Exhibit 10.1

 

Proprietary and Confidential Executed Version

 

EXCLUSIVE DISTRIBUTION AGREEMENT

 

This Exclusive Distribution Agreement (“the Agreement”) is entered into and
takes into effect on 15th Feb 2019, by and between:

 

CASI Pharmaceuticals INC., (“CASI”) a Nasdaq listed company incorporated and
existing under the laws of the State of Delaware, USA with its registered
domicile at 9620 Medical Center Drive in Rockville, MD USA.

9620 Medical Center Drive in Rockville, MD USA.

 

China Resources Guokang Pharmaceuticals Co., Ltd, (“CRGK” or “the Distributor”)
a company of limited liability, established and existing under the Laws of the
People’s Republic of China, with its registered domicile at 5th Floor, Tower 1,
Xinghuo Road No.9, Fengtai District, Beijing, the People’s Republic of China,
unified social credit code: 91110106700207387G.

 

CASI (Beijing) Biopharmaceuticals Technology Co., Ltd, (“CASI China”) a company
of limited liability, incorporated and existing under the Laws of the People’s
Republic of China, with its registered domicile at Suite 1701-1702, Tower 1,
China Central Place office building, No.77 Jian-Guo Road, Chaoyang District,
Beijing, China. Unified social credit code: 91110105599603317U.

 

CASI, CASI China and the Distributor may be referred to hereinafter collectively
as “the Parties” or each as “the Party” to this Agreement.

 

WHEREAS:

 

A. CASI wishes to engage the Distributor to import and distribute its Product in
the Territory.

 

B. The Distributor is engaged inter-alia in the business of the import,
distribution and sale of drug products. The Distributor has the required
permits, experience, expertise, resources and qualified personnel to provide the
aforementioned services;

 

C. The Distributor maintains a well-established sales network which is capable
of and competitive in the distribution and sale of the Product within the
Territory.

 

D. The Parties are willing to carry out the foregoing pursuant to the terms and
conditions set forth in this Agreement.

 

E. CASI China, a subsidiary wholly owned by CASI, is authorized to coordinate,
communicate with all Parties to the Agreement and provide supports for the
performance of this Agreement within the Territory.

 

THEREFORE, in consideration of these premises and the covenants and agreements
set forth herein, and intending to be legally bound thereby, the Parties hereby
agree as follows:

 

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Definitions

 

In this Agreement the following terms, whether used in singular or plural form,
shall, as used herein, have the following respective meanings:

 

“Adverse Event” or “Adverse Drug Event” (ADE) shall mean any adverse event
associated with the use of the Product in humans, whether or not considered
drug-related, including (i) an adverse event occurring in the course of the use
of the Product in professional practice; (ii) an adverse event occurring from an
overdose, whether accidental or intentional, related to the Product; (iii) an
adverse event occurring from drug abuse related to the Product; and (iv) any
failure of expected pharmacological action.

 

“Adverse Drug Reaction” (ADR) shall mean a special type of adverse drug event
(ADE) associated with the use of the Product in humans, in which a causative
relationship between an injury and the administration of the Product can be
identified.

 

“Affiliate” with respect to a Party shall mean: any person, corporation,
company, partnership, joint venture or other business entity controlling,
controlled by or under common control from time to time with the relevant Party,
either directly or indirectly. For purposes of this definition, the term
“control” shall mean (i) the holding, directly or indirectly, of more than fifty
percent (50%) of the ordinary shares or voting stock or voting equity interests
in, or (ii) the right to appoint fifty percent (50%) or more of the directors
of, or (iii) any other arrangement resulting in the right to direct the
management of or otherwise having the right to exercise a dominant influence
over the said person, corporation, company, partnership or joint venture.

 

“Agreement” means this Exclusive Distribution Agreement (including any
supplementary agreement and amendment signed by the Parties hereof), and all
Appendixes hereto.

 

The “Product” means the product (s) listed in the Product List set forth in
Appendix II of this Agreement, as amended by CASI from time to time with
justifiable and legitimate reasons.

 

“Territory” shall mean the People’s Republic of China (excluding Hong Kong SAR,
Macau and Taiwan).

 

“Specifications” shall mean all statutory and contractual requirements of the
Product as set forth in Appendix II the Product List and Appendix IV the Quality
Agreement.

 

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“cGMP” shall mean current Good Manufacturing Practices and general biological
products standards as promulgated under the United States Federal Food Drug and
Cosmetic Act at 21 CFR (Chapters 210, 211, 600 and 610) and the EEC Guide to
Good Manufacturing Practices for Medicinal Products as promulgated under
European Directive 2003/94/EC (replacing 91/356/EEC), and the current good
manufacturing practices and general biological products standards as promulgated
under the Chinese Decree No. 79 on Good Manufacturing Practice by the Ministry
of Health, and all relevant laws and regulations promulgated by the National
Medical Products Administration of China (“NMPA”, the former China Food and Drug
Administration) including any amendments to such regulations, to the extent
these regulations relate to guidelines applicable for biopharmaceuticals,
pharmaceuticals and active pharmaceuticals ingredients.

 

“Batch” shall mean a specific quantity of Product that is intended to be of
uniform character and quality and is produced during the same circle of
manufacture.

 

“FIFO” stands for the first-in, first-out method in managing inventory, meaning
that the oldest inventory items are recorded as sold first, the cost associated
with the inventory that was purchased first is the cost expensed first.

 

“FCPA” shall mean the Foreign Corrupt Practice Act of the United States.

 

“Material Breach of the Agreement” means a failure of performance under this
Agreement which is significant enough to give the aggrieved Party the right to
initiate a legal proceeding, and which seriously impairs the Agreement as a
whole and which defeats the purpose of the Agreement.

 

“Intellectual Property” shall mean, collectively, all of the following
intangible legal rights, whether or not filed, perfected, registered or recorded
and whether now or hereafter existing, filed, issued or acquired: (i)
inventions, patents, utility models, industrial designs and design patents or
any extension thereof, (ii) rights associated with works of authorship,
including without limitation, copyrights, copyright applications and copyright
registrations, (iii) rights in trademarks, trademark registrations and
applications therefor, trade names, service marks, service names, logos or trade
dress, (iv) rights relating to the protection of formulae, trade secrets,
know-how and confidential information, and (v) all other intellectual or
proprietary rights existing under applicable laws.

 

“Know-How” shall mean any information or material that is confidential and
proprietary, including, without limitation, ideas, concepts, discoveries,
inventions, developments, improvements, trade secrets, designs, devices,
equipment, process conditions, algorithms, notation systems, works of
authorship, computer programs, technologies, formulas, techniques, methods,
procedures, assay systems, applications, data, documentation, reports, chemical
compounds, products and formulations, whether patentable or otherwise. Know-How
shall also include non-Confidential Information and material to the extent such
information and material first lost its confidentiality by virtue of its
disclosure in an issued patent or published patent application, a filing with a
regulatory authority or as part of a legal proceeding.

 

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“CASI IP” means all proprietary Intellectual Property owned or controlled by
CASI or any of its Affiliates as of the effective date of this Agreement that is
necessary or useful in the performance of the services under this Agreement.

 

“CASI Technology” means the proprietary and/or patented technology and Know-How
of CASI and/or its Affiliates, including the processes and time-cycles for the
conversion of the Product Materials into the Product, required and appropriate
treatment of waste liquids, solids, gases, reprocessing or refining of any
sub-standard Product produced for whatever reason and methods of
testing/analysis of raw materials, in-process materials and Product along with
working standards.

 

“Confidential Information” means all information, in whatever form or manner
presented, which: (a) relates to a disclosing party’s business or business
plans, including, but not limited to, manufacturers, customers, prospective
customers, contractors, clinical data, the content and format of various
clinical and medical databases, utilization data, cost and pricing data, disease
management data, software products, programming techniques, data warehouse and
methodologies, Know-How, CASI Technology, trade secrets, technical and
non-technical materials, products, specifications, processes, sales and
marketing plans and strategies, designs, and any discussions and proceedings
relating to any of the foregoing; (b) is disclosed pursuant to this Agreement;
and (c): (i) is disclosed in writing electronically, or visually is marked or
stamped to indicate its confidential nature or is otherwise identified as
confidential by the disclosing party at the time of such disclosure; (ii) is
disclosed orally and is identified as confidential by the disclosing party at
the time of such disclosure and is confirmed in writing within ten (10) working
days after such disclosure; or (iii) is information, however disclosed, which
should reasonably be considered to be confidential.

 

“Incoterms 2010” shall mean the International Rules for the Interpretation of
Trade Terms issued by the International Chamber of Commerce (“ICC”).

 

“Working Day” means any calendar day other than Saturday and Sunday and any
statutory holidays.

 

“Third Party” means any other party or entity other than the Parties and/or
their respective Affiliates.

 

1.Product and Territory

 

1.1 Product. CASI hereby appoints the Distributor on an exclusive basis as its
sole distributor for the sale of the Product set forth in Appendix II
(hereinafter referred to as “the Product”) in the Territory of the People’s
Republic of China (excluding Hong Kong, Taiwan and Macau) during the term of
this Agreement.

 

1.2 Territory. CASI is appointing the Distributor hereunder with respect to the
sale of the Product to any purchasers whose principal place of business is
located within the Territory.

 

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1.3 Best Efforts. The Distributor shall use its best efforts to distribute and
sell the Product to the maximum number of Customers in the Territory.

 

1.4 Sales Limited to Territory. The Distributor shall not solicit orders from
any prospective purchaser whose principal place of business is located outside
the Territory. If the Distributor receives any order from a prospective
purchaser whose principal place of business is located outside the Territory,
the Distributor shall immediately notify CASI and refer that order to CASI. The
Distributor is prohibited from accepting any such orders. The Distributor may
not deliver or tender (or cause to be delivered or tendered) any Product outside
of the Territory. The Distributor shall not sell any Product to a purchaser if
the Distributor knows or has reason to believe that such purchasers intends to
remove those Product from the Territory.

 

1.5 Sub-Distribution. The Distributor may enter into agreement with independent
and qualified legal persons (the “Sub-Distributors”) as permitted by laws to
sell and distribute the Product within the Territory, provided that CASI has
been notified in writing and received the due diligence or any other information
of the sub-distributor as CASI requests.

 

1.6 Unless the Distributor receives prior approval in writing by CASI, the
Distributor shall not supply the Product for any clinical study and pre-clinical
study or any investigative purposes within or outside of the Territory.

 

2.Prices and Payment Terms

 

2.1 Purchaser Orders. The Distributor shall order the Product from CASI by
submitting a written purchase order identifying the Product ordered, the amount
of Product and the requested delivery date (s). All orders for the Product are
subject to acceptance by CASI. CASI shall have no liability to the Distributor
with respect to purchase orders which are not accepted, provided however, that
CASI will not unreasonably reject any purchase order for the Product from the
Distributor.

 

2.2 Payment Terms. Unless expressly stated otherwise by CASI, all payments shall
be made on the basis of net cash, to be received by CASI within 90 days
following the date of CASI’s invoice for the Product and sent by wire transfer
to the bank account designated by CASI in writing (refer to Appendix VII). All
payments shall be made without any deductions for Taxes and shall be free of
set-offs or counterclaims. The currency of all payments shall be remitted in US
Dollar and the purchase prices will be quoted, invoiced and paid in the currency
of US Dollar, unless otherwise specified in Appendix VII “Arrangements on the
Currency of Payment”.

 

2.3 Taxes. The Distributor will be responsible for any and all payment of Taxes
in the Territory, now or hereafter imposed with respect to the transactions
contemplated hereunder (with the exception of income taxes or other taxes
imposed upon CASI and measured by the gross or net income of CASI). CASI China
is not liable for any taxation within the Territory concerning this Agreement.

 

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2.4 Invoice. CASI may invoice for each Purchase Order following delivery of the
correspondent Batch of the Product and Documentation. Prior to the 5 day of each
month, CASI shall have issued all invoices for Deliveries occurring during the
previous month. Each invoice shall be sent to the addressee and address
mentioned in Appendix III “the Purchase Order” and shall at least refer to:

 

a. Purchase Order Number;

b. Invoice Number;

c. CASI’s Reference Number (if any);

d. The Distributor’s VAT Number;

e. CASI’s VAT Number;

f. Invoice Date;

g. CASI’s bank account number/IBAN code.

 

2.5 Default in Payment. If the Distributor fails to make full payment to CASI as
required under this Agreement, and such default continues for a period of not
more than five (5) working days, a default interest of 0.1% of the amount
payable per day shall be charged and paid together with the full amount overdue.
If such default continues for a period of more than five (5) working days, a
default interest of 0.3% of the amount payable per day shall be charged and paid
together with the full amount overdue.

 

2.6 Mandatory Price Reduction. If a mandatory price reduction is enforced on the
Product within the Territory, the Distributor shall manage and adjust the retail
price through consultation with CASI. The Distributor shall refrain from
arbitrary adjustment of pricing.

 

2.7 Remedy for Inventory Loss. Should the local government impose a mandatory
price reduction on the Product, the Distributor shall provide all inventory
reports of its sales channel concerning the Product for CASI to, out of good
will, remedy the inventory loss of the Distributor, pharmacies and hospitals.
The amount of remedy shall be specified in writing by and between CASI and the
Distributor through mutual consent and consultation.

 

2.8 The Implementation Plan. The Implementation Plan for the remedy of inventory
loss due to mandatory price reduction, which includes the amount of remedy,
closing date, the allocation of the finalized remedy amount to each customer
shall be specified in writing between the Parties through mutual consent and
consultation.

 

3.Supply of the Product

 

To enable CASI to organize an adequate supply of the Product, the Distributor
shall adhere to the following procedure, as may be amended by the Parties from
time to time:

 

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3.1 At least forty-five (45) days before the first day of each calendar quarter,
the Distributor will provide a written estimate of the quantity of the Product
it expects to purchase during that calendar quarter as well as a forecast for
the quantity of the Product it expects to purchase for the next two (2) calendar
quarters.

 

3.2 The Distributor shall not designate a delivery date earlier than twenty (20)
days after the date of receipt of the Purchase Order by CASI without prior
consultation.

 

4.Importation, Delivery, Acceptance and the Passing of Risk

 

4.1 Incoterms CIP. CASI shall supply the Product to the Distributor in
accordance with CIP Incoterms 2010, and pursuant to the Purchaser Order, deliver
the Product to an international airport (the Named Place of Delivery) designated
in writing by the Distributor. The Passing of Risk and the transfer of title
shall be in reference with 2010 CIP and in accordance with Appendix I “the
Import Agreement”.

 

4.2 The Distributor shall be responsible for including, without limitations,
customs declaration, customs clearance, importing inspection and other formality
for importation of the Product at its own costs in accordance with the “Import
Agreement” as Appendix I to this Agreement.

 

4.3 CASI shall warrant that shelf life of the Product upon delivery is not less
than 18 calendar months. The following documents shall be provided by CASI to
the Distributor for each delivery:

 

·Invoice;

·Packing List;

·Certificate of Origin;

·Certificate of analysis

·Delivery Note

·Certificate of Insurance

 

4.4 Acceptance and Inspection. The Distributor shall commence inspection of the
Product and check all documents listed in Clause 3.3 upon each delivery and
notify CASI in writing within 5 working days (specified herein as “the term of
inspection”) after the delivery of any incompliance and issues concerning
quality, quantity, packaging, labelling, storage and delivery. After the term of
inspection, if CASI has not been notified in writing of any enquiries listed
herein, the Product of each delivery shall be deemed as accepted by the
Distributor.

 

5.Reserved Rights of CASI

 

5.1 CASI may participate in government procurement, bidding, promotion,
advertising and sale of the Product within the Territory in its own name and/or
on its own behalf in compliance with all applicable laws and regulations without
providing notice to the Distributor.

 

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5.2 CASI is entitled to initiate, either directly or by its affiliates, any
clinical and preclinical research, development and investigative study within
the Territory and the Distributor shall use its reasonable best efforts to
support CASI with respect to such research, development and study.

 

6.Obligations of the Distributor

 

6.1 The Distributor is obliged not to purchase, distribute or acquire any
Product as listed in Appendix II “Product List” from any third party. The
Distributor may only acquire the Product from CASI or a CASI affiliate.

 

6.2 The Distributor shall not sell or distribute the Product in any other
country or regions except for the Territory specified in this Agreement. If the
Distributor intends to expand beyond the Territory to other regions, a separate
written agreement must be signed between the Distributor and CASI.

 

6.3 The Distributor possesses all necessary and mandatory permits, licenses and
qualifications to distribute and sell the Product within the Territory, in
conformance with all provisions and requirements as stipulated in Appendix IV
the “Quality Agreement”.

 

6.4 The Distributor is obliged to maintain and ensure the authenticity, validity
and effectiveness of all its permits, licenses and qualifications and to renew
such permits, licenses and qualifications in a timely manner in compliance with
requirements and statutory procedures stipulated by applicable laws and
regulations, including without limitations, business license, certificate of
good supply practice (“GSP”), business permit for the sale and distribution of
pharmaceuticals issued by the National Medical Product Administration of China
or a municipal medical product administration with jurisdiction.

 

6.5 The Distributor has a comprehensive and fully functional pharmaceutical
products quality management system (“QMS”) and sufficient number of technical
employees which meets up with the number of technical employees required by law,
including sales personnel who are qualified and licensed to engage in the
business of pharmaceuticals sale and distribution.

 

6.6 The Distributor shall adhere to the marketing plan and sales strategy
designated and confirmed by CASI and mutually agreed in writing upon between the
parties.

 

6.7 The Distributor shall specify in each purchase order, the Product name,
specifications, unit price, Product quantity, sample quantity, total price and
delivery date.

 

6.8 The Distributor shall prepare, record and document all customer manuals,
technical instruction, advertising and marketing materials at its own costs and
submit the aforesaid information to CASI in a timely manner for its approval.

 

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7.Obligations of CASI

 

7.1 Unless a mutual consent of the Parties to this Agreement is furnished in
writing, CASI shall not authorize any other party to be its importer or agent to
distribute the Product within the Territory, or sell, supply or deliver the
Product to any other natural person or legal person within the Territory.

 

7.2 Upon the receipt of a purchase order from the Distributor, CASI shall issue
a written confirmation within 5 working days to the Distributor regarding the
following:

·CASI is able to supply the Product to the Distributor as specified in the
Purchase Order;

·CASI is able to deliver the Product on or before the delivery date as specified
in the Purchase Order.

·If a written confirmation has not be rendered by CASI within 5 working days
upon the receipt of the Purchase Order, it shall be deemed as CASI has not
accepted the Purchase Order.

 

7.3 CASI shall provide the Distributor with all relevant documents and bills as
may be needed during its course of sale and distribution of the Product. CASI
shall provide a delivery note which contains information of the Product code,
quantity, batch number, production date and expiration date.

 

7.4 CASI represents and warrants that the Product it supplies to the Distributor
in accordance with this Agreement conforms with the provisions set forth in
Appendix IV “the Quality Agreement”:

 

7.5 CASI warrants that the Product is manufactured in conformance with standards
of GMP, provisions of all applicable laws and regulations, including labelling,
written instructions and specifications as required by the department of health
and other government authority with jurisdiction of drug product supervision and
administration within the Territory, furthermore, any other specifications which
CASI will notify the Distributor from time to time.

 

7.6 CASI shall support and provide the Distributor reasonable and legitimate
assistance within the Territory for the sale and distribution of the Product
from time to time at the Distributor’s request, and, shall respond promptly to
all enquiries from the Distributor.

 

8.Recall, Return and Replacement Policy

 

8.1 Right of Return and Replacement. The Distributor is entitled to return and
replacement of the Product in accordance with the provisions in Annex II
the“Quality Agreement.” CASI is responsible for the return and replacement of
the Product at its own costs and expenses.

 

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8.2 Conditions of Return and Replacement. The Distributor shall strictly abide
by the return and replacement policy under this Agreement and provisions set
forth in its Annex II “the Quality Agreement” for return and/or replacement of
the Product. CASI reserves its right to reject any return and/or replacement of
the Product requested by the Distributor without justifiable cause and
supporting evidence at request, or incompliance with provisions hereof. The
Distributor may only return or replace the Product purchased by itself from
CASI.

 

8.3 FIFO. The Distributor shall manage its inventory with the method of
“first-in first-out”. The Distributor is entitled to the return and replacement
of expired Product at its own expenses and cost.

 

8.4 The Distributor shall collect data from its sales channel (including without
limitation, hospital inventory, sub-distributor inventory and bonded warehouse
of the imported Product) for the statistics of Product with an expiration date
of less than 9 months separately for each calendar month. The Distributor shall
inform CASI in writing of such statistics and sell such Product that is about to
expire with its best efforts in order to reduce its inventory.

 

8.5 If the expiration of the Product is due to Distributor’s negligence or
misconduct during inventory management, the Distributor shall return and replace
the Product at its own cost and expense. Damages due to the Distributor’s
miscalculations and inaccurate statistics of the Product with an expiration date
less than 9 months unconformable with provisions hereof, shall be borne by the
Distributor. The Distributor shall from time to time provide CASI information
regarding expiration dates for the Product, stored in the Distributor’s own
warehouse. CASI, out of good will, shall reduce such inventory to the minimum.

 

8.6 Under any circumstances, the Distributor is prohibited from selling or
encouraging the Customers to sell any expired Product on the market. The
Distributor shall inform CASI immediately with a written notice once it has the
knowledge that any of the Product is deemed unfit for sale, as well as, the
expiration of inventory in hospitals, pharmacies and drug stores. Upon written
consent of CASI, the Distributor is authorized to return or replace such Product
on behalf of the Customer, and CASI shall bear all expense and cost to be
incurred from the return or replacement.

 

8.7 In the event of a recall ordered by a governmental agency or by one of the
Parties regarding any of the Product (the “Recall”), the Parties shall cooperate
with one another in conducting the Recall. When the Recall is solely caused by
CASI, CASI shall pay all costs and expenses of such Recall.

 

9.Pharmacovigilance

 

9.1 CASI shall provide the Distributor all necessary information which it deems
beneficial to the sale of Product within the Territory. Once the Distributor has
any knowledge of severe or accidental ADR or any other potentially collateral
adverse reaction which has occurred during the use of Product, it shall inform
and report to CASI all information concerning such event in accordance with the
provisions stipulated in “the Pharmacovigilance Agreement” as Appendix V.

 

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9.2 It is required that the Distributor shall encrypt all information regarding
pharmacovigilance during its transmission and hold such information strictly
confidential, unless any laws or regulations mandated otherwise.

 

10.No Representation or Employment

 

10.1 No Employment. The Distributor shall be considered to be an independent
contractor. The relationship between CASI and the Distributor shall not be
construed to be that of employer and employee, nor to constitute any
partnership, joint venture or agency of any kind. The Distributor shall, as a
diligent and responsible distributor, sell and distribute the Product in its own
name, at its own risks and for its own account.

 

10.2 Distributor’s Expenses. The Distributor shall pay all of its expenses,
including without limitation all travel and accommodation expenses incurred in
connection with its service hereunder. CASI shall not reimburse the Distributor
for any of other expenses.

 

10.3 No Representation. The Distributor shall have no right to enter into any
contracts or commitments in the name of, or on behalf of CASI, or to bind CASI
in any respect whatsoever. In addition, the Distributor shall not obligate or
purport to obligate CASI by issuing or making any affirmations, representations,
warranties or guarantees with respect to the Product to any third party.

 

11.Intellectual Property

 

11.1 Right to Use. The Distributor may use CASI trademarks, trade names and
service marks on a non-exclusive basis within the Territory only during the
effective term of this Agreement and solely for display or advertising purposes
in connection with selling and distributing the Product in accordance with this
Agreement.

 

11.2 CASI Proprietary. All Intellectual Property relating to the Product as
defined in this Agreement are the proprietary of CASI and this Agreement shall
by no means be construed as a licensing of any kind to the Distributor.

 

11.3 The Distributor shall not reverse assemble, decompile, reverse engineer,
analyze or otherwise attempt to identify or derive CASI IP, Know-How, CASI
Technology and any other intellectual property relating to formulas,
formulations, component, structure from the Product or any part thereof.

 

12.Reporting

 

12.1 The Distributor shall provide sales report of the Product on a regular
basis for CASI within 20 working days after the end of each financial year. The
report shall be furnished in the format defined by CASI and its content shall
meet the specific requirements hereunder.

 

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12.2 The Distributor and CASI shall organize an operation meeting not less than
once every 4 weeks and organize the management meeting not less than twice every
year to summarize and assess its performance. The agenda shall be delivered to
both Parties after mutual confirmation at least 15 working days prior to the
meeting to be held.

 

12.3 The Distributor agrees to provide CASI a written report on or before the
3rd working day of each calendar month which shall contain:

 

·The Distributor’s and its sub-distributors’ inventory statistics, sales
breakdown, documents evidencing the actual inventory of the sub-distributors.

·The sales breakdown and inventory of the Product in local hospitals in the
areas where the Distributor’s sales representatives are present.

oThe Distributor agrees at the same time to provide CASI the following
information from time to time in a prompt manner:

·All applicable laws, regulations, ordinances and administrative mandates
whether initially promulgated or recently amended concerning the registration,
import, sale and distribution of the Product within the Territory;

·A report on overall market conditions concerning the Product;

·Record documents of complaints from Customers;

·Other relevant information which CASI requests for.

 

13.Inventory

 

13.1 Inventory Level. The Distributor shall maintain its inventory level in its
own warehouse which can secure the supply of the Product for not less than 3
months, excluding the inventory in its sales channel. The inventory level shall
be determined based on the actual supply of the Product to the sub-distributors
and customers over the previous 3 months by average.

 

13.2 Selling-Off of Inventory. The Distributor shall have the right to sell off
its remaining inventory of the Product after termination or expiration of this
Agreement, provided however, that the Distributor shall comply with all terms
and conditions of this Agreement restricting such reselling activities in effect
immediately prior to such termination or expiration.

 

14.Publicity

 

14.1 The Distributor agrees that any publicity or advertising which shall be
released by it in which CASI is identified in connection with the Product shall
be in accordance with the terms of this Agreement and with any information or
data which CASI has furnished in connection with this Agreement.

 

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14.2 The Distributor is obliged to forward copies of any publicity and
advertising to CASI for prior written approval before any information is
publicized. The Distributor is obliged to ensure the compliance of Anti-Unfair
Competition Law, Laws on the Advertising and Marketing of Pharmaceutical Drug
Products, the Securities Act of the United States and any other applicable laws
and regulations for all and any of its publicity and advertising activities.

 

15.Product Packaging and Labelling

 

15.1 The Distributor shall be responsible to verify the packaging and labelling
requirements by applicable laws and regulations for the Product within the
Territory and shall inform CASI timely in writing of any (or potential)
non-conformity or required changes of Product packaging and labelling as
required by relevant government authority within the Territory.

 

16.No Assignment

 

16.1 This Agreement and the rights and obligations hereunder may not be
assigned, delegated or transferred by either party without the prior written
consent of the other party; provided, however, that the Distributor’s consent
shall not be required with respect to any assignment, delegation or transfer by
CASI to another division of CASI or to any affiliate of CASI or any division of
such affiliate. This Agreement shall inure to the benefits of the permitted
successors and assignees of CASI.

 

17.Conflict of Interest

 

17.1 During the term of this Agreement, and for 6 (six) months thereafter, the
Distributor shall not market directly or indirectly in the Territory products
which are competitive with the Product of CASI, unless CASI gives prior consent
in writing otherwise.

 

18.Limited Warranty

 

18.1 CASI solely warrants that on the date of delivery, the Product shall
conform to the Specifications agreed by both Parties. All other warranties,
representations, undertaking, conditions or other terms, express or implied,
statutory, contractual or otherwise, including without limitation, any warranty
in relation to non-infringement of third-party rights, merchantability,
suitability or fitness for any purpose are hereby excluded. The provisions of
the foregoing warranties are in lieu of any other warranty, whether expressed or
implied, written or oral.

 

18.2 CASI will only be liable for any damages caused or incurred by the
Distributor if and to the extent that such damage is directly or solely caused
by the breach of the express warranty set forth herein.

 

18.3 Modification of the Product. The Distributor may not customize, modify or
have customized or modified any Product unless it obtains the prior written
consent of CASI, the consent of such may be withheld in the sole discretion of
CASI.

 

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19.Limitations of Liability

 

19.1 Limitations of Liability. CASI’s liability arising out of the manufacture,
sale or supplying of the Product or their use or disposition, whether based upon
warranty, contract, tort or otherwise, shall not exceed the actual purchase
price paid by the Distributor for the Product.

 

19.2 No Consequential Damages. In no event shall CASI be liable to the
Distributor or any other person or entity for special, incidental or
consequential damages (including, but not limited to, loss of profits, loss of
data or loss of use damages) arising out of the manufacture, sale or supplying
of the Product, even if CASI has been advised of the possibility of such damages
or losses.

 

20.Indemnification

 

20.1 Both Parties agree to defend, indemnify and hold harmless the Indemnified
Parties from and against any and all Claims arising out of or in connection with
the use, sale and distribution of the Product.

 

21.Compensation for Contractual Breach and Liquidated Damage

 

21.1 Upon the occurrence of a material breach or default as to any obligations
hereunder by either Party and the failure of the breaching party to promptly
pursue (within thirty (30) days after receiving written notice thereof from the
aggrieved party) a reasonable remedy designed to cure (in the reasonable
judgment of the aggrieved party) such material breach or default, the breaching
party shall compensate the aggrieved party 30% of the total transaction amount
during the valid term of this Agreement as the compensation for contractual
breach.

 

21.2 In the event that the damage or loss caused by the material breach is
evidently more or less than the amount of compensation in total, the breaching
party shall compensate such actual liquidated damages.

 

21.3 This Agreement may be terminated by the aggrieved party by giving a written
notice of termination to the breaching party, such termination being immediately
effective upon the giving of such notice of termination.

 

21.4 For further clarity, any breach of Clause 6.3 and 6.4 under this Agreement
by the Distributor, once occurs, will result in the immediate termination of
this Agreement. The Distributor is liable for the compensation of contractual
breach provided in Clause 21.1 as well as compensate of all direct and/or
indirect, collateral and/or consequential damages and losses of CASI /and or
CASI China.

 

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22.Bankruptcy

 

22.1 Upon the filing of a petition in bankruptcy, insolvency or reorganization
against or by either party, or either party becoming subject to a composition
for creditors, whether by law or agreement, or either party going into
receivership or otherwise becoming insolvent (such party hereinafter referred to
as the “insolvent party”), this Agreement may be terminated by the other party
by giving a written notice of termination to the insolvent party, such
termination being immediately effective upon the delivery of such notice of
termination.

 

23.Change in Control

 

23.1 Upon the occurrence of a change in control or management or operating
personnel of either party (“the changed party”), which has, or in the reasonable
opinion of the other party could have, a material adverse effect on the
business, prospects or operations of such changed party and the failure of such
changed party to promptly pursue (within 10 days after receiving written notice
thereof from the other party) a remedy designed to cure (in the sole judgment of
the other party) the other party’s objections to such change, this Agreement may
be terminated by the other party by giving a written notice of termination to
the changed party, such termination being immediately effective upon the
delivery of such notice of termination.

 

24.Term and Termination of the Agreement

 

24.1 The term of this Agreement is 3 years. This Agreement shall automatically
terminate at that time, renewable through mutual written consent by all Parties.

 

24.2 Each Party to this Agreement may terminate the Agreement with a written
notice of termination nine (9) months in advance prior to the expiration date.
Neither Party shall be required to make any payment for compensation of any kind
to the other Party on account of the termination, dissolution or expiration of
this Agreement, except as may be determined in the event that this Agreement is
terminated as a consequence of contractual breach.

 

Upon termination of this Agreement, consequentially:

 

24.3 The Distributor shall cease to act in all respects as CASI’s Distributor of
the Product.

 

24.4 All purchase orders placed by the Distributor and accepted by CASI prior to
the termination date shall be performed in accordance with the terms of this
Agreement.

 

24.5 The Distributor shall immediately return to CASI all promotion materials,
samples and other documents which have been supplied to the Distributor by CASI.

 

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24.6 The Distributor shall dispose of its remaining inventory of the Product,
provided, however, that CASI shall be entitled, but not obliged to, repurchase
all or a part of the Distributor’s inventory of the Product at the price equal
to the price formerly paid by the Distributor to purchase the Product from CASI.

 

24.7 The Distributor shall cooperate to deregister any ancillary registration
and authorization in its name or to transfer any such registration to CASI or a
third party designated by CASI. If applicable or at CASI’s request, the
Distributor shall ensure such registrations and authorizations are maintained
throughout the term of this Agreement and thereafter until the aforesaid
transfer has been taken into effect.

 

25.Amendment and Modification of the Agreement

 

25.1 No amendment and modification shall be made except by a written
supplementary agreement after consultation and confirmation of all Parties.
Should there be any discrepancy between this Agreement and the supplementary
agreement, the supplementary agreement shall supersede.

 

26.Communication and Notice

 

26.1 Any communication which is required or permitted hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally with
receipt acknowledged, faxes with transmission confirmed, or delivered by
commercial courier service with receipt acknowledged, to the recipients at the
address and contact details notified below, or any other recipients and/or
addresses as may be notified to the Party sending the notice.

 

To CASI

Name: Cynthia W. Hu

Title: COO, General Counsel & Secretary to the Board

Phone: 240-864-2718

Email:

cynthiaw@casipharmaceuticals.com

Postal Address:

Rockville, MD 20850

To the Distributor

Name: Yuan Yue

Title:

Phone:15811212382

Email: yuanyue@crguokang.com

Postal Address: 5th Floor, Tower 1, Xinghuo Road No.9, Fengtai District,
Beijing, the People’s Republic of China

 

To CASI China

Name: Cissy (Chunhua) Wang

Title: COO

Phone: 010-65618789-8777

Email: Cissyw@casipharmaceuticals.com.cn

Postal Address: Suite 1701-1702, Floor 17th Tower 1 China Central Place, No. 77
Jianguo Road,

Chaoyang District, Beijing City, P.R. China

Postcode: 100021

 

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27.No Waiver

 

27.1 Failure by CASI to enforce any provision of the Agreement shall not be
construed as a waiver of CASI’s right to act or to enforce such terms or
conditions and CASI’s rights shall not be affected by any delay, failure or
omission to enforce any such provision. No waiver by CASI of any breach of the
Distributor’s obligations shall constitute a waiver of any other rights prior to
subsequent breach.

 

28.Entire Agreement

 

28.1 This Agreement supersedes and prevails any previous agreements or
understandings, whether oral, written, express or implied, heretofore in effect
and sets forth the entire agreement between CASI and the Distributor with
respect to the subject matter hereof.

 

29.Confidentiality

 

29.1 Nondisclosure. The Distributor agrees that CASI has a proprietary interest
in any information provided to the Distributor by CASI, whether in connection
with this Agreement or otherwise, whether in writing or oral form, which is: (i)
a trade secret, confidential or proprietary information; (ii) not publicly
known; and (iii) annotated by a legend, stamp or other written identification as
confidential or proprietary information (hereinafter referred to as “Proprietary
Information”). The Distributor shall disclose the Proprietary Information only
to those of its agents and employees to whom it is necessary in order to carry
out their duties as limited by the terms and conditions hereof. Both during and
after the term of this Agreement, all disclosures by the Distributor to its
agents and employees shall be held in strict confidence by such agents and
employees. During and after the term of this Agreement, the Distributor, its
agents and employees shall not use the Proprietary Information for any purpose
other than in pursuant to this Agreement. This clause shall also apply to any
consultants or subcontractors that the Distributor may engage in connection with
this obligation under this Agreement.

 

29.2 Exclusions. Notwithstanding anything contained in this Agreement to the
contrary, the Distributor shall not be liable for a disclosure of the
Proprietary Information of CASI, if the information so disclosed: (i) was in the
public domain at the time of disclosure without breach of this Agreement; or
(ii) was known to or contained in the records of the Distributor from a source
other than CASI at the time of disclosure by CASI to the Distributor and can be
so demonstrated; or (iii) was independently developed and is so demonstrated
promptly upon receipt of the documentations and technology by the Distributor。

 

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30.Force Majeure

 

30.1 Neither Party shall be liable for any damage, loss, cost or expense arising
out of or in connection with any non-fulfillment of this Agreement to the extent
such non-fulfillment is due to Force Majeure, provided that the affected Party
shall use its reasonable efforts to avoid or remove such causes of
non-performance and shall continue the performance with utmost dispatch whenever
such causes are removed.

 

The Party invoking Force Majeure shall inform the other Party thereof as soon as
possible by giving written notice. The Parties shall consult with each other in
order to minimize the other Party’s possible damage and/or costs.

 

31.Authorization

 

31.1 All Parties to this Agreement confirm that all signatories to this
Agreement have taken and completed all internal and external actions, procedures
and formalities required by laws and/or corporate governance and have been fully
authorized to enter into this Agreement legitimately.

 

32.Compliance

 

32.1 The Distributor is obliged to abide by “CASI FCPA Sales Compliance Policy”
(referred to Annex VI) during all of its activities concerning the performance
of this Agreement and the Product.

 

32.2 The Distributor is obliged to conduct due diligence on all of its
sub-distributors to ensure their compliance with all applicable laws and
regulations during their sales and marketing activities of the Product,
including without limitations, the compliance with Anti-Unfair Competition,
Anti-Monopoly, Pharmaceuticals Product Advertising and Marketing,

 

32.3 As required by CASI, the Distributor and its sub-distributors shall attend
compliance and legal training provided and scheduled by CASI.

 

32.4 Clause 13.1, Clause 16 and 17, Clause 30 and 33 and Appendix VI
“Anti-Bribery and FCPA Undertaking” of this Agreement are equally effective and
legally binding to sub-distributors as to the Distributor.

 

33.Survival of Rights

 

33.1 The Parties’ rights and obligations shall be binding upon and inure to the
benefit of the Parties and their respective successors, permitted assigns,
directors, officers, employees, agents and legal representatives. Termination of
one or more of the rights and obligations of the Parties, for whatsoever reason,
shall not affect the provisions of this Agreement which are intended to continue
to have effective after such termination.

 

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34.Severability

 

In the event that any provision of this Agreement shall be held to be invalid or
unenforceable, the same shall not affect in any respect whatsoever, the validity
or enforceability of the remaining provisions between CASI and the Distributor
and shall severed therefrom. The pertaining provisions held to be invalid or
unenforceable shall be reformed to provisions satisfying the legal and economic
intent of the original provisions to the maximum extent permitted by law.

 

35.Dispute Resolution

 

35.1 Governing Law. The Parties’ rights and obligations arising out of or in
connection with this Agreement shall be governed, construed, interpreted and
enforced in accordance with the laws of the People’s Republic of China,
excluding principles of conflicts of laws and contra proferentem. The
applicability of the United Nations Convention on Contracts for the
International Sale of Goods (“CISG”) is excluded.

 

35.2 Jurisdiction. The Parties agree that any dispute, controversy or claim
arising out of or relating to this Agreement or to a breach hereof, including
its interpretation, performance, termination, shall be resolved through friendly
consultation. Shall the dispute, controversy or claim fail to be resolved after
thirty (30) days of consultation, each Party may file an arbitration to China
International Economic and Trade Arbitration Commission (“CIETAC”) in accordance
with its Arbitration Rules. The seat of arbitration is Beijing, the People’s
Republic of China and the language of arbitration is English. The award or
ruling of arbitration is final and legally binding for all.

 

36.Headings and Appendixes

 

36.1 The headings contained in this Agreement are included for mere convenience
of reference and shall not affect their construction or interpretation.

 

36.2 All Appendixes attached hereinafter are an integral part of the Agreement,
equally effective and legally binding with all terms and conditions set forth
herein.

 

37.Languages and Counterparts

 

37.1 This Agreement is furnished in both Chinese and English, shall there be any
discrepancy between the two versions, the English version shall prevail.

 

37.2 This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, equally effective and legally binding for all
Parties.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above set forth.

 

—————- (SIGNATURE PAGE FOLLOWS) —————-

 

(SIGNATURE PAGE)

 

CASI Pharmaceuticals, Inc.   CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD  
        By: /s/ George Zhi Chi      By: /s/ GENG Xiao-Le Printed Name: George
Zhi Chi   Printed Name: GENG Xiao-Le Title: CFO   Title: General Manager Date:
March 7, 2019   Date: March 7, 2019       CASI (BEIJING) BIOPHARMACEUTICALS
TECHNOLOGY CO., LTD                 By: /s/ Larry (Wei) Zhang       Printed
Name: Larry (Wei) Zhang       Title: President       Date: March 7, 2019      

 

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LIST OF APPENDIXES

 

Appendix I “Import Agreement”

Appendix II “Product List”

Appendix III “Purchase Order”

Appendix IV “Quality Agreement”

Appendix V “Pharmacovigilance Agreement”

Appendix VI “FCPA Sales Compliance Policy”

Appendix VII “Payment Terms”

 

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APPENDIX I

IMPORT AGREEMENT

 

Importer:

China Resources Guokang Pharmaceuticals Co., Ltd, (“CRGK” or “the Distributor”)
a company of limited liability, established and existing under the Laws of the
People’s Republic of China, with its registered domicile at 5th Floor, Tower 1,
Xinghuo Road No.9, Fengtai District, Beijing, the People’s Republic of China.

 

Primary Contact for Import:

Name: Yue Yuan

Phone: 15811212382

Email: yuanyue@crguokang.com

 

Seller:

CASI Pharmaceuticals, Inc., a Delaware corporation, with offices at 9620 Medical
Center Drive, #300, Rockville, Maryland 20850, the United States (“CASI”).

 

Primary Contact for Import and Sale:

Name: Albert

Phone: 13911096951

Email: albertg@casipharmaceuticals.com.cn

 

1.This Agreement is furnished in accordance with and as Appendix I to the
Exclusive Distribution Agreement executed by CASI, CASI China and CRGK on 15th
Feb 2019, effective on the same date. Shall there be any discrepancy between
this Agreement and the Exclusive Distribution Agreement, the Exclusive
Distribution Agreement supersedes.

 

2.This Agreement applies CIP (“Carriage and Insurance Paid”) of Incoterms 2010
issued by the International Chamber of Commerce.

 

3.Named Place of Delivery: Beijing International Airport

 

4.Named Place of Destination: Building F05, Beijing Tianzhu Airport City Free
Trade Zone

 

5.Bonded Warehouse:Building F05, Beijing Tianzhu Airport City Free Trade Zone

 

6.Passing of Risk: the risk passes from the seller to the buyer when the Product
is delivered by the seller to the first carrier, on condition that insurance is
prepaid by the seller.

 

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7.Transfer of Title: Title of the Product shall transfer from the seller to the
buyer when it arrives at the named place of destination.

8.The seller shall provide the following documents to the buyer once the Product
arrives at the named place of delivery:

 

a.One original Airway Bill

 

b.Invoices, original in duplicate

 

c.Packing Lists in duplicate.

 

d.Original Certificate of Origin issued by the International Chamber of
Commerce;

 

e.Certificate of Analysis in duplicate.

 

f.Certificate of Insurance with minimum cover.

 

9.Quotation:

 

COMMODITY & OTHER

SPECIFICATIONS

 

QUANTITY

 

UNIT

PRICE 

AMOUNT

 

        TOTAL:  

 

10.Shipping Advice: After each shipment of the Product, the seller shall notify
the Importer by the contact details listed above, including the information of
at least: (a) name of the Product; (b) quantity, (c) net weight, (d) quantity in
total, (e) flight departure date, (f) named place of delivery.

 

11.Quality: It is trilaterally agreed that quality of the Product as listed in
Appendix II shall meet with the requirements of all applicable laws and
regulations, industrial standards within the Territory, details specified in
Appendix IV “Quality Agreement” complementary to the Exclusive Distribution
Agreement.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on 15th Feb 2019.

 

—————- (SIGNATURE PAGE FOLLOWS) —————-

 

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(Signature Page)

 

CASI Pharmaceuticals, Inc.   CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD  
        By: /s/George Zhi Chi   By: /s/ GENG Xiao-Le Printed Name: George Zhi
Chi   Printed Name: GENG Xiao-Le Title: CFO   Title: General Manager Date: March
7, 2019   Date: March 7, 2019       CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY
CO., LTD             By: /s/Larry (Wei) Zhang     Printed Name: Larry (Wei)
Zhang     Title: President     Date: March 7, 2019    

 

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APPENDIX II

Product List

 

Compound name: Melphalan Hydrochloride for Injection

Brand Name: Evomela®

Package: 50mg/box

 

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APPENDIX III

 

PURCHASE ORDER

 

PO No:2019CRGK-0**BJ

  Date: ******

To: (Seller)

TO: CASI PHARMACEUTICALS INC.

Add: 9620 Medical Center Drive, #300, Rockville,

Maryland 20850, the United States (“CASI”).

Tel:

Email:

 

From: China Resources Guokang Pharmaceutical Co., Ltd.

No.9, Xinghuo Road, Fengtai District,

Beijing (100070), China

Tel: +8610 63626592 / Fax: +8610 63626501

 

– NOTES 注释 –

 

In accordance with the provisions of “Exclusive Distribution Agreement” dated
15th Feb, 2019 between both parties hereto, China Resources Guokang
Pharmaceutical Co., Ltd. issues this Purchase Order as follows;

 

根据双方2019年2月15日签订的《独家经销协议》规定, 华润国康 (北京) 医药有限公司发布采购订单如下:

  

Commodity

 

Quantity

 

Unit price /Package (in US$)

 

Amount (in US$)

 

******* *****   Boxes USD******美元 USD******美元

Total:

 

******   Boxes CIP BEIJING BY AIR USD*******

Shipping date

On or Before ******

 

Terms of payment

By wire transfer (T/T) made by China Resources Guokang Pharmaceutical Co., Ltd.
within 90 days after issuance date of the invoice designated by CASI.

 

 

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Details of Designated Account

 

  Transportation Air transportation INCOTERM CIP Port of Shipment *****, USA
Named Place of Destination

Beijing Airport Please specify the full name of destination

 

Basis of price

Before or After Tax (Please specify) and marked in US dollars.

 

Other term and condition(s)

Shipping advice should be sent by e-mail via freight forwarder to:

 

Ms. Yuan Yue (yuanyue@crguokang.com) in advance with details.

 

 

CASI Pharmaceuticals, Inc.   CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD  
        By: /s/ George Zhi Chi   By: /s/ GENG Xiao-Le Printed Name: George Zhi
Chi   Printed Name: GENG Xiao-Le Title: CFO   Title: General Manager Date: March
7, 2019   Date: March 7, 2019       CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY
CO., LTD             By: /s/Larry (Wei) Zhang     Printed Name: Larry (Wei)
Zhang     Title: President     Date: March 7, 2019    

 

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APPENDIX IV

QUALITY AGREEMENT

 

This Quality Agreement defines the quality related activities for the Product
manufactured by Spectrum Pharmaceuticals, licensed to CASI Pharmaceuticals INC.,
and registered by CASI (Beijing) Biopharmaceuticals Technology Co., Ltd
(hereinafter referred to as “CASI China”) in the Territory, delivered from
Building F05,Beijing Tianzhu Airport City Free Trade Zone to China Resources
Guokang Pharmaceutical Co., Ltd. (hereinafter referred to as “the Distributor”)
for distribution within the Territory pursuant to the provisions set forth in
the Exclusive Distribution Agreement entered into effect on 15th Feb, 2019.

 

Article 1: Parties and Manufacturing Site

 

This Quality Agreement is made and entered into by and between CASI and the
Distributor as listed below:

 

Manufacturing and Marketing Authorization Holder

Name: Spectum Pharmaceuticals, Inc.

Address: 157 Technology Drive Irvine, CA 92618

Manufacturing Site: PATHEON MANUFACTURING SERVICES, LLC

Address: Greenville, NC 27834

 

Distributor

Name:China Resources Guokang Pharmaceutical Co., Ltd.

Address:No.9, Xinghuo Road, Fengtai District, Beijing 100070, China

 

Article 2: Scope of the Quality Agreement

 

The Product referred to in this Agreement is listed in Appendix II “Product
List” to the Exclusive Distribution Agreement.

 

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Article 3: Definitions

  

The terms used in this Quality Agreement shall have the following meanings:

1.“Quality Information” used herein means any information provided by any
distributor, any person who directly handles the Product at customs, pharmacies,
hospitals and clinics, any patient, or any other user concerning quality defects
of the Product, including concerns about quality defects, after the release of
the Products to the market in the Territory by The Distributor.

 

2.“Inferior Products” used herein means the Product, which failed to pass
National Inspection by the Customs or other administrative authority of China
and failed to pass the acceptance testing at the inspection conducted by the
Distributor.

 

3.“Defective Products” used herein refers to the Product which has been detected
or defected during storage or transportation, after it passed the acceptance
testing at the inspection conducted by the Distributor.

 

4.“Faulty Products” used herein refers to the Product either of which, after the
release to the market, Quality Information has been reported or of which quality
abnormality has been found in the reserved samples at the Distributor, and it is
proved that such quality issues were caused by the Product regardless of the
possibility of recall.

 

5.“Recall” means to retrieve the Product by CASI’s decision after their release
to the market by the Distributor.

 

6.All terms not defined in the preceding paragraph shall conform to applicable
Pharmaceutical Affairs Laws, ministerial ordinances, notifications and other
regulations of China and the United States.

 

7.For any term of this Article of which the definition has conflict with the
statutory definition provided by applicable laws and regulations, the statutory
definition shall prevail.

 

Article 4: Packaging, Labeling and Transportation

 

Packaging form, labeling and transportation conditions are listed in Annex 2 to
this Quality Agreement.

 

Article 5: Delivery of Products and Acceptance Testing

 

1.CASI will deliver the Product to The Distributor in accordance with Article 5.

 

2.The Distributor will confirm the quantity, appearance and shipping documents
as defined in Article 7 for the Products delivered to The Distributor’s
warehouse or the bonded warehouse.

 

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3.The Distributor will perform the testing of the Product delivered to The
Distributor’s named warehouse, according to the acceptance criteria for visual
inspection as defined in Appendix 3 and shall notify the result in writing to
CASI within 5 working days after the delivery to the Distributor’s named
warehouse.

 

Article 6: Shipping documents

 

CASI will issue the Certificate of Analysis for each manufacturing lot as
defined in Annex 3 and provide it to The Distributor.

 

Article 7: Storage Condition and Shelf Life

 

The Distributor will control the Product in accordance with the storage
condition, expiration date defined in Appendix 3 and applicable laws of the
People’s Republic of China.

 

Article 8 Lot Numbering

 

The lot numbering system is described in Annex 3.

 

Article 9: Handling of Inferior, Defective and Faulty Products

 

1.The Distributor shall notify CASI and discuss appropriate measures with CASI
when the Distributor as the actual knowledge of any information of Inferior
Products or Defective Products.

 

2.Regarding Faulty Products, in accordance with the Quality Information handling
procedure as defined in Article 11, CASI shall investigate the cause of Faulty
Products to take countermeasures and notify the result to the Distributor.

 

3.Returns or exchange of the Products from The Distributor to CASI shall be
limited to the following items.

 

(1)Product liability due to Product quality attributed to CASI;

 

(2)Inferior Products;

 

(3)Defective Product;

 

(4)Faulty Product which were proved to be attributed to CASI.

 

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4. A list of responsible contact persons about Product quality is shown in Annex
4.

 

Article 10 Product Quality Liability and Indemnification

 

Product quality liability and indemnification of the Distributor and/or the
manufacturer shall be construed and interpreted specifically in conformance with
(1) Chapter V of “the Tort Law of China” (President Decree No.21(2010)) ; (2)
Chapter III and Chapter IV of “the Product Quality Law of China” (President
Decree No. 71(1993)); (3) “Law on the Management of Medical Products of China”
(Amendment by the Standing Committee of the National People’s Congress of
China(2015)) and; (4) “Regulations on the Quality Management of Medical Product
Business Operations of China” (Decree No. 13 by the former China Food and Drug
Administration(2015)).

 

Article 11. Communication and Consultation

 

1.In the event that The Distributor obtains the following information, the
Distributor shall notify it to CASI immediately.

 

(1)The ministerial ordinances, notifications and other communication of the
People’s Republic of China concerning the Product that are not written or
defined in this Quality Agreement.

 

(2)The measures taken to prevent the occurrence and spread of potential risks to
public health due to any issue other than Quality Information, the Product
recall and regulations defined in this Quality Agreement.

 

2.Any changes to the terms and conditions stipulated in the Annexes shall be
made in writing through friendly consultation by CASI and the Distributor.

 

Article 12: Audits

 

CASI shall conduct audit to verify compliance with this Quality Agreement at the
Distributor’s premise after a 30 days prior written notice.

 

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Article 13: Documentation and Records

 

The Distributor will retain the documents and records concerning the marketing
of the Product for the duration of the shelf life of the Product plus one year
from the date of preparation (for the procedures, from the date when stopped
using that procedure).

 

Article 14 Term and Termination

 

As an Appendix to the Exclusive Distribution Agreement, this Quality Agreement
is executed and takes into effect on the effective date of the Exclusive
Distribution Agreement with the same term of validity. Upon termination or
expiry date of the Exclusive Distribution Agreement, all provisions stipulated
in this Quality Agreement concerning Product quality shall survive for another 1
year.

 

Article 15 Recordation of Revision

 

15.1 All revisions to this Quality Agreement shall be recorded and documented by
filling the Revision Form in Annex 11.

 

15.2 Shall there be any discrepancy between this Quality Agreement and the
Exclusive Distribution Agreement, the Exclusive Distribution Agreement
supersedes, notwithstanding that Article 10 of this Quality Agreement shall
prevail all provisions and definitions concerning product quality liability and
indemnification.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above set forth.

 

CASI Pharmaceuticals, Inc.   CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD  
        By: /s/ George Zhi Chi   By: /s/ GENG Xiao-Le Printed Name: George Zhi
Chi   Printed Name: GENG Xiao-Le Title: CFO   Title: General Manager Date: March
7, 2019   Date: March 7, 2019       CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY
CO., LTD             By: /s/ Larry (Wei) Zhang     Printed Name: Larry (Wei)
Zhang     Title: President     Date: March 7, 2019    

 

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QUALITY AGREEMENT

LIST OF ANNEXES

 

Annex 1 Product Quality and Specifications

Annex 2 Packaging, Labeling and Transportation

Annex 3 Product Instruction Sample

Annex 4 Labelling of Shipping Box (with instruction) Surface Sample

Annex 5 Bottle Labelling (with storage instruction) Sample

Annex 6 Acceptance Criteria for Visual Inspection

Annex 7 Storage Conditions and Expiration Date

Annex 8 Primary Contacts Concerning Product Quality

Annex 9 Request for Complaints Investigation

Annex 10 Quality Information Report

Annex 11 Quality Terms Revision

 

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Annex 1 Product Quality Specifications

 

Name of Product

 

—Melphalan hydrochloride for injection—

Import License Ref. No

 

—H20180073——

Import License Issuance Date

 

—11/30/2018——

Quality Management System of the International Organization for Standardization
for Distributor

 

ISO9000

Quality Management National Standards of the Administrative Committee of
National Standardization, China for Distributor

 

 

GB/T 19000

 

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Annex 2: Packaging, Labeling and Transportation

 

Transportation Conditions:

 

Product Name

 

Transportation route Temperature

 

Melphalan hydrochloride for injection

 

 

Normal Room Temperature

 

 

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Annex 3 Product Instructions Sample

 

[tv520374_ex10-1img01.jpg]

 

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Annex 4 Labelling of Shipping Box (with Instruction) Surface Sample

 

[tv520374_ex10-1img02.jpg]

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Annex 5 Labelling Bottle (with Storage Instruction) Sample

 

[tv520374_ex10-1img03.jpg]

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Annex 6 Acceptance Criteria for Visual Inspection

 

The Product in conformity with the following criteria of visual inspection will
be accepted by the Distributor:

 

Test item

 

Acceptance criteria

 

Lot Number/Expiration

 

No typographical errors. Easily legible.

 

Stain, scratch, wrinkle

 

No stains, scratches or wrinkles are visually detected.

 

Label statement, figuration

 

No printing defectives or figuration defectives

 

Perforation

 

Uninterrupted perforation line. Easy to open.

 

Bar code

 

No scanning error. Matching the information.

 

Sealing

 

Securely sealed.

 

Package Insert

 

Securely contained inside.

 

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Annex 7 Storage Conditions and Expiration Date

 

Storage

 

Normal Room Temperature

 

Expiration

 

3 Years

 

 

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Annex 8 Primary Contacts Concerning Product Quality

 

 

CASI:  

CRGK:

 

CASI China:

Primary Contact

Printed Name:Alex Zukiwski

Title: CMO

Phone: 240-864-2888

Email:alexz@casipharmaceuticals.com

 

Primary Contact

Printed Name: Lili

Title: Quality Manager

Phone: 010-63626524

Email: lili8@crguokang.com

Primary Contact

Printed Name: Helen

Title:

Phone: 13621245934

Email: helenl@casipharmaceuticals.com.cn

 

 

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Annex 9

Request for Complaints Investigation

Date:

To:

CASI Pharmaceuticals INC.

 

Product name

 

 

Lot number

 

 

Date of complaint

 

 

 

Quantity of complaint

 

  Contact Details

Company Name:

Company Address:

Name of the Complainant:

Phone:

 

Email:

 

 

Delivered sample

 

Delivered:Yes ¨  No ¨

 

Complaint Details

 

  Response

 

¨   Letter of Reply to Complaint

¨   Investigation Report

 

Please submit the above document to the Quality Assurance Department of CASI
first.

 

Remarks

 

 Standard Timeline: Reply in 1 week

 

         

 

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Annex 10

Quality Information Report

 

Reported by (department):

 

　　　　　　

Section

 

　　　　　　　　　　

Reported by (person):

 

 

Date of report

 

　　　　　　

Date of obtaining the information

 

　　　　

Phone

 

TEL　　　　　　Ext. (　　　　　)

Information obtained by:

 

 

Product Name of the Information

 

Descriptions

 

 

 

 

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Annex 11

Quality Terms Revision Form

 

No

Date of

revision

Content of revision Revised by CASI The Distributor                            
                               

 

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APPENDIX V

PHARMACOVIGILANCE AGREEMENT

 

This Pharmacovigilance Agreement (this “Agreement” of “PVA”) is entered into and
effective as of 15th Feb 2019, by and between:

 

China Resources Guokang Pharmaceuticals Co., Ltd, (“CRGK” or “the Distributor”),
a company organized under the Laws of the People’s Republic of China, with a
registered office located at 5th Floor, Tower 1, Xin-Huo Road No. 9, Feng-Tai
District, Beijing, the People’s Republic of China, unified social credit code:
91110106700207387G, and

 

CASI Pharmaceuticals, Inc., a Delaware corporation, with offices at 9620 Medical
Center Drive, #300, Rockville, Maryland 20850, the United States (“CASI”).

 

CASI and the Distributor are hereby collectively referred to herein as the
“Parties” and each, individually, as a “Party”.

 

1.PURPOSE

 

1.1 CASI and the Distributor are Parties to the Exclusive Distribution Agreement
effective on 15th Feb 2019 for the distribution of the Product, (as such
agreement may be amended from time to time, the “Exclusive Distribution
Agreement”), executed on even date with this Pharmacovigilance Agreement (this
“PVA”).

 

1.2 The purpose of this PVA is to describe the procedures and define the
responsibilities that CASI and the Distributor will employ to ensure that AE (as
defined below) notification and reporting requirements for the product listed in
Appendix II (the “Product List”) in order to meet applicable rules of regulatory
authority set forth in 21 C.F.R. § 314.80 and guidelines. The Distributor, as
marketing authorization holder in the Territory, also has certain
pharmacovigilance (“PV”) obligations in order to meet local regulatory rules and
guidelines.

 

The terms used in this PVA shall have the meanings as defined herein, and if not
defined herein, as defined in the Exclusive Distribution Agreement, or by laws
and regulations as applicable.

 

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2.DEFINITIONS

 

Adverse Event (“AE”) is any untoward medical occurrence in a patient or
clinical-trial subject administered a medicinal product and which does not
necessarily have to have a causal relationship with the treatment. An AE can
therefore be any unfavorable and unintended sign (e.g. an abnormal laboratory
finding), symptom, or disease temporarily associated with the use of a medicinal
product or device, whether or not considered related to such medicinal product
or device.

 

“Special Situations”, for the purposes of this PVA, means the use of Product
during pregnancy (with or without outcome), use during lactation, dispensing
errors, maladministration, accidental or occupational exposure, pediatric
exposure, unexpected benefit, overdose, lack of efficacy, drug-drug interaction,
withdrawal syndrome, drug dependence, misuse, abuse or addiction, transmission
of infectious disease, disease progression or aggravation, off-label use,
treatment noncompliance, withdrawal periods, environmental issues and the use of
counterfeit product, all of which shall be reported by the Distributor to CASI
following the requirements of AE reporting even if no AE has occurred.

 

“Urgent Safety Action” refers to a Product recall, withdrawal, restriction,
and/or field correction, including recalls, withdrawals, restrictions, and/or
field corrections of such Product required by any regulatory authority or
voluntary recalls, withdrawals, restrictions, and/or field corrections of such
Product.

 

“Transfer Date” refers to the date on which the Distributor receives the Product
from the carrier at the named place of delivery as defined in Appendix I “Import
Agreement” to the Exclusive Distribution Agreement.

 

“ICSRs”refers to the “Individual Case Safety Report” , required to be submitted
to the Food and Drug Administration of the United States (“FDA”) which contains
format requirements for drug and non-vaccine biologics post-market reporting
based upon the International Council for Harmonization of Technical Requirements
for Pharmaceuticals in Human Use (“ICH”) E2B (“R2”) specifications.

 

“Safety Signal” refers to information that arises from one or multiple sources
(including observations of experiments) which suggests a new, potential causal
association, or a new aspect of a known association between an intervention
(e.g. administration of a medicine) and event or set of related events, either
adverse or beneficial, that is judged to be sufficient likelihood to justify
action of verification.

 

“PADERs” refers to Periodic Adverse Drug Experience Report (PADERs) which
contains format requirements for drug and non-vaccine biologics post-market
reporting based upon the International Council for Harmonization of Technical
Requirements for Pharmaceuticals in Human Use (“ICH”) E2B (“R2”) specifications.

 

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3.SCOPE

 

3.1 This PVA applies to AE reporting requirements for the Product. In the event
of a conflict between the terms of PVA and the Exclusive Distribution Agreement,
the terms of the PVA shall control in regard to AEs.

 

4.EFFECTIVE DATE AND REVIEW

 

4.1 This PVA shall become effective on the effective date of the Exclusive
Distribution Agreement. No provision of this PVA may be amended or modified
other than by a written document signed by an authorized representative of each
Party.

 

4.2 The Distributor shall commit to forward AEs after the Transfer Date as per
local regulations, i.e. forwarding of AEs when received by error on the
tradename of another Person who is marketing authorization holder for the
Product.

 

4.3 If applicable regulatory requirements change and there is disagreement
regarding the interpretation of any aspect of this PVA, and/or either Party
requests a review of this PVA due to issues or conflicts involving legal or
regulatory requirements, the Parties agree to review, and, if appropriate, amend
and/or revise the terms of this PVA. Renegotiation/review shall be considered
complete when the Parties execute a written amendment or addendum to this PVA.

 

5.RESPONSIBILITIES

 

5.1 The Parties agree to implement necessary training, procedures and
systems/processes for the timely and direct reporting of any AE or Special
Situation (as defined in Clause 2 above) reports made known to them, as set
forth in this PVA.

 

5.2 The Parties also agree that personnel performing the tasks described in this
PVA are qualified to perform those tasks.

 

5.3 The Parties agree that data privacy must be maintained at all time in
relation to the activities defined in this PVA.

 

5.4The Parties agree that cross-border data exchange and transmission shall be
in strict compliance with the requirements of applicable laws and regulations of
the People’s Republic of China and the United States.

 

5.5The Parties shall proactively provide remedy to the most possible extent in
order to minimize losses and costs arising from the performance and execution of
this PVA due to the promulgation of new policy, laws or regulations on the
cross-border data exchange and data transmission either in China or the United
States, inter alia, take necessary measures to acquire the approval and/or apply
for the permit for the exchange and transmission of sensitive data e.g.
concerning human genetic resources, biopharmaceuticals and biochemistry.

 

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6.TRAINING

 

6.1 Each Party shall ensure that its personnel involved with carrying out the
terms of the PVA are trained appropriately. Training documentation will be
maintained by each Party respectively. Upon request by the Distributor, CASI
shall provide the Distributor with complete copies of its training
documentation.

 

7.URGENT SAFETY ACTIONS

 

7.1 CASI shall be responsible for all Urgent Safety Actions arising from or
related to the Product manufactured, sold or otherwise distributed prior to the
Transfer Date. The Distributor shall be responsible for all Urgent Safety
Actions arising from or related to the Product manufactured, sold or otherwise
distributed on and after the Transfer Date.

 

8.INTAKE AND EXCHANGE OF AE AND SPECIAL SITUATION INFORMATION

 

8.1 In the event that the Distributor learns of any AEs, Product complaints, or
Special Situations for the Product on and after the Transfer Date, the
Distributor will record all available AE, Product complaint, or Special
Situation information on an intake form and e-mail the completed form to CASI
via e-mail with read receipt as soon as possible but no later than five (5)
calendar days of receipt. The Distributor will provide to CASI all information
provided to the Distributor relating to the AE, Product complaint, or Special
Situation but minimally, the following information will be provided:

 

(a)Date that the Distributor was notified of the AE, Product complaint, or
Special Situation;

 

(b)Name and contact details of the reporter;

 

(c)Name of the Product;

 

(d)Nature of the AE, Product complaint, or Special Situation; and

 

(e)Patient details (if available).

 

8.2 The contacts for each Party are identified in Annex I to this PVA. Either
Party may change its contact persons and/or its primary liaison upon immediate
notification to the other Party in writing.

 

8.3 The Distributor will send a PDF copy of the original AE source document
received by the Distributor to CASI via e-mail at the e-mail address listed in
Annex I. Both CASI and the Distributor will agree to maintain records of all
safety information that has been exchanged for the purpose of future audits
and/or inspections by the National Medical Products Administration (“NMPA”, the
former “China Food and Drug Administration”) and/or other regulatory authority,
in compliance with this PVA. All exchanged safety information records will be
maintained for a period of no less than 10 years.

 

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9.SAFETY REGULATORY REPORTS

 

9.1 On and after the Transfer Date, the Distributor will hold and maintain the
global safety database for all AEs occurring with Product reported to either
Party. The Distributor is responsible for the preparation and submission of all
safety reports, including all ICSRs (15-day reports) as well as all aggregate
reports (PADERs) in accordance with regulatory requirements. For clarity, prior
to the Transfer Date, CASI shall continue to be responsible for all the
obligations of the Distributor under this Section.

 

10.AE REPORT PROCESSING AND FOLLOW-UP

 

10.1 On and after the Transfer Date, the Distributor is responsible for
processing AE reports including performing database entry/assessment, completing
medical review, and performing any follow-up, as required. For clarity, prior to
the Transfer Date, CASI shall continue to be responsible for all the obligations
of the Distributor under this Section.

 

11.LITERATURE REVIEW

 

11.1 On and after the Transfer Date, the Distributor is responsible for
performing review of the worldwide scientific literature for AE information
related to Product in accordance with its procedures. For clarity, prior to the
Transfer Date, CASI shall continue to be responsible for all the obligations of
the Distributor under this Section.

 

12.SAFETY ISSUES/SIGNALS

 

12.1 On and after the Transfer Date, the Distributor is responsible for
identifying safety issues or signals relating to the Product and communicating
safety issues to appropriate regulatory authorities. For clarity, prior to the
Transfer Date, CASI shall continue to be responsible for all the obligations of
the Distributor under this Clause.

 

13RECONCILIATION AND CONFIRMATION OF RECEIPT

 

13.1 On and after the Transfer Date, the Distributor will respond back to CASI
for each AE report communicated to the Distributor, preferably within
forty-eight (48) hours, but in no case later than two (2) Business Days after
receipt by the Distributor. If CASI does not receive a response back within the
above stated timeframe, CASI will continue to communicate for the AE report
until confirmation is received. The Distributor shall provide cumulative
reconciliation information during the term of this PVA in accordance with the
provisions hereof. CASI and the Distributor will effectively perform a monthly
reconciliation to ensure that all forwarded reports of all safety information
have been successfully exchanged between both Parties.

 

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14.REGULATORY AUTHORITY INTERACTIONS

 

14.1 On and after the Transfer Date, the Distributor is responsible for
completing and reporting of AE reports for Product and for submission to
regulatory/competent authorities. This includes individual case 15-Day Alert
Reports and Periodic Safety Reports or Periodic Safety Update Reports, if
applicable.

 

14.2 On and after the Transfer Date, communications with NMPA relating to PV
issues for the Product will be the responsibility of the Distributor or CASI.
For clarity, prior to the Transfer Date, CASI shall continue to be responsible
for all the obligations of the Distributor under this Section.

 

15.RISK EVALUATION AND MITIGATION STRATEGY (REMS)

 

15.1 If a local REMS or other risk management activity is required for Product
by a regulatory authority, (i) on and after the Transfer Date, the Distributor
or CASI shall be responsible for the authorship, submission and administration
of the program; or (ii) prior to the Transfer Date, CASI shall be responsible
for the authorship, submission and administration of the program.

 

16.SUMMARY OF RESPONSIBILITIES ON OR AFTER THE TRANSFER DATE

 

16.1 Responsibilities on and after the Transfer Date are summarized below.

 

Activity

 

The Distributor

 

CASI

 

Receipt of AE Reports

 

X X

Email Transfer of AEs, Product Complaints, and Special Situations

 

X X

Safety Report Preparation and Submission in the United States

 

  X

Safety Report Preparation and Submission in China

 

X  

Safety Signal Identification

 

  X

Literature Review

 

  X

Regulatory Reporting Related to AEs

 

  X

  

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Activity

 

The Distributor

 

CASI

 

Interactions with Regulatory Authorities Related to AEs

 

  X

Immediate Confirmation of Receipt

 

X X

Reconciliation Listing

 

X X

Perform Reconciliation Against Database

 

  X

Risk Management Plans

 

  X

 

17.COMPLIANCE WITH PHARMACOVIGILANCE AGREEMENT AUDIT

 

17.1 The Parties shall communicate urgent or critical issues affecting the other
Party’s pharmacovigilance system in relation to meeting the obligations set
forth in this PVA within 14 Business Days of discovery or receipt of documented
findings cited during a regulatory authority inspection. Once corrective actions
are determined, the inspected Party will provide a summary of the relevant
inspection findings with associated corrective actions to the extent the other
Party is impacted.

 

17.2 On and after the Transfer Date, CASI may audit the Distributor’s
pharmacovigilance systems/operations or contracted pharmacovigilance activities,
by giving a 90 days’ prior written notice, to ensure that the elements set forth
in this PVA are being fulfilled for the Product. As soon as the decision to
audit is taken, all such audits will be notified by CASI to the Distributor.
Audits must be reasonable in scope and in relationship to the Product and must
take place during normal business hours. The Distributor will correct audit
observations in a timely manner and communicate those actions with CASI.

 

17.3 In the case of a serious suspected breach of compliance with this PVA, a
directed audit will be performed by the Distributor or an independent third
party with written notification only and a minimum of 30 days. The possibility
of a directed audit for serious breach is therefore agreed upon by way of
execution of this PVA.

 

17.4 Parties shall allow foreign and local health authorities to inspect their
pharmacovigilance operations as it is necessary for either Party to maintain
registration in the countries where the Product is marketed. The Parties shall
allow foreign and local health authorities to inspect their pharmacovigilance
operations as necessary for either Party to maintain a marketing authorization.
The Parties shall inform each other of any local Product-specific
pharmacovigilance inspections at the time they receive notification of the
inspection.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above set forth.

 

(SIGNATURE PAGE)

 

CASI Pharmaceuticals, Inc.   CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD  
        By: /s/ George Zhi Chi   By: /s/ GENG Xiao-Le Printed Name: George Zhi
Chi   Printed Name: GENG Xiao-Le Title:  CFO   Title: General Manager Date: 15th
Feb 2019   Date: March 7, 2019             CASI (BEIJING) BIOPHARMACEUTICALS
TECHNOLOGY CO., LTD             By: /s/ Larry (Wei) Zhang     Printed Name:
Larry (Wei) Zhang     Title: President     Date: 15th Feb 2019          

 

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Annex I

Pharmacovigilance List of Contacts

 

The Distributor

 

CASI

AEs; Product complaints, Product and Special Situations Requests:

Email Transfer to

Name:

Title:

Phone: +8610-63626524

E-mail to:

e-mail: Lili8@crguokang.com

 

AEs; Product complaints, Product and Special Situations Requests:

Email Transfer to:

Name:Dr. Alex Zukiwski

Title: Chief Medical Officer

Phone: (240) 864-2888

E-mail to:

e-mail: alexz@casipharmaceuticals.com

 

Primary Contact and AE specific Questions:

Name, Title:

Phone: +8610-63626524

Email:

Lili8@crguokang.com

Primary Contacts:

Name, Title:

Dr. Alex Zukiwski Chief Medical Officer

Phone e: (240) 864-2888

e-mail: alexz@casipharmaceuticals.com

 

Name:Dr. Ken K. Ren

Title:Chief Executive Officer

Phone: (240) 893-0086

Email:kenr@casipharmaceuticals.com

 

Secondary Contact:

Name, Title

Phone: +8601-63626519

Lirui116@crguokang.com

Secondary Contact:

Name:James Goldschmidt,

Title:PhD SVP, Business Development

Phone (240) 864-2843

Email: jamesg@casipharmac”euticals.com

 

Name:Cynthia W. Hu

Title:COO & General Counsel

Phone: (240) 864-2781

Email: cynthiaw@casipharmaceuticals.com

 

 

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IN WITNESS WHEREOF, the Parties have executed this Annex to the PVA as of the
date first above set forth.

 

(SIGNATURE)

 

 

CASI Pharmaceuticals, Inc.   CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD  
        By: /s/ George Zhi Chi   By: /s/ GENG Xiao-Le Printed Name: George Zhi
Chi   Printed Name: GENG Xiao-Le Title: CFO   Title: General Manager Date: March
7, 2019   Date: March 7, 2019       CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY
CO., LTD             By: /s/ Larry (Wei) Zhang     Printed Name: Larry (Wei)
Zhang     Title: President     Date: March 7, 2019    

 

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APPENDIX VI

CODE OF CONDUCT AND ETHICAL STANDARDS

ON ANTI-BRIBERY AND ANTI-FOREIGN CORRUPTION PRACTCE ACT

(“FCPA”) OF THE UNITED STATES

 

In this Appendix specifically:

“CRGK” refers to: China Resources Guokang Pharmaceuticals Co., Ltd,

 

“CASI” jointly refers to CASI Pharmaceuticals INC., and CASI (Beijing)
Biopharmaceuticals Technology Co., Ltd, together.

 

1.Representation

 

CRGK represents and undertakes to CASI that:

 

(a)it and its Affiliates and its (and its Affiliates’) directors, officers and
employees (“Representatives”), shall refrain from offering, giving, demanding or
accepting any gift, payment or favor, whether directly or through any other
person or entity, private or public, that is intended to: (i) induce the
recipient to perform a function or activity improperly, or (ii) secure any
improper advantage for CASI and/or CRGK ;

 

(b)it shall keep transparent and accurate books and records (including
accounting records) with regard to its performance under the Exclusive
Distribution Agreement;

 

(c)it shall have, maintain and enforce throughout the term of this Agreement its
own anti-bribery and corruption policies and procedures in compliance with
applicable Laws and regulations;

 

(d)it, its Affiliates and its Representatives have not been convicted of any
offence involving bribery and corruption and, to the best of CRGK ’s knowledge,
neither have been nor are the subject of any investigation, inquiry or
enforcement proceedings by any governmental or regulatory authority under any
applicable anti-bribery and anti-corruption Laws and regulations;

 

(e)it shall not contact, or otherwise meet with any government official with
respect to any transactions required under this Agreement, without the prior
written approval of CASI and, when requested by CASI, only in the presence of a
CASI designated representative;

 

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(f)except as disclosed in writing: (i) it does not have any interest which
directly or indirectly conflicts with its proper and ethical performance of this
Agreement; and (ii) it shall maintain arms’ length relations with all Third
Parties (including government officials) with which it deals for or on behalf of
CASI (or in performance of this Agreement);

 

(g)it, its Affiliates and its Representatives shall in all other respects comply
with all applicable anti-bribery and anti-corruption Laws, regulations, Foreign
Corruption Practice Act (“FCPA”); and

 

(h)it shall at all times comply with and not get into any kind of activities
which are against the ethics and regulations of CASI as mentioned in the CASI
Code of Conduct.

 

2.Liability.

CRGK shall ensure that any and all persons, such as, but not limited to, agents,
distributors, contractors, representatives, intermediaries or any other
associated persons, who perform services for or act on behalf of CRGK in
connection with this Agreement (hereinafter jointly “Persons”) do so only on the
basis of a written contract with terms and conditions no less strict than those
imposed on CRGK in Clause 1 of these Requirements. CRGK shall be responsible for
the compliance by such Persons with any applicable anti-bribery and
anti-corruption Laws and regulations and CASI Code of Conduct, and shall be
directly liable to CASI for any breach by such Persons thereof.

 

3.Breach and Remedies.

Any breach of Clauses 1 and 2 by CRGK , its Affiliates and Representatives or
any of the Persons shall be deemed a material breach of this Agreement and,
without prejudice to other remedies available to it, including but not limited
to the right to demand specific performance, CASI shall have the right to
immediately suspend performance or terminate this Agreement according to Clause
10.2 (a) of the Agreement.

 

4.Disclosure of (Possible) Violation

CRGK agrees that CASI may make full disclosure of information relating to a
possible violation of the terms of these Ethical Standards and Anti-Bribery and
Anti-Corruption Requirements at any time and for any reason to any Governmental
Authority, and to whomsoever CASI determines in good faith has a legitimate need
to know.

 

5.Right to Audit.

CASI shall have the right to audit the conduct of CRGK, its Affiliates and
subcontractors under this Agreement, each of which shall be obligated to
cooperate fully in any such audit.

 

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6.Sub-Distributors Management

CRGK is attentive to and experienced in the management and risk control of its
sub-distributors and warrants that all sub-distributors contracted with CRGK for
the performance of the Exclusive Distribution Agreement will strictly abide by
statutory and contractual obligations in relation to ant-bribery, anti-unfair
competition and FCPA.

 

(SIGNATURE PAGE) 

 

CASI Pharmaceuticals, Inc.   CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD  
        By: /s/ George Zhi Chi   By: /s/ GENG Xiao-Le Printed Name: George Zhi
Chi   Printed Name: GENG Xiao-Le Title: CFO   Title: General Manager Date: March
7, 2019   Date: March 7, 2019       CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY
CO., LTD             By: /s/ Larry (Wei) Zhang     Printed Name: Larry (Wei)
Zhang     Title: President     Date: March 7, 2019    

 

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APPENDIX VII

SUPPLEMENTRY PAYMENT TERMS

 

This Appendix is entered into and effective on 15th Feb 2019 as supplementary
provisions on payment terms to the Exclusive Distribution Agreement signed on
the aforesaid same date by and between:

 

China Resources Guokang Pharmaceuticals Co., Ltd, (“CRGK” or “the Distributor”)
a company of limited liability, established and existing under the Laws of the
People’s Republic of China, with its registered domicile at 5th Floor, Tower 1,
Xinghuo Road No.9, Fengtai District, Beijing, the People’s Republic of China,
unified social credit code: 91110106700207387G. And

 

CASI Pharmaceuticals INC., (“CASI”) a Nasdaq listed company incorporated and
existing under the laws of the State of Delaware, USA with its registered
domicile at 9620 Medical Center Drive in Rockville, MD USA. And

 

1.Definition of the “Difference”

The “Difference” used in this annex shall mean the difference between (a) export
CIP prices and (b) calculation CIP prices to be determined to guarantee the
agreed distribution channel margin from CASI to CRGK with are set forth.

 

2.Compensation for the “Difference”

CASI shall compensate for the “Difference” based upon the calculation formula
shown as follows on the condition that the result of calculation is positive;

a.Export CIP Price;

b.Calculation CIP Price;

c.The total amount into which “Difference” is converted

 

Calculation Formula:

c = (a-b) ×1.02 × the number of Products to be sold by CASI to CRGK.

 

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3.Total of Compensation

The parties agree that each compensation amount which is calculated in this
Appendix are totaled based on the calculating formula shown as follows. In case
of the result of calculation is positive, CASI shall compensate CRGK by using
credit note to deduct equivalent payment of the contract. On the contrary, in
case of the result of calculation is negative, the parties agree that CASI shall
not have any obligation to compensate CRGK, furthermore, the amount of negative
above is carried over for the subsequent calculation from and after each time of
calculation as long as the total of such negative amount is completely consumed.

 

4. Exchange Rate

For the purpose of supporting to calculate the “Difference”, the parties hereto
shall jointly amend the exchange rate appropriately by the end of July and
January respectively, which is applicable to sales and purchase between the
parties for the next half year, with using the average of recent three (3)
months TTM rate (in case of alteration at July, the parties hereto refer to
average of April to June) which is Chinese Yuan (RMB) exchange rate against US
dollars (USD), as reported on the website in the Bank of China
(http://www.boc.cn/sourcedb/whpj/).

 

Whenever RMB exchange rate against USD in any month (Average Rate) rises or
falls by three percent (3%) or more compared with recent exchange rate, the
recent exchange rate may be changed to the Average Rate upon the parties’
agreement through the consolation in which case the Average Rate shall apply
from the following month and the same shall apply thereafter. For clarity, the
Average Rate shall be the one as reported on the website in the Bank of China
exchange quotation with reference to the local exchange quotation.

 

(SIGNATURE PAGE)

 

CASI Pharmaceuticals, Inc.   CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD  
        By: /s/ George Zhi Chi   By: /s/ GENG Xiao-Le Printed Name: George Zhi
Chi   Printed Name: GENG Xiao-Le Title: CFO   Title: General Manager Date: March
7, 2019   Date: March 7, 2019      

 

— End of the Document —

 

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