Blueprint





 







Exhibit 10.1

 



SHARE PURCHASE AGREEMENT

 


This
SHARE PURCHASE AGREEMENT (this “Agreement”),
is made and entered into as of December 26, 2017, by and among
Cellular Biomedicine Group Inc., a Delaware corporation with its
principal place of business at 19925 Stevens Creek Blvd., Suite
100, Cupertino, California 95014 U.S.A. (the “Company”), and
the purchasers whose names are set forth in Annex A (each, a
“Purchaser”,
and collectively, the “Purchasers”).

 



RECITALS

 

 

             
WHEREAS, the Company wishes to issue and sell to the Purchaser, and
the Purchaser wishes to subscribe for and purchase from the
Company, shares of Common Stock of the Company, par value $0.001
per share (the “Common
Stock”), upon the terms and subject to the conditions
set forth herein.

 


NOW,
THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements herein
contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:


 


ARTICLE
I


DEFINITIONS

 

1.1. Certain Defined Terms. As used in this
Agreement, and unless the context requires a different meaning, the
following terms shall have the following meanings:

 


“Action” means
any notice of noncompliance or violation, or any claim, demand,
charge, action, suit, litigation, audit, settlement, complaint,
stipulation, assessment or arbitration, or any request (including
any request for information), review, inquiry, hearing, proceeding
or investigation, an opposition,
revocation, reexamination, interference or similar
proceeding by any Person or by or before any Governmental
Authority.

 


 “Affiliate”
has the meaning set forth in Rule 12b-2 of the regulations under
the Securities Exchange Act of 1934, as amended.

 


 “the
Purchaser” is defined in
the preamble.

 


“the
Purchaser Indemnified Parties” is defined in Section
10.2.

 


 “Closing”
is defined in Section 2.2.

 


“Closing Date”
is defined in Section 2.2.

 


 “Contract”
means any contract, agreement, binding arrangement, commitment or
understanding, bond, note, indenture, mortgage, debt instrument,
license (or any other contract, agreement or binding arrangement
concerning Intellectual Property), franchise, lease or other
instrument or obligation of any kind, written or oral (including
any amendments or other modifications thereto).

 


 “GAAP”
means United States generally accepted accounting principles
applied on a consistent basis.


 









 






 


“Governmental
Authority” means any foreign, federal or national,
state or provincial, municipal or local government, governmental
authority, regulatory or administrative agency, governmental
commission, department, board, bureau, agency or instrumentality,
political subdivision, court, tribunal, official arbitrator or
arbitral body in each case whether domestic or
foreign.

 


 “Indemnitee”
is defined in Section 10.4(a).

 


“Indemnitor” is
defined in Section 10.4(a).

 


“Intellectual
Property” means all of the following as they exist in
any jurisdiction throughout the world: (a) Patents; (b) trademarks;
(c) Copyrights; (d) trade secrets and other confidential or
proprietary business information, including concepts, ideas,
designs, research or development information, processes,
procedures, techniques, technical information, specifications,
operating and maintenance manuals, drawings, methods, know-how,
data, formulas, compositions, and methods, technical data, customer
and supplier lists, pricing and cost information, and business and
marketing plans and proposals, discoveries, inventions,
modifications, extensions, improvements, and other proprietary
rights (whether or not patentable or subject to copyright,
trademark, or trade secret protection); (e) all domain name and
domain name registrations, web sites and web pages and related
rights, registrations, items and documentation related thereto; (f)
Software; (g) rights of publicity and privacy, and moral rights,
and (h) all licenses, sublicenses, permissions, and other
agreements related to the preceding property.

 


“IRS” means the
U.S. Internal Revenue Service or any successor entity.

 


“Knowledge”
means: (i) with respect to the Company, the knowledge of a
particular matter by a U.S. Security Exchange Act Section 16
officer of the Company (“Officer”) in
each case after due inquiry under the circumstances; (ii) with
respect to each Officer, the knowledge of a particular matter by
such Officer, in each case after due inquiry under the
circumstances; and (iii) with respect to the Purchaser, the actual
present knowledge of a particular matter by any of the directors or
executive officers of the Purchaser,
as applicable, without any duty of inquiry.

 


“Law” means any
federal, state, local, municipal, foreign or other law, statute,
legislation, principle of common law, ordinance, code, edict,
decree, proclamation, treaty, convention, rule, regulation,
directive, requirement, writ, injunction, settlement, Permit or
Order that is or has been issued, enacted, adopted, passed,
approved, promulgated, made, implemented or otherwise put into
effect by or under the authority of any Governmental
Authority.

 


 “Liabilities”
means any and all debts, liabilities and obligations of any nature
whatsoever, whether accrued or fixed, absolute or contingent,
mature or unmatured or determined or determinable, including those
arising under any Law, Action, Order or Contract.

 


 “Lien”
means any interest (including any security interest), pledge,
mortgage, lien, encumbrance, charge, claim or other right of third
parties, whether created by law or in equity, including any such
restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership.

 


“Loss” is
defined in Section 10.2.

 



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 “Material
Adverse Effect” means, with respect to the Purchaser
and the Company, any event, fact, condition, change, circumstance,
occurrence or effect, which, either individually or in the
aggregate with all other events, facts, conditions, changes,
circumstances, occurrences or effects, (a) that has a material
adverse effect on the business, properties, prospects, assets,
Liabilities, condition (financial or otherwise), operations,
licenses or other franchises or results of operations of business,
or materially diminish the value of the business or its assets or
materially increase the liabilities or (b) that materially impairs
or delays the ability of the Purchaser or the Company to perform
their respective obligations under this Agreement or to consummate
the transactions contemplated hereby and thereby; provided, however, that a Material
Adverse Effect will not include any adverse effect or change
resulting from any change, circumstance or effect relating to (i)
the economy in general, (ii) securities markets, regulatory or
political conditions in the United States or China (including
terrorism or the escalation of any war, whether declared or
undeclared or other hostilities), (iii) changes in applicable Laws
or GAAP or the application or interpretation thereof, (iv) the
industry in which the Company’s or the Company’s
business operates and not specifically relating to the business or
(v) a natural disaster (provided, that in the cases of clauses (i)
through (v), the Company’s or the Purchaser’s business
is not disproportionately affected by such event as compared to
other similar companies and businesses in similar industries and
geographic regions as the Company’s or the Purchaser’s
business).

 


“Order” means
any order, writ, rule, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental
Authority.

 


“Patents” means
all patents, patent applications and the inventions, designs and
improvements described and claimed therein, patentable inventions,
and other patent rights (including any divisionals, continuations,
continuations-in-part, substitutions, or reissues thereof, whether
or not patents are issued on any such applications and whether or
not any such applications are amended, modified, withdrawn, or
refiled).

 


“Permit” means
any federal, state, local, foreign or other third-party permit,
grant, easement, consent, approval, authorization, exemption,
license, franchise, concession, ratification, permission,
clearance, confirmation, endorsement, waiver, certification,
designation, product registration, rating, registration or
qualification that is or has been issued, granted, given or
otherwise made available by or under the authority of any
Governmental Authority or other Person.

 


“Permitted
Exceptions” means bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).

 


 “Person”
shall include any individual, trust, firm, corporation, limited
liability company, partnership, Governmental Authority or other
entity or association, whether acting in an individual, fiduciary
or any other capacity.

 


“Registrable
Securities” is defined in Section 9.6.

 


 “Representative”
means, as to any Person, such Person’s Affiliates and its and
their managers, directors, officers, employees, agents and advisors
(including financial advisors, counsel and
accountants).

 


 “SEC”
means U.S. Securities and Exchange Commission.

 


“Securities
Act” means the Securities Act of 1933, as
amended.

 



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“the Company ”
is defined in the preamble.

 


 “the Company
Indemnified Parties” is
defined in Section 10.3.

 


“SEC Filings”
mean any forms, reports and documents filed or furnished (including
such documents, as supplemented and amended since the times of
filing) by the Company with the Securities and Exchange Commission
(the “SEC”) under
the Exchange Act filed prior to the date of this
Agreement


 


“Special Reps”
is defined in Section 10.1.


 


 “Survival
Date” is defined in Section 10.1.

 


 “Tax”
means any applicable federal, state, local or foreign income, gross
receipts, license, payroll, parking, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental,
natural resources, customs duties, capital stock, franchise,
profits, withholding, social security (or similar), payroll,
unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on
minimum, estimated tax, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether
disputed or not, including such item for which Liability arises
from the application of Treasury Regulation 1.1502-6, as a
transferee or successor-in-interest, by contract or otherwise, and
any Liability assumed or arising as a result of being, having been,
or ceasing to be a member of any affiliated group (as defined in
Section 1504(a) of the Internal revenue Service Code) (or being
included or required to be included in any Tax Return relating
thereto) or as a result of any Tax indemnity, Tax sharing, Tax
allocation or similar Contract.

 


“Third
Party” shall mean any
Person that is not a Party to this Agreement or an Affiliate of a
Party to this Agreement.

 


“Transaction
Documents” mean this
Agreement and all schedules, exhibits and appendices attached to
hereto and thereto.

 



ARTICLE II



PURCHASE AND SALE OF SHARES

 

2.1. Purchase
of Shares. Upon the terms and subject to the conditions
herein set forth, the Company hereby agrees to sell and deliver to
the Purchasers, and the Purchasers hereby agree to purchase and
acquire from the Company, up to 1,166,667 shares (the “Shares”) of Common Stock at the
purchase price of Twelve U.S. Dollars ($12.00) per share, for an
aggregate purchase price of Nineteen Million Dollars ($14,000,000)
(the “Purchase
Price”).

 

2.2. Closing.
The purchase and sale of the
Shares shall take place remotely via the exchange of
documents and signatures, at 10:00 a.m. EST, on or about December
28, 2017, or at such other time and place as the Company and the
Purchasers mutually agree upon in writing (which time and place are
designated as the “Closing” and such date is
designated as the “Closing
Date”).

 



ARTICLE III



CLOSING DELIVERABLES AND CLOSING
CONDITIONS


 

3.1. Closing
Deliveries by the Company.

 


At
Closing, the Company shall deliver or cause to be delivered to the
Purchasers:


 



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(a) duly issued
certificate evidencing the number of Shares sold in exchange for
the Purchase Price paid at the closing registered in the name of
the Purchaser;

 

(b) At Closing,
executed counterparts of the Transaction Documents to which the
Company is a party;

 

(c) a certificate of a
duly authorized officer of the Company certifying as to the matters
set forth in Section 6.1(a).

 

3.2. Closing
Deliveries by the Purchasers.

 


At the
Closing, each Purchaser shall deliver to the Company:

 

(a) the Purchase Price
by wire transfer in immediately available funds in US dollars to
the bank account designated by the Company and provided in
Exhibit 2 attached
hereto;

 

(b) executed
counterparts of the Transaction Documents to which such Purchaser
is a party (including but not limited to the Investor Questionnaire
attached as Exhibit
3 to this Agreement); and

 

(c) if the Purchaser is
an entity, a certificate of a duly authorized officer of such
Purchaser certifying as to the matters set forth in
Section 7.1.

 


3.3. Conditions to Obligations of the
Company.

 


The
obligations of the Company to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment
or written waiver, at or prior to the Closing, of each of the
following conditions:

 

(a) Representations and Warranties. The
representations and warranties of each Purchaser shall be true and
correct in all material respects as of each date when made and as
of the Closing Date, as though made at that time (except for
representations and warranties that speak as of a specific date),
and each Purchaser shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by each Purchaser at or prior to the Closing
Date.

 

(b) No Order. No Governmental Authority
shall have enacted, issued, promulgated, enforced or entered any
Law or Order (whether temporary, preliminary or permanent) that has
the effect of making the transactions contemplated by the
Transaction Documents illegal or otherwise restraining or
prohibiting the consummation of such transactions; and

 

(c) Qualifications. All authorizations,
approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are
required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be obtained and effective
as of the Closing.

 


3.4. Conditions to Obligations of the
Purchasers.

 


 The
obligations of the Purchasers to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment
or written waiver, at or prior to the Closing, of each of the
following conditions:

 



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(a) Representations and Warranties.
The representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of
Closing Date as though made at such time (except for
representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date.

 

(b) No Order. No Governmental
Authority shall have enacted, issued, promulgated, enforced or
entered any Law or Governmental Order (whether temporary,
preliminary or permanent) that has the effect of making the
transactions contemplated by the Transaction Documents illegal or
otherwise restraining or prohibiting the consummation of such
transactions;

 

(c) No Material Adverse Change.
There shall not have occurred prior to the Closing any event or
transaction reasonably likely to have a Material Adverse Effect or
above taken as a whole.


 




ARTICLE IV



[Intentionally omitted]


 


 



ARTICLE V



TERMINATION


 

5.1. Termination.

 


This
Agreement may be terminated at any time prior to the
Closing:

 

(a) by either the
Purchasers or the Company in the event that any Order restraining,
enjoining or otherwise prohibiting the transactions contemplated by
this Agreement shall have become final and
non-appealable;

 

(b) by the Company if
the Purchasers shall have breached any of its representations,
warranties, covenants or agreements contained in this Agreement
which would give rise to the failure of a condition set forth in
Article VII, which breach cannot be or has not been cured
within 30 days after the giving of written notice by the
Company to the Purchasers specifying such breach,

 

(c) by the Purchasers
if the Company shall have breached any of its representations,
warranties, covenants or agreements contained in this Agreement
which would give rise to the failure of a condition set forth in
Article VI, which breach cannot be or has not been cured
within 30 days after the giving of written notice by the
Purchaser to the Company specifying such breach; or

 

(d) by the mutual
written consent of the Company and the Purchasers.

 

5.2 Effect
of Termination. In the event of termination of this
Agreement under this Section 5.2, this Agreement shall forthwith
become void and there shall be no liability on the part of any
party hereto except that nothing herein shall relieve any party
hereto from liability for any willful breach of any provision of
this Agreement.

 



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ARTICLE VI



REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 


The
Company represents and warrants to the Purchasers, as of the date
of this Agreement and as of the Closing Date, except as set forth
in the SEC Filings, as follows:

 

6.1. Organization;
Capitalization; Subsidiaries.

 

(a) The
Company is a Delaware corporation duly organized, validly existing
and in good standing under the laws of Delaware and has full
corporate power and authority to own, use and operate its assets
and to conduct its business as and where it is being
conducted.

 

(b) Exhibit 1 hereto sets forth all
of the subsidiaries of the Company and their respective ownership
of corporate interests in the Company as of the date hereof and as
of the Closing Date. Except for employee stock options granted in
the normal course of business, there are no other securities,
options, warrants, calls, rights, commitments or agreements of any
character to which the Company is bound to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold,
repurchased or redeemed, any of its corporate interests or
obligating the Company to sell, transfer, deliver, assign, convey
or purchase or cause to be sold, transferred, delivered, assigned,
conveyed or purchased any corporate interests in the
Company.

 

6.2. Authorization.
The Company has full power and authority to enter into this
Agreement to which it is a party and to consummate the transactions
contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by Board of
Directors’ action on the part of the Company. This Agreement
has been duly executed and delivered by the Company. This Agreement
constitutes, and upon the execution and delivery thereof by the
Company, will constitute, a legal, valid and binding obligation of
the Company, as applicable, enforceable against the Company, as
applicable, in accordance with their respective terms, except as
the enforceability thereof may be limited by the Permitted
Exceptions.

 

6.3. Valid
Issuance of the Shares. The Shares to be issued to the
Purchasers pursuant to this Agreement have been or will be upon
issuance duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable.

 

6.4. DISCLAIMER
OF FREEDOM TO OPERATE. THE COMPANY SPECIFICALLY DISLAIMS,
AND NEITHER MAKES ANY WARRANTY, EXPRESS OR IMPLIED, OR
NON-INFRINGMENT, OR MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR USE, NOR WARRANTS THE ABILITY TO PROCEED WITH THE
RESEARCH, DEVELOPMENT AND/OR COMMERCIAL PRODUCTION OF A NEW PRODUCT
OR PROCESS WITHOUT A RISK OF INFRINGING THE INTELLECTUAL PROPERTY
(IP) RIGHTS OF ANY THIRD PARTIES.

 

6.5. Litigation;
Legal Matters. There is no Action pending or, to the
Knowledge of the Company, threatened, whether at law or in equity,
or before or by any Governmental Authority, nor any Order of any
Governmental Authority which would have a Material Adverse Effect
(without regard to the availability of insurance), and the Company
has no Knowledge of any valid basis for any such
Action.

 



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6.6. Compliance
with Laws. The Company is in compliance, and has complied,
in all material respects with all Laws and Orders in respect of the
ownership, operation, use or possession of its assets and/or the
conduct of its business. None of the ownership, operation, use or
possession of its assets or the conduct of the Company’s
business conflicts with the rights of any other Person or violates,
or with or without the giving of notice or passage of time, or
both, will violate, conflict with or result in a default, right to
accelerate or loss of rights under, any terms or provisions of any
Lien, Contract or any Law or Order to which the Company is a party
or by which any of its assets or the Company’s business may
be bound or affected. The Company has not received any written
notice, order, complaint or other written communication from any
Governmental Authority that the Company is not in compliance in all
material respects with any such Laws and Orders with respect to the
assets and/or the conduct of the Company’s
business.

 

6.7. Taxes.
 

 

(a) The Company has
filed all federal, state, local and other tax returns which it has
been required to file which relate to or might in any way affect
its assets and/or its business.  Each such return is true and
accurate in all material respects.  The Company has timely
paid all taxes due with respect to the taxable periods covered by
such tax returns and all other taxes (whether or not shown on any
tax return). There are no Liens with respect to taxes on any of its
assets (other than statutory Liens for current taxes not yet due
and payable).

 

(b) There are no
pending or, to the Knowledge of the Company, threatened audits,
investigations, disputes, notices of deficiency, claims or other
Actions for or relating to any taxes of the Company which would
reasonably be expected to result in any Liens on its assets or
result in any material liability of the Company for any
tax.

 

 

ARTICLE VII




REPRESENTATIONS AND WARRANTIES OF THE
PURCHASERS

 


Each
Purchaser represents and warrants to the Company as of the date of
this Agreement and as of the Closing Date as follows:

 

7.1. Organization
and Qualification. Each Purchaser, if not an individual
person, is an entity duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its formation and
has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being
conducted.

 

7.2. Authorization.
Each Purchaser has full corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part
of such Purchaser. This Agreement has been duly executed and
delivered by such Purchaser. This Agreement constitutes, and upon
the execution and delivery thereof by such Purchaser, a legal,
valid and binding obligation, as applicable, enforceable against
each Purchaser in accordance with its terms. Such Purchaser has
corporate power and authority to enter into this Agreement to which
it is a party and to consummate the transactions contemplated
hereby.

 



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7.3. No
Contravention. Neither the execution, delivery and
performance of this Agreement by a Purchaser, nor the consummation
of the transactions contemplated hereby or thereby, will (a)
violate or conflict with, any provision of the governing documents
of such Purchaser, (b) violate or conflict with any Law or Order to
which such Purchaser is bound or subject, or (c) any Contract or
Permit to which such Purchaser is a party or by which Party or such
Purchaser may be bound or affected, other than, in cases of clauses
(a) through (c), such violations or conflicts which not reasonably
be expected to have a Material Adverse Effect.

 

7.4.         No
Registration of the Shares. The Purchaser acknowledges that
it is aware that (i) the Shares are restricted shares and have not
been registered under the Securities Act and that the Shares cannot
be and will not be sold unless they are subsequently registered
under the Securities Act or an exemption from such registration is
available, (ii) the Shares have not been registered or qualified
under any applicable state law regulating securities and therefore
the Shares cannot and will not be sold unless it is subsequently
registered or qualified under any such act or an exemption
therefrom is available, (iii) neither the Company, nor any
representative of the Company has made any representation,
warranty, or covenant whatsoever as to whether any exemption from
the Securities Act, including, without limitation, any exemption
for limited sales in routine brokers’ transactions pursuant
to Rule 144 under the Securities Act is, or will become, available,
(iv) neither the Company, nor any Representative of the Company has
made any representation, warranty, or covenant whatsoever as to
whether any exemption from any applicable state law is, or will
become, available, and (v) therefore, the Purchaser must agree to
bear the economic risk of investment for an indefinite period of
time.

 

7.5. Sophistication.
Each Purchaser represents and warrants that it (i) is an
“accredited investor” as that term is defined in Rule
501(a) under Regulation D promulgated pursuant to the Securities
Act; or (ii) has such knowledge and experience in financial and
business matters as to be able to protect its own interests in
connection with an investment in the Shares. Each Purchaser further
represents and warrants that (x) it is capable of evaluating the
merits and risk of such investment, (y) that it has not been
organized for the purpose of acquiring Shares and (z) that it is
being represented in this transaction by an attorney who is fully
familiar with the securities laws affecting this
transaction.

 

7.6. Intent.
Each Purchaser is purchasing the Shares solely for investment
purposes, for the Purchaser’s own account, and not with a
view towards the distribution or dissemination thereof. Each
Purchaser has no present arrangement to sell the Shares to or
through any person or entity. Each Purchaser understands that the
Shares must be held indefinitely unless such Shares are resold
pursuant to a registration statement under the Securities Act or an
exemption from registration is available.

 

7.7. No
Obligation to Register Shares. Each Purchaser understands
that the Company is under no obligation to register the Shares
under the Securities Act, or to assist such Purchaser in complying
with the Securities Act or the securities laws of any state of the
United States or of any foreign jurisdiction other than as
expressly provided herein.

 

7.8. Investment
Experience. Each Purchaser, or such Purchaser’s
professional advisors, have such knowledge and experience in
finance, securities, taxation, investments and other business
matters as to evaluate investments of the kind described in this
Agreement. By reason of the business and financial experience of
such Purchaser or his or her professional advisors (who are not
affiliated with or compensated in any way by the Company or any of
its affiliates or selling agents), such Purchaser can protect his
or her own interests in connection with the transactions described
in this Agreement. Each Purchaser is able to afford the loss of
his, her or its entire investment in the Shares.

 



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7.9. Independent
Investigation. Each Purchaser, in making the decision to
purchase the Shares, has relied upon an independent investigation
of the Company and has not relied upon any information or
representations made by any third parties or upon any oral or
written representations or assurances from the Company, its
officers, directors or employees or any other representatives or
agents of the Company, other than as set forth in this Agreement
and the exhibits and schedules attached hereto. Each Purchaser is
familiar with the business, operations and financial condition of
the Company and has had an opportunity to ask questions of, and
receive answers from, the Company’s officers and directors
concerning the Company and the terms and conditions of the offering
of the Shares and has had full access to such other information
concerning the Company as such Purchaser has
requested.

 

7.10. Not
a Broker-Dealer. Each Purchaser is neither a registered
representative under the Financial Industry Regulatory Authority
(“FINRA”), a member of FINRA or associated or
Affiliated (as defined below) with any member of FINRA, nor a
broker-dealer registered with the SEC under the Exchange Act of
1934, as amended (“Exchange Act”) or engaged in a
business that would require it to be so registered, nor is it an
Affiliate of a broker-dealer or any Person engaged in a business
that would require it to be registered as a broker-dealer. In the
event such Purchaser is a member of FINRA, or associated or
Affiliated with a member of FINRA, such Purchaser agrees, if
requested by FINRA, to sign a lock-up, the form of which shall be
satisfactory to FINRA with respect to the Securities.
“Affiliate” means, with respect to any specified
Person: (i) if such Person is an individual, the spouse of that
Person and, if deceased or disabled, his heirs, executors, or legal
representatives, if applicable, or any trusts for the benefit of
such individual or such individual’s spouse and/or lineal
descendants, or (ii) otherwise, another Person that directly, or
indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the Person
specified. As used in this definition, “control” shall
mean the possession, directly or indirectly, of the power to cause
the direction of the management and policies of a Person, whether
through the ownership of voting securities or by contract or other
written instrument. “Person” shall mean an individual,
entity, corporation, partnership, association, limited liability
company, limited liability partnership, joint-stock company, trust
or unincorporated organization.

 

7.11. Not
an Underwriter. Each Purchaser is not an underwriter of the
Securities, nor is it an Affiliate of an underwriter of the
Securities.

 

7.12. No
Advice from Company. Each Purchaser acknowledges that he,
she or it has had the opportunity to review this Agreement, the
exhibits hereto (including the risk factors relating to the Company
attached hereto) and the transactions contemplated by this
Agreement with such Purchaser’s own legal counsel and
investment and tax advisors. Except for any statements or
representations of the Company made in this Agreement, each
Purchaser is relying solely on its counsel and advisors and not on
any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with
respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction. Each
Purchaser has consulted, to the extent deemed appropriate by such
Purchaser, with such Purchaser’s own advisers as to the
financial, tax, legal and related matters concerning an investment
in the Securities and on that basis believes that its investment in
the Securities is suitable and appropriate for such
Purchaser.

 

7.13. Reliance
on Representations and Warranties. Each Purchaser
understands that the Shares are being offered and sold to such
Purchaser in reliance on exemptions contained in specific
provisions of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of such Purchaser set forth in this Agreement in
order to determine the applicability of the exemptions contained in
such provisions.  

 



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7.14.           Regulation
S Exemption. To the extent that the Shares are being offered
and sold to a Purchaser in reliance on an exemption from the
registration requirements of United States federal and state
securities laws under Regulation S promulgated under the Securities
Act (each, a “Reg. S
Purchaser”), such Purchaser represents, warrants and
agrees that:

 

(a) The Purchaser is
not a U.S. Person and is not an affiliate (as defined in Rule
501(b) under the Securities Act) of the Company and is not
acquiring the Shares for the account or benefit of a U.S. Person. A
“U.S. Person”
means any one of the following:

 

(i) any natural person
resident in the United States of America;

 

(ii) any
partnership, limited liability company, corporation or other entity
organized or incorporated under the laws of the United States of
America;

 

(iii) any
estate of which any executor or administrator is a U.S.
Person;

 

(iv) any
trust of which any trustee is a U.S. Person;

 

(v) any agency or
branch of a foreign entity located in the United States of
America;

 

(vi) any
non-discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. person;

 


 

(vii) any
discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated
or (if an individual) resident in the United States of America;
and

 

(viii) any
partnership, company, corporation or other entity if:

 


(1)           organized
or incorporated under the laws of any foreign jurisdiction;
and


 


(2)           formed
by a U.S. person principally for the purpose of investing in
securities not registered under the Securities Act, unless it is
organized or incorporated, and owned, by accredited
investors (as defined
in Rule 501(a) under the Securities Act) who are not natural
persons, estates or trusts.


 

(b) At the time of the
origination of contact concerning this Agreement and the date of
the execution and delivery of this Agreement, the Purchaser was
outside of the United States.

 

(c) The Purchaser will
not, during the period commencing on the date of issuance of the
Shares and ending on the six-month anniversary of such date, or
such shorter period as may be permitted by Regulation S or other
applicable securities law (the “Restricted Period”), offer, sell,
pledge or otherwise transfer the Shares in the United States, or to
a U.S. Person for the account or for the benefit of a U.S. Person,
or otherwise in a manner that is not in compliance with Regulation
S.

 

(d) The Purchaser will,
after expiration of the Restricted Period, offer, sell, pledge or
otherwise transfer the Shares only pursuant to registration under
the Securities Act or an available exemption therefrom and in
accordance with all applicable state and foreign securities
laws.

 



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(e) The Purchaser was
not in the United States engaged in, and prior to the expiration of
the Restricted Period will not engage in, any short selling of or
any hedging transaction with respect to the Shares, including
without limitation, any put, call or other option transaction,
option writing or equity swap.

 

(f) Neither the
Purchaser nor or any person acting on his behalf has engaged, nor
will engage, in any directed selling efforts to a U.S. Person with
respect to the Shares and the Purchaser and any person acting on
his or her behalf have complied and will comply with the
“offering restrictions” requirements of Regulation S
under the Securities Act.

 

(g) The transactions
contemplated by this Agreement have not been pre-arranged with a
Purchaser located in the United States or with a U.S. Person, and
are not part of a plan or scheme to evade the registration
requirements of the Securities Act.

 

(h) Neither the
Purchaser nor any person acting on its behalf has undertaken or
carried out any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States, its territories or possessions, for
any of the Shares. The Purchaser agrees not to cause any
advertisement of the Shares to be published in any newspaper or
periodical or posted in any public place and not to issue any
circular relating to the Shares, except such advertisements that
include the statements required by Regulation S under the
Securities Act, and only offshore and not in the U.S. or its
territories, and only in compliance with any local applicable
securities laws.

 

7.15. Review
of Investor Questionnaire. Each Purchaser has carefully
reviewed and completed the Investor Questionnaire annexed hereto as
Exhibit
3.

 

7.16. No
Advertisements. Each Purchaser is not subscribing for the
Shares as a result of or subsequent to any advertisement, article,
notice or other communication published in any newspaper, magazine,
or similar media or broadcast over television or radio or via the
Internet, or presented at any seminar or meeting, and is not aware
of any public advertisement or general solicitation in respect of
the Company or its securities.

 

7.17. Legend.
Each Purchaser acknowledges and agrees that the Shares shall bear a
restricted legend (the “Legend”), in the form and
substance as set forth in Article VIII hereof, prohibiting the
offer, sale, pledge or transfer of the securities, except (i)
pursuant to an effective registration statement filed under the
Securities Act, (ii) pursuant to an exemption from registration
provided by Rule 144 under the Securities Act (if available), or
(iii) pursuant to any other exemption from the registration
requirements of the Securities Act, and in each case in accordance
with any applicable securities laws of any state or any other
jurisdiction.

 

7.18. Economic
Considerations. Each Purchaser is not relying on the
Company, or its affiliates or agents with respect to economic
considerations involved in this investment. Each Purchaser has
relied solely on his, her or its own advisors.

 

7.19. Compliance
with Laws. Any resale of the Shares in any jurisdiction
outside of the United States will be made in compliance with the
securities laws of such jurisdiction. Each Purchaser will not offer
to sell or sell the Shares in any jurisdiction unless such
Purchaser obtains all required consents, if any. Each Purchaser
acknowledges that such Purchaser is familiar with Rule 144
(“Rule 144”) under the Securities Act, and has been
advised that Rule 144 permits resales only under certain
circumstances. Each Purchaser understands that to the extent that
Rule 144 is not available, such Purchaser will be unable to sell
any Securities without either registration under the Securities Act
or the existence of another exemption from such registration
requirement.

 



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7.20. Foreign
Investors. If a Purchaser is not a United States person (as
defined by Section 7701(a)(30) of the Internal Revenue Code of
1986, as amended), the Purchaser hereby represents that it has
satisfied itself as to the full observance of the laws of its
jurisdiction in connection with any invitation to subscribe for the
Shares or any use of this Agreement, including (i) the legal
requirements within its jurisdiction for the purchase of the
Shares, (ii) any foreign exchange restrictions applicable to such
purchase, (iii) any governmental or other consents that may need to
be obtained, and (iv) the income tax and other tax consequences, if
any, that may be relevant to the purchase, holding, redemption,
sale, or transfer of the Shares. Such Purchaser’s
subscription and payment for and continued beneficial ownership of
the Shares will not violate any applicable securities or other laws
of the Purchaser’s jurisdiction.

 

7.21. Investment
Commitment. Each Purchaser's overall commitment to
investments which are not readily marketable is not
disproportionate to such Purchaser's net worth, and an investment
in the Shares will not cause such overall commitment to become
excessive.

 

7.22. Receipt
of Information. Each Purchaser has received all documents,
records, books and other information pertaining to such
Purchaser’s investment in the Company that has been requested
by the Purchaser.

 

7.23. Residence.
If the Purchaser is an individual, then the Purchaser resides in
the state or province identified in the address of the Purchaser
set forth on Exhibit
3; if the Purchaser is a partnership, corporation, limited
liability company or other entity, then the office or offices of
the Purchaser in which its principal place of business is
identified in the address or addresses of the Purchaser set forth
on Exhibit
3.

 

7.24. No
Reliance. Other than as set forth herein, each Purchaser is
not relying upon any other information, representation or warranty
by the Company or any officer, director, stockholder, agent or
representative of the Company in determining to invest in the
Shares. Each Purchaser has consulted, to the extent deemed
appropriate by such Purchaser, with such Purchaser’s own
advisers as to the financial, tax, legal and related matters
concerning an investment in the Shares and on that basis believes
that its investment in the Shares is suitable and appropriate for
the Purchaser.

 

7.25. No
Governmental Review. Each Purchaser is aware that no federal
or state agency has (i) made any finding or determination as to the
fairness of this investment, (ii) made any recommendation or
endorsement of the Shares or the Company, or (iii) guaranteed or
insured any investment in the Shares or any investment made by the
Company.

 

7.26. Potential
Loss of Investment; Risk Factors. Each Purchaser understands
that an investment in the Shares is a speculative investment which
involves a high degree of risk and the potential loss of his or her
entire investment. Each Purchaser has considered carefully and
understands the risks associated with an investment in the Shares
set forth in the SEC Filings.

 

7.27.  Anti
Money Laundering Law Compliance. Each Purchaser, its
Affiliates and each of their respective officers, directors,
supervisors, managers, agents, and employees, has not violated, its
purchase of the Shares will not violate, and it has instituted and
maintains policies and procedures designed to ensure continued
compliance with the anti-money laundering laws, regulations or
government guidance regarding anti-money laundering, and
international anti-money laundering principals or procedures of the
United States, Hong Kong, People’s Republic of China and any
related or similar statutes, rules, regulations or guidelines,
issued, administered or enforced by any governmental agency
(collectively, the “Anti Money Laundering
Laws”), and no Proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Purchaser with respect to the Anti Money Laundering Laws is
pending or, to the best knowledge of the Purchaser,
threatened.

 



 

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ARTICLE VIII



LEGENDS, ETC.


 

8.1. Legend.
Each certificate representing the Shares shall be endorsed with the
following legends, in addition to any other legend required to be
placed thereon by applicable federal or state securities
laws:

 


Investment
pursuant to Regulation D:

 


“THESE
SECURITIES ARE BEING OFFERED TO INVESTORS WITHOUT REGISTRATION WITH
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT IN RELIANCE UPON REGULATION D PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (“THE SECURITIES
ACT”). TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT
PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.”

 


Investment pursuant to Regulation
S:

 


“THESE
SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (“THE SECURITIES ACT”)) AND WITHOUT
REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S
PROMULGATED UNDER THE SECURITIES ACT. TRANSFER OF THESE SECURITIES
IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO
REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE
EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.”

 

8.2. The
Purchasers’ Compliance. Nothing in this Article VIII
shall affect in any way each Purchaser’s obligations and
agreement to comply with all applicable securities laws upon resale
of the Shares.

 

8.3. Company’s
Refusal to Register Transfer of Shares. The Company shall
refuse to register any transfer of the Shares not made (i) pursuant
to an effective registration statement filed under the Securities
Act, or (ii) pursuant to an available exemption from the
registration requirements of the Securities Act.

 



ARTICLE IX



OTHER AGREEMENTS

 

9.1. Further
Assurances. In the event that at any time after the Closing
Date any further action is reasonably necessary to carry out the
purposes of this Agreement, each of the parties will take such
further action (including the execution and delivery of such
further instruments and documents) as the other parties reasonably
may request, at the sole cost and expense of the requesting
party(ies) (unless otherwise specified herein or unless such
requesting party(ies) is entitled to indemnification therefor under
ARTICLE X in which
case, the costs and expense will be borne by the parties as set
forth in ARTICLE
X).


 



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9.2. Confidentiality.
Each Purchaser shall, and shall cause their respective Affiliates
to: (a) treat and hold in strict confidence any confidential or
proprietary information relating to the information obtained from
such Purchaser’s due diligence on the Company
(“Confidential
Information”), and will not use for any purpose, nor
directly or indirectly disclose, distribute, publish, disseminate
or otherwise make available to any third party any of the
Confidential Information without the Company’s prior written
consent; (b) in the event that any of them becomes legally
compelled to disclose any Confidential Information, to provide the
Company with prompt written notice of such requirement so that the
Company or an Affiliate thereof may seek a protective order or
other remedy or waive compliance with this Section 9.2; (c) in
the event that such protective order or other remedy is not
obtained, or the Company waives compliance with this
Section 9.2, to furnish only that portion of such Confidential
Information which is legally required to be provided as advised in
writing by outside counsel and to exercise their commercially
reasonable efforts to obtain assurances that confidential treatment
will be accorded such Confidential Information; (d) to the extent
permitted by applicable Law, to promptly furnish (prior to, at, or
as soon as practicable following, the Closing) to the Company any
and all copies (in whatever form or medium) of all such
Confidential Information and to destroy any and all additional
copies of such Confidential Information and any analyses,
compilations, studies or other documents prepared, in whole or in
part, on the basis thereof; provided, however, that Confidential
Information shall not include any information which, at the time of
disclosure, is generally available publicly and was not disclosed
in breach of this Agreement by such Purchaser or their respective
Affiliates. Each Purchaser agrees and acknowledge that remedies at
law for any breach of its obligations under this Section 9.2
are inadequate and that in addition thereto the Company (or an
Affiliate thereof) shall be entitled to seek equitable relief,
including injunction and specific performance, in the event of any
such breach.

 

9.3. Publicity.
None of the parties hereto shall, and each party shall cause their
respective Representatives not to, disclose, make or issue, any
statement or announcement concerning this Agreement or the
transactions contemplated hereby (including the terms, conditions,
status or other facts with respect thereto) to any third parties
(other than its Representatives who need to know such information
in connection with carrying out or facilitating the transactions
contemplated hereby) without the prior written consent of the other
parties hereto (such consent not to be unreasonably withheld,
delayed or conditioned), except (i) as required by applicable Law
after conferring with the other parties concerning the timing and
content of such required disclosure, and (ii) in the case of the
Company, as may be required of the Company by applicable Law
(including any Securities and Exchange Commission rules) or stock
exchange’s requirement.

 

9.4. Litigation
Support. Following the Closing, in the event that and for so
long as any party is actively contesting or defending against any
third party or Governmental Authority Action in connection with any
fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act
or transaction involving the transactions contemplated herein, the
other parties will (i) reasonably cooperate with the contesting or
defending party and its counsel in the contest or defense, (ii)
make available its personnel at reasonable times and upon
reasonable notice and (iii) provide (A) such testimony and (B)
access to its non-privileged books and records as may be reasonably
requested in connection with the contest or defense, at the sole
cost and expense of the contesting or defending party (unless such
contesting or defending party is entitled to indemnification
therefor under ARTICLE
X in which case, the costs and expense will be borne by the
parties as set forth in ARTICLE X).

 

9.5.  Registration
Statement. The Company shall prepare and file a registration
statement with the SEC on Form S-1 or equivalent form covering the
registration of the Shares as soon as practicable, and to cause
such registration statement to be declared effective by the
SEC.

 



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9.6. Piggyback
Registration Rights. The Company agrees that if, after the
date hereof, the Board shall authorize the filing of a registration
statement under the Securities Act (other than a registration
statement (i) filed in connection with an offering of securities to
employees or directors of the Company pursuant to any employee
stock option or other benefit plan, (ii) filed on Form S-4 or S-8
or any successor to such forms, (iii) for an exchange offer or
offering of securities solely to the Company’s existing
security holders, (iv) for a dividend reinvestment plan, or (v)
solely in connection with a merger, share capital exchange, asset
acquisition, share purchase, reorganization, amalgamation,
subsequent liquidation, or other similar business transaction that
results in all of the Company’s shareholders having the right
to exchange their common stock for cash, securities or other
property of a non-capital raising bona fide business transaction)
in connection with the proposed offer of any of its securities by
it or any corporation with which it may combine or merge subsequent
to the Offering, the Company shall: (A) promptly notify each
Purchaser that such registration statement will be filed and that
the Shares purchased pursuant to this Agreement and then held by
such Purchaser (hereinafter the “Registrable
Securities”) will be included in such registration
statement at such Purchaser’s request; (B) cause such
registration statement to cover all of such Registrable Securities
issued to such Purchaser for which such Purchaser requests
inclusion; (C) use reasonable best efforts to cause such
registration statement to become effective as soon as practicable;
and (D) take all other reasonable action necessary under any
Federal or state law or regulation of any governmental authority to
permit all such Registrable Securities that have been issued to
such Purchasers to be sold or otherwise disposed of, and will
maintain such compliance with each such Federal and state law and
regulation of any governmental authority for the period necessary
for such Purchasers to promptly effect the proposed sale or other
disposition, but no later than the date that, assuming compliance
with all of the requirements of Rule 144 promulgated under the
Securities Act, the Purchaser would be entitled to sell all the
Registrable Securities pursuant to Rule 144 without limitation. If
the Purchaser desires to include in such registration statement all
or any part of the Registrable Securities held by him/her/it,
he/she/it shall, within twenty (20) days after the above-described
notice from the Company, so notify the Company in writing. Such
notice shall state the intended method of disposition of the
Registrable Securities by such Purchaser. If a Purchaser decides
not to include all of his/her/its Registrable Securities in any
registration statement thereafter filed by the Company, such
Purchaser shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement
or registration statements as may be filed by the Company with
respect to offerings of its securities, all upon the terms and
conditions set forth herein. As used in this Section 9.6, the term
“Shares” refers to the purchased Shares, all securities
received in replacement of or in connection with the Shares
pursuant to stock dividends or splits, all securities received in
replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or
additional securities or other properties to which such Purchaser
is entitled by reason of such Purchaser’s ownership of the
Shares. Notwithstanding the foregoing, Purchasers holding
Registrable Securities proposing to distribute their securities
through a registration statement that involves an underwritten
offering shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwritten offering, and satisfy such other, customary terms and
conditions as the underwriter or underwriters may reasonably
impose. Additionally, the Company shall not be required to include
any of a Purchaser’s Registrable Securities in such
underwriting unless such Purchaser accepts the terms of the
underwriting as agreed upon between the Company and its
underwriter(s), and then only in such quantity as the underwriter
or underwriters in their sole discretion determine will not
jeopardize the success of the offering by the Company. If the
underwriters determine that less than all of the Registrable
Securities requested to be registered can be included in such
offering, then the Registrable Securities that are included in such
offering shall be allocated among the selling Purchasers in
proportion (as nearly as practicable to) the number of Registrable
Securities owned by each such Purchaser or in such other
proportions as shall mutually be agreed to by all such selling
Purchasers.

 



-16-








 






 


ARTICLE
X




INDEMNIFICATION

 

10.1. Survival.
All
representations and warranties of the Company and the Purchasers
contained in this Agreement (including all schedules and exhibit
hereto and all certificates, documents, instruments and
undertakings furnished pursuant to this Agreement) shall survive
the Closing through and until the second anniversary of the Closing
Date; provided however that the representations and warranties
contained in Sections 6.1 (Organization; Capitalization;
Subsidiaries), 6.2 (Authorization), 6.1 (Organization), and 6.2
(Authorization) such representations and warranties collectively,
the “Special
Reps”) will survive
indefinitely (in each case, the date until each such representation
and warranty shall survive is herein referred to as the
“Survival
Date”). If
written notice of a claim for breach of any representation or
warranty has been given on or before the applicable Survival Date
for such representation or warranty, then the relevant
representations and warranties shall survive as to such claim,
until the claim has been finally resolved. All covenants,
obligations and agreements of the parties contained in this
Agreement (including all schedules and exhibits hereto and all
certificates, documents, instruments and undertakings furnished
pursuant to this Agreement), including any indemnification
obligations, shall survive the Closing indefinitely and continue
until fully performed in accordance with their terms.

 

10.2. Indemnification by the Company. Except
as otherwise limited by this ARTICLE X, the Company shall
indemnify, defend and hold harmless each of the Purchasers, and
their respective Affiliates, any assignee or successor thereof, and
each officer, director, manager, employee, agent and Representative
of each of the foregoing (collectively, “the Purchaser Indemnified
Parties”) from and against, and pay or reimburse the
Purchaser Indemnified Parties for, any and all losses, Actions,
Orders, Liabilities, damages, diminution in value, taxes, interest,
penalties, Liens, amounts paid in settlement, costs and expenses
(including reasonable expenses of investigation and court costs and
reasonable attorneys’ fees and expenses), (any of the
foregoing, a “Loss”)
suffered or incurred by, or imposed upon, any Purchaser Indemnified
Party arising in whole or in part out of or resulting directly or
indirectly from:

 

(a) any breach of any
representation, covenant, obligation or warranty of the Company in
this Agreement;

 

(b) enforcing the
Purchaser Indemnified Parties’ indemnification rights
provided for hereunder.

 

10.3. Indemnification by the Purchasers.
Except as otherwise limited by this ARTICLE X, the Purchasers shall
indemnify, defend and hold harmless the Company, its respective
Affiliates and each officer, manager, employee, agent and
Representative of each of the foregoing (collectively, the
“the
Company Indemnified Parties”) from and against, and
pay or reimburse the Company Indemnified Parties for, any and all
Losses, suffered or incurred by, or imposed upon, any the Company
Indemnified Party arising in whole or in part out of or resulting
directly or indirectly from:

 

(a) any breach of any
representation, covenant, obligation or warranty of the Purchasers
in this Agreement;

 

(b) any and all
Transfer Taxes as defined in Section 11.1; and

 

(c) enforcing the
Company Indemnified Parties’ indemnification rights provided
for hereunder.

 



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10.4. Indemnification
Procedures.

 

(a) For the purposes of
this Agreement, (i) the term “Indemnitee”
shall refer to the Person or Persons indemnified, or entitled, or
claiming to be entitled, to be indemnified, pursuant to the
provisions of Section 10.2 or 10.3, as the case may be, and
(ii) the term “Indemnitor”
shall refer to the Person or Persons having the obligation to
indemnify pursuant to such provisions.

 

(b) In the case of any
claim for indemnification under this Agreement arising from a claim
of a Third Party (including any Governmental Authority), an
Indemnitee must give prompt written notice and, subject to the
following sentence, in no case later than thirty (30) days after
the Indemnitee’s receipt of notice of such claim, to the
Purchasers or the Company of any claim of which such Indemnitee has
knowledge and as to which it may request indemnification hereunder.
The failure to give such notice will not, however, relieve an
Indemnitor of its indemnification obligations except to the extent
that the Indemnitor is actually harmed thereby. The Indemnitor will
have the right to defend and to direct the defense against any such
claim in its name and at its expense, and with counsel selected by
the Indemnitor unless (i) the Indemnitor fails to acknowledge fully
its obligations to the Indemnitee within fifteen (15) days after
receiving notice of such Third Party claim or contests, in whole or
in part, its indemnification obligations therefor, (ii) if the
Indemnitor is a Purchaser, the applicable Third Party claimant is a
Governmental Authority or a then-current customer of a Purchaser,
or any of its respective Affiliates, (iii) if the Indemnitor is a
Purchaser, an adverse judgment with respect to the claim will
establish a precedent materially adverse to the continuing business
interests of the Purchaser or any of their respective Affiliates,
(iv) there is a conflict of interest between the Indemnitee and the
Indemnitor in the conduct of such defense, (v) the applicable Third
Party alleges claims of fraud, willful misconduct or intentional
misrepresentation, or (vi) such claim is criminal in nature, could
reasonably be expected to lead to criminal proceedings, or seeks an
injunction or other equitable relief against the Indemnitee. If the
Indemnitor elects, and is entitled, to compromise or defend such
claim, it will within fifteen (15) days (or sooner, if the nature
of the claim so requires) notify the Indemnitee of its intent to do
so, and the Indemnitee will, at the request and expense of the
Indemnitor, cooperate in the defense of such claim. If the
Indemnitor elects not to, or is not entitled under this Section
10.4(b) to, compromise or defend such claim, fails to notify the
Indemnitee of its election as herein provided or refuses to
acknowledge or contests its obligation to indemnify under this
Agreement, the Indemnitee may pay, compromise or defend such claim.
Notwithstanding anything to the contrary contained herein, the
Indemnitor will have no indemnification obligations with respect to
any such claim which has been or will be settled by the Indemnitee
without the prior written consent of the Indemnitor (which consent
will not be unreasonably withheld, delayed or conditioned);
provided, however, that notwithstanding the foregoing, the
Indemnitee will not be required to refrain from paying any claim
which has matured by a court judgment or decree, unless an appeal
is duly taken therefrom and exercise thereof has been stayed, nor
will it be required to refrain from paying any claim where the
delay in paying such claim would result in the foreclosure of a
Lien upon any of the property or assets then held by the Indemnitee
or where any delay in payment would cause the Indemnitee material
economic loss. The Indemnitor’s right to direct the defense
will include the right to compromise or enter into an agreement
settling any claim by a Third Party; provided that no such
compromise or settlement will obligate the Indemnitee to agree to
any settlement that requires the taking or restriction of any
action (including the payment of money and competition
restrictions) by the Indemnitee (other than the delivery of a
release for such claim and customary confidentiality obligations),
except with the prior written consent of the Indemnitee (such
consent to be withheld, conditioned or delayed only for a good
faith reason). Notwithstanding the Indemnitor’s right to
compromise or settle in accordance with the immediately preceding
sentence, the Indemnitor may not settle or compromise any claim
over the objection of the Indemnitee; provided, however, that
consent by the Indemnitee to settlement or compromise will not be
unreasonably withheld, delayed or conditioned. The Indemnitee will
have the right to participate in the defense of any claim with
counsel selected by it subject to the Indemnitor’s right to
direct the defense. The fees and disbursements of such counsel will
be at the expense of the Indemnitee; provided, however, that, in
the case of any claim which seeks injunctive or other equitable
relief against the Indemnitee, the fees and disbursements of such
counsel will be at the expense of the Indemnitor.

 



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(c) Any indemnification
claim that does not arise from a Third Party claim must be asserted
by a written notice to the Purchasers or the Company. The recipient
of such notice will have a period of thirty (30) days after receipt
of such notice within which to respond thereto. If the recipient
does not respond within such thirty (30) days, the recipient will
be deemed to have accepted responsibility for the Losses set forth
in such notice and will have no further right to contest the
validity of such notice. If the recipient responds within such
thirty (30) days after the receipt of the notice and rejects such
claim in whole or in part, the party delivering will be free to
pursue such remedies as may be available to it under this Agreement
or applicable Law.

 

10.5. Limitations
on Indemnification.

 

(a) No
Indemnitor shall be liable for an indemnification claim made under
Section 10.2(a) or Section 10.3(a) as the case may be: (i) for
which a claim for indemnification is not asserted hereunder on or
before the applicable Survival Date, (ii) to the extent Losses
incurred by the Purchaser Indemnified Parties in the aggregate
under Section 10.2(a) or by the Company Indemnified Parties in the
aggregate under Section 10.3(a), as applicable, exceed an amount
equal the sum of $1,000,000 (the “Indemnification
Cap”); and (iii) unless and until the Losses of the
Purchaser Indemnified Parties collectively, or of the Company
Indemnified Parties collectively, as applicable, exceed an
aggregate amount equal to $500,000 (the “Basket”), in
which case the applicable Indemnitor(s) shall be obligated to the
Indemnitee(s) for the amount of such Losses of the Indemnitee(s)
that exceed the Basket; provided, however, that the Basket and the
Indemnification Cap shall not apply to (i) indemnification claims
to the extent amounts are actually paid under insurance policies
maintained by the Indemnitor (or any of its Affiliates) and (y)
indemnification claims based, in whole or in part, on fraud,
willful misconduct or intentional misrepresentation.
  

 

(b) The
Basket and the Indemnification Cap shall apply only to
indemnification claims made under Section 10.2(a) or Section
10.3(a) and shall not affect or apply to any other indemnification
claim made pursuant to this Agreement, including those asserted
under any other clause of Section 10.2 or Section
10.3.

 

10.6. General
Indemnification Provisions.

 

(a) The amount of any
Losses suffered or incurred by any Indemnitee shall be reduced by
the amount of any insurance proceeds or other cash receipts paid to
the Indemnitee or any Affiliate thereof as a reimbursement with
respect to such Losses (and no right of subrogation shall accrue to
any insurer hereunder, except to the extent that such waiver of
subrogation would prejudice any applicable insurance coverage),
including any indemnification received by the Indemnitee or such
Affiliate from an unrelated party with respect to such Losses, net
of the costs of collection and any related anticipated future
increases in insurance premiums resulting from such Loss or
insurance payment.

 

(b) No investigation by
the Purchasers or Knowledge of the Purchasers of a breach of a
representation or warranty of the Company shall affect the
representations and warranties of the Company or the recourse
available to the Purchasers under any provision of this Agreement
(including ARTICLE
X) with respect thereto.

 

(c)  Notwithstanding
anything in this Agreement to the contrary, for purposes of
application of the indemnification provisions of this ARTICLE X, the amount of any
Loss arising from the breach of any representation, warranty,
covenant, obligation or agreement contained in this Agreement shall
be the entire amount of any Loss actually incurred by the
respective Indemnitee as a result of such breach and not just that
portion of the Loss that exceeds the relevant level of materiality,
if any.

 



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(d) Except to the
extent otherwise provided in Section 10.7 below, any
indemnification obligation of an Indemnitor under this ARTICLE X will be paid in cash
within three (3) Business Days after the determination of such
obligation in accordance with Section 10.4.

 



ARTICLE XI


TAX
MATTERS

 

11.1. Transfer
Taxes. All Taxes imposed in connection with the issuance of
the Shares to the Purchasers (the “Transfer
Taxes”), whether such Taxes are assessed initially
against the Purchasers or any Affiliate of the Purchasers or the
Company or any Affiliate thereof, shall be borne and paid by the
Purchasers.

 



ARTICLE XII


GENERAL
PROVISIONS

 

12.1. Expenses,
Taxes, Etc. Except as otherwise expressly provided in this
Agreement, each party will pay all fees and expenses incurred by it
in connection with the negotiation, execution, delivery of, and the
performance under, this Agreement and the consummation of the
transactions contemplated hereby.

 

12.2. Notices. Any notice, request,
instruction or other document to be given hereunder by a party
hereto shall be in writing and shall be deemed to have been given,
(i) when received if given in person or by courier or a courier
service, (ii) on the date of transmission if sent by facsimile or
email (with affirmative confirmation of receipt, and provided, that
the party providing notice shall within two (2) business days
provide notice by another method under this Section 12.2) or (iii)
five (5) business days after being deposited in the U.S. mail,
certified or registered mail, postage prepaid:

 


	


If to the Company, to:


Andy
Chan


19925
Stevens Creek Blvd., Ste 100


Cupertino, CA
95014


Email:
andy.chan@cellbiomedgroup.com

 


 

 


 

	


with a copy (which will not constitute notice) to:


Ellenoff Grossman
Schole LLP


1345
Avenue of the Americas,


New
York, NY 10105


Attn:
Sarah Williams, Esq


Email:
swilliams@egsllp.com

 


 

 


 


	


If to the Purchasers, to:


their
respective addresses as set forth on Annex A attached
hereto.

	


with a copy (which will not constitute notice) to:


[Name]


[Company]


[Address]


Email:


 






 


or to
such other individual or address as a party hereto may designate
for itself by notice given as herein provided.

 



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12.3. Interpretation.
The headings and subheadings of this Agreement are for reference
and convenience purposes only and in no way modify, interpret or
construe the meaning of specific provisions of the Agreement. In
this Agreement, unless the context otherwise requires: (i) whenever
required by the context, any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and
the singular form of nouns, pronouns and verbs shall include the
plural and vice versa; (ii) reference to any Person includes such
Person’s successors and assigns but, if applicable, only if
such successors and assigns are permitted by this Agreement, and
reference to a Person in a particular capacity excludes such Person
in any other capacity; (iii) any accounting term used and not
otherwise defined in this Agreement has the meaning assigned to
such term in accordance with GAAP; (iv) “including”
(and with correlative meaning “include”) means
including without limiting the generality of any description
preceding or succeeding such term and shall be deemed in each case
to be followed by the words “without limitation”; (v)
the words “herein,” “hereto,” and
“hereby” and other words of similar import in this
Agreement shall be deemed in each case to refer to this Agreement
as a whole and not to any particular Section or other subdivision
of this Agreement; (vi) the word “if” and other words
of similar import when used herein shall be deemed in each case to
be followed by the phrase “and only if”; (vii) the term
“or” means “and/or”; (viii) reference to
any Law means such Law as amended, modified, codified or reenacted,
in whole or in part, and in effect from time to time, including
rules and regulations promulgated thereunder; (ix) any agreement,
instrument, insurance policy, Law or Order defined or referred to
herein or in any agreement or instrument that is referred to herein
means such agreement, instrument, insurance policy, Law or Order as
from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in
the case of statutes, regulations, rules or orders) by succession
of comparable successor statutes, regulations, rules or orders and
references to all attachments thereto and instruments incorporated
therein; and (x) except as otherwise indicated, all references in
this Agreement to the words “Section,”
“Schedule” and “Exhibit” are intended to
refer to Sections, Schedules and exhibits to this
Agreement.

 

12.4. Conflict
Between Agreements. In the event of any inconsistency,
conflict or ambiguity as to the rights and obligations of the
parties under this Agreement, the terms of this Agreement shall
control and supersede any such inconsistency, conflict or
ambiguity.

 

12.5. Severability.
In case any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any
respect, the validity, legality, and enforceability of the
remaining provisions will not in any way be affected or impaired.
Any illegal or unenforceable term will be deemed to be void and of
no force and effect only to the minimum extent necessary to bring
such term within the provisions of applicable Law and such term, as
so modified, and the balance of this Agreement will then be fully
enforceable. The parties will substitute for any invalid, illegal
or unenforceable provision a suitable and equitable provision that
carries out, so far as may be valid, legal and enforceable, the
intent and purpose of such invalid, illegal or unenforceable
provision.

 

12.6. No
Third-Party Beneficiaries. Except for the indemnification
rights of the Purchaser Indemnified Parties and the Company
Indemnified Parties set forth herein, this Agreement is for the
sole benefit of the parties hereto and their successors and
permitted assigns and nothing herein expressed or implied shall
give or be construed to give to any Person, other than the parties
hereto and such successors and assigns, any legal or equitable
rights hereunder.

 

 



-21-








 






 

12.7. Amendment;
Waiver. This Agreement may not be amended or modified except
by an instrument in writing signed by each of the parties hereto.
Neither the failure nor any delay by any party in exercising any
right, power or privilege under this Agreement will operate as a
waiver of such right, power or privilege, and single or partial
exercise of any such right, power or privilege will preclude any
other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. To the maximum
extent permitted by applicable Law, (i) no Action or right arising
out of this Agreement can be discharged by one party, in whole or
in part, by a waiver or renunciation of the Action or right unless
in a writing signed by the party against which such waiver or
renunciation is charged; (ii) no waiver that may be given by a
party will be applicable except in the specific instance for which
it is given; (iii) no extension of time granted by any party for
the performance of any obligation or act by any other party will be
deemed to be an extension of time for the performance of any other
obligation or act hereunder; and (iv) no notice to or demand
on one party will be deemed to be a waiver of any obligation of
such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided
in this Agreement or the documents referred to in this
Agreement.

 

12.8. Remedies.
Except as specifically set forth in this Agreement, any party
having any rights under any provision of this Agreement will have
all rights and remedies set forth in this Agreement and all rights
and remedies which such party may have been granted at any time
under any other contract or agreement and all of the rights which
such party may have under any applicable Law. Except as
specifically set forth in this Agreement, any such party will be
entitled to (a) enforce such rights specifically, without posting a
bond or other security, (b) to recover damages by reason of a
breach of any provision of this Agreement and (c) to exercise all
other rights granted by applicable Law. The exercise of any remedy
by a party will not preclude the exercise of any other remedy by
such party.

 

12.9. Mutual
Drafting. The parties acknowledge and agree that: (a) this
Agreement is the result of negotiations between the parties and
will not be deemed or construed as having been drafted by any one
party, (b) each party and its counsel have reviewed and negotiated
the terms and provisions of this Agreement (including any exhibits
attached hereto) and the other Transactional Documents and have
contributed to their revision, (c) the rule of construction to the
effect that any ambiguities are resolved against the drafting party
will not be employed in the interpretation of this Agreement, (d)
neither the drafting history nor the negotiating history of this
Agreement or the other Transactional Documents may be used or
referred to in connection with the construction or interpretation
thereof, and (e) the terms and provisions of this Agreement will be
construed fairly as to all parties hereto and not in favor of or
against any party, regardless of which party was generally
responsible for the preparation of this Agreement.

 

12.10. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving
effect to its choice of law principles).

 

12.11. Consent to Jurisdiction; Waivers. For
purposes of any Action arising out of or in connection with this
Agreement or any transaction contemplated hereby, each of the
parties hereto (a) irrevocably submits to the exclusive
jurisdiction and venue of any state or federal court located within
New York County, State of New York, (b) agrees that service of any
process, summons, notice or document by U.S. registered mail to
such party’s respective address set forth in Section 12.2
shall be effective service of process for any Action with respect
to any matters to which it has submitted to jurisdiction in this
Section 12.11, and (c) waives and covenants not to assert or plead,
by way of motion, as a defense or otherwise, in any such Action,
any claim that it is not subject personally to the jurisdiction of
such court, that the Action is brought in an inconvenient forum,
that the venue of the Action is improper or that this Agreement or
the subject matter hereof may not be enforced in or by such court,
and hereby agrees not to challenge such jurisdiction or venue by
reason of any offsets or counterclaims in any such
Action.

 



-22-








 






 

12.12. WAIVER
OF TRIAL BY JURY. THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, THE RIGHT ANY PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT AND ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY IN CONNECTION WITH SUCH
AGREEMENTS.

 

12.13. Counterparts.
This Agreement may be executed in one or more counterparts, and by
the different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement. A
photocopy, faxed, scanned and/or emailed copy of this Agreement or
Transactional Documents or any signature page to this Agreement or
any Transactional Documents, shall have the same validity and
enforceability as an originally signed copy.

 

12.14. Entire
Agreement. This Agreement (including the exhibits and
Schedules hereto, which are hereby incorporated herein by reference
and deemed part of this Agreement), together with Transactional
Documents constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and supersede all prior
agreements and undertakings, both written and oral, with respect to
the subject matter hereof.

 

 



[Remainder of Page Intentionally Left Blank; Signatures Appear on
Following Page]

 


 



-23-








 






IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written
above.

 


	
 

	
 the
Company :
 



CELLULAR BIOMEDICINE GROUP, INC.

 

By: /s/ Tony (Bizuo) Liu


Name:
Tony (Bizuo) Liu


Title:
Chief Executive Officer








 

 

 



[Purchasers signature page follows]


 




 








 






 


	
 

	
 the
Purchasers:
 


 


Maplebrook
Limited


 

By: /s/ Britta Pfister


Name:
Britta Pfister

Title: Corporate
Director

 


 


Windsor
Capital Limited

By: /s/ Ming Li


Name:
Ming Li


Title:
Director








 

 


 




 








 






 



ANNEX A

 


 


	


Name of Purchaser

	


Number of Shares

	


Price per Share

	


Total Purchase Price


	

Maplebrook
Ltd.

	

666,667

	

$12.00

	

$8,000,000


	

Windsor
Capital Ltd.

	

500,000

	

$12.00

	

$6,000,000


	
 

	
 

	
 

	
 


	

Total

	


1,166,667

	
 

	


$14,000,000