EXHIBIT 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is made as of September
20, 2015, between CASI Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), [________________], a company formed under the laws of [_________]
(“[______]”) and any Person that delivers any portion of the Subscription Amount
pursuant to Section 2.02(b) of this Agreement (such Persons, together with
[______], jointly and severally, and including their successors and assigns, the
“Purchaser”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement, the
Company desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, securities of the Company as described in this
Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual promises, covenants and
conditions contained in this Agreement, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
Company and the Purchaser agree as follows:

 

Article 1

Definitions

 

Section 1.01.         Definitions. In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.01:

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person.
For purposes of this definition, “control” when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the terms “controlling” and “controlled” have correlative
meanings.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States, any day which is a legal holiday in
Hong Kong or the mainland of the PRC, or any day on which banking institutions
in the State of New York or Hong Kong or the mainland of the PRC are authorized
or required by law or other governmental action to close.

 

“Closing” means the closing of the purchase and sale of the Shares and the
Warrants pursuant to Section 2.01.

 

“Closing Date” means the day on which all conditions precedent to (i) the
Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Shares and the Warrants, in each case, have been
satisfied or waived.

  

“Commission” means the United States Securities and Exchange Commission.

 

   

 

 

“Common Stock” means the common stock of the Company, par value $0.01 per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed.

 

“Initial Exercise Date” means the date that is 91 days after the Closing Date.

 

“Per Share Purchase Price” equals $1.190, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“PRC” means the People’s Republic of China.

 

“PRC Approvals” means any consent or approval by the PRC governmental and
regulatory authorities necessary to consummate the transactions contemplated
hereby, including but not limited to the approval by or registration with the
State Administration of Foreign Exchange of the PRC.

 

“Securities” means the Shares, the Warrants and the Warrant Shares.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended and
interpreted from time to time.

 

“Shares” means the shares of Common Stock issued or issuable to the Purchaser
pursuant to this Agreement.

 

“Subscription Amount” means the aggregate amount to be paid for the Shares and
Warrants purchased by the Purchaser hereunder as specified below the Purchaser’s
name on the signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in immediately available
funds.

 

“Trading Day” means a day on which the principal Trading Market is open for
trading.

 

“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
NYSE MKT or the New York Stock Exchange (or any successors to any of the
foregoing).

 

“Transaction Documents” means this Agreement, the Warrants and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.

 

“Transfer Agent” means American Stock Transfer & Trust Company, the current
transfer agent of the Company, and any successor transfer agent of the Company.

 

 2 

 

  

“Warrants” means, collectively, the Common Stock purchase warrants delivered to
the Purchaser at the Closing in accordance with Section 2.2(a) hereof, which
Warrants shall be exercisable beginning from the Initial Exercise Date and have
a term of exercise equal to three (3) years from the Initial Exercise Date, in
substantially the form set forth on Exhibit A attached hereto.

 

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

 

Article 2

Purchase and Sale

 

Section 2.01.         Closing. On the Closing Date, upon the terms and subject
to the conditions set forth herein, the Company agrees to sell, and the
Purchaser agrees to purchase, up to an aggregate of $[____________] of Shares
and Warrants. The Shares and Warrants will be sold together, and each one share
of Common Stock shall entitled Purchaser to purchase a Warrant to purchase 0.20
shares of Common Stock. The Purchaser shall deliver to the Company, via wire
transfer of immediately available funds, the amount equal to the Subscription
Amount as set forth on the signature page hereto executed by the Purchaser and
the Company shall deliver to the Purchaser its Shares and a Warrant as
determined pursuant to Sections 2.02(a) and 3.01(d), and the Company and the
Purchaser shall deliver the other items set forth in Section 2.02 deliverable at
the Closing. Upon satisfaction of the covenants and conditions set forth in
Sections 2.02 and 2.03, the Closing shall occur at 10:00 a.m. at the offices of
Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York 10017 or
such other location as the parties shall mutually agree.

 

Section 2.02.         Deliveries.

 

(a)          On or prior to the Closing Date, the Company shall deliver or cause
to be delivered to the Purchaser the following:

 

 (i)     the Shares; and

 

(ii)     a Warrant, registered in the name of the Purchaser, to purchase the
number of shares of Common Stock equal to 20% of the number of Shares to be
registered in the name of the Purchaser pursuant to Section 3.01(d) of this
Agreement, with an exercise price equal to $[Per Share Purchase Price plus
$0.50] per share, subject to adjustment therein.

 

(b)          On or prior to the Closing Date, the Purchaser shall deliver or
cause to be delivered to the Company the following:

 

(i)      the Subscription Amount by wire transfer to the account as specified in
writing by the Company or by delivery of immediately available funds.

 

 3 

 

  

Section 2.03.         Closing Conditions.

 

(a)          The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met:

 

  (i)    the truth and accuracy in all material respects on the Closing Date of
the representations and warranties of the Purchaser contained herein (unless as
of a specific date therein);

 

 (ii)    all obligations, covenants and agreements of the Purchaser required to
be performed at or prior to the Closing Date shall have been performed or
waived; and

 

(iii)    the delivery by the Purchaser of the items set forth in Section 2.02(b)
of this Agreement.

 

(b)          The respective obligations of the Purchaser hereunder in connection
with the Closing are subject to the following conditions being met:

 

  (i)    the truth and accuracy in all material respects when made and on the
Closing Date as if made on the Closing Date of the representations and
warranties of the Company contained herein (unless as of a specific date
therein);

 

 (ii)    all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed or waived;

 

(iii)    the delivery by the Company of the items set forth in Section 2.02(a)
of this Agreement; and

 

(iv)   the Purchaser shall have received, or be satisfied that it will receive
the PRC Approvals.

 

Article 3

Representations, Warranties and Covenants

 

Section 3.01.         Representations and Warranties of the Company. Except as
otherwise described in the Company’s most recent Annual Report on Form 10-K, the
Company’s Quarterly Reports on Form 10-Q filed after the Company's most recent
Annual Report on Form 10-K, the Company's Proxy Statement for its 2015 annual
meeting of shareholders, and any of the Company's Current Reports on Form 8-K
filed after the filing of the Company’s most recent Form 10-K, the Company
hereby represents and warrants to, and covenants with, the Purchaser as of the
date hereof, as follows:

 

 4 

 

  

(a)          The Company is a corporation, duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company has full
power and authority to conduct its business as presently conducted and is
registered or qualified to do business and in good standing in each jurisdiction
in which it owns property or transacts business and where the failure to be so
qualified would have a material adverse effect upon the Company and its
subsidiaries as a whole or the business, financial condition, properties,
operations or assets of the Company and its subsidiaries as a whole or the
Company’s ability to perform its obligations under this Agreement and the other
Transaction Documents in all material respects, and to the knowledge of the
Company, no proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification.

 

(b)          The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Transaction Documents.
The execution and delivery of the this Agreement and the other Transaction
Documents and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
and no further action on the part of the Board of Directors or stockholders is
required. Upon execution of the Transaction Documents by the Company, the
Transaction Documents will be validly executed and delivered by the Company and
will constitute legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement of
creditors’ rights generally, and as limited by laws relating to the availability
of specific performance, injunctive relief, or other equitable remedies.

 

(c)          The issuance and sale of each of the Shares and the Warrants have
been duly authorized by the Company, and the Shares, when issued and paid for in
accordance with this Agreement, will be duly and validly issued, fully paid and
nonassessable. The Warrant Shares have been duly authorized and reserved for
issuance pursuant to the terms of the Warrants, and the Warrant Shares, when
issued by the Company upon valid exercise of the Warrants and payment of the
exercise price, will be duly and validly issued, fully paid and nonassessable.
The Company shall, so long as any of the Warrants are outstanding, take all
action necessary to reserve and keep available out of its authorized and
unissued capital stock, solely for the purpose of effecting the exercise of the
Warrants, all of the number of Warrant Shares.

 

(d)          Within one (1) Business Day of the Closing, the Company will
instruct the Transfer Agent to credit the Purchaser the number of Shares as
indicated on the signature page hereto, registered in the name of the Purchaser
(and, upon request, will deliver physical stock certificates to the Purchasers
representing the Shares), in each case, subject to Section 3.02(g) of this
Agreement.

 

 5 

 

  

(e)          The execution and delivery of the Transaction Documents and the
sale and issuance of the Securities to be sold by the Company pursuant to the
Transaction Documents, the fulfillment of the terms of the Transaction Documents
and the consummation of the transactions contemplated thereby will not: (i)
result in a conflict with or constitute a material violation of, or material
default (with the passage of time or otherwise) under, (A) any bond, debenture,
note, loan agreement or other evidence of indebtedness, or any material lease or
contract to which the Company is a party or by which the Company or their
respective properties are bound, (B) the Certificate of Incorporation, by-laws
or other organizational documents of the Company, as amended, or (C) any law,
administrative regulation, or existing order of any court or governmental
agency, or other authority binding upon the Company or the Company’s respective
properties; or, (ii) result in the creation or imposition of any lien,
encumbrance, claim or security interest upon any of the material assets of the
Company or an acceleration of indebtedness pursuant to any obligation, agreement
or condition contained in any material bond, debenture, note or any other
evidence of indebtedness or any material indenture, mortgage, deed of trust or
any other agreement or instrument to which the Company is a party or by which it
is bound or to which any of the property or assets of the Company is subject. No
consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency,
governmental body or any other third party is required for the execution and
delivery of the Transaction Documents by the Company, other than such as have
been made or obtained, and except for any filings required to be made under
federal or state securities laws.

 

Section 3.02.         Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants as follows:

 

(a)          The Purchaser has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, and this Agreement constitutes a valid and binding obligation of
the Purchaser enforceable against the Purchaser in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and any other laws of general application
affecting enforcement of creditors’ rights generally, and as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies.

 

(b)          The Purchaser understands that nothing in this Agreement or any
other materials presented to the Purchaser in connection with the purchase and
sale of the Shares and Warrants constitutes legal, tax or investment advice. The
Purchaser has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Shares and Warrants.

 

(c)          This Agreement is made with Purchaser in reliance upon the
Purchaser’s representation to the Company, which by Purchaser’s execution of
this Agreement, Purchaser hereby confirms, that the Securities to be acquired by
Purchaser will be acquired for investment for Purchaser’s own account, not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and that Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, Purchaser further represents that Purchaser does not presently have
any contract, undertaking, agreement or arrangement with any Person to sell,
transfer or grant participations to such Person or to any third Person, with
respect to any of the Securities.

 

 6 

 

  

(d)          Purchaser understands that the Securities have not been, and will
not be, registered under the Securities Act, by reason of a specific exemption
from the registration provisions of the Securities Act which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
the Purchaser’s representations as expressed herein. Purchaser understands that
the Securities are “restricted securities” under applicable U.S. federal and
state securities laws and that, pursuant to these laws, Purchaser must hold the
Securities indefinitely unless they are registered with the Commission and
qualified by state authorities, or an exemption from such registration and
qualification requirements is available. Purchaser further acknowledges that if
an exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Securities, and on requirements
relating to the Company which are outside of Purchaser’s control, and which the
Company is under no obligation and may not be able to satisfy.

 

(e)          Purchaser understands that no public market now exists for the
Warrants, and that the Company has made no assurances that a public market will
ever exist for the Warrants.

 

(f)           Purchaser is aware of Rule 144 under the Securities Act and the
restrictions imposed thereby and further understands and agrees that so long as
Purchaser beneficially owns 10% or more of the Company’s then outstanding
securities, the Company may deem the Purchaser to be an “affiliate” as defined
in Rule 144(a)(1) and any transfers of the Shares or the Warrant Shares by the
Purchaser shall be subject to the limitations applicable to affiliates set forth
in the Securities Act and the rules promulgated thereunder, including without
limitation Rule 144.

 

(g)          Purchaser understands that the Securities issued upon exercise of
the Warrants, may bear one or all of the following legends (or substantially
similar legends), unless and until the Shares and the Warrant Shares are
registered under the Securities Act pursuant to an effective registration
statement:

 

(i)           “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

 

(ii)         Any legend required by the securities laws of any state to the
extent such laws are applicable to the Securities represented by the certificate
so legended.

 

 7 

 

  

(h)          Purchaser is an “accredited investor” as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act. The Purchaser has not been
the subject of any disqualifying event described in Rule 506(d)(1)(i)-(viii) of
the Securities Act (a “Disqualification Event”), except for a Disqualification
Event as to which Rule 506(d)(2)(i–iv) or (d)(3) applies.

 

(i)           Neither the Purchaser, nor any of its officers, directors,
employees, agents, stockholders or partners has either directly or indirectly,
including through a broker or finder (a) engaged in any general solicitation, or
(b) published any advertisement in connection with the offer and sale of the
Shares and the Warrants.

 

Article 4

Other Agreements of the Parties

 

Section 4.01.         Registration Rights.

 

(a)          Within 120 days after Closing, the Company shall prepare and file
with the Commission a registration statement on Form S-3 (or such other form if,
at such time, the Company is not eligible to utilize such Form S-3) covering the
resale of all of the Registrable Securities from time to time on a continuous
basis pursuant to Rule 415 of the Securities Act (the “Resale Registration
Statement” including the base prospectus contained therein, the “Prospectus”).
For purposes of this Section 4.01, “Registrable Securities” shall mean the
Securities and any shares of Common Stock issuable with respect to the
Securities by way of a stock dividend, stock split or other distribution, or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization; provided that such Registrable Securities shall cease
to be Registrable Securities when (i) a registration statement covering such
securities has been declared effective by the Commission and such securities
have been disposed of pursuant to such effective registration statement, (ii)
such securities have been sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act were met, (iii) such securities are otherwise
transferred and such securities may be resold without subsequent registration
under the Securities Act, or (iv) such securities shall have ceased to be
outstanding.

 

(b)          Not less than ten (10) Trading Days prior to the initial filing of
the Resale Registration Statement and not less than five (5) Trading Days prior
to the filing of any related prospectus or any amendment or supplement thereto,
the Company shall (i) furnish to the Purchaser copies of all such documents
proposed to be filed, which documents will be subject to the review and
reasonable comments of the Purchaser, and (ii) cause its officers and directors,
counsel and independent registered public accountants to respond to any
inquiries from the Purchaser and its advisors. The Company shall permit counsel
designated by the Purchaser to review such Resale Registration Statement,
related prospectus, and any amendment or supplement thereto (as well as all
requests for acceleration or effectiveness thereof) within the time periods
referenced above and shall use reasonable best efforts to reflect in such
documents any comments as such counsel may reasonably propose and will not
request acceleration of the Resale Registration Statement without prior notice
to such counsel.

 

 8 

 

  

(c)          Upon filing the Resale Registration Statement, the Company shall
use its reasonable best efforts to cause such Resale Registration Statement to
be declared effective by the Commission as soon as practicable thereafter,
including the filing of amendments and post-effective amendments and supplements
to such Resale Registration Statement. The Company shall otherwise comply with
all rules and regulations of the Commission and other governmental and
regulatory authorities applicable to the registration of such Registrable
Securities and the effectiveness of the Resale Registration Statement.

 

(d)          The Company shall maintain such Resale Registration Statement and
shall comply with its other obligations under this Section 4.01 until the
earlier to occur of (i) such time as the Purchaser owns no Registrable
Securities and (ii) such time as the Registrable Securities may be resold by the
Purchaser pursuant to Rule 144 of the Securities Act without the requirement for
the Company to be in compliance with the current public information required
under such Rule and without volume or manner-of-sale restrictions. To the extent
that the Company fails to maintain an effective Resale Registration Statement
for an excess of ten (10) consecutive or twenty (20) aggregate Trading Days
during any twelve (12)-month period, and the Purchaser suffers losses as a
result of such failure, the Purchaser shall be entitled to seek specific
performance or compensatory damages as set forth in this Agreement.

 

(e)          The Company shall promptly notify the Purchaser of the
effectiveness of the Resale Registration Statement and each post-effective
amendment thereto. Additionally, the Company will promptly notify the Purchaser
upon the occurrence of any of the following events in respect of the Resale
Registration Statement or related prospectus: (i) receipt of any request for
additional information by the Commission or any other governmental entity during
the period of effectiveness of the Resale Registration Statement or amendments
or supplements to the Resale Registration Statement or any related prospectus;
(ii) the issuance by the Commission or any other governmental entity of any stop
order suspending the effectiveness of the Resale Registration Statement or the
initiation of any proceedings for that purpose and the Company will promptly use
its reasonable best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued; (iii) receipt of any notification with respect to the suspension of
the qualification or exemption from qualification of the Registrable Securities
for sale in any jurisdiction or the initiation of any proceeding for such
purpose; (iv) the happening of any event that, in the reasonable determination
of the Company and its counsel, makes any statement made in the Resale
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Resale Registration Statement,
related prospectus or documents so that (or the Company otherwise becomes aware
of any statement included in the Resale Registration Statement, related
prospectus or document that is untrue in any material respect or that requires
the making of any changes in the Resale Registration Statement, related
prospectus or document so that), in the case of the Resale Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and that in the case of the related
prospectus, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; and (v) the Company’s reasonable determination that a
post-effective amendment to the Resale Registration Statement would be
appropriate (in which event the Company will promptly make available to the
Purchaser any such supplement or amendment to the Resale Registration Statement
and, as applicable, the related prospectus). In the event of any suspension of
the Purchaser’s ability to sell Shares pursuant to the Resale Registration
Statement as a result of the foregoing (a “Suspension”), the Company will use
its best efforts to cause the use of the prospectus so suspended to be resumed
as soon as reasonably practicable after notice of a Suspension to the Purchaser
and such Suspension shall be subject to the liquidated damages provisions set
forth in Section 4.01(d) above.

 

 9 

 

  

(f)           The Company shall furnish to the Purchaser with respect to the
Registrable Securities registered under the Resale Registration Statement such
number of copies of the prospectus (including preliminary and supplemental
prospectuses and prospectus amendments) as the Purchaser may reasonably request,
in order to facilitate the public sale or other disposition of all or any of the
Registrable Securities by the Purchaser.

 

(g)          The Company shall file documents required of the Company for normal
blue sky clearance in states as shall be reasonably appropriate in the opinion
of the Company and its legal counsel; provided, however, that the Company shall
not be required to qualify to do business or consent to general service of
process in any jurisdiction in which it would not otherwise be required to
qualify but for this Section 4.01(g).

 

(h)          All expenses incident to the Company’s compliance with this Section
4.01, including, without limitation, all registration and filing fees, fees and
expenses of compliance with securities laws, printing expenses, filing expenses,
and fees and disbursements of the Company’s counsel and independent registered
public accountants will be borne by the Company. Any expenses incurred in
connection with the sale of any of the Shares or the Warrant Shares pursuant to
the Resale Registration Statement shall be borne by the Company except that any
brokerage commissions shall be borne by the Purchaser.

 

(i)           The Company shall, at the reasonable request of the Purchaser,
prepare and file with the Commission such amendments (including post-effective
amendments) and supplements to the Resale Registration Statement and any
prospectus used in connection with the Resale Registration Statement as may be
necessary in order to make reasonable changes to the plan of distribution set
forth in such Resale Registration Statement.

 

 10 

 

  

(j)           Notwithstanding anything herein to the contrary, the Purchaser’s
rights under this Section 4.01 shall be automatically assignable by the
Purchaser to any Affiliate of Purchaser of all or any portion of such
Registrable Securities, to the extent of the Registrable Securities so
transferred, if: (i) the Purchaser agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (A) the name and address of such transferee or assignee, and
(B) the securities with respect to such registration rights are being
transferred or assigned, and (iii) at or before the time the Company receives
the written notice contemplated by clause (ii) of this sentence, the transferee
or assignee agrees in writing to be bound by the provisions of Section 4.01 of
this Agreement. In the event that the Purchaser transfers all or any portion of
its Registrable Securities pursuant to this Section 4.01(j), the Company shall
have ten (10) Business Days following the receipt of such notice to file any
amendments or supplements necessary to keep the Resale Registration Statement
current and effective pursuant to Rule 415. Upon any such assignment, all of the
Purchaser’s rights under this Agreement with respect to such transferred
securities shall inure to the benefit of the transferee.

 

Section 4.02.         Use of Proceeds. The Company shall use the net proceeds
from the sale of the Securities hereunder for working capital purposes.

 

Section 4.03.         Listing of Common Stock. The Company hereby agrees to use
best efforts to maintain the listing or quotation of the Common Stock on the
Trading Market on which it is currently listed, and concurrently with the
Closing, the Company shall apply to list or quote all of the Shares and Warrant
Shares on such Trading Market and promptly secure the listing of all of the
Shares and Warrant Shares on such Trading Market. The Company further agrees, if
the Company applies to have the Common Stock traded on any other Trading Market,
it will then include in such application all of the Shares and Warrant Shares,
and will take such other action as is necessary to cause all of the Shares and
Warrant Shares to be listed or quoted on such other Trading Market as promptly
as possible. The Company will then use its reasonable best efforts to continue
the listing and trading of its Common Stock on a Trading Market and will comply
in all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the Trading Market.

 

Section 4.04.         Subsequent Transactions. Except with respect to an Exempt
Issuance, from the date hereof until 30 days after the Closing Date, neither the
Company nor any of its subsidiaries shall issue, enter into any agreement to
issue or announce the issuance or proposed issuance of any shares of Common
Stock or Common Stock Equivalents. “Exempt Issuance” means the issuance of (a)
shares of Common Stock or options to employees, officers or directors of the
Company pursuant to any stock or option plan duly adopted for such purpose, by a
majority of the non-employee members of the Board of Directors or a majority of
the members of a committee of non-employee directors established for such
purpose, (b) securities upon the exercise or exchange of or conversion of any
Securities issued hereunder and/or other securities, derivatives or contingent
rights exercisable or exchangeable for or convertible into shares of Common
Stock issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price
or conversion price of such securities, (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company and approved in advance by Purchaser or
its successors or assigns, provided that any such issuance shall only be to a
Person (or to the equity holders of a Person) which is, itself or through its
subsidiaries, an operating company or an owner of an asset in a business
synergistic with the business of the Company and shall provide to the Company
additional benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for
the purpose of raising capital or to an entity whose primary business is
investing in securities, and (d) securities issued in a transaction approved in
advance by Purchaser or its successors or assigns.

 

 11 

 

  

Article 5

Miscellaneous

 

Section 5.01.         Fees and Expenses. Each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement, except that
the Company shall pay or reimburse at the Closing all reasonable costs and
expenses incurred or to be incurred by the Purchaser up to a maximum of $35,000
in connection therewith. The Company shall pay all Transfer Agent fees, stamp
taxes and other taxes and duties levied in connection with the delivery of any
Securities to the Purchaser.

 

Section 5.02.         Entire Agreement. The Transaction Documents, together with
the exhibits and schedules thereto, contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior
negotiations, correspondence, agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules.

 

Section 5.03.         Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a
day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (c) the second (2nd) Trading Day following the date of mailing,
if sent by any U.S. nationally recognized overnight courier service or (d) upon
actual receipt by the party to whom such notice is required to be given if
delivered personally. The address for such notices and communications shall be
as set forth on the signature pages attached hereto.

 

Section 5.04.         Amendments; Waivers. No provision of this Agreement may be
waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Purchaser or, in the case of
a waiver, by the party against whom enforcement of any such waived provision is
sought. Any amendment or waiver effected in accordance with this Section 5.04
shall be binding upon the Purchaser and the Company. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right.

 

 12 

 

  

Section 5.05.         Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.

 

Section 5.06.         Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns; provided that neither party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other party; except that i) the Purchaser
may transfer or assign its rights and obligations under this Agreement, in whole
or from time to time in part, to one or more of its Affiliates at any time, and
ii) the Purchaser may transfer or assign his rights and obligations under this
Agreement in whole to any Person at any time, provided that, in each case, such
designee or assign agrees to be bound by the terms and conditions of this
Agreement and other Transaction Documents, as applicable.

 

Section 5.07.         No Third-Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.

 

Section 5.08.         Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of conflicts of law
thereof.

 

Section 5.09.         Survival. The representations, warranties and covenants
contained herein shall survive the execution and delivery of this Agreement for
a period of 18 months.

 

Section 5.10.         Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

Section 5.11.         Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

 13 

 

  

Section 5.12.         Replacement of Securities. If any certificate or
instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction. The applicant for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs (including
customary indemnity) associated with the issuance of such replacement
Securities.

 

Section 5.13.         Saturdays, Sundays, Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be
taken or such right may be exercised on the next succeeding Business Day.

 

Section 5.14.         Construction. The parties agree that each of them and/or
their respective counsel has reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments hereto. In addition, each and every reference to share prices and
shares of Common Stock in any Transaction Document shall be subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

 

Section 5.15.         WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING
IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING OUT OF
OR RELATING TO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, THE PARTIES EACH KNOWINGLY AND
INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY
JURY.

  

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]

 

 14 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

  CASI PHARMACEUTICALS, INC.       By:       Name:  Ken K. Ren    
Title:    Chief Executive Officer           Address for notice:           9620
Medical Center Drive     Suite 300     Rockville, Maryland 20850     Attention:
Cynthia W. Hu     Facsimile: 240.864.2601           With a copy to (which shall
not constitute notice):           Richard Baltz     Arnold & Porter LLP     601
Massachusetts Avenue, NW     Washington, DC 20001     Facsimile: 202-942-5999

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

[Signature Page to Securities Purchase Agreement]

 

   

 

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Name of Purchaser:

 

Signature of Authorized Signatory of Purchaser:    

Name of Authorized Signatory:

Title of Authorized Signatory:

Facsimile Number of Authorized Signatory:

Address for Notice of Purchaser:

 

SUBSCRIPTION AMOUNT (TOTAL INVESTMENT AMOUNT):

 

Per Share Purchase Price: $1.190

Per 0.20 Warrant Purchase Price: $0.025

 

Total Shares:

Total Warrant Shares:

 

Address for Delivery of Warrants for Purchaser (if not same as address for
notice):

           

 

Shares to be delivered by (check one and complete the required information in
order to receive your shares):

 

¨ The Depository Trust Company Deposit Withdrawal Agent Commission System (DWAC)
(DWAC not available until after shares are registered)

 

  ___________________________________________________     Name of Brokerage Firm
or Agent Account Name     To Receive Shares  

 

  _______________________________ ______________________     Account No. DTC No.
 

 

¨ Physical Stock Certificate

 

Address for Delivery of Stock Certificates for Purchaser (if not same as address
for notice):

 

  _________________________________________  
__________________________________________  
__________________________________________

 

[Signature Page to Securities Purchase Agreement]

 

   

 

 

Exhibit A

Form of Common Stock Purchase Warrant

 

CASI Pharmaceuticals, Inc.

 

Warrant Shares: Issue Date: _______, 2015

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, _____________ (the “Holder”) is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after 91 days following the Issue Date (the “Initial Exercise Date”)
and on or prior to the close of business on the third anniversary of the Initial
Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and
purchase from CASI Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), up to [________] shares (subject to adjustments as provided below)
(the “Warrant Shares”) of Common Stock.

 

Section 1.          Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated September 20, 2015, among
the Company and the purchaser signatory thereto.

 

Section 2.          Exercise.

 

(a)          Exercise of Warrant. Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times on or after
the Initial Exercise Date and on or before the Termination Date by delivery to
the Company (or such other office or agency of the Company as it may designate
by notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company) of a duly executed facsimile copy of a
notice of exercise substantially in the form annexed hereto (a “Notice of
Exercise”); and, within three (3) Trading Days of the date said Notice of
Exercise is delivered to the Company, the Company shall have received payment of
the aggregate Exercise Price of the shares thereby purchased by wire transfer or
cashier’s check drawn on a United States bank. No ink-original Notice of
Exercise shall be required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Exercise form be required.
Notwithstanding anything herein to the contrary, the Holder shall not be
required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has
been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date the
final Notice of Exercise is delivered to the Company. Partial exercises of this
Warrant resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable hereunder in an amount equal to the
applicable number of Warrant Shares purchased. The Holder and the Company shall
each maintain records showing the number of Warrant Shares purchased and the
date of such purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Business Day of receipt of such notice. In the event of
any dispute or discrepancy, the records of the Holder shall be controlling and
determinative in the absence of manifest error. The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face hereof.

 

 A-1  

 

  

(b)          Exercise Price. The exercise price per share of the Common Stock
under this Warrant shall be $1.69, subject to adjustment hereunder (the
“Exercise Price”).

 

(c)          Cashless Exercise. If at any time after the earlier of (i) the one
year anniversary of the date of the Purchase Agreement and (ii) the completion
of the then-applicable holding period required by Rule 144, or any successor
provision then in effect, there is no effective Registration Statement
registering, or no current prospectus available for, the resale of the Warrant
Shares by the Holder, then this Warrant may also be exercised, in whole or in
part, at such time by means of a “cashless exercise” in which the Holder shall
be entitled to receive a number of Warrant Shares equal to the quotient obtained
by dividing [(A-B) (X)] by (A), where:

 

(A) = the VWAP on the Trading Day immediately preceding the date on which Holder
elects to exercise this Warrant by means of a “cashless exercise,” as set forth
in the applicable Notice of Exercise;

 

(B) = the Exercise Price of this Warrant as adjusted hereunder; and

 

(X) = the number of Warrant Shares that would be issuable upon exercise of this
Warrant in accordance with the terms of this Warrant if such exercise were by
means of a cash exercise rather than a cashless exercise.

 

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if the OTC Bulletin Board is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then
listed or quoted for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the “Pink Sheets” published by Pink OTC
Markets, Inc. (or a similar organization or agency succeeding to its functions
of reporting prices), the most recent bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the
Holders of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be
paid by the Company.

 

 A-2  

 

  

(d)          Mechanics of Exercise.

 

(i)          Delivery of Certificates Upon Exercise. Shares purchased hereunder
shall be transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through
its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is then a
participant in such system and there is an effective Registration Statement
permitting the issuance of the Warrant Shares to the Holder, and otherwise by
physical delivery of a certificate to the address specified by the Holder in the
Notice of Exercise by the date that is three (3) Trading Days after the delivery
to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery
Date”). The Warrant Shares shall be deemed to have been issued, and Holder or
any other person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date the
Warrant has been exercised, with payment to the Company of the Exercise Price
and all taxes required to be paid by the Holder, if any, pursuant to Section
2(d)(v) prior to the issuance of such shares, having been paid. If the Company
fails for any reason to deliver to the Holder the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to
the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
of Warrant Shares subject to such exercise (based on the VWAP of the Common
Stock on the date of the applicable Notice of Exercise), $10 per Trading Day for
each Trading Day after such Warrant Share Delivery Date until such Warrant
Shares are delivered or Holder rescinds such exercise.

 

(ii)         Delivery of New Warrants Upon Exercise. If this Warrant shall have
been exercised in part, the Company shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased Warrant
Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.

 

(iii)        Compensation for Buy-In on Failure to Timely Deliver Warrant Shares
Upon Exercise. In addition to any other rights available to the Holder, if the
Company fails to cause the Transfer Agent to transmit to the Holder the Warrant
Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and
if after such date the Holder is required by its broker to purchase (in an open
market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the
amount, if any, by which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased
exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares
that the Company was required to deliver to the Holder in connection with the
exercise at issue times (2) the price at which the sell order giving rise to
such purchase obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number of Warrant
Shares for which such exercise was not honored (in which case such exercise
shall be deemed rescinded) or deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company timely complied with
its exercise and delivery obligations hereunder. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms
hereof.

 

 A-3  

 

  

(iv)        No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up to the next
whole share.

 

(v)         Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by an assignment
form substantially in the form attached hereto duly executed by the Holder (an
“Assignment Form”) and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto.

 

(vi)        Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

 

 A-4  

 

  

(e)          Holder’s Exercise Limitations. The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that
after giving effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with the Holder or
any of the Holder’s Affiliates), would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of shares of Common Stock beneficially owned by
the Holder and its Affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised portion of
this Warrant beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Common Stock
Equivalents) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its
Affiliates. Except as set forth in the preceding sentence, for purposes of this
Section 2(e), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is not
representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules
required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 2(e) applies, the determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of
a Notice of Exercise shall be deemed to be the Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates) and of which portion of this Warrant is
exercisable, in each case subject to the Beneficial Ownership Limitation, and
the Company shall have no obligation to verify or confirm the accuracy of such
determination. In addition, a determination as to any group status as
contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 2(e), in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of Common Stock as
reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the
Company or (C) a more recent written notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the written
or oral request of a Holder, the Company shall within two (2) Trading Days
confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its
Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99 %
of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of this
Warrant. The Holder, upon not less than 61 days’ prior notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this
Section 2(e), provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any such increase or decrease will not be
effective until the 61st day after such notice is delivered to the Company. The
provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(e) to
correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant. Notwithstanding anything herein to the
contrary, if the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s
Affiliates) beneficially owned greater than 9.99% of the number of outstanding
shares of the Common Stock on the Closing Date (as beneficial ownership is
calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder), any limitation on the exercise of this
Warrant imposed by this Section 2(e) shall be not applicable to the Holder (or
any successors or assigns of this Warrant) and the Company shall effect any
exercise of this Warrant and the Holder shall have the right to exercise any
portion of this Warrant, pursuant to Sections 2(a), 2(b), 2(c), and 2(d),
regardless of the amount of Common Stock that the Holder (together with the
Holder’s Affiliates, and any other Persons acting as a group together with the
Holder or any of the Holder’s Affiliates) beneficially owns at any time during
the term of this Warrant.

 

 A-5  

 

  

Section 3.          Certain Adjustments.

 

(a)          Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise makes a
distribution or distributions on shares of its Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon exercise of this Warrant), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues by reclassification of shares of the Common Stock any
shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant shall remain
unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

(b)          Calculations. All calculations under this Section 3 shall be made
to the nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the number of
shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.

 

 A-6  

 

  

(c)          Notice to Holder.

 

(i)          Adjustment to Exercise Price. Whenever the Exercise Price is
adjusted pursuant to this Section 3, the Company shall promptly mail to the
Holder a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.

 

(ii)         Notice to Allow Exercise by Holder. If (A) the Company shall
declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or
a redemption of the Common Stock, (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company, then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, concurrently with any notice provided to holders of the
Company’s Common Stock or filed with the Commission, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder shall remain entitled to exercise this Warrant during
the period commencing on the date of such notice to the effective date of the
event triggering such notice except as may otherwise be expressly set forth
herein.

 

Section 4.          Transfer of Warrant.

 

(a)          Transferability. This Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company or its designated agent, together with (i) a
written assignment of this Warrant substantially in the form attached hereto
duly executed by the Holder or its agent or attorney and funds sufficient to pay
any transfer taxes payable upon the making of such transfer and (ii) any other
documents or certificates reasonably requested by the Company to effect such
transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees, as applicable, and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. The Warrant, if properly assigned in accordance herewith,
may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.

 

 A-7  

 

  

(b)          New Warrants. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or
exchanges shall be dated the initial issue date set forth on the first page of
this Warrant and shall be identical with this Warrant except as to the number of
Warrant Shares issuable pursuant thereto.

 

(c)          Warrant Register. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5.          Miscellaneous.

 

(a)          No Rights as Stockholder Until Exercise. This Warrant does not
entitle the Holder to any voting rights, dividends or other rights as a
stockholder of the Company prior to the exercise hereof as set forth in Section
2.

 

(b)          Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

 

(c)          Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then, such action may be taken or such right
may be exercised on the next succeeding Business Day.

 

 A-8  

 

  

(d)          Authorized Shares; Noncircumvention.

 

The Company covenants that, during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such action as may be
necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the Trading Market upon which the Common Stock may be listed. The Company
covenants that all Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of the purchase
rights represented by this Warrant and payment for such Warrant Shares in
accordance herewith, be duly authorized, validly issued, fully paid and
nonassessable.

 

Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant and (iii) use its reasonable
best efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof, as may be, necessary to
enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.

 

(e)          Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

 

(f)           Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder’s rights, powers or remedies.

 

(g)          Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement.

 

 A-9  

 

  

(h)          Remedies. The Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive and not to assert the defense in any action for specific performance that
a remedy at law would be adequate.

 

(i)           Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
Company and the successors and permitted assigns of Holder. The provisions of
this Warrant are intended to be for the benefit of any Holder from time to time
of this Warrant and shall be enforceable by the Holder or holder of Warrant
Shares.

 

(j)           Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

 

(k)          Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

 

(l)           Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

 

[Signature Pages Follow]

 

 A-10  

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above indicated.

 

 

CASI PHARMACEUTICALS, INC.

 

  By:       Name:  Ken K. Ren     Title:    Chief Executive Officer

 

[Signature Page to Warrant] 

 

   

 

 

Notice of Exercise

 

TO: CASI PHARMACEUTICALS, INC.

 

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the
Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any. Payment shall take the form of (check
applicable box) in lawful money of the United States, by wire transfer of
immediately available funds or by check.

 

(2) Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

 

_______________________________

 

_______________________________

 

_______________________________

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:    

Signature of Authorized Signatory of Investing Entity:    

Name of Authorized Signatory:    

Title of Authorized Signatory:    

Date:    

 

 

   

 

 

Assignment Form

 

(To assign the foregoing Warrant, execute
this form and supply required information.
Do not use this form to exercise the Warrant.)

 

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant
and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address is

 

_______________________________________________________________.

  

_______________________________________________________________

 

Dated: ______________, _______

 

Holder’s Signature: ____________________________         Holder’s Address:
_____________________________           _____________________________