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  EXHIBIT
4.1

REGISTRATION RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of September 26, 2018, by and among Cellular
Biomedicine Group, Inc., a Delaware corporation (the
“Company”), and Novartis
Pharma AG, a company organized under the laws of Switzerland (the
“Purchaser”).

 

               This
Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, among the Company, Shanghai Cellular
Biopharmaceutical Group Ltd. and the Purchaser (the
“Purchase
Agreement”).

 

               The
Company and the Purchaser hereby agree as follows:

 

        1.                       

Definitions.

 

               Capitalized
terms used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:

 

            “Advice”
shall have the meaning set forth in Section 6(c).

 

“Effectiveness Date”
means, with respect to the Registration Statement required to be
filed hereunder, the 75th calendar day
following the date hereof (or, in the event of a substantive review
by the Commission, the 105th calendar day
following the date hereof) (the “Outside Date”);
provided,
however, that in
the event the Company is notified by the Commission that the
Registration Statement will not be reviewed or is no longer subject
to further review and comments, the Effectiveness Date as to the
Registration Statement shall be the fifth Trading Day following the
date on which the Company is so notified if such date precedes the
dates otherwise required above, provided, further, that if the Commission
notifies the Company that it will not review the Registration
Statement or declare the Registration Statement effective until the
Company files its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2018 (the “10-Q”), the number of
days from which the Company is so notified through the date the
Company files its 10-Q shall be added to the Outside Date, and
provided,
further, that if
such Effectiveness Date falls on a day that is not a Trading Day,
then the Effectiveness Date shall be the next succeeding Trading
Day.

 

“Effectiveness Period”
shall have the meaning set forth in Section 2(a).

 

“Event” shall have the
meaning set forth in Section 2(b).

 

“Event Date” shall have
the meaning set forth in Section 2(b).

 

“Filing Date” means, with
respect to the Registration Statement required hereunder, the
15th
calendar day following the date hereof.

 

“Holder” or
“Holders” means the holder
or holders, as the case may be, from time to time of Registrable
Securities.

 

“Indemnified Party” shall
have the meaning set forth in Section 5(c).

 

“Indemnifying Party” shall
have the meaning set forth in Section 5(c).

 

 

1

 

 

“Losses” shall have the
meaning set forth in Section 5(a).

 

“Plan of Distribution”
shall have the meaning set forth in Section 2(a).

 

“Prospectus” means the
prospectus included in the Registration Statement (including a
prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated by the Commission pursuant to
the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration
Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference
in such Prospectus.

 

“Registrable Securities”
means, as of any date of determination, (a) all of the Shares, and
(b) any securities issued or then issuable upon any stock split,
dividend or other distribution, recapitalization or similar event
with respect to the foregoing; provided, however, that any such
Registrable Securities shall cease to be Registrable Securities
(and the Company shall not be required to maintain the
effectiveness of any, or file another, Registration Statement
hereunder with respect thereto) for so long as (x) the Registration
Statement with respect to the sale of such Registrable Securities
is declared effective by the SEC under the Securities Act and such
Registrable Securities have been disposed of by the Holder in
accordance with such effective Registration Statement,
(y) such
Registrable Securities have been previously sold in accordance with
Rule 144, or (z) after such time as
the Registrable Securities constitute 4.9% or less of the
outstanding shares of Common Stock of the Company, such securities
become eligible for resale without volume or manner-of-sale
restrictions and without current public information pursuant to
Rule 144 as set forth in a written opinion letter to such effect,
addressed, delivered and acceptable to the Transfer Agent and the
affected Holders, as reasonably determined by the Company, upon the
advice of counsel to the Company.

 

“Registration Statement”
means the registration statement required to be filed hereunder
pursuant to Section 2(a), including the Prospectus, amendments and
supplements to any such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be
incorporated by reference in such registration
statement.

 

 “Rule
415” means Rule 415 promulgated by the SEC pursuant to
the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted
by the SEC having substantially the same purpose and effect as such
Rule.

 

“Rule 424” means Rule 424
promulgated by the SEC pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar
rule or regulation hereafter adopted by the SEC having
substantially the same purpose and effect as such
Rule.

 

“Selling Stockholder
Questionnaire” shall have the meaning set forth in
Section 3(a).

 

 

2

 

 

“SEC Guidance” means (i)
any publicly-available written or oral guidance of the SEC staff,
or any comments, requirements or requests of the SEC staff and (ii)
the Securities Act.

 

“Trading Day” means any
day on which the Common Stock is traded on the Trading Market on
which the Common Stock is then traded; provided, that “Trading
Day” shall not include any day on which the Common Stock is
scheduled to trade on such Trading Market for less than 4.5 hours
or any day that the Common Stock is suspended from trading during
the final hours of trading on such Trading Market (or, if such
Trading Market does not designate in advance the closing time of
trading on such Trading Market, then during the hour ending at
4:00:00 p.m., New York time).

 

“Trading Market” means any
of the following markets or exchanges on which the Common Stock may
be listed or quoted for trading: the NYSE MKT, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange, or any successor to any of the
foregoing.

 

        2.                       

Shelf
Registration.

 

(a) On or prior to the
Filing Date, the Company shall prepare and file with the SEC the
Registration Statement covering the resale of all of the
Registrable Securities that are not then registered on an effective
Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415. Each Registration Statement filed
hereunder shall be on Form S-3 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form
S-3, in which case such registration shall be on another
appropriate form in accordance herewith, subject to the provisions
of Section 2(c)) and shall contain (unless otherwise directed by at
least 85% in interest of the Holders) substantially the
“Plan of
Distribution” attached hereto as Annex A and substantially the
“Selling
Stockholders” section attached hereto as Annex B; provided, however, that no Holder shall
be required to be named as an “underwriter” without
such Holder’s express prior written consent, except that a
Holder may be named as a “statutory underwriter” if
such Holder is, or is affiliated with, a broker-dealer and states
such fact in its Selling Stockholder Questionnaire. Subject to the
terms of this Agreement, the Company shall use commercially
reasonable efforts to cause the Registration Statement filed under
this Agreement (including under Section 3(c)) to be declared
effective under the Securities Act as promptly as reasonably
practicable after the filing thereof, but in any event no later
than the applicable Effectiveness Date, and shall use commercially
reasonable efforts to keep such Registration Statement continuously
effective under the Securities Act until the date that all
Registrable Securities covered by such Registration Statement (i)
have been sold, thereunder or pursuant to Rule 144, or (ii) may be
sold without volume or manner-of-sale restrictions pursuant to Rule
144 and without the requirement for the Company to be in compliance
with the current public information requirement under Rule 144, as
determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the
Transfer Agent and the affected Holders (the “Effectiveness
Period”).  The Company
shall telephonically request effectiveness of the Registration
Statement as of 5:00 p.m. Eastern Time on a Trading Day. The
Company shall immediately notify the Holders via e-mail of the
effectiveness of the Registration Statement on the same Trading Day
that the Company telephonically confirms effectiveness with the
SEC, which shall be the date requested for effectiveness of such
Registration Statement. The Company shall, by 9:30 a.m. Eastern
Time on the Trading Day after the effective date of such
Registration Statement, file a final Prospectus with the SEC as
required by Rule 424. Failure to so notify the Holder within one
(1) Trading Day of such notification of effectiveness or failure to
file a final Prospectus as foresaid shall be deemed an Event under
Section 2(b).

 

 

3

 

 

(b)  If:

 

(i)

the Registration Statement is not filed on or
prior to its Filing Date (if the Company files the
Registration Statement without affording the Holders the
opportunity to review and comment on the same as required by
Section 3(a) herein, the Company shall be deemed to have not
satisfied this clause (i)), or

 

(ii)

the
Company fails to file with the SEC a request for acceleration of
the Registration Statement in accordance with Rule 461 promulgated
by the SEC pursuant to the Securities Act, within five Trading Days
of the date that the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such Registration Statement
will not be “reviewed” or will not be subject to
further review, or

 

(iii)

prior to the effective date of the Registration
Statement, the Company fails to file a pre-effective
amendment and otherwise respond in writing to comments made by the
SEC in respect of such Registration Statement within ten (10)
calendar days after the receipt of comments by or notice from the
SEC that such amendment is required in order for such Registration
Statement to be declared effective, provided, however, that if the
SEC issues a comment that requires the Company to file its 10-Q on
a pre-effective amendment, the deadline to file such pre-effective
amendment or response relating to such comment shall be no later
than November 13, 2018, or

 

(iv)

the Registration
Statement registering for resale all of the Registrable Securities
is not declared effective by the SEC by the Effectiveness Date,
or

 

(v)

after the effective
date of the Registration Statement, the Registration Statement
ceases for any reason to remain continuously effective as to all
Registrable Securities included in such Registration Statement, or
the Holders are otherwise not permitted to utilize the Prospectus
therein to resell such Registrable Securities, for more than 15
consecutive calendar days or more than an aggregate of 30 calendar
days (which need not be consecutive calendar days) during any
12-month period,

 

(any
such failure or breach being referred to as an “Event”) then, in addition
to any other rights the Holders may have hereunder or under
applicable Law, on each Event Date and on each monthly anniversary
of each such Event Date (if the applicable Event shall not have
been cured by such date) until the applicable Event is cured, the
Company shall pay to each Holder an amount in cash, as partial
liquidated damages and not as a penalty, equal to the product of
1.5% multiplied by the aggregate Purchase Price multiplied by the
proportion of (A) the Shares held by such Holder for which the
Registration Statement had not been declared effective to (B) the
total number of Shares purchased pursuant to the Purchase
Agreement. The parties agree that the maximum aggregate liquidated
damages payable to a Holder under this Agreement shall be 9.0% of
the aggregate Purchase Price. If the Company fails to pay any
partial liquidated damages pursuant to this Section in full within
seven days after the date payable, the Company will pay interest
thereon at a rate of 18% per annum (or such lesser maximum amount
that is permitted to be paid by applicable Law) to the Holder,
accruing daily from the date such partial liquidated damages are
due until such amounts, plus all such interest thereon, are paid in
full. The partial liquidated damages pursuant to the terms hereof
shall apply on a daily pro rata basis for any portion of a month
prior to the cure of an Event. For purposes of this Agreement, the
“Event
Date” shall be (A) for purposes of clauses (i) and
(iv), the date on which such Event occurs, (B) for purpose of
clause (ii), the date on which such five Trading Day period is
exceeded, (C) for purpose of clause (iii), the date which such ten
calendar day period is exceeded, and (D) for
purpose of clause (v), the date on which such 15 or 30 calendar day
period, as applicable, is exceeded.

 

 

4

 

 

(c) If Form S-3 is not
available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the resale of
the Registrable Securities on another appropriate form and (ii)
undertake to register the Registrable Securities on Form S-3 as
soon as such form is available, provided that the Company shall
maintain the effectiveness of the Registration Statement then in
effect until such time as the Registration Statement on Form S-3
covering the Registrable Securities has been declared effective by
the SEC.

 

(d) Notwithstanding
anything to the contrary contained herein, in no event shall the
Company be permitted to name any Holder or affiliate of a Holder as
any Underwriter without the prior written consent of such Holder,
except that a Holder may be named as a “statutory
underwriter” if such Holder is, or is affiliated with, a
broker-dealer and states such fact in its Selling Stockholder
Questionnaire.

 

3.            

Registration
Procedures.

 

               In
connection with the Company’s registration obligations
hereunder, the Company shall:

 

(a) Not less than five
Trading Days prior to the filing of the Registration Statement and
not less than three Trading Day prior to the filing of any related
Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated
therein by reference, but not including (A) any Exchange Act filing
or (B) any supplement or post-effective amendment to a registration
statement that is not related to such Holder’s Registrable
Securities), (i) furnish to each Holder copies of all such
documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be
subject to the review of such Holders, and (ii) cause
Representatives to respond to such inquiries as shall be necessary,
in the reasonable opinion of respective counsel to each Holder, to
conduct a reasonable investigation within the meaning of the
Securities Act. The Company shall not file the Registration
Statement or any such Prospectus or any amendments or supplements
thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith, provided that the
Company is notified of such objection in writing no later than four
Trading Days after the Holders have been so furnished copies of the
Registration Statement or two Trading Days after the Holders have
been so furnished copies of any related Prospectus or amendments or
supplements thereto. As a condition for inclusion in any
Registration Statement, each Holder agrees to furnish to the
Company a completed questionnaire in the form attached to this
Agreement as Annex
B (a “Selling
Stockholder Questionnaire”) on a date that is not less
than two Trading Days prior to the Filing Date or by the end of the
third Trading Day following the date on which such Holder receives
draft materials in accordance with this Section.

 

 

5

 

 

(b) (i) Prepare and
file with the SEC such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used
in connection therewith (subject to any requirement that a
post-effective amendment be declared effective by the SEC) as may
be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for the
Effectiveness Period, (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement
(subject to the terms of this Agreement), and, as so supplemented
or amended, to be filed pursuant to Rule 424, (iii) respond as
promptly as reasonably practicable to any comments received from
the SEC with respect to the Registration Statement or any amendment
thereto and provide as promptly as reasonably practicable to the
Holders true and complete copies of all correspondence from and to
the SEC relating to the Registration Statement (provided that, the
Company shall excise any information contained therein which would
constitute material non-public information regarding the Company or
any of its Subsidiaries), and (iv) comply in all material respects
with the applicable provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement during the
applicable period in accordance (subject to the terms of this
Agreement) with the intended methods of disposition by the Holders
thereof set forth in such Registration Statement as so amended or
in such Prospectus as so supplemented.

 

(c) If, during the
Effectiveness Period, the number of Registrable Securities at any
time exceeds 100% of the number of shares of Common Stock then
registered in the Registration Statement, file as soon as
reasonably practicable, but in any case prior to the applicable
Filing Date, an additional Registration Statement covering the
resale by the Holders of not less than the number of such
Registrable Securities.

 

(d) Notify the Holders
of Registrable Securities to be sold (which notice shall, pursuant
to clauses (iii) through (vi) hereof, be accompanied by an
instruction to suspend the use of the Prospectus until the
requisite changes have been made) as promptly as reasonably
practicable (and, in the case of (i)(A) below, not less than one
Trading Day prior to such filing) and, if requested by any such
Person, confirm such notice in writing no later than one Trading
Day following the day:

 

(i)

(A) when a
Prospectus or any Prospectus supplement or post-effective amendment
to the Registration Statement is proposed to be filed (other than
(I) any Exchange Act filing or (II) any supplement or
post-effective amendment to the Registration Statement that is not
related to such Holder’s Registrable Securities), (B) when
the SEC notifies the Company whether there will be a
“review” of such Registration Statement and whenever
the SEC comments in writing on such Registration Statement, and (C)
with respect to the Registration Statement or any post-effective
amendment, when the same has become effective,

 

 

6

 

 

(ii)

of any request by
the SEC or any other federal or state Governmental Authority for
amendments or supplements to the Registration Statement or
Prospectus or for additional information,

 

(iii)

of the issuance by
the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration
Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose,

 

(iv)

of the receipt by
the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such
purpose,

 

(v)

of the occurrence
of any event or passage of time that makes the financial statements
included in the Registration Statement ineligible for inclusion
therein or any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement,
Prospectus or other documents so that, in the case of the
Registration Statement or the Prospectus, as the case may be, it
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading, and

 

(vi)

of the occurrence
or existence of any pending corporate development with respect to
the Company that the Company believes may be material and that, in
the determination of the Company, makes it not in the best interest
of the Company to allow continued availability of the Registration
Statement or Prospectus, provided, however, in no event shall any
such notice contain any information which would constitute
material, non-public information regarding the Company or any of
its Subsidiaries.

 

(e) Use its best
efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order stopping or suspending the
effectiveness of the Registration Statement, or (ii) any suspension
of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction, at the
earliest practicable moment.

 

(f) If requested by a
Holder, furnish to such Holder, without charge, at least one
conformed copy of the Registration Statement and each amendment
thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated therein by
reference to the extent requested by such Person, and all exhibits
to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing
of such documents with the SEC; provided, that any such item
which is available on the EDGAR system (or successor thereto) need
not be furnished in physical form.

 

 

7

 

 

(g) Subject to the
terms of this Agreement, consent to the use of such Prospectus and
each amendment or supplement thereto by each of the selling Holders
in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving of any notice pursuant
to Section 3(d).

 

(h)  Prior to any
resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or
qualification (or exemption from the registration or qualification)
of such Registrable Securities for the resale by the Holder under
the securities or Blue Sky laws of such jurisdictions within the
United States as any Holder reasonably requests in writing, to keep
each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all
other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by each
Registration Statement; provided, that, the Company
shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject the Company
to any material tax in any such jurisdiction where it is not then
so subject, or file a general consent to service of process in any
such jurisdiction.

 

(i) If requested by a
Holder, cooperate with such Holder to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to the
Registration Statement, which certificates shall be free, to the
extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holder may
request.

 

(j) Upon the occurrence
of any event contemplated by Section 3(d), as promptly as
reasonably practicable under the circumstances taking into account
the Company’s good faith assessment of any adverse
consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement
or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered,
neither the Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading. If the
Company notifies the Holders in accordance with clauses (iii)
through (vi) of Section 3(d) above to suspend the use of any
Prospectus until the requisite changes to such Prospectus have been
made, then the Holders shall suspend use of such Prospectus. The
Company will use its best efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable. The
Company shall be entitled to exercise its right under this Section
3(j) to suspend the availability of the Registration Statement and
Prospectus, subject to the payment of partial liquidated damages
otherwise required pursuant to Section 2(b), for a period not to
exceed 60 calendar days (which need not be consecutive days) in any
12-month period.

 

 

8

 

 

(k) Otherwise use
commercially reasonable efforts to comply with all applicable rules
and regulations of the SEC under the Securities Act and the
Exchange Act, including, without limitation, Rule 172 under the
Securities Act, file any final Prospectus, including any supplement
or amendment thereof, with the SEC pursuant to Rule 424 under the
Securities Act, promptly inform the Holders in writing if, at any
time during the Effectiveness Period, the Company does not satisfy
the conditions specified in Rule 172 and, as a result thereof, the
Holders are required to deliver a Prospectus in connection with any
disposition of Registrable Securities and take such other actions
as may be reasonably necessary to facilitate the registration of
the Registrable Securities hereunder.

 

(l) The Company shall
use commercially reasonable efforts to maintain eligibility for use
of Form S-3 (or any successor form thereto) for the registration of
the resale of Registrable Securities.

 

(m) The Company may
require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially
owned by such Holder and, if required by the SEC, the natural
persons thereof that have voting and dispositive control over the
shares. During any periods that the Company is unable to meet its
obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish
such information within three Trading Days of the Company’s
request, any liquidated damages that are accruing at such time as
to such Holder only shall be tolled and any Event that may
otherwise occur solely because of such delay shall be suspended as
to such Holder only, until such information is delivered to the
Company.

 

        4.                       

Registration Expenses. All fees
and expenses incident to the performance of or compliance with the
Company’s obligations under this Agreement by the Company
shall be borne by the Company, whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The
fees and expenses referred to in the foregoing sentence shall
include (i) all registration and filing fees (including fees and
expenses of the Company’s counsel and independent registered
public accountants) (A) with respect to filings made with the SEC,
(B) with respect to filings required to be made with any Trading
Market on which the Common Stock is then listed for trading, and
(C) in compliance with applicable state securities or Blue Sky laws
reasonably agreed to by the Company in writing (including fees and
disbursements of counsel for the Company in connection with Blue
Sky qualifications or exemptions of the Registrable Securities),
(ii) printing expenses (including expenses of printing certificates
for Registrable Securities), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so
desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement. In addition,
the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions
contemplated by this Agreement (including all salaries and expenses
of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder. In no
event shall the Company be responsible for any broker or similar
commissions of any Holder or, except to the extent provided for in
the Transaction Documents, any legal fees or other costs of the
Holders.

 

        5.                       

Indemnification.

 

 

9

 

 

(a) Indemnification by the Company.
The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Holder and the
Holder’s Representatives, agents, brokers (including brokers
who offer and sell Registrable Securities as principal as a result
of a pledge or any failure to perform under a margin call of Common
Stock), and investment advisors (and any other Persons with a
functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each of
them, each Person who controls any such Holder (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, members, stockholders, partners,
agents and employees (and any other Persons with a functionally
equivalent title or any other title) of each such controlling
Person, to the fullest extent permitted by applicable Law, from and
against any and all Losses, as incurred, arising out of or relating
to (i) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form
of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the
case of any Prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading or (ii)
any violation or alleged violation by the Company of the Securities
Act, the Exchange Act or any state securities Law, or any rule or
regulation thereunder, in connection with the performance of its
obligations under this Agreement, except to the extent, but only to
the extent, that (A) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing
to the Company by such Holder expressly for use therein, or to the
extent that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in the Registration Statement, such
Prospectus or in any amendment or supplement thereto (it being
understood that the Holder has approved Annex A hereto for this
purpose) or (B) in the case of an occurrence of an event of the
type specified in Section 3(d)(iii)-(vi), the use by such Holder of
an outdated, defective or otherwise unavailable Prospectus after
the Company has notified such Holder in writing that the Prospectus
is outdated, defective or otherwise unavailable for use by such
Holder and prior to the receipt by such Holder of the Advice
contemplated in Section 6(c). No investigation by any Holder or
knowledge by any Holder of any facts or circumstances shall affect
the Company’s indemnification obligations under this Section
5(a). The Company shall notify the Holders promptly upon becoming
aware of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by
this Agreement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
indemnified person and shall survive the transfer of any
Registrable Securities by any of the Holders in accordance with
Section 6(g).

 

(b) Indemnification by Holders.
Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company and its Representatives to the fullest extent
permitted by applicable Law, from and against all Losses, as
incurred, to the extent arising out of or based solely upon: any
untrue or alleged untrue statement of a material fact contained in
any Registration Statement, any Prospectus, or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or supplement
thereto, in light of the circumstances under which they were made)
not misleading (i) to the extent, but only to the extent, that such
untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company expressly for
inclusion in such Registration Statement or such Prospectus or (ii)
to the extent, but only to the extent, that such information
relates to such Holder’s information provided in the Selling
Stockholder Questionnaire or the proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in
writing by such Holder expressly for use in the Registration
Statement (it being understood that the Holder has approved
Annex A hereto for
this purpose), such Prospectus or in any amendment or supplement
thereto. In no event shall the liability of a selling Holder be
greater in amount than the dollar amount of the proceeds (net of
all expenses paid by such Holder in connection with any claim
relating to this Section 5 and the amount of any damages such
Holder has otherwise been required to pay by reason of such untrue
statement or omission) received by such Holder upon the sale of the
Registrable Securities included in the Registration Statement
giving rise to such indemnification obligation.

 

 

10

 

 

(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an
“Indemnified
Party”), such Indemnified Party shall promptly notify
the Person from whom indemnity is sought (the “Indemnifying Party”) in
writing, and the Indemnifying Party shall have the right to assume
the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all
reasonable fees and expenses incurred in connection with defense
thereof; provided,
that, the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have materially and
adversely prejudiced the Indemnifying Party.

 

               An
Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party or Parties unless: (i) the Indemnifying
Party has agreed in writing to pay such fees and expenses, (ii) the
Indemnifying Party shall have failed promptly to assume the defense
of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Proceeding, or (iii) the named
parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and
counsel to the Indemnified Party shall reasonably believe that a
material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense
thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld or
delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a
party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.

 

               Subject
to the terms of this Agreement, all reasonable fees and expenses of
the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing
to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred,
within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that, the Indemnified
Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for
which such Indemnified Party is finally determined by a court of
competent jurisdiction (which determination is not subject to
appeal or further review) not to be entitled to indemnification
hereunder.

 

 

11

 

 

(d) Contribution. If the
indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party,
in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party and Indemnified Party in connection with
the actions, statements or omissions that resulted in such Losses
as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party and Indemnified Party
shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any
Losses shall be deemed to include, subject to the limitations set
forth in this Agreement, any reasonable attorneys’ or other
reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification
provided for in this Section was available to such party in
accordance with its terms.

 

               The
parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the
immediately preceding paragraph. In no event shall the contribution
obligation of a Holder of Registrable Securities be greater in
amount than the dollar amount of the proceeds (net of all expenses
paid by such Holder in connection with any claim relating to this
Section 5 and the amount of any damages such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the
sale of the Registrable Securities giving rise to such contribution
obligation.

 

The
indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.

 

 

        6.                       

Miscellaneous.

 

(a) Remedies. In the event of a
breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery
of damages, shall be entitled to seek specific performance of its
rights under this Agreement. Each of the Company and each Holder
agrees that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of
any of the provisions of this Agreement and hereby further agrees
that, in the event of any action for specific performance in
respect of such breach, it shall not assert or shall waive the
defense that a remedy at law would be adequate.

 

 

12

 

 

(b) No Piggyback on Registrations;
Prohibition on Filing Other Registration Statements. Neither
the Company nor any of its security holders (other than the Holders
in such capacity pursuant hereto) may include securities of the
Company in any Registration Statements other than the Registrable
Securities. For the avoidance of doubt, the previous sentence shall
not apply to any securities issued pursuant to that certain
Controlled Equity OfferingSM Sales Agreement,
dated March 22, 2016, by and between the Company and Cantor
Fitzgerald & Co. to the extent that such securities have been
registered as of the date hereof on the Company’s
registration statement on Form S-3 (File No. 333-210337), which was
declared effective on June 17, 2016. The Company shall not file any
other registration statements, other than a registration statement
on Form S-4 or Form S-8, or their then-equivalents, until the date
that the Registration Statement has been declared effective by the
SEC.

 

(c) Discontinued Disposition. By
its acquisition of Registrable Securities, each Holder agrees that,
upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Section 3(d)(iii) through (vi), such
Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until it is advised in
writing (the “Advice”) by the Company
that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed. The Company will use
commercially reasonable efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable. The
Company agrees and acknowledges that any periods during which the
Holder is required to discontinue the disposition of the
Registrable Securities hereunder shall be subject to the provisions
of Section 2(b).

 

(d) Piggy-Back Registrations. If,
at any time during the Effectiveness Period, there is not an
effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with
the SEC a registration statement relating to an offering for its
own account or the account of others under the Securities Act of
any of its equity securities, other than on Form S-4 or Form S-8
(each as promulgated under the Securities Act) or their
then-equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or
equity securities issuable in connection with the Company’s
employee Benefit Plans, then the Company shall deliver to each
Holder a written notice of such determination and, if within 15
days after the date of the delivery of such notice, any such Holder
shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable
Securities such Holder requests to be registered; provided, however, that the Company shall
not be required to provide notice or otherwise register any
Registrable Securities pursuant to this Section 6(d) that are
eligible for resale pursuant to Rule 144 (without volume
restrictions or current public information requirements)
promulgated by the SEC pursuant to the Securities Act or that are
the subject of a then-effective Registration Statement that is
available for resales or other dispositions by such Holder; and
provided,
further, that if
the Company intends to file a registration statement in connection
with an underwritten public offering (an “Underwritten Offering”),
and the managing underwriter has advised the Company in good faith
that the inclusion of all of the Registrable Securities requested
to be included by the Holders participating in such Underwritten
Public Offering (including pursuant to this Section 6(d)) shall be
limited due to market conditions, the order of priority of the
securities to be included in such offering shall be: (i) first, the
primary securities to be included in such Underwritten Offering;
(ii) second, any securities that the Holders request to include in
such Registration Statement, on a pro rata basis, based on the
number of requested securities; and (iii) any other securities that
are requested to be included in such Registration Statement on a
pro rata basis, based on the number of requested
securities.

 

 

13

 

 

(e) Amendments and Waivers. The
provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers
or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the
Company and the Holders of 51% or more of the then-outstanding
Registrable Securities, provided that, if any
amendment, modification or waiver disproportionately and adversely
impacts a Holder (or group of Holders), the consent of such
disproportionately impacted Holder (or group of Holders) shall be
required. If the Registration Statement does not register all of
the Registrable Securities pursuant to a waiver or amendment done
in compliance with the previous sentence, then the number of
Registrable Securities to be registered for each Holder shall be
reduced pro rata among all Holders and each Holder shall have the
right to designate which of its Registrable Securities shall be
omitted from such Registration Statement. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof
with respect to a matter that relates exclusively to the rights of
a Holder or some Holders and that does not directly or indirectly
affect the rights of other Holders may be given only by such Holder
or Holders of all of the Registrable Securities to which such
waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the first sentence of this
Section 6(e). No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any
provision of this Agreement unless the same consideration also is
offered to all of the similarly-situated parties to this
Agreement.

 

(f) Notices. Any and all notices or
other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in the Purchase
Agreement.

 

(g) Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties and shall
inure to the benefit of each Holder. The Company may not assign
(except by merger) its rights or obligations hereunder without the
prior written consent of all of the Holders of the then-outstanding
Registrable Securities. Each Holder may assign their respective
rights hereunder in the manner and to the Persons as permitted
under Section 11.7 of the Purchase Agreement.

 

(h) No Inconsistent Agreements.
Neither the Company nor any of its Subsidiaries has entered, as of
the date hereof, nor shall the Company or any of its Subsidiaries,
on or after the date of this Agreement, enter into any agreement
with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as set forth
on Schedule 6(h),
neither the Company nor any of its Subsidiaries has previously
entered into any agreement granting any registration rights with
respect to any of its securities to any Person that have not been
satisfied in full.

 

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

 

 

14

 

 

(j) Governing Law; Enforcement. All
questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be determined in accordance
with the provisions of the Purchase Agreement, including Sections
10.11, 10.12, 10.13 and 10.14 thereof.

 

(k) Cumulative Remedies. The
remedies provided herein are cumulative and not exclusive of any
other remedies provided by Law.

 

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

 

(m) Interpretation. This Agreement
shall be interpreted in accordance with the provisions of Section
10.3 of the Purchase Agreement.

 

(n) Independent Nature of Holders’
Obligations and Rights. The obligations of each Holder
hereunder are several and not joint with the obligations of any
other Holder hereunder, and no Holder shall be responsible in any
way for the performance of the obligations of any other Holder
hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any
Holder pursuant hereto or thereto, shall be deemed to constitute
the Holders as a partnership, an association, a joint venture or
any other kind of group or entity, or create a presumption that the
Holders are in any way acting in concert or as a group or entity
with respect to such obligations or the transactions contemplated
by this Agreement or any other matters, and the Company
acknowledges that the Holders are not acting in concert or as a
group, and the Company shall not assert any such claim, with
respect to such obligations or transactions. Each Holder shall be
entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall
not be necessary for any other Holder to be joined as an additional
party in any proceeding for such purpose. The use of a single
agreement with respect to the obligations of the Company contained
was solely in the control of the Company, not the action or
decision of any Holder, and was done solely for the convenience of
the Company and not because it was required or requested to do so
by any Holder. It is expressly understood and agreed that each
provision contained in this Agreement is between the Company and a
Holder, solely, and not between the Company and the Holders
collectively and not between and among Holders.

 (Signature Pages Follow)

 

 

 

15

 

 

               IN
WITNESS WHEREOF, the parties have executed and delivered this
Registration Rights Agreement as of the date first written
above.

 

	

CELLULAR BIOMEDICINE GROUP, INC.

 

 

	

By:
/s/ Bizuo (Tony)
Liu

     
Name: Bizuo (Tony) Liu

     
Title: Chief Executive Officer

 

 

 

 

 

[SIGNATURE
PAGE OF PURCHASER FOLLOWS]

 

                                                            

 

 

16

 

 

	

NOVARTIS PHARMA AG

 

 

 

	

By:
/s/ Teresa
Jose

     Name:
Teresa Jose

     Title:
CFO, Oncology

 

	
 

	

By:
/s/ Liz
Barrett

     Name:
Liz Barrett

     Title:
CEO, Novartis Oncology

 

 

 

17

 

 

 

Annex
A

 

PLAN OF DISTRIBUTION

 

We are
registering the shares of common stock on behalf of the Selling
Stockholders. Each Selling Stockholder and any of their pledgees,
assignees and successors-in-interest may, from time to time, sell
any or all of their securities covered hereby on the principal
Trading Market or any other stock exchange, market or trading
facility on which the securities are traded or in private
transactions. These sales may be at fixed or negotiated prices. A
Selling Stockholder may use any one or more of the following
methods when selling securities:

 

●

ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;

 

●

block trades in
which the broker-dealer will attempt to sell the securities as
agent but may position and resell a portion of the block as
principal to facilitate the transaction;

 

●

purchases by a
broker-dealer as principal and resale by the broker-dealer for its
account;

 

●

exchange
distributions in accordance with the rules of the applicable
exchange;

 

●

privately
negotiated transactions;

 

●

settlement of short
sales;

 

●

transactions
through broker-dealers that agree with the Selling Stockholders to
sell a specified number of such securities at a stipulated price
per security;

 

●

through the writing
or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;

 

●

a combination of
any such methods of sale; or

 

●

any other method
permitted pursuant to applicable law.

 

The
Selling Stockholders may also sell securities under Rule 144 or any
other exemption from registration under the Securities Act of 1933,
as amended (the “Securities Act”), if available, rather
than under this prospectus.

 

Broker-dealers
engaged by the Selling Stockholders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of securities, from
the purchaser) in amounts to be negotiated, but, except as set
forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in
compliance with FINRA Rule 2440; and in the case of a principal
transaction a markup or markdown in compliance with FINRA
IM-2440.

 

In
connection with the sale of the securities or interests therein,
the Selling Stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn
engage in short sales of the securities in the course of hedging
the positions they assume. The Selling Stockholders may also sell
securities short and deliver these securities to close out their
short positions, or loan or pledge the securities to broker-dealers
that in turn may sell these securities. The Selling Stockholders
may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or
more derivative securities which require the delivery to such
broker-dealer or other financial institution of securities offered
by this prospectus, which securities such broker-dealer or other
financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction).

 

 

18

 

 

The
Selling Stockholders and any broker-dealers or agents that are
involved in selling the securities may be deemed to be
“underwriters” within the meaning of the Securities Act
in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the
resale of the securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
Each Selling Stockholder has informed the Company that it does not
have any written or oral agreement or understanding, directly or
indirectly, with any person to distribute the
securities.

 

The
Company is required to pay certain fees and expenses incurred by
the Company incident to the registration of the securities. The
Company has agreed to indemnify the Selling Stockholders against
certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.

 

We
agreed to keep this prospectus effective until the date that (i)
the securities constitute 4.9% or less of the outstanding shares of
common stock of the Company and may be resold by the Selling
Stockholders without registration and without regard to any volume
or manner-of-sale limitations by reason of Rule 144, without the
requirement for the Company to be in compliance with the current
public information under Rule 144 under the Securities Act or any
other rule of similar effect or (ii) all of the securities have
been sold pursuant to this prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale
securities will be sold only through registered or licensed brokers
or dealers if required under applicable state securities laws. In
addition, in certain states, the resale securities covered hereby
may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied
with.

 

Under
applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale securities may not
simultaneously engage in market making activities with respect to
the common stock for the applicable restricted period, as defined
in Regulation M, prior to the commencement of the distribution. In
addition, the Selling Stockholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of
purchases and sales of the common stock by the Selling Stockholders
or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the
need to deliver a copy of this prospectus to each purchaser at or
prior to the time of the sale (including by compliance with Rule
172 under the Securities Act).

 

 

                                                             

 

 

19

 

Annex B

 

SELLING STOCKHOLDERS

 

The
common stock being offered by the selling shareholders are those
previously issued to the selling shareholders, and those issuable
to the selling shareholders, upon exercise of the warrants. For
additional information regarding the issuances of those shares of
common stock and warrants, see "Private Placement of Common Shares"
above. We are registering the shares of common stock in order to
permit the selling shareholders to offer the shares for resale from
time to time. [Description of the relationship between any selling
shareholders and the Company to be provided.]

 

The
table below lists the selling shareholders and other information
regarding the beneficial ownership of the shares of common stock by
each of the selling shareholders. The second column lists the
number of shares of common stock beneficially owned by each selling
shareholder, based on its ownership of the shares of common stock,
as of ________, 2018, assuming exercise of the warrants held by the
selling shareholders on that date, without regard to any
limitations on exercises.

 

The
third column lists the shares of common stock being offered by this
prospectus by the selling shareholders.

 

In
accordance with the terms of a registration rights agreement with
the selling shareholders, this prospectus generally covers the
resale of the number of shares of common stock issued to the
selling shareholders in the __________________. The fourth column assumes the sale
of all of the shares offered by the selling shareholders pursuant
to this prospectus.

 

The
selling shareholders may sell all, some or none of their shares in
this offering. See "Plan of Distribution."

 

	

Name of Selling Stockholder

 

	

Shares of Common Stock Beneficially Owned Prior to
Offering

 

	

Maximum Number of shares of Common Stock to be Sold Pursuant to
this Prospectus

 

	

Shares of Common Stock Beneficially Owned After
Offering

 

 

 

                                                          

 

 

 

20

 

EXHIBIT
4

 

Selling Stockholder Questionnaire

 

 

[attached
hereto]

 

 

FORM OF

 

SELLING SECURITYHOLDER QUESTIONNAIRE

 

 

CELLULAR
BIOMEDICINE GROUP, INC.

 

19925
STEVENS CREEK BLVD., SUITE 100

 

CUPERTINO
CA 95014

 

 

 

Ladies
and Gentlemen:

 

The
undersigned beneficial owner (the “Selling Securityholder”) of
securities of Cellular Biomedicine Group, Inc., a Delaware
corporation (the “Company”),
understands that the Company intends to file with the Securities
and Exchange Commission a registration statement on Form S-1/S-3
(the “Registration
Statement”). The Registration Statement registers for
resale under the Securities Act of 1933, as amended (the
“Securities
Act”), the
securities the Selling Securityholder beneficially owns that are
disclosed in response to Question 5(b) of this Questionnaire (the
“Registrable
Securities”). The
Company will use the information that the undersigned provides in
this Questionnaire to ensure the accuracy of the Registration
Statement and the related prospectus.

 

 

Certain
legal consequences arise from being named as a selling
securityholder in the Registration Statement and the related
prospectus. Accordingly, holders and beneficial owners of
securities to be registered under the Registration Statement are
advised to consult their own securities counsel regarding the
consequences of being named or not being named as a selling
securityholder in the Registration Statement and the related
prospectus.

 

 

The
undersigned Selling Securityholder acknowledges that by completing,
dating, executing and returning this Questionnaire to the Company,
the Selling Securityholder is giving written notice to the Company
of its desire to have the Registrable Securities disclosed in
response to Question 5(b) of this Questionnaire included in the
Registration Statement.

 

 

Please answer every question.

 

 

If the answer to any question is “none” or “not
applicable,” please so state.

 

 

Name. Type or print the full legal name of the Selling
Securityholder.

 

__________________________________________________________________

 

 

 

21

 

 

Contact Information. Provide the address, telephone number,
fax number and email address of the Selling
Securityholder.

 

 

	

Address:

 

	

_________________________

 

	
 

	
 

	

_________________________

 

	
 

	

Phone:

 

	

_________________________

 

	
 

	

Fax:

 

	

_________________________

 

	
 

	

E-Mail:

 

	

_________________________

 

	
 

 

Relationship with the Company. Describe the nature of any
position, office or other material relationship the Selling
Securityholder has had with the Company during the past three
years.

 

 

	

______________________________________________________________________

______________________________________________________________________

 

 

Organizational Structure. Please indicate or (if applicable)
describe how the Selling Securityholder is organized.

 

 

	

(a) Is
the Selling Securityholder a natural person?

(if so, please mark the box and skip to Question 5)

 

	

___
Yes

 

	

 ___
No

 

	
 

	

(b) Is
the Selling Securityholder a reporting company under the Securities
Exchange Act of 1934, as amended (the "Exchange
Act")?

(if so, please mark the box and skip to Question 5)

 

	

___
Yes

 

	

 ___
No

 

	
 

	

(c) Is
the Selling Securityholder a majority-owned subsidiary of a
reporting company under the 1934 Act?

(if so, please mark the box and skip to Question 5)

 

	

___
Yes

 

	

 ___
No

 

	
 

	

(d) Is
the Selling Securityholder a registered investment company under
the Investment Company Act of 1940?

(if so, please mark the box and skip to Question 5)

 

	

___
Yes

 

	

 ___
No

 

	
 

 

 

22

 

 

If the
answer to all of the foregoing questions is "no," please describe:
(i) the exact legal description of the Selling Securityholder
(e.g., corporation, partnership, limited liability company, etc.);
(ii) whether the legal entity so described is managed by another
entity and the exact legal description of such entity (repeat this
step until the last entity described is managed by a person or
persons, each of whom is described in any one of (a) through (d)
above); (iii) the names of each person or persons having voting and
investment control over the Company's securities that the entity
owns (e.g., director(s), general partner(s), managing member(s),
etc.).

 

 

Legal Description of Entity:

 

____________________________________________________________

 

Name of Entit(ies)/(y) Managing Such Entity (if
any):

 

____________________________________________________________

 

____________________________________________________________

 

Name of Entit(ies)/(y) Managing such Entit(ies)/(y) (if
any):

 

____________________________________________________________

 

____________________________________________________________

 

Name(s) of Natural Person(s) Having Voting or Investment Control
Over the Shares Held by such Entit(ies)/(y):

 

____________________________________________________________

 

 

23

 

 

Ownership of the Company’s Securities. This question
covers beneficial ownership of the Company’s securities.
Please consult Appendix A
to this Questionnaire for information as to the meaning of
“beneficial ownership.” State (a) the number of shares
of the Company’s common stock (including any shares issuable
upon exercise of warrants or other convertible securities) that the
Selling Securityholder beneficially owned as of the date this
Questionnaire is signed and (b) the number of such shares of the
Company’s common stock that the Selling Securityholder wishes
to have registered for resale in the Registration
Statement:

 

Number of shares of common stock and other equity securities
owned:

 

____________________________________________________________

 

Number of shares of common stock and other equity securities owned
to be registered for resale in the Registration
Statement:

 

____________________________________________________________

 

Acquisition of Shares. If the Selling Securityholder did not
acquire the securities to be sold directly from the Company, please
describe below the manner in which the securities were acquired
including, but not limited to, the date, the name and address of
the seller(s), the purchase price and pursuant to which documents
(the "Acquisition
Documents") and please forward such documents as provided
below.

 

__________________________________________________________________

 

 

__________________________________________________________________

 

Broker-Dealer Status.

 

 

	

Is the
Selling Securityholder a broker-dealer?

 

	

___
Yes

 

	

 ___
No

 

	
 

 

 

	

If the
answer to Section 7(a) is “yes,” did the Selling
Securityholder receive the Registrable Securities as compensation
for investment banking services to the Company?

Note:
If the answer to 7(b) is "no," SEC guidance has indicated that the
Selling Securityholder should be identified as an underwriter in
the Registration Statement.

 

	

___
Yes

 

	

 ___
No

 

	

 ___N/A

 

 

 

	

Is the
Selling Securityholder an affiliate of a
broker-dealer?

 

	

___
Yes

 

	

 ___
No

 

	
 

 

 

24

 

 

	

If the
Selling Securityholder is an affiliate of a broker-dealer, does the
Selling Securityholder certify that it purchased the Registrable
Securities in the ordinary course of business, and at the time of
the purchase of the Registrable Securities to be resold, the
Selling Securityholder had no agreements or understandings,
directly or indirectly, with any person to distribute the
Registrable Securities?

Note:
If the answer to 7(d) is "no", SEC guidance has indicated that the
Selling Securityholder should be identified as an underwriter in
the Registration Statement.

 

	

___
Yes

 

	

 ___
No

 

	

 ___N/A

 

 

Legal Proceedings with the Company. Is the Company a party
to any pending legal proceeding in which the Selling Securityholder
is named as an adverse party?

 

 

	
 

	

___
Yes

 

	

 ___
No

 

	
 

 

State
any exceptions here:

 

 

__________________________________________________________________

 

__________________________________________________________________

 

Reliance on Responses. The undersigned acknowledges and
agrees that the Company and its legal counsel shall be entitled to
rely on its responses in this Questionnaire in all matters
pertaining to the Registration Statement and the sale of any
Registrable Securities pursuant to the Registration
Statement.

 

The
undersigned hereby acknowledges and is advised of the following
Interpretation A.65 of the July 1997 SEC Manual of Publicly
Available Telephone Interpretations regarding short
selling:

 

 

By
returning this Questionnaire, the undersigned will be deemed to be
aware of the foregoing interpretation.

 

 

25

 

 

If the
Company is required to file a new or additional registration
statement to register Registrable Securities beneficially owned by
the Selling Securityholder, the undersigned hereby agrees to
complete and return to the Company, upon the request of the
Company, a new Questionnaire (in a form substantially similar to
this Questionnaire).

 

 

If the
Selling Securityholder transfers all or any portion of its
Registrable Securities after the date on which the information in
this Questionnaire is provided to the Company, the undersigned
hereby agrees to notify the transferee(s) at the time of transfer
of its rights and obligations hereunder.

 

 

By
signing below, the undersigned represents that the information
provided herein is accurate and complete. The undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date
hereof at any time while the Registration Statement remains
effective.

 

 

By
signing below, the undersigned consents to the disclosure of the
information contained herein and the inclusion of such information
in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that
such information will be relied upon by the Company in connection
with the preparation or amendment of the Registration Statement and
the related prospectus.

 

 

 

 

[SIGNATURE
PAGE FOLLOWS]

 

{00625354.DOCX.2}                                                               

 

 

26

 

 

IN
WITNESS WHEREOF the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

 

	

Dated:
___________________

	

Beneficial
Owner: ___________________________

By:___________________________

Name:

Title:

	
 

	
 

 

AS SOON AS POSSIBLE, PLEASE FAX A COPY OF THE COMPLETED AND
EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY
OVERNIGHT MAIL, TO:

 

	

Ellenoff
Grossman & Schole LLP

1345
Avenue of the Americas

New
York, New York 10105

Attn:
Jessica Yuan, Esq.

Fax:
(212) 370-7889

E-mail:
jyuan@egsllp.com

 

                                                        

 

 

27

 

 

APPENDIX A

 

DEFINITION OF "BENEFICIAL OWNERSHIP"

 

1.           A
"Beneficial Owner" of a security includes any person who, directly
or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares:

 

(a)
Voting power which includes the power to vote, or to direct the
voting of, such security; and/or

 

(b)
Investment power which includes the power to dispose, or direct the
disposition of, such security.

 

Please
note that either voting power or investment power, or both, is
sufficient for you to be considered the beneficial owner of
shares.

2.           Any
person who, directly or indirectly, creates or uses a trust, proxy,
power of attorney, pooling arrangement or any other contract,
arrangement or device with the purpose or effect of divesting such
person of beneficial ownership of a security or preventing the
vesting of such beneficial ownership as part of a plan or scheme to
evade the reporting requirements of the federal securities acts
shall be deemed to be the beneficial owner of such
security.

3.           Notwithstanding
the provisions of paragraph (1), a person is deemed to be the
“beneficial owner” of a security if that person has the
right to acquire beneficial ownership of such security within 60
days, including but not limited to any right to acquire: (a)
through the exercise of any option, warrant or right; (b) through
the conversion of a security; (c) pursuant to the power to revoke a
trust, discretionary account or similar arrangement; or (d)
pursuant to the automatic termination of a trust, discretionary
account or similar arrangement; provided, however, any person who
acquires a security or power specified in (a), (b) or (c) above,
with the purpose or effect of changing or influencing the control
of the issuer, or in connection with or as a participant in any
transaction having such purpose or effect, immediately upon such
acquisition shall be deemed to be the beneficial owner of the
securities which may be acquired through the exercise or conversion
of such security or power.

 

 

 

                                                         

 

 

28Blueprint

Exhibit 10.1

 

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

 

 

LICENSE
AND COLLABORATION AGREEMENT

 

dated as of

 

September 25, 2018

 

by and among

 

NOVARTIS PHARMA AG,

 

CELLULAR BIOMEDICINE GROUP, INC.,

 

CELLULAR BIOMEDICINE GROUP HK LTD.

 

CELLULAR BIOMEDICINE GROUP (WUXI) LTD.

(西比曼生物科技(无锡)有限公司),

 

CELLULAR BIOMEDICINE GROUP (SHANGHAI) LTD.

(西比曼生物科技(上海)有限公司),

 

and

 

SHANGHAI CELLULAR BIOPHARMACEUTICAL GROUP LTD.

(上海赛比曼生物科技有限公司)

 

 

 

                                                                  

Confidential
Treatment Requested by Cellular Biomedicine Group, Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

TABLE OF CONTENTS

 

Page

 

 

	

1

	

DEFINITIONS
AND INTERPRETATION

	

2

	

1.1

	

Definitions

	

2

	

1.2

	

Interpretation

	

18

	

2

	

LICENSES

	

19

	

2.1

	

License
Grants to CBMG

	

19

	

2.2

	

License
Grants to Novartis

	

20

	

2.3

	

Sublicenses;
Subcontracting

	

20

	

2.4

	

No
Other Rights

	

20

	

2.5

	

Exclusivity;
Right of First Negotiation

	

21

	

2.6

	

Certain
Terms of Novartis Third Party Agreements

	

21

	

3

	

GOVERNANCE

	

22

	

3.1

	

Alliance
Managers

	

22

	

3.2

	

Joint
Oversight Committee

	

22

	

3.3

	

Meetings
of the Joint Oversight Committee

	

23

	

3.4

	

Sub-Committees

	

23

	

4

	

DISCLOSURE
OF KNOW-HOW AND COOPERATION

	

23

	

4.1

	

Disclosure
of Know-How

	

23

	

4.2

	

Cooperation

	

24

	

5

	

DEVELOPMENT

	

24

	

5.1

	

Development
Generally

	

24

	

5.2

	

Development
Plan and Development Budget

	

24

	

5.3

	

Development
Activities

	

24

	

5.4

	

Additional
CBMG Development Obligations

	

24

	

5.5

	

Development
Costs

	

25

	

6

	

REGULATORY

	

26

	

6.1

	

Novartis
Responsibility

	

26

	

6.2

	

CBMG
Support

	

27

	

6.3

	

Ownership
of Regulatory Documentation

	

27

	

6.4

	

Communication
with Regulatory Authorities

	

27

	

7

	

MANUFACTURE

	

27

	

7.1

	

Manufacturing
and Supply Agreement

	

27

	

7.2

	

Quality

	

27

	

7.3

	

Costs

	

28

	

8

	

COMMERCIALIZATION

	

28

	

8.1

	

Commercialization

	

28

	

8.2

	

Pharmacovigilance

	

28

 

 

 

 

	

9

	

FINANCIAL
PROVISIONS

	

28

	

9.1

	

Collaboration
Payments; Product Price

	

28

	

9.2

	

No
Projections

	

29

	

10

	

PAYMENT
TERMS AND REPORTS

	

30

	

10.1

	

Payment
Terms

	

30

	

10.2

	

Currency;
Payment Approval

	

30

	

10.3

	

Tax
Matters

	

30

	

10.4

	

Permits
to Make Payments; Blocked Payments

	

30

	

10.5

	

Records
and Audit Rights

	

31

	

11

	

INTELLECTUAL
PROPERTY

	

32

	

11.1

	

Ownership

	

32

	

11.2

	

Prosecution
and Maintenance

	

33

	

11.3

	

Enforcement

	

34

	

11.4

	

Defense

	

35

	

11.5

	

Recovery

	

35

	

11.6

	

Trademarks

	

35

	

11.7

	

Patent
Extensions

	

35

	

12

	

CONFIDENTIALITY

	

36

	

12.1

	

Duty
of Confidence

	

36

	

12.2

	

Exceptions

	

36

	

12.3

	

Authorized
Disclosures

	

37

	

12.4

	

Terms
of this Agreement

	

37

	

12.5

	

Trade
Secrets

	

38

	

13

	

TERM
AND TERMINATION

	

39

	

13.1

	

Term

	

39

	

13.2

	

Termination
for Breach

	

39

	

13.3

	

Termination
by Novartis for Change in Applicable Law or Action of a
Governmental Entity

	

40

	

13.4

	

Termination
by Novartis for Material Safety Issue

	

40

	

13.5

	

Termination
by Novartis for Failure to Obtain Required PRC Approvals for
DLBCL

	

40

	

13.6

	

Termination
by Novartis for Failure to Execute Ancillary
Agreements

	

40

	

13.7

	

Termination
by Novartis for Quality Audit Failure

	

41

	

13.8

	

Termination
by Novartis for Failure to Finalize Tech Transfer Work
Plans

	

41

	

13.9

	

Termination
by Novartis for Expiration or Termination of an Ancillary
Agreement

	

41

	

13.1

	

Termination
by Novartis for Change of Control

	

41

	

13.11

	

Termination
by Novartis for Third Party Necessary Patent Rights

	

41

	

13.12

	

Termination
by Novartis for Termination or Diminishment of License under
Novartis Third Party Agreement

	

41

	

13.13

	

Termination
by Novartis for Loss of Market Share

	

41

 

 

 

 

 

	

13.14

	

Termination
by Novartis for Non-Viability of Product
Commercialization

	

41

	

13.15

	

Termination
by Novartis for Divestiture of the Product

	

42

	

13.16

	

Termination
by Novartis for Wind-Down of Product-Related
Activities

	

42

	

13.17

	

Termination
for Insolvency

	

42

	

14

	

EFFECTS
OF EXPIRATION OR TERMINATION

	

42

	

14.1

	

Effects
of Expiration or Termination

	

42

	

14.2

	

Survival

	

43

	

14.3

	

Accrued
Obligations

	

43

	

14.4

	

Termination
Not Sole Remedy

	

43

	

15

	

REPRESENTATIONS,
WARRANTIES, AND COVENANTS

	

44

	

15.1

	

Representations
and Warranties by CBMG

	

44

	

15.2

	

Representations
and Warranties by Novartis

	

48

	

15.3

	

Mutual
Covenants

	

50

	

15.4

	

Covenants
by CBMG

	

51

	

15.5

	

No
Other Warranties

	

52

	

16

	

INDEMNIFICATION
AND LIABILITY

	

53

	

16.1

	

Indemnification
by CBMG

	

53

	

16.2

	

Indemnification
by Novartis

	

53

	

16.3

	

Indemnification
Procedure

	

54

	

16.4

	

Special,
Indirect, and Other Losses

	

55

	

16.5

	

No
Exclusion

	

55

	

17

	

PUBLICATIONS
AND PUBLICITY

	

56

	

17.1

	

Use of
Names

	

56

	

17.2

	

Press
Releases and Publicity Related to this Agreement

	

56

	

17.3

	

Public
Disclosures and Publications Related to the Product

	

56

	

17.4

	

Disclosures
Required By Law

	

56

	

18

	

MISCELLANEOUS

	

57

	

18.1

	

Fees
and Expenses

	

57

	

18.2

	

Notices

	

57

	

18.3

	

Entire
Agreement

	

58

	

18.4

	

Severability

	

58

	

18.5

	

Assignment;
Binding Effect

	

58

	

18.6

	

Headings

	

58

	

18.7

	

Waiver
and Amendment

	

59

	

18.8

	

Third
Party Beneficiaries

	

59

	

18.9

	

Specific
Performance and Other Equitable Relief

	

59

	

18.10

	

Negotiation
of Agreement

	

59

	

18.11

	

Choice
of Law

	

60

	

18.12

	

Arbitration

	

60

	

18.13

	

Waiver
of Jury Trial

	

61

	

18.14

	

Performance
by Affiliates

	

61

	

18.15

	

Counterparts;
Electronic Signatures

	

61

 

                                                              

 

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

 

Exhibits

 

Exhibit
A:                   
CBMG Patents

Exhibit B:
                   

Clinical
Development Plan

Exhibit
C:                   
Knowledge of CBMG

Exhibit
D                    
Required PRC Approvals

Exhibit
E:                   
Manufacturing and Supply Agreement Terms

Exhibit
F:                   
Form of Invoice

 

 

                                                               

 

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

LICENSE AND COLLABORATION AGREEMENT

 

This
LICENSE AND COLLABORATION AGREEMENT (this “Agreement”) is made as of
September 25, 2018 (the “Effective Date”), by and
between Novartis Pharma AG, a company (Aktiengesellschaft) organized and
existing under the laws of Switzerland, having its principal place
of business at Lichtstrasse 35, 4056 Basel, Switzerland
(“Novartis”), Cellular
Biomedicine Group, Inc., a
corporation organized and existing under the laws of Delaware,
having its principal place of business at 19925 Stevens Creek
Blvd., Suite 100, Cupertino, California 95014, USA
(“CBMG
Parent”), Cellular Biomedicine Group HK Ltd., a
company organized and existing under the laws of the Hong Kong
Special Administrative Region of the People’s Republic of
China, whose registered office is at Unit 402, 4th Floor, Fairmont
House, No 8, Cotton Tree Drive, Admiralty, Hong Kong
(“CBMG
HK”), Cellular Biomedicine Group (Wuxi) Ltd.
(西比曼生物科技(无锡)有限公司),
a company organized and existing under the laws of the PRC whose
legal address is located at 1699 Huishan Boulevard, Room 1103,
Huishan High Tech Park, Wuxi, China (“CBMG Wuxi”), Cellular
Biomedicine Group Ltd. (Shanghai) Ltd. (西比曼生物科技(上海)有限公司),
a company organized and existing under the laws of the PRC whose
legal address is located at 333 Guiping Road, Building No.1 F6,
Xuhui District, Shanghai, China (“CBMG Shanghai”), and
Shanghai Cellular Biopharmaceutical Group Ltd. (上海赛比曼生物科技有限公司),
a company organized and existing under the laws of the PRC, whose
legal address is located at 85 Faladi Road, Building No.3, China
(Shanghai) Pilot Free Trade Zone, Shanghai, China
(“Shanghai
Cellular”) (CBMG HK, CBMG Wuxi, CBMG Shanghai, and
Shanghai Cellular, collectively, the “CBMG Subsidiaries”) (the
CBMG Subsidiaries, together with CBMG Parent, “CBMG”). Novartis, CBMG
Parent, and CBMG Subsidiaries are each referred to individually as
a “Party” and, collectively,
as the “Parties.”

 

RECITALS

 

WHEREAS, CBMG and
Novartis desire to enter into a collaboration under which CBMG will
become Novartis’s collaboration partner and manufacturer of
the Product in the Territory (as such terms are defined
below);

 

WHEREAS, CBMG will
manufacture and supply the Product in the Territory for use by
Novartis, its Affiliates, and its designees in the Territory, on
the terms and conditions set forth in this Agreement and the
Ancillary Agreements (as such terms are defined
below);

 

WHEREAS,
concurrently with the execution and delivery of this Agreement,
CBMG and Novartis are entering into that certain Share Purchase
Agreement, pursuant to which Novartis will purchase from CBMG
Parent, and CBMG Parent will sell to Novartis, a certain number of
shares of CBMG’s common stock, par value $.001 per share (the
“Share Purchase
Agreement”); and

 

WHEREAS, subject to
the terms of this Agreement, each Party is relying on the other
Party with regard to its satisfaction of all legal, regulatory,
contractual, and other obligations, and each Party will act
independently in accordance with this Agreement and all Applicable
Laws.

 

NOW,
THEREFORE, in consideration of the foregoing, the representations,
warranties, obligations, and agreements set forth in this
Agreement, and other good and valuable consideration, the adequacy
and receipt of which hereby are acknowledged, and intending to be
legally bound hereby, the Parties hereby agree as
follows:

 

                                                              

 

1

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

1. DEFINITIONS AND
INTERPRETATION

 

1.1 Definitions.

 

 
When
used in this Agreement, except as otherwise expressly provided
herein, the following terms shall have the meanings set forth or
referenced below.

 

“Accounting
Standards” means, with respect to Novartis,
IFRS and, with respect to CBMG, GAAP, in each case, as generally
and consistently applied throughout such Party’s
organization. Each Party shall promptly notify the other Party in
the event that it changes the Accounting Standards pursuant to
which its records are maintained, it being understood that each
Party may only use internationally recognized accounting principles
(e.g., IFRS, GAAP,
etc.).

 

“Action” means any action,
suit, arbitration, or other proceeding, whether civil, criminal, or
administrative, at law or in equity by or before any Governmental
Entity.

 

“Additional Indication”
means any Indication other than the Initial
Indications.

 

“Additional Indication Clinical
Development Costs” means Clinical Development Costs
incurred by or on behalf of the Parties in connection with the
Development of the Product for an Additional Indication in the
Territory.

 

“Affiliate” means, with
respect to a Person, any other Person that controls, is controlled
by, or is under common control with such Person. For purposes of
this Agreement, a Person will be deemed to control another Person
if it owns or controls, directly or indirectly, more than fifty
percent (50%) of the Equity Securities of such other Person
entitled to vote in the election of directors (or, in the case that
such other Person is not a corporation, for the election of the
corresponding managing authority), or otherwise has the power to
direct the management and policies of such other Person (including
any PRC domestic capital companies not controlled through ownership
of Equity Securities but through contracts under a VIE structure).
The Parties acknowledge that, in the case of certain entities
organized under the laws of certain countries outside of the United
States, the maximum percentage ownership permitted by law for a
foreign investor may be less than fifty percent (50%), and that in
such case such lower percentage will be substituted in the
preceding sentence; provided, that such foreign
investor has the power to direct the management and policies of
such entity.

 

“Agreement” has the
meaning set forth in the first paragraph of this
Agreement.

 

“Alliance
Manager” has the meaning set forth in
Section
3.1.

 

“Ancillary Agreements”
means the Manufacturing and Supply Agreement, the Share Purchase
Agreement, the Pharmacovigilance Agreement, and any other
agreements entered into by Novartis and CBMG or their respective
Affiliates in connection with this Agreement.

 

 

                                                              

 

2

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

 

“Anti-Corruption Laws” has
the meaning set forth in the definition of “Applicable
Law.”

 

“Applicable Law” means,
individually and collectively, any federal, state, local, national,
and supra-national laws, treaties, statutes, ordinances, rules, and
regulations, including any rules, regulations, guidance,
guidelines, circulars, officially announced policies of any
Governmental Entity(ies), and requirements of any national
securities exchange or securities listing organization having the
binding effect of law, including: (a) those in effect in the
Territory (“Applicable PRC Law”); (b)
cGCP, cGLP, and cGMP; and (c) those concerning bribery, corruption,
or illegal payments and gratuities, including the United States
Foreign Corrupt Practices Act, the Hong Kong Prevention of Bribery
Ordinance, the UK Bribery Act 2010, the PRC Criminal Law, the PRC
Unfair Competition Law, the Interim Regulations on Prohibition of
Commercial Bribery issued by the SAIC, and any Applicable PRC Laws
similar to any of the foregoing (“Anti-Corruption
Laws”).

 

“Applicable PRC Law” has
the meaning set forth in the definition of “Applicable
Law.”

 

“Acquirer” means,
collectively, the Third Party referenced in the definition of
Change of Control and such Third Party’s Affiliates, other
than the applicable Party in the definition of Change of Control
and such Party’s Affiliates, determined immediately prior to
the closing of such Change of Control or the entry into a
definitive agreement providing for a transaction or series of
transactions that would constitute a Change of Control, as
applicable.

 

“Aggregate Deferral
Amount” has the meaning set forth in Section 5.5(c)(i)(B).

 

“Arbitrators” has the
meaning set forth in Section 18.12(a).

 

“Audited Party” has the
meaning set forth in Section 10.5.

 

“Auditing Party” has the
meaning set forth in Section 10.5.

 

“Auditor” has the meaning
set forth in Section 10.5.

 

“Business Day” means a day
other than a Saturday, Sunday, or a bank or other public holiday in
Basel, Switzerland, New York, New York, or Shanghai,
PRC.

 

“Calendar Quarter” means
each successive period of three (3) calendar months commencing on
January 1, April 1, July 1, and October 1, except that the first
(1st)
Calendar Quarter of the Term shall commence on the Effective Date
and end on the day immediately prior to the first (1st) to occur of
January 1, April 1, July 1, or October 1 after the Effective Date,
and the last Calendar Quarter shall end on the last day of the
Term.

 

“Calendar Year” means each
successive period of twelve (12) calendar months commencing on
January 1 and ending on December 31, except that the first
(1st)
Calendar Year of the Term shall commence on the Effective Date and
end on December 31 of the year in which the Effective Date occurs,
and the last Calendar Year of the Term shall commence on January 1
of the year in which the Term ends and end on the last day of the
Term.

 

 

                                                              

 

3

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“CAPAs” has the meaning
set forth in Section 7.2.

 

“CBMG” has the meaning set
forth in the first paragraph of this Agreement.

 

“CBMG HK” has the meaning
set forth in the first paragraph of this Agreement.

 

“CBMG Background Intellectual
Property” means any and all Patent Rights, Know-How,
and other intellectual property rights: (a) in existence and
Controlled by CBMG or its Affiliates as of the Effective Date; or
(b) that arise outside of activities under this Agreement and the
Ancillary Agreements and are Controlled by CBMG or its Affiliates
after the Effective Date.

 

“CBMG Collaboration
Technology” means: (a) any and all Know-How,
compounds, data, derivatives, designs, developments, discoveries,
enhancements, inventions, materials, modifications, molecules, new
uses, processes, products, research results, sequences, techniques,
writings, or other technology rights, whether or not patentable, in
each case, that are invented, conceived, reduced to practice, or
otherwise developed in the course of activities under this
Agreement or any Ancillary Agreement solely by or on behalf of
CBMG; and (b) any and all Patent Rights and other intellectual
property rights in any of the foregoing.

 

“CBMG Indemnitees” has the
meaning set forth in Section 16.1.

 

“CBMG Know-How” means any
Know-How Controlled by CBMG or any of its Affiliates as of the
Effective Date or thereafter during the Term or the term of any
Ancillary Agreement, as applicable (including with respect to any
CBMG Collaboration Technology and CBMG’s interest in any
Joint Collaboration Technology) which is: (a) necessary or useful
for the Development, Manufacture, or Commercialization of the
Product; or (b) related to CBMG’s serum-free medium or viral
vectors.

 

“CBMG Other CART” means
any CART therapy owned or controlled by CBMG other than any CART
therapy targeting CD-19.

 

“CBMG Parent” has the
meaning set forth in the first paragraph of this
Agreement.

 

“CBMG Patents” means any
Patent Rights Controlled by CBMG or any of its Affiliates as of the
Effective Date or thereafter during the Term or the term of any
Ancillary Agreement, as applicable (including with respect to any
CBMG Collaboration Technology and CBMG’s interest in any
Joint Collaboration Technology) which include claims that are: (a)
necessary or useful for the Development, Manufacture, or
Commercialization of the Product; or (b) related to CBMG’s
serum-free medium or viral vectors, including the Patent Rights
identified on Exhibit
A.

 

“CBMG Production Costs”
has the meaning set forth on Schedule 9.1(e).

 

“CBMG Shanghai” has the
meaning set forth in the first paragraph of this
Agreement.

 

“CBMG Subsidiaries” has
the meaning set forth in the first paragraph of this
Agreement.

 

 

                                                              

 

4

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“CBMG Technology” means
the CBMG Know-How and the CBMG Patents.

 

“CBMG Technology Tech Transfer
Plan” has the meaning set forth in Section 15.3(a).

 

“CBMG Trade Secrets” has
the meaning set forth in Section 12.5(a).

 

“CBMG Wuxi” has the
meaning set forth in the first paragraph of this
Agreement.

 

“CDA” means that certain
Confidentiality Agreement, by and between Novartis and CBMG Parent,
dated December 4, 2017.

 

“cGCP” means the
then-current ethical, scientific, and quality standards required by
the FDA for designing, conducting, recording, and reporting trials
that involve the participation of human subjects, as set forth in
FDA regulations in 21 C.F.R. Parts 11, 50, 54, 56, and 312 and
related FDA guidance documents, by the International Conference on
Harmonization E6: Good Clinical Practices Consolidated Guideline,
and as otherwise required by the SAMR, including those set out in,
or issued pursuant to, the Drug Operation Quality Administrative
Standards issued by the SAMR.

 

“cGLP” means the
then-current good laboratory practices as required by the FDA under
21 C.F.R. Part 58 and all applicable FDA rules, regulations,
orders, and guidances, and the requirements with respect to current
good laboratory practices prescribed by the European Community, the
OECD (Organization for Economic Cooperation and Development
Council) and the ICH Guidelines, or as otherwise required by the
SAMR, including those set out in, or issued pursuant to, the
Non-Clinical Drug Research Quality Administrative Standards issued
by the SAMR.

 

“cGMP” means the
then-current good manufacturing practices as required by the FDA
under 21 C.F.R. Parts 210 and 211 and all applicable FDA rules,
regulations, orders, and guidances, and the requirements with
respect to current good manufacturing practices prescribed by the
European Community under provisions of The Rules Governing
Medicinal Products in the European Community, Volume 4, Good
Manufacturing Practices, Guidelines on Good Manufacturing Practices
specific to Advanced Therapy Medicinal Products, or as otherwise
required by the SAMR, including under the Quality Administrative
Standard for Drug Manufacturing, any requirements issued pursuant
to the Regulation of Drug Manufacturing Administrative Procedures
issued by the SAMR, or the appendix thereto for biochemical
drugs.

 

“Change of
Control” means, with respect to a Party:
(a) a merger or consolidation of such Party or its parent company
with a Third Party that results in the voting securities of such
Party or its parent company outstanding immediately prior thereto,
or any securities into which such voting securities have been
converted or exchanged, ceasing to represent at least fifty percent
(50%) of the combined voting power of the surviving entity or the
parent company of the surviving entity immediately after such
merger or consolidation; (b) a transaction or series of related
transactions pursuant to which a Third Party, together with its
Affiliates, becomes the direct or indirect beneficial owner of more
than fifty percent (50%) of the combined voting power of the
outstanding securities of such Party or its parent company; or (c)
the sale or other transfer to a Third Party of all or substantially
all of such Party’s and its controlled Affiliates’
assets.

 

                                                              

 

5

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Claim” means any action, cause of action,
claim, demand, proceeding, suit, or judgment brought by a Third
Party.

 

“Clinical Development”
means any and all pre-clinical and clinical drug or biologic
development activities conducted before or after obtaining
Regulatory Approval that are reasonably related to or which lead to
the development, preparation, and submission of data and
information to a Regulatory Authority for the purpose of obtaining,
supporting, or expanding Regulatory Approval or to the appropriate
body for obtaining, supporting, or expanding pricing approval,
including all activities related to pharmacokinetic profiling,
design, and conduct of Clinical Studies, regulatory affairs,
statistical analysis, report writing, and regulatory filing
creation and submission (including the services of outside advisors
and consultants in connection therewith). “Clinical Development”
does not include Technical Development.

 

“Clinical Development
Budget” means the budget for the
Parties’ Clinical Development of the Product, which budget is
included in the Clinical Development Plan.

 

“Clinical Development
Costs” means the direct costs incurred by or on behalf
of a Party or its Affiliates during the Term and pursuant to this
Agreement for the Clinical Development of the Product, calculated
as the sum of: [***].

 

“Clinical Development
Plan” means the Clinical Development plan, including
the Clinical Development Budget, attached as Exhibit B and any amendments
thereto, as in effect from time to time in accordance with this
Agreement, outlining the goals, activities, timelines,
deliverables, allocation of responsibilities between the Parties,
and the commitment of resources by the respective Parties with
respect to the Clinical Development of the Product for purposes of
obtaining Regulatory Approval in the PRC.

 

“Clinical Study” means a
study in humans to obtain information regarding a product which is
authorized by the SAMR, the FDA, or other applicable Regulatory
Authority, including information relating to the safety,
tolerability, pharmacological activity, pharmacokinetics, dose
ranging, or efficacy of the product.

 

“Collaboration Payment
Term” has
the meaning set forth in Section 9.1(b).

 

“Collaboration Technology”
means, collectively, the CBMG Collaboration Technology, the
Novartis Collaboration Technology, and the Joint Collaboration
Technology.

 

“Combination Product” has
the meaning set forth in the definition of “Net Sales.”

 

“Commercialize” means
to market, promote, distribute, import, export, offer to sell, or
sell a pharmaceutical or biological product or conduct other
commercialization activities, and “Commercialization” means
marketing, promoting, distributing, importing, exporting, offering
for sale, selling, or other commercialization activities with
respect to a pharmaceutical or biological product.

 

                                                              

 

6

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Competing Infringement”
has the meaning set forth in Section 11.3(a).

 

“Competing
Product” means any CART
therapy targeting CD-19 other than the Product.

 

“Confidential Information”
means any and all confidential or proprietary information and data
and all other scientific, pre-clinical, clinical, regulatory,
manufacturing, marketing, financial, and commercial information or
data, whether communicated in writing or orally or by any other
method, which is or has been provided by or on behalf of one (1)
Party to the other Party or its designee in connection with this
Agreement. “Confidential Information” includes the
following, which are transferred, disclosed, or made available by
the disclosing Party: confidential and proprietary technical and
commercial information, Know-How, amino acid and nucleic acid
sequences, biochemical, cell-based, and animal assays, animal
models, dosages, dosage schedules, drawings, specifications,
models, or designs relating to development, manufacture,
production, registration, promotion, distribution, marketing,
performance, or sale(s); experimental, manufacturing, process,
analytical, packaging, product, warehousing, quality control, and
quality assurance and marketing specifications, standards,
procedures, processes, methods, instructions, and techniques,
samples, prototypes, formulae, writings of any kind, opinions, or
otherwise unwritten data or in the form of computer software or
computer programs; biological, chemical, or physical materials
provided under this Agreement; and reports provided under this
Agreement.

 

“Contract” means any
written contract, agreement, or commitment.

 

“Control” or
“Controlled” means, with
respect to any Patent Rights, Know-How, or other intellectual
property right, the possession, legal authority, or right (whether
by ownership, license, or sublicense, other than by a license,
sublicense, or other right granted (but not assignment) pursuant to
this Agreement) by a Party of the ability to assign or grant to the
other Party the licenses, sublicenses, or rights to access and use
or disclose such Patent Rights, Know-How, or other intellectual
property right as provided for in this Agreement, without paying
any consideration to any Third Party (now or in the future) or
violating the terms of any agreement or other arrangement with any
Third Party in existence as of the time such Party would be
required hereunder to grant such license, sublicense, or rights of
access and use.

 

“Cover,”
“Covering,” or
“Covered” means, with
respect to the Product, that, but for a license granted to a Person
under a claim included in a Patent Right, the Development,
Manufacture, or Commercialization of the Product by such Person
would infringe, or contribute to or induce the infringement of,
such claim, or with respect to a patent application, as if such
claim was contained in an issued patent.

 

“Data Protection Laws”
means any Applicable Law concerning the protection or processing or
both of personal data, including the PRC Constitution,
People’s Republic of China General Principles of Civil Law
effective January 1, 1987, Opinions of the Supreme People’s
Court on Several Issues Concerning the Implementation of the
People’s Republic of China General Principles of Civil Law
(Trial) effective January 26, 1988, People’s Republic of
China Regulations on Employment Services and Employment Management
(effective January 1, 2008), People’s Republic of China
Tortious Liability Law (effective July 1, 2010), Regulating the
Internet Information Service Market Order Several Provisions
(effective March 15, 2012), Decision of the Standing Committee of
the National People’s Congress on the Strengthening of the
Protection of Network Information (effective December 28, 2012),
Information Security Technology Guidelines on Personal Information
Protection within Information Systems for Public and Commercial
Services (effective February 1, 2013), Protection of Personal
Information of Telecommunications and Internet Users Provisions
(effective September 1, 2013), Amendments to the Consumer
Protection Law (effective March 15, 2014), Amendments to the
People’s Republic of China Criminal Law (9th set of
amendments) (effective November 1, 2015), People’s Republic
of China Cyber Security Law (effective June 1, 2017),
People’s Republic of China General Provisions of Civil Law
(effective October 1, 2017), and other Applicable Laws relating to
data protection and privacy.

 

                                                              

 

7

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Deferral Amount” has the
meaning set forth in Section 5.5(c)(i)(B).

 

“Deferral Election” has
the meaning set forth in Section 5.5(c)(i)(B).

 

“Develop” or “Development” means Clinical Development or
Technical Development, as the context requires.

 

“Development Budget” means
the Clinical Development Budget or the Technical Development
Budget, as the context requires.

 

“Development Costs” means
Clinical Development Costs or Technical Development Costs, as the
context requires.

 

“Development Plan” means
the Clinical Development Plan or the Technical Development Plan, as
the context requires.

 

“Dispute” has the meaning
set forth in Section 18.12(a).

 

“DLBCL” means diffuse
large B-cell lymphoma.

 

“Effective Date” has the
meaning set forth in the first paragraph of this
Agreement.

 

“Equity Securities” means,
with respect to any Person that is a legal entity, any and all
shares of capital stock, membership interests, units, profits
interests, ownership interests, equity interests, registered
capital, and other equity securities of such Person, and any right,
warrant, option, call, commitment, conversion privilege, preemptive
right or other right to acquire any of the foregoing, or security
convertible into, exchangeable or exercisable for any of the
foregoing, or any Contract providing for the acquisition of any of
the foregoing.

 

“FDA” means the United
States Food and Drug Administration, any successor entity thereto
in the United States, or any equivalent entity outside of the
United States, as applicable.

 

                                                              

 

8

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“FD&C Act” means the
United States Federal Food, Drug, and Cosmetic Act.

 

“Field” means the
treatment, prevention, or diagnosis of all indications in
humans.

 

“Finance Officers” has the
meaning set forth in Section 5.5(c).

 

“First Commercial Sale”
means the first commercial sale in an arms’-length
transaction of the Product to a Third Party by Novartis or any of
its Affiliates in the Territory following receipt of applicable
Regulatory Approval of the Product. For clarity, “First
Commercial Sale” shall not include any distribution or other
sale solely for patient assistance, named patient use,
compassionate use, or test marketing programs, or
non-registrational studies or similar programs or studies where the
Product is supplied without charge or at the actual Manufacturing
cost thereof (without allocation of indirect costs or any
markup).

 

“FTE” means a full-time
scientific equivalent person (i.e., one (1) fully-dedicated or
multiple partially-dedicated employees aggregating to one (1)
full-time employee employed or contracted by Novartis or CBMG, or
their respective Affiliates, as applicable) based upon a total of
[***] working hours per year (taking into account normal vacations,
sick days and holidays at the Party they are employed and not being
considered working days), undertaken in connection with the conduct
of Development in accordance with the Development Plan. For
clarity: (a) personnel who directly support Development activities
(including data managers and clinical planning managers) shall
constitute FTEs; and (b) personnel who do not directly support
Development activities (including support functions such as
managerial, financial, legal, or business development) shall not
constitute FTEs.

 

“FTE Costs” means the
product of: (a) the actual number of FTEs utilized in the
Development of the Product in accordance with the Development Plan
(including the Development Budget) after the Effective Date, as
documented by the applicable Party using a reliable time tracking
system; and (b) the FTE Rate.

 

“FTE Rate” means: (a) with
respect to FTEs in the U.S., Switzerland, and the European Union
(including, for the avoidance of doubt, the United Kingdom), the
rate of [***] during Calendar Year 2018, such amount to be adjusted
as of January 1, 2019 and annually thereafter by the percentage
increase or decrease, if any, in the Consumer Price Index for All
Urban Consumers (CPI-U) for the U.S. City Average, 1982-84 = 100,
calculated by the Bureau of Labor Statistics of the U.S. and
available at
https://www.bls.gov/regions/new-england/data/consumerpriceindex_us_table.htm;
and (b) with respect to FTEs in the PRC, the rate of [***] during
Calendar Year 2018, such amount to be adjusted as of January 1,
2019 and annually thereafter by the percentage increase or
decrease, if any, in the China Consumer Price Index – Health
Cares, as reported by the National Bureau of Statistics of China
and available at
http://data.stats.gov.cn/english/easyquery.htm?cn=A01. For the
avoidance of doubt, such rate is intended to cover the cost of
salaries, benefits, infrastructure costs, travel, general
laboratory or office supplies, postage, insurance, training, and
all other general expenses and overhead items. Notwithstanding the
foregoing, for any Calendar Year during the Term that is less than
a full year, the above referenced rate shall be proportionately
reduced to reflect such portion of FTEs for such full Calendar
Year.

 

                                                              

 

9

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“GAAP” means generally
accepted accounting principles as practiced in the United States,
as consistently applied.

 

“Generic
Version” means, with respect to the
Product, a product (including a “biogeneric,”
“follow-on biologic,” “follow-on biological
medicine or product,” “similar biological medicine or
product,” or “biosimilar product”) that is
determined by the applicable Regulatory Authority or by Applicable
Law to be “similar,” “comparable,”
“interchangeable,” “bioequivalent,” or
“biosimilar” to the Product.

 

“Governmental Entity”
means any federal, state, local or foreign government, regulatory,
legislative, or administrative body, or any agency, bureau, board,
commission, court, department, tribunal, or other instrumentality
thereof, including any Regulatory Authority.

 

“Healthcare Laws” means
all Applicable Laws (including Applicable PRC Laws) that govern the
research, development, testing, manufacture, handling, packaging,
labeling, storage, promotion, marketing, sales, distribution,
import, export, or any other use with respect to any product or
product candidate, including the FD&C Act; the Public Health
Service Act; the federal False Claims Act; the federal
Anti-Kickback Statute; the Civil Monetary Penalty Statute; the
Stark Law; the Health Insurance Portability and Accountability Act
of 1996 (HIPAA); Physicians Payments Sunshine Act (Title XI of
Social Security Act); the Medicare Program (Title XVIII of the
Social Security Act); the Medicaid Program (Title XIX of the Social
Security Act); Federal Sentencing Guidelines for Organizations; the
Health Information Technology for Economic and Clinical Health Act
(HITECH); the Clinical Laboratories Improvement Act (CLIA); all
regulations promulgated or enforced thereunder; and analogous
Applicable Law to the foregoing in any jurisdiction.

 

“ICC” has the meaning set
forth in Section
18.12(b).

 

“IFRS” means International
Financial Reporting Standards, the set of accounting standards and
interpretations as promulgated by the International Standards
Accounting Board and as they may be updated for time to time, as
consistently applied.

 

“IND” means an investigational new drug
application, clinical trial application, or similar application or
submission for approval to conduct Clinical Studies filed with or
submitted to a Regulatory Authority in the Territory in conformance
with the requirements of such Regulatory Authority, and any
amendments thereto.

 

“Indemnification Claim
Notice” has the meaning set forth in Section 16.3(b).

 

“Indemnified Party” has
the meaning set forth in Section 16.3(b).

 

“Indemnifying Party” has
the meaning set forth in Section 16.3(b).

 

                                                              

 

10

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Indemnitee” means a CBMG
Indemnitee or a Novartis Indemnitee, as the context
requires.

 

“Indication” means a
disease or pathological condition for which clinical results for
such disease or condition and a separate MAA or a supplement (or
other addition) to an existing MAA is required for the purpose of
obtaining Regulatory Approval in the Territory.

 

“Initial Indications”
means DLBCL and pALL.

 

“Initial Indication Clinical
Development Costs” means Clinical Development Costs
incurred by or on behalf of the Parties in connection with the
Development of the Product for an Initial Indication in the
Territory.

 

“Initial Term” has the
meaning set forth in Section 13.1.

 

“Insolvency
Event” means, in relation to either Party
or an Affiliate thereof, as the case may be, any one (1) of the
following: (a) that Party is the subject of voluntary or
involuntary bankruptcy proceedings instituted on behalf of or
against such Party (except for involuntary bankruptcy proceedings
which are dismissed within sixty (60) days, or withdrawn or
terminated prior to the declaration of insolvency of such Party);
(b) an administrator, administrative receiver, receiver and
manager, interim receiver, custodian, sequestrator, or similar
officer is appointed in respect of that Party (collectively, the
“Receiver”) and that Party
has not caused the underlying action or the Receiver to be
dismissed within sixty (60) days after the Receiver’s
appointment; (c) the board of directors or shareholders’
meeting of such Party has passed a resolution to wind up or
deregister that Party (or other through a process whereby the
business is terminated and assets of such Party are distributed
amongst the creditors, equityholders, or investors), or such a
resolution shall have been passed, other than a resolution for the
solvent reconstruction or reorganization of that Party; (d) a
resolution shall have been passed by that Party or that
Party’s directors or shareholders to make an application for
an administration order or to appoint an administrator, liquidation
committee, group, or similar body or Person; (e) that Party
makes a general assignment, composition, or arrangement with or for
the benefit of all or the majority of that Party’s creditors,
or makes, suspends, or threatens to suspend making payments to all
or the majority of that Party’s creditors; (f) any distress,
execution, sequestration, or other similar process being levied or
enforced upon or sued upon against the property or assets of that
Party that is not discharged within seven (7) days; (g) that Party
cannot repay debts that have fallen due, or its assets are
insufficient to pay all of its debts, or it manifestly lacks the
ability to repay its debts; or (h) in the case of any Person in the
PRC, a Governmental Entity cancels or withdraws any Permit needed
for that Party or its Affiliate to operate, or orders the
dissolution of such Party or its Affiliate as a result of, or in
connection with, any non-compliance with Applicable PRC
Law.

 

“JOC Co-Chairs” has the
meaning set forth in Section 3.2(b).

 

“Joint Collaboration
Technology” means: (a) any and all Know-How,
compounds, data, derivatives, designs, developments, discoveries,
enhancements, inventions, materials, modifications, molecules, new
uses, processes, products, research results, sequences, techniques,
writings, or other technology rights, whether or not patentable, in
each case, that are invented, conceived, reduced to practice, or
otherwise developed in the course of activities under this
Agreement or any Ancillary Agreement jointly by or on behalf of
both Parties; and (b) any and all Patent Rights and other
intellectual property rights in any of the foregoing.

 

                                                              

 

11

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Joint Oversight
Committee” or “JOC” means the committee
established under Section 3.2.

 

“Know-How” means all
commercial, technical, scientific, and other know-how and
information, biochemical, cellular, and animal assays, animal
models, trade secrets, knowledge, technology, methods, processes,
practices, formulae, instructions, skills, techniques, procedures,
experiences, ideas, technical assistance, designs, drawings,
assembly procedures, computer programs, specifications, data and
results (including biological, chemical, pharmacological,
toxicological, pharmaceutical, physical, and analytical,
preclinical, clinical, safety, Manufacturing, and quality control
data and know-how, including regulatory data, study designs, and
protocols), and materials, in all cases, in written, electronic, or
any other form now known or hereafter developed.

 

“Knowledge” means, with
respect to CBMG, the actual knowledge of those Persons listed in
Exhibit C after due
inquiry.

 

“Look-Back Date” has the
meaning set forth in Section 15.1(e).

 

“Loss of Market Share”
means, with respect the Product in the Territory, that: (a) [***]
Generic Versions of the Product has been sold by any Third Party in
the Territory; (b) the Net Sales of the Product in any Calendar
Quarter are less than [***] as compared with the Net Sales of the
Product in the corresponding Calendar Quarter in the immediately
preceding Calendar Year (e.g., the fourth (4th) Calendar Quarter
of Calendar Year 2018 as compared to the fourth (4th) Calendar Quarter
of Calendar Year 2017); or (c) the sale of the Product in the
Territory is not Covered by a Valid Claim in the
Territory.

 

“Losses” means any and all
liability, damage, loss, cost, or expense of any nature (including
reasonable attorneys’ fees and litigation
expenses).

 

“MAA” means an application for the
authorization to market the Product in the Territory, as defined by
Applicable Law and regulations and filed with the applicable
Regulatory Authority.

 

“Manufacture” or
“Manufacturing” means all
activities related to the manufacture of a pharmaceutical or
biological product, including manufacturing supplies, for
Development or Commercialization, packaging, in-process and
finished product testing, release of product or any component or
ingredient thereof, quality assurance and quality control
activities related to manufacturing and release of product, ongoing
stability tests, storage, shipment, and regulatory activities
related to any of the foregoing.

 

                                                              

 

12

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Manufacturing and Supply
Agreement” means a manufacturing and supply agreement
to be entered into after the Effective Date that contains the terms
and conditions set forth on Exhibit E.

 

“Margin” has the meaning
set forth in Section 9.1(e).

 

“MOFCOM” means the
Ministry of Commerce of the PRC and its local authorized
bodies.

 

“MOST” means the Ministry
of Science and Technology of the PRC and its local authorized
bodies.

 

“Net Sales” means the net
sales recorded by Novartis or any of its Affiliates or
sublicensees, excluding distributors and wholesalers, for any
Product sold to Third Parties other than sublicensees in the
Territory as determined in accordance with Novartis’s
Accounting Standards as consistently applied, less a deduction of
[***] for direct expenses related to the sales of the Product,
distribution and warehousing expenses, and uncollectible amounts on
previously-sold products.

 

(a) The deductions
booked on an accrual basis by Novartis and its Affiliates under its
Accounting Standards to calculate the recorded net sales from gross
sales include the following:

 

[***]

 

(b) With respect to the
calculation of Net Sales:

 

             [***]

 

 “Novartis”
has the meaning set forth in the first paragraph of this
Agreement.

 

“Novartis Background Intellectual
Property” means any and all Patent Rights, Know-How,
and other intellectual property rights: (a) in existence and
Controlled by Novartis or its Affiliates as of the Effective Date;
or (b) that arise outside of activities under this Agreement and
the Ancillary Agreements and are Controlled by Novartis or its
Affiliates after the Effective Date.

 

“Novartis Collaboration
Technology” means: (a) any and all Know-How,
compounds, data, derivatives, designs, developments, discoveries,
enhancements, inventions, materials, modifications, molecules, new
uses, processes, products, research results, sequences, techniques,
writings, or other technology rights, whether or not patentable, in
each case, that are invented, conceived, reduced to practice, or
otherwise developed in the course of activities under this
Agreement or any Ancillary Agreement solely by or on behalf of
Novartis; and (b) any and all Patent Rights and other intellectual
property rights in any of the foregoing.

 

“Novartis Data Protection and
Information Security Requirements” means the
requirements set forth on Schedule 15.4(c).

 

                                                              

 

13

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Novartis Indemnitees” has
the meaning set forth in Section 16.2.

 

“Novartis Know-How” means
any Know-How Controlled by Novartis or any of its Affiliates as of
the Effective Date or thereafter during the Term or the term of any
Ancillary Agreement, as applicable, that is necessary for the
Development or Manufacture of the Product.

 

“Novartis Patents” means
any Patent Rights Controlled by Novartis or any of its Affiliates
as of the Effective Date or thereafter during the Term or the term
of any Ancillary Agreement, as applicable, which include claims
that are necessary for the Development or Manufacture of the
Product.

 

“Novartis Technology”
means the Novartis Know-How and the Novartis Patents.

 

“Novartis Third Party
Agreements” means any agreement between Novartis or an
Affiliate thereof, on the one hand, and a Third Party, on the other
hand, which is set forth on Schedule 2.6(b).

 

“Novartis Trade Secrets”
has the meaning set forth in Section 12.5(a).

 

“Order” means any order,
injunction, ruling, writ, judgment, or decree of any Governmental
Entity.

 

“Other Development
Expenses” means any expenses incurred for clinical
materials, analytical services, or other items, in each case, to
the extent provided in the Development Plan.

 

“Out-of-Pocket Costs”
means direct expenses, other than Other Development Expenses, paid
or payable to Third Parties which are specifically identifiable and
incurred by a Party or its Affiliates for the Development of the
Product in accordance with the Development Plan; provided, that such expenses
shall have been recorded as income statement items in accordance
with such Party’s Accounting Standards and shall not include:
(a) any expenses relating to management, human resources, or
finance personnel; or (b) any pre-paid amounts, capital
expenditures (including amortization thereof), or items intended to
be covered by the FTE Rate.

 

“pALL” means pediatric
acute lymphoblastic leukemia.

 

“Party” or
“Parties” has the meaning
set forth in the first paragraph of this Agreement.

 

“Patent Extensions” has
the meaning set forth in Section 11.7.

 

“Patent Rights” means all
patents and patent applications and all substitutions, divisions,
continuations, and continuations-in-part, any patent issued with
respect to any such patent applications, any reissue,
reexamination, utility models, or designs, renewal, or extension
(including any supplementary protection certificate) of any such
patent, and any confirmation patent or registration patent or
patent of addition based on any such patent, and all counterparts
thereof.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Permit” means all
clearances, orders, declarations, approvals, authorizations,
qualifications, registrations, filings, certifications, consents,
licenses, waivers, and permits required by any Governmental
Entity(ies) or under Applicable Law.

 

“Person” means any natural person,
corporation, unincorporated organization, partnership, association,
sole proprietorship, joint stock company, joint venture, limited
liability company, trust, government, or Regulatory Authority, or
any other similar entity.

 

“Pharmacovigilance
Agreement” has the meaning set forth in Section 8.2.

 

“PRC” means the
People’s Republic of China, excluding the Hong Kong Special
Administrative Region, the Macau Special Administrative Region, and
Taiwan.

 

“Product” means
Novartis’s proprietary CD-19 targeting CART therapy,
generically known as tisagenlecleucel.

 

“Product Marks” has the
meaning set forth in Section 11.6.

 

“Product Price” has the
meaning set forth in Section 9.1(e).

 

“Product Tech Transfer
Plan” has the meaning set forth in Section 15.3(a).

 

“Prohibited Fund” has the
meaning set forth in Section 15.1(h)(iv).

 

“Prohibited Payment” has
the meaning set forth in Section 15.1(h)(ii).

 

“Prosecution and
Maintenance” or “Prosecute and Maintain”
means, with respect to a Patent Right, the preparation, filing,
prosecution, and maintenance of such Patent Right, and
re-examinations, reissues, and appeals with respect to such Patent
Right, together with the initiation or defense of interferences,
oppositions, or other similar proceedings with respect to the
particular Patent Right, and any appeals therefrom. For clarity,
“Prosecution and Maintenance” or “Prosecute and
Maintain” shall not include any other enforcement actions
taken with respect to a Patent Right.

 

“Quality Audit” has the
meaning set forth in Section 7.2.

 

“Receiver” has the meaning
set forth in the definition of “Insolvency
Event.”

 

“Regulatory
Approval” means, with respect to the Product
in the Territory, all approvals, registrations, licenses, or
authorizations from a Regulatory Authority in the Territory that
are necessary to market and sell the Product in the
Territory.

 

“Registration Authority”
has the meaning set forth in Section 15.3(b).

 

“Regulatory Documentation”
means all: (a) documentation comprising Regulatory Filings,
marketing authorizations, Regulatory Approvals, or other Permits
for any product or product candidate of CBMG or its Affiliates (or,
after the Effective Date, the Product), and including pre-clinical
and clinical data and information, regulatory materials, drug
dossiers, master files (including Drug Master Files, as defined in
21 C.F.R. Part 314.420 and any non-U.S. equivalents), and any other
reports, records, regulatory correspondence, and other materials
relating to Development or Regulatory Approval for any product or
product candidate of CBMG or its Affiliates (or, after the
Effective Date, the Product), or required to manufacture or
commercialize any product or product candidate of CBMG or its
Affiliates (or, after the Effective Date, the Product), including
any information that relates to pharmacology, toxicology,
chemistry, manufacturing, and controls data, batch records, safety,
and efficacy, and any safety database; and (b) material
correspondence and other filings relating to any product or product
candidate of CBMG or its Affiliates (or, after the Effective Date,
the Product) submitted to or received from any Governmental Entity
(including minutes and official contact reports relating to any
communications with any Governmental Entity) and relevant
supporting documents submitted to or received from Governmental
Entities with respect thereto, including all regulatory drug lists,
final versions of advertising and promotion documents, adverse
event files and complaint files.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Regulatory Filings”
means any submission to a Regulatory Authority of any appropriate
regulatory application (including any IND or MAA), including any
submission to a regulatory advisory board, marketing authorization
application, and any supplement or amendment thereto.

 

“Regulatory Requirements”
has the meaning set forth in Section 15.1(g)(i).

 

“Relevant Affiliate”
means, as to either of the Parties, and as the context requires,
any Affiliate of such Party that is intended to be a signatory to
any of the Ancillary Agreements.

 

“Renewal Term” has the
meaning set forth in Section 13.1.

 

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

 

“Required PRC Approvals” means all
Permits required for the performance of the Parties’
obligations under this Agreement and the Ancillary Agreements under
Applicable PRC Law set forth on Exhibit D.

 

“Restricted Activities”
has the meaning set forth in Section 2.5(b)(ii).

 

“ROFN Activities” has the
meaning set forth in Section 2.5(b)(ii).

 

“ROFN Notice” has the
meaning set forth in Section 2.5(b)(ii).

 

“Rules” has the meaning
set forth in Section 18.12(b).

 

“SAFE” means the State
Administration of Foreign Exchange of the PRC and its local
authorized bodies.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“SAIC” means the former
State Administration of Industry and Commerce, now part of
SAMR.

 

“Sales & Collaboration Payment
Report” means a written report showing
each of: (a) the Net Sales of the Product in the Territory
during the reporting period by Novartis and its Affiliates and
sublicensees; and (b) the collaboration payments payable, in
USD, which shall have accrued under this Agreement with respect to
such Net Sales.

 

“SAMR” means the State
Administration of Market Regulation, the Chinese regulatory body in
which the former China Food and Drug Administration and SAIC
functions have been merged following a restructuring, and, where
the context permits, including a reference to the new State Drug
Administration, and their local authorized bodies.

 

“Senior Officers” means,
with respect to Novartis, CEO, Oncology Business Unit or his/her
designee and, with respect to CBMG, CEO or his/her
designee.

 

“Shanghai Cellular” has
the meaning set forth in the first paragraph of this
Agreement.

 

“Share Purchase Agreement”
has the meaning set forth in the Recitals.

 

“Tech Transfer Work Plans”
means the CBMG Technology Tech Transfer Plan and the Product Tech
Transfer Plan.

 

“Technical Development”
means any and all technical and Manufacturing-related activities,
including test method development and stability testing, assay
development, process development, formulation development, quality
assurance and quality control development, validation and other
testing, packaging development, as well as record-keeping, data and
database development, management, storage, and retention activities
relating to any of the foregoing.

 

“Technical Development
Budget” means the budget for the
Parties’ Technical Development of the Product, which budget
is included in the Technical Development Plan.

 

“Technical Development
Costs” means the direct costs incurred by or on behalf
of a Party or its Affiliates during the Term and pursuant to this
Agreement for the Technical Development of the Product, calculated
as the sum of: [***].

 

“Technical Development
Plan” means the Technical Development plan, including
the Technical Development Budget, to be agreed to by the Parties
following the Effective Date and as in effect from time to time in
accordance with this Agreement, outlining the goals, activities,
timelines, deliverables, allocation of responsibilities between the
Parties, and the commitment of resources by the respective Parties
with respect to the Technical Development of the
Product.

 

“Term” has the meaning set
forth in Section
13.1.

 

“Territory” means the PRC.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

“Third Party” means any
Person other than a Party or an Affiliate of a Party.

 

“Third Party Infringement”
has the meaning set forth in Section 11.4(a).

 

“Transactions” means the
transactions contemplated by this Agreement and the Ancillary
Agreements.

 

“United
States” means
the United States of America, its territories, and its
possessions.

 

“USD” means the lawful
currency of the United States.

 

“Valid Claim” means a claim of an issued patent
Controlled by Novartis or its Affiliates that has not expired or
been revoked or held invalid or unenforceable by a patent office,
court, or other governmental agency of competent jurisdiction in
the Territory in a final and non-appealable judgment (or judgment
from which no appeal was taken within the allowable time
period).

 

“VIE” means Variable
Interest Entity.

 

1.2 Interpretation

 

.

(a) When a reference is
made to an Article, Section, clause, Schedule, or Exhibit, such
reference shall be to an Article, Section, clause, or Schedule of,
or Exhibit to, this Agreement unless otherwise
indicated.

 

(b) Whenever the words
“include,” “includes,”
“including,” or derivative or similar words are used in
this Agreement, they shall be deemed to be followed by the words
“without limitation.”

 

(c) Unless the context
requires otherwise, words using the singular or plural number also
include the plural or singular number, respectively, the use of any
gender herein shall be deemed to include the other genders, words
denoting natural persons shall be deemed to include business
entities and vice versa, and references to a Person are also to its
permitted successors and assigns.

 

(d) The terms
“hereof,” “herein,” “hereby,”
“hereto,” and derivative or similar words refer to this
entire Agreement (including the Exhibits and Schedules hereto) and
not merely to the specific Section, paragraph, or clause in which
such word appears, and references to “the date hereof”
means the date of this Agreement.

 

(e) The phrase
“to the extent” shall mean the degree to which a
subject or other thing extends, and such phrase shall not mean
simply “if.”

 

(f) Unless the context
requires otherwise, the word “or” shall be interpreted
to mean “and/or.”

 

                                                              

 

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IRS Employer Identification No. 86-1032927

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hereof denoted with “[***]”

 

 

  

(g) A reference to any
period of days shall be deemed to be to the relevant number of
calendar days, unless the defined term “Business
Day(s)” is used.

 

(h) With respect to the
determination of any period of time, unless otherwise set forth
herein, “from” means “from and including,”
“to” means “to but excluding,” and
“through” means “through and
including.”

 

(i) References to a
specific time shall refer to prevailing Eastern Time, unless
otherwise indicated.

 

(j) A reference to
“$,” “USD,” “U.S. Dollars,” or
“Dollars” shall mean the legal tender of the
U.S.

 

(k) A reference to
“RMB” shall mean the legal tender of the People's
Republic of China.

 

(l) Unless otherwise
defined, a reference to any accounting term shall have the meaning
as defined under GAAP.

 

(m) References to any
Governmental Entity or Regulatory Authority shall include a
reference to any successor body assuming the same or similar
regulatory or administrative functions.

 

2. LICENSES

 

2.1 License Grants to
CBMG.

 

(a) Subject to the
terms and conditions of this Agreement, during the Term, Novartis
hereby grants to CBMG a co-exclusive (with Novartis and its
Affiliates), transferrable (pursuant to Section 18.5), sublicensable (pursuant
to Section 2.3) license, under the
Novartis Technology, to Manufacture the Product in the Territory
solely for the Development (and solely in accordance with the
Development Plan) and the Commercialization of the Product in the
Territory by Novartis or its Affiliates or licensees.

 

(b) Subject to the
terms and conditions of this Agreement, during the Term, Novartis
hereby grants to CBMG a non-exclusive, royalty-free,
non-transferrable, sublicensable (pursuant to Section 2.3) license, under the
Novartis Technology, solely to perform CBMG’s other
activities under this Agreement, including under the Development
Plan.

 

2.2 License Grants to
Novartis.

 

(a) Subject to the
terms and conditions of this Agreement, CBMG hereby grants to
Novartis an exclusive, worldwide, transferrable (pursuant to
Section
18.5),
sublicensable (pursuant to Section 2.3) license, under the CBMG
Technology, to Develop, Manufacture, and Commercialize the Product
in the Field.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(b) Subject to the
terms and conditions of this Agreement, CBMG hereby grants to
Novartis a non-exclusive, royalty-free, transferrable (pursuant to
Section
18.5),
sublicensable (pursuant to Section 2.3) license, under the CBMG
Technology, to Develop, Manufacture, and Commercialize any product
(including the Product), including to perform Novartis’s
activities under this Agreement.

 

2.3 Sublicenses;
Subcontracting.

 

 

(a)

Sublicenses.

 

(i)

Subject to
Section
2.6, CBMG shall not
sublicense any of its rights under Section 2.1 to any Person without first
obtaining, in each case, the prior written consent of Novartis. If
CBMG grants any such sublicense following receipt of such consent,
it shall provide Novartis with a copy of any executed sublicense
agreement within thirty (30) days of any such agreement’s
execution.

 

(ii)

Novartis may
sublicense any of its rights under Section 2.2 to any Person
(which sublicensed rights may be further sublicensable through
multiple tiers).

 

(iii)

Each sublicense
granted by a Party pursuant to this Section 2.3(a) will be subject and
subordinate to this Agreement and will contain provisions
consistent with the applicable terms and conditions of this
Agreement. Notwithstanding anything to the contrary in any
sublicense agreement, the granting Party shall remain primarily
liable to the other Party for the performance of all of its
obligations under, and its compliance with all provisions of, this
Agreement.

 

(b)

Subcontracting.

 

(i)

CBMG shall not
subcontract to any Third Party the performance of CBMG’s
tasks and obligations under this Agreement or the Development Plan
without first obtaining, in each case, Novartis’s prior
written consent. If CBMG enters into any subcontract following
receipt of such consent, it shall provide Novartis, upon
Novartis’s request, with a copy of any executed subcontract
agreement within thirty (30) days of any such agreement’s
execution. Any subcontract permitted by this Section 2.3(b)(i) may include a
sublicense of rights necessary for the performance of the
subcontract as reasonably required; provided, that CBMG shall
remain responsible for the performance of this Agreement and shall
cause any such subcontractor to comply with all applicable terms
and conditions of this Agreement.

 

(ii)

Novartis may
exercise its rights and perform its obligations under this
Agreement itself or through any of its Affiliates or any Third
Parties.

 

2.4 No Other Rights.

 

Except as otherwise expressly provided in this Agreement,
under no circumstances will a Party or any of its Affiliates, as a
result of this Agreement, obtain any ownership interest, license,
or other right in or to any Patent Rights, Know-How, or other
intellectual property rights of the other Party, including tangible
or intangible items owned, controlled, or developed by the other
Party, or provided by the other Party to the receiving Party at any
time, in each case, pursuant to this Agreement.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

2.5 Exclusivity; Right of First
Negotiation.

 

 

(a) Exclusivity. During [***], CBMG
shall not, and shall cause its Affiliates, licensees, and
sublicensees not to, alone or with any Third Party (including
through licensing any Third Party), directly or indirectly,
Develop, Manufacture, or Commercialize any Competing Product in the
Territory.

 

(b) Right of First
Negotiation.

 

(i)

CBMG hereby grants
to Novartis the exclusive right of first negotiation, as set forth
in this Section 2.5(b), with respect to:
[***].

 

(ii)

During the
Term, CBMG shall not, and shall cause its Affiliates, licensees,
and sublicensees not to, directly or indirectly: (A) license,
transfer, sell, or otherwise grant to any Third Party any right to
Develop, Manufacture, or Commercialize any CBMG Other CART in the
Field; or (B) enter into a definitive agreement providing for a
transaction or series of transactions that would constitute a
Change of Control of CBMG (collectively, the “Restricted Activities”)
without first complying with this Section 2.5(b). In the event that CBMG
wishes to conduct any Restricted Activities, CBMG shall notify
Novartis in writing, such notice to be accompanied by the proposed
scope of the Restricted Activities it wishes to conduct (such
notice and accompanying information, the “ROFN Notice” and such
Restricted Activities set forth in the ROFN Notice, the
“ROFN
Activities”). Novartis shall have [***] from the date
on which it receives the ROFN Notice to notify CBMG whether
Novartis wishes to exercise its right of first negotiation with
respect to the ROFN Activities. Upon CBMG’s receipt of such
notice, the Parties shall enter into exclusive, good-faith
negotiations for a period no longer than [***] from CBMG’s
receipt of such notice (unless extended upon agreement of the
Parties) regarding the terms and conditions of an agreement
granting Novartis rights to conduct the ROFN
Activities.

 

(iii)

If, with
respect to any ROFN Activities: [***], CBMG shall be permitted to
undertake the proposed ROFN Activities without again complying with
this Section
2.5(b);
provided, that CBMG
shall not, during such [***] period, license, transfer, sell, or
otherwise grant (or offer to do any of the foregoing) to a Third
Party [***]. For purposes of this Section 2.5(b)(iii), [***]. In the
event that CBMG does not, for any reason, grant rights to such
Third Party with respect to such ROFN Activities within [***], then
CBMG shall not be permitted to grant rights to any Third Party to
conduct such ROFN Activities without again complying with this
Section
2.5(b).

 

2.6 Certain Terms of Novartis Third Party
Agreements.

 

.o the
extent that any license grant by Novartis to CBMG under the
Novartis Technology pursuant to Section 2.1 constitutes the grant of a
sublicense to CBMG of certain Novartis Technology that is not owned
by Novartis or any of its Affiliates, but that is in-licensed by
Novartis or any such Affiliate from a Third Party licensor pursuant
to a Novartis Third Party Agreement, then:

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(a) CBMG acknowledges
that the rights and licenses under, or with respect to, the
Novartis Technology granted by Novartis to CBMG under this
Agreement shall be no greater in scope than those granted by such
Third Party licensor to Novartis; and

 

(b) CBMG shall
comply, and shall cause its Affiliates and sublicensees to comply,
with the obligations applicable to sublicensees under such Novartis
Third Party Agreement.

 

3. GOVERNANCE

 

3.1 Alliance Managers.

 

Within
thirty (30) days following the Effective Date, each Party will
appoint (and notify the other Party in writing with respect to the
identity of) a senior representative having a general understanding
of pharmaceutical and biological Development, Manufacture, and
Commercialization issues to act as its alliance manager under this
Agreement (each, an “Alliance Manager”). The
Alliance Managers will serve as the lead contact point between the
Parties for the purpose of providing the other Party with
information on the progress of Development, Manufacture, and
Commercialization of the Product and will be primarily responsible
for: (a) facilitating the flow of information and otherwise
promoting communication, coordination, and collaboration between
the Parties; (b) providing single-point communication for seeking
consensus both internally within the respective Party’s
organization and together regarding key strategy and planning
issues, as appropriate, including facilitating review of external
corporate communications; and (c) raising cross-Party or
cross-functional disputes in a timely manner. Each Party may
replace its Alliance Manager by written notice to the other
Party.

 

3.2 Joint Oversight
Committee.

 

 

(a) No later than (30)
days after the Effective Date, the Parties shall establish the
Joint Oversight Committee, which shall facilitate communications
between the Parties, and monitor and provide strategic oversight
with respect to the activities under this Agreement, including the
Development, Manufacture, and Commercialization of the Product in
the Territory, all in accordance with this Section 3.2. The JOC shall have no
decision-making authority.

 

(b) No later than
thirty (30) days after the Effective Date, each Party shall appoint
three (3) representatives to the JOC, each of whom will have
sufficient seniority within the applicable Party or its Affiliates
and knowledge and expertise in the Development, Manufacturing, and
Commercialization of products similar to the Product to make
decisions arising within the scope of the JOC’s
responsibilities. The JOC may change its size from time to time by
mutual consent of its representatives; provided, that the JOC will
consist at all times of an equal number of representatives of each
of CBMG and Novartis. Each Party may replace its JOC
representatives at any time upon written notice to the other Party.
The JOC may invite non-representatives to participate in the
discussions and meetings of the JOC; provided, that such
participants are bound under written obligations of confidentiality
no less protective of the Parties’ Confidential Information
than those set forth in this Agreement. The JOC will be chaired by
one (1) chairperson designated by Novartis and one (1) chairperson
designated by CBMG (collectively, the “JOC Co-Chairs”), whose
responsibilities will include conducting meetings, including, when
feasible, ensuring that objectives for each meeting are set and
achieved. Responsibility for running each meeting of the JOC will
alternate between the JOC Co-Chairs from meeting-to-meeting, with
Novartis’s JOC Co-Chair running the first meeting. The JOC
Co-Chairs will prepare and circulate agendas and to ensure the
preparation of minutes. The JOC Co-Chairs shall have no additional
powers or rights beyond those held by the other JOC
representatives.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

3.3 Meetings of the Joint Oversight
Committee.

 

 
The JOC shall hold its initial meeting
no later than sixty (60) days after the Effective Date and shall
thereafter meet at least once per Calendar Quarter during the Term
unless the Parties mutually agree in writing to a different
frequency. No later than five (5) Business Days prior to any
meeting of the JOC (or such shorter time period as the Parties may
agree), the Alliance Managers will prepare and circulate an agenda
for such meeting; provided, however, that either Party may
propose additional topics to be included on such agenda, either
prior to or in the course of such meeting. Either Party may also
call a special meeting of the JOC (in person or by audio or video
teleconference) by providing at least ten (10) Business Days’
prior written notice to the other Party if such Party reasonably
believes that a significant matter must be addressed prior to the
next scheduled meeting, in which event such Party will work with
the JOC Co-Chairs and the Alliance Managers of both Parties to
provide the representatives of the JOC no later than three (3)
Business Days prior to the special meeting with an agenda for the
meeting and materials reasonably adequate to enable an informed
discussion on the matters to be considered. The JOC may meet in
person or by audio or video teleconference; provided, that at least one (1)
meeting per Calendar Year will be in person unless the Parties
mutually agree in writing to waive such requirement. In-person JOC
meetings will be held at locations alternately selected by CBMG and
by Novartis. Each Party will bear the expenses of its respective
JOC representatives’ participation in JOC meetings. Meetings
of the JOC will be effective only if at least one (1)
representative of each Party is present or participating in such
meeting. The JOC Co-Chairs or their designees will send draft
meeting documentation to each representative of the JOC for review
and approval within ten (10) Business Days after each JOC meeting.
Such documentation will be officially endorsed by the JOC at the
next JOC meeting, including reflecting any differences noted by the
Parties, and will be signed by the Alliance Managers.

 

3.4 Sub-Committees.

 

The JOC may, at any time it deems necessary or appropriate,
establish additional joint committees and delegate such of its
responsibilities as it determines appropriate to such joint
committees.

 

4. DISCLOSURE OF KNOW-HOW AND
COOPERATION

 

4.1 Disclosure of
Know-How

 

 
As soon as reasonably practicable after
the Effective Date and on a continuing basis during the Term, each
Party shall, without additional consideration, disclose to the
other Party copies of any Know-How: (a) in its Control; (b) in
existence as of the Effective Date or which arises in the course of
its performance of this Agreement; and (c) which is necessary for
the other Party to exercise its rights or fulfill its obligations
under this Agreement, including to perform the activities assigned
to it under the Development Plan and, where the other Party is
Novartis, its activities in connection with the Commercialization
of the Product.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

4.2 Cooperation.

 

From time to time during the Term, at the request of a
Party, the other Party shall, without additional consideration,
provide reasonable assistance to the requesting Party or its
Affiliates in connection with understanding and using such
Party’s Know-How for purposes consistent with licenses and
rights granted to the requesting Party under this
Agreement.

 

5. DEVELOPMENT

 

5.1 Development
Generally.

 

As between the Parties, Novartis shall control and be
responsible in its sole discretion for the Development of the
Product in the Territory. CBMG shall be responsible for conducting
certain Development activities in support of Novartis’s
Development efforts, as set forth in the Development
Plan.

 

5.2 Development Plan and Development
Budget.

 

 

() The initial
Development Plan, including the initial Development Budget, is
attached as Exhibit
B and shall remain in effect unless and until modified as
provided herein.

 

(a) The Development
Plan and Development Budget shall at all times include a reasonably
detailed written plan of the material Development activities to be
performed by each Party through the end of the next Calendar Year,
and the budget for such activities.

 

(b) The Parties will
review the Development Plan, including the Development Budget, for
potential amendments at least once each Calendar Year and will
provide any such proposed amendments to the JOC for its review and
discussion. Novartis shall have sole decision-making authority with
respect to amendments to the Development Plan. Following any such
amendment, such Development Plan and Development Budget as amended
shall be deemed to be the Development Plan and the Development
Budget.

 

5.3 Development
Activities.

 

CBMG shall perform the Development activities assigned to it
under the Development Plan.

 

5.4 Additional CBMG Development
Obligations.

 

 

(a) No less than five
(5) Business Days prior to each scheduled meeting of the JOC, CBMG
will provide Novartis’s JOC representatives with a written
report on the status and progress of its Development activities
pursuant to the Development Plan, including information on progress
versus plan, spend versus budget (on a Calendar Quarter basis),
protocol deviations, notable safety and efficacy findings
(including serious adverse events and events of interest from a
risk management perspective), inspection, and audit
findings.

 

(b) CBMG shall make
available to Novartis such information about its Development
activities pursuant to the Development Plan as may be reasonably
requested by Novartis from time to time.

 

                                                              

 

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(c) Novartis shall have
the right to review any data generated by CBMG during the conduct
of CBMG’s Development activities pursuant to the Development
Plan as may be reasonably requested by Novartis from time to
time.

 

(d) CBMG shall promptly
inform Novartis in writing about any unforeseen or material
results, problems, difficulties, or issues in connection with its
Development activities pursuant to the Development
Plan.

 

(e) CBMG shall
ensure that Novartis’s authorized representatives may, during
regular business hours: (i) examine and inspect CBMG’s,
its Affiliates’, and its permitted subcontractors facilities
used in the performance of CBMG’s Development activities
pursuant to the Development Plan; and (ii) subject to
Applicable Law, inspect all data, documentation, and work products
relating to the activities performed by CBMG, its Affiliates, or
its permitted subcontractors, in each case, generated pursuant to
the Development Plan; provided, that to the extent
CBMG does not have the right to permit Novartis to directly conduct
inspections of CBMG’s, its Affiliates’, and its
permitted subcontractors under subsections (i) or (ii) above, CBMG
agrees, upon Novartis’s request, to conduct such inspections
on Novartis’s behalf. The aforementioned right to inspect
facilities, data, documentation, and work products may be exercised
by Novartis at any time upon ten (10) Business Days’ prior
written notice. Novartis shall be responsible for all costs of any
inspections conducted pursuant to this Section 5.4(e), which costs shall be
considered Development Costs.

 

5.5 Development Costs.

 

(a) Clinical Development
Costs.

 

(i)

Initial Indication Clinical
Development Costs. Novartis shall be responsible for [***]
of Initial Indication Clinical Development Costs.

 

(ii)

Additional Indication Clinical
Development Costs. Subject to Section 5.5(c), each Party shall be
responsible for [***] of Additional Indication Clinical Development
Costs associated with an Additional Indication.

 

(b) Technical Development Costs.
The Parties shall agree on each Party’s responsibility for
Technical Development Costs no later than the date on which the
Parties finalize the Technical Development Plan.

 

(c) Reconciliation;
Deferral.

 

() Each Party shall,
within thirty (30) days following each Calendar Quarter during
which it incurs Development Costs, submit to a finance officer
designated by Novartis and a finance officer designated by Shanghai
Cellular (the “Finance Officers”) a
report which sets forth the Development Costs incurred by such
Party during such Calendar Quarter. Each such report will specify
in reasonable detail all applicable FTE Costs, Out-of-Pocket Costs,
and Other Development Expenses. Within thirty (30) days after
receipt of such reports, the Finance Officers shall determine
whether a reconciliation payment is due from Shanghai Cellular to
Novartis or from Novartis to Shanghai Cellular and, if so, the
amount of such reconciliation payment, so that CBMG and Novartis
share Development Costs in accordance with Sections 5.5(a) and 5.5(b).

 

                                                              

 

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(A) If Novartis is
required to pay such a reconciliation payment, then, subject to
Section
5.5(c)(ii), it
shall submit such payment to Shanghai Cellular within forty-five
(45) days of receipt of Shanghai Cellular’s invoice for the
amount of such reconciliation payment.

 

(B) If Shanghai
Cellular is required to pay such a reconciliation payment, then,
subject to Section
5.5(c)(ii),
Shanghai Cellular may elect to: (1) submit such payment to Novartis
within forty-five (45) days of receipt of Novartis’s invoice
for the amount of such reconciliation payment; or (2) provide
written notice to Novartis of its election to irrevocably defer
(each, a “Deferral
Election”) payment of all or a portion of such
reconciliation payment to Novartis until the First Commercial Sale
of the Product for the applicable Additional Indication in the
Territory (each deferred reconciliation payment amount, a
“Deferral
Amount,” and the aggregate amount of such deferred
reconciliation payments with respect to such Additional Indication
as of such First Commercial Sale, the “Aggregate Deferral
Amount”). Upon the First Commercial Sale of the
Product for the applicable Additional Indication in the Territory,
an amount equal to [***] of the Aggregate Deferral Amount
applicable to such Additional Indication shall immediately become
due and payable to Novartis by Shanghai Cellular.

 

(i) In the event of
any disagreement with respect to the calculation of a
reconciliation payment in accordance with this Section 5.5(c), any undisputed portion
of such reconciliation payment shall be paid or become eligible for
offset, as applicable, in accordance with Section 5.5(c)(i)(A) or
Section
5.5(c)(i)(B), as applicable, and the remaining, disputed
portion will be paid or eligible for offset, as applicable, within
ten (10) Business Days after the date on which CBMG and Novartis,
using good-faith efforts, resolve the dispute; provided, that if the Parties
cannot resolve such dispute, it shall be resolved in accordance
with Section
18.12.

 

(d) Parties’ Responsibility.
Any expenses incurred by a Party for Development activities
relating to the Product that do not fall within the definition of
“Development Costs” shall be borne solely by such
Party.

 

6. REGULATORY

 

6.1 Novartis
Responsibility.

 

As between the Parties, Novartis shall be solely responsible
in its sole discretion for regulatory activities under this
Agreement, including: (a) determining the regulatory plans and
strategies for the Product; (b) making all Regulatory Filings with
respect to the Product, except for those that are required to be
made by CBMG or its Affiliates under Applicable Law, in which case
Novartis shall have the right to review and provide its written
approval prior to the submission of such Regulatory Filings to the
SAMR or other relevant Regulatory Authority; (c) obtaining and
maintaining all Regulatory Approvals for the Product, except for
those which are required to be obtained by CBMG or its Affiliates
under Applicable Law, in which case Novartis shall have the right
to review and give its written approval prior to the submission of
any application for such Regulatory Approvals to the SAMR or other
relevant Regulatory Authority; and (d) conducting all meetings with
Regulatory Authorities in connection with the Development and
Regulatory Approval of the Product, in each case ((a) through (d)),
in the Territory. Any such activities may be performed by Novartis,
its Affiliates, or its designees.

 

                                                              

 

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6.2 CBMG Support.

 

CBMG shall cooperate with and support Novartis in connection
with Novartis’s activities pursuant to Section 6.1 to the extent reasonably
requested by Novartis from time to time. For the avoidance of
doubt, such cooperation and support shall include the provision to
Novartis of local market access and related support and
advice.

 

6.3 Ownership of Regulatory
Documentation.

 

All
Regulatory Documentation generated under this Agreement shall be
owned by and held in the name of Novartis or its designee, and any
such Regulatory Documentation issued in the name of CBMG or its
Affiliates shall promptly be assigned by CBMG to Novartis or its
designee to the extent permitted by Applicable Law or, in the event
assignment is not permitted under Applicable Law, held in trust
for, or for the sole benefit of, Novartis or its
designee.

 

6.4 Communication with Regulatory
Authorities.

 

Novartis
shall have the exclusive right to correspond or communicate with
Regulatory Authorities regarding the Product in the Territory and
other regulatory matters under this Agreement. Unless required by
Applicable Law, CBMG and its Affiliates, sublicensees, and
subcontractors shall not correspond or communicate with any
Regulatory Authority regarding the Product or any other regulatory
matters under this Agreement without first obtaining, in each case,
Novartis’s prior written consent; provided, that, upon
Novartis’s request, CBMG or its Affiliates shall attend any
meeting with a Regulatory Authority in the Territory regarding the
Product or any other regulatory matters under this Agreement. If
CBMG or its Affiliates, sublicensees, or subcontractors receives
any correspondence or other communication from a Regulatory
Authority in the Territory regarding the Product or any other
regulatory matter under this Agreement, CBMG shall provide Novartis
with access to or copies of all such material written or electronic
correspondence promptly after its receipt for Novartis’s
review and comment, and shall incorporate any and all of
Novartis’s comments thereto.

 

7. MANUFACTURE

 

7.1 Manufacturing and Supply
Agreement.

 

Novartis (or its Affiliate) and CBMG shall negotiate and
enter into the Manufacturing and Supply Agreement within ninety
(90) days after the Effective Date.

 

7.2 Quality.

 

CBMG grants to Novartis, its Affiliates, and its designees,
upon reasonable prior notice, the right to inspect CBMG’s
production facilities to perform a quality audit in order to
confirm CBMG’s compliance with cGMP, Novartis’s quality
requirements, and Applicable Law (each, a “Quality Audit”). If
Novartis reasonably believes (as a result of a condition which it
observes during a Quality Audit or otherwise) that CBMG may not be
in compliance with cGMP, Novartis’s quality requirements, or
Applicable Law, then the Parties shall discuss and agree upon any
appropriate corrective actions to address such non-compliance
(collectively, the “CAPAs”), and CBMG shall
promptly implement such CAPAs at its sole cost and
expense.

 

                                                              

 

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7.3 Costs.

 

CBMG shall bear all costs and expenses incurred by either
Party in connection with or arising out of the Tech Transfer Work
Plans.

 

8. COMMERCIALIZATION

 

8.1 Commercialization.

 

.Novartis
shall be solely responsible, at its cost and in its sole
discretion, for the Commercialization of the Product in the
Territory, including booking sales and pricing.

 

8.2 Pharmacovigilance.

 

If required by Applicable Law, within a reasonable amount of
time, not to exceed six (6) months following the Effective Date,
the Parties shall agree upon and implement a procedure for the
mutual exchange of safety information associated with the Product.
The details of the operating procedures relating to the exchange
shall be the subject of a mutually-agreed upon pharmacovigilance
agreement (the “Pharmacovigilance
Agreement”). The Pharmacovigilance Agreement shall
enable each Party to comply with its respective obligations under
Applicable Law with regard to adverse event data collection,
analysis, and reporting.

 

9. FINANCIAL
PROVISIONS

 

9.1 Collaboration Payments; Product
Price

 

 

(a) Collaboration Payment Rates.
During the Collaboration Payment Term, Novartis shall make the
following collaboration payments under this Section 9.1 to CBMG based on the
aggregate annual Net Sales of the Product in the Territory;
provided, that,
notwithstanding any other provision of this Agreement, the maximum
aggregate collaboration payments that CBMG will be entitled to
receive in any Calendar Year based on the aggregate Net Sales of
the Product in the Territory in such Calendar Year for the Initial
Indications shall be [***]. In connection with (and in no event
later than thirty (30) days following each amendment of the
Development Plan and the Development Budget which provides for the
Development of the Product for an Additional Indication in the
Territory), the Parties shall agree on the maximum aggregate
collaboration payments that CBMG will be entitled to receive based
on Net Sales of the Product in the Territory in any Calendar Year
for such Additional Indication. For clarity, the collaboration
payments shall be payable only once with respect to the same unit
of Product. All collaboration payments made pursuant to this
Section
9.1 shall be made
as provided in Article 10.

 

	

Net Sales of the Product in the Territory in a Calendar Year during
the Collaboration Payment Term

 

	

Collaboration Payment Rate

 

	

[***]

 

 

 

                                                              

 

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(b) Collaboration Payment
Term.
 The collaboration payments described in this
Section
9.1 shall be
payable on Net Sales of the Product that occur in the Territory
during the Term (the “Collaboration Payment
Term”).

 

(c) Loss of Market
Share. In the event
of a Loss of Market Share for the Product in the Territory, the Net
Sales of the Product in the Territory to be included as Net Sales
for the purpose of the calculation of collaboration payments due
under Section
9.1(a) from and
after such Loss of Market Share until the end of the Collaboration
Payment Term shall be reduced by [***].

 

(d) Third Party Obligations. In the
event that Novartis determines that any Patent Rights, Know-How, or
other intellectual property rights Controlled by a Third Party are
necessary or useful in order to Develop, Manufacture, or
Commercialize the Product in the Territory, Novartis shall have the
right (but not the obligation) to negotiate and acquire rights to
such Patent Rights, Know-How, or other intellectual property rights
through a license or otherwise (including pursuant to any
settlement agreement) and to deduct from the collaboration payments
payable by Novartis to CBMG on Net Sales of the Product pursuant to
Section
9.1 with respect to a given
Calendar Quarter [***] of the amounts paid (including [***]) by
Novartis to such Third Party with respect to the
Product.

 

(e) Product Price. The price at
which Novartis shall purchase and CBMG shall sell Product pursuant
to the Manufacturing and Supply Agreement (the “Product Price”) shall in
no event exceed the CBMG Production Costs per patient plus [***]
thereof (the “Margin”); provided, that the CBMG
Production Costs shall not exceed the applicable amount set forth
in Schedule
9.1(e) under the
heading “Product Price Cap per Calendar
Year.”

 

(f) Consideration for CBMG Collaboration
Technology. The Parties acknowledge and agree that [***]
reflects compensation for the CBMG Collaboration Technology
licensed by CBMG to Novartis under this Agreement.

 

9.2 No Projections.

 

Novartis and CBMG each acknowledge and agree that nothing in
this Agreement shall be construed as representing an estimate or
projection of anticipated sales of the Product, and that the Net
Sales levels set forth above or elsewhere in this Agreement or that
have otherwise been discussed by the Parties are merely intended to
define the collaboration payment obligations in the event such Net
Sales levels are achieved. NEITHER NOVARTIS NOR CBMG MAKES ANY
REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, THAT EITHER
PARTY OR ITS AFFILIATES OR SUBLICENSEES WILL BE ABLE TO
SUCCESSFULLY DEVELOP OR COMMERCIALIZE THE PRODUCT OR, IF
COMMERCIALIZED, THAT ANY PARTICULAR NET SALES LEVEL OF THE PRODUCT
WILL BE ACHIEVED.

 

                                                              

 

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10. PAYMENT TERMS AND
REPORTS

 

10.1 Payment Terms.

 

(a) Novartis shall
provide to Shanghai Cellular a Sales & Collaboration Payment
Report within forty-five (45) days after each Calendar Quarter
during the Collaboration Payment Term. Shanghai Cellular shall
submit an invoice substantially in the form of Exhibit F to Novartis with
respect to the collaboration payment amount shown therein. Novartis
shall pay to Shanghai Cellular all undisputed collaboration payment
amounts within forty-five (45) days after its receipt of such
invoice. Any disputes concerning collaboration payment amounts owed
by Novartis to Shanghai Cellular shall be resolved in accordance
with Section
18.12.

 

(b) All payments to be
made by a Party hereunder shall, unless otherwise agreed in writing
by the Parties (including pursuant to any Ancillary Agreement), be
made in USD by wire transfer to such bank account as the other
Party may designate. Any payment which falls due on a date which is
not a Business Day may be made on the next succeeding Business
Day.

 

10.2 Currency; Payment
Approval.

 

All
payments under this Agreement shall be payable in USD.
Notwithstanding the foregoing sentence, to the extent any Ancillary
Agreement provides that payments under such Ancillary Agreement
shall be payable in RMB, such payments shall be made in RMB. When
conversion of payments is required to be undertaken by a Party, the
USD or RMB equivalent (as applicable) shall be calculated using
such Party’s then-current standard exchange rate methodology
as consistently applied in its external reporting.

 

10.3 Tax Matters.

 

Each
Party shall be responsible for all taxes, fees, duties, levies, or
similar amounts imposed on its income, assets, capital, employment,
personnel, and right or license to do business. Except as otherwise
provided, each Party shall be responsible for its own sales tax,
use tax, excise tax, value-added tax (VAT), goods and services tax
(GST), consumption tax, and similar taxes based upon its own
activities under this Agreement. Each Party shall use reasonable
and legal efforts to reduce tax withholding, to the extent
permitted by Applicable Law, on payments made pursuant to this
Agreement. In the event any payments due under this Agreement are
subject to withholding tax under Applicable Law, the paying Party
shall deduct the respective amount from the applicable payment and
pay the withholding tax to the relevant tax authority. The paying
Party shall deliver within sixty (60) days to the other Party
evidence of such payment. Each Party shall make all reasonable
efforts to obtain relief or reduction of withholding tax under the
applicable tax treaties, including the submission or issuance of
requisite forms and information. Any such amount deducted and paid
to the applicable tax authority shall be deemed fully paid to the
other Party in satisfaction of the applicable payment obligation
under this Agreement.

 

10.4 Permits to Make Payments; Blocked
Payments.

 

 

(a) The Party
making any payment due under this Agreement shall be responsible
for applying for and obtaining any Permits from any Governmental
Entity needed to make such payments (if any), including Permits
from SAFE (if any). If, by reason of Applicable Law in the
Territory, the requisite Permits cannot be obtained, then: (i) the
Party which is due any payment under this Agreement may offset the
amount of any such unreceived payment against any amounts payable
by such Party pursuant to this Agreement or any other Ancillary
Agreement; and (ii) to the extent that such Party is not able to
fully offset such payment in accordance with (i), Novartis and
Shanghai Cellular shall in good faith negotiate on an agreement
pursuant to which such Party will receive the full benefit of the
unreceived payment, subject to Applicable Law.

 

                                                              

 

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(b) Subject to
Applicable Law and Section 10.4(a), if at any time legal
restrictions in the Territory prevent the prompt remittance of any
payments with respect to sales therein, the Party which is so
prevented shall have the right and option to make such payments by
depositing the payment amount in local currency to the other
Party’s account in a bank or depository designated by such
Party in the Territory.

 

10.5 Records and Audit
Rights.

 

Each Party shall keep complete, true, and accurate books and
records in accordance with its Accounting Standards in relation to
this Agreement, including with respect to Development Costs, Net
Sales, collaboration payments, and Product Price. Each Party will
keep such books and records for at least three (3) years following
the Calendar Year to which they pertain. Each Party (the
“Auditing
Party”) may, upon written request, cause an
internationally-recognized independent accounting firm (the
“Auditor”), which is
reasonably acceptable to the other Party (the “Audited Party”), to
inspect the relevant records of such Audited Party and its
Affiliates to verify the payments made and amounts reported by the
Audited Party and the related reports, statements, and books of
accounts, as applicable. Before beginning its audit, the Auditor
shall execute an undertaking acceptable to the Audited Party by
which the Auditor shall agree to keep confidential all information
made available to the Auditor during the audit. The Auditor shall
have the right to disclose to the Auditing Party only its
conclusions regarding any payments owed under this Agreement. Each
Party and its Affiliates and sublicensees shall make their records
available for inspection by the Auditor during regular business
hours at such place or places where such records are customarily
kept, upon receipt of reasonable advance notice from the Auditing
Party. The records shall be reviewed solely to verify the accuracy
of the Audited Party’s collaboration payments and other
payment obligations and compliance with the financial terms of this
Agreement. Such inspection right shall not be exercised more than
once without cause in any Calendar Year and not more frequently
than once without cause with respect to records covering any
specific period of time. In addition, the Auditing Party shall only
be entitled to audit the books and records of the Audited Party
from the three (3) Calendar Years prior to the Calendar Year in
which an audit request is made. The Auditing Party agrees to hold
in strict confidence all information received and all information
learned in the course of any audit, except to the extent necessary
to enforce its rights under this Agreement or to the extent
required to comply with Applicable Law or judicial order. The
Auditor shall provide its audit report and basis for any
determination to the Audited Party at the time such report is
provided to the Auditing Party before it is considered final. In
the event that the final result of the inspection reveals an
underpayment or an overpayment by either Party, the underpaid or
overpaid amount shall be settled promptly. The Auditing Party shall
pay for any audit, as well as its expenses associated with
enforcing its rights with respect to any payments hereunder;
provided, that, if
an underpayment of amounts due or overpayment of amounts payable by
the Auditing Party of more than twenty percent (20%) of the total
payments due hereunder for the applicable year is discovered, the
fees and expenses charged by the Auditor shall be paid by Audited
Party.

 

                                                              

 

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hereof denoted with “[***]”

 

 

  

11. INTELLECTUAL
PROPERTY

 

11.1 Ownership.

 

 

(a) Background Intellectual
Property. As between the Parties, and subject to the
licenses granted under this Agreement, each Party retains all
right, title, and interest in and to all Patent Rights, Know-How,
and other intellectual property rights that such Party Controls as
of the Effective Date or that it develops or otherwise acquires
after the Effective Date outside the performance of the activities
under this Agreement or the Ancillary Agreements. Without limiting
the generality of the foregoing, as between the Parties, Novartis
shall own all right, title, and interest in and to the Novartis
Background Intellectual Property, and CBMG shall own all right,
title, and interest in and to the CBMG Background Intellectual
Property.

 

(b) Collaboration
Technology.

 

(i)

All determinations
of inventorship under this Agreement or the Ancillary Agreements,
including with respect to Collaboration Technology, shall be made
in accordance with U.S. patent law.

 

(ii)

As between the
Parties, Novartis shall own all right, title, and interest in and
to any and all Novartis Collaboration Technology.

 

(iii)

As between the
Parties, CBMG shall own all right, title, and interest in and to
any and all CBMG Collaboration Technology.

 

(iv)

Each Party shall
own an equal, undivided one-half (1/2) interest in any and all
Joint Collaboration Technology.

 

(v)

Each Party shall
and hereby does assign to the other Party any right, title, and
interest it may have in or to any Collaboration Technology, and
agrees to execute such documents and take such other actions
reasonably requested by the other Party to the extent necessary to
give effect to the ownership allocation set forth in this
Section
11.1(b).

 

(c) Invention Protection. Each
Party shall ensure that the employees, officers, and independent
contractors (excluding any sublicensees or subcontractors, each of
which are subject to Section 2.3) of such Party or its
respective Affiliates performing activities under this Agreement or
any Ancillary Agreement shall, prior to commencing such work, be
bound by written invention assignment obligations requiring: (i)
prompt reporting of any Patent Rights, Know-How, or other
intellectual property rights arising from such work; (ii)
assignment to the applicable Party or Affiliate of all of his or
her right, title, and interest in and to any Patent Rights,
Know-How, or other intellectual property rights arising from such
work; (iii) cooperation in the Prosecution and Maintenance,
defense, and enforcement of any Patent Right that is required to be
assigned under this Agreement; and (iv) performance of all acts and
signing, executing, acknowledging, and delivering any and all
documents required for effecting the obligations and purposes of
this Agreement. To the extent that any employee inventors in the
PRC claim rights to any invention that relates to the subject
matter of this Agreement or any Ancillary Agreement (including
rights to any Collaboration Technology), then the Party which
suffers such Claim shall indemnify the other Party and hold such
other Party harmless pursuant to Section 16.1(a) or Section 16.2(a) (as the case may
be).

 

                                                              

 

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hereof denoted with “[***]”

 

 

  

11.2 Prosecution and
Maintenance.

 

(a) Background Intellectual
Property. Novartis shall be solely responsible in its sole
discretion for the Prosecution and Maintenance of the Novartis
Background Intellectual Property at Novartis’s sole cost and
expense, and CBMG shall be solely responsible for the Prosecution
and Maintenance of the CBMG Background Intellectual Property at
CBMG’s sole cost and expense.

 

(b) Novartis Patents; Collaboration Technology.
Novartis shall be solely responsible in its sole discretion for the
Prosecution and Maintenance, at Novartis’s sole cost and
expense, of: (i) the Novartis Patents; and (ii) the Patent Rights
claiming or directed to any and all Collaboration
Technology.

 

(c)

CBMG Patents.

 

(i)

CBMG shall, in
consultation with Novartis, be responsible for the Prosecution and
Maintenance of the CBMG Patents at CBMG’s cost and expense.
CBMG shall consult with Novartis and keep Novartis reasonably
informed of the status of such CBMG Patents, provide copies of all
relevant documents in a timely manner for Novartis’s review
and comment, and reasonably consider and use good-faith efforts to
incorporate any and all of Novartis’s comments.

 

(ii)

CBMG shall notify
Novartis in writing of any decision not to file applications for,
to cease the Prosecution and Maintenance of, or to not continue to
pay the expenses with respect to the Prosecution and Maintenance
of, any CBMG Patent, including any decision to abandon any pending
patent application or issued patent within the CBMG Patents. CBMG
shall provide such notice at least ninety (90) days prior to any
relevant filing or payment due date, or any other due date that
requires action, in connection with such CBMG Patent or claim
thereof. In such event, CBMG shall permit Novartis, at
Novartis’s sole discretion, cost, and expense, to file or to
continue the Prosecution and Maintenance of such CBMG Patent. If
Novartis continues to Prosecute and Maintain such CBMG Patent,
then:

 

(A)

Such CBMG Patent
shall remain in the Control of CBMG and shall be included in the
definition of “CBMG Patents” for the purpose of this
Agreement;

 

(B)

CBMG shall fully
cooperate with Novartis in connection with the Prosecution and
Maintenance of such CBMG Patent to the extent reasonably requested
by Novartis, including by providing reasonable access to relevant
persons and executing all documentation reasonably requested by
Novartis; and

 

                                                              

 

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Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(C)

Novartis shall keep
CBMG reasonably informed of the status of such CBMG Patent and
shall notify CBMG in writing at least forty-five (45) days prior to
any relevant filing or payment due date of any decision not to file
applications for, to cease the Prosecution and Maintenance of, or
to not continue to pay the expenses of the Prosecution and
Maintenance of, such CBMG Patent, including any decision to abandon
any pending patent application or issued patent within such CBMG
Patent, in which case CBMG shall be entitled to reassume the sole
right for the Prosecution and Maintenance of such CBMG Patent at
its sole discretion (subject to this Section 11.2(c)), cost, and
expense.

 

11.3 Enforcement.

 

(a) Each Party
shall promptly notify the other Party of any infringement by a
Third Party of any Novartis Patent or CBMG Patent in the Territory
of which it becomes aware, including any declaratory judgment,
opposition, or similar action alleging the invalidity,
unenforceability, or non-infringement with respect to such Novartis
Patent or CBMG Patent (collectively, “Competing
Infringement”).

 

(b) Novartis shall have
the sole right, but not the obligation, to bring and control any
legal action in connection with any Competing Infringement of any
Novartis Patent as it reasonably determines appropriate, at its
cost and expense.

 

(c) Novartis shall
have the first right, but not the obligation, to bring and control
any legal action in connection with the Competing Infringement of
any CBMG Patent as it reasonably determines appropriate, at its
cost and expense, and CBMG shall have the right, at its own cost
and expense, to be represented in any such action by counsel of its
own choice. If Novartis does not wish to bring an action with
respect to, or to otherwise terminate, any such Competing
Infringement of any CBMG Patent, then it shall provide written
notice thereof to CBMG: (i) within sixty (60) days following the
notice of alleged Competing Infringement; or (ii) prior to three
(3) months before the time limit, if any, specified under
Applicable Law for the filing of such actions, whichever comes
first, then, upon receipt of such notice (or, if no such notice is
provided by Novartis, upon the earlier of (i) and (ii)), CBMG shall
have the right, but not the obligation, to bring and control any
such action at its own expense and by counsel of its own choice,
and Novartis shall have the right (but not the obligation), at its
own expense, to be represented in any such action by counsel of its
own choice; provided, however, that if Novartis
notifies CBMG in writing prior to fifteen (15) days before such
time limit for the filing of any such action that Novartis intends
to file such action before the time limit, then Novartis shall be
obligated to file such action before the time limit and to
reimburse CBMG for its reasonable and documented costs and expenses
(including reasonable attorneys’ and professional fees)
incurred in connection with CBMG’s preparation of such
action, and CBMG shall not have the right to bring and control such
action.

 

(d) At the request and
expense of the Party bringing and controlling an action pursuant to
Section
11.3(b) or
Section
11.3(c), the other
Party shall provide reasonable assistance in connection therewith,
including by executing reasonably appropriate documents,
cooperating in discovery, and joining as a party to the action if
required.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

11.4 Defense.

 

(a) Each Party
shall promptly notify the other Party of any actual or potential
claim alleging that the Development, Manufacture, or
Commercialization of the Product in the Territory infringes,
misappropriates, or otherwise violates any Patent Rights, Know-How,
or other intellectual property rights of any Third Party
(“Third Party
Infringement”). In any such instance, the Parties
shall as soon as practicable thereafter discuss in good faith the
best response to such notice of Third Party
Infringement.

 

(b) Novartis shall
have the first right, but not the obligation, to defend any such
claim of Third Party Infringement, at Novartis’s sole
discretion, cost, and expense, and CBMG shall have the right to be
represented in any such action by counsel of its own choice at
CBMG’s sole cost and expense.

 

(c) If Novartis
declines or fails to assert its intention to defend any such claim
of Third Party Infringement within ninety (90) days following its
receipt or sending of a notice, as applicable, pursuant to
Section 11.4(b),
then CBMG shall have the right, but not the obligation, to defend
such claim of Third Party Infringement at CBMG’s sole
discretion, cost, and expense, and Novartis shall have the right
(but not the obligation) to be represented in any such action by
counsel of its own choice at Novartis’s sole cost and
expense.

 

(d) In no event shall a
Party settle or otherwise compromise any Third Party Infringement
by admitting that any Novartis Patent (in the case of CBMG) or CBMG
Patent (in the case of Novartis) is invalid or unenforceable
without first obtaining, in each case, the prior written consent of
the other Party, which consent shall not be unreasonably withheld,
conditioned, or delayed.

 

11.5 Recovery.

 

.Any
recovery received as a result of any action under Section 11.3 or Section 11.4 shall be allocated in the
following order: (a) to reimburse the Party taking legal action for
the costs and expenses (including attorneys’ and professional
fees) incurred by such Party in connection with such action, to the
extent not previously reimbursed; (b) to reimburse the Party not
taking the lead in a legal action but which joins such legal action
as provided herein, for the costs and expenses (including
attorneys’ and professional fees) incurred by such Party in
connection with such action, to the extent not previously
reimbursed; and (c) the remainder of the recovery shall be retained
by Novartis.

 

11.6 Trademarks.

 

Novartis
shall have the right (but not the obligation) to brand the Product
using Novartis-related trademarks and any other trademarks and
trade names it determines appropriate in its sole discretion for
the Product, which may vary within the Territory (the
“Product
Marks”). Novartis shall own all rights in the Product
Marks and shall register and maintain the Product Marks to the
extent it determines reasonably necessary.

 

11.7 Patent Extensions.

 

Upon Novartis’s request, CBMG shall cooperate in
obtaining patent term restoration, supplemental protection
certificates or their equivalents, and patent term extensions
(collectively, “Patent Extensions”) with
respect to the CBMG Patents, where applicable, at Novartis’s
sole cost and expense. If the Parties agree on a Patent Extension
for a CBMG Patent, CBMG shall provide all reasonable assistance
requested by Novartis, including permitting Novartis to proceed
with applications for such Patent Extensions in the name of CBMG,
if deemed appropriate by Novartis, and executing documents and
providing any relevant information and assistance to
Novartis.

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

12. CONFIDENTIALITY

 

12.1 Duty of
Confidence.

 

(a) Subject to the
other provisions of this Article 12, all Confidential
Information disclosed by a Party or its Affiliates under this
Agreement shall be maintained in confidence and otherwise
safeguarded by the recipient Party and, as the Party shall cause,
its Affiliates. The recipient Party may only use such Confidential
Information for the purposes of this Agreement and pursuant to the
rights granted to the recipient Party under this Agreement. Subject
to the other provisions of this Article 12, the recipient Party and
its Affiliates shall hold as confidential such Confidential
Information of the other Party or its Affiliates in the same manner
and with the same protection as the recipient Party maintains its
own confidential information, but in any event with no less than
reasonable protections which are customary in the biopharmaceutical
industry. Subject to the other provisions of this Article 12 and Article 14, a recipient Party may only
disclose Confidential Information of the other Party to its
Affiliates and licensees or sublicensees and their
respective employees, directors, agents, contractors,
consultants, and advisers, in each case, solely to the extent
reasonably necessary for the purposes of, and for those matters
undertaken pursuant to, this Agreement and, in the case of
Novartis, in connection with the Development, Manufacture, or
Commercialization of the Product outside the Territory;
provided, that any
such Persons is bound to maintain the confidentiality of the
Confidential Information in a manner consistent with the
confidentiality provisions of this Agreement.

 

(b) Subject to
Section 12.3, CBMG shall maintain in
confidence and otherwise safeguard the Novartis Know-How to the
extent such Novartis Know-How is of a confidential and proprietary
nature.

 

12.2 Exceptions.

 

The
obligations under this Article 12 shall not apply to any
information to the extent that such information:

 

(a) is (at the time of
disclosure) or becomes (after the time of disclosure) known to the
public or part of the public domain through no breach of this
Agreement by the recipient Party or its Affiliates;

 

(b) was known to, or
was otherwise in the possession of, the recipient Party or its
Affiliates, as evidenced by written records, prior to the time of
disclosure by the disclosing Party or any of its
Affiliates;

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(c) is disclosed to the
recipient Party or any of its Affiliates on a non-confidential
basis by a Third Party who is entitled to disclose it without
breaching any confidentiality obligation to the disclosing Party or
any of its Affiliates; or

 

(d) is independently
developed by or on behalf of the recipient Party or its Affiliates,
as evidenced by written records, without reference to the
Confidential Information disclosed by the disclosing Party or its
Affiliates to the recipient Party or its Affiliates under this
Agreement.

 

Specific
aspects or details of Confidential Information shall not be deemed
to be within the public domain or in the possession of the
recipient Party merely because the Confidential Information is
embraced by more general information in the public domain or in the
possession of the recipient Party. Further, any combination of
Confidential Information shall not be considered in the public
domain or in the possession of the recipient Party merely because
individual elements of such Confidential Information are in the
public domain or in the possession of the recipient Party, unless
the combination and its principles are in the public domain or in
the possession of the recipient Party.

 

12.3 Authorized
Disclosures.

 

(a) In addition to
disclosures allowed under Section 12.2, Novartis may disclose
CBMG’s or its Affiliates’ Confidential Information to
the extent such disclosure is necessary in the following instances:
(i) in connection with the Prosecution and Maintenance of
Patent Rights as permitted by this Agreement; (ii) in
connection with Regulatory Filings for the Product; (iii) in
connection with prosecuting or defending litigation as permitted by
this Agreement; (iv) in complying with applicable court orders
or governmental regulations (including securities regulations); (v)
in connection with the sale of all or substantially all of its
business or assets to which this Agreement relates; or (vi) to
the extent otherwise necessary or appropriate in connection with
exercising the licenses and other rights granted to it
hereunder.

 

(b) In addition,
Novartis or its Affiliates or sublicensees may disclose
CBMG’s or CBMG’s Affiliates’ Confidential
Information to Third Parties as may be necessary or useful in
connection with the Development or Commercialization of the Product
as contemplated by this Agreement, including in connection with
subcontracting transactions.

 

(c) In the event the
recipient Party is required to disclose Confidential Information of
the disclosing Party pursuant to Applicable Law or in connection
with bona fide legal process, including disclosures of the type
contemplated by Section 12.3(a)(iv), such disclosure shall not
be deemed a breach of this Agreement; provided, that the recipient
Party: (i) informs the disclosing Party as soon as reasonably
practicable following it becoming aware of the required disclosure;
(ii) limits the disclosure to the required purpose; and
(iii) at the disclosing Party’s request and expense,
assists in attempting to object to or limit the required
disclosure.

 

12.4 Terms of this
Agreement.

 

                                                              

 

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Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(a) Each of the Parties
agrees not to disclose to any Third Party the terms and conditions
of this Agreement without first obtaining, in each case, the prior
written consent of the other Party, except that either Party may
disclose this Agreement to its Affiliates, licensors, licensees, or
sublicensees and their respective employees, directors,
agents, contractors, consultants, and advisers, or as otherwise
permitted for a disclosure of Confidential Information in this
Article
12.

 

(b) Each Party shall
give the other Parties a reasonable opportunity to review those
portions of all filings with the United States Securities and
Exchange Commission (or any stock exchange, including Nasdaq, or
any similar regulatory agency in any country other than the United
States) describing the terms and conditions of this Agreement
(including any filings of this Agreement) prior to submission of
such filings, and shall give due consideration to any reasonable
comments by the non-filing Parties with respect to such filing,
including the provisions of this Agreement for which confidential
treatment should be sought.

 

12.5 Trade Secrets.

 

(a) Either Party
may, from time to time, identify and designate items of Know-How
disclosed hereunder by or on behalf of such Party as being a trade
secret by: (i) if such Know-How is disclosed in writing or other
tangible form, marking such Know-How as “Trade Secret”
or similar manner to expressly designate it as a trade secret; or
(ii) if such Know-How is disclosed in any other manner, by
expressly indicating that such Know-How is a trade secret at the
time of initial disclosure and promptly thereafter providing the
other Party a written description of such Know-How that is marked
in a manner to expressly identify such Know-How and indicate it is
a trade secret (such Know-How so identified and designated as a
trade secret, collectively, in the case of CBMG,
“CBMG Trade
Secrets” and, in the case of Novartis,
“Novartis Trade
Secrets”).

 

(b) Novartis shall have
the right to use and disclose CBMG Trade Secrets and CBMG shall
have the right to use and disclose Novartis Trade Secrets, in each
case, solely to the extent permitted under this Agreement or the
Manufacturing and Supply Agreement; provided, however, that: (i) any such use
or disclosure shall be limited to CBMG or Novartis’s
Affiliates and licensees, sublicensees, and Third Parties with whom
Novartis or CBMG, as applicable, has a bona fide contractual
relationship and their respective employees, directors, agents,
contractors, consultants, and advisors, in each case, solely to the
extent such Person is bound by written obligations of
confidentiality (including of non-use and non-disclosure) as
protective of such CBMG Trade Secrets or Novartis Trade Secrets, as
applicable, as those set forth in this Agreement; and (ii) Novartis
may use and disclose CBMG Trade Secrets and CBMG may use and
disclose Novartis Trade Secrets, in each case, in accordance with
Sections
12.2 and
12.3. Novartis
shall not use or disclose any CBMG Trade Secrets for any other
purpose, or otherwise authorize the same. CBMG shall not use or
disclose any Novartis Trade Secrets for any other purpose, or
otherwise authorize the same.

 

(c) Without limiting
the foregoing, Novartis and CBMG shall take reasonable measures to
protect the secrecy of and avoid disclosure and unauthorized use of
the CBMG Trade Secrets and Novartis Trade Secrets, as applicable,
including by taking at least those measures that it employs to
protect its own trade secrets.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(d) Neither CBMG nor
any of its Affiliates shall be obligated under this Agreement or
any Ancillary Agreement to disclose or transfer to Novartis or its
Affiliates any trade secret of CBMG or its Affiliates, except as
expressly provided under this Agreement or any Ancillary Agreement.
Neither Novartis nor any of its Affiliates shall be obligated under
this Agreement or any Ancillary Agreement to disclose or transfer
to CBMG or its Affiliates any trade secret of Novartis or its
Affiliates, except as expressly provided under this Agreement or
any Ancillary Agreement.

 

(e) For clarity: (i)
CBMG Trade Secrets shall constitute Confidential Information of
CBMG; and (ii) Novartis Trade Secrets shall constitute Confidential
Information of Novartis.

 

(f) In the event of a
conflict or inconsistency between this Section 12.5 and any other provision of
Article
12 or Section 11.1, such other provision of
Article
12 or Section 11.1 will control.

 

13. TERM AND
TERMINATION

 

13.1 Term.

 

The
term of this Agreement will commence upon the Effective Date and
shall continue, unless earlier terminated as permitted by this
Agreement, until the ten (10)-year anniversary of the Effective
Date (the “Initial
Term”). Thereafter, this Agreement shall be
automatically renewed for consecutive two (2)-year periods (each, a
“Renewal
Term”) (each Renewal Term, collectively with the
Initial Term, the “Term”) unless terminated
by Novartis by written notice to CBMG at least ninety (90) days
prior to such automatic renewal.

 

13.2 Termination for
Breach.

 

(a) If either Party is
in material breach of any material obligation under this Agreement,
the non-breaching Party may provide written notice to the breaching
Party specifying the claimed particulars of such material breach,
and in the event such material breach is capable of being cured but
is not cured within ninety (90) days after the receipt by the
breaching Party of such notice, then subject to Section 13.2(c), the non-breaching
Party shall have the right to terminate this Agreement immediately
by giving written notice to the breaching Party to such effect;
provided,
however, that if
such breach is capable of being cured but cannot be cured within
such ninety (90)-day period and the breaching Party initiates
actions to cure such breach within such period and thereafter
diligently pursues such actions, the non-breaching Party shall
grant the breaching Party such additional period as is reasonable
under the circumstances to cure such breach. For clarity, in the
event that a material breach is not capable of being cured, then
subject to Section
13.2(c), the
non-breaching Party shall have the right to terminate this
Agreement immediately by giving written notice to the breaching
Party to such effect.

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(b) In the event that
Novartis is the non-breaching Party referenced in Section 13.2(a), without
limiting any of its other rights or remedies under this Agreement
or otherwise, Novartis may, in lieu of exercising its right to
terminate this Agreement, provide written notice to CBMG following
the expiration of the applicable cure period that: (i) this
Agreement shall continue in full force and effect; and (ii) from
and after expiration of the applicable cure period, each
collaboration payment, as calculated under Section 9.1 and payable under
Section
10.1, shall be
reduced by fifty percent (50%).

 

(c) In the event
that arbitration is commenced pursuant to Section 18.12 with respect to any
alleged breach hereunder, no purported termination of this
Agreement pursuant to this Section 13.2 shall take effect until
the resolution of such arbitration.

 

13.3 Termination by Novartis for Change in
Applicable Law or
Action of a Governmental Entity.

 

Novartis
may terminate this Agreement upon sixty (60) days’ prior
written notice where any Applicable Law is enacted or any existing
Applicable Law is amended, supplemented, or otherwise modified, or
any Governmental Entity takes any action, including with respect to
regulation of VIEs generally or CBMG’s VIE structure
specifically, any Requisition of Scientific Data, or any
requisition or seizure of any of CBMG’s or its
Affiliates’ other assets (including CBMG’s or its
Affiliates’ manufacturing facilities) which are material to
its business, in each case, in a manner which Novartis, in its sole
discretion, determines renders illegal or restricts or adversely
affects any activity contemplated by this Agreement. During such
sixty (60)-day period, neither Party shall be obligated to perform
under this Agreement to the extent that it reasonably believes such
performance would violate Applicable Law. For purposes hereof,
“Requisition of Scientific Data” means any instance
where a Governmental Entity in the PRC requires, pursuant to
Article 24 thereof, scientific data as defined under the Scientific
Data Management Procedures issued by the State Council General
Office with effect from March 17, 2018 to be disclosed to any
Governmental Entity in the PRC.

 

13.4 Termination by Novartis for Material
Safety Issue.

 

Novartis may terminate this Agreement upon sixty (60)
days’ prior written notice where it determines in its sole
discretion that a safety issue exists with respect to the
Development, Manufacture, or Commercialization of the Product. In
connection with such termination, CBMG shall provide all assistance
reasonably requested by Novartis during such period as is
reasonably required to identify, further characterize, and fully
document such safety issue. During such sixty (60)-day period,
Novartis shall not be required to undertake any Development,
Manufacturing, or Commercialization activities or any other
activities, in each case, which it believes would implicate a
material safety issue.

 

13.5 Termination by Novartis for Failure to
Obtain Required PRC Approvals for DLBCL.

 

Novartis may terminate this Agreement effective immediately
where any Required PRC Approval which is necessary for the
Development, Manufacture, or Commercialization of the Product for
DLBCL is not obtained by the applicable Party(ies) within eighteen
(18) months after the Effective Date.

 

13.6 Termination by Novartis for Failure to
Execute Ancillary Agreements.

 

Novartis may terminate this Agreement effective immediately
if any of the Ancillary Agreements is not executed within six (6)
months after the Effective Date.

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

13.7 Termination by Novartis for Quality
Audit Failure.

 

Novartis may terminate this Agreement effective immediately
if: (a) Novartis reasonably believes (as a result of a condition
which it observes during a Quality Audit or otherwise) that CBMG
may not be in compliance with cGMP, Novartis’s quality
requirements, or Applicable Law; and (b) CBMG fails to successfully
implement the CAPAs, as determined in Novartis’s sole
discretion, within sixty (60) days following the Parties’
agreement on such CAPAs in accordance with Section 7.2.

 

13.8 Termination by Novartis for Failure to
Finalize Tech Transfer Work Plans.

 

Novartis may terminate this Agreement effective immediately
if the Tech Transfer Work Plans are not finalized within thirty
(30) days after the Effective Date in accordance with Section 15.3(a).

 

13.9 Termination by Novartis for Expiration
or Termination of an Ancillary Agreement.

 

Novartis may terminate this Agreement effective immediately
upon the expiration or termination of any Ancillary
Agreement.

 

13.10 Termination by Novartis for Change of
Control.

 

Novartis may terminate this Agreement upon sixty (60)
days’ prior written notice upon a Change of Control of CBMG
or CBMG’s or any Affiliate’s entry into a definitive
agreement providing for a transaction or series of transactions
that would constitute a Change of Control of CBMG; provided, that, at the
applicable time, the Acquirer: (a) is researching, developing,
manufacturing, or commercializing any cell therapy or gene therapy
product, service, or technology that Novartis determines competes
with any cell therapy or gene therapy product, service, or
technology of Novartis or any of its Affiliates; or (b) has not
been, during the five (5) consecutive Calendar Years immediately
preceding such time, in full compliance with all Regulatory
Requirements and Novartis internal regulatory and compliance
standards; or (c) is researching, developing, manufacturing, or
commercializing a Competing Product; or (d) recorded greater than
[***] in worldwide net sales during the prior twelve (12)-month
period (in each case, (a) through (d), as determined in
Novartis’s sole discretion).

 

13.11 Termination by Novartis for Third
Party Necessary Patent Rights.

 

Novartis may terminate this Agreement upon sixty (60)
days’ prior written notice where Novartis determines, in its
sole discretion, that a Third Party Controls a Patent Right which
is necessary for the Development, Manufacture, or Commercialization
of the Product in the Territory.

 

13.12 Termination by Novartis for
Termination or Diminishment of License under Novartis Third Party
Agreement.

 

Novartis may terminate this Agreement upon sixty (60)
days’ prior written notice where: (a) any Novartis Third
Party Agreement is terminated; or (b) the scope or exclusivity of
any license granted to Novartis under any Novartis Third Party
Agreement is diminished.

 

13.13 Termination by Novartis for Loss of
Market Share.

 

Novartis may terminate this Agreement upon sixty (60)
days’ prior written notice in the event of a Loss of Market
Share.

 

13.14 Termination by Novartis for
Non-Viability of Product Commercialization.

 

Novartis
may terminate this Agreement upon sixty (60) days’ prior
written notice where Novartis determines, in its sole discretion,
that the Commercialization of the Product in the Territory is not
commercially viable.

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

13.15 Termination by Novartis for
Divestiture of the Product.

 

Novartis may terminate this Agreement effective immediately
where Novartis sells, assigns, transfers, conveys, licenses, or
otherwise divests to a Third Party any material right in and to the
Product in the Territory.

 

13.16 Termination by Novartis for Wind-Down
of Product-Related Activities.

 

Novartis may terminate this Agreement effective immediately
where Novartis ceases all material development, manufacture, and
commercialization activities with respect to the Product in the
Territory.

 

13.17 Termination for
Insolvency.

 

Either Party may terminate this Agreement upon written
notice if an Insolvency Event occurs in relation to the other
Party. If a Party becomes aware of the likely occurrence of any
Insolvency Event in regard to that Party, it shall promptly so
notify the other Party in sufficient time to give the other Party
sufficient notice to protect its interests under this Agreement.
Novartis may terminate this Agreement in the event CBMG rejects
this Agreement under Section 365 of the United States
Bankruptcy Code, 11 U.S.C. § 101 et
seq.

 

14. EFFECTS OF EXPIRATION OR
TERMINATION

 

14.1 Effects of Expiration or
Termination.

 

Upon
the expiration or termination of this Agreement for any reason, the
following consequences shall apply:

 

(a) Each of
CBMG’s and Novartis’s rights and obligations under this
Agreement shall terminate, except as otherwise contemplated by this
Article
14.

 

(b) Each Party shall,
upon receipt of a written request from the other Party following
the expiration or termination of this Agreement, promptly return to
the other Party (or, where the requesting Party is CBMG, destroy)
all Confidential Information of such other Party, including all
reproductions and copies thereof together with all internal
material and documents generated by it containing Confidential
Information or references thereto, from which references the
substance of the Confidential Information can be implied or
understood and shall delete all references thereto stored
electronically; provided, that: (i) one (1)
copy of all such Confidential Information may be retained by either
Party in its confidential files for archive purposes; and (ii)
Novartis shall be entitled to retain and use any such Confidential
Information in connection with exercising any of its rights which
survive expiration or termination in accordance with this
Article
14.

 

(c) In the event there
are any ongoing Clinical Studies of the Product in the Territory as
of the effective date of expiration or termination of this
Agreement, at Novartis’s request, CBMG agrees to continue
supporting such Clinical Studies to the extent contemplated in the
Development Plan in effect as of the effective date of expiration
or termination of this Agreement or, in the case of Clinical
Studies being conducted by or on behalf of CBMG, at
Novartis’s request, to promptly transition to Novartis or its
designee CBMG’s responsibilities for such Clinical Studies or
portions thereof. Development Costs incurred by the Parties in
connection with any such support or transition shall be subject to
cost-sharing in accordance with Section 5.5(a)(ii).

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(d) At Novartis’s
request, CBMG shall transition to Novartis any arrangement with any
contractor from which CBMG or its Affiliates had arranged to obtain
supply of the Product or any related materials in accordance with
the Manufacturing and Supply Agreement. In addition, CBMG shall
support a full technical transfer of the Product to Novartis or its
designee in accordance with the Manufacturing and Supply Agreement.
CBMG shall promptly provide to Novartis a copy of all data and
other Know-How pertaining to the Manufacture of the Product to the
extent not previously provided to Novartis, and Novartis shall have
the right to use (and authorize the use of) and to disclose all
such data and other Know-How following the expiration or
termination of this Agreement for purposes of Manufacturing the
Product and otherwise exercising its rights under this Agreement
which survive termination in accordance with this Article 14. Further, to the extent CBMG
has any remaining obligations under the Tech Transfer Work Plans,
CBMG shall promptly complete such activities in accordance
therewith.

 

(e) At Novartis’s
request, CBMG and its Affiliates shall transfer to Novartis or its
designees all Regulatory Filings and other Regulatory Documentation
relating to the Product.

 

(f) Section 12.1(b) shall cease to apply,
and Novartis shall be free to use and disclose without restriction
all CBMG Know-How. In addition, CBMG shall promptly provide to
Novartis a copy of all such Know-How, to the extent not previously
provided to Novartis.

 

14.2 Survival.

 

In
addition to any other provisions of this Agreement that are
elsewhere expressly stated to survive, the provisions of
Articles 1
(Definitions and Interpretation), 10 (Payment Terms and Reports),
14 (Effects of
Expiration or Termination), 16 (Indemnification and
Liability), and 18
(Miscellaneous) and
Sections 2.2(b)
(License Grants to Novartis), 2.3(a)(ii) (Sublicenses),
2.5(a)
(Exclusivity), 5.5
(Development Costs), 11.1 (Ownership), 15.1 (Representations and
Warranties by CBMG), 15.2 (Representations and
Warranties by Novartis), and 15.5 (No Other Warranties)
shall survive the expiration or termination of this Agreement for
any reason, in accordance with their respective terms and
conditions, and for the duration stated, and where no duration is
stated, shall survive indefinitely. In addition, the provisions of
Article 12 shall survive the
termination or expiration of this Agreement for a period of ten
(10) years.

 

14.3 Accrued
Obligations.

 

Except
as otherwise expressly provided herein, the expiration or
termination of this Agreement for any reason shall not release
either Party from any liability that, at the time of such
expiration or termination, has already accrued to the other Party
or that is attributable to a period of time prior to such
expiration or termination, nor will any expiration or termination
of this Agreement preclude either Party from pursuing all rights
and remedies it may have under this Agreement, or at law or in
equity, with respect to breach of this Agreement prior to such
expiration or termination.

 

14.4 Termination Not Sole
Remedy.

 

Termination
is not the sole remedy under this Agreement and, whether or not
termination is effected and notwithstanding anything contained in
this Agreement to the contrary, all other remedies at law or in
equity will remain available except as agreed to otherwise
herein.

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

15. REPRESENTATIONS, WARRANTIES, AND
COVENANTS

 

15.1 Representations and Warranties by
CBMG.

 

CBMG
represents and warrants to Novartis, as of the Effective Date, as
follows:

 

(a) Due Organization and Good
Standing. CBMG, and each of its Relevant Affiliates, is a
corporation or other entity duly organized, validly existing, and,
where applicable, in good standing under the laws of its
jurisdiction of organization, and has the requisite power and
authority to own, lease, and operate its properties and to carry on
its business as now conducted, and is qualified to do business in
each jurisdiction in which the character of its properties or the
nature of its business requires such qualification.

 

(b) Authorization of Transaction.
Each of CBMG and its Relevant Affiliates has all power and
authority to execute, deliver, and perform its obligations under
this Agreement and each Ancillary Agreement to which it is or will
be a party and to consummate the transactions contemplated hereby
or thereby. The execution, delivery, and performance by CBMG and
its Relevant Affiliates of this Agreement and each Ancillary
Agreement to which it will be a party have been duly and validly
authorized by all necessary action on the part of CBMG and its
Relevant Affiliates, and no other proceedings on the part of CBMG
or any of its Relevant Affiliates will be necessary to authorize
the execution, delivery, and performance by CBMG and its Relevant
Affiliates of this Agreement or any Ancillary Agreement or to
consummate the transactions contemplated hereby or thereby.
Assuming due authorization, execution, and delivery by the other
parties thereto, this Agreement and each Ancillary Agreement, when
executed and delivered by CBMG and its Relevant Affiliates, shall
constitute a valid and binding obligation of CBMG and its Relevant
Affiliates, enforceable against CBMG and its Relevant Affiliates in
accordance its terms (except as may be limited by bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization,
preference, or similar Applicable Laws of general applicability
relating to or affecting the rights of creditors generally and
subject to general principles of equity (regardless of whether
enforcement is sought in equity or at law)).

 

(c) Permits. No Permits are
required in connection with the execution, delivery, and
performance of this Agreement or any Ancillary Agreement by CBMG
and its Relevant Affiliates, except for the Required PRC
Approvals.

 

(d) No Conflict or Violation.
Assuming all Permits described in Section 15.1(c) have been obtained, the
execution, delivery, and performance by CBMG and its Relevant
Affiliates of this Agreement and the Ancillary Agreements and the
consummation by CBMG and its Relevant Affiliates of the
Transactions will not: (i) violate the organizational documents of
CBMG or any of its Relevant Affiliates; (ii) violate in any
material respect any Applicable Law applicable to CBMG or any of
its Relevant Affiliates; or (iii) require a consent or approval
under, conflict with, result in a violation or breach of, or
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, or cancel (with or
without notice or lapse of time or both), or result in a loss of
benefit under any Contract or Permit to which CBMG or any of its
Relevant Affiliates is subject, in each case, in any material
respect.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(e) Legal Proceedings. There are
no, and since January 1, 2016 (the “Look-Back Date”), there
have not been, except as set forth on Schedule 15.1(e), any Actions pending
or, to the Knowledge of CBMG, threatened against CBMG or its
Affiliates: (i) which, if adversely determined, would materially
and adversely impact CBMG or its Affiliates; or (ii) that challenge
the validity or enforceability of this Agreement or seeks to enjoin
or prohibit consummation of the Transactions, or that would
reasonably be expected to impair or materially delay the
CBMG’s or its Relevant Affiliates’ ability to
consummate the Transactions or perform their respective obligations
under this Agreement and the Ancillary Agreements. Neither CBMG nor
any of its Affiliates nor any of their respective material
properties or assets are subject to any outstanding
Order.

 

(f) Compliance with All Applicable Laws,
including Orders and Permits.

 

(i)

CBMG and each of
its Affiliates is, and since the Look-Back Date, has been, in full
compliance with all Applicable Law and Orders. CBMG and its
Affiliates are, and have at all times since the Look-Back Date
been, conducted their respective businesses in full compliance with
all Applicable Law and Orders. CBMG and each of its Affiliates
possess all Permits required to conduct their respective
businesses. Each such Permit is in full force and effect. Since the
Look-Back Date, neither CBMG nor any Affiliate of CBMG has received
any written communication from a Governmental Entity that alleges
that its business has not been conducted in compliance with any
such Applicable Law, Order, or Permit or threatens to revoke,
restrict, or limit any Permit necessary or advisable for the
operation of such business. Since the Look-Back Date, neither CBMG,
nor any Affiliate of CBMG, has received any written communication
from any Governmental Entity that alleges that its VIE structure
(or any aspect thereof) is not in compliance with Applicable PRC
Laws or alleging that it is a circumvention of the requirement for
VIEs to obtain Permits, or threatening to revoke, restrict, or
limit any Permit for any Affiliate within the VIE structure that is
necessary or advisable for the operation of such
business.

 

(ii)

CBMG and each of
its Affiliates is, and since the Look-Back Date, has been, in full
compliance with all Applicable Law, concerning the exportation of
any products, technology, technical data, and services, including
those administered by the United States Department of Commerce, the
United States Department of State, and the United States Department
of Treasury. CBMG and its Affiliates are in full compliance with
United States and international economic and trade sanctions,
including those administered by the United States Office of Foreign
Assets Control.

 

(iii)

Neither CBMG nor
any of its Affiliates has agreed to a material restriction on its
right to conduct its business freely with any other business,
including a restriction on the geographic scope of its business or
a restriction on the kind of business that it is entitled to carry
on. Neither CBMG nor any of its Affiliates is in breach of any
provision of the PRC Anti-Monopoly Law.

 

(g)

Regulatory
Matters.

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(i)

Since the
Look-Back Date, CBMG and its Affiliates are, and have been, in full
compliance with all applicable rules, regulations, decrees,
guidance, pronouncements, circulars, standards, and policies of the
FDA and the SAMR and any other applicable Regulatory Authority,
including cGMP, cGLP, and cGCP (collectively, “Regulatory
Requirements”).

 

(ii)

No IND filed by or
on behalf of CBMG with the FDA or the SAMR has been terminated by
the FDA or the SAMR, and none of the FDA, the SAMR, or any other
Regulatory Authority has recommended, commenced, or, to the
Knowledge of CBMG, threatened to initiate, any action to place a
clinical hold order on, or otherwise delay or suspend, proposed or
ongoing Clinical Studies conducted or proposed to be conducted by
or on behalf of CBMG and its Affiliates.

 

(iii)

All operations of
CBMG and its Affiliates and all of the manufacturing facilities and
operations of CBMG’s and its Affiliates’ suppliers of
products and product candidates and the components thereof
manufactured in or imported into the United States are in full
compliance with applicable Regulatory Requirements, and meet the
sanitation standards set by the FD&C Act. All of the operations
of CBMG and its Affiliates and all of the manufacturing facilities
and operations of CBMG’s and its Affiliates’ suppliers
of products and product candidates and the components thereof
manufactured in or imported into the PRC are in full compliance
with applicable SAMR Regulatory Requirements, and all the
operations of CBMG and its Affiliates and all of the manufacturing
facilities and operations of CBMG’s and its Affiliates’
suppliers of products and product candidates manufactured outside
of the United States or the PRC are in compliance with applicable
Regulatory Requirements in each jurisdiction in which the activity
takes place.

 

(iv)

(A) CBMG and its
Affiliates have obtained, in accordance with Applicable Law, all
Permits required under any Applicable Law or required by the SAMR,
the FDA, or any other applicable Regulatory Authority for the
lawful operation of their respective businesses, as presently
conducted; (B) each such Permit is valid and in full force and
effect; (C) there are currently no Actions pending that seek the
revocation, cancellation, or adverse modification of any Permit;
and (D) CBMG has no Knowledge that any of the Permits will not be
renewed or extended on expiry of the current term on the same
terms, or will only be extended or renewed on less favorable terms
than currently in effect. All Regulatory Documentation has been
maintained and retained in accordance with Applicable Law, and such
Regulatory Documentation is in the possession or control of CBMG
and its Affiliates.

 

(v)

CBMG and its
Affiliates are not subject to any unresolved notice, citation,
suspension, revocation, warning, administrative proceeding, review,
or investigation by a Regulatory Authority that alleges or asserts
that CBMG or any of its Affiliates has violated any applicable
Healthcare Laws, including an FDA Form 483, FDA warning letter,
untitled letter, or similar notice of alleged non-compliance. There
has not been a recall or market withdrawal or any product or
product candidates by or on behalf of CBMG or its Affiliates. CBMG
and its Affiliates have complied with all adverse event reporting
requirements applicable to its products and product
candidates.

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(vi)

All reports,
documents, claims, Permits, and notices related to the conduct of
the business of CBMG and its Affiliates required to be filed,
maintained, or furnished to the FDA, the SAMR, and any other
Regulatory Authority have been so filed, maintained, or furnished,
and all such reports, documents, claims, Permits, and notices were
complete and accurate in all material respects on the date filed
(or were promptly corrected in or supplemented by a subsequent
filing).

 

(vii)

(A) Neither CBMG
nor any of its Affiliates nor, to the Knowledge of CBMG, any of
their respective officers, employees, agents, or distributors, or
any other Person involved in development of any data included in
any filing of CBMG or its Affiliates submitted to a Regulatory
Authority, has been convicted of any crime or engaged in any
conduct for which debarment is mandated or authorized by 21 U.S.C.
§ 335a, nor has any such Person been so debarred; and (B)
neither CBMG nor any of its Affiliates nor, to the Knowledge of
CBMG, any of their respective officers, employees, or agents, nor
any other Person involved in the development of any data included
in any filing of CBMG or its Affiliates submitted to a Regulatory
Authority, has been convicted of any crime or engaged in any
conduct for which such Person could be excluded from participating
in the federal health care programs under 42 U.S.C. § 1320a-7,
nor has any such Person been excluded from participation in such
programs. Neither CBMG nor any of its Affiliates nor, to the
Knowledge of CBMG, any of their respective directors, senior
managers, or legal representatives is prohibited under Applicable
PRC Laws from holding the current offices which they occupy within
CBMG or any of its Affiliates.

 

(h) Ethical Practices. Neither CBMG
nor any of its Affiliates nor, to the Knowledge of CBMG, any of
their respective directors, officers, or employees or any other
Person acting for, or on behalf of, CBMG or its Affiliates
has:

 

(i)

violated or is in
violation of any applicable Anti-Corruption Law;

 

(ii)

made,
undertaken, offered to make, promised to make, or authorized the
payment or giving of any bribe, rebate, payoff, influence payment,
kickback, or other payment or gift of money or anything of value
(including meals or entertainment), to any officer, employee, or
ceremonial office holder of any government or instrumentality
thereof, any political party or supra-national organization (such
as the United Nations), any political candidate, any royal family
member, or any other person who is connected or associated
personally with any of the foregoing, or to any non-governmental
individual or entity, that is prohibited under any applicable
Anti-Corruption Law or otherwise for the purpose of influencing any
act or decision of such payee in his official capacity, inducing
such payee to do or omit to do any act in violation of his lawful
duty, securing any improper advantage or inducing such payee to use
his influence with a government or instrumentality thereof to
affect or influence any act or decision of such government or
instrumentality, or to secure any improper advance or inducing such
payee to enter into a commercial arrangement in violation of
Applicable Law (each, a “Prohibited
Payment”);

 

(iii)

been subject to any
investigation by any Governmental Entity with regard to any actual
or alleged Prohibited Payment;

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(iv)

used funds or
other assets, or made any promise or undertaking in such regard,
for the establishment or maintenance of a secret or unrecorded fund
(a “Prohibited
Fund”); or

 

(v)

made any false or
fictitious entries in any of CBMG’s or its Affiliates’
books or records relating to any Prohibited Payment or Prohibited
Fund.

 

(i)

Data Privacy and
Protection.

 

(i)

CBMG and its
Affiliates have complied with each relevant requirement of all
applicable Data Protection Laws.

 

(ii)

Neither CBMG nor
any of its Affiliates has received a notice or allegation from a
Governmental Entity or any other Person: (A) alleging noncompliance
with any Data Protection Laws; (B) requiring it to change, cease
using, block, or delete any personal data; (C) prohibiting the
transfer of personal data to any place; or (D) requiring it to take
any other type of action with respect to the collection, use,
transfer, or deletion of personal information.

 

(iii)

CBMG and its
Affiliates have obtained each necessary consent from data subjects
and has complied with each necessary condition to permit it to
process or use all relevant personal information in connection with
their respective businesses and, where appropriate, any relevant
purpose for which it would be necessary for Novartis to use such
personal information in accordance with this Agreement and the
Ancillary Agreements.

 

(j)

Intellectual
Property.

 

(i)

CBMG has the right
to grant all rights and licenses it purports to grant to Novartis
to the CBMG Patents and the CBMG Know-How under this
Agreement.

 

(ii)

CBMG has not
granted any right or license to any Third Party relating to any of
the CBMG Patents or the CBMG Know-How that would conflict or
interfere with any of the rights or licenses granted to Novartis
under this Agreement.

 

(iii)

All title in and
ownership rights pertaining to any CBMG Patents and CBMG Know-How
that arose out of or derived from (whether in whole or in part) the
work performed by, or services rendered by, any existing or former
employee of, or a consultant previously or currently engaged by
CBMG or its Affiliates during his or her employment or engagement
are vested in CBMG or its Affiliate, as applicable, and the
relevant individuals or Persons have validly executed, either alone
or with CBMG or its Affiliate, as applicable, all necessary deeds,
contracts, agreements, and documentation needed to vest title and
ownership rights pertaining to such CBMG Patents and CBMG Know-How
in CBMG or its Affiliate in accordance with Applicable Law, and no
past or present employee has any claim for employee-inventor rights
against CBMG or any of its Affiliates.

 

15.2 Representations and Warranties by
Novartis.

 

Novartis
represents and warrants to CBMG, as of the Effective Date, as
follows:

 

                                                              

 

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Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

 

(a) Due Organization and Good
Standing. Novartis, and each of its Relevant Affiliates, is
duly incorporated, validly existing, and, where applicable, in good
standing under the laws of its jurisdiction of
organization.

 

(b) Authorization of Transaction.
Each of Novartis and its Relevant Affiliates has all power and
authority to execute, deliver, and perform its obligations under
this Agreement and each Ancillary Agreement to which it is or will
be a party and to consummate the transactions contemplated hereby
or thereby. The execution, delivery, and performance by Novartis
and its Relevant Affiliates of this Agreement and each Ancillary
Agreement to which it will be a party have been duly and validly
authorized by all necessary action on the part of Novartis and its
Relevant Affiliates, and no other proceedings on the part of
Novartis or any of its Relevant Affiliates will be necessary to
authorize the execution, delivery, and performance by Novartis and
its Relevant Affiliates of this Agreement or any Ancillary
Agreement or to consummate the transactions contemplated hereby or
thereby. Assuming due authorization, execution and delivery by the
other parties thereto, this Agreement and each Ancillary Agreement,
when executed and delivered by Novartis and its Relevant
Affiliates, shall constitute a valid and binding obligation of
Novartis and its Relevant Affiliates, enforceable against Novartis
and its Relevant Affiliates in accordance its terms (except as may
be limited by bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization, preference, or similar Applicable Law
of general applicability relating to or affecting the rights of
creditors generally and subject to general principles of equity
(regardless of whether enforcement is sought in equity or at
law)).

 

(c) Permits. No Permits are
required in connection with the execution and delivery of this
Agreement or any Ancillary Agreement by Novartis and its Relevant
Affiliates, except for those required in connection with the
Development, Manufacture, or Commercialization of the Product in
the Territory after the Effective Date.

 

(d) No Conflict or
Violation. Assuming
all Permits described in Section 15.2(c) have been obtained, the
execution and delivery by Novartis and its Relevant Affiliates of
this Agreement and the Ancillary Agreements do not: (i) violate the
organizational documents of Novartis or any of its Relevant
Affiliates; (ii) violate in any material respect any Applicable Law
to which Novartis or any of its Relevant Affiliates is subject; or
(iii) require a consent or approval under, conflict with, result in
a violation or breach of, or constitute a default under, result in
the acceleration of, create in any party the right to accelerate,
terminate, or cancel any Contract to which Novartis or any of its
Relevant Affiliates is a party, in each case, in any material
respect.

 

(e) Legal Proceedings. There are no Actions pending or
threatened in writing against Novartis which would, if adversely
determined, prohibit or materially delay the consummation of the
Transactions. Novartis is not subject to any Order that would
reasonably be expected to materially impair or materially delay
Novartis’s ability to consummate the transactions
contemplated hereby.

 

(f)

Intellectual
Property.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(i)

Novartis has the
right to grant all rights and licenses it purports to grant to CBMG
to the Novartis Patents and the Novartis Know-How under this
Agreement.

 

(ii)

Novartis has not
granted any right or license to any Third Party relating to any of
the Novartis Patents or the Novartis Know-How that would conflict
or interfere with any of the rights or licenses granted to CBMG
under this Agreement.

 

(iii)

All title in and
ownership rights pertaining to any Novartis Patents and Novartis
Know-How that arose out of or derived from (whether in whole or in
part) the work performed by, or services rendered by, any existing
or former employee of, or a consultant previously or currently
engaged by Novartis or its Affiliates during his or her employment
or engagement are vested in Novartis or its Affiliate, as
applicable, and the relevant individuals or Persons have validly
executed, either alone or with Novartis or its Affiliate, as
applicable, all necessary deeds, contracts, agreements, and
documentation needed to vest title and ownership rights pertaining
to such Novartis Patents and Novartis Know-How in Novartis or its
Affiliate in accordance with Applicable Law, and no past or present
employee has any claim for employee-inventor rights against
Novartis or any of its Affiliates.

 

15.3 Mutual Covenants.

 

 

(a) Technology Transfer of the CBMG
Technology and the Product. The Parties shall diligently
negotiate in good faith to finalize two (2) tech transfer work
plans: one (1) with respect to the transfer of the CBMG Technology
from CBMG to Novartis, as set forth on Schedule 15.3(a) (the
“CBMG Technology
Tech Transfer Plan”); and one (1) with respect to the
transfer of the Product manufacturing process from Novartis to
CBMG, which latter plan shall be attached to the Manufacturing and
Supply Agreement (the “Product Tech Transfer
Plan”) as soon as practicable after the Effective
Date; provided,
that such tech transfer work plans shall be finalized within thirty
(30) days after the Effective Date and prior to the execution of
the Manufacturing and Supply Agreement. Upon the finalization of
the tech transfer work plans, such work plans shall be deemed to be
the “Tech Transfer
Work Plans.” The Parties may amend the Tech Transfer
Work Plans from time to time upon mutual agreement.

 

(b) Registration. If required by
Applicable Law, CBMG shall, promptly following the Effective Date
and in accordance with Applicable PRC Laws, submit the following
items to the competent MOFCOM registration authority in the PRC
(the “Registration
Authority”) in accordance with Applicable PRC Laws:
(x) for registration of the license granted by Novartis to CBMG
pursuant to Sections 2.1(a) and 2.1(b) as a technology import
contract; and (y) for registration of the license granted by CBMG
to Novartis pursuant to Sections 2.2(a) and 2.2(b) as a technology export
contract:

 

(i)

a written
application for registration of this Agreement;

 

(ii)

a duplicate copy of
this Agreement; and

 

                                                              

 

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Confidential Treatment Requested by Cellular Biomedicine Group,
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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(iii)

other supporting
documents as may be required by the relevant Registration
Authority.

 

 

Novartis shall use
good-faith efforts to provide reasonable assistance to CBMG in
connection with the registration of this Agreement. CBMG shall: (1)
obtain from the Registration Authority the “Technology Import
Contract Registration Certificate” and the “Technology
Export Contract Registration Certificate” in respect of this
Agreement promptly following issuance thereof by the Registration
Authority; and (2) provide copies of such certificates to Novartis
promptly (but in no event later than five (5) Business Days)
following CBMG’s receipt thereof.

 

(c) Further Assurances. Subject to
the provisions of this Agreement, each of Novartis and CBMG shall,
from time to time, execute and deliver all such further instruments
and take such other action as may be reasonably necessary to
effectively carry out or better evidence or perfect the full intent
and meaning of this Agreement.

 

(d) Third Party Consents. Each
Party, as applicable, agrees to use commercially reasonable efforts
to obtain the consents for which it is responsible as set forth on
Schedule
15.3(d);
provided, that the
foregoing shall not obligate either Party or its Affiliates to make
any material payment or grant any other material consideration or
undertake any material liability, obligation, or commitment in
order to obtain such consent.

 

(e) Compliance with Law. Each Party
covenants that it shall, in performing its obligations under this
Agreement (including the Development Plan), comply with Applicable
Law in all jurisdictions in which any relevant activities under
this Agreement take place.

 

(f) No Debarment. Each Party
covenants that no Person who is known by such Party to have been
debarred under subsection (a) or (b) of Section 306 of the FD&C
Act or who is prohibited under Applicable Law from acting as a
director, senior manager, or legal representative will be employed
by such Party in the performance of any activities under this
Agreement.

 

(g) No Disqualification. Each Party
covenants that, to the knowledge of such Party, no Person on any of
the FDA clinical investigator enforcement lists (including the: (i)
Disqualified/Totally Restricted List; (ii) Restricted List; and
(iii) Adequate Assurances List) will participate in the performance
of any activities under this Agreement.

 

(h) Insurance. Each Party covenants
that it shall maintain insurance (or, with respect to Novartis,
self-insure) with respect to its activities and obligations under
this Agreement in such amounts as are commercially reasonable in
the industry for companies conducting similar business and shall
require any of its Affiliates undertaking activities under this
Agreement to do the same; provided, that CBMG’s
failure to comply with this Section 15.3(h) shall not be deemed a
breach where such failure occurs prior to the Parties’ entry
into the Manufacturing and Supply Agreement.

 

15.4 Covenants by CBMG.

 

                                                              

 

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IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

 

(a) Data Subjects. CBMG shall
obtain, or shall cause its Affiliates to obtain, written consent
from all data subjects in form and substance agreed by the Parties
and in the circumstances agreed by the Parties. To the extent that,
Applicable Law prevents the disclosure or transfer of any data
(including data associated with Regulatory Filings, Clinical
Studies, or individual patients) to, or the processing of data by,
Novartis where the same is contemplated by this Agreement or any
Ancillary Agreement, CBMG shall, to the extent permitted by
Applicable Law, disclose or transfer the same to an entity
designated by Novartis in the PRC. In the event that Applicable Law
prevents disclosure or transfer of data by CBMG to, or the
processing of data by, the Novartis designee, then the Parties
shall negotiate in good faith to put in place arrangements that
will allow Novartis to as far as permitted under Applicable Law to
obtain the same rights and economic benefits as it would have been
entitled to had a transfer to Novartis or a Novartis designee been
permitted.

 

(b) Non-Solicitation. During the
Term, CBMG shall not, and shall cause its Affiliates not to,
directly or indirectly, actively recruit, solicit, or hire any
former or current employee of Novartis or its Affiliates for a
period of twelve (12) months following termination of such
employment, which employee has, directly or indirectly, been
involved in the Development, Manufacture, or Commercialization of
the Product without first obtaining, in each case, the prior
written consent of Novartis.

 

(c) Compliance with Novartis Data
Protection and Information Security Requirements. CBMG shall
diligently work with Novartis in good faith to finalize the
Novartis Data Protection and Information Security Requirements. The
Novartis Data Protection and Information Security Requirements
shall be finalized prior to the time at which CBMG first processes
Personal Data (as such term is defined in Part A, Section 9 of
Schedule
15.4(c)) pursuant
to this Agreement or any Ancillary Agreement. From and after such
time, CBMG shall comply, and shall cause its Affiliates to comply,
with the Novartis Data Protection and Information Security
Requirements. CBMG grants to Novartis, its Affiliates, and its
designees, from time to time, upon reasonable prior notice, the
right to audit CBMG’s and its Affiliates’ compliance
with the Novartis Data Protection and Information Security
Requirements.

 

15.5 No Other
Warranties.

 

EXCEPT
AS EXPRESSLY STATED IN THIS ARTICLE 15: (A) NO REPRESENTATION
OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF CBMG OR
NOVARTIS; AND (B) ALL OTHER CONDITIONS AND WARRANTIES, WHETHER
ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY
EXCLUDED, INCLUDING ANY CONDITIONS AND WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, CBMG HEREBY
ACKNOWLEDGES: (1) THAT THE PRODUCT CONSTITUTES A NOVEL THERAPY AND
THE MANUFACTURING PROCESS FOR THE PRODUCT IS COMPLEX AND
EXPERIMENTAL IN NATURE; (2) THAT NO REPRESENTATION OR WARRANTY
WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF NOVARTIS WITH
RESPECT TO THE MANUFACTURE OF THE PRODUCT, INCLUDING BY NOVARTIS,
CBMG, OR ANY OTHER PERSON; AND (3) THE MATTERS SET FORTH ON
SCHEDULE
15.5.

 

 

                                                              

 

52

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

16. INDEMNIFICATION AND
LIABILITY

 

16.1 Indemnification by
CBMG.

 

CBMG
shall indemnify and hold Novartis, its Affiliates, and its
sublicensees, and their respective officers, directors, and
employees (the “Novartis Indemnitees”)
harmless from any and all Losses incurred by or imposed upon the
Novartis Indemnitees or any of them in connection with any Claim,
in each case, to the extent arising or resulting from:

 

(a) the Development
or Manufacture of the Product by CBMG or any of its Affiliates,
sublicensees, or subcontractors;

 

(b) the negligence or
willful misconduct of CBMG or any of its Affiliates, sublicensees,
or subcontractors; or

 

(c) the breach of
any of the obligations, covenants, representations, or warranties
made by CBMG to Novartis under this Agreement;

 

provided, however, that CBMG shall not be
obliged to so indemnify and hold harmless the Novartis Indemnitees
for any Claims: (x) under Sections 16.2(a) through 16.2(c); or (y) to the extent
that such Claims arise from the breach, negligence, or willful
misconduct of Novartis or any Novartis Indemnitee.

 

16.2 Indemnification by
Novartis.

 

Novartis
shall indemnify and hold CBMG, its Affiliates, and its
sublicensees, and their respective officers, directors, and
employees (the “CBMG
Indemnitees”) harmless from any and all Losses
incurred by or imposed upon the CBMG Indemnitees or any of them in
connection with any Claim, in each case, to the extent arising or
resulting from:

 

(a) the Development
or Commercialization of the Product in the Territory by Novartis or
any of its Affiliates, sublicensees, or
subcontractors;

 

(b) the negligence or
willful misconduct of Novartis or any of its Affiliates,
sublicensees, or subcontractors; or

 

(c) the breach of
any of the obligations, covenants, representations, or warranties
made by Novartis to CBMG under this Agreement;

 

provided, however, that Novartis shall
not be obliged to so indemnify and hold harmless the CBMG
Indemnitees for any Claims: (x) under Sections 16.1(a) through 16.1(c); or (y) to the extent
that such Claims arise from the breach, negligence, or willful
misconduct of CBMG or any CBMG Indemnitee.

 

 

                                                              

 

53

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

 

16.3 Indemnification
Procedure.

 

(a) For the avoidance
of doubt, all indemnification claims in respect of a CBMG
Indemnitee or Novartis Indemnitee shall be made solely by CBMG or
Novartis, respectively.

 

(b) A Party seeking
indemnification hereunder (the “Indemnified Party”) shall
notify the other Party (the “Indemnifying Party”) in
writing reasonably promptly after the assertion against the
Indemnified Party of any Claim or fact in respect of which the
Indemnified Party intends to base a claim for indemnification
hereunder (an “Indemnification Claim
Notice”); provided, that the failure or
delay to so notify the Indemnifying Party shall not relieve the
Indemnifying Party of any obligation or liability that it may have
to the Indemnified Party, except to the extent that the
Indemnifying Party demonstrates that its ability to defend or
resolve such Claim is adversely affected thereby. The
Indemnification Claim Notice shall contain a description of the
Claim and the nature and amount of the Claim (to the extent that
the nature and amount of such Claim is known at such time). Upon
the request of the Indemnifying Party, the Indemnified Party shall
furnish promptly to the Indemnifying Party copies of all
correspondence, communications, and official documents (including
court documents) received or sent in respect of such
Claim.

 

(c) Subject to
Section 16.3(d) and Section 16.3(e), the Indemnifying Party
shall have the right, upon written notice given to the Indemnified
Party within thirty (30) days after receipt of the Indemnification
Claim Notice and, where the Indemnifying Party is CBMG, only with
Novartis’s prior written consent, to assume the defense and
handling of such Claim, at the Indemnifying Party’s sole
expense, in which case Section 16.3(d) shall govern. The
assumption of the defense of a Claim by the Indemnifying Party
shall not be construed as acknowledgement that the Indemnifying
Party is liable to indemnify any Indemnitee with respect to the
Claim, nor shall it constitute a waiver by the Indemnifying Party
of any defenses it may assert against any Indemnified Party’s
claim for indemnification. In the event that it is ultimately
decided that the Indemnifying Party is not obligated to indemnify
or hold an Indemnitee harmless from and against the Claim, the
Indemnified Party shall reimburse the Indemnifying Party for any
and all reasonable documented costs and expenses (including
reasonable attorneys’ fees and costs of suit) and any losses
incurred by the Indemnifying Party in its defense of the Claim. If
the Indemnifying Party does not give written notice to the
Indemnified Party, within thirty (30) days after receipt of the
Indemnification Claim Notice, of the Indemnifying Party’s
election to assume the defense and handling of such Claim or, where
the Indemnifying Party is CBMG, Novartis does not provide such
prior written consent, Section 16.3(e) shall
govern.

 

(d) Upon assumption
of the defense of a Claim by the Indemnifying Party and, where the
Indemnifying Party is CBMG, upon Novartis’s prior written
consent: (i) the Indemnifying Party shall have the right to and
shall assume sole control and responsibility for defending and
handling the Claim; (ii) the Indemnifying Party may, at its own
cost, appoint as counsel in connection with conducting the defense
and handling of such Claim any law firm or counsel reasonably
selected by the Indemnifying Party; (iii) the Indemnifying Party
shall keep the Indemnified Party informed of the status of such
Claim; and (iv) the Indemnifying Party shall have the right to
settle such Claim on any terms the Indemnifying Party chooses;
provided,
however, that it
shall not, without the prior written consent of the Indemnified
Party (such consent not to be unreasonably withheld, conditioned,
or delayed), agree to a settlement of any Claim which could lead to
liability or create any financial or other obligation on the part
of the Indemnified Party for which the Indemnified Party is not
entitled to indemnification under this Agreement or which admits
any wrongdoing or responsibility for the Claim on behalf of the
Indemnified Party. The Indemnified Party shall cooperate with the
Indemnifying Party and shall be entitled to participate in, but not
control, the defense of such Claim with its own counsel and at its
own expense. In particular, the Indemnified Party shall furnish
such records, information, and testimony, provide witnesses, and
attend such conferences, discovery proceedings, hearings, trials,
and appeals as may be reasonably requested in connection therewith.
Such cooperation shall include access during normal business hours
by the Indemnifying Party to, and reasonable retention by the
Indemnified Party of, records and information that are reasonably
relevant to such Claim, and making the Indemnified Party, the
Indemnitees, and its and their employees and agents available on a
mutually convenient basis to provide additional information and
explanation of any records or information provided.

 

                                                              

 

54

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(e) If the
Indemnifying Party does not assume the defense of the Indemnified
Party in accordance with Section 16.3(c), the Indemnified Party
may, at the Indemnifying Party’s expense, select counsel
reasonably acceptable to the Indemnifying Party in connection with
conducting the defense and handling of such Claim and defend or
handle such Claim in such manner as it may deem appropriate. In
such event, the Indemnified Party shall keep the Indemnifying Party
reasonably informed of the status of such Claim and shall not
settle such Claim without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably
withheld, conditioned, or delayed. If the Indemnified Party defends
or handles such Claim, the Indemnifying Party shall cooperate with
the Indemnified Party, at the Indemnified Party’s request but
at no expense to the Indemnified Party, and shall be entitled to
participate in the defense and handling of such Claim with its own
counsel and at its own expense.

 

16.4 Special, Indirect, and Other
Losses.

 

NEITHER
PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT,
NEGLIGENCE, BREACH OF STATUTORY DUTY, OR OTHERWISE FOR ANY SPECIAL,
INDIRECT, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES OR FOR
LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE EXTENT
ANY SUCH DAMAGES ARE: (A) INCURRED AS A RESULT OF A BREACH OF
SECTION
2.5; (B) INCURRED
AS A RESULT OF A BREACH OF ARTICLE 12; (C) INCURRED AS A RESULT OF
A PARTY’S GROSS NEGLIGENCE, INTENTIONAL MISCONDUCT, OR FRAUD;
OR (D) REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR
WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS ARTICLE 16.

 

16.5 No Exclusion.

 

Neither
Party excludes any liability for death or personal injury caused by
its negligence or willful misconduct or that of its officers,
directors, employees, agents, sublicensees, or
subcontractors.

 

                                                              

 

55

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

17. PUBLICATIONS AND
PUBLICITY

 

17.1 Use of Names.

 

Neither
Party shall use the name, symbol, trademark, trade name, or logo of
the other Party or its Affiliates in any press release,
publication, or other form of public disclosure without first
obtaining, in each case, the prior written consent of the other
Party (such consent not to be unreasonably withheld, conditioned,
or delayed), except for those disclosures for which consent has
already been obtained. Notwithstanding the foregoing, Novartis
shall be entitled to use the name of CBMG to the extent necessary
or useful in connection with the Development or Commercialization
of the Product.

 

17.2 Press Releases and Publicity Related
to this Agreement.

 

CBMG
agrees not to issue any press release or other public statement,
whether oral or written, disclosing the existence of this
Agreement, the terms of this Agreement, or any information relating
to this Agreement without first obtaining, in each case, the prior
written consent of Novartis, exercisable in its sole discretion.
CBMG shall provide Novartis with any such proposed press release or
other public statement no less than five (5) Business Days prior to
the date on which CBMG proposes to issue (subject to obtaining
Novartis’s prior written consent) such press release or other
public statement.

 

17.3 Public Disclosures and Publications
Related to the Product.

 

 

(a) Subject to
Section
17.2, any proposed
public disclosure (whether written, electronic, oral, or otherwise)
by CBMG relating to the Product shall require, in each case, the
prior written consent of Novartis (such consent not to be
unreasonably withheld, conditioned, or delayed).

 

(b) For the avoidance
of doubt, Novartis or any of its Affiliates may, without any
required consents from CBMG, publish or have published information
about Clinical Studies related to the Product, including the
results of such Clinical Studies.

 

17.4 Disclosures Required By
Law.

 

Notwithstanding
Section
17.1, Section 17.2, and Section 17.3, each Party may make any
disclosures required of it to comply with any duty of disclosure it
may have pursuant to Applicable Law or the requirements of any
Governmental Entity or Regulatory Authority or pursuant to the
rules of any recognized stock exchange. In the event of a
disclosure required by Applicable Law, the requirements of any
Governmental Entity or Regulatory Authority, or the rules of any
recognized stock exchange, the Parties shall coordinate with each
other with respect to the timing, form, and content of such
required disclosure. If so requested by the other Party, the Party
subject to such obligation shall use commercially reasonable
efforts to obtain an order protecting to the maximum extent
possible the confidentiality of such provisions of this Agreement
as reasonably requested by the other Party. If the Parties are
unable to agree on the form or content of any required disclosure,
such disclosure shall be limited to the minimum required as
determined by the disclosing Party in consultation with its legal
counsel. Without limiting the foregoing, CBMG shall provide
Novartis with each proposed filing by CBMG with the United States
Securities and Exchange Commission (or any stock exchange,
including Nasdaq, or any similar regulatory agency in any country
other than the United States) describing the terms of this
Agreement (including any filings of this Agreement) at least ten
(10) Business Days prior to submission of such filing, and shall
reasonably consider and in good faith incorporate any and all of
Novartis’s comments relating to such filing, including the
provisions of this Agreement for which confidential treatment
should be sought.

 

                                                              

 

56

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

18. MISCELLANEOUS

 

18.1 Fees and Expenses.

 

Except
as otherwise specified in this Agreement, each of the Parties shall
bear its own costs and expenses (including investment banking and
legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.

 

18.2 Notices.

 

All
notices, requests, consents, claims, demands, waivers, and other
communications under this Agreement shall be in writing and shall
be delivered personally or sent electronic transmission, by a
nationally-recognized overnight courier service, or by registered
or certified mail, postage and fees prepaid, to the intended
recipient at such Party’s address shown below (or such other
address as may be specified by such Party in a notice given in the
manner provided in this Section 18.2). Such notice or other
communication shall be deemed to have been duly given: (a) when
delivered, if delivered personally (with written confirmation of
receipt); (b) when sent, if sent by electronic mail (if confirmed
by reply electronic mail that is not automated); provided, that any electronic
mail sent at or after 5:00 p.m. prevailing Eastern Time shall be
deemed to be sent at 9:00 a.m. prevailing Eastern Time on the
following Business Day; (c) one (1) Business Day after being sent,
if sent overnight by a nationally-recognized overnight courier
service (with written proof of delivery); or (d) five (5) Business
Days after being sent, if sent by registered or certified mail,
return receipt requested, with postage and fees
prepaid.

 

If to
Novartis, to:

 

Novartis Pharma
AG

Lichtstrasse
35

CH-4056
Basel, Switzerland

Attention: Global
Head M&A & BD&L

 

with
copies, in the case of notice to Novartis, to:

 

Novartis
Pharmaceuticals Corporation

59
Route 10

East
Hanover, New Jersey 07936

Attention: VP
General Counsel Oncology

 

and

 

Novartis
Pharmaceuticals Corporation

59
Route 10

East
Hanover, New Jersey 07936

Attention: VP -
Global Head Oncology BD&L

 

If to
CBMG, to:

 

                                                              

 

57

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

Cellular
Biomedicine Group, Inc.

19925
Stevens Creek Blvd, Suite 100

Cupertino, CA
95014

Attention: Chief
Legal Officer

 

with
copies, in the case of notice to CBMG, to:

 

Ellenoff Grossman
& Schole LLP

 1345 Avenue
of the Americas

New
York, New York 10105

Attention: Sarah
Williams, Esq.

 

18.3 Entire Agreement.

 

This
Agreement (including the Exhibits and Schedules hereto) and the
Ancillary Agreements constitute the entire agreement between the
Parties with respect to the subject matter hereof and supersedes
all prior and contemporaneous agreements and understandings between
the Parties, both written and oral, with respect to such subject
matter; provided,
however, that this
Agreement shall not supersede the terms and provisions of the CDA
applicable to any period prior to the Effective Date.

 

18.4 Severability.

 

If any
term or provision of this Agreement or the application of any such
term or provision to any Person or circumstance shall be held
invalid, void, or unenforceable in any respect by a court of
competent jurisdiction, the remainder of the terms and provisions
of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired, or invalidated, so long as the
economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to either Party.
Upon such a determination, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent
of the Parties as closely as possible in an acceptable manner in
order that the agreement of the Parties be consummated as
originally contemplated to the fullest extent
possible.

 

18.5 Assignment; Binding
Effect.

 

This
Agreement and the rights and obligations hereunder are not
assignable (by operation of law or otherwise) by CBMG unless such
assignment is consented to in writing by Novartis. This Agreement
and the rights and obligations hereunder are assignable (by
operation of law or otherwise) by Novartis: (a) to any of its
Affiliates, upon prior written notice to CBMG; and (b) to any Third
Party, upon CBMG’s prior written consent, not to be
unreasonably withheld, conditioned, or delayed. Subject to the
foregoing, this Agreement and all the provisions hereof shall be
binding upon and shall inure to the benefit of the Parties and
their respective successors and permitted assigns. Notwithstanding
the foregoing, no assignment shall relieve the assigning Party of
any of its obligations hereunder. Any purported assignment in
violation of this Section 18.5 shall be null and
void.

 

18.6 Headings.

 

The
headings contained in this Agreement are inserted for convenience
only and shall not be considered in interpreting or construing any
of the provisions contained in this Agreement.

 

 

                                                              

 

58

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

18.7 Waiver and
Amendment.

 

This
Agreement may be amended, modified, or supplemented only by a
written mutual agreement executed and delivered by each of the
Parties. Except as otherwise provided in this Agreement, any
provision of this Agreement may be waived by the Party entitled to
the benefits thereof only by a written instrument signed by the
Party granting such waiver. No failure or delay by either Party in
exercising any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power, or privilege.

 

18.8 Third Party
Beneficiaries.

 

This
Agreement is for the sole benefit of the Parties and their
permitted successors and assigns, and nothing herein express or
implied shall give or be construed to give to any Person, other
than the Parties and such permitted successors and assigns, any
legal or equitable rights hereunder, except with respect to
Novartis Indemnitees and CBMG Indemnitees, who are Third Parties,
solely with respect to Article 16.

 

18.9 Specific Performance and Other
Equitable Relief.

 

The
Parties hereby expressly recognize and acknowledge that immediate,
extensive, and irreparable damage would result, no adequate remedy
at law would exist, and damages would be difficult to determine in
the event that any provision of this Agreement is not performed in
accordance with its specific terms or otherwise breached. It is
hereby agreed, notwithstanding the intent of the Parties to submit
claims to arbitration in accordance with Section 18.12, that the Parties shall
be entitled to specific performance of the terms hereof and
immediate injunctive relief and other equitable relief, without the
necessity of proving the inadequacy of money damages as a remedy,
and the Parties further hereby agree to waive any requirement for
the securing or posting of a bond in connection with the obtaining
of such injunctive or other equitable relief. The Parties further
agree not to assert that a remedy of injunctive relief, specific
performance, or other equitable relief is unenforceable, invalid,
contrary to law, or inequitable for any reason, nor to assert that
a remedy of monetary damages would provide an adequate remedy. Such
remedies, and any and all other remedies provided for in this
Agreement, shall, however, be cumulative in nature and not
exclusive and shall be in addition to any other remedies whatsoever
which either Party may otherwise have. Each of the Parties hereby
acknowledges that the existence of any other remedy contemplated by
this Agreement does not diminish the availability of specific
performance of the obligations hereunder or any other injunctive
relief. Each of the Parties further acknowledges and agrees that
injunctive relief or specific performance will not cause an undue
hardship to such Party.

 

18.10 Negotiation of
Agreement.

 

Each of
Novartis and CBMG acknowledges that it has been represented by
independent counsel of its choice throughout all negotiations that
have preceded the execution of this Agreement and that it has
executed the same with consent and upon the advice of said
independent counsel. Each Party and its counsel cooperated in the
drafting and preparation of this Agreement and the documents
referred to herein, and any and all drafts relating thereto shall
be deemed the work product of the Parties and may not be construed
against either Party by reason of its preparation. Accordingly, any
rule of Applicable Law or any legal decision that would require
interpretation of any ambiguities in this Agreement against the
Party that drafted it is of no application and is hereby expressly
waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intentions of the Parties and this
Agreement.

 

                                                              

 

59

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

18.11 Choice of Law.

 

This
Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to agreements made and to
be performed entirely within such State, without regard to the
conflict of laws principles of such State to the extent that the
laws of another jurisdiction would be required
thereby.

 

18.12 Arbitration.

 

 

(a) Any claim,
dispute, or controversy of whatever nature arising among the
Parties out of or in connection with this Agreement, including any
action or claim based on tort, contract, or statute (including any
claims of breach or violation of statutory or common law
protections from discrimination, harassment, and hostile working
environment), or concerning the interpretation, effect,
termination, validity, performance, or breach of this Agreement
(each, a “Dispute”), shall be
resolved in accordance with this Section 18.12.

 

(b) The Parties
shall use good-faith efforts to resolve each Dispute.
Notwithstanding the foregoing, any Dispute that a Party in its
absolute discretion considers cannot otherwise be resolved shall be
referred in writing by such Party to the Senior Officers. The
Senior Officers will attempt to resolve any such Dispute within
fifteen (15) calendar days after the referral of the Dispute. If
the Senior Officers are unavailable or unable to resolve a Dispute
within the fifteen (15)-calendar day period, then the Dispute shall
be resolved by final and binding arbitration under the Rules of
Arbitration of the International Chamber of Commerce (the
“ICC”)
(the “Rules”) before a panel of
three (3) arbitrators (collectively, the “Arbitrators”) appointed
in accordance with the said Rules; provided, however, that the president of
the arbitral tribunal shall be appointed by mutual agreement of the
co-Arbitrators.

 

(c) The seat of
arbitration shall be New York, New York, United States of America.
The language of arbitration shall be English. The Expedited
Procedure Provisions of the Rules shall not apply. The Parties
shall make every effort to conduct the arbitration in an
expeditious and cost-effective manner, having regard to the
complexity and value of the Dispute. The Parties shall aspire to
work with the arbitral tribunal to complete the arbitration within
ninety (90) days after selection of the third (3rd)
Arbitrator.

 

(d) The decision or
award rendered by the Arbitrators shall be final and
non-appealable, and judgment may be entered upon it in accordance
with Applicable Law in any court of competent jurisdiction. The
Arbitrators shall be authorized to award compensatory damages, but
shall not be authorized to reform, modify, or materially change
this Agreement or any other agreements contemplated
hereunder.

 

(e) Each Party shall
bear its own attorneys’ fees, costs, and disbursements
arising out of the arbitration and the costs of the Arbitrator
selected by it, and shall pay an equal share of the fees and costs
of the president of the arbitral tribunal and the ICC
administrative expenses; provided, however, that the Arbitrators
shall be authorized to determine whether a Party is the prevailing
Party, and, if so, to award to that prevailing Party reimbursement
for its reasonable attorneys’ fees, costs, and disbursements
(including, for example, expert witness fees and expenses,
photocopy charges, travel expenses, etc.), or the fees and costs of
the Arbitrators and the ICC administrative expenses.

 

                                                              

 

60

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

(f) Nothing contained
in this Agreement shall deny any Party the right to seek specific
performance or injunctive or other equitable relief in accordance
with Section
18.9.

 

18.13 Waiver of Jury
Trial.

 

TO THE
EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE
PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE), ANY RIGHT TO TRIAL
BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED
TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT: (A) NO REPRESENTATIVE OF THE OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER; (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER; (C) EACH PARTY MAKES THIS WAIVER
VOLUNTARILY; AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 18.13. THE PARTIES AGREE THAT
ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS
WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY, AND BARGAINED-FOR
AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THEIR RIGHTS TO
TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER AMONG THEM RELATING TO
THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS AND WILL
INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE
SITTING WITHOUT A JURY.

 

18.14 Performance by
Affiliates.

 

.CBMG
acknowledges and accepts that Novartis may exercise its rights and
perform its obligations under this Agreement either directly or
through one (1) or more of its Affiliates. Novartis’s
Affiliates shall have the benefit of all rights of Novartis under
this Agreement, but not be subject to Novartis’s obligations,
unless expressly provided under this Agreement or to the extent
that an Affiliate is exercising a right hereunder, or in the case
of a permitted assignment. Accordingly, “Novartis”
shall be interpreted to mean “Novartis or its
Affiliates” where necessary to give Novartis’s
Affiliates the benefit of the rights provided to Novartis under
this Agreement and the ability to perform its obligations under
this Agreement; provided, that Novartis shall
remain responsible for the acts and omissions, including financial
liabilities, of its Affiliates.

 

18.15 Counterparts; Electronic
Signatures.

 

This
Agreement may be executed in any number of counterparts, each of
which, when executed, shall be deemed to be an original and all of
which together shall be deemed to be one (1) and the same
instrument binding upon all of the Parties, notwithstanding the
fact that both Parties are not signatory to the original or the
same counterpart. For purposes of this Agreement, .PDF and other
electronic signatures shall be deemed originals.

 

[Remainder
of Page Intentionally Left Blank]

 

 61

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

IN
WITNESS WHEREOF, the Parties intending to be bound have caused this
Agreement to be executed by their duly authorized
representatives.

 

 

 

	

 

	
NOVARTIS
PHARMA AG

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ 
Teresa
Jose

	

 

	

 

	

 

	
Teresa
Jose

	

 

	

 

	

 

	

CFO,
Oncology

	

 

 

	

 

	
Company Name

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ 
Liz
Barret

	

 

	

 

	

 

	
Liz
Barret

	

 

	

 

	

 

	

CEO, Novartis
Oncology

	

 

 

 

	

 

	
CELLULAR
BIOMEDICINE GROUP, INC.

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ 
Bizuo
(Tony) LIU

	

 

	

 

	

 

	
Bizuo (Tony)
LIU

	

 

	

 

	

 

	

CEO

	

 

 

                                                              

 

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

CELLULAR
BIOMEDICINE GROUP HK LTD.

 

 

 

By:            

/s/AndrewChan                                                                 

Name:                       

Andrew
Chan

Title:                       

Director

 

 

CELLULAR BIOMEDICINE GROUP (WUXI) LTD. (西比曼生物科技(无锡)有限公司)

(Company
seal)

 

 

By:            

/s/ Bizuo (Tony) LIU

(sign and affix company chop)

Name:                       

Bizuo (Tony)
LIU

Title:                       

Legal
Representative

 

CELLULAR
BIOMEDICINE GROUP (SHANGHAI) LTD.

(西比曼生物科技(上海)有限公司)

(Company
seal)

 

 

By:            

/s/ Bizuo (Tony) LIU

(sign and affix company chop)

Name:                       

Bizuo (Tony)
LIU

Title:                       

Legal
Representative

 

 

SHANGHAI
CELLULAR BIOPHARMACEUTICAL GROUP LTD.

(上海赛比曼生物科技有限公司)

(Company
seal)

 

 

By:            

/s/ Bizuo (Tony) LIU

(sign and affix company chop)

Name:                       

Bizuo (Tony)
LIU

Title:                       

Legal
Representative

 

 

 

 

 

Exhibit
A

 

CBMG Patents

 

* *
*

 

	

No.

	

Patent Titles

	

China

	

PCT

[***]

 

{00625357.DOCX.1}                                                                  

A-1

 

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

 

Exhibit
B1

 

Clinical Development Plan

 

* *
*

 

(INITIAL
PLAN - Subject to Change based on CFDA Health Authority
Discussions)

 

Novartis
intends to seek agreement with CFDA that local clinical trial data
are not required to support KYMRIAH registration in China, given
final regulation issued on 10-July 2018 by China’s State Drug
Administration accepting foreign clinical trial data towards new
drug approvals, given that following conditions are
met:

 

● compliance with ICH
GCP requirements;

● support for the
efficacy and safety profile of the intended indications;
and

● a lack of ethnic
differences that affect the efficacy and safety profile of
product

 

In
event that CFDA will still require a local China study to support
registration in each pursued indication, for reasons such as
significant manufacturing process changes intended for commercial
product not studied to date in clinical trial setting, or
post-approval commitment(s), the following study proposals would be
considered, subject to negotiation and alignment with
CFDA:

 

❖

Study 1: For
treatment of pediatric and young adult patients with relapsed or
refractory acute lymphoblastic leukemia (ALL)

 

	

Study
Purpose

 

	

To
demonstrate the efficacy and safety of tisagenlecleucel strategy in
Chinese pediatric and young adult relapsed and refractory B-cell
Acute lymphoblastic leukemia (ALL).

 

	

Primary
Objective

 

	

Evaluate
the efficacy of tisagenlecleucel treatment strategy in Chinese
patients as measured by [***], which includes [***]

 

	

Treatment
Arms

 

	

Single-arm
design:

A
target per-protocol dose of tisagenlecleucel transduced cells for
pediatric patients will consist of [***].

 

	

Sample
Size

 

	

[***]patients
treated with tisagenlecleucel (It is anticipated that approximately
[***] patients would need to be enrolled to ensure at least [***]
patients successfully infused.)

 

	

Timelines

 

	

[***]

 

 

 

                                                              

 

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

  

 

 

❖

Study 2: For
treatment of patients with relapsed or refractory diffuse large
B-cell lymphoma (DLBCL) who are ineligible for autologous stem cell
transplantation

 

	

Study
Purpose

 

	

To
demonstrate the efficacy and safety of tisagenlecleucel strategy in
Chinese adult patients with relapsed or refractory aggressive
B-cell non-Hodgkin lymphoma

 

	

Primary
Objective

 

	
 

● To evaluate the
efficacy of tisagenlecleucel treatment strategy in Chinese patients
, defined as [***]

	

Treatment
Arms

 

	

Single-arm
design

A
single target [***].

 

	

Sample
Size

 

	

[***]
patients treated with tisagenlecleucel (It is anticipated that
approximately [***] patients would need to be enrolled to ensure at
least [***] patients successfully infused.)

 

	

Timelines

 

	

[***]

 

1 The initial Clinical Development Plan does not include any
budgetary figures given the responsibility allocation for Initial
Indication Clinical Development Costs in Section
5.5(a)(i).

 

 

 

Exhibit C

 

Knowledge of CBMG

 

* *
*

 

Bizuo
(Tony) Liu, CEO

                                                             

 

 

 

Exhibit D

 

Required
PRC Approvals

 

* *
*

PART A: MATTERS
RELATED TO DRUG COMMERCIALIZATION, MANUFACTURING AND
DISTRIBUTION

 

[***]

 

PART B: MATTERS
RELATING TO THE TRANSACTION (Note that these are all post-closing
filings)

 

	

Item

 

	

Matter

 

	

Required
filing/registration/filing

 

	

Agency

 

	

Responsible
Party

 

	
1) 

 

 

	

Technology
licensing

 

	

Technology import registration

 

	

MOFCOM

 

	

[***]

 

	
2) 

 

 

	

Share
acquisition

 

	

Update round-tripping investment registration information, to the
extent reasonably required under Applicable PRC Law, for existing
PRC resident shareholders of CMBG Parent to reflect changes to
filed information with SAFE resulting from the transactions
contemplated by the Share Purchase Agreement

 

	

SAFE

 

	

[***]

 

 

 

 

 

Exhibit E

 

Manufacturing
and Supply Agreement Terms

 

[***]

 

 

 

 

Confidential Treatment Requested by Cellular Biomedicine Group,
Inc

IRS Employer Identification No. 86-1032927

Confidential treatment requested with respect to certain portions
hereof denoted with “[***]”

 

 

 

 

 

Exhibit F

 

Form
of Invoice

 

[Attached.]

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