Agreement dated as of June 30, 2000 (the "Prior Stockholders Agreement");

 

WHEREAS, on July 5, 2007, Actinium Bermuda merged with and into the Company, thereby causing the Company to succeed to all of the rights and obligations of Actinium Bermuda under the Prior Stockholders Agreement;

 

WHEREAS, pursuant to the Series E Preferred Stock Purchase Agreement, dated the date hereof (the "Preferred Stock Purchase Agreement"), among the Company and the investors listed in and executing the Preferred Stock Purchase Agreement (the "Series E Investors"), the Company proposes to issue and sell to such Series E Investors up to an aggregate of 27,586,203 shares, par value $.01 per share, of its Series E Preferred Stock (the "Series E Preferred Stock");

 

  

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WHEREAS, each Stockholder owns the respective number of Shares (as hereinafter defined) of the Company (after giving effect to the transactions contemplated by the Preferred Stock Purchase Agreement) set forth opposite such Stockholder's name on Schedule A hereto;

 

WHEREAS, this Agreement is being entered into contemporaneously with, and as a condition to, the Series E Investors' consummation of the transactions contemplated by the Preferred Stock Purchase Agreement; and

 

WHEREAS, (a) AHL is the holder of a majority of the voting power of the "Shares" held by the "General Atlantic Stockholders" (as each such term is defined in the Stockholders Agreement) and (b) Organon and Dr. Maurits Geerlings, Jr. ("Geerlings") are the holders of a majority of the voting power of the "Shares" held by the "Major Stockholders" (as each such term is defined in the Stockholders Agreement); therefore, the Company, AHL, Organon and Geerlings together have the power and right to amend and restate the Stockholders Agreement pursuant to Section 8.3(b) thereof.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.         Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

 

"AHL" has the meaning set forth in the introduction to this Agreement.

 

"Affiliate" means any Person who is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

 

  

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"Agreement" means this Agreement as the same may be amended, supplemented or modified in accordance with the terms hereof.

 

"Board of Directors" means the Board of Directors of the Company.

 

"Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close.

 

"CEO Director" has the meaning set forth in Section 6.2(b)(ii) of this Agreement.

 

"Certificate" means the Fourth Amended and Restated Certificate of Incorporation of the Company as in effect on the date hereof, as the same may be amended, supplemented or modified.

 

"Charter Documents" means the Certificate and the By-laws of the Company as in effect on the date hereof, as the same may be amended, supplemented or modified.

 

"Code" means the Internal Revenue Code of 1986, as amended, or any successor statute thereto.

 

"Commission" means the Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

 

"Common Stock" means the Common Stock, par value $.01 per share, of the Company and any other common stock of the Company or any other capital stock into which such stock is reclassified or reconstituted, whether by way of recapitalization, merger, consolidation or other reorganization or otherwise.

 

  

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"Common Stock Equivalents" means any security or obligation which is by its terms convertible into, or exercisable or exchangeable for, shares of Common Stock, including, without limitation the Preferred Stock, and any option, warrant or other subscription or purchase right with respect to Common Stock or any such convertible, exercisable or exchangeable security or obligation.

 

"Company" has the meaning set forth in the introduction to this Agreement.

 

"Company Option" has the meaning set forth in Section 3.1(b) of this Agreement.

 

"Company Option Period" has the meaning set forth in Section 3.1(b) of this Agreement.

 

"Designating Party" has the meaning set forth in Section 6.3(a) of this Agreement.

 

"Drag-Along Event" has the meaning set forth in Section 3.1(g)(i) of this Agreement.

 

"Drag-Along Notice" has the meaning set forth in Section 3.1(g)(n) of this Agreement.

 

"Drag-Along Rights" has the meaning set forth in Section 3.1(g)(i) of this Agreement.

 

"Drag-Along Stockholders" has the meaning set forth in Section 3.1(g)(i) of this Agreement.

 

  

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"Eligible Investor" means a Stockholder that is (i) a Series E Investor who or which, at the time in question, holds any of the issued and outstanding Series E Preferred Stock, (ii) an Initial Investor, or (iii) a Major Stockholder.

 

"Excess New Securities" has the meaning set forth in Section 4.2(a) of this Agreement.

 

"Excess Offered Securities" has the meaning set forth in Section 3.1(c)(i) of this Agreement.

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.

 

"Exempt Issuances" has the meaning set forth in Section 4.1 of this Agreement.

 

"Existing Stockholders" has the meaning set forth in the introduction to this Agreement.

 

"Fair Value" has the meaning set forth in Section 3.2(b) of this Agreement.

 

"Family Members" has the meaning set forth in Section 2.2 of this Agreement.

 

"Governmental Authority" means the government of any nation, state, city, locality or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

 

  

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"Initial Investors" has the meaning set forth in the introduction to this Agreement.

 

"Investors" means the Initial Investors, the Series E Investors and any Transferees of any Initial Investor's Shares and any subsequent Transferees of any of such Shares, in any case to whom Shares are Transferred in accordance with Section 2.4 of this Agreement, and the term "Investor" shall mean any such Person.

 

"Involuntary Transfer" means any Transfer, proceeding or action by or in which a Stockholder shall be deprived or divested of any right, title or interest in or to any of the Shares, including, without limitation, (i) any seizure under levy of attachment or execution, (ii) any Transfer in connection with bankruptcy (whether pursuant to the filing of a voluntary or an involuntary petition under the United States Bankruptcy Code of 1978, or any modifications or revisions thereto) or other court proceeding to a debtor in possession, trustee in bankruptcy or receiver or other officer or agency, (iii) any Transfer to a state or to a public officer or agency pursuant to any statute pertaining to escheat or abandoned property, (iv) any Transfer pursuant to a divorce or separation agreement or a final decree of a court in a divorce action and (v) any Transfer resulting from the death of a Stockholder.

 

"Involuntary Transferee" has the meaning set forth in Section 3.2(a) of this Agreement.

 

"IPO Effectiveness Date" means the date upon which the Company closes its Qualified Initial Public Offering.

 

"Isotopia" means Isotopia B.V., a private limited company established under Netherlands law.

 

  

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"Liens" means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or preference, priority, right or other security interest or preferential arrangement of any kind or nature whatsoever (excluding preferred stock and equity-related preferences).

 

"Major Stockholders" means Isotopia, Dr. Maurits W. Geerlings, Sr., Dr. Maurits W. Geerlings, Jr., Kenneth R. Givens, and any Permitted Transferee thereof to whom Shares are Transferred in accordance with Section 2.3 of this Agreement, and the term "Major Stockholder" shall mean any such Person.

 

"New Issuance Notice" has the meaning set forth in Section 4.1 of this Agreement.

 

"New Securities" has the meaning set forth in Section 4.1 of this Agreement.

 

"Organon" has the meaning set forth in the introduction to this Agreement.

 

"Offer Price" has the meaning set forth in Section 3.1(a) of this Agreement.

 

"Offered Securities" has the meaning set forth in Section 3.1(a) of this Agreement.

 

"Offering Notice" has the meaning set forth in Section 3.1(a) of this Agreement.

 

"Permitted Transferee" has the meaning set forth in Section 2.2 of this Agreement.

 

"Person" means any individual, firm, corporation, partnership, trust, company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

 

  

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"Preemptive Rightholder(s)" has the meaning set forth in Section 4.1 of this Agreement.

 

"Preferred Stock" means collectively the shares of Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock.

 

"Preferred Stock Purchase Agreement" has the meaning set forth in the Recitals to this Agreement.

 

"Price Negotiation Period" has the meaning set forth in Section 3.2(a) of this Agreement.

 

"Prior Stockholders Agreement" has the meaning set forth in the Recitals of this Agreement.

 

"Proportionate Percentage" has the meaning set forth in Section 4.2(a) of this Agreement.

 

"Proposed Price" has the meaning set forth in Section 4.1 of this Agreement.

 

"Pubco Transaction" means (i) a reverse merger or similar transaction between the Company and a corporation whose securities are publicly traded in the U.S. or other mutually agreed upon jurisdiction("Pubco"), or (ii) the quotation (a "Public Quotation") of the Company's securities for purchase and sale on a U.S. quotation service (iii) any filing with an applicable regulatory body which will result in the Company becoming an entity whose securities are traded on a public exchange in the U.S. or other mutually agreed upon jurisdiction ( any of the foregoing, a "Pubco Transaction").

 

  

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"Qualified Initial Public Offering" means the closing of the Company's initial direct public offering or underwritten public offering on a reasonable efforts basis pursuant to an effective registration statement filed pursuant to the Securities Act, covering the offer and sale of the Company's Common Stock for the account of the Company (a) in which (i) the Company actually receives gross proceeds equal to or greater than $5,000,000, calculated before deducting underwriters' discounts and commissions and other offering expenses, and (ii) a per share offering price equal to or greater than the product of (A) the Applicable Per Share Stated Value, as such term is defined in the Certificate, of the Series E Preferred Stock, multiplied by (B) two (2), and (b) following which the Company's Common Stock is listed on a national securities exchange or approved for quotation on a Nasdaq Market.

 

"Rightholder(s)" has the respective meanings set forth in Sections 3.1(c)( and 3.2(a) of this Agreement.

 

"Rightholder Option Period" has the meaning set forth in Section 3.1(c)(i) of this Agreement.

 

"Sale Majority" has the meaning set forth in Section 3.1(g)(i) of this Agreement.

 

"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

  

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"Selling Stockholder" has the meaning set forth in Section 3.1(a) of this Agreement.

 

"Series A Preferred Stock" means the Company's Series A Convertible Participating Preferred Stock, par value $0.01 per share.

 

"Series B Preferred Stock" means the Company's Series B Preferred Stock, par value $0.01 per share.

 

"Series C Preferred Stock" means any series of the Company's Series C-1 Preferred Stock, par value $0.01 per share, Series C-2 Preferred Stock, par value $0.01 per share, Series C-3 Preferred Stock, par value $0.01 per share, and Series C-4 Preferred Stock, par value $0.01 per share, collectively.

 

"Series D Preferred Stock" means the Company's Series D Preferred Stock, par value $0.01 per share.

 

"Series E Investor" means an Investor who owns any shares of Series E Preferred Stock.

 

"Series E Preferred Directors" has the meaning set forth in Section 6.2(b)(i) of this Agreement.

 

"Series E Preferred Stock" has the meaning set forth in the Recitals to this Agreement.

 

"Shares" means, with respect to each Stockholder, all shares, whether now owned or hereafter acquired, of Common Stock and Preferred Stock, owned by such Stockholder; provided, however, for the purposes of any computation of the number of "Shares" owned by any Stockholder pursuant to the definition of "Eligible Investor" and any of Sections 2, 3, 4.1, 4.2, 6 and 8.3, all outstanding Common Stock Equivalents owned by any Stockholder shall be deemed converted, exercised or exchanged as applicable and the shares of Common Stock issuable upon such conversion, exercise or exchange shall be deemed outstanding and owned by such Stockholder, whether or not such conversion, exercise or exchange has actually been effected.

 

  

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"Stock Option Plan" means any stock option plan of the Company pursuant to which Common Stock or options to purchase shares of Common Stock in such amounts as are determined from time to time by the Board of Directors in its discretion are reserved and available for grant to officers, directors, employees and consultants of the Company and its subsidiaries.

 

"Stockholders" has the meaning set forth in the Recitals to this Agreement.

 

"Stockholders Agreement" has the meaning set forth in the Recitals to this Agreement.

 

"Stockholders Meeting" has the meaning set forth in Section 6.1 of this Agreement.

 

"Subject Purchaser" has the meaning set forth in Section 4.1 of this Agreement.

 

"Tag-Along Rightholder" has the meaning set forth in Section 3.1(f)(i) of this Agreement.

 

"Third-Party Purchaser" means any Person to whom any Stockholder wishes to Transfer all or any portion of its or his Shares other than a Person which is a Permitted Transferee of such Stockholder.

 

  

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"Transfer" has the meaning set forth in Section 2.1 of this Agreement.

 

"Transferred Shares" has the meaning set forth in Section 3.2(a) of this Agreement.

 

"Transferring Stockholder" has the meaning set forth in Section 3.1(f)(i) of this Agreement.

 

"Written Consent" has the meaning set forth in Section 6.1 of this Agreement.

 

2.         Restrictions on Transfer of Shares.

 

2.1         Limitation on Transfer. No Stockholder shall sell, give, assign, hypothecate, pledge, encumber, grant a security interest in or otherwise dispose of (whether by operation of law or otherwise) (each a "Transfer") any Shares or any right, title or interest therein or thereto, except in accordance with the provisions of this Agreement, including, without limitation, Section 2.4. Any attempt to Transfer any Shares or any rights thereunder in violation of the preceding sentence shall be null and void abinitio.

 

  

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2.2         Permitted Transfers. Notwithstanding anything to the contrary contained in this Agreement, but subject to Sections 2.1, 2.3 and 2.4, at any time: (a) each of the Major Stockholders who is an individual may Transfer all or a portion of his Shares to or among (i) a member of such Major Stockholder's immediate family, which shall include his spouse, siblings, children or grandchildren ("Family Members") or (ii) a trust, corporation, partnership, limited liability company, or other legal entity, all of the beneficial interests in which shall be held by such Major Stockholder or one or more Family Members of such Major Stockholder; provided, however, that during the period that any such trust, corporation, partnership, limited liability company, or other legal entity holds any right, title or interest in any Shares, no Person other than such Major Stockholder or one or more Family Members of such Major Stockholder may be or may become beneficiaries, stockholders, limited or general partners or members thereof; (b) each of the Investors may Transfer all or a portion of his Shares to any of its Affiliates, to any other Investor or to any Affiliate of any other Investor; (c) Isotopia may Transfer all or a portion of its Shares to Dr. Maurits W. Geerlings, Sr., or any of his Family Members; and (d) Maurits Geerlings, Sr. may Transfer up to 17,500 of his Shares (subject to appropriate and proportionate adjustment for stock dividends payable in shares of, stock splits and other subdivisions and combinations of, and recapitalizations and like occurrences with respect to, the Common Stock) to a non-Family Member if and to the extent he has not already Transferred such number of Shares prior to the date hereof (the Persons referred to in the preceding clauses (a), (b) and (c) are each referred to hereinafter as a "Permitted Transferee"). A Permitted Transferee of Shares pursuant to this Section 2.2 may Transfer its Shares pursuant to this Section 2.2 only to the Transferor Stockholder or to a Person that is a Permitted Transferee of such Transferor Stockholder.

 

2.3         Permitted Transfer Procedures. If any Stockholder wishes to Transfer Shares to a Permitted Transferee under Section 2.2, such Stockholder shall give notice to the Company of its intention to make any Transfer permitted under Section 2.2 not less than ten (10) days prior to effecting such Transfer, which notice shall state the name and address of each Permitted Transferee to whom such Transfer is proposed, the relationship of such Permitted Transferee to such Stockholder, and the number of Shares proposed to be Transferred to such Permitted Transferee.

 

  

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2.4         Transfers in Compliance with Law; Substitution of Transferee. Notwithstanding any other provision of this Agreement, no Transfer may be made unless (a) the Transferee has agreed in writing to be bound by the terms and conditions of this Agreement pursuant to an instrument substantially in the form attached hereto as Exhibit A, (b) the Transfer complies in all respects with the applicable provisions of this Agreement and (c) the Transfer complies in all respects with applicable federal and state securities laws, including, without limitation, the Securities Act. If requested by the Company, an opinion of counsel to such Transferring Stockholder shall be supplied to the Company at such Transferring Stockholder's expense, to the effect that such Transfer complies with the applicable federal and state securities laws; provided, that no opinion of counsel shall be required for any Transfer by any Investor to any Permitted Transferee of such Investor. Upon becoming a party to this Agreement, (i) a Permitted Transferee of a Major Stockholder shall be substituted for, and shall enjoy the same rights and be subject to the same obligations as, the Transferring Major Stockholder hereunder with respect to the Shares Transferred to such Permitted Transferee, (ii) a Transferee of an Investor shall be substituted for, and shall enjoy the same rights and be subject to the same obligations as, the Transferring Investor hereunder with respect to the Shares Transferred to such Transferee, (iii) a Transferee other than a Permitted Transferee of a Major Stockholder shall be subject to the same obligations as, but none of the rights of, the Transferring Major Stockholder hereunder with respect to the Shares Transferred to such Transferee, and (iv) a Transferee of any Stockholder (other than a Stockholder which is a Major Stockholder or an Investor) shall be substituted for, and shall be entitled to the same obligations as, the Transferring Stockholder hereunder with respect to the Shares Transferred to such Transferee.

 

3.         Right of First Refusal, Drag-Along and Tag-Along Rights.

 

3.1           Proposed Voluntary Transfers.

 

  

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(a)           Offering Notice. Subject to Section 2, if any Stockholder, other than a Series E Investor as to Shares of Series E Preferred Stock, (a "Selling Stockholder") wishes to Transfer all or any portion of its or his Shares, to any Third-Party Purchaser, such Selling Stockholder shall offer such Shares first to the Company by sending written notice (an "Offering Notice") to the Company, which shall state: (a) the name and address of the Third-Party Purchaser; (b) the number of Shares proposed to be Transferred (the "Offered Securities"); (c) the proposed purchase price per Share for the Offered Securities (the "Offer Price") and the type of consideration offered (including, if the consideration consists in whole or in part of non-cash consideration, such information available to the Selling Stockholder as is necessary for the Company and the Rightholders (as hereinafter defined) under this Section 3.1 to analyze the economic value and investment risk of such non-cash consideration); and (d) the other terms and conditions of such sale. Upon delivery of the Offering Notice, such offer shall be irrevocable unless and until the rights of first offer provided for herein shall have been waived or shall have expired. The Company shall promptly deliver a copy of the Offering Notice to each of the Rightholders under this Section 3.1. The Offering Notice shall include a copy of the agreement between the Selling Stockholder and the Third-Party Purchaser pertaining to the proposed Transfer of the Offered Securities to the Third-Party Purchaser.

 

(b)           Company Option; Exercise. For a period of fifteen (15) days after the giving of the Offering Notice pursuant to Section 3.1(a) (the "Company Option Period"), the Company shall have the right (the "Company Option") but not the obligation to purchase any or all of the Offered Securities at a purchase price per share equal to the Offer Price and upon the terms and conditions set forth in the Offering Notice, except that the Company may, at its option, substitute cash consideration for non-cash consideration (other than notes) based upon the value of such non-cash consideration (as determined in good faith by a majority of the entire Board of Directors, which determination must include the Series E Preferred Directors). The right of the Company to purchase any or all of the Offered Securities under this Section 3.1(b) shall be exercisable by delivering written notice of the exercise thereof, prior to the expiration of the Company Option Period, to the Selling Stockholder, with a copy to the Eligible Investors and the Major Stockholders, which notice shall state the number of Offered Securities, respectively, proposed to be purchased by the Company. The failure of the Company to respond within the Company Option Period shall be deemed to be a waiver of the Company Option, provided that the Company may waive its rights under this Section 3.1(b) prior to the expiration of the Company Option Period by giving written notice to the Selling Stockholder, with a copy to the Eligible Investors and the Major Stockholders.

 

  

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(c)           Rightholder Option; Exercise.

 

(i)         If the Company does not elect to purchase all of the Offered Securities, then for a period of thirty (30) days after the earlier to occur of (a) the expiration of the Company Option Period and (b) the date upon which the Selling Stockholder shall have received written notice from the Company of its exercise of the Company Option pursuant to Section 3.1(b) or its waiver thereof (the "Rightholder Option Period"), each of the Eligible Investors and those of the Major Stockholders who is not a Selling Stockholder (for the purpose of Section 3.1, (each, a "Rightholder" and collectively, the "Rightholders") shall have the right to purchase all, but not less than all, of the remaining Offered Securities at a per share purchase price equal to the Offer Price and upon the terms and conditions set forth in the Offering Notice, except that each Rightholder may, at its option, substitute cash consideration for non-cash consideration (other than notes) based upon the value of such non-cash consideration (as determined in good faith by a majority of the entire Board of Directors, which determination must include the Series E Preferred Directors). Each such Rightholder shall have the right to purchase that percentage of the Offered Securities determined by dividing (i) the total number of Shares then owned by such Rightholder by (ii) the total number of Shares then owned by all such Rightholders. If any Rightholder does not fully subscribe for the number or amount of Offered Securities it or he is entitled to purchase, then each other fully participating Rightholder shall have the right to purchase that percentage of the Offered Securities not so subscribed for (for the purposes of this Section 3.1(c), the "Excess Offered Securities") determined by dividing (x) the total number of Shares then owned by such fully participating Rightholder by (y) the total number of Shares then owned by all fully participating Rightholders who elected to purchase Excess Offered Securities. The procedure described in the preceding sentence shall be repeated until there are no remaining Excess Offered Securities. If the Company and/or the Rightholders do not purchase all of the Offered Securities pursuant to Section 3.1(b) and/or Section 3.1(c), then the Selling Stockholder may, subject to Section 3.1(f), sell the Offered Securities to a Third-Party Purchaser in accordance with Section 3.1(e).

 

  

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(ii)         The right of each Rightholder to purchase all of the remaining Offered Securities under subsection (i) above shall be exercisable by delivering written notice of the exercise thereof, prior to the expiration of the Rightholder Option Period, to the Selling Stockholder with a copy to the Company. Each such notice shall state (a) the number of Shares held by such Rightholder and (b) the number of Shares that such Rightholder is willing to purchase pursuant to this Section 3.1(c). The failure of a Rightholder to respond within the Rightholder Option Period to the Selling Stockholder shall be deemed to be a waiver of such Rightholder's rights under subsection (i) above, provided that each Rightholder may waive its rights under subsection (ii) above prior to the expiration of the Rightholder Option Period by giving written notice to the Selling Stockholder, with a copy to the Company.

 

(d)           Closing. The closing of the purchases of Offered Securities subscribed for by the Company under Section 3.1(b) and/or the Rightholders under Section 3.1(c) shall be held at the executive offices of the Company at 11:00 a.m., local time, on the 60th day after the giving of the Offering Notice pursuant to Section 3.1(a) or at such other time and place as the parties to the transaction may agree. At such closing, the Selling Stockholder shall deliver certificates representing the Offered Securities, duly endorsed for Transfer and accompanied by all requisite Transfer taxes, if any, and such Offered Securities shall be free and clear of any Liens (other than those arising hereunder and those attributable to actions by the purchasers thereof) and the Selling Stockholder shall so represent and warrant, and shall further represent and warrant that it is the sole beneficial and record owner of such Offered Securities. The Company and/or each Rightholder, as the case may be, purchasing Offered Securities shall deliver at the closing consideration to be paid in full and the cash portion of such consideration shall be paid in immediately available funds for the Offered Securities purchased by it or him. At such closing, all of the parties to the transaction shall execute such additional documents as are otherwise necessary or appropriate.

 

  

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(e)           Sale to the Third-Party Purchaser. Unless the Company and/or the Rightholders elect to purchase all, but not less than all, of the Offered Securities under Sections 3.1(b) and 3.1(c), the Selling Stockholder may, subject to Section 3.1(f), sell all, but not less than all, the Offered Securities to the Third-Party Purchaser and not to any assignee or designee of such Third-Party Purchaser at a purchase price per share equal to the Offer Price and on the terms and conditions set forth in the Offering Notice; provided, however, that such sale is bona fide and consummated within sixty (60) days after the earlier to occur of (i) the waiver by the Company and all of the Rightholders of their options to purchase the Offered Securities and (ii) the expiration of the Rightholder Option Period; and provided further, that such sale shall not be consummated unless and until (x) such Third-Party Purchaser shall represent in writing to the Company and each Rightholder that it is aware of the rights of the Company and the Stockholders contained in this Agreement and (y) prior to the purchase by such Third-Party Purchaser of any of such Offered Securities, such Third-Party Purchaser shall become a party to this Agreement and shall agree to be bound by the terms and conditions hereof in accordance with Section 2.4 hereof. If such sale is not consummated within such sixty (60) day period for any reason, then the restrictions provided for herein shall again become effective, and no Transfer of such Offered Securities may be made thereafter by the Selling Stockholder without again offering the same to the Company and the Rightholders in accordance with this Section 3.1.

 

  

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(f)            Tag-Along Rights.

 

(i)         If any Stockholder (a "Transferring Stockholder") wishes to Transfer all or any portion of its or his Shares to a Third-Party Purchaser, then each of the Stockholders (other than the Transferring Stockholder) (each, a "Tag-Along Rightholder") shall have the right to sell to such Third-Party Purchaser, upon the same terms and conditions as the Transferring Stockholder, up to that number of Shares held by such Tag-Along Rightholder equal to that percentage of the number of Shares proposed to be Transferred by the Transferring Stockholder determined by dividing (i) the total number of Shares then owned by such Tag-Along Rightholder by (ii) the sum of (x) the total number of Shares then owned by all such Tag-Along Rightholders exercising their rights pursuant to this Section 3.1(f) and (y) the total number of Shares then owned by the Transferring Stockholder. To the extent that the Tag-Along Rightholders exercise their rights pursuant to this Section 3.1(f), the number of Shares proposed to be Transferred by the Transferring Stockholder shall be reduced accordingly.

 

(ii)        The Transferring Stockholder shall give written notice to each Tag-Along Rightholder of each proposed sale by it of Shares which gives rise to the rights of the Tag-Along Rightholders set forth in this Section 3.1(f) at least fifteen (15) days prior to the proposed consummation of such sale, setting forth the name of such Transferring Stockholder, the number of Shares proposed to be sold, the name and address of the proposed Third-Party Purchaser, the proposed amount and form of consideration and terms and conditions of payment offered by such Third-Party Purchaser, the percentage of Shares that such Tag-Along Rightholder may sell to such Third-Party Purchaser (determined in accordance with Section 3.1(0(0), and a representation that such Third-Party Purchaser has been informed of the "tag-along" rights provided for in this Section 3.1(f) and has agreed to purchase Shares in accordance with the terms hereof. The tag-along rights provided by this Section 3.1(0 must be exercised by any Tag-Along Rightholder wishing to sell Shares pursuant to this Section 3.1(f) within ten (10) days following receipt of the notice required by the preceding sentence, by delivery of a written notice to the Transferring Stockholder indicating such Tag-Along Rightholder's wish to exercise its rights and specifying the number of Shares (up to the maximum number of Shares owned by such Tag-Along Rightholder required to be purchased by such Third-Party Purchaser) it wishes to sell. The failure of a Tag-Along Rightholder to respond within such 10-day period shall be deemed to be a waiver of such Tag-Along Rightholder's rights under this Section 3.1(f), provided that any Tag-Along Rightholder may waive its rights under this Section 3.1(0 prior to the expiration of such 10-day period by giving written notice to the Transferring Stockholder, with a copy to the Company. If a Third-Party Purchaser fails to purchase Shares from any Tag-Along Rightholder that has properly exercised its tag-along rights pursuant to this Section 3.1(f)( ii), then the Transferring Stockholder shall not be permitted to consummate the proposed sale of his or its Shares unless and until, simultaneous with such sale, the Transferring Stockholder purchases from such Tag-Along Rightholder the number of Shares such Tag-Along Rightholder is entitled to sell under this Section 3.1(1) on the same terms and conditions as the Transferring Stockholder is Transferring his or its Shares to the Third-Party Purchaser.

 

  

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(g)           Drag-Along Rights.

 

(i)         If the Stockholders holding a majority of the voting power of the Shares (the "Sale Majority") approve a bona tide sale or exchange, whether directly or pursuant to a sale, merger, consolidation or other business combination, of all or substantially all of the Shares to a Third-Party Purchaser (a "Drag-Along Event"), then the Stockholders comprising a part of the Sale Majority shall have the right, subject to all of the provisions of this Section 3.1(g) ("Drag-Along Rights"), to require all of the other Stockholders (the "Drag-Along Stockholders" and each individually a "Drag-Along Stockholder") to (A) if such Drag-Along Event is structured as a sale of Shares, sell, Transfer and deliver or cause to be sold, Transferred and delivered to such Third-Party Purchaser all Shares and Common Stock Equivalents owned by the Drag-Along Stockholders or (B) if such Drag-Along Event is structured as a merger, consolidation or other business combination requiring the consent or approval of the Drag-Along Stockholders, vote their Shares in accordance with the written instructions of the Stockholders comprising a part of the Sale Majority in favor thereof, and otherwise consent to and raise no objection to such transaction, and waive any dissenters' rights, appraisal rights or similar rights which the Drag-Along Stockholders may have in connection therewith; and, in any such event, subject to the provisions of subsection (iii) of this Section 3.1(g), the Drag-Along Stockholders shall agree to and shall be bound by the same terms, provisions and conditions in respect of the Drag-Along Event. The provisions of Section 3.1 (f) shall not apply to any transaction to which this Section 3.1(g) applies to the extent the Stockholders comprising a part of the Sale Majority shall have in fact exercised their Drag-Along Rights under this Section 3.1(g).

 

(ii)        If the Stockholders comprising a part of the Sale Majority desire to exercise their Drag-Along Rights, they shall give written notice to the Drag-Along Stockholders ("Drag-Along Notice") of the Drag-Along Event which gives rise to the obligations of the Drag-Along Stockholders set forth in this Section 3.1(g), at least thirty (30) days prior to the proposed consummation of the transaction. The Drag-Along Notice shall set forth (A) the name and address of the Third-Party Purchaser, (B) the date on which such transaction is proposed to be consummated, (C) the proposed amount and form of consideration and terms and conditions of payment offered by the Third-Party Purchaser and (D) a representation that the Third-Party Purchaser has been informed of the Drag-Along Rights provided for in this Section 3.1(g) and has agreed to purchase Shares in accordance with the terms hereof.

 

  

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(iii)       In connection with a Drag-Along Event pursuant to this Section 3.1(g), the Drag-Along Stockholders shall make substantially the same representations, warranties, covenants and indemnities and other similar agreements as the Stockholders comprising a part of the Sale Majority agree to make in connection with the proposed Transfer by them relating to the ownership of and title to their Shares. No Drag-Along Stockholder shall be subject to the requirements of this Section 3.1(g) with respect to a Drag-Along Event if such Drag-Along Event (A) requires that the payment with respect to each share of Common Stock or Preferred Stock, as applicable, held by such Drag-Along Stockholder is not in accordance with the Certificate if such Drag-Along Event were deemed a "Liquidation" or "Acquisition Transaction" for purposes of Article IV, Section 3 thereof (or such equivalent Article and Section thereof), (B) provides that such Drag-Along Stockholder will not receive the same form of consideration or the same per share consideration for their shares of Common Stock or Preferred Stock, as applicable, as all other holders of such shares of Common Stock or Preferred Stock, as applicable, or (C) requires such Drag-Along Stockholder to agree to any indemnification obligations which (1) are for breaches of representations and warranties of any Person other than the Company or such Drag-Along Stockholder, (2) provide for indemnification other than in proportion to such Drag-Along Stockholder's ownership interest in the Company, determined on a fully-diluted basis as-converted to Common Stock basis (excluding: (a) all Shares issuable pursuant to the exercise of an option wherein such right of exercise has not yet vested as of the closing of the Drag-Along Event, (b) all Shares exercisable pursuant to either a warrant or an option for which the exercise price is greater than the fair market value of the underlying Shares as of the closing of the Drag-Along Event; and (c) all options and Shares reserved for the issuance of options under the Stock Option Plan for which options have not yet issued as of the closing of the Drag-Along Event), and (3) are not limited to the value of the consideration actually received by such Drag-Along Stockholder pursuant to such Drag-Along Event (excluding liability for such Drag-Along Stockholder's own fraud or malfeasance). In addition and without limitation to the foregoing, no Drag-Along Stockholder shall be subject to the requirements of this Section 3.1(g) with respect to a Drag-Along Event if such Drag-Along Stockholder is required to provide indemnification in connection with such Drag-Along Event and any of the Stockholders comprising a part of the Sale Majority are not required to provide indemnification or such Drag-Along Stockholder's indemnification obligations in connection with such Drag-Along Event are upon terms and conditions which are less favorable to such Drag-Along Stockholder than the terms and conditions upon which any of the Stockholders comprising a part of the Sale Majority are obligated to provide indemnification in connection with such Drag-Along Event.

 

  

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3.2           Involuntary Transfers.

 

(a)          Rights of First Offer upon Involuntary Transfer. If an Involuntary Transfer of any Shares (the "Transferred Shares") owned by any Stockholder other than an Eligible Investor shall occur, then the Company and the Stockholders other than the Stockholder who suffered or will suffer such Involuntary Transfer (for the purpose of Section 3.2, each, a "Rightholder" and collectively, the "Rightholders") shall have the same rights as specified in Sections 3.1(b) and 3.1(c), respectively, with respect to such Transferred Shares as if the Involuntary Transfer had been a proposed voluntary Transfer by a Selling Stockholder and shall be governed by Section 3.1 except that (i) the time periods shall run from the date of receipt by the Company of actual notice of the Involuntary Transfer (and the Company shall immediately give notice to the Rightholders of the date of receipt of such notice), (ii) such rights shall be exercised by notice to the Transferee of such Transferred Shares (the "InvoluntaryTransferee") rather than to the Stockholder who suffered or will suffer the Involuntary Transfer and (iii) the purchase price per Transferred Share shall be agreed upon by the Involuntary Transferee and the Company and/or the purchasing Rightholders purchasing a majority of the Transferred Shares, as the case may be; provided, however, that if such parties fail to agree as to such per share purchase price within thirty (30) days after the date on which the Company or the last of the Rightholders exercised its rights under this Section 3.2(a), whichever is later (such period, the "Price Negotiation Period"), the per share purchase price shall be the Fair Value thereof as determined in accordance with Section 3.2(b).

 

  

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(b)          Fair Value. If the parties fail to agree upon the per share purchase price of the Transferred Shares in accordance with Section 3.2(a) hereof, then the Company or the Rightholders, as the case may be, shall purchase the Transferred Shares at a per share purchase price equal to the Fair Value (as hereinafter defined) thereof. The Fair Value of the Transferred Shares shall be determined by a panel of three independent appraisers, which shall be nationally recognized investment banking firms or nationally recognized experts experienced in the valuation of corporations engaged in the business conducted by the Company. Within five (5) Business Days after the last day of the Price Negotiation Period or such earlier date as the applicable parties determine that they cannot agree as to the per share purchase price, the Involuntary Transferee and the Board of Directors (in the case of a purchase by the Company), or the purchasing Rightholders purchasing a majority of the Transferred Shares being purchased by the purchasing Rightholders (if the Company is not purchasing any Transferred Shares), or the Board of Directors and such purchasing Rightholders jointly (in the case of a purchase by the Company and Rightholders), as the case may be, shall each designate one such appraiser that is willing and able to conduct such determination. If either the Involuntary Transferee or the Board of Directors or the purchasing Rightholders or both, as the case may be, fails to make such designation within such period, then the other party that has made the designation shall have the right to make the designation on its behalf. The two appraisers designated shall, within a period of five (5) Business Days after the designation of the second appraiser, designate a mutually acceptable third appraiser. The three appraisers shall conduct their determination as promptly as practicable, and the Fair Value of the Transferred Shares shall be the average of the determination of the two appraisers that are closer to each other than to the determination of the third appraiser, which third determination shall be discarded; provided, however, that if the determination of two appraisers are equally close to the determination of the third appraiser, then the Fair Value of the Transferred Shares shall be the average of the determination of all three appraisers. Such determination shall be final and binding on the Involuntary Transferee, the Company and the Rightholders. The Involuntary Transferee shall be responsible for the fees and expenses of the appraiser designated by or on behalf of it, and the Company or the purchasing Rightholders (if both the Company and the purchasing Rightholders), or the purchasing Rightholders (if the Company is not purchasing any Transferred Shares) for the fees and expenses of the appraiser designated by or on behalf of the Board of Directors or the purchasing Rightholders (if the Company is not purchasing any Transferred Shares), as the case may be. The Involuntary Transferee and the Company or the purchasing Rightholders, as the case may be, shall each share half the fees and expenses of the appraiser designated by the appraisers. For purposes of this Section 3.2(b), the "Fair Value" of the Transferred Shares means the per share fair market value of such Transferred Shares determined in accordance with this Section 3.2(b) based upon all considerations that the appraisers determine to be relevant. All expenses to be shared by the Company and the purchasing Rightholders, or among the purchasing Rightholders (if the Company is not purchasing any Transferred Shares), shall be shared in proportion to the number of Transferred Shares purchased.

 

  

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(c)           Closing. The closing of any purchase under this Section 3.2 shall be held at the offices of the Company's legal counsel or such other location as may be designated by the Company at 11:00 a.m., local time, on the earlier to occur of (i) the fifth Business Day after the purchase price per Transferred Share shall have been agreed upon by the Involuntary Transferee and the Company or the purchasing Rightholders, as the case may be, in accordance with Section 3.2(a)( iii), or (ii) the fifth Business Day after the determination of the Fair Value of the Transferred Shares in accordance with Section 3.2(b), or at such other time and place as the parties to the transaction may agree. At such closing, the Involuntary Transferee shall deliver certificates, if applicable, or other instruments or documents representing the Transferred Shares being purchased under this Section 3.2, duly endorsed with a signature guarantee for Transfer and accompanied by all requisite Transfer taxes, if any, and such Transferred Shares shall be free and clear of any Liens (other than those arising hereunder) arising through the action or inaction of the Involuntary Transferee and the Involuntary Transferee shall so represent and warrant, and further represent and warrant that it is the beneficial owner of such Transferred Shares. The Company or each Rightholder, as the case may be, purchasing such Transferred Shares shall deliver at closing payment in full in immediately available funds for such Transferred Shares. At such closing, all parties to the transaction shall execute such additional documents as are otherwise necessary or appropriate.

 

(d)          General. In the event that the provisions of this Section 3.2 shall be held to be unenforceable with respect to any particular Involuntary Transfer, the Company and the Rightholders shall have the rights specified in Sections 3.1(b) and 3.1(c), respectively, with respect to any Transfer by an Involuntary Transferee of such Shares, and each Rightholder agrees that any Involuntary Transfer shall be subject to such rights, in which case the Involuntary Transferee shall be deemed to be the Selling Stockholder for purposes of Section 3.1 of this Agreement and shall be bound by the provisions of Section 3.1 and other related provisions of this Agreement.

 

  

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4.             Future Issuance of Shares; Preemptive Rights.

 

4.1      Offering Notice. Except for the issuance of (a) any Excluded Securities of any kind described in clauses (A) through (F) of Section C.5.3(a)(vii) of Article IV of the Certificate, (b) any of the Series E Preferred Stock issued pursuant to the Preferred Stock Purchase Agreement, or (c) any shares of Common Stock issued pursuant to any Extraordinary Event (as defined in the Certificate) (such issuances described in (a) through (c) of this Section 4.1 being referred to collectively as "Exempt Issuances"), if the Company wishes to issue any capital stock or any other securities or obligations convertible into, or exercisable or exchangeable for, any capital stock of the Company or any option, warrant or other subscription or purchase right with respect to any capital stock of the Company or any such convertible, exercisable or exchangeable securities or obligations (collectively, "New Securities") to any Person (the "Subject Purchaser"), then the Company shall offer such New Securities, in accordance with Section 4.2(a), first to each of the Eligible Investors (each, a "Preemptive Rightholder" and collectively, the "Preemptive Rightholders") by sending written notice (the "New Issuance Notice") to the Preemptive Rightholders, which New Issuance Notice shall state (x) the number of New Securities proposed to be issued and (y) the proposed purchase price per security of the New Securities (the "Proposed Price"). Upon delivery of the New Issuance Notice, such offer shall be irrevocable unless and until the rights provided for in Section 4.2 shall have been waived or shall have expired.

 

4.2      Preemptive Rights; Exercise.

 

(a)           For a period of twenty (20) days after the giving of the New Issuance Notice pursuant to Section 4.1, each of the Preemptive Rightholders shall have the right to purchase up to its Proportionate Percentage (as hereinafter defined) of the New Securities at a purchase price equal to the Proposed Price and upon the same terms and conditions set forth in the New Issuance Notice, except that if all or any part of the consideration to be paid by a Subject Purchaser is not cash, then the value of the non-cash consideration (other than notes) shall be determined in good faith by a majority of the entire Board of Directors (which determination must include the Series E Preferred Directors) and any Preemptive Rightholder electing to purchase any New Securities may pay the cash equivalent thereof. Each such Preemptive Rightholder shall have the right to purchase that percentage of the New Securities determined by dividing (x) the total number of Shares then owned by such Preemptive Rightholder exercising its rights under this Section 4.2 by (y) the total number of shares of Common Stock then issued and outstanding (assuming for such purpose, the complete exercise, exchange or conversion of all then issued and outstanding Common Stock Equivalents) (the "Proportionate Percentage"). If any Preemptive Rightholder does not fully subscribe for the number or amount of New Securities that it or he is entitled to purchase pursuant to the preceding sentence, then each other fully participating Preemptive Rightholder shall have the right to purchase that percentage of the remaining New Securities not so subscribed for (for the purposes of this Section 4.2(a), the "Excess New Securities") determined by dividing (x) the total number of Shares then owned by such fully participating Preemptive Rightholder by (y) the total number of Shares then owned by all fully participating Preemptive Rightholders who elected to purchase Excess New Securities. The procedure described in the preceding sentence shall be repeated until there are no remaining Excess New Securities.

 

  

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(b)           The right of each Preemptive Rightholder to purchase the New Securities under Section 4.2(a) above shall be exercisable by delivering written notice of the exercise thereof, prior to the expiration of the 20-day period referred to in Section 4.2(a) above, to the Company, which notice shall state the amount of New Securities that such Preemptive Rightholder elects to purchase pursuant to Section 4.2(a). The failure of a Preemptive Rightholder to respond within such 20-day period shall be deemed to be a waiver of such Preemptive Rightholder's rights under Section 4.2(a), provided that each Preemptive Rightholder may waive its rights under Section 4.2(a) prior to the expiration of such 20-day period by giving written notice to the Company.

 

4.3      Closing. The closing of the purchase of New Securities subscribed for by the Preemptive Rightholders under Section 4.2 shall be held at the executive offices of the Company at 11:00 a.m., local time, on (a) the date of the initial closing of the sale to the Subject Purchaser made pursuant to Section 4.4 if the Preemptive Rightholders elect to purchase some, but not all, of the New Securities under Section 4.2, or (b) at another time and place if the the parties to the transaction so agree in writing. At such closing, the Company shall deliver certificates representing the New Securities, and such New Securities shall be issued free and clear of all Liens (other than those arising hereunder and those attributable to actions by the purchasers thereof) and the Company shall so represent and warrant, and further represent and warrant that such New Securities shall be, upon issuance thereof to the Preemptive Rightholders and after payment therefor, duly authorized, validly issued, fully paid and non-assessable. Each Preemptive Rightholder purchasing the New Securities shall deliver at the closing payment in full in immediately available funds for the New Securities purchased by him or it. At such closing, all of the parties to the transaction shall execute such additional documents as are otherwise necessary or appropriate.

 

  

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4.4      Sale to Subject Purchaser. The Company may sell to the Subject Purchaser all of the New Securities not purchased by the Preemptive Rightholders pursuant to Section 4.2 on terms and conditions that are no more favorable to the Subject Purchaser than those set forth in the New Issuance Notice; provided, however, that such sale is bona tide and consummated within ninety (90) days following the earlier to occur of (i) the waiver by the Preemptive Rightholders of their option to purchase New Securities pursuant to Section 4.2, and (ii) the expiration of the 20-day period referred to in Section 4.2. If such sale is not consummated within such 90-day period for any reason, then the restrictions provided for herein shall again become effective, and no issuance and sale of New Securities may be made thereafter by the Company without again offering the same in accordance with this Section 4. The closing of any issuance and purchase pursuant to this Section 4.4 shall be held at a time and place as the parties to the transaction may agree within such 90-day period.

 

  

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5.             After-Acquired Securities Agreement to be Bound.

 

5.1      After-Acquired Securities. All of the provisions of this Agreement shall apply to all of the Shares and Common Stock Equivalents now owned or which may be issued or Transferred hereafter to a Stockholder in consequence of any additional issuance, purchase, exchange or reclassification of any of such Shares or Common Stock Equivalents, corporate reorganization, or any other form of recapitalization, consolidation, merger, share split or share dividend, or which are acquired by a Stockholder in any other manner.

 

5.2      Agreement to be Bound. The Company shall not issue any shares of capital stock or any Common Stock Equivalents to any Person not a party to this Agreement, other than any Common Stock Equivalents issued to directors, officers, employees or consultants of the Company pursuant to the Stock Option Plan, unless either (a) such Person has agreed in writing to be bound by the terms and conditions of this Agreement pursuant to an instrument substantially in the form attached hereto as Exhibit B, or (b) such Person has otherwise entered into an agreement with the Company restricting the Transfer of its or his Shares in form and substance reasonably satisfactory to the Eligible Investors holding a majority of the voting power of the Shares held by the Eligible Investors. Upon the exercise of any Common Stock Equivalents under the Stock Option Plan, the holder of such Common Stock Equivalents shall agree in writing to be bound by the terms and conditions of this Agreement pursuant to an instrument substantially in the form attached hereto as Exhibit B. Upon becoming a party to this Agreement, such Person shall be deemed to be a party to, and bound by, the provisions of this Agreement. Any issuance of Shares or any Common Stock Equivalents by the Company in violation of this Section 5.2 shall be null and void abinitio.

 

  

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6.             Corporate Governance.

 

6.1       General. From and after the execution of this Agreement, each Stockholder shall vote its Shares at any regular or special meeting of stockholders of the Company (a "Stockholders Meeting") or in any written consent executed in lieu of such a meeting of stockholders (a "Written Consent"), and shall take all other actions necessary, to give effect to the provisions of this Agreement (including, without limitation, Section 6.2 hereof).

 

6.2       Election of Directors; Number and Composition.

 

(a)           Number. Each Stockholder shall vote its Shares at any Stockholders Meeting, or act by Written Consent with respect to such Shares, and take all other actions necessary to ensure that the number of directors constituting the entire Board of Directors shall consist of such number of directors as is authorized in accordance with the Charter Documents.

 

(b)           Composition. Each Stockholder shall vote its Shares at any Stockholders Meeting called for the purpose of filling the positions on the Board of Directors, or in any Written Consent executed for such purpose, and take all other actions necessary to ensure: (i) the nomination and election to the Board of Directors of two individuals designated by the holders of at least a majority of the issued and outstanding Series E Preferred Stock (the "Series E Preferred Director"); (ii) the nomination and election to the Board of Directors of one individual who shall be the then current chief executive officer of the Company (the "CEO Director"), who shall initially be Dragan Cicic, M.D., (iii) the nomination and election to the Board of Directors of two individuals who are not employees, officers or directors of any of the Investors or any of their respective Affiliates.

 

  

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6.3      Removal and Replacement of Directors.

 

(a)          Replacement of Directors. If at any time, a vacancy is created on the Board of Directors by reason of the incapacity, death, removal or resignation of a director designated by the Stockholders entitled to designate directors under Section 6.2(b) (each a "Designating Party"), then the Designating Party shall promptly designate a new director and, after written notice to each of the other Stockholders and the Company of such new designee, each Stockholder shall vote all of its or his Shares so as to elect such new designee to the Board of Directors.

 

(b)          Removal of Directors. Each Designating Party may remove its designated director at any time and for any reason (or no reason) in such Designating Party's sole discretion and, after written notice to each of the other Stockholders and the Company of the new designee to replace such removed director, each Stockholder shall vote all of its Shares so as to elect such new designee to the Board of Directors.

 

6.4      Reimbursement of Expenses; D&O Insurance. The Company shall reimburse the members of the Board of Directors for all reasonable travel and accommodation expenses incurred by the directors in connection with the performance of their duties as directors of the Company upon presentation of appropriate documentation therefor.

 

6.5      Annual Budget. Not less than thirty (30) days prior to the end of each fiscal year, the Company shall prepare and submit to the Board of Directors for its approval an annual operating budget for the next succeeding fiscal year in reasonable detail.

 

6.6      Books and Records. The Company shall, and shall cause its subsidiaries to, keep proper books of records and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Company and each of its subsidiaries in accordance with generally accepted accounting principles consistently applied.

 

  

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7.           Stock Certificate Legend. A copy of this Agreement shall be filed with the Secretary of the Company and kept with the records of the Company. Each certificate representing Shares now held or hereafter acquired by any Stockholder shall for as long as this Agreement is effective bear legends substantially in the following forms:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

 

THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, DATED AS OF THE DATE HEREOF, AMONG THE COMPANY AND THE STOCKHOLDERS NAMED THEREIN, A COPY OF WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE AMENDED AND RESTATED STOCKHOLDERS AGREEMENT.

 

8.             Miscellaneous.

 

8.1      Recapitalizations, Exchanges, etc. The provisions of this Agreement shall apply to the full extent set forth herein with respect to (a) the shares of Common Stock and Preferred Stock, (b) any and all shares of capital stock of the Company into which the shares of Common Stock or Preferred Stock, as applicable, are converted, exchanged or substituted in any recapitalization or other capital reorganization by the Company and (c) any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, the shares of Common Stock and Preferred Stock, as applicable, and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. The Company shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise) to enter into a stockholders agreement with the Investors and other Stockholders on terms substantially the same as this Agreement as a condition of any such transaction.

 

  

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8.2      Notices. All notices, demands or other communications provided for or permitted hereunder shall be made in writing and shall be sent by registered or certified first class mail, return receipt requested, telecopier, courier service, overnight mail or personal delivery:

 

(a)       if to the Company:

 

Actinium Pharmaceuticals, Inc.

________________________

________________________

U.S.A.

Telefax:__________________

Attention: Dragan Cicic, M.D.

 

with a copy to:

________________________

________________________

________________________

 

(b)       if to AHL:

 

Actinium Holdings Limited

________________________

________________________

Telefax   __________________                             

Attention: [_______________]

 

with a copy to:

________________________

________________________

 

  

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(c)        if to Organon:

 

N.V. Organon

[________________________]

Telecopy: [________________]

Attention: [________________]

 

(d)        if to any Major Stockholder or Stockholder, at its address as it appears on the record books of the Company.

 

Any party may, by notice given in accordance with this Section 8.2, designate another address or Person for receipt of notices hereunder. All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if telecopied or sent by electronic mail.

 

8.3       Successors and Assigns. This Agreement shall be binding upon andinure to the benefit of the parties and their respective successors, heirs, legatees and legal representatives. This Agreement is not assignable except in connection with a Transfer of Shares in accordance with this Agreement.

 

8.4       Amendment and Waiver.

 

(a)          Except as specifically set forth in this Agreement, no failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise.

 

  

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(b)          Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by any party from the terms of any provision of this Agreement, shall be effective only if it is made or given in writing and signed by the Company, the Stockholders holding a majority of the voting power of the Shares held by the Stockholders, and Series E Investors holding a majority of the voting power of the Shares held by the Series E Investors. Any such amendment, supplement, modification, waiver or consent shall be binding upon the Company and all of the Stockholders.

 

8.5      Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. This Agreement may be executed by facsimile signature(s) which shall be binding on the party delivering same, to be followed by delivery of originally executed signature pages.

 

8.6      Specific Performance. The parties hereto intend that each of the parties have the right to seek damages or specific performance in the event that any other party hereto fails to perform such party's obligations hereunder. Therefore, if any party shall institute any action or proceeding to enforce the provisions hereof, any party against whom such action or proceeding is brought hereby waives any claim or defense therein that the plaintiff party has an adequate remedy at law.

 

8.7      Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

  

35

  

 

8.8      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION.NO SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY COURT OR BEFORE ANY SIMILAR AUTHORITY OTHER THAN IN A COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK AND THE PARTIES HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF SUCH SUIT, PROCEEDING OR JUDGMENT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT WHICH IT MAY HAVE HAD TO BRING SUCH AN ACTION IN ANY OTHER COURT, DOMESTIC OR FOREIGN, OR BEFORE ANY SIMILAR DOMESTIC OR FOREIGN AUTHORITY AND AGREES NOT TO CLAIM OR PLEAD THE SAME. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING IN RELATION TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

8.9      Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

 

  

36

  

 

8.10    Entire Agreement. This Agreement, together with the exhibits hereto, is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement, together with the exhibits hereto, supersedes all prior agreements and understandings among the parties with respect to such subject matter, including the Prior Stockholders Agreement.

 

8.11    Term of Agreement. This Agreement shall become effective upon the execution hereof and shall terminate upon the first to occur of (a) the consummation of the Qualified Initial Public Offering or b) the consummation of a Pubco Transaction.

 

8.12    Further Assurances. Each of the parties shall, and shall cause their respective Affiliates to, execute such instruments and take such action as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated hereby.

 

[Remainder of Page Intentionally Left Blank]

 

  

37

  

 

IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Amended and Restated Stockholders Agreement on the date first written above. 

 

	 	ACTINIUM PHARMACEUTICALS, INC.	 
	 	 	 	 
	
 

	By: 	/s/ Dragan Cicic	 
	 	 	
Name: Dragan Cicic

	 
	 	 	
Title: President and CEO

	 
	 	 	 	 
	 	
ACTINIUM HOLDINGS LIMITED

	 
	 	 	 	 
	 	By:  	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	
N.V. ORGANON

	 
	 	 	 	 
	 	By:  	 	 
	 	 	Name: 	 
	 	 	
Title:

	 
	 	 	 	 
	 	 	
DR. MAURITS GEERLINGS, JR.

	 
	 	 	 	 
	 	 	 	 

 

The Purchasers of Series E Preferred Shares, to be set forth on Schedule A to this Agreement, have executed a Subscription Agreement with the Company which provides, among other things, that by executing the Subscription Agreement each Purchaser is deemed to have executed the AMENDED AND RESTATED STOCKHOLDERS AGREEMENT in all respects.

 

  

38

  

 

IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Amended and Restated Stockholders Agreement on the date first written above. 

 

	 	ACTINIUM PHARMACEUTICALS, INC.	 
	 	 	 	 
	
 

	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	
ACTINIUM HOLDINGS LIMITED

	 
	 	 	 	 
	 	By:	/s/ Michael Shettay	 
	 	 	Name: Michael Shettay	 
	 	 	Title: President	 
	 	 	 	 
	 	
N.V. ORGANON

	 
	 	 	 	 
	 	By: 	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	 	DR. MAURITS GEERLINGS, JR.	 
	 	 	 	 
	 	 	 	 

 

The Purchasers of Series E Preferred Shares, to be set forth on Schedule A to this Agreement, have executed a Subscription Agreement with the Company which provides, among other things, that by executing the Subscription Agreement each Purchaser is deemed to have executed the AMENDED AND RESTATED STOCKHOLDERS AGREEMENT in all respects.

 

  

39

  

 

IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Amended and Restated Stockholders Agreement on the date first written above. 

 

	 	ACTINIUM PHARMACEUTICALS, INC.	 
	 	 	 	 
	
 

	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	
ACTINIUM HOLDINGS LIMITED

	 
	 	 	 	 
	 	By:	 	 
	 	 	Name: 	 
	 	 	Title: 	 
	 	 	 	 
	 	
N.V. ORGANON

	 
	 	 	 	 
	 	By: 	/s/ David Nicholson	 
	 	 	Narne: David Nicholson, Ph.D	 
	 	 	
Title: Sr. VP, Worldwide Licensing 

          & Knowledge Management

	 
	 	 	 	 
	 	 	DR. MAURITS GEERLINGS, JR.	 
	 	 	 	 
	 	 	 	 

 

The Purchasers of Series E Preferred Shares, to be set forth on Schedule A to this Agreement, have executed a Subscription Agreement with the Company which provides, among other things, that by executing the Subscription Agreement each Purchaser is deemed to have executed the AMENDED AND RESTATED STOCKHOLDERS AGREEMENT in all respects.

 

  

40

  

 

IN WITNESS WHEREOF, the undersigned have executed, or have caused to he executed, this Amended and Restated Stockholders Agreement on the date first written above. 

 

	 	ACTINIUM PHARMACEUTICALS, INC.	 
	 	 	 	 
	
 

	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	
ACTINIUM HOLDINGS LIMITED

	 
	 	 	 	 
	 	By:	 	 
	 	 	Name: 	 
	 	 	Title: 	 
	 	 	 	 
	 	
N.V. ORGANON

	 
	 	 	 	 
	 	By: 	 	 
	 	 	Narne: 	 
	 	 	
Title:

	 
	 	 	 	 
	 	 	DR. MAURITS GEERLINGS, JR.	 
	 	 	 	 
	 	 	/s/ Maurits Geerlings, Jr.   	 

 

The Purchasers of Series F Preferred Shares, to be set forth on Schedule A to this Agreement, have executed a Subscription Agreement with the Company which provides, among other things, that by executing the Subscription Agreement each Purchaser is deemed to have executed the AMENDED AND RESTATED STOCKHOLDERS AGREEMENT in all respects.

 

  

41

  

 

SCHEDULE A

 

SCHEDULE OF PURCHASERS 

 

Initial Closing (October 5, 2011)

 

	
Name of Purchaser

	 	
Series E Shares

	 	 	
Warrants

	 
	
Baker, Adam

	 	 	191,570	 	 	 	47,892	 
	
Barber, Michael K. and Julia K (JTWROS)

	 	 	114,942	 	 	 	28,735	 
	
Beam, George B.

	 	 	38,314	 	 	 	9,578	 
	
Blank, Robert N.

	 	 	95,785	 	 	 	23,946	 
	
Brawley, William Wade

	 	 	95,785	 	 	 	23,946	 
	
Byer, Scott

	 	 	95,785	 	 	 	23,946	 
	
Carroll, Michael and Sheila (JTWROS)

	 	 	670,496	 	 	 	167,623	 
	
Chambers, Michael R.

	 	 	95,785	 	 	 	23,946	 
	
Conan, Roger

	 	 	191,570	 	 	 	47,892	 
	
Craig, Ron D.

	 	 	383,141	 	 	 	95,785	 
	
Davis, Frank

	 	 	95,785	 	 	 	23,946	 
	
Dunn, Robert

	 	 	383,141	 	 	 	95,785	 
	
Duty, Clint N.

	 	 	191,570	 	 	 	47,892	 
	
Eckert, Douglas E.

	 	 	95,785	 	 	 	23,946	 
	
Elefther, George IRA (Stern, Agee & Leach Inc C/F)

	 	 	471,263	 	 	 	117,815	 
	
Engdall, Michael and Susan

	 	 	191,570	 	 	 	47,892	 
	
Fischgrund, Stephen

	 	 	57,471	 	 	 	14,367	 
	
Fox, L. Dean

	 	 	766,282	 	 	 	191,570	 
	
Hanks, Bryan J. and Michelle B. (JTWROS)

	 	 	95,785	 	 	 	23,946	 
	
Hasley, Jimmy R. IRA

	 	 	335,248	 	 	 	83,811	 
	
Hasty, Benjamin

	 	 	114,942	 	 	 	28,735	 
	
Herweck, Richard L.

	 	 	38,314	 	 	 	9,578	 
	
Johnston, Christopher M.

	 	 	95,785	 	 	 	23,946	 
	
Johnston, Timothy P.

	 	 	181,991	 	 	 	45,497	 
	
Konetzni, Albert H., Jr. and Shirley A. (JTWROS)

	 	 	95,785	 	 	 	23,946	 
	
Krauch, Robert H.

	 	 	766,282	 	 	 	191,570	 
	
Kuhar, David A.

	 	 	57,471	 	 	 	14,367	 
	
Laflash, Harold 0. and Greta G. (JTWROS)

	 	 	95,785	 	 	 	23,946	 
	
Larsen, Kenneth N. Trust U/A/D 9/25/09, Kenneth

	 	 	191,570	 	 	 	47,892	 

  

 

  

42

  

 

	
N. Larsen Trustee

	 	 	 	 	 	 
	
Laskowski, Jan J. and Sofia M. (JTWROS)

	 	 	191,570	 	 	 	47,892	 
	
Lees, James W.

	 	 	95,785	 	 	 	23,946	 
	
Lemaster, Timothy E.

	 	 	210,727	 	 	 	52,681	 
	
Levine, Richard

	 	 	1,149,423	 	 	 	287,355	 
	
Magolske, Charles J.

	 	 	38,314	 	 	 	9,578	 
	
McCarthy, Kevin P.

	 	 	191,570	 	 	 	47,892	 
	
Miller, Brian IRA (Robert W. Baird & Co., Inc. TTEE, FBO Brian Miller IRA Acct # 6144 2867)

	 	 	383,141	 	 	 	95,785	 
	
Muckenhin, Carl F.

	 	 	95,785	 	 	 	23,946	 
	
Murray, Ian H.

	 	 	383,141	 	 	 	95,785	 
	
O'Brien, Denis

	 	 	1,915,800	 	 	 	478,948	 
	
Oppito, Joseph T.

	 	 	57,471	 	 	 	14,367	 
	
Paull, Burton Mark

	 	 	191,570	 	 	 	47,892	 
	
Pellegrini, Timothy J. and Catherine A. (JTWROS)

	 	 	95,785	 	 	 	23,946	 
	
Pimpinella, John and Mueller, Bernadette (jtwros)

	 	 	38,314	 	 	 	9,578	 
	
Reed, Clayton A. and Stephanie S.

	 	 	95,785	 	 	 	23,946	 
	
Reid, Matthew

	 	 	191,570	 	 	 	47,892	 
	
Richardson, Earl R.

	 	 	287,355	 	 	 	71,838	 
	
Rinker, Timothy J.

	 	 	95,785	 	 	 	23,946	 
	
Rosen, Marvin S.

	 	 	103,448	 	 	 	25,861	 
	
Scheck, Dianne M.

	 	 	383,141	 	 	 	95,785	 
	
Soicher, Ronald

	 	 	134,099	 	 	 	33,524	 
	
Smith, Sharon M.

	 	 	38,314	 	 	 	9,578	 
	
Sommer, John L. IRA (Sterne, Agee & Leach Inc. C/F)

	 	 	574,711	 	 	 	143,677	 
	
Stapell, Robert T.

	 	 	95,785	 	 	 	23,946	 
	
Turner, Michael L.

	 	 	76,628	 	 	 	19,157	 
	
Valka, William A. and

Barbara B. (JTWROS)

	 	 	95,785	 	 	 	23,946	 
	
Washauer, Gary A.

	 	 	95,785	 	 	 	23,946	 
	
Weidner, Charles L. and Weidner, Alice N. Barnett, TTEE fbo The Weidner Family Revocable Trust dtd 8/13/07

	 	 	383,141	 	 	 	95,785	 
	
Whitley, Michael E.

	 	 	95,785	 	 	 	23,946	 

 

  

43

  

 

	
Wieghaus, Timothy

	 	 	
95,785

	 	 	 	
23,946

	 
	
Wikel, Daniel P.

	 	 	
191,570

	 	 	 	
47,892

	 
	
Wilson, William, III and Wilson, Patricia White COTTEE of The Wilson Family Restated Living Trust UTA dtd 04/2004

	 	 	
383,141

	 	 	 	
95,785

	 
	
Wimberly, James M.

	 	 	
95,785

	 	 	 	
23,946

	 
	
Zaborowski, Peter J. and Tiffany B. (JTWROS)

	 	 	
383,141

	 	 	 	
95,785

	 
	
Zar, Keith A.

	 	 	
191,570

	 	 	 	
47,892

	 
	
Zelinski, George M.

	 	 	
383,141

	 	 	 	
95,785

	 
	
Total Number of

Purchasers: 65

	 	
  TOTAL: 

15,804,644

	 	 	
  TOTAL: 

3,951,131

	 

 

First Subsequent Closing (October 31, 2011)

 

	
Name of Purchaser

	 	
Series E Shares

	 	 	
Warrants

	 
	
Borbolla, Jorge

	 	 	95,785	 	 	 	23,946	 
	
Cantwell, David

	 	 	402,298	 	 	 	100,574	 
	
Chandler, Andrew

	 	 	95,643	 	 	 	23,910	 
	
Eilers Jr., John W.

	 	 	95,785	 	 	 	23,946	 
	
Matter, Dr. Richard and Anita (JTWROS)

	 	 	95,785	 	 	 	23,946	 
	
Mendez, Eliana Cardenas and Roberto (JTWROS)

	 	 	95,785	 	 	 	23,946	 
	
Park, Stephen and Tracy (JTWROS)

	 	 	114,942	 	 	 	28,735	 
	
Stanley, Conor

	 	 	306,436	 	 	 	76,608	 
	
Total Number of

Purchasers: 8

	 	
TOTAL:

1,302,459

	 	 	
TOTAL:

325,611

	 

 

Second Subsequent Closing (November 17, 2011)

 

	
Name of Purchaser

	 	
Series E Shares

	 	 	
Warrants

	 
	
Craig, Ron D.

	 	 	383,141	 	 	 	95,785	 
	
Hart, Michael M.

	 	 	38,314	 	 	 	9,578	 
	
Sullivan, Brendan

	 	 	19,157	 	 	 	4,789	 
	
Sullivan, Gregory F., MD and Gene M.

	 	 	229,884	 	 	 	57,471	 
	
Variety Investments Limited

	 	 	1,149,423	 	 	 	287,355	 
	
Total Number of

Purchasers: 5

	 	
TOTAL:

1,819,919

	 	 	
TOTAL:

454,978

	 

 

  

44

  

 

Third Subsequent Closing (November 30, 2011)

 

	
Name of Purchaser

	 	
Series E Shares

	 	 	
Warrants

	 
	
Einstein, Christina G. IRA (Stern Agee & Leach Inc. C/F)

	 	 	191,570	 	 	 	47,892	 
	
Ferriter, Dr. John M.

	 	 	95,785	 	 	 	23,946	 
	
Jones, Rex. A.

	 	 	766,282	 	 	 	191,570	 
	
Mehos, Christopher J.

	 	 	191,570	 	 	 	47,892	 
	
Murray, Ian H.

	 	 	172,413	 	 	 	43,103	 
	
Murray, Thomas and Lillian (JTWROS)

	 	 	38,314	 	 	 	9,578	 
	
Stanley, Michael

	 	 	114,942	 	 	 	28,735	 
	
Total Number of

Purchasers: 7

	 	
TOTAL:

1,570,876

	 	 	
TOTAL:

392,716

	 

Fourth Subsequent Closing (December 12, 2011)

 

	
Name of Purchaser

	 	
Series E Shares

	 	 	
Warrants

	 
	
Cady, Roger K. IRA (Sterne Agee & Leach Inc. C/F Roger K. Cady RIO IRA)

	 	 	191,570	 	 	 	47,892	 
	
Chaban, Bohdan

	 	 	191,570	 	 	 	47,892	 
	
Duffy, John M.

	 	 	38,314	 	 	 	9,578	 
	
Guscott, Simon C.

	 	 	114,942	 	 	 	28,735	 
	
Jones, Brian E. and Peggy A. (JTWROS)

	 	 	766,282	 	 	 	191,570	 
	
Kane, Timothy J. and Annette K. (JTWROS)

	 	 	114,942	 	 	 	28,735	 
	
Poe, Steven W. and Judith L.

	 	 	38,314	 	 	 	9,578	 
	
Poe, Tracy N. 

	 	 	191,570	 	 	 	47,892	 
	
Sullivan, Jared MD

	 	 	38,314	 	 	 	9,578	 
	
Weidner (Charles L. Weidner TTEE & Alice N. Barrett Weidner TTEE FBO The Weidner Family Revocable Trust Dtd. 8/13/07)

	 	 	287,355	 	 	 	71,838	 
	
Total Number of

Purchasers: 10

	 	
TOTAL:

1,973,173

	 	 	
TOTAL:

493,288

	 

 

  

45

  

 

Fifth Subsequent Closing (December 28, 2011)

 

	
Name of Purchaser

	 	
Series E Shares

	 	 	
Warrants

	 
	
Herndon, Phillip Todd

	 	 	287,355	 	 	 	71,838	 
	
Katz, Deborah L.

	 	 	95,785	 	 	 	23,946	 
	
Klimitchek, Ken R.

	 	 	191,570	 	 	 	47,892	 
	
LARK Enterprises, Ltd.

	 	 	191,570	 	 	 	47,892	 
	
Lytle, Jon H. and Carrie M. (JTWROS)

	 	 	191,570	 	 	 	47,892	 
	
Minta Group LLC

	 	 	95,785	 	 	 	23,946	 
	
Tomlinson, Sandra F.

	 	 	76,628	 	 	 	19,157	 
	
Welsh, John H. IRA (Sterne Agee & Leach Inc. C/F John H. Welsh Roth IRA)

	 	 	95,785	 	 	 	23,946	 
	
Total Number of

Purchasers: 8

	 	
TOTAL:

1,226,048

	 	 	
TOTAL:

306,509

	 

 

Sixth Subsequent Closing (January 31, 2012)

 

	
Name of Purchaser

	 	
Series E Shares

	 	 	
Warrants

	 
	
Conan, Roger

	 	 	95,785	 	 	 	23,946	 
	
D'Amato, Anthony

	 	 	76,628	 	 	 	19,157	 
	
Duffy, John M.

	 	 	38,314	 	 	 	9,578	 
	
Ganse, Charles W.

	 	 	95,785	 	 	 	23,946	 
	
Harvest Financial Services Ltd. as Qualifying Fund Manager of the Chris McHugh ARF

	 	 	479,119	 	 	 	119,779	 
	
Holroyd, Douglas R. & Jill K.

	 	 	153,256	 	 	 	38,314	 
	
Levine, Richard

	 	 	766,282	 	 	 	191,570	 
	
McHugh, Chris

	 	 	536,397	 	 	 	134,099	 
	
Plaschika, Gerhard

	 	 	38,314	 	 	 	9,578	 
	
Poe, Tracy (Sterne Agee & Leach Inc. C/F Tracy N. Poe R/O IRA)

	 	 	114,942	 	 	 	28,735	 
	
Rajan, Srinivasa

	 	 	19,157	 	 	 	4,789	 
	
Ray Sinnott Pension Fund

	 	 	49,808	 	 	 	12,452	 
	
Ray Sinnott

	 	 	57,375	 	 	 	14,343	 
	
Sullivan, Brendan

	 	 	38,314	 	 	 	9,578	 
	
Sterne Agee & Leach Inc. C/F Gregory F. Sullivan II IRA

	 	 	19,157	 	 	 	4,789	 
	
Syntec Scientific Ltd. by Ray

	 	 	191,474	 	 	 	47,868	 

 

  

46

  

 

	    Sinnott	 	 	 	 	 	 	 	 
	
Sterne Agee & Leach Inc. CT JB Trahern Bene Owner Ann Trahern DCSD IRA

	 	 	
100,766

	 	 	 	
25,191

	 
	
Ziaks, Lance and Jannet

	 	 	
38,314

	 	 	 	
9,578

	 
	
Total Number of

Purchasers: 18

	 	 	
TOTAL:

2,909,187

	 	 	 	
TOTAL:

727,290

	 

 

  

47

  

 

EXHIBIT Al

 

ACKNOWLEDGMENT AND AGREEMENT

 

The undersigned wishes to receive from ________ ("Transferor") _______  shares, par value $[insert number] per share, of [Common Stock] [Preferred Stock] or certain options, warrants or other rights to purchase  shares of [Common Stock] [Preferred Stock] (the "Shares") of Actinium Pharmaceuticals, Inc., a Delaware corporation (the "Company");

 

The Shares are subject to the Amended and Restated Stockholders Agreement, dated ] (the "Agreement"), among the Company and the other parties listed on the signature pages thereto;

 

The undersigned has been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms;

 

Pursuant to the terms of the Agreement, the Transferor is prohibited from Transferring such Shares and the Company is prohibited from registering the Transfer of the Shares unless and until a Transfer is made in accordance with the terms and conditions of the Agreement and the recipient of such Shares acknowledges the terms and conditions of the Agreement and agrees to be bound thereby; and

 

The undersigned wishes to receive such Shares and have the Company register the Transfer of such Shares.

 

1For Transfers of previously issued stock.

 

  

48

  

 

In consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce the Transferor to Transfer such Shares to the undersigned and the Company to register such Transfer, the undersigned does hereby acknowledge and agree that (i) he[/she] has been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares are subject to the terms and conditions set forth in the Agreement, and (iii) the undersigned does hereby agree fully to be bound thereby as a "Stockholder" and as [SELECT AS APPROPRIATE] [an "Investorl [an "Eligible Investor"] [a "Major Stockholder"] (as therein defined).

 

This                    day of                       , 20     .

 

	 	 	 	 

 

  

49

  

 

EXHIBIT B 1/

 

ACKNOWLEDGMENT AND AGREEMENT

 

The undersigned wishes to receive from Actinium Pharmaceuticals, Inc., a Delaware corporation (the "Company"),                   shares, par value $[insert number] per share, of [Common Stock] [Preferred Stock], or certain newly issued options, warrants or other rights to purchase                shares of [Common Stock] [Preferred Stock] (the "Shares"), of the Company;

 

The Shares are subject to the Amended and Restated Stockholders Agreement, dated [             ] (the "Agreement"), among the Company and the other parties listed on the signature pages thereto;

 

The undersigned has been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms;

 

Pursuant to the terms of the Agreement, the Company is prohibited from issuing the Shares unless and until a Transfer is made in accordance with the terms and conditions of the Agreement and the recipient of such Shares acknowledges the terms and conditions of the Agreement and agrees to be bound thereby; and

 

The undersigned wishes to receive such Shares.

 

1/             For newly issued stock.

 

  

50

  

 

In consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce the Company to issue such Shares, the undersigned does hereby acknowledge and agree that (i) he[/she] has been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares are subject to terms and conditions set forth in the Agreement, and (iii) the undersigned does hereby agree fully to be bound thereby as a "Stockholder".

 

This                    day of                       , 20     .

 

  

51

  

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	
1.

	Definitions  	3
	 	 	 
	
2.

	Restrictions on Transfer of Shares  	13
	 	2.1  	Limitation on Transfer   	13
	 	2.2 	Permitted Transfers  	14
	 	2.3  	Permitted Transfer Procedures  	14
	 	2.4 	Transfers in Compliance with Law; Substitution of Transferee  	15
	 	 	 
	
3.

	
Right of First Offer, Drag-Along and Tag-Along Rights

	
15

	  	
3.1

	
Proposed Voluntary Transfers                                                                                                       

	
15

	  	
3.2

	
Involuntary Transfers                                                                                                       

	
23

	 	 	 
	
4.

	
Future Issuance of Shares; Preemptive Rights                                                                                                                 

	
26

	  	
4.1

	
Offering Notice                                                                                                       

	
26

	  	
4.2

	
Preemptive Rights; Exercise                                                                                                       

	
26

	  	
4.3

	
Closing                                                                                                       

	
27

	  	
4.4

	
Sale to Subject Purchaser                                                                                                       

	
28

	 	 	 
	
5.

	
After-Acquired Securities; Agreement to be Bound                                                                                                                 

	
29

	  	
5.1

	
After-Acquired Securities                                                                                                       

	
29

	  	
5.2

	
Agreement to be Bound                                                                                                       

	
29

	 	 	 
	
6.

	
Corporate Governance                                                                                                                 

	
30

	  	
6.1

	
General                                                                                          

	
30

	  	
6.2

	
Stockholder Actions                                                                                                       

	
 

	  	
6.3

	
Election of Directors; Number and Composition                                                                                                       

	
30

	  	
6.4

	
Removal and Replacement of Director                                                                                                       

	
31

	  	
6.5

	
Reimbursement of Expenses; D&O Insurance                                                                                                       

	
31

	  	
6.6

	
Annual Budget                                                                                       

	
31

	  	
6.7

	
Books and Records                                                                                                       

	
31

	 	 	 
	
7.

	
Stock Certificate Legend                                                                                                                 

	
32

	 	 	 
	
8.

	
Miscellaneous                                                                                                                 

	
32

	 	8.1	
Recapitalizations, Exchanges, etc.

	32
	  	
8.2

	
Notices                                                                                                       

	
33

	  	
8.3

	
Successors and Assigns                                                                                                       

	
34

	  	
8.4

	
Amendment and Waiver                                                                                                       

	
34

	  	
8.5

	
Counterparts                                                                                                       

	
35

	  	
8.6

	
Specific Performance                                                                                                       

	
35

	  	
8.7

	
Headings                                                                                                       

	
35

	  	
8.8

	
GOVERNING LAW                                                                                                       

	
36

	  	
8.9

	
Severability                                                                                                       

	
36

	  	
8.10

	
Entire Agreement                                                                                                       

	
37

 

  

F-1

  

 

	 	8.11	Term of Agreement 	37
	 	8.12	Further Assurances	37
	 	 	 	 
	EXHIBITS	 
	 	 	 	 
	A	 	Form of Transfer Agreement (Previously issued shares)	 
	B	 	Form of Transfer Agreement (Newly issued shares)	 

 

 

F-2f8k122812a1ex10iv_cactus.htm

Exhibit 10.4

SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

 

BY AND AMONG

 

ACTINIUM PHARMACEUTICALS, INC.

 

ACTINIUM HOLDINGS LIMITED

 

AND

 

THE INVESTORS PARTY HERETO

 

October 5, 2011

 

  

  

  

 

SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

 

THIS SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into as of October 5, 2011, by and among Actinium Pharmaceuticals, Inc., a Delaware corporation (the "Company"), Actinium Holdings Limited (formerly named General Atlantic Investments Limited"), a Bermuda corporation ("AHL"), and the persons identified on Exhibit A hereto (together with AHL, the "Investors").

 

BACKGROUND

 

WHEREAS, the Company, Actinium Pharmaceuticals, Ltd., a Bermuda corporation ("Actinium Bermuda"), APL and N.V. Organon, a Netherlands corporation ("Organon"), entered into an Investor Rights Agreement dated as of October 24, 2006 (the "Original Investor Rights Agreement");

 

WHEREAS, on July 5, 2007, Actinium Bermuda merged with and into the Company, thereby causing the Company to succeed to all of the rights and obligations of Actinium Bermuda under the Original Investor Rights Agreement;

 

WHEREAS, upon the initial closing of the Company's Series D Preferred financing on March 8, 2008, the Company, AHL and Organon entered into an Amended and Restated Investor Rights Agreement (the "First Amended Investor Rights Agreement") which amended, restated and replaced in its entirety the Original Investor Rights Agreement;

 

WHEREAS, the Investors are purchasing or otherwise acquiring shares of the Company's Series E Preferred Stock, par value $0.01 per share pursuant to that certain Series E Preferred Stock Purchase Agreement (the "Purchase Agreement"), dated as of the date hereof, by and among the Investors and the Company;

 

WHEREAS, as a condition of entering into the Purchase Agreement, the Investors have requested that the Company agree to amend and restate in its entirety the First Amended Investor Rights Agreement to read as set forth in this Agreement; and

 

WHEREAS, AHL constitutes the sole holder of the Series D Preferred Shares (as defined in the Existing Investor Rights Agreement) and, therefore, the Company and AHL have the power and right to amend the First Amended Investor Rights Agreement pursuant to Section 4.6 thereof.

 

NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in this Agreement and in the Purchase Agreement, the parties, intending to be legally bound, mutually agree as follows:

 

Section 1 GENERAL

 

1.1 Definitions. As used in this Agreement the following terms shall have the following respective meanings:

 

"Affiliate" means, with respect to any Person, any other Person who is an "affiliate" of such Person within the meaning of Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

 

"Board" means the Board of Directors of the Company.

 

  

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"Certificate" means the Company's Fourth Amended and Restated Certificate of Incorporation, as such may be amended from time to time in accordance with the provisions thereof.

 

"Charter Documents" means the Certificate and the Bylaws of the Company as in effect on the date hereof, and as may be amended from time to time in accordance with the provisions thereof.

 

"Common Stock" means the shares of the Common Stock, $0.01 par value per share, of the Company.

 

"Counterpart" means a counterpart signature page to this Agreement in substantially the same form as Exhibit B attached to this Agreement.

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and any rules or regulations promulgated thereunder, all as the same is in effect from time to time.

 

"Form S-3" means such form under the Securities Act as in effect on the date hereof or any successor form under the Securities Act that permits significant incorporation by reference of the Company's subsequent public filings under the Exchange Act

 

"Holder" means any Investor owning of record any Preferred Stock and any assignee of record of such Preferred Stock of the Company.

 

"Indemnifiable Losses" means shall mean all losses, liabilities, obligations, claims, demands, damages, penalties, settlements, causes of action, costs and expenses, including, without limitation, the actual reasonable costs paid in connection with an Indemnitee's investigation and evaluation of any claim or right asserted against such Indemnitee Party and all reasonable attorneys', experts' and accountants' fees, expenses and disbursements and court costs including, without limitation, those incurred in connection with the Indemnitee's enforcement of this Agreement and the indemnification provisions of Section 7 of this Agreement

 

"IPO" means the Company's sale of its Common Stock its first underwritten public offering of its Common Stock registered under the Securities Act (as defined below) in connection with which all the then-outstanding shares of Preferred Stock are converted into shares of Common Stock pursuant to the Company's Certificate of Incorporation, as it may be amended from time to time.

 

"Major Holder" means (a) AHL, (b) any Holder in the aggregate of at least 500,000 shares of (i) Series B Preferred Stock, (ii) Series D Preferred Stock, or (iii) Series B Preferred Stock and Series D Preferred Stock, and (c) any Holder of at least 100,000 shares of Series E Preferred Stock

 

The number of shares of "Registrable Securities then outstanding" shall be determined by the number of shares of Common Stock of the Company outstanding which are Registrable Securities plus the number of shares of Common stock of the Company issuable pursuant to then exercisable, convertible or exchangeable securities which are Registrable Securities

 

"Person" means any natural person, corporation, general partnership, limited partnership, limited liability partnership, limited liability company, proprietorship, joint venture, trust, association, union, entity or other form of business organization or any governmental or regulatory authority whatsoever.

 

  

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"Preferred Stock" means shares of the Company's Series A Preferred Stock, Series B Preferred Stock, Series C-1, C-2, C-3 and C-4 Preferred Stock, Series D Preferred Stock and Series E Preferred Stock collectively.

 

"Qualified Initial Public Offering" means the closing of the Company's initial direct public offering or underwritten public offering on a firm commitment basis pursuant to an effective registration statement filed pursuant to the Securities Act, covering the offer and sale of the Company's Common Stock for the account of the Company (a) in which (i) the Company actually receives gross proceeds equal to or greater than $5,000,000, calculated before deducting underwriters' discounts and commissions and other offering expenses, and (ii) a per share offering price equal to or greater than the product of (A) the Applicable Per Share Stated Value, as such term is defined in the Certificate, of the Series E Preferred Stock, multiplied by (B) two (2), and (b) following which the Company's Common Stock is listed on a national securities exchange or approved for quotation on the Nasdaq National Market.

 

"Register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.

 

"Registrable Securities" means the following shares of the Company's Common Stock (referred to herein collectively as the "Stock"): (i) the shares of Common Stock of the Company issued or issuable upon conversion of shares of the Series A Preferred Stock, the Series B Preferred Stock, the Series C-1 Preferred Stock, the Series C-2 Preferred Stock, the Series C-3 Preferred Stock, the Series C-4 Preferred Stock, Series D Preferred Stock and/or the Series E Preferred Stock of the Company issued and outstanding as of the date of this Agreement, and (ii) the shares of Common Stock issued or issuable upon exercise of the Warrants issued pursuant to the Purchase Agreement, but shall not include shares for which registration rights have terminated pursuant to Section 10.6 hereof, or (iii) any other shares of the Company's Common Stock issued as (or issuable upon conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to or in exchange for or replacement of any existing series of the Company's Preferred Stock of the Company, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which an Investor's rights under this Agreement are not assigned; provided, however, that Registrable Securities shall not include any securities (A) sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, (B) sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale, or (C) if the Investor thereof is no longer entitled to exercise any right provided in Sections 2, 3 or 4 in accordance with Section 10.6 hereof.

 

"SEC" or "Commission" means the Securities and Exchange Commission.

 

"Securities Act" means the Securities Act of 1933, as amended, and any rules or regulations promulgated thereunder, all as the same is in effect from time to time.

 

"Series A Preferred Stock" means the Company's Series A Preferred Stock, par value $0.01 per share.

 

"Series B Preferred Stock" means the Company's Series B Preferred Stock, par value $0.01 per share.

 

  

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"Series C Preferred Stock" means any series of the Company's Series C-1 Preferred Stock, par value $0.01 per share, Series C-2 Preferred Stock, par value $0.01 per share, Series C-3 Preferred Stock, par value $0.01 per share, and Series C-4 Preferred Stock, par value $0.01 per share, collectively.

 

"Series D Preferred Stock" means the Company's Series D Preferred Stock, par value $0.01 per share.

 

"Series E Directors" means those certain directors elected to the Board by the holders of the Series E Preferred Shares.

 

"Series E Preferred Stock" means the Company's Series E Preferred Stock, par value $0.01 per share.

 

"Series E Preferred Shares" means any shares of Series E Preferred Stock issued to and held by the Holders and their permitted assigns.

 

"Subsidiaries" means any Person of which a Company, directly or indirectly, through one or more intermediaries owns or controls at the time at least fifty percent (50%) of the outstanding voting equity or similar interests or the right to receive at least fifty percent (50%) of the profits or earnings or aggregate equity value.

 

"Transaction Documents" has the meaning ascribed to it in the Purchase Agreement. 

 

Section 2  PIGGYBACK RIGHTS

 

2.1. Notice of Registration. If at any time or from time to time, the Company shall determine to register any of its equity securities for its own account in a direct public offering or an underwritten public offering, the Company will:

(i) prior to the filing of such registration give to the Holders written notice thereof; and

(ii) include in such registration (and any related qualification under blue sky laws or other compliance), and underwriting, all the Registrable Securities (subject to cutback as set forth in Section 2.2) specified in a written request or requests made within thirty (30) days after receipt of such written notice from the Company by any Holder.

 

2.2. Underwriting. The right of any Holder to registration pursuant to this Section 2 shall be conditioned upon such Holder's participation in such offering and the inclusion of Registrable Securities in the offering to the extent provided herein. If any Holder proposes to distribute its securities through an underwritten offering, such Holder shall (together with the Company and any other stockholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of this Section 2, if the Company or the managing underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit the Registrable Securities to be included in such registration. The Company shall so advise the Holders and the other stockholders distributing their securities through such offering pursuant to piggyback registration rights , and the number of shares of Registrable Securities and other securities that may be included in the registration and underwriting shall be allocated among the Holders (i) of Series E Preferred Shares, and (ii) only after all Series E Preferred Shares have been registered, among the Holders of Series D Preferred Shares, Series C Preferred Shares, Series B Preferred Shares and Series A Preferred Shares and any other participating stockholders in proportion, in each case as nearly as practicable, to the respective amounts of Registrable Securities held by such Holders and other securities held by other stockholders at the time of filing the registration statement, provided that the aggregate amount of Registrable Securities held by selling Holders included in the offering shall not be reduced below thirty percent (30%) of the total amount of securities included in that offering unless the offering is the IPO of the Company's securities, in which case all Registrable Securities held by Holders may be excluded. In the event the Company or the managing underwriter does determine that marketing factors require a limitation of the number of shares to be underwritten (the "Cutback"), such Cutback shall be applied first to reduce, pro rata, Holders of Series A Preferred Shares, Series B Preferred Shares, Series C Preferred Shares, and Series D Preferred Shares before it shall be applied pro rata to Holders of Series E Preferred Shares, subject to the above mentioned thirty percent (30%) reduction limit, if at all. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to each Holder or other stockholder to the nearest 100 shares. If any Holder or other stockholder disapproves of the terms of any such underwriting, he or she may elect to withdraw therefrom by written notice to the Company and the managing underwriter, Any securities excluded or withdrawn from such offering shall be withdrawn from such registration, and shall not be transferred in a public distribution prior to one-hundred eighty (180) days after the effective date of the registration statement relating thereto.

 

  

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2.3. Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2 prior to the effectiveness of such registration, whether or not any Holder has elected to include securities in such registration.

 

Section 3 DEMAND REGISTRATION

 

3.1. Demand Registration. If at any time after the earlier of (i) the third anniversary of the date hereof, or (ii) three (3) months after the Company's Common Stock becomes publicly traded (whether through a Qualified Initial Public Offering, a Pubco Transaction (as defined below) or otherwise, (the "Start Date")) , whichever is earlier, Holders of at least thirty-five percent (35%) of the Registrable Securities then outstanding request in writing that the Company file a registration statement under the Securities Act covering the registration of at least 20% of the then outstanding Registrable Securities, or a lesser percentage if the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed $10,000,000, then the Company will (i) give written notice of the proposed registration to all other Holders within 10 days of receipt of such request, and (ii) use its best efforts to cause such shares to be registered (together with any Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company) within twenty (20) days of the mailing of such written notice by the Company; provided, however, that (a) the Company shall not be required to effect any such registration (i) within one-hundred eighty (180) days prior to the filing of, and one-hundred eighty (180) days following the effective date of, a registration statement pertaining to a direct or underwritten public offering of the Company's securities in which Registrable Securities were or will be registered; provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective, (ii) if, within thirty (30) days of receipt of the written request from the Holders pursuant to this Section 3.1, the Company gives notice to the Holders of the Company's intention to make a public offering within sixty (60) days or (iii) if the Holders making the request propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 4 below, (b) if the Company furnishes the requesting Holders with a certificate of the President of the Company stating that in the good faith judgment of the Board of Directors it would be materially detrimental to the Company and its stockholders for a registration statement to be filed in the near future, such registration obligation shall be deferred for not more than ninety (90) days, but the Company shall not be entitled to such deferral more than once in any 12-month period and (c) the Company shall not be obligated to effect more than a total of two (2) demand registrations pursuant to this Section 3, and (d) the Company shall not be required to effect a registration in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Act. Any such registration shall be firmly underwritten by an underwriter of nationally recognized standing which shall be mutually agreeable to the Company and a majority in interest of the Holders requesting the registration. If any Holder disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the managing underwriter and the Holders making the request. The Registrable Securities so withdrawn shall also be withdrawn from registration, and such Registrable Securities shall not be transferred in a public distribution prior to ninety (90) days after the effective date of such registration; provided, however, that, if by the withdrawal of such Registrable Securities, a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum of any limitation imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities in the registration the right to include additional Registrable Securities. Holders shall be so entitled to include additional Registrable Securities in the registration upon written notice within 10 days of such offer being made.

 

  

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3.2. Underwritten Public Offering. In the event the Company offers its equity securities in an underwritten offering, the Company shall enter into an underwriting agreement with an investment banking firm or firms containing representations, warranties, indemnities and agreements then customarily included by an issuer in underwriting agreements with respect to secondary distributions. The Company shall not cause the registration under the Securities Act of any other shares of its Common Stock to become effective (other than registration of an employee stock plan, or registration in connection with any Rule 145 or similar transaction) during the effectiveness of a registration requested hereunder for an underwritten public offering if, in the judgment of the underwriter or underwriters, marketing factors would materially adversely affect the price of the Registrable Securities subject to such underwritten registration.

 

Section 4 FORM S-3 REGISTRATION

 

Holders of at least thirty percent (30%) of the Registrable Securities shall be entitled to request in writing (each, an "S-3 Registration Request") registrations of Registrable Securities then owned by such requesting Holders on a Form S-3 registration statement or any successor form under the Securities Act (an "S-3 Registration"). The Company shall pay for the expenses of such request as provided in Section 6. The S-3 Registration Request must be made in writing, and the S-3 Registration Request shall: (i) specify the number of shares intended to be offered and sold; (ii) express the present intention of the requesting Holders to offer or cause the offering of such shares for distribution; and (iii) contain the undertaking of the requesting Holders to provide all such information and materials and take all such action as may be required in order to permit the Company to comply with all applicable requirements of the SEC and to obtain any desired acceleration of the effective date of such registration statement. The Company shall, as soon as practicable, (a) promptly give written notice of the proposed registration to all other Holders, and (b) tile an S-3 Registration and obtain all such qualifications and compliance as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of the requesting Holders' Registrable Securities as are specified in the S-3 Registration Request (together with any Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within twenty (20) days after receipt of such written notice from the Company), within 15 days after receipt of such written notice by the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 4: (i) if Form S-3 is not available for such offering by the requesting Holders; (ii) the requesting Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate gross price to the public of less than $1,000,000; (iii) if within thirty (30) days of receipt of a written request from the requesting Holders, the Company gives notice to the Holders of the Company's intention to make its IPO or a public offering within sixty (60) days; (iv) if the Company furnishes the requesting Holders with a certificate of the President, Chief Executive Officer or Chairman of the Board of the Company stating that in the good faith judgment of the Board of Directors it would be seriously detrimental to the Company and its stockholders for a registration statement to be filed in the near future, such registration obligation shall be deferred for not more than ninety (90) days, but the Company shall not be entitled to such deferral more than once in any 12-month period, (iv) if in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service or process in effecting such registration, qualification or compliance; or (v) the Company has, within the twelve (12) month period preceding the date of such request, already effected two registrations on Form S-3 for any Holder pursuant to this Section 4.

 

  

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Section 5 OBLIGATIONS OF COMPANY

 

Whenever the Company is required by the provisions of this Agreement to effect the registration of the Registrable Securities, the Company shall: (i) prepare and, as soon as possible, file with the SEC a registration statement with respect to the Registrable Securities, and use its reasonable best efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, to remain effective until the earlier of the completion of the distribution of the Registrable Securities so registered or one hundred twenty (120) days subsequent to the effective date of such registration; (ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to make and to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities proposed to be registered in such registration statement for the period covered under clause (i) above; (iii) furnish to any Holder such number of copies of any prospectus (including any preliminary prospectus and any amended or supplemented prospectus), in conformity with the requirements of the Securities Act, as such Holder may reasonably request in order to effect the offering and sale of the Registrable Securities to be offered and sold; (iv) use its best efforts to register or qualify the Registrable Securities covered by such registration statement under the securities or blue sky laws of such states as the Holders shall reasonably request, maintain any such registration or qualification current for the period covered under clause (i) above, and take any and all other actions either necessary or reasonably advisable to enable Holders to consummate the public sale or other disposition of the Registrable Securities in jurisdictions where such Holders desire to effect such sales or other disposition; (v) take all such other actions either necessary or reasonably desirable to permit the Registrable Securities held by a Holder to be registered and disposed of in accordance with the method of disposition described herein; (vi) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering; (vii) notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, such obligation to continue for 120 days from the date of effectiveness of the registration statement; (viii) cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; (ix) provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration; and (x) use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to Section 3, if such securities are being sold through underwriters, or if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (A) an opinion, dated such date as registration statement becomes effective, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters and to the Holders requesting registration of Registrable Securities and (B) a letter dated such date as registration statement becomes effective, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to the Holders of a majority of the Registrable Securities being registered, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities. Notwithstanding the foregoing, the Company shall not be required to register or to qualify an offering of the Registrable Securities under the laws of a state if as a condition to so doing the Company is required to qualify to do business or to file a general consent to service of process in any such state or jurisdiction, unless the Company is already subject to service in such jurisdiction.

 

  

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Subject to the volume limitations and other underwriting conditions set forth in Sections 2.2 and 3.1, above, in the event a registration statement is not filed with the SEC including all the Registrable Securities no later than ninety (90) days after the Start Date (as defined in Section 3 above) or if such registration statement is not declared effective by the SEC within 180 days following the Start Date (or is declared effective but can no longer be used to sell Registrable Securities), the Company shall pay to each Holder of Registrable Securities one (1%) percent of such Holder's purchase price of that holder's unregistered Registrable Securities for each thirty (30) days (pro rata for shorter periods) until such registration statement is filed with the SEC and/or declared effective or is able to be reused by the holders of Registrable Securities, or such Holder is able to sell its shares, pursuant to Rule 144 or otherwise, as the case may be.

 

SECTION 6 EXPENSES OF REGISTRATION

 

The Company shall pay all of the fees and expenses (exclusive of underwriting discounts and commission and stock transfer taxes) incurred by the Company in complying with Sections 2, 3, 4 and 5 hereof in connection with any registration statement that is initiated pursuant to this Agreement, including, without limitation, all SEC and blue sky registration and filing fees, printing expenses, transfer agent and registrar fees, the fees and disbursements of the Company's outside counsel, the reasonable fees and disbursements of one special counsel to the Holders (not to exceed $20,000), and the expense of any special audits not to exceed twenty thousand dollars ($20,000) incident to or required by any such registration (the "Registration Expenses"). If a registration proceeding is begun upon the request of Holders pursuant to Sections 3 or 4 but such request is subsequently withdrawn, then the Holders of Registrable Securities to have been registered may either: (i) bear all Registration Expenses of such proceeding, pro rata on the basis of the number of shares to have been registered, in which case the Company shall be deemed not to have effected a registration pursuant to Sections 3 or 4, as applicable, of this Agreement; or (ii) require the Company to bear all Registration Expenses of such proceeding, in which case the Company shall be deemed to have effected a registration pursuant to Section 3 or 4, as applicable, of this Agreement. Notwithstanding the foregoing, however, if at the time of the withdrawal, the Holders have learned of a material adverse change in the condition, business or prospects of the Company from that known to the Holders at the time of their request, then the Holders shall not be required to pay any of said Registration Expenses. In such case, the Company shall be deemed not to have effected a registration pursuant to Sections 3 or 4, as applicable, of this Agreement. Any underwriting discounts, fees and disbursements of any additional counsel to the Holders, selling commissions and stock transfer taxes applicable to the Registrable Securities registered on behalf of Holders shall be borne by the Holders of the Registrable Securities included in such registration. The expenses of any legal services or special audit required in connection with any registration, qualification or compliance pursuant to Section 3 or 4 in excess of twenty thousand dollars ($20,000) shall be borne pro rata by the Holders of Registrable Securities proposing to distribute such shares of Registrable Securities in such registration.

 

  

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SECTION 7 INDEMNIFICATION

 

7.1. The Company. To the extent permitted by law, the Company will indemnify Holders and each person controlling Holders within the meaning of Section 15 of the Securities Act, and each underwriter if any, of the Company's securities, with respect to any registration, qualification or compliance which has been effected pursuant to this Agreement, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act or Exchange Act or state securities law applicable to the Company in connection with any such registration, qualification or compliance, and the Company will reimburse Holders and each person controlling Holders, and each underwriter, if any, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information expressly furnished to the Company by such Holder or controlling person or underwriter seeking indemnification for use in connection with such registration by any such Holder, underwriter or controlling person.

 

7.2. Holders. To the extent permitted by law, each Holder shall, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected (the "Indemnifying Holder"), indemnify the Company, each of its directors and officers and each person who controls the Company within the meaning of Section 15 of the Securities Act, and each underwriter, if any, of the Company's securities with respect to any registration, qualification or compliance which has been effected pursuant to this Agreement, against all expenses, claims, losses, damages and liabilities (or actions in respect thereof), arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by such Indemnifying Holder of any rule or regulation promulgated under the Securities Act applicable to such Indemnifying Holder in connection with any such registration, qualification or compliance, and the Indemnifying Holder will reimburse the Company, such directors and officers and each person controlling Company and each underwriter, if any, for any legal or any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, in reliance upon and in conformity with written information furnished to the Company by such Indemnifying Holder, provided that in no event shall any indemnity under this Section 7.2 exceed the net proceeds of the offering received by such Indemnifying Holder; provided, further, that the indemnity agreement contained in this Section 7.2 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Indemnifying Holder (which consent shall not be unreasonably withheld); provided further, however, that the indemnity agreement contained in this Section 7.2 with respect to any preliminary prospectus shall not inure to the benefit of any Holder or underwriter, or any person controlling such Holder or underwriter, from whom the person asserting any such losses, claims, damages or liabilities purchased shares in the offering, if a copy of the prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Holder or underwriter to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the shares to such person, and if the prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability.

 

  

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7.3. Defense of Claims. Each party entitled to indemnification under this Section 7 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense; provided, however, that the Indemnifying Party shall pay such expense if representation of the Indemnified Party by counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between the Indemnified Party and any other party represented by such counsel in such proceeding, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 7 unless the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action. No Indemnifying Party, in the defense of any such claim or litigation shall, except with the written consent of each Indemnified Party which consent shall not be unreasonably withheld, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. No Indemnifying Party shall be required to indemnify any Indemnified Party with respect to any settlement entered into without the Indemnifying Party's prior written consent.

 

7.4. Contribution. If the indemnification provided for in this Section 7 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any losses, claims, damages or liabilities referred to herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other, in connection with the violations that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder exceed the net proceeds from the offering received by such Holder.

 

7.5. Conflict; Survival. Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. The obligations of the Company and Holders under Section 7 shall survive the completion of any offering of Registrable Securities in a registration statement.

 

  

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SECTION 8 RULE 144 REPORTING

 

With a view to making available the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the Registrable Securities to the public without registration, the Company agrees to:

 

(a) Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after ninety (90) days following the effective date of the IPO;

 

(b) File with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements;

 

(c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act (at any time from and after ninety (90) days following the effective date of the IPO) and of the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company, and such other reports and documents so filed as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing such Holder to sell any such securities without registration; and

 

(d) Take such action, including the voluntary registration of its Common Stock under Section 12 of the Exchange Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in which the first registration statement filed by the Company for the offering of its securities to the general public is declared effective.

 

SECTION 9 STANDOFF AGREEMENT

 

Upon the effectiveness of any registration statement for the offering of equity securities of the Company, if requested by the Company and the managing underwriter, each Holder agrees not to offer to sell or sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company held by the Holder at any time during such period (other than (i) those included in the offering or (ii) those unregistered shares of Series E Preferred Stock which are sold under Rule 144, if any), directly or indirectly, without the prior written consent of the Company or the underwriters for such period of time following the effective date of the registration statement(not to exceed one-hundred eighty (180) days) as may be requested by the Company and the managing underwriter, provided that the foregoing obligations shall apply only if all directors and executive officers of the Company and all other stockholders holding greater than one percent (1%) of the outstanding Registrable Securities of the Company, and all other persons with registration rights (whether or not pursuant to this Agreement), enter into similar agreements. This Section 9 shall not apply to a registration relating solely to employee benefit plans, or to a registration relating solely to a transaction pursuant to Rule 145 under the Securities Act. In order to enforce the foregoing, the Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the share or securities of every other person subject to the foregoing restrictions) until the end of such period.

 

From and after the date of this Agreement, the Company shall not, without the prior written consent of at least a majority of the outstanding Registrable Securities (the "Required Vote"), grant to future investors any registration rights on parity with or more favorable than the registration rights granted to the Holders hereunder. Without limiting the foregoing, the Company shall not, without the prior written consent of the Holders of at least the Required Vote, allow future investors to make a demand registration which could result in such registration statement being declared effective prior to the earlier of either of the dates set forth in subsection 3.1 or within 120 days of the effective date of any registration effected pursuant to Section 3.

 

  

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SECTION 10 COVENANTS OF THE COMPANY

 

10.1                Financial Information and Reporting.

 

(a) The Company and its Subsidiaries shall maintain accurate books and records of account in which complete entries shall be made pursuant to a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied, and shall set aside on their books all such proper accruals and reserves as shall be required under generally accepted accounting principles consistently applied.

 

(e) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days thereafter, the Company shall furnish each Major Holder (other than a Major Holder reasonably deemed by the Board to be a competitor of the Company) a consolidated balance sheet of the Company and its Subsidiaries, as at the end of such fiscal year, and a consolidated statement of income and a consolidated statement of cash flows and changes in stockholders' equity of the Company and its Subsidiaries, for such year, all prepared in accordance with generally accepted accounting principles consistently applied and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail (the "Audited Financial Statements"). The Audited Financial Statements shall be accompanied by a report and opinion thereon by a firm of independent public accountants of national standing or such other independent public accounting firm approved by the Holders of a majority of the then outstanding Series E Preferred Shares and selected by the Board (the "Audit Report") and a certificate of the Chief Executive Officer (or principal operating officer) of the Company certifying that no information inconsistent with that set forth in the information in the Audited Financial Statements and the Audit Report has been filed with any governmental agency or given to the Company's or its Subsidiaries' lenders.

 

(f) The Company shall furnish to each Major Holder (other than a Major Holder reasonably deemed by the Board to be a competitor of the Company), as soon as practicable after the end of each quarterly accounting periods in each fiscal year of the Company and its Subsidiaries, and in any event within forty-five (45) days thereafter, an unaudited consolidated balance sheet of the Company and its Subsidiaries, and an unaudited consolidated statement of income and an unaudited consolidated statement of cash flows and changes in stockholders' equity of the Company and its Subsidiaries for such quarterly period, and for the current fiscal year to date, including a comparison of the current fiscal year to date to the Company's annual budget with any variances between such figures so listed and setting forth, in each case, comparable figures for the prior year, all prepared in accordance with generally accepted accounting principles and in reasonable detail, with the exception that no notes need be attached to such statements.

 

(g) The Company shall furnish to each Major Holder (other than a Major Holder reasonably deemed by the Board to be a competitor of the Company), concurrently with the Company's furnishing to the Board, but in no event later than thirty (30) days before the end of each fiscal year, an annual budget, including projected income, cash flow and balance sheet statements on at least a monthly basis for the ensuing fiscal year, and operating plans, including a brief qualitative description of the Company's plan by its Chief Executive Officer in support of the annual budget of the Company and its Subsidiaries for such fiscal year (the "Budget"). In addition, the Company shall furnish concurrently with its furnishing to the Board, any proposed material revision to the Budget. The Budget and each proposed material revision to the Budget shall be deemed accepted as a Company's budget for such fiscal year only when it has been approved by a majority of the entire Board (which majority must include the Series E Directors).

 

  

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(h) The Company shall furnish to each Major Holder (other than a Major Holder reasonably deemed by the Board to be a competitor of the Company), no later than five (5) days after an executive officer of the Company or its Subsidiaries, as the case may be, first has knowledge of any of the following: (i) the occurrence of a default hereunder, or under any material agreement of the Company or its Subsidiaries, including without limitation any loan or financing agreement, (ii) the commencement of any legal proceeding against the Company or any of its Subsidiaries, or (iii) the occurrence of any effect, event, condition, or circumstance, in any case, that individually or in the aggregate with any one or more other effects, events, conditions or circumstances, with or without the passage of time, the giving of notice or both, has had or could reasonably be expected to have a material and adverse effect on the business, properties, assets, financial condition, results of operations, prospects or liabilities of the Company or its Subsidiaries, a statement from the Company's Chief Executive Officer describing such occurrence and management's anticipated response.

 

(i) The Company shall furnish to each Major Holder (other than a Major Holder reasonably deemed by the Board to be a competitor of the Company), such other financial and other information of the Company and its Subsidiaries the Holders of a majority of the then outstanding Series E Preferred Shares may reasonably request pursuant to this Section 10.1Error! Reference source not found. in writing; provided, that the Company generates such information in the ordinary course of its business and the Company shall not be required to provide any information if and to the extent that such information would lose its privilege under the attorney-client privilege between the Company and its counsel as a result of such information being furnished to the Major Holders.

 

(j) The Company shall furnish to each Major Holder (other than a Major Holder reasonably deemed by the Board to be a competitor of the Company), concurrently with the Company's furnishing to the Board, but in no event later than five (5) business days after the date of filing or delivery, copies of all materials of whatsoever nature filed or delivered by the Company or its Subsidiaries thereof (i) with the Commission; (ii) with any national or foreign securities exchange or quotation bureau; and (iii) to holders of any class of its capital stock or other securities.

 

(k) The Company shall furnish to each Major Holder (other than a Major Holder reasonably deemed by the Board to be a competitor of the Company), concurrently with the Company's furnishing to the Board, but in no event later than five (5) business days after the date of delivery, any and all management letters provided by the Company's accountants to the Company.

 

(l) In the event the Company or any of its Subsidiaries fails to timely provide each Major Holder (other than a Major Holder reasonably deemed by the Board to be a competitor of the Company) with the reports and information required by this Section 10.1, the Holders of a majority of the then outstanding Series E Preferred Shares may, after thirty (30) days after providing written notice of such failure to the Company, during which period the Company shall have the opportunity to cure such deficiency, request that an independent accounting firm of such Holder's choice and as to which the Company has no reasonable objection audit the Company and its Subsidiaries, at the Company's expense, which audit shall be limited to the production of such reports in a manner satisfactory to the Holders of a majority of the then outstanding Series E Preferred Shares in their reasonable discretion. The Company and its Subsidiaries shall cooperate in good faith in any such audit.

 

  

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10.2              Reservation of Common Stock.

The Company shall (and shall use its best efforts to cause its stockholders to) take any and all action necessary to reserve for issuance the number of shares of Common Stock into which all of the shares of Preferred Stock then outstanding are convertible, and shall (and shall use its best efforts to cause its stockholders to) increase the number of shares of Common Stock reserved for issuance as required by any increase in the number of shares of Common Stock into which the shares of Preferred Stock may then be converted.

 

10.3                Board of Directors.

 

The Company shall call, and shall use its best efforts to have, regular meetings of the Board not less often than once each quarter. The Board may conduct meetings by any means of communication by which all directors participating may simultaneously hear each other during the meeting. In the event a director's presence in person at a meeting is desirable or necessary, the Company shall pay all reasonable and appropriately documented travel expenses and other out-of-pocket expenses incurred by directors who are not employed by the Company in connection with attendance at such meeting of the Board or any committee thereof.

 

10.4                Negative Covenants.

 

For so long as at 500,000 shares of Series E Preferred Stock is outstanding, the Company shall not (and shall not cause or permit any of the Company's Subsidiaries to) take, directly or indirectly, any actions involving any of the matters specified in Section C.6 of Article IV of the Certificate without first obtaining the approval of the holders of at least 51% in voting power of the then outstanding Series E Preferred Stock voting as a single class (with each share of Series E Preferred Stock having a number of votes equal to the number of shares of Common Stock into which such share of Series E Preferred Stock is then convertible).

 

10.5                Real Property Holding Corporation.

 

The Company covenants that it will operate in a manner such that it will not become a "United States real property holding corporation" as that term is defined in Section 897(c)(2) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (a "USRPHC"). The Company agrees to make determinations as to its status as a USRPHC, and will file statements concerning those determinations with the Internal Revenue Service, in the manner and at the times required under Reg. § 1.897-2(h), or any supplementary or successor provision thereto. Within 30 days of a request from the Investors or any of their respective partners, the Company will inform the requesting party, in the manner set forth in Reg, § 1.897- 2(h)(1)(iv) or any supplementary or successor provision thereto, whether that party's interest in the Company constitutes a United States real property interest (within the meaning of Internal Revenue Code Section 897(c)(1) and the regulations thereunder) and whether the Company has provided to the Internal Revenue Service all required notices as to its USRPHC status.

 

10.6              Termination of Covenants.

 

Except for the covenants set forth in Section 10.2, 10.7, 10.8, 10.9 and 10.10Error! Reference source not found., all covenants of the Company and its Subsidiaries contained in this Section 10 of this Agreement shall expire and terminate as to the Holders upon the first to occur of (a) the consummation of the Qualified Initial Public Offering or (b) the time at which the Company first becomes subject to the reporting provisions of the Exchange Act. Unless otherwise specified herein, the rights and provisions of this Agreement shall terminate as to all Holders on the fifth anniversary of the closing date of the Qualified Initial Public Offering.

 

  

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10.7                Restrictive Agreements.

 

Neither the Company nor any of its Subsidiaries will, without the prior written approval of the holders of a majority of the then outstanding Series E Preferred Shares, enter into or become obligated under any agreement or contract (excluding sales agreements executed in the ordinary course of business) including, without limitation, any loan agreement, promissory note (or other evidence of indebtedness), mortgage, security agreement or lease, which by its terms prevents or restricts the Company or its Subsidiaries from performing its obligations under this Agreement.

 

10.8                Limitation on Subsequent Registration Rights.

 

After the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the then outstanding Series E Preferred Shares enter into any agreement with any holder or prospective holder of any securities of the Company that would grant such holder any registration rights.

 

10.9                D&O Insurance.

 

The Company will maintain a Directors' and Officers' insurance policy on the Directors and Officers of the Company in an aggregate amount of at least Two Million Dollars ($2,000,000). The Company will provide a copy of the insurance certificate regarding the insurance described in this Section 10.9 to any Holder upon its request.

 

10.10                Indemnification.

 

The Company shall indemnify and hold harmless each Holder, each of their respective direct and indirect subsidiaries and Affiliates, and each of the respective partners, members, stockholders, equity holders, officers, directors, trustees and other fiduciaries, employees, agents, and representatives of any of the foregoing (collectively, referred to as the "Indemnitees" and individually as a "Indemnitee") from and against any and all Indemnifiable Losses resulting from, relating to or arising out of any claim or claims made against such Indemnitee in connection with any threatened, pending or completed action, suit, arbitration, investigation or other proceeding arising out of, or relating to the any Indemnitee's performance of its obligations or the exercise of any Indemnitee's rights in accordance with the terms of this Agreement, including actions taken in their capacity as directors or stockholders of the Company; provided, however, that the Company shall not be obligated to indemnify or hold harmless any Indemnitee under this Section 10.10 against any Indemnifiable Losses resulting from or arising out of any such action or claim if it has been adjudicated by a final and non-appealable determination of a court or other trier of fact of competent jurisdiction that such Indemnifiable Losses were the result of (a) a breach of such Indemnitee's fiduciary duty to the Company, (b) any action or omission made by the Indemnitee in bad faith, (c) any criminal action on the part of such Indemnitee or (d) such lndemnitee's willful misconduct.

 

The Company shall reimburse, promptly following request therefor, all reasonable expenses incurred by an Indemnitee in connection with any threatened, pending or completed action, suit, arbitration, investigation or other proceeding arising out of, or relating to, the Indemnitees' actions in connection with any transaction undertaken in connection with this Agreement.

 

  

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10.11             Pubco Transaction

 

The Company will utilize its reasonable commercial efforts to undertake either (i) a reverse merger or similar transaction between the Company and a corporation whose shares of common stock are publicly traded in the United States or other mutually agreed jurisdiction ("Pubco"), or (ii) any filing with an applicable regulatory body which will result in the Company becoming an entity traded on a public exchange (the "Pubco Transaction"). The Pubco Transaction (unless mutually agreed upon by the Company and Laidlaw & Company (UK) Ltd. ("Laidlaw"), shall (a) be on a U.S. stock exchange, (b) have no less than the OTCQB, (c) be with an entity which must, among other criteria, (i) be fully reporting, (ii) have no material liabilities or contingent liabilities, (iii) be Depository Trust Company eligible, (iv) have no mature or unmatured rescission rights, (v) have not been late in any SEC filing for the last one (1) year, and (vi) be in good standing in its place of incorporation and on such other terms and conditions (including normal and customary due diligence) reasonably satisfactory to Laidlaw and Company no later than one year (twelve months) after the final Closing of the no less than $4,000,000 of gross proceeds from the sale of the Company's Series E Preferred Stock, and the receipt (for the purpose of financing the Company's transaction costs of the Pubco Transaction) of no less than $750,000 in convertible bridge financing simultaneous with or subsequent to such final Closing.

 

In the event that the Company does not fulfill its obligations as set forth in this Section 10.11 with respect to the Pubco Transaction or otherwise (itself or through a successor) become a public entity, then upon written demand of Laidlaw or holders of Series E Preferred Shares, the Company shall (i) issue to Laidlaw and the holders of Series E Preferred Shares warrants to purchase an additional number of shares of Common Stock of Company equal to 25% of the common share equivalents of the Series E Preferred Shares plus common stock warrants ("Warrants") issued at the Closings (as defined in the Purchase Agreement), on the same terms including the exercise price as the Warrants and (ii) increase the dividend rate on the Series E Preferred Stock to 8.75%. The parties agree that this additional warrant issuance and increased dividend by the Company shall be in full satisfaction of its obligations to Laidlaw and holders of Series E Preferred Shares with respect to such Pubco Transaction.

 

SECTION 11 COVENANTS OF THE HOLDERS

 

11.1              Confidentiality of Records.

 

Each Holder agrees that it will keep confidential and not disclose, divulge or use for any purpose other than to evaluate and monitor its investment in the Company any confidential or proprietary information ("Confidential Information") which such party obtains from the Company pursuant to financial statements, reports and other information submitted by the Company to such party pursuant to this Agreement or the Purchase Agreement; provided, however, that the Investors may disclose Confidential Information (a) to their respective general partners, limited partners, members, stockholders, equity holders, Affiliates and any of the directors, officers and other representatives of any of the foregoing in accordance with their respective normal reporting practices, and to their respective attorneys, accountants, consultants and other professionals under an obligation of confidentiality and (b) to any prospective purchaser of any securities of the Company so long as such prospective purchaser is obligated not to disclose, divulge or use such Confidential Information to the same extent as the disclosing Investor. Each Holder shall use the same level of care with the Confidential Information that it uses with its own confidential information. "Confidential Information" shall not include the following: (i) information that is now in, or hereafter enters, the public domain through no fault of the Holder; (ii) information that previously was known by the Holder independently of the Company; (iii) information that is independently developed by the Holder without reference to Confidential Information; (iv) information that is disclosed with the written approval of the Company; or (v) information that is received from a third party without a duty of confidentiality. Notwithstanding the foregoing, no Holder shall be prohibited from disclosing Confidential Information that is required to be disclosed pursuant to any legal process or subpoena from any court, arbitrator, governmental body, official or authority or by applicable law; provided that the disclosing Holder takes reasonable steps to minimize the extent of such disclosure and provides the Company with reasonably prompt notice after becoming required to disclose such Confidential Information to afford the Company an opportunity to intervene and oppose such disclosure. This provision shall survive any termination of this Agreement.

 

  

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SECTION 12 MISCELLANEOUS

 

12.1               Governing Law.

 

This Agreement shall be governed by and construed under the laws of the State of New York, notwithstanding the conflicts of laws principles of the State of New York or any other jurisdiction. No suit, action or proceeding with respect to this Agreement may be brought in any court or before any similar authority other than in a court of competent jurisdiction in the State of New York and the parties hereby submit to the exclusive jurisdiction of such courts for the purpose of such suit, proceeding or judgment. Each of the parties hereto hereby irrevocably waives any right which it may have had to bring such an action in any other court, domestic or foreign, or before any similar domestic or foreign authority and agrees not to claim or plead the same. Each of the parties hereto hereby irrevocably and unconditionally waives trial by jury in any legal action or proceeding in relation to this Agreement and for any counterclaim therein.

 

12.2               Survival.

 

The representations, warranties, covenants, and agreements made herein shall survive any investigation made by any Holder and the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company or its Subsidiaries or the Investors pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company or its Subsidiaries or the Investors, as applicable, hereunder solely as of the date of such certificate or instrument.

 

12.3               Successors and Assigns.

 

Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors and permitted assigns of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a Holder of Preferred Stock from time to time; provided, however, that each such successor and permitted assign the transferee has agreed in writing to be bound by the terms of this Agreement as if such successor and permitted assign were an original Holder by executing the Counterpart.

 

12.4              Entire Agreement.

 

This Agreement and each of the Exhibits hereto, the Purchase Agreement and each of the Exhibits and Schedules thereto, the other Transaction Documents and each of the exhibits, schedules, and appendices thereto, constitute the full and entire understanding and agreement between the parties hereto with regard to the subject matter hereof and thereof and no party hereto shall be liable or bound to any other party hereto in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein.

 

12.5              Severability.

 

If any provision of the Agreement is held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

  

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12.6               Amendment and Waiver.

 

Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders of a majority of each of the then outstanding Series E Preferred Shares and any amendment or waiver so made shall be binding upon each Holder and the Company. In addition, any provision of this Agreement and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively) by any party so waiving in writing, such waiver to be enforceable solely against such party.

 

12.7               Delays or Omissions.

 

No delay or omission to exercise any right, power, or remedy accruing to any party hereto, upon any breach, default or noncompliance of any party under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. Any waiver, permit, consent, or approval of any kind or character on part of any party hereto of any breach, default or noncompliance under the Agreement or any waiver on such party's part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to the parties hereto, shall be cumulative and not alternative.

 

12.8               Notices.

 

All notices, requests, demands and other communications given or made in accordance with the provisions of this Agreement shall be addressed (i) if to a Holder, at such Holder's address, fax number or email address furnished on the signature pages hereof or such Holder's Counterpart hereto or as otherwise furnished to the Company by the Holder in writing, or (ii) if to the Company, to the attention of the President at such address, fax number or email address furnished on the signature page below or as otherwise furnished by the Company in writing, and shall be made or sent by a personal delivery or overnight courier, by registered, certified or first class mail, postage prepaid, or by facsimile or electronic mail with confirmation of receipt, and shall be deemed to be given on the date of delivery when made by personal delivery or overnight courier, 48 hours after being deposited in the U.S. mail, or upon confirmation of receipt when sent by facsimile or electronic mail. Any party may, by written notice to the other, alter its address, number or respondent, and such notice shall be considered to have been given three (3) days after the overnight delivery, airmailing, faxing or sending via e-mail thereof.

 

12.9              Titles and Subtitles.

 

The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

  

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12.10                Counterparts; Execution by Facsimile Signature.

 

This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Agreement may be executed by facsimile signature(s) which shall be binding on the party delivering same, to be followed by delivery of originally executed signature pages.

 

[SIGNATURES ON FOLLOWING PAGES]

 

  

20

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights Agreement as of the date set forth in the first paragraph hereof.

 

COMPANY:

 

ACTINIUM PHARMACEUTICALS, INC.

 

By: /s/ Dragan Cicic           

Name: Dragan Cicic, M.D. 

Title: President

 

Address: 391 Lafayette Street 

  Newark, NJ 07105

 

Tel: (973) 344 6500 

Fax: (973) 344 2539

email: dcicic@actiniumpharmaceuticals.com

	
[Signature Page to Second Amended and Restated Investor Rights Agreement]

 

  

21

  

 

IN WITNESS WHEREOF, the parties hereto have executed this First Amended and Restated Investor Rights Agreement as of the date set forth in the first paragraph hereof,

 

ACTINIUM PHARMACEUTICALS, INC.

 

  

By: /s/ Michael Sheffey

Name: Michael Sheffey 

Title: President

 

Address:

 

Actinium Holdings Limited 

c/o Michael Sheffery, Ph.D 

OrbiMed Advisors LLC 

767 Third Avenue, 30th Floor 

New York, NY 10017

 

with a copy to:

 

Shalom Leaf, Esq,

Shalom Leaf, PC

600 Madison Avenue, 22nd Floor

New York, NY 10022

 

AMERASIA CAPITAL GROUP LLC (AS TO SECTION 10.10 ONLY)

 

BY: /s/ Sandesh Seth

NAME: SANDESH SETH

TITLE: MANAGING PARTNER

 

ADDRESS: 244 FIFTH Avenue, Suite 5217, New York, NY 10001,

 

TEL: 6468272460

FAX: 6468957678

EMAIL: sseth@amerasiacapital.com

 

	
[Signature Page to Second Amended and Restated Investor Rights Agreement]

 

  

22

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Investor Rights Agreement as of the date set forth in the first paragraph hereof.

 

N.V. ORGANON

 

/s/ David Nicholson

By: David Nicholson, Ph.D.

Name:

Title: Sr. VP, Worldwide Licensing 

           & Knowledge Management

 

Address: 126 E. LINCOLN AVE.

RAILWAY INS 07065

 

Tel: 732-594-5520

Fax: 732-594-5392

email: DAVID.NICHOLSON@MERCK.COM

 

MAURITS GEERLINGS M.D.

 

	 
	 	 
	ADDRESS:	 
	 	 
	 TEL:	 
	 FAX:	 
	 EMAIL:	 

 

SECTION 2 The Investors listed on Exhibit A to the Agreement, other than NV Organon, have executed a Subscription Agreement with the Company which provides, among other things, that by executing the Subscription Agreement each Investor is deemed to have executed the SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT in all respects and is bound to the terms and conditions thereof as set forth in such Subscription Agreement.

 

	
[Signature Page to Second Amended and Restated Investor Rights Agreement]

 

  

23

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Investor Rights Agreement as of the date set forth in the first paragraph hereof.

 

N.V. ORGANON

 

	
By: 

	 
	
Name: 

	 
	
Title:

	 

 

	ADDRESS:	 
	 	 
	 TEL:	 
	 FAX:	 
	 EMAIL:	 

 

MAURITS GEERLINGS M.D.

 

/s/ Maurits Geerlings, Jr.  

 

ADDRESS: 220 FOREST HILLSCIRCLE

 DEVON, PA 19333 USA

 

TEL: +1-610-293-0111

FAX: +1-610-293-0111

EMAIL: MGEERLINGS@COMCAST.NET

 

SECTION 2 The Investors listed on Exhibit A to the Agreement, other than NV Organon, have executed a Subscription Agreement with the Company which provides, among other things, that by executing the Subscription Agreement each Investor is deemed to have executed the SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT in all respects and is bound to the terms and conditions thereof as set forth in such Subscription Agreement.

 

	
[Signature Page to Second Amended and Restated Investor Rights Agreement]

 

  

24

  

 

Exhibit A

List of Investors

 

	
N.V. Organon

	
Baker, Adam

	
Barber, Michael K. and Julia K (JTWROS)

	
Beam, George B.

	
Blank, Robert N.

	
Brawley, William Wade

	
Byer, Scott

	
Carroll, Michael and Sheila (JTWROS)

	
Chambers, Michael R.

	
Conan, Roger

	
Craig, Ron D.

	
Davis, Frank

	
Dunn, Robert

	
Duty, Clint N.

	
Eckert, Douglas E.

	
Elefther, George IRA (Stern, Agee & Leach Inc C/F)

	
Engdall, Michael and Susan

	
Fischgrund, Stephen

	
Fox, L. Dean

	
Hanks, Bryan J. and Michelle B. (JTWROS)

	
Hasley, Jimmy R. IRA

	
Hasty, Benjamin

	
Herweck, Richard L.

	
Johnston, Christopher M.

	
Johnston, Timothy P.

	
Konetzni, Albert H., Jr. and Shirley A. (JTWROS)

	
Krauch, Robert H.

	
Kuhar, David A.

	
Laflash, Harold 0. and Greta G. (JTWROS)

	
Larsen, Kenneth N. Trust U/A/D 9/25/09, Kenneth N. Larsen Trustee

	
Laskowski, Jan J. and Sofia M. (JTWROS)

	
Lees, James W.

	
Lemaster, Timothy E.

	
Levine, Richard

	
Magolske, Charles J.

	
McCarthy, Kevin P.

	
Miller, Brian IRA (Robert W. Baird & Co., Inc. TTEE, FBO Brian Miller IRA Acct # 6144 2867)

	
Muckenhin, Carl F.

	
Murray, Ian H.

	
O'Brien, Denis

 

  

1

  

 

	
Oppito, Joseph T.

	
Paull, Burton Mark

	
Pellegrini, Timothy J. and Catherine A. (JTWROS)

	
Pimpinella, John and Mueller, Bernadette (jtwros)

	
Reed, Clayton A. and Stephanie S.

	
Reid, Matthew

	
Richardson, Earl R.

	
Rinker, Timothy J.

	
Rosen, Marvin S.

	
Scheck, Dianne M.

	
Soicher, Ronald

	
Smith, Sharon M.

	
Sommer, John L. IRA (Sterne, Agee & Leach Inc. C/F)

	
Stapell, Robert T.

	
Turner, Michael L.

	
Valka, William A. and Barbara B. (JTWROS)

	
Washauer, Gary A.

	
Weidner, Charles L. and Weidner, Alice N. Barnett, TTEE fbo The Weidner Family Revocable Trust dtd 8/13/07

	
Whitley, Michael E.

	
Wieghaus, Timothy

	
Wikel, Daniel P.

	
Wilson, William, III and Wilson, Patricia White COTTEE of The Wilson Family Restated Living Trust UTA dtd 04/2004

	
Wimberly, James M.

	
Zaborowski, Peter J. and Tiffany B. (JTWROS)

	
Zar, Keith A.

	
Zelinski, George M.

	
Borbolla, Jorge

	
Cantwell, David

	
Chandler, Andrew

	
Eilers Jr., John W.

	
Matter, Dr. Richard and Anita (JTWROS)

	
Mendez, Eliana Cardenas and Roberto (JTWROS)

	
Park, Stephen and Tracy (JTWROS)

	
Stanley, Conor

	
Craig, Ron D.

	
Hart, Michael M.

	
Sullivan, Brendan

	
Sullivan, Gregory F., MD and Gene M.

	
Variety Investments Limited

	
Einstein, Christina G. IRA (Stern Agee & Leach Inc. CIF)

	
Ferriter, Dr. John M.

	
Jones, Rex. A.

 

  

2

  

 

	
Mehos, Christopher J.

	
Murray, Ian H.

	
Murray, Thomas and Lillian (JTWROS)

	
Stanley, Michael

	
Cady, Roger K. IRA (Sterne Agee & Leach Inc. C/F Roger K. Cady R/O IRA)

	
Chaban, Bohdan

	
Duffy, John M.

	
Guscott, Simon C.

	
Jones, Brian E. and Peggy A. (JTWROS)

	
Kane, Timothy J. and Annette K. (JTWROS)

	
Poe, Steven W. and Judith L.

	
Poe, Tracy N.

	
Sullivan, Jared MD

	
Weidner (Charles L. Weidner TTEE & Alice N. Barrett Weidner TTEE FBO The Weidner Family Revocable Trust Dtd. 8/13/07)

	
Herndon, Phillip Todd

	
Katz, Deborah L.

	
Klimitchek, Ken R.

	
LARK Enterprises, Ltd.

	
Lytle, Jon H. and Carrie M. (JTWROS)

	
Minta Group LLC

	
Tomlinson, Sandra F.

	
Welsh, John H. IRA (Sterne Agee & Leach Inc. C/F John H. Welsh Roth IRA)

	
Conan, Roger

	
D'Amato, Anthony

	
Duffy, John M.

	
Ganse, Charles W.

	
Harvest Financial Services Ltd. as Qualifying Fund Manager of the Chris McHugh ARF

	
Holroyd, Douglas R. & Jill K.

	
Levine, Richard

	
McHugh, Chris

	
Plaschika, Gerhard

	
Poe, Tracy (Sterne Agee & Leach Inc. C/F Tracy N. Poe R/O IRA)

	
Rajan, Srinivasa

	
Ray Sinnott Pension Fund

	
Ray Sinnott

	
Sullivan, Brendan

	
Sterne Agee & Leach Inc. C/F Gregory F. Sullivan II IRA

	
Syntec Scientific Ltd. by Ray Sinnott

	
Sterne Agee & Leach Inc. C/F JB Trahern Bene Owner Ann Trahern DCSD IRA

	
Ziaks, Lance and Jannet

 

  

3

  

 

Exhibit B

 

Counterpart Signature Page

 

to

 

Second Amended and Restated Investor Rights Agreement dated July       , 2011

 

for

 

Actinium Pharmaceuticals, Inc.

 

The undersigned hereby acknowledges receipt of a copy of that certain Second Amended and Restated Investor Rights Agreement, dated July        , 2011, as amended to date, among Actinium Pharmaceuticals, Inc., a Delaware corporation, Actinium Holdings Limited, the Investors referred to therein and the undersigned (as hereafter amended from time to time, the "Investor Rights Agreement"), and hereby certifies to the other parties thereto that it has read and fully understands the Investor Rights Agreement, that it has had an opportunity to review and discuss the terms and conditions of the Investor Rights Agreement with its legal counsel and other advisors, and that it agrees to be bound by the terms and conditions of the Investor Agreement as if it were an original signatory thereto.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on this day of              , 20_.

 

INVESTOR:

 

SECTION 3 The Investors listed on Exhibit A to the Agreement, other than NV Organon, have executed a Subscription Agreement with the Company which provides, among other things, that by executing the Subscription Agreement each Investor is deemed to have executed the SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT in all respects and is bound to the terms and conditions thereof as set forth in such Subscription Agreement,

 

 

I-1

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